TARP chief: Banks possibly 'in more danger now'

[notesdev]

WASHINGTON (CNN) – The banking system today may be in a more precarious position than it was a year ago, the man charged with overseeing a $700 billion bailout program said Wednesday.

Neil Barofsky, the special inspector general managing the Troubled Asset Relief Program, told CNN's Wolf Blitzer on Wednesday that the government's decision to support bank mergers over the past year may have put the U.S. economy more at risk.

"These banks that were too big to fail are now bigger," Barofsky said. "Government has sponsored and supported several mergers that made them larger and that guarantee, that implicit guarantee of moral hazard, the idea that the government is not going to let these banks fail, which was implicit a year ago, is now explicit, we've said it. So if anything, not only have there not been any meaningful regulatory reform to make it less likely, in a lot of ways, the government has made such problems more likely.

"Potentially we could be in more danger now than we were a year ago," he added.

Earlier in the day, Barofsky issued a scathing report criticizing the Treasury Department for not being transparent enough about how bailout money was being spent. He warned that this could have lasting effects.

"I think this cynicism, this anger, this distrust of government that's born in part from a lack of transparency could have far-reaching ramifications, whether there's a next crisis or when anytime the government is going to call on the American people, the taxpayer, to support necessary programs," Barofsky said.

---

Apparently the only real concern anybody in the government or banking sector has is to keep the big bonus bucks flowing to the pigmen, and from there to the campaign coffers of Congressmen who make sure the gravy train keeps on a-rollin'.

[AndyA]

1. This is easily solved.

Force the "too big to fail banks" into a break up so there are many smaller banks, which will create more competition in the industry and preventing the failure of any one player from bringing down the system.

Force the executives to return bonuses that they took during the period when the banks were failing. This is the responsible, expected thing for them to do. Who the hell takes a bonus when they failed to prevent a devastating business loss? It isn't done in business. (At least, in normal business.) You get bonuses for a job well done, for meeting income goals, for bringing in a PROFIT.

Put that money back into the smaller banks and they will be much healthier.

[notesdev]

4. There be the irony

Had we not shoveled trillions of dollars into these loser banks, they would have all failed, and smaller banks would have taken their places by now. Sure there would have been a period of adjustment, but nothing like the catastrophe they have set us up for now.

This whole banking/finance mess is an amazing example of how the urge to "do something" can be incredibly destructive when the best thing to do is to do nothing and let things work themselves out.

[davidwparker]

11. +1

[IrateCitizen]

16. What you said.

:thumbsup:

[BR_Parkway]

30. I can see the logic of propping them up in a panic then moreso than

I can see the ongoing lack of anything to prevent it happening again. Snap reaction to prevent a panic and run on banks makes sense, even if I disagree with how they went about doing it. But if that was supposed to buy us some time - we don't seem to be seeing anything getting changed during that time

[ixion]

31. exactly

spot on.

[phasma ex machina]

17. +1 ... Barofsky can bet on continuing distrust of government.

[pokercat999]

19. Hmmmm seems we broke up Ma Bell for lesser concerns

than the banks. In reality the government is playing a dangerous game in that they are letting the banks remain in business even though they are technically bankrupt. Their assets, especially real estate, are worth far less than they're actual market value allowing banks such as Citi operate on a 33 to 1 leverage rate based on assets that are actually much lower in value is suicidal. Their only hope is the economy recovers and these assets go back up in value. This is a scam and I'm willing to bet it has a bad ending and that ending could be tomorrow or in the next 5 years, but I don't think it will be longer.

If you look at the banks that have been taken over by the FDIC you will find their reported (on the books) assets are actually over valued by 30 to 40 percent or more in almost every case.

[MarjorieG]

2. Also may mean we were in uncharted, dangerous territory. We stabilized on the surface, now we make

structural and regulatory changes. There was no perfect way to deal with this.

[Phoebe Loosinhouse]

3. Keeping the gravy train on track is Priority One for our Reps

They prove it in the financial sector, the election system sector, the medical insurance and drug sector, the defense contracting sector, the private prison industry sector, the agri sector, the natural resource sector, the public education sector, there's not one area of our country where the hands held out are not willingly filled to the brim and the appropriate legislation is produced.

