Break up the banks: Gee, do ya think?

If they are too big to fail, they are too big to exist.

http://www.bloomberg.com/news/articl...vert-melt-down

The question is why have we done nothing in the last nearly 8 years to break them up.

We bailed them out in 2008 and 2009, but we left them intact. Why?

Arguably they were more powerful after the economy stabilized than before the last crash.

And now it looks like we are headed into another crash. Now what? Bail them out again?

If they are too big to fail, they are too big to exist.

http://www.bloomberg.com/news/articl...vert-melt-down

The question is why have we done nothing in the last nearly 8 years to break them up.

We bailed them out in 2008 and 2009, but we left them intact. Why?

Arguably they were more powerful after the economy stabilized than before the last crash.

And now it looks like we are headed into another crash. Now what? Bail them out again? Originally Posted by ExNYer

On paper, yes they are too big and should be broken up. In reality, they make plenty of campaign contributions and don't want to change things - so it will be tough to do. Plus, they are publicly held companies and the shareholders might get upset. Perhaps a better plan would be to stop mergers among the too big to fail group.

If they are too big to fail, they are too big to exist.

http://www.bloomberg.com/news/articl...vert-melt-down

The question is why have we done nothing in the last nearly 8 years to break them up.

We bailed them out in 2008 and 2009, but we left them intact. Why?

Arguably they were more powerful after the economy stabilized than before the last crash.

And now it looks like we are headed into another crash. Now what? Bail them out again? Originally Posted by ExNYer

Let the next president make that call along with his SCOTUS recommendation.

Let the next president make that call along with his SCOTUS recommendation. Originally Posted by i'va biggen

Fuck...but if you insist, I can go along with that...

My basic understanding, and I definitely could be wrong, is that the Big Banks and the Fed depend on each other. COG?

My basic understanding, and I definitely could be wrong, is that the Big Banks and the Fed depend on each other. COG? Originally Posted by gnadfly

The FED is owned by its member banks.

The FED is owned by its member banks. Originally Posted by CuteOldGuy

http://www.federalreserve.gov/faqs/about_14986.htm


"The Federal Reserve System fulfills its public mission as an independent entity within government. It is not "owned" by anyone and is not a private, profit-making institution.

"As the nation's central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms.

"However, the Federal Reserve is subject to oversight by the Congress, which often reviews the Federal Reserve's activities and can alter its responsibilities by statute. Therefore, the Federal Reserve can be more accurately described as "independent within the government" rather than "independent of government."

"The 12 regional Federal Reserve Banks, which were established by the Congress as the operating arms of the nation's central banking system, are organized similarly to private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

The FED is owned by its member banks. Originally Posted by CuteOldGuy

The Fed's profit each year (it earned over $100 billion in 2015 thanks to QE) is remitted to the US Treasury - i.e. the taxpayers!


As for the idea of breaking up the large banks, am I the only person who appreciates the IRONY of this? The reason J.P. Morgan and Bank of America et alia bulked up in the first place is because they were stiff-armed by the US government (more specifically, by Hank Paulson and Ben Bernanke) to buy failing institutions back in 2008! And now the same government wants to bust them up?

No good deed goes unpunished!

And how in the fuck can any self-respecting Libertarian favor letting the federal government step in anytime it feels like it and arbitrarily tell any successful business or financial institution it is too big to fail and therefore must be broken up? That's way too much power!

The IRONY of all this astonishes me!

The FED is owned by its member banks. Originally Posted by CuteOldGuy

Good point .

The Fed's profit each year (it earned over $100 billion in 2015 thanks to QE) is remitted to the US Treasury - i.e. the taxpayers!


As for the idea of breaking up the large banks, am I the only person who appreciates the IRONY of this? The reason J.P. Morgan and Bank of America et alia bulked up in the first place is because they were stiff-armed by the US government (more specifically, by Hank Paulson and Ben Bernanke) to buy failing institutions back in 2008! And now the same government wants to bust them up?

