What Happens If "Too Big To Fail" Banks Fail Again?

[No DUplicitous DUpe]

What Happens If "Too Big To Fail" Banks Fail Again?
(posted with permission from: http://sane-ramblings.blogspot.com/2011/06/what-happens-when-too-big-to-fail-banks.html)

One of the hottest things on Wall Street these days is speculating in commodities. The list of those who are speculating reads like a "Who's Who" of the U.S. bailed out banking giants: Bank of America, Citigroup, J.P. Morgan Chase, Goldman Sachs, Morgan Stanley and others.

Although commodities such as oil, wheat, corn, coffee, coco, cotton, gold and silver have hit the jackpot for banks, they are very risky because their prices can abruptly change. Just as real estate mortgages