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« Video - S&P Downgrades Obama | Main | What An Audit Of The Fed Might Reveal About Maiden Lane I, II, III »
Wednesday
Jun082011

Taxpayers Dollars Still Bailing Out Insolvent Banks Including Citigroup, JPMorgan, Wells Fargo & Bank Of America

Tim Carney at the Washington Examiner explains:

Last week, the ratings agency announced a review of whether these bailout assumptions still apply after passage of the Dodd-Frank financial regulation bill. The Moody's review will be the truest test yet of President Obama's promise that the legislation—derided by Republicans as a bailout bill — can end the "Too Big To Fail" dynamic that has encouraged financial risk taking and given these banks an unfair advantage.

The implicit government guarantee these banks enjoy is a subsidy. The "five notches of uplift from government support assumptions" that Moody's gives to Bank of America translate into real profits for Bank of America. Without a presumed bailout, Bank of America's senior debt would be rated Baa3, just barely on the right side of the "Investment Grade"/"Speculative Grade" boundary. The presumed "government support" raises the bank's debt rating to A2, which is "very low credit risk."

Even Wimpy from "Popeye" would be a "very low credit risk" if you could count on Ben Bernanke and Tim Geithner to pay for his hamburger.

As a result, all the big banks pay lower interest rates than they would pay in a market environment. Put another way: Anyone lending money to big banks (by buying their bonds, for instance), does so on the assumption that if the bank cannot repay the loan, U.S. taxpayers will. It's hardly shocking that experts think our recently bailed-out and very politically connected banks are still too big to fail, but the Moody's report makes it official.

Continue reading...

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Now watch this important Congressional testimony if you have any doubts as to the reputed insolvency of our largest banks:

Adam Levitin Tells Congress: Citigroup, Bank Of America, JPMorgan & Wells Fargo Are All INSOLVENT

 

 

 

 

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Reader Comments (10)

Back in September of 2008, we proclaimed that bailouts (by any name) would NEVER END under the present Intrenational financial and monetary system. We can spin them away, and call them something else but they are a hallmark of the debt as money system. Because of the many euphamisms that sprung up over the amazing world-wide bailout, we wrote:

This is kind of like bribing the prison bully with 5 cartons of Marlboro’s in return for a promise to stop sodomizing you, and the two of you shake on it … and then he immediatey spins you around and thrusts a boner into your aching sphincter, proclaiming, “This isn’t butt-fucking, it’s rectal elasticity assistance.”

We here at letthemfail know that this blog, it’s domain and its premise will have the name recognition and longevity of Coca Cola, or Kleenex, since a bailout–by any other name–will be a household word, recognized world wide as the remedial fix-it-all of the fascist elite.

Carry on....
Jun 6, 2011 at 3:56 PM | Unregistered CommenterWil Martindale
Forex dollar chart............

http://www.fxstreet.com/rates-charts/usdollar-index/

It was getting obvious that the fed and others were de-valuing the dollar awhile back. When this got media exposure the dollar suddenly went up....... now that the story is old news....... it's dropping again.
Jun 6, 2011 at 4:17 PM | Unregistered Commenterjohn
Here the taxpayers sit. Broke, out of work, hungry. Yet we see these guys sitting there in 5000dollar suits, 200 dollar haircuts, martini lunches, awash in hookers and drugs with their kids driving ferraris. And they expect us to bail them
out when they flop again while they increase all of our banking fees and dream up new penalties and higher interest rates? Can you say "Violent overthrow"? These vultures are like SA drug cartel kingpins. Instead of drugs, they get to deal in our dollars.
Jun 6, 2011 at 5:21 PM | Unregistered CommenterGrebis
SYDNEY (MarketWatch) -- Austan Goolsbee, a long-time adviser to President Barack Obama and chairman of the U.S. President's Council of Economic Advisers, said Tuesday that he will return to the University of Chicago's graduate business school. Goolsbee will return to Chicago in time for the upcoming school year. No replacement was named.

http://www.marketwatch.com/story/goolsbee-to-return-to-chicago-university-position-2011-06-06-2014320
Jun 6, 2011 at 10:18 PM | Registered CommenterDailyBail
It was getting obvious that the fed and others were de-valuing the dollar awhile back. When this got media exposure the dollar suddenly went up....... now that the story is old news....... it's dropping again.

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the other reason for the recent spike in the dollar was the profound weakness of the euro due to problems in greece...after the most recent bailout agreement with greece, the euro rallied again, which hurt the dollar as these are the 2 currencies into which investors pile when there is uncertainty...generally, but not always, the dollar rallies when the euiro falls and vice-versa...both are completely bankrupt currencies...it's a shell game...
Jun 6, 2011 at 10:21 PM | Registered CommenterDailyBail
nice comment wil...
Jun 6, 2011 at 10:21 PM | Registered CommenterDailyBail
Jun 6, 2011 at 10:22 PM | Registered CommenterDailyBail
Jun 6, 2011 at 10:23 PM | Registered CommenterDailyBail
U.S.-Funded Colombia 'Clean Energy' Project to be Unveiled

http://www.tradeaidmonitor.com/2011/05/us-funded-colombia-clean-energy-project-to-be-unveiled.html


New U.S.-Funded Mexican Environmental Program Slated for Fall -- Project Will 'Fill Gaps," Not Duplicate, Seven Other Programs

http://www.tradeaidmonitor.com/2011/06/new-us-funded-mexican-environmental-program-slated-for-fall-project-will-fill-gaps-not-duplicate-sev.html


Note: This is a must read site on an every other day basis. Take a moment to review these links and check out the other articles this site has.
Jun 8, 2011 at 3:52 PM | Unregistered Commenterjohn
Call for tax on financial deals to fight global warming

http://www.irishtimes.com/newspaper/world/2011/0608/1224298573311.html

[snip]

Instead of countries “re-branding” aid as climate finance, he said, a tax on international financial transactions “would be a mechanism that can generate real funds . . . to act immediately to address the protection of forests and fight climate change.”
Jun 8, 2011 at 4:16 PM | Unregistered Commenterjohn

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