BUSTED: Obama Lied About No More Wall St. Bailouts
Obama pats himself on the back.
"Because of Financial Reform, the American people will never again be asked to foot the bill for Wall Street's mistakes. There will be no more taxpayer-funded bailouts. Period. If a large financial institution should ever fail, we will have the tools to wind it down without endangering the broader economy."
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By Dr. Pitchfork
This sounds great, but it's complete baloney. How do we know? Because in SIGTARP's recent report on Extraordinary Financial Assistance Provided to Citi, Geithner admits, in no uncertain terms, that the fabled "resolution authority" will never actually be used and that taxpayer-funded bailouts are still on the table. The report notes:
"As Secretary Geithner told SIGTARP, while the Dodd-Frank Act gives the Government 'better tools,' and reduced the risk of failures, '[i]n the future we may have to do exceptional things again' if the shock to the financial system is sufficiently large. Secretary Geithner's candor about the prospect of having to 'do exceptional things again' in such an unknowable future crisis is comendable. At the same time, it underscores a TARP legacy, the moral hazard associated with the continued existence of institutions that remain 'too big to fail.'"
In other words, in spite of Obama's claims, and in spite of the very specific language within the bill itself, Geithner reserves the right to break the law ("do exceptional things") in order to save the big banks the next time they get into trouble. Moreover, we have every expectation that the government will do exactly that. We still have Too Big To Fail, and according to Geithner, Too Big To Fail means there WILL be more bailouts the next time around.
Sorry, Mr. President, you've been BUSTED!
Apr 26, 2013 at 9:24 AM
Reader Comments (13)
http://www.huffingtonpost.com/2011/01/13/citigroup-was-on-the-verg_n_808721.html
http://www.nakedcapitalism.com/2011/01/should-we-buy-geithners-resistance-to-name-systemically-important-firms.html
http://www.nakedcapitalism.com/2011/01/sigtarp-on-citi-rescue-ignoring-a-bomb-that-has-yet-to-be-defused.html
http://homeequitytheft.blogspot.com/2011/01/municipal-group-of-pension-funds-tell.html
[snip]
•The group represents more than $430 billion in pension fund investments, including $5.7 billion invested in the four banks, according to a statement from New York City Comptroller John C. Liu. “The banks’ boards cannot continue to pretend the foreclosure mess is the result of technical glitches and paperwork errors,” Liu said. “There is a fundamental problem in their procedures that endangers not just homeowners, but shareholders, and local economies.”
Obama said Frank-Dodd means "no more taxpayer funded bailouts. Period."
Geithner said the law does nothing whatsoever to prevent the possibility of another bailout, something I've been saying for months. The fact that Geithner admits it in a government report allows me to now make that claim without reservation. No "stretch" here. Sorry.
As long as there are campaign contributions, there will always be bailouts, easing of laws (deregulation) to make crime easier to get away with and more profitable, greater trade deficits, more foreign control of our sovereignty, etc..
I wonder if Gobie really understands how low on the food chain he really is. I love the old liberal trick of using many names to make ones self appear to be a vast army of scary liberals who should be allowed to control everyone elses thoughts, desires, and actions.
It is pathetic.
Government ‘may have to do exceptional things again,’ Treasury secretary says
SAN FRANCISCO (MarketWatch) — Treasury Secretary Timothy Geithner warned that the U.S. government may have to take control of major financial institutions again if there’s a crisis as big as the last one, according to a report released Thursday by a group overseeing the Troubled Asset Relief Program.
“We may have to do exceptional things again if we face a shock that large,” Geithner told the Office of the Special Inspector General for TARP in December.
http://www.marketwatch.com/story/geithner-warns-of-future-bailouts-2011-01-13
The times, they are a changin'... Here's the list of the 28 G-SIBs (global systemically important banks) maintained by the FSB (Financial Stability Board)...
http://www.financialstabilityboard.org/publications/r_121031ac.pdf
Supposedly FSB is set to release a similar list of insurers this month.
Actually, Obama is correct about no more bailouts. The FSB dictates policy to all nations of the G20 (which are no longer sovereign). The FSB expressly disclaims bailouts and provides instead for bail-INS. Under a bailout, a failed bank gets welfare directly from the government. In a bail-IN, the accounts of depositors (who are unsecured creditors under the law) are looted to pay the derivatives counterparties (secured creditors, whose collateral calls speed the death of the bank).
This is the essence of what happened at MF Global and Sentinel (the 7th Circuit case), as well as in Cyprus and Ireland. This is the new model for bank theft. Bailouts are passe. So is national sovereignty, as Merkel stated this week.
But don't worry. There's only $9 trillion sitting in FDIC-insured banks, plus another $19 trillion in retirement funds.
The Financial Stability Board (FSB) is an international body that monitors and makes recommendations about the global financial system. It was established after the 2009 G-20 London summit in April 2009 as a successor to the Financial Stability Forum. The Board includes all G-20 major economies, FSF members, and the European Commission. It is based in Basel, Switzerland.[1]
The FSB represents the G-20 leaders' first major international institutional innovation. Secretary of the US Treasury Tim Geithner has described it as "in effect, a fourth pillar" of the architecture of global economic governance. The FSB has been assigned a number of important tasks, working alongside the IMF, World Bank, and WTO. Chairman of the board is the Canadian Mark Carney, Governor of the Bank of Canada
http://en.wikipedia.org/wiki/Financial_Stability_Board
http://news.yahoo.com/g20-draft-sees-fsb-role-202026355.html