What is Digg?102 Comments
- inactive, on 03/31/2009, -1/+131FTA - We have now come to the point where the “systemically unimportant” banks of Main Street must, along with the nation’s taxpayers, bail out the “systemically important” Wall Street firms. Not only are a handful of Wall Street CEOs holding a gun to the taxpayers’ heads, they have the banks of Main Street America looking down the barrel as well.
The very banks capable of dragging this country out of our economic turmoil, the banks that are doing all they can to give Main Street and rural America a hand up, got the back of the hand from their own government on the same day that Citi was getting a hand out! And yesterday AIG got another $30 billion helping of taxpayer money.
What did community banks do to deserve this? They played by the rules—unlike their Wall Street counterparts! And now they will pay to bail out those firms that did not. And in an echo of that terrible day that so surprised and shocked our nation in 1941, the response from community banks on Main Street is OUTRAGE! And “outrage” is a perfect word to express the growing frustration and emotion of our nation’s community bankers as our government’s seemingly two-faced policy actions continue.
caferrell opinion - These local banks are fully capitalized and ready to put America back to work. We need to convince the statsts in Washington to let the system run as designed. If the criminal Wall Street banks are insolvent, then send them into bankruptc¡y so that their assets can be purchased at market prices by banks that are not gambling casinos. - Seminarian, on 03/31/2009, -1/+93I agree with caferrell. The local banks ARE "main street," and they will fuel the economic recovery. The giant finance operations that got "too big to fail" and did not obey basic rules of economics are now holding a gun to everyone's heads and demanding that they be rewarded for avarice, greed and recklessness. The problem is not going to be solved with the same thinking that caused it.
- inactive, on 03/31/2009, -2/+70Those who created the problem, and who continue to profit from it have no desire to fix it. The goal is to continue the transferal of wealth from the middle class and even the millionaires to those elite few who pull all of the strings around the world. It is a long planned power grab.
- chupavacas, on 03/31/2009, -1/+57Remember that the Fed is a cartel of member banks. Community banks are not members. They will bail out their own kind to the detriment of everybody else.
- le0pardess, on 03/31/2009, -1/+54FTA: Join with ICBA and send your comment letters to the FDIC by the thousands. Become militant. Engage your congressional delegations! Your bank’s survival is at stake. Your community’s well-being is at stake! Shake the walls of the FDIC and Congress until they reverse this and other misguided policies. Together we can bring equity and fairness to our financial system. Together we can rock Washington!
At this point I think a lot of us are used to a militant persistence. That is the easy part, and I will gladly print the article off and give it to my credit unions I have belonged to for so many years. Support us or I take my money out (plan to anyway).
The hard part is the damn treasonous, fools in the District of Criminals doing what we want and expect. When we cried out in September by the hundreds of thousands, if not millions, we were ignored. However, Hank power grabber got his way and so did Pinocchio Gutner. What a tragedy to realize we have come to a massive loss and sell out by an oligarchy of thieves, liars, traitors and tyrants.
Let us remember the words of Andrew Jackson: "Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the grace of the Eternal God, will rout you out." And that is what we intend to here... - emazur, on 03/31/2009, -0/+52Sen. Jim Bunning gets Geithner to admit fundamental flaw in FDIC (towards the end of the video, the whole thing is worth watching):
http://www.youtube.com/watch?v=faerjvrtFJI
This confirms a statement from G. Edward Griffin's "The Creature from Jekyll Island":
"The FDIC operates exactly in this fashion. Depositors are told their insured accounts are protected in the event their bank should become insolvent. To pay for this protection, each bank is assessed a specific percentage of its total deposits. That percentage is the same for all banks regardless of their previous record or how risky their loans. Under such conditions, it does not pay to be cautious. The banks making reckless loans earn a higher rate of interest than those making conservative loans. They also are far more likely to collect from the fund, yet they pay not one cent more. Conservative banks are penalized and gradually become motivated to make more risky loans to keep up with their competitors and to get their “fair share” of the fund's protection. Moral hazard, therefore, is built right into the system."
36 - Kent4jmj, on 03/31/2009, -1/+36Copied your comments, the original article and emailed to my two Senators. They're idiots but may be well intentioned. That's why I keep writing them, in the hopes the lights may go on.