At what point do we admit that a large part of our entire government could/should go down in a RICO investigation? Of course, no one would actually do that or go there, so they have no fear. Any DA or USA willing to pierce the net would be out of office on their own corruption charges so fast their heads would spin.

[dixiegrrrrl]

13. Or find themselves underneath a small burning plane.

[CountAllVotes]

5. more danger now than before

isn't that ironic?

How much more do these thieves want anyway?

How about ALL OF IT; all that is left that is!

:kick:

[Sinti]

6. Of course they're in more danger - it's called Moral Hazard

They know if they fail someone the taxpayers pick them up, dust them off, and give them brazillions more to play with.

If I were in charge I would let them merge to their heart's content, until there are only two or three left - all the while encouraging a national public sentiment in favor of trust busting. Then I'd break them into so many small pieces they'd be completely unrecognizable from their former selves. Same with insurance and many other unrecognized monopolies. The bar seems to be higher for antitrust action than it used to be, so I'd just let them hang themselves, while I built my case. We do have laws that we have to work within.

[Angry Dragon]

7. Please explain something to me.......

I am new here and read many posts on many subjects and what I hear are people talking among themselves, sometimes in an angry manner, but among themselves. The people that can and should do something are not listening. Who out there really has the power to make the changes that need to be done?? Who out there has the courage and the conviction to follow through?? I do not see anyone.

I voted for Obama, not because he was black, but he promised a new way of doing things. I have not seen a lot of that. I see things going the same way as before if not even worse. The people that are suppose to be working with him are still protecting their own little worlds. The other side is even worse than they have ever been.

I am for a revolution, I do not care if it is bloody or not, because we have nothing to lose. If things continue as they are we will be under the thumb of every large corporation and do nothing elected officials, unless you call doing the bidding of corporations doing something. We are on the road of self-destruction and might as well decide the way we are going to be destroyed.

The explanation I need is if someone sees something I do not

[notesdev]

9. You and me both

I need that explanation too.

[Sinti]

14. Technically, you do.

The best thing you can do is talk to others, and come to agreement about what you need. Then you make actions to get it, to get real change you will have to force the issues. Write congressmen, email and snail-mail, sign petitions, protest, and strike - but a strike has to be a well-planned, clearly defined operation and has to last more than one day. Without greater community, we cannot fight back against the Resource Acquisition Mafia and it's subsidiary International Megacorp.

Congresspeople don't listen to you when they believe they are more likely to get ahead by listening to the multinationals and RAM - whether it be a job with one of their affiliates, or more money for their campaign. They see the most benefit from them, ATM. That has to change.

Bloodshed is never necessary, you can't "kill" a corporation. You would only wind up killing your fellow human beings, most of whom want exactly what you want. You need to talk to others, help them see the truth of the diminishing returns and why, and then ask and talk about "what do we do?"

If you resort to violence, they have more capacity for violence than you do - but the triggers are pulled by men, men who want exactly what we all want - safety, a roof over their head, and food in their belly, and a decent life for their children. Everything else really doesn't matter without those things.

edited to change diminishing resources to diminishing returns :p

[Angry Dragon]

15. I agree with what you said

I am calling and writing and no one bothers to return any messages. No one listens. I see it in health care. Everyone wants it but they do not seem to care if the people get it or not.

[westerebus]

21. Choices.

The world can be a violent place.

You have choices. You can deny that violence is a part of your world.

You can accept that you may have to resort to violence to defend yourself.

You can decide not to use violence under any circumstances.

You may decide that the limited use of violence to defend yourself is acceptable.

You can hope that other's are willing to use violence to defend you.

You can rely on your willingness to use violence to defend yourself and other's under limited
circumstances.

You can realize other's are willing and capable of using violence against any one at any time.

You may come to understand that the violence committed by some corporations is impersonal and
universal.

Where as some is very personal.

The willingness to defend one's self is an endorsement of violence as the last resort.

