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Price Tag of Too-Big-to-Fail Bailout Still Felt Ten Years Later

James Delingpole, of Breitbart, has an article, and a podcast, on what the cost of the 2008 bank bailouts actually was.

The too-big-to-fail 2008 bailout of the banks, in real terms, cost more than the Marshall Plan, the Louisiana Purchase, the Race to the Moon, the Savings and Loans crisis, the Korean War, the New Deal, the Invasion of Iraq, the Vietnam War, and NASA combined.

Get your head around that, if you can.

The taxpayers bailed out the banks, and some others, because they were too-big-to-fail, we were told. Why are they too-big-to-fail? Another question comes to mind: Why were they allowed to become too-big-to-fail?

If Apple were to suddenly collapse because the public decided to not buy their products anymore, would the taxpayer be expected to bail them out? It sounds slightly ridiculous to us mere mortals, but we bailed out those banks. And Chrysler and AIG and GM. Why? What makes them so special that they must be propped up at all costs, when they got into trouble through mismanagement? They took huge risks and lost. Did they pay any real penalties as a result? No. They were let off the hook, at taxpayer expense, and continue taking huge risks. They no doubt expect they no doubt expect to be protected once again.

Has anything been solved by the bailouts? No. The banks continue to be big risk takers, and are basically insolvent. The day of reckoning has merely been pushed off.

What can be done about it? For one, the big banks need to be broken up so they are no longer too-big-to-fail. If they are not too-big-to-fail, then if they take big risks, and fail, the bank as a whole can fail, and those banks that take sensible risks will survive. That is what happens in free markets. In the Crony Capitalist model, the bad banks are bailed out. They are propped up for the benefit of those who took the bad risks at the expense of the taxpayer.

An alternative course is to prevent any bailouts. Of course, if the too-big-to-fail banks fail, the repercussions will be large. A systemic collapse becomes more likely. The pain will be more severe and more widespread, which is what the bailouts prevented, or so we are told.

Nothing has changed, since the 2008 crisis. The banks are still too-big-to-fail, and they are still taking huge risks. Meanwhile, the taxpayers are on the hook for the enormous costs of the bailouts. This is America in 2018.

 

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Shorty Dawkins

Oath Keepers Merchandise

2 comments

  1. PEACE IN…
    Ron Paul has called for an audit of the FED. Does Oath Keepers support this call?

    Former Congress Lady Cynthia McKinney courageously, rightly, and patriotically exposed that congress persons are signing a first loyalty to Israel oath which she refused to sign. Does Oath Keepers support this pledge to a foreign entity?

    Nationwide, there are efforts to remove Confederate Monuments and names from public venues. Does Oath Keepers support this?

    Talmudist Jews have a monopoly ownership of mainstream media which is a real direct threat to democracy. Does Oath Keepers support braking-up this media control?
    PEACE IN…PEACE OUT…

  2. Obama allowed our Troops with Dept of VA loans to be taken advantage of with his fake HAMP and VA HAMP gas chambers for us. What should have been first address was how can you promote a modification when in fact over 96% of the Dept of VA loan are attached to the bank’s Ginnie Mae Mortgage Backed Securities (MBS)? The answer is the lenders/issuers are made to separate the Notes from the debts using the UCC3 procedure were the Notes are signed with a blank endorsement and relinquish to Ginnie Mae.

    Ginnie who is not authorized to purchase a mortgage loan only has ownership of the Note and not the debt. The ownership of the blank Note castrates the document so that there cannot be a sell or modification of the loan as it makes up the component in interest rate and term that determine the payouts of the MBS principal payments to the investor.

    The perfect example of the flaw in the Ginnie Mae program was at the beginning of the crisis on Sept 25, 2008, and the FDIC set out and successfully tricked America that somehow $140 billion in Fed Gov loans (VA & FHA) that had backend insurance covering up to 20% of the backend debt from 80% ot 100% of the outstanding loan owed. So we had 1.3 million VA & FHA loans that could not be included in the FDIC to JPMorgan for $1.9 billion. Understand in Sept 2008 these loans were still worth $140 billion with 99% of the loans performing.

    Shiela Bair in protecting the FDIC from having to pay its insurance liability for a $300 billion bank failure, never came cleans on the contents of that sale, and in doing so people wrongly assumed JPMorgan was the owner of the loans. However, Wells Fargo was and still is in possession of the loans servicing most of them that they did not illegally foreclose. Wells violates the SEC and IRS laws by taking illegal proceeds of foreclosure and collecting payment, not due to them or any entity that had a right to the payments.

    We had a solution of a bad designed Ginnie program where the HUD comes clean explain the lack of proof of owners as WaMu stopped existing and has no claim to the debt because of the choice to separate the Note and debt and the risk would be not able to collect of the debt. the Troops now not having a debt could have been present with an option to pursue the lack of ownership or rewrite the debt at the 2% 40yr term Obama promised.

    However, seeing an opening to simply screw the military families Wells Fargo the greedest bank created to decide to keep all the monies for it false bottom-line. Because Wells is acting in collussion with HUD is seizing the properties we not only got forgery, sale of stolen good, and false insurance claims of the Dept of VA Guaranty Fund and FHA Mortgage Insurance Premuim plus a 4th Amendment Rights violation!

    Wells Fargo Bank during 2009-2010 cost the taxpayers $11.4 billion and combine with the illegal collections of the rest of the loans we are looking at over $70 billion not properly reported to the IRS!

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