- govsucks, on 03/31/2009, -2/+35Well I must disagree with "Not only are a handful of Wall Street CEOs holding a gun to the taxpayers’ heads, they have the banks of Main Street America looking down the barrel as well."
Government is the one holding the gun to the heads of taxpayers, the Wall Street CEOs are just taking advantage of collectivist stupidity. - kemp34, on 03/31/2009, -1/+28The mass centralization of capital and resources is NOT an aspect of true freedom, as it would NOT take place without all the government/corporate-crony interaction that slants the rules against anybody that is not a part of the central club.
Centralized Crony Corporatism is the TRUE enemy of all free people. Another reasons the bail outs must stop now. - Doxocopa, on 03/31/2009, -1/+28Read about Geitner's Litle Secret in an excellent article by William Engdahl...
http://digg.com/business_finance/Geithner_s_Dirty_ ... - rizzo2008, on 03/31/2009, -4/+30I'm telling you people END the Federal Reserve. We dont need a central bank and somehow managed without one before 1913.
- iancgi, on 03/31/2009, -6/+31Because they are trying to consolidate all the wealth and destroy the middle class along with small business. This country is turning into a hybrid fascist state and no one even knows it.
- Coinspinner, on 03/31/2009, -1/+23It never ceases to amaze me what it takes to get folks riled up in this country!
Any other developed nation would be having non-stop demonstrations. - kemp34, on 03/31/2009, -0/+22Wall Street/International Bankers/Fed = person holding gun.
Government = gun.
Common workers, savers, taxpayers, non-institutional entities = head.
We are being ripped off. - NZN444, on 03/31/2009, -1/+22Here Here.
The war is real, and our enemy is close. Idiocracy, our current model of government, is taking this ship down.
Support intelligence held to the rigors of science and well reasoned logic. Faith has its place at your dinner table, but in the public space, bring your sentience or stay home.
You will be a part of this war, whether you thought you would or not. And as it always was, it is about owning your life and all of the tools that empower it... like local community banks, ecologically sensitive farmers markets, sustainable energy production and distribution systems, entrepreneurial education, and Constitutionally relevant law. - borez, on 03/31/2009, -0/+21They're only "too big to fail" because the people pulling the strings have a lot of money tied up in them.
- dagr8tim, on 03/31/2009, -0/+19I'm quite happy with my local credit union.
- emmeron, on 03/31/2009, -1/+20The Fed != the Government. Perhaps the Government's governing body is the Fed, in a sense...
So while the government holds the guns, the Fed pulls the strings. - BigManOnCampus, on 03/31/2009, -0/+17This makes me want to cancel my Chase credit-card, and refinance everything over to a community bank.
- mbtria, on 03/31/2009, -0/+14This is the Corporate State. An intertwining of governments with the major corporations. It is the fascism of Mussolini, the pholosphical progenitor of that disease. Most of the industrialized world is undergoing a metamorphosis into this abomination. It is the Zeitgeist of the ruling class.
Above it is called Centralized Crony Corporatism, but it really is fascism. - inactive, on 03/31/2009, -1/+14Efficient? I don't think you're using the correct adjective.
- kemp34, on 03/31/2009, -0/+12I am with you sir.
- kemp34, on 03/31/2009, -0/+12Do it.
- inactive, on 03/31/2009, -3/+14The very essence of socialism is taxing success to support failure. Morever, crippling productive enterprises creates an opening for Big Government.
- mfc5200, on 03/31/2009, -0/+11At the end of the day, it will never happen. Look at Pelosi for example
http://www.opensecrets.org/politicians/pacs.php?cy ...
Her largest contributors are banks. The same is basically true for every incumbent politician. The Federal Reserve is owned by the largest banks. As long as we continue to vote for the same politicians who got us here, we can't expect anything else.
For example, with regard to TARP, they could have taken that $750 billion, and gave it to lots of smaller SUCCESSFUL banks to encourage lending. Rather, they chose to give it to large failing banks. The healthier banks would have lent that money out, knowing there is nothing else to do with it. The failing banks used that money to clean up their balance sheets, not 1 dollar left their front door. So had we given that money to successful smaller banks, it would have been lent out, stimulated the economy, but the larger banks would have failed. Hence such a plan was never discussed.
