Why Should Taxpayers Give Big Banks $83 Billion a Year?

[kpete]

The top five banks — JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc. - – account for $64 billion of the total subsidy, an amount roughly equal to their typical annual profits (see tables for data on individual banks). In other words, the banks occupying the commanding heights of the U.S. financial industry — with almost $9 trillion in assets, more than half the size of the U.S. economy – would just about break even in the absence of corporate welfare. In large part, the profits they report are essentially transfers from taxpayers to their shareholders.

http://www.bloomberg.com/news/2013-02-20/why-should-taxpayers-give-big-banks-83-billion-a-year-.html

[RKP5637]

1. The majority of Americans are peasants and delusional, but the illusion of the

American dream works so well.

[xchrom]

2. because it's a FACT that the world would go to hell

in a festive green and yellow basket if we didn't.

[kpete]

3. with peeps?

[xchrom]

4. What would a green and yellow basket on it's way to Hell

Be without peeps?

[DarkLink]

5. WE Shouldn't- and we need to stop passively accepting this bullshit

The more they get away with, the more brazen they get, the more money they want.

It will never be enough, they want it all.

The corrupt have always been among us and the criminals usually don't just turn themselves in.

We have to demand justice.

There is something terribly wrong with the American people.

At a time when technology should have us at the peak of intelligence, we are passively accepting brazen looting and violations of the very essential tenets of our Democracy.

What is wrong with US?

[xtraxritical]

6. All DUer's should have their money in local banks or credit unions.

It's pretty easy to do. If you have direct deposit/payments with other institutions there will be a little more effort involved but it's way worth it.

[Igel]

7. They don't.

Hence the reason for its being called an "implicit subsidy." There's no transfer of money, however the Bloomberg editors may have presented it.

There is a reduced cost because the market believes implicitly that the government is providing a kind of quiet emergency insurance. That lowers the interest that they need to pay. However, in the current market the Fed is basically keeping interests rates low everywhere, so the research is more historical then current news.

Still, notice what happened last time there was a problem. The small banks racked up big bills as they went belly up and required FDIC to pay the insured. The large banks got a bail-out, to be sure--and paid it back with interest. In some cases some banks were only cajoled into taking the bail out because the Fed and Treasury didn't want investors to know which bank(s) actually needed the bail out. Perhaps they could afford this only because of the implicit subsidy. In this case, however, they saved the FDIC a ton of money, prevented further unravelling of the financial markets, and got paid back so that the "subsidy" continued, in retrospect, to be either implicit or temporary.

This, however, is old news.

[Stretch714]

8. It will never change until we some how get the lobby money out od DC. nt

[kenny blankenship]

9. That's nothing. FED Reserve is gifting them 85 billion A MONTH

by buying their shit investments off their books at face value instead of shit which is what they are. This fraudulent scheme goes by the neutral sounding name of Quantitative Easing, Version III.

That is in addition to the free money they are normally allowed to borrow from FED, ("normal", only because FED has created an enduring climate of Zero Interest Rate Percentage because of the gutshot US economy) and then loan back to US Treas. at interest. When the US Govt needs to spend in excess of its own revenues from taxes, because of its misguided attachment to capitalism, the funds have to come from banks like these, but the banks don't actually have the money they lend. Taxpayers have to pay these worthless banks back the borrowed principal plus the accrued interest. The contribution of the banks to economic growth and/or recovery in all this iS NOTHING. Their "goodwill" and "knowhow" is no more than the ability to skim from the top and the willpower to profit at an entire nation's expense.

This is the true face of Capitalism - RULE by capital, and not simply by those with actual capital, but in the end rule by those with the greatest fantasy claims to capital, the most fearsome mask of "creditworthiness." They have the biggest bluff. Their fantasy and rule is perpetuated by this ongoing official grant of credit origination (or money creation, by another name) to their private, self-interested cartel, backed up by the public's ability and willingness to be bled in perpetuity.