You can hope it never comes to that.

If it comes to that, you have choices.......

[Sinti]

22. A corporation, any corporation, is completely incapable of violence

A corporation is a legal structure used to facilitate trade, and business in general. It's literally a document, an agreement between men and the government (also a legal structure used to facilitate cooperation among men).

http://en.wikipedia.org/wiki/Corporation

Only human beings can commit violence.

You, in your thoughtful post, have left out the possibility that men can come to agreements between themselves, to join together rather than divide. The world, for humans, is a violent place, because humans make it so. Other animals do not generally hunt their own species.

Men choose violence, even if all the violence were committed by machines, men would have to choose to use the machines. Nearly all men can be reached - if they cannot, there are so many of us that can that it would be absolutely fruitless for the handful of "hardliners" to even attempt to force their way.

We all need to talk - beer summit style. We need to accept that others opinions and actions are a product of the information they have in their minds and if we want to change "the way it is" we have to change that information.

[westerebus]

23. When the shooting stops.

Corporate violence: strip mining, air pollution, water pollution, industrial pollution of all kinds that causes birth defects in children and cancers in the general population, deforestation, bank fraud, insider trading, market manipulation, corruption of government institutions to include the Congress and regulatory divisions of the US government, price fixing, spying, private quasi military protection services used to do wet work, and on and on.

Yes, there are people behind all this. Which is why we are supposed to be nation with laws. Laws that protect those who would be harmed by the actions of corporations and the people who run them.

A man cleaning oil drums doesn't think he's committing violence when the waste water goes into the public sewer system. The woman who processed the billing from the chemical company doesn't think she's involved in cover up. The driver from the back woods of Huang Doa province didn't call the EPA when the oil drums smelled like chemical resins instead of fish oil as printed on his invoice.

It's impersonal. It's universal. It's above all else, corporate crime. You may not think this is violence. It's not in the category of one man with a gun. They don't always use guns.

Some times they use elections.

[Sinti]

24. I see, and agree with what you are saying. All of these things are a type of violence.

All of these individual acts of violence and/or disregard are committed by human beings. What has to be done, if you ever want to end it, is develop a social framework, a new set of norms among the individual humans, that they too are responsible for their fate - and the fate of others.

The control and abuse of resources, and in turn human beings, is the primary problematic action, IMO. This type of action is also completely unnecessary. We are smart animals, we can find ways to live in complete symbiosis with the rest of the planet. We have not yet directed our collective intellect toward this end.

"bank fraud, insider trading, market manipulation, corruption of government institutions to include the Congress and regulatory divisions of the US government, price fixing"

This is all an illusion revolving around paper currency. This paper currency is a resource that only has value if we believe it has value and use it - it's a tool to facilitate trade and nothing more. It has no intrinsic worth, even the paper it's printed on is not recyclable into a useful product. Obviously, from the ridiculous behavior of those who have the most of this particular resource, this resource has no value at all. If they continue to behave as they do, this fact will become obvious to everyone.

Human beings need a few things to survive, food, water, shelter. Resource acquisition and control provides those at the very top with "guaranteed" survival for many generations, as long as the illusion they've created with their dollars doesn't fail. If the illusion does fail, and people see the trick to the sleight of hand they've played, then it's up for them. So, they too, potentially suffer from the very trick they use that keeps others below them. This bit of maya, if you'll pardon the expression, will surely fall away some day, in my personal opinion. I'm holding that opinion if for no other reason than it comforts me.

Elections - winning an election is one thing. Being a leader is quite another. It doesn't matter who gets elected, or what they do - human beings have to allow others to deny them survival. If private quasi military protection services try to enforce hegemony of the corporate owners, they too are men and can be reached. The corporate owners themselves are men and can be reached. I truly believe this.

The problem is, if you choose to use their methods (tools) to get what you want, other people will also use their tools regardless of what you say with your words. So, actual non-violence is a requirement. You need to behave with respect for others, if you wish to receive respect. Violence causes chemical reactions in the brain, disabling part of the logical thinking process - it's a fight or flight problem.