Until we vote for honest politicians, we can't expect anything else than to have our money stolen from us. - Feenix566, on 03/31/2009, -1/+12The small banks should be madder than anyone about these bailouts. If Citibank and Bank of America were allowed to fail that would leave a huge vacuum in the banking market. Who do you think would fill that space? The small banks, of course! Right now they should be reaping the benefits of their years of sound investments, but instead they're relegated to the sidelines so we can keep these "systemically important" banks afloat.
The big banks are being "kept afloat" by floating on the blood, sweat, and tears of everyone who plays by the rules and doesn't have any connections in Washington! - inactive, on 03/31/2009, -2/+13"send them into bankruptc¡y so that their assets can be purchased at market prices by banks that are not gambling casinos."
That's the problem. The smaller banks would be harder to control in this brave new world.
It's all about central management of every facet of our lives. Allowing the market to restructure goes against that plan. - dinsy, on 03/31/2009, -0/+10..."avarice, greed and recklessness" - its also dishonesty, and this is not mentioned enough IMO, in addition to pressuring congress etc. we should call for prosecution, indictment, sue the banks and stop letting the press pretend that they just "screwed up". There was malevolence in every step of this.
- Bloodwine, on 03/31/2009, -1/+11I bank with a regional bank and I have absolutely nothing bad to say about them. No ATM fees, same-day-posting all day (until 6pm when they close). They also make business and personal loans at reasonable rates.
The big nationals need to be left alone to fail, so the smaller banks can gobble up all the good assets and fill the void. - Karmashock, on 03/31/2009, -0/+10This is how populism works people. It's all about pull. It's not about who's right or wrong or good or bad or useful or useless. It's about who has the inside track with the government. It's all about who knows who.
Well, surprise surprise the Wall Street crowd has better connections with Washington then does Detroit auto executives or thousands of small banks all over the US. That really is "Surprising." /s
Wise up. The government is run by people and people are people. They're naturally going to do all sorts of things that aren't in the common interest especially if they have to choose between someone they know well who is undeserving and someone that don't know who is deserving. The way our brains are wired we often don't even know we're doing it. This is especially true of people that make judgments based upon "moral" grounds which is often code for "feelings." Well feelings are EXTREMELY subject to things like personal ties. I can say with certainty that I won't half as bad if someone I don't know is hurt versus someone that I do know. I'm not a bad person for working that way... that's normal. The problem here is that these people are being given authority over OTHER PEOPLE'S MONEY. They're "systematically" incapable of coming to good decisions about these things. And that doesn't even begin to address that Keynesian economics are a crock of crap, have never worked, and will NEVER work... EVER.
We need to send a message to the government to just stop it. Just knock it off. We'll come out of this but not if they mortgage our whole country for the next thousand years. - kemp34, on 03/31/2009, -0/+10So the Fed is the reason for why things are generally better now or is it technological development in spite of things like the Fed?
- byronm, on 03/31/2009, -1/+11When you realize how many people work for the banking giants and have their entire wellbeing tied to their success not only as employees but as customers of these corporations it tends to turn you off from trying to protest against them.
Personally, i try and keep my business away from the mega banks.. but no matter how hard i try BofA ends up owning most of my cl's and loans in the end :( - ousthouse, on 03/31/2009, -0/+10Federal Reserved up.
- davenport651, on 03/31/2009, -0/+10What's the story behind this quote from Andrew Jackson? Seriously, I've never heard this before and want to know more.
- inactive, on 03/31/2009, -2/+11I'm not going to argue the validity of the NWO/World Currency/tin foil hat *****. I don't think it is relevant.
But I'm going to have to ask you to prove the second part of your post. - kemp34, on 03/31/2009, -2/+11***** rationalization for crony corporatism and innocent taxpayer plundering if I have ever seen one.
- avengingturnip, on 03/31/2009, -2/+11Secede. It is time for secession.
- inactive, on 03/31/2009, -2/+10Probably because the local banks are making better investments and being wise about whom to loan their money, no?