No good deed goes unpunished!

And how in the fuck can any self-respecting Libertarian favor letting the federal government step in anytime it feels like it and arbitrarily tell any successful business or financial institution it is too big to fail and therefore must be broken up? That's way too much power!

The IRONY of all this astonishes me! Originally Posted by lustylad

Then the government fined some of them because they had been forced to assume the assets of errant financial institutions that were subsequently found guilty of malfeasance.

Then the government fined some of them because they had been forced to assume the assets of errant financial institutions that were subsequently found guilty of malfeasance. Originally Posted by I B Hankering

Yep. So Jamie Dimon keeps paying shakedown money to Odumbo's DOJ to make bullshit lawsuits go away because he knows most people don't understand banking anyway and he wants to avoid bad PR. He is being sued for WaMu's lending mistakes. Bank of America is being sued for Countrywide's sins. And the Feds have found a new pinata to whack for goodies. Some of the fines and settlements collected by Eric Holder went to fund left-wing community organizer groups like La Raza and NeighborWorks. Banks are the new tobacco companies.

Then lying commie demagogues like Bernie Sanders come along and point to the settlements as proof that all "banksters" commit fraud.

The narrative is completely false but hey, don't let a good crisis go to waste.



Bernie’s Wall Street Slander

The Vermont socialist preaches class hatred to crowds besotted by the politics of envy.


By Bret Stephens
Feb. 8, 2016 7:14 p.m. ET

Last Friday a crane collapsed in lower Manhattan, killing a man named David Wichs. The next day the papers told the story of his life: a Jewish immigrant from Czechoslovakia; a math whiz with a degree from Harvard; a thoughtful neighbor and husband; “the nicest, most trustworthy person that I have known,” according to his boss, Mark Gorton, of Tower Research Capital. Mr. Wichs was just 38 when he died.

I never met Mr. Wichs, but reading about him reminded me of so many people I know in his industry—prodigiously bright and slyly funny, reasonably wealthy but rarely ostentatious, family men of the type who show up at school auctions and United Jewish Appeal dinners. Maybe they voted for Barack Obama the first time, probably not the second. They’re the people who, even now, make American finance the envy of the world.

They’re the most demonized people in America.

That’s the import of Bernie Sanders’s remark, in his debate last week with Hillary Clinton, that “the business model of Wall Street is fraud.” The senator from Vermont went on to say that “corruption is rampant” in the financial sector, his evidence being that “major bank after major bank has reached multibillion settlements” with the feds.

This wasn’t the first time Mr. Sanders has accused Wall Street of fraud, and it surely won’t be the last. No political or social penalties attach, in today’s America, to the wholesale indictment of this entire industry and the people who work in it. Had another presidential candidate made a similarly damning remark about some other profession—public-school teachers, say, or oil-rig workers—there would have been the usual outcry about false stereotypes, the decline of civility and so on. When Bernie says it about Wall Street there’s a collective shrug, if not nodding agreement.

Some six million people work in financial services in America, according to Commerce Department figures. Take only the securities and investment end of the business, and you’re still talking about 900,000 people, a population that considerably exceeds Vermont’s 626,000. Is Mr. Sanders suggesting that some large proportion of those 900,000 is in on the fraud; that every man among them is a Madoff—including David Wichs? And if they are the criminals he alleges, does he mean to put a few thousand of them behind bars?

Those are questions that ought to be put to Mr. Sanders, and ones his supporters might also want to ask themselves. The strength of the Sanders candidacy is said to lie in the purity of his idealism, especially in contrast to the morally flexible and ideologically ambidextrous candidacy of Mrs. Clinton.

But the reason Mr. Sanders is drawing his big crowds is neither his fanatical sincerity nor his avuncular charm. It’s that he’s preaching class hatred to people besotted by the politics of envy. Barack Obama, running for president eight years ago, famously suggested to Samuel “Joe the Plumber” Wurzelbacher that “when you spread the wealth around it’s good for everybody.”

Mr. Sanders dispenses with the niceties. “I do not have millionaire or billionaire friends,” he boasts, as if there’s an income ceiling on virtue. That’s telling the 10,100,000 American households with a net worth of at least $1 million (excluding the value of their homes) to buzz off.

It is also telling any intellectually sentient voter that the drift of the modern Democratic Party runs in the same illiberal direction as the Trumpian right, only with a different set of targets. Mr. Sanders thinks Wall Street’s guilt is proved by its capitulation to the demands of a government that could barely prove a single case of banker fraud in court.

Another interpretation is that a government with almost unlimited powers to break, sue, micromanage or otherwise ruin an unpopular institution is not a government banks are eager to fight. The problem with capitalism isn’t that it concentrates excessive economic power in the hands of the few. It’s that it gives political power ever-tastier treats on which to feast. Covering for that weakness is the reason Wall Street plows money into the pockets of pliable Democrats like Chuck Schumer, Cory Booker—and Mrs. Clinton.

That’s something Mr. Sanders will never understand, being the sort of man whose notion of wisdom is to hold fast to the angry convictions of his adolescence. That may be why he connects with so many younger voters. But it’s also why his moral judgments are so sweeping and juvenile. Wall Street remains one of America’s crowning glories. To insinuate that the people who make it work are swindlers is no less a slur than to tag immigrants as criminals and moochers.

My colleague Holman Jenkins once cracked that some plausible ideas vanish in the presence of thought. I would add that some widespread beliefs vanish in the presence of decency. That goes as much for Bernie Sanders’s economic prejudices as it does for Donald Trump’s ethnic ones, a thought that ought to trouble the placid consciences of this column’s more liberal readers.
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Then the government fined some of them because they had been forced to assume the assets of errant financial institutions that were subsequently found guilty of malfeasance. Originally Posted by I B Hankering

JP Morgan has a fine and restitution bullet ...PRE-INDICTMENT... around $50 BILLION .... for failing to stop A money laundering operation, which is why it "tweaked" its cash handling regulations for customers.

Hopefully a "President Hillary" or a "President Sanders" would let JPMorgan remain "whole" until the tab is paid.

Good point . Originally Posted by Fancylady

It is? It's a quasi-government NONPROFIT institution. If a bank wants to do business with the Fed the bank IS REQUIRED to buy stock in "the Fed." ... Look at it this way ...

You want to buy a new Ford pickup for which you will have a mandatory Ford Dealership service policy, so to get the MANDATORY service policy you have to buy shares of stock in Ford Motor Company! And if you want to finance the new truck through Ford you will have to buy shares of stock in the Fort Motor Credit Company.

Oh, and you can vote your shares of stock, you were required to sign a proxy when you purchased.

If we the people are going to let or legislators force private institutions to act outside of their comfort zones and lend money based on the the threat of increased regulations to those that do not have the ability to pay them back we deserve to prop them up and suffer the consequences to our treasury.
Social engineering has done nothing to help this nation.

The fallacy of equality that the social engineers believe fails to understand that while we are all created equal those that fail to achieve will never remain equal. Forcing equality by taking from achievers and giving to non-achievers does nothing to improve the overall lot .

Our government cannot do anything without first taking the cost of doing it from the individuals. It is unfortunate that our government has taken so much from us that they had to take from those that there is hope they will have the ability and desire to pay. Of course the social engineering is toward socialism and soon there will be no others to take from as the turnip s will have no blood. The result is eventual default and or the refusal of the rest of the world to recognize our dollar as the world currency standard. How long before dollar bills will be worth less than toilet paper.

Punish the banks and break them up and see what it does for our economy. Then count the days to see how long it takes for the big banks to reincarnate themselves.

And most of the problem is regulations from the Federal Government that forces banks to consolidate to keep their doors open.