I have said this for a while. They have not stopped, just behind the curtain now..
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We’ve previously documented the fact that bailouts of the big banks are continued in stealth mode up to the present day.
True, the banks claim they’ve repaid the Tarp bailout funds … but nearly half of the banks “repaid” such bailout funds by borrowing from other government bailout funds (and the rest could only repay money by fudging their accounting and using stealth bailouts which are are a little harder to detect).
Indeed, the government has decided on perpetual bailouts for the too big to fail banks.
Some of the ongoing stealth bailouts include:
Obama’s erroneously-labelled “jobs” act (and see this, this and this)
The mortgage settlement (and see this and this; indeed, settling prosecutions for pennies on the dollar is always a backdoor bailout)
Interest rate swaps
The Transaction Account Guarantee program, an extension of FDIC insurance coverage to all transaction balances
And the fed is going easy on the big banks in many other ways as wells
But the biggest ongoing bailouts include interest rate spreads, interest on excess reserves and other constant streams of bailout revenue:
There are so many rivers and streams of bailout money going to the big banks, I will start with the specifics and end with broader monetary policies.
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The TARP bailout is peanuts compared to the numerous other bailouts the government has given to the giant banks [and even the numerous rounds of quantitative easing are a drop in the bucket compared to stealth bailout programs].
And I’m not referring to the $23 trillion in bailouts, loans, guarantees and other publicy-disclosed programs that the special inspector general for the TARP program mentions. I’m talking about more covert types of bailouts.
Like what?
Mortgages and Housing
*** PhD economists John Hussman and Dean Baker, fund manager and financial writer Barry Ritholtz and New York Times’ writer Gretchen Morgenson say that the only reason the government keeps giving billions to Fannie and Freddie is that it is really a huge, ongoing, back-door bailout of the big banks.
Many also accuse Obama’s foreclosure relief programs as being backdoor bailouts for the banks. (See this, this, this and this).
Commercial Real Estate, Mortgage Backed Securities, Cars and Student Loans
Some pretty sharp writers allege that the government is also secretly bailing out the banks by supporting everything from commercial real estate, to mortgage-backed securities, car loans and student loans (and don’t forget McDonald’s and Harley).
Derivatives
The government’s failure to rein in derivatives or break up the giant banks also constitute enormous subsidies, as it allows the giants to make huge sums by keeping the true price points of their derivatives secret. See this and this.
Foreign Bailouts
The big banks – such as JP Morgan – also benefit from foreign bailouts, such as the European bailout, as they are some of the largest creditors of the bailed out countries, and the bailouts allow them to get paid in full, instead of having to write down their foreign losses. So when the Fed bails out foreign banks, it is a bailout for American banks as well.
Toxic Assets and Accounting Shenanigans
The PPIP program – which was supposed to reduce the toxic assets held by banks – actually increased them (at least in the short-run), and just let the banks make a quick buck.
lot more,,,,,,,,,,,,,,,,,,
http://www.ritholtz.com/blog/2012/03/open-ended-bailouts-are-continuing/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29
Realist - Everybody in America is soft, and hates conflict. The cure for this, both in politics and social life, is the same -- hardihood. Give them raw truth.
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