- lobsterGun, on 03/31/2009, -0/+8
http://wiki.answers.com/Q/Why_did_Andrew_Jackson_o ... - kaelyiesta, on 03/31/2009, -0/+7Unfortunately, a lot of us are convinced that the government has to do something and spending, any spending, will help make this go away. This expedient redistribution of wealth is not seen as malinvested to them. There are many economic theories that base their entire philosophy on the failure to understand that gross spending isn't the desired goal, but rather net productivity. Put plainer, they don't realize that spending isn't necessarily productive. Spending directs production, and if the spending is misaligned with true market interests(our desires for goods and services), then production decreases, and standard of living falls.
A simple example is that of a hole digger. If we all spend some money employing people to dig and then refill holes, that spending brings about a lot of our total potential production(a nation of people has only so much potential labor available to be put to use) to bear on the task of digging holes then refilling them. That production is does not increase our wealth and indeed diminishes it(as much of our wealth requires maintenance in such an advanced economy).
This is true to a lesser degree of these bailouts. While it's possible that a company can turn around and act responsibly if given investment money and become profitable, it's not guaranteed. The simple argument is that if such ventures are likely to be rewarding, the free market would have jumped at the chance to make money. Spending, while under the restraints of the free market(and thus using rational economic calculation), is necessarily productive because there is incentive for it to be so. A non productive behavior sees itself with fewer sources of income and thus is removed. So, within the confines of rational economic incentives, private investors would spend money investing in these failing banks if they found that decision to be profitable and thus productive. Government has no such incentive and so such spending may not have the right motive behind it. It is certainly not concerned with ROI for those whose wealth was used to fund the decision. Productivity may or may not come from such decisions.
This is all not even considering the fact that this devaluation of others wealth is immoral. - MrFunStuff, on 03/31/2009, -1/+8Inflation destroys the middle class!
Imagine working all your life to save up $200,000 for retirement (just as an example), and in 3 years that $200,000 is devalued through inflation to where it only buys $100,000 worth of goods.
Gotta love the banksters!
Never mind the fact that they print these dollars out of thin air, backed by nothing. And the fact that our currency, which is essentially paper, is accepted world-wide as the "world's reserve currency" just blows my mind.
But the biggest problem we're having now is the fact that the Federal Reserve is not allowing the free market to control interest rates, but instead deciding that their "experts" in the figurative ivory towers in D.C. and NY know what interest rate banks should charge their customers.
Keeping rates at 1-3% for over a decade has resulted in over-borrowing and malinvestment across the board. This is not how a free market works.
In a free market, if banks keeps rates too low for too long, or they loan money to risky borrowers, they will start to lose money... then they will have to raise their rates and tighten their guidelines. This is how the it's is supposed to work. If you lose money as a business owner, you raise your prices.
What did the Fed do? They lowered them. (Fighting inflation with inflation is like putting out a fire with gasoline.)
To allow Bernanke and his bankster buddies to arbitrarily set the lending rates for the entire banking system is essentially price-fixing. This is why we are in this mess today, and the whole thing is starting to unravel on them. The consumers are at fault for sure, for borrowing money they could not pay back, but they did not start the problem.
But no one should be bailed out either. This is what happens in a free market when you try to take advantage of the system. Bailing out the homeowners... and especially bailing out the banks (Bear Strearns)... is only going to make the problem worse.
Tough talk isn't going to do anything. Raising rates is what they should do, but really, they should have done that a long time ago. But they didn't.
Why?
Because they are fleecing us. They loan the money to their corporate buddies fresh off the presses before it's devalued. As the money makes it into the system, it devalues the dollar, wiping out the savings of middle class Americans. Keeping rates low ensures the stock market stays high, and all their Wall Street buddies continue to make a killing... and makes it to where the average investor has no choice but to put their money into the stock market. Who wants to make 2% interest on their money in the banks?
They know what they're doing up there. And it's not good for us. Most people don't have a clue though.
Ron Paul does though...
http://www.youtube.com/watch?v=N6V5ym9kx_8 - d0ctaew, on 03/31/2009, -4/+11Fed up...or F'ed up?
- mfc5200, on 03/31/2009, -0/+6This is the classic example of an originally noble program going terribly wrong (analogous to FCC).
If there was no FDIC, I would go up to say two banks and say, "What percent of my deposits will sit in that vault right there?" and point to their bank vaults.
Bank A would say, " We keep 95% of your money in the vault, loan out the other 5%, but we don't give you any interest"
Bank B would say, "We lend out 90% of your money, keep 10% of it in the vault, and give you 3% per year on your deposits"
Most people I think would decide to go the safer route, and go with Bank A, they would rather pass up on interest payments knowing 95% of their money is safe in a vault.
But once you put the FDIC into the equation, all of the sudden it doesn't matter. You could care less where your money is, and the result is that the banks that take the most risk, receive a lot of deposits because people feel they are "insured" by the government. Of course, the eventual result is that these banks will do well in the boom times, but do equally bad in during the busts. However, because people don't care where their money is, this reckless bank then poses a systematic risk because it holds more deposits than it otherwise would have without the FDIC.
Without the FDIC, this situation would never happen. It encourages risk, and reduces individual responsibility. The FDIC has gone from being a protector, to being corrupted and is now part of the problem.
The FDIC reduces safety competition between banks, it encourages banks to take as much risk within the confines of the law as possible.Without the FDIC, people would make an active effort to keep their money with the most conservative banks. - iancgi, on 03/31/2009, -0/+6Im afraid you are the one who needs to wake up FredFredrickson.
None of the money the banks got from the bailout is being used for loans or make new credit lines, its all being used to buy up smaller banks and their assets, hence the consolidation of wealth.
Do some independent research and you will see what is really goin on in this world.
I have been doing independent research on geo-political issues for 7 years, im not parroting *****, im speaking truth. You sir are the parrot, and worst of all you dont even know it. - dancantone, on 03/31/2009, -2/+8Fred, you're a ***** fool my friend.
- NZN444, on 04/01/2009, -0/+5I read an interesting article by John Dvorak where he suggested that the spreadsheet was to blame for all our worlds troubles. I jest. http://www.pcmag.com/article2/0,2817,2338796,00.as ...
But in all seriousness... how many entrepreneurs are proud of the first spreadsheets they created to calculate revenue flow of any of their new venture concepts? Years later, would you put them up as examples of spot-on accounting? Are our bankers any better? How about our tax accountants? Our financial planners? Seriously, who is good with spreadsheet projections based on speculative revenue flow planning and models?
Perhaps we need to dumb down our numbers... seems like humans are good at formulas, but calculating numbers... well... I guess that's why computers run the world.
3 cheers for skynet... hip hip! - inactive, on 03/31/2009, -2/+7I agree with the tone of the article but I wish it would be more clear about the specifics. How are community banks being forced to bail out the larger banks? Are they being forced to loan their excess reserves to prop up insolvent or shaky banks?
- kemp34, on 03/31/2009, -0/+5FDIC "Insurance" = systemic moral hazard.
You CANNOT insure a system. It is literally not scientifically possible. - DJMattB241, on 03/31/2009, -0/+5I would digg this a thousand times if I could.
- mcquitty, on 03/31/2009, -0/+5Fannie Mae and Freddie Mac are part of the problem.
Many community banks, and especially credit unions, gave loans from their own coffers. They were one the hook for the loans. If the borrower didn't pay them back, they lost money.
During the frenzy of loan applications, the process went something like this:
1. Mortgage broker gets a client saying they don't even need documentation of income.
2. Mortgage broker closes the loan, taking a nice 3K+ profit.
3. Mortgage company gets profit and sells loan. This could be into a CDS or to Freddie Mac/Fannie Mae.
4. FM/FM doesn't know about the poor quality of the loans.
5. Moody's rates these CDS as good stable investments, because of the slightly higher interest rate.
6. These are bundled up and sold. Another profit to be made.
7. The government backs the loans through FM/FM and now we, the taxpayer, are on the hook for them.
Why in the hell would you ever decide to take the risk away from someone's business? Without risk, there's no incentive to make sure you run a good clean business.
To put it another way..
If I have to loan you money out my pocket, I will do everything I can to vet you and make sure you can repay it. If I can sell your loan to someone else and make a profit just for closing the loan, I will not care if the person can pay it back or not. I will loan money to everyone.
That's FM/FM. -
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