Just when you thought that the big Wall Street banks couldn't do anything more to tick you off after giving their executives huge bonuses and going back to their risky trading ventures while taking so much government bailout money, they do more things to make any decent person crazy. Did you see the Business Week article that came out on August 5th? If you have high blood pressure, you probably shouldn't check it out, but otherwise you should:
- A new trend in business loans is to link credit lines to credit default swaps, those financial weapons of mass destruction that were a major prime mover around the 2008 market collapse. Citibank, JPMorgan and Bank of America are all doing it.
- With many states passing laws against the local firms that were doing payday lending, or at least passing usury laws against this outrageous practice that is essentially legalized loan sharking targeting poor people, the big banks are using interstate commerce laws to get into the market. Wells Fargo and U.S. Bancorp are among the loan sharkers expanding into this market.
- Morgan Stanley, Smith Barney and UBS are now selling a new kind of highly complex derivative for small investors. Offering attractive rates early on, they can easily turn into massive potential losses down the road. But because of their complexity, it's hard for small investors to understand the potential losses.
Seriously, when do these Wall Street bankers have no shame whatsoever? Sorry, I guess we all know the answer to that question. And since they have none, the federal government needs to come down on these firms like a ton of bricks. Regulate them, prosecute them, and break them up are the only answers to keep these amoral leeches from bringing our fragile economy down again.
Reid, Pelosi, and McCaskill tell us right out : If you do not like influence in Washington, you are free to leave the country. WHAT COULD BE PLAINER THAN THAT?
Senator Merkley of Oregon worked hard to restrict payday lenders here, and I hope he seizes this retrenchment of that market into the big banks as an opportunity to really knock some heads together. It's not just morally and politically and economically right, this should be personal for him as they try to undo one of his most successful efforts in the Oregon House but on a national scale.
In case anyone forgot:
http://clerk.house.gov/evs/2008/roll681.xml
http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=110&session=2&vote=00213
This is said to be "modern" finance but its the age-old usury scheme with a twist, money will be controlled by banks rather than by elected politicians.
It turns out that the oligarchs behind the "private" creation of money have been trying to undermine the US as a sovereign country and to place it under control of the international cartel of financiers.
The truth is that our government could issue its own currency and run on a government credit system. In fact, unless it chooses to do so soon, the will to oppose the banks will not be mustered in time to avert a complete take-over by a small group of international financiers will do the final morphing to place us under a gigantic European System where nation-states are a thing of the past.
Do you feel loyalty to the American Union, for example? Would you give your life for NATO? The present form of monetarism is the final blow to liberty and freedom. Democracy cannot exist where big money talks in selecting and electing our political representatives.
So when do you think that will happen given that we've let the current crisis pass with no meaningful reform?
It should be no surprise that Wall Street will dictate much of its "reforms," continuing to conduct business as usual while taking government bailout money. The auto industry, on the other hand, had to give itself over to government intervention, complete with sanctions on the United Auto Workers, if they dare to fight for their piece of the pie.
Auto execs are excoriated for flying to Washington on private jets while Wall Street bankers continue to dole out million dollar bonuses. And of course, our reps on Capitol Hill would NEVER fly on a "fact-finding mission" on a private jet, right? Hypocrites!
Read the Atlantic article: http://www.theatlantic.com/doc/200905/imf-advice
Absent such guidance, constraints and enforcement, banks will do what they can to increase their profits at the expense of society.
There is a notable vacuum of leadership on this subject from the Obama administration. There seems to be a lot of confusion among the parties - POTUS and Congress.
Banks have, and will continue, to aggressively exploit the lack of regulations and enforcement. Especially since they've learned that the Obama administration, Schapiro's SEC and Holder's DOJ are unwilling (or unable) to prosecute them for their individual behaviors - they are free to do whatever deceitful actions they please and the shareholders will pay for it with fines. They now know that any sort of enforcement will not affect their incomes (the government has demonstrated its guarantee of their personal incomes) or their lives (the government has demonstrated that it will not prosecute individuals, no matter how egregious their behaviors).