Fix And Break Up Wall Street First (11.21.09)

Update (7.6.12; 7.27.12)

Facts From Bloomberg News 4.16.12 by David Lynch

Five Banks Control 56% of U.S. Economy (quoted portions verbatim)

"Five banks- JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., Wells Fargo & CO and Goldman Sachs Group Inc. - held $8.5 trillion in assets at the end of 2011, equal to 56 percent of the U.S. economy, according to central bankers at the federal Reserve.

Five years earlier, before the financial crisis, the largest banks' assets amounted to 43 percent of U.S. output. The Big Five today are about twice as large as they were a decade ago relative to the economy, sparking concern that trouble at a major bank would rock the financial system and force the government to step in as it did in 2007 with the Fed-assisted rescue of Bear Stearns Cos. by JP Morgan and in 2008 with Citigroup and Bank of America after the Lehman Brothers bankruptcy, the largest in U.S. history."

So these banks got bigger and became more successful, funded by U.S. taxpayers, because of their failure, not because of their success.

They are also becoming bigger cherry picking assets of struggling European banks, which potentially exposes our government to more bailouts if those foreign assets become worthless in the face of a European economic meltdown.

Analysis: The Rise of Monster Megabanks Backed Up By Ongoing Too Big To Fail

"Today's 6291 commercial banks are less than half the number that existed in 1984, according to the Federal Deposit Insurance Corp."

"Even with policy makers' claims that the next crisis will be handled differently, investors still regard the largest banks as protected by an implicit guarantee. One sign of that attitude is that investors continue to demand [and receive] from the largest banks lower interest payments in return for deposits."

In other words, "too big to fail" for the 28 global banks favors them to the tune of $250 billion, over small regional banks that actually lend signifignant percentage of their assets to clients (see "Lending Sideshow" under "Upper Room"whereby Goldman Sachs revenues in 2009 from investment banking- a bank's legitimate purpose- was only 11% of their income, whereas 76% came from trading like hedge funds).

Again, the Wall Street Banks need to be broken up before any full blown crisis in Europe, or the U.S. banks will just get bigger as European banks falter.

Any help for European banks from the U.S. must come with the stipulation of actually curing systemic risk.

Tax change and rules favoring smaller regional banks must also be enacted. 

We can't wait until another round of "too big to fail" to take another 9 million good jobs, and give the same banks an even larger percentage of the U.S. economy.

Clark Howard is right.

We cannot accept the word of the Monster Mega Banks of this world, as we now examine the facts and fruits of crony capitalism, such as lower wages, lower median wages, forced part time work, corporate cuts in health benefits, record levels of corporate cash, high levels of UE and the requirement of both spouses in the workforce.

This is the present day reality for the majority of us Americans in the good old USA. (added 4.11.13)  

11.21.09

Proverbs 16,11: "The balances and scales belong to the Lord, all the weights in the bag are of his making." Proverbs 11,1: "A false balance is abhorrent to the Lord."

Revelation 6,5: "Immediatly I [John] saw a black horse appear, and it's rider was holding a pair of scales [one fair, the other false] and I seemed to hear a voice shout from among the four living creatures and say 'A day's wages for a quart of corn, a day's wages for three quarts of barley, but do not tamper with the oil or the wine."

Wall Street has this country using its scales, not the Lord's: Four banks hold half the mortgages in U.S., and control two thirds of credit, and forty percent of deposits. In 2005 Washington handed them the gift of way too easy $30 to $1 capital requirements, which unleashed their quest for speculative investments and gaming the commodities markets, all to provide themselves higher salaries. So just three years later they receive $800 billion to avoid the collapse of the entire financial system, then already $2 trillion in interest free loans from the Federal Reserve, then go right on paying themselves the same millions and more, now with the people's money. Yet they still pay no more in taxes as a percentage than poor and middle income folks. They created the $290 trillion risky derivatives market, which now demands sustained inflation and dollar devaluation to bail them and their insurers out, again. Meanwhile, folks can't get credit, foreclosures are skyrocketing, wages for most people are going down and unemployment is going up, and food insecurity rises throughout the world. "A day's wage for a quart of corn!"

Not that real plenty isn't possible- it is- but using the wrong scales leads to the injustice of famine.

Fix the scales first- break up the banks, spread out the risky mortgage holdings (cut mortgage balances of loans made in risky period), change the capital requirements back to 10 to 1, regulate wild speculation in the commodities market. Restore some trust and fairness on Wall Street and in Washington. How can we trust anybody as to the cost of health care, when the entire money system is out of balance.

And all you faithful take heart- God won't let our oil of the Holy Ghost, our anointing, or the wine, the joy of our salvation, be limited no matter the iniquities of this world.