Was The Financial Meltdown Manufactured By Banks-Too-Big-To-Fail?
Posted by politicalpartypooper on April 7, 2010
The Enron Nine: J.P. Morgan Chase, Citigroup, Credit Suisse First Boston, Canadian Imperial Bank of Commerce, Bank of America, Merrill Lynch, Barclay’s, Deutsche Bank and Lehman Brothers.
The Bailout Nine: Fannie Mae, AIG, Freddie Mac, Bank of America, Citigroup, J.P. Morgan, Wells Fargo, Goldman Sachs, Morgan Stanley.
Merril Lynch was bought by Bank of America but is also famous for using one-third of the bailout money it received to give bonuses to its top executives. In 2008, Credit Suisse was caught overvaluing its assets by $2.85 Billion. Lehman Brothers, of course, was allowed to die. It filed for the world’s largest bankruptcy discharge ever in 2008. The previous record was held by none other than Enron. Canadian Imperial is of course, Canadian, but since 2003 has been involved in one controversy after another. From as late as 2001 to at least 2007, Deutsche Bank engaged in a covert espionage scandal on its critics. Barclay’s needed a huge bailout from its own British Government.
I thought it was interesting that five American banking firms were tied to Enron scandals and were also amongst the largest firms to receive bailouts or bankruptcy discharge due to the mortgage crisis. Of course everyone knows that Wells Fargo, J.P. Morgan, Bank of America, Goldman Sachs, Citigroup and Morgan Stanley received one hundred cents on the dollar from the Federal Government for their bad bets on AIG Credit Default Swaps. Those firms continue to this day to chase down the individual owners of those mortgages, meaning they are being paid twice for the same credit transaction. Ever wonder how they paid back the Fed so quickly? Now you know.
What does it say for America and its banking system when five of the companies that helped Enron cook its books were also five of the most heavily bailed out firms in America? Coincidence? Or does it rather tell us that there is an overwhelming culture of corruption at America’s biggest banks? Can we do anything about this? Does anyone want to?
Fannie Mae and Freddie Mac need to go. I think it has already been proven beyond doubt that they are as corrupt as lenders can be. But what about these other guys? They all continue to receive respect in the business sector, even after some of the largest scandals in the financial history of the world. They are currently fighting financial regulatory reform tooth and nail, and it seems as though they are winning. There is already talk that “Banks-too-big-to-fail” will be allowed to remain as such, meaning the next financial meltdown is only as far away as one of these banks next brain farts.
How do we reign in these mammoths? Do we need to get more serious about prosecuting some of these people? An even bigger question lies unanswered: Was the housing bubble artificially created? With the advent of Credit default swaps, did these huge banks see a way to take on very risky debt at high interest rates and get paid anyway? Did they use that opportunity to create a crisis where they knew the government would have to bail them out and honor AIG’s CDS commitments?
No one has answered these questions. No one in our government has even asked them. Why not? I want to know. Was the financial meltdown MANUFACTURED by these Banks-too-big-to-fail? History is not on their side. The only evidence we have from their collective pasts is that, hell yes, we ought to be massively investigating if they manufactured this crisis for a huge payday.