Thread:
700,000,000,000 was paid out to banks and corporations in 2008. How that money was used is still a mystery. The working people were left with NOTHING
When America thinks of the bailout, it is that sum of 700,000,000,000 that they think of.
READ ON!
700,000,000,000 was paid out to banks and corporations in 2008. How that money was used is still a mystery. The working people were left with NOTHING
When America thinks of the bailout, it is that sum of 700,000,000,000 that they think of.
READ ON!
Most people think that the big bank bailout was the $700 billion that the treasury department used to save the banks during the financial crash in September of 2008.
But this is a long way from the truth. The Special Inspector General for TARP summary of the bailout says that the total commitment of government is $16.8 trillion dollars with the $4.6 trillion already paid out.
Yes, it was trillions not billions and the banks are now larger and still too big to fail. But it isn’t just the government bailout money that tells the story of the bailout. This is a story about lies, cheating, and a multi-faceted corruption which was often criminal.
Rating agencies- Rating agencies like Standard and Poor’s are paid by the banks (which is a conflict of interest) and have a huge influence on the ratings of securities. During the housing bubble ratings agencies continued to give triple AAA ratings to toxic mortgages.
Money laundering – It has been proven that the American Division of the HSBC bank did money laundering for Mexican drug cartels to the tune of $881 billion according to the Justice Department. The penalty to this bank for blatant corruption was $1.9 billion and the New York
Times laments that HSBC was too big to indict. Nobody goes to jail at a time when an unemployed black person gets 10 years for robbing a minute mart.
Betting Against – Both JP Morgan Chase and Goldman Sachs worked with hedge funds to bet against the toxic mortgages after the crash had started. They made money by selling short on the financial catastrophe they had created
JP Morgan was fined $296.9 million and Goldman Sachs was fined $550 million for actions.
Insider Trading –The jailed billionaire Raj Rajartmn made nearly $One million a minute by getting inside information from Goldman Schs. The New York attorney has fingered 70
Insider Trading –The jailed billionaire Raj Rajartmn made nearly $One million a minute by getting inside information from Goldman Schs. The New York attorney has fingered 70
hedge funds but the prosecution is very slow. The operating principles of the big banks is a cesspool of greed, ethics and criminal intent and they give a very bad name to free market capitalism.
During the housing bubble Wall street was considered the heart and soul of free market capitalism, but when they were in danger of total collapse they fell on their knees as socialists, begging the government and tax payers to bail them out
Many people have asked why the government bailed them out. Isn’t capitalism designed to get rid of the weak and the failed; so why didn’t we just let them fail? The answer was that they were too big to fail and allowing them to fail could have created a worldwide depression.
In fact, in a meeting with Congress on September 18th, 2008. Treasury Secretary Paulson told the members that $5.5 trillion in wealth could disappear by 2pm of that day.
In a meeting with Senator Sherrod Brown, Secretary Paulson and Federal Reserve Chairman Ben Bernanke said, “we need $700 billion and we need it in 3 days.”
THE QUESTION AT THE TIME WAS “WHY DID THIS HAPPEN ?”
1933 – The Glass –Stiegel Act regulated interest rates, established deposit insurance, and erected a wall between commercial and investment banking by restricting the former from engaging in non-banking activities like securities and insurance.
1978 – A successful legal challenge to the state usury laws and the massive promotion of credit cards by the banks led to dramatic growth of credit card debt by consumers.
1979 –Pension regulation was loosened which created a new market for speculation and the capital to feed it
1979 –Pension regulation was loosened which created a new market for speculation and the capital to feed it
1980 – Investors fled conventional interest bearing accounts to alternatives such as money market, venture capital and hedge funds which were lightly regulated.
1982- Congress passed the Garn-St. Germaine Depository Institution Act which deregulated the Savings and Loan industry
1982- Congress passed the Garn-St. Germaine Depository Institution Act which deregulated the Savings and Loan industry
This led to speculation with other people’s money and a crisis which would cost the taxpayer $201 billion. The deregulation of interest rates at conventional banks also led to elimination of bank net-worth, accounting standards, and loan to value ratio requirements.
1999-Republican Phil Gramm successfully led the effort that repealed most of the Glass-Stiegel Act, which was a depression era law that kept Commercial Banking and Investment separated.
2000- Only a year later Gramm inserted the new Commodity Futures Modernization Act into a must pass budget bill that rocketed through the Congress. One part of this bill would prohibit the regulation of Derivatives which allowed finance gurus to leverage and speculate with other
people’s money. By using derivatives, credit default swaps and other unregulated financial instruments the big banks were able to chop up and resell loans and mortgages as repackaged securities or derivatives. The new securitization became globalized and eventually affected the
world economy. After the creation of new financial tools (like credit default swaps and derivatives) as well as more access to everybody’s money; the banks began to do high risk gambling just like a big casino. The new financial tools were backed by the government so that
taxpayers would get hung with the bill.
2007 – The speculation and lack of effective regulation eventually led to the crash of 2007 and The Great Recession. The industry is not afraid to do it again because they know no one goes to jail and the government will bail them out.
Why didn’t more people know that the bailout had climbed into the trillions?
In an article Secrets and Lies of the Bailout, Matt Taibbi says “It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people.
In an article Secrets and Lies of the Bailout, Matt Taibbi says “It was all a lie – one of the biggest and most elaborate falsehoods ever sold to the American people.
We were told that the taxpayer was stepping in – only temporarily, mind you – to prop up the economy and save the world from financial catastrophe. What we actually ended up doing was the exact opposite:
committing American taxpayers to permanent, blind support of an ungovernable, unregulatable, hyper concentrated new financial system that exacerbates the greed and inequality that caused the crash, and forces Wall Street banks like Goldman Sachs and Citigroup to increase risk
rather than reduce it. After the original $700 billion bailout, the ongoing bailout was kept very secret because Chairman Ben Bernanke, argued that revealing borrower details would create a stigma — investors and counterparties would shun firms that used the central bank as
lender of last resort. In fact, $7.7 trillion of the secret emergency lending was only disclosed to the public after Congress forced a one-time audit of the Federal Reserve in November of 2011. After the audit the public found out the bailout was in trillions not billions; and
that there were no requirements attached to the bailout money – the banks could use it for any purpose.
WHERE DID THE TRILLIONS GO? How many people became ultra ultra wealthy with American tax payers money. MITCH MCCONNELL IS TRYING THIS AGAIN.
WHERE DID THE TRILLIONS GO? How many people became ultra ultra wealthy with American tax payers money. MITCH MCCONNELL IS TRYING THIS AGAIN.
@threadreaderapp please unroll
