We Suck, That's Why We Make the Big Bucks
In another episode in the continuing series of Kabuki Theater, banking CEOs are getting their chance to act contrite and tell lies in front of the cameras.
"We understand the anger felt by many citizens," he said. "We are grateful for the taxpayer assistance we have received."
With Bank of America having repaid its bailout money, he said "the vast majority of our employees played no role in the economic crisis" and do not deserve to be penalized with lower compensation.No, Bank of America failed. It should've gone through bankruptcy reorganization. In a true capitalistic society, we don't expect the government to save companies for the employees benefit, just because the owners incurred huge gambling losses. We don't reward business owners and managers for being shitty at their jobs.
Well we do now.
Bank Of America and Goldman Sachs are now too big to remain profitable on a single planet. They've outgrown our planet Earth, and yet governments around the world are committed to giving them free money to keep them growing.
The financial shenanigans (some are illegal), that got them into this mess, are now blessed by our various governments and supported.
In one outrageous instance, Goldman Sachs front runs third party trades and skims off the top. They have no business in the deal, but because they have servers inside the exchange and can manipulate trading they are able to shim themselves between trades for other institutions and steal money from them. This is computerized robbery of other people's money, is considered to be one of the innovative financial products that Obama has praised them for. Criminal behaviour is highly admired on Capital Hill.
And as to the banks paying back the TARP money... I've written as much before, but I'll repeat how this scam works.
1. The gov buys preferred stock at a highly inflated price.
2. The gov and the bank agree to swap preferred for common stock at a highly inflated price.
3. The stock is revalued far below market.
4. The bank buys the common stock back at a fraction of the price originally paid.
It's a nice scam if you're big enough to get the government help you pull it off.
On top of TARP, if you've been keeping up with financial news that run a little deeper than what appears on television, you know that the FED is loaning money to these banks for essentially nothing, then the banks are loaning the money to the taxpayer at a high rate of interest. This revolving cycle of debt creation provides the banks a way to profit without actually doing any real business. They just latch their proboscis into the juicy flesh of the US Taxpayer and start sucking.
Another nice scam, if you're big enough to get politicians to sell out their country for you.
I don't expect anything out of these hearings. We have another crash coming, and fixing the system would make it happen sooner. The banks are gambling and making huge fake profits, on imaginary assets. If their holdings weren't valued with con artists trickery, they'd be functionally bankrupt. If they went Mark To Mark, valuing their toxic loans for what they are actually worth instead of what they wish they were worth, they'd have negative equity.
Wait, they are bankrupt! Without regular infusions of taxpayer welfare whore payments, they'd be going bankrupt now!
the US debt is now $10 trillion, and revenue is $2 Trillion. The revenue is going to keep falling. It's just a matter of time before the stress of rapidly expanding debt and falling receipts, plunge our nation into default.
And the parasites will still be feeding on us.