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Joined: 19 Mar 2003
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PostPosted: Tue Oct 25, 2011 12:12 am    Post subject: OWS Reply with quote

Is it just me, or did the Occupy Wall Street clowns thread disappear?

All sides should agree: down with the Big Banks

Liberal protesters "occupying" Wall Street hate the big banks, which they see as the engine of capitalism. But conservatives ought to hate the big banks because they are the enemies of capitalism.

Three events last week cemented how the bailed-out subsidy sucklers of Wall Street continue to profit, not from the free exchange and risk-taking that embodies the market, but from cronyism and offloading their risk onto the taxpayer.

First, Bank of America, which would have collapsed if not for the 2008 taxpayer-funded bailout, moved a reported $55 trillion in derivatives from its investment banking arm, Merrill Lynch, to a subsidiary that is backstopped by taxpayers through the Federal Deposit Insurance Corp.

Bloomberg news reported that FDIC officials don't like the move, which puts depositors' money at risk and taxpayers ultimately on the hook if risky derivatives blow up. But Wall Street insiders like the move for precisely that reason: If Bank of America melts down, these hedge fund managers or other big-time investors want their money in a division of the bank propped up by government.

In short, big-time investors in risky financial products want taxpayers to bear some of their risk, and Bank of America has come up with a clever way to do that.

Banks play the same public-risk-private-profit game in the mortgage industry, where lenders and Realtors have successfully pushed a measure to expand taxpayer insurance for mortgages to include big-dollar homes. Sens. Johnny Isakson, R-Ga., and Robert Menendez, D-N.J., last week passed through the Senate a measure to expand the size of a loan that the federal government can insure, up to $729,750.

The Menendez-Isakson measure would allow government-owned mortgage giants Fannie Mae and Freddie Mac to buy loans of that size off of lenders, and the Federal Housing Administration could insure loans that big. If a loan owned by Fannnie or Freddie (or insured by the FHA) fails, taxpayers take it on the chin while banks still get paid.

Assuming a 20 percent down payment, this proposed new bailout limit would have taxpayers subsidizing homes worth more than $910,000. Even in pricey Potomac, Md. -- plush with the wealth of lobbyists, government consultants and dual GS-15 incomes -- that sum could buy you a five-bedroom, 2 1/2-bath home with a two-car garage on a cul-de-sac.

Finally, last week we learned how much self-dealing was involved in the 2008 bank bailouts. A Government Accountability Office report highlighted plenty of conflicts of interest at the Federal Reserve. New York Fed official Stephen Friedman was on the board of Goldman Sachs and actively buying up shares of Goldman while the Fed moved to give Goldman special access to its lending windows.

JP Morgan CEO Jamie Dimon sat on the New York Fed's board while the Fed was pouring billions of bailout dollars into JP Morgan and granting JP Morgan special regulatory exceptions.

Meanwhile, the banks keep hiring the "public servants" who help steer bailouts their way, further corrupting both the market and the government. Fed bailout honcho Brian Madigan, who, according to the New York Times, "played a leading role in the emergency lending programs during the financial crisis," cashed out to Barclays this year.

Senate Banking Committee counsel Amy Friend, who helped pass the summer 2008 housing bailout (dubbed the "Bank of America Bill"), now works for a leading financial consulting and lobbying firm. And FHA Commissioner David Stevens, who helped craft a handful of mortgage bailouts, cashed out to the Mortgage Bankers Association. That's just naming a few.

And all of these big banks still profit from an implicit bailout. The credit ratings agency Moody's recently downgraded Bank of America, Wells Fargo and Citigroup because the agency saw the likelihood of a bailout decrease from certain to "very high." These banks' credit is rated higher than they would be in a free market, meaning they profit from the expectation of a bailout, if necessary.

So banks profit largely through activities that do not create value or efficiencies. They profit through financial games that rest on government favors. Many Occupy Wall Street protestors demonize all profit. Conservatives defend profit-seeking as the engine that creates prosperity for all of society.

But the big banks have rigged the game so that they profit without creating value. In fact, they profit from activities that weaken the economy by creating instability.

Today, big banks give capitalism a bad name. Believers in the free market should stop giving banks cover.
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Joined: 18 Oct 2004
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PostPosted: Tue Oct 25, 2011 6:54 am    Post subject: Reply with quote

That sums it up well enough for now. This private-public collusion is really damned hard to undo though...what's the next step? Blowing their cover would help but 90% of Americans would not understand the language written in the article above.
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Joined: 03 Feb 2004
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PostPosted: Tue Oct 25, 2011 10:02 am    Post subject: Reply with quote

Very interesting article to say the least. It's mind boggling how deep this shit goes. Insane actually! Very well written as well.
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Joined: 24 Jan 2008
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PostPosted: Thu Oct 27, 2011 12:47 am    Post subject: Re: OWS Reply with quote


Last edited by shlee on Thu Mar 20, 2014 2:10 pm; edited 1 time in total
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PostPosted: Mon Nov 07, 2011 6:21 am    Post subject: Reply with quote

anybody seen "inside job"?
it certainly was flawed, but spelled out a lot of this in great detail.
the whole thing is just criminal.
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Jason G

Joined: 30 Jun 2004
Posts: 1934
Location: Robotrippin'

PostPosted: Wed Nov 09, 2011 11:04 am    Post subject: Reply with quote

Read "Griftopia" by Matt Taibbi.

I won't lie, it's got a rabidly left wing viewpoint, that's just what Taibbi does. But It really does explain how much the game is rigged in favor of the finance industry. By the time I was done reading it, I was very, very angry.
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Joined: 01 Apr 2005
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PostPosted: Fri Nov 11, 2011 4:10 pm    Post subject: Reply with quote

What's plain to me is that it's a public-private collusion that allows this to happen. The banks couldn't do any of this without our government's help. And if the primary message of OWS was to get corporate donations and lobbyists out of our government, I would be squarely behind them.

What is ironic to me is that UAW has endorsed, and is participating in, OWS. Didn't they benefit from bailouts themselves in 2008? Rolling Eyes
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