So, you have to remain calm, and peaceful and talk about what you want and how to get it, not how much you don't like something and how to get rid of it. The mind, and the world around you, is additive - new things come from and add to the story of human consciousness. Old things may disappear, but they don't cease to exist.

We're humans, our mind is our great advantage in the animal kingdom. We just have to use our minds a little differently :)

What do you think?

[westerebus]

26. Maya.

That the veil of deception should one day fall from men's eyes and from the pure
light of creation find meaning with his connection to truth.

You have your work cut out for you.

If it were truth that's lacking, then we have failed in our observation of what we are.

If in fact our observations are correct, we are what we are.

If naming what we observe is with out judgment, we cast no prejudice on what we observe.

It is what it is.

That evil exists is true. That good exists is not more true. To see man as reasonable is a
possibility, given our observation and with holding any prejudice, only barely.

Were it other wise, we would know peace.

Live and let live is not a one way street.

[Sinti]

27. That evil exists is true...

I disagree with this statement. Does evil exist in the animal and natural world, outside of judgment? A man's opinions and actions are the result of the information he has in his mind, with some genetic component that helps create his perception. No newborn feels greed, or hatred - it's the information gathered in living that brings out these feelings in a person. Evil and good are used to try to deny this fact.

What we are (I feel mistakenly) denouncing as evil in this world are simply acts that shorten a human being's life and/or cause suffering.

I think the time is ripe for a change in the thinking all together. The vast majority of people do not benefit from the current system, truly. Even the people at the very top only get the questionable benefit of watching others starve. The structure and method for living we are currently using is obviously not working well for most humans. Adaptation of a species to improve it's chances of survival is part of the natural order. I don't think what is ultimately a handful of men can defy the laws of nature.

Human beings should not be parasites. The current system is a parasitic one, rather than symbiotic. We create a lot of toxic waste, simply due to our lack of forethought. The entire disposable nature of things should show the parasitic nature of our behavior. We're taking precious resources and turning them into toxins at a shocking rate.

We have to come back to symbiosis, or we will die. Nature demands this, an overly aggressive parasite such as us will surely be shrugged off by its host, or the host will die and kill the parasite with it. This is true of all parasites.

How you get people to open their eyes is another subject all together, but it can be done. We certainly have our work cut out for us if we are to survive as a species. We must evolve - and evolve beyond the Pax Romana.

I may just be wearing rose-colored glasses, but I feel I only have one input into the thought stream and I want it to be one of possibility. To accept the limitation of what is right now would defy my personal line of logic, and generally make me feel horrible. If you're going to be here for while, you might as well try to enjoy it.

[westerebus]

28. There is always possibility. n/t

[Me.]

8. Not One Dime More

Nothing has been learned, nothing has changed. Next time round they should be on their own. They can ask for those big fat bonuses back and use that money to prop up their profligatory practices.

[flyarm]

10. do you have a link to this? thank You K&R!!!

[mule_train]

12. This time, give them TWO trillion, and no questions asked

that'll teach them to waste money on bonusses

think how ashamed they'll feel

[roamer65]

18. Nationalize the big banks.

It should have been done a year ago. THey are are hoarding capital and exacerbating the credit crisis. Once they are stabilized, then break them up and sell them off as smaller entities. We should also re-enact Glass-Steagall.

[jschurchin]

20. I disagree roamer.

Let capitalism work. Let them go under. If you or I owned a business, and through our mismanagement our business failed, so be it. We fuck up, we fail. Same goes for Wells Fargo, Chase, Citi, Goldman Sachs, etc., etc.

There are over 3,000 banks in the U.S.. A good number are on very solid financial footing and who would be more than willing to take the business from the bankrupt. And make no mistake, not a single one of the top 5 banks in america are solvent. If they are forced to mark their level 3 assets to market, they would fail tomorrow.

The one thing that we need to refuse to do is give the greedy fuck's one more red cent. They fucked up their business model, time for them to pay the piper.

[Bigmack]

25. YES!

[mule_train]

29. the solution - bigger boinusses

because that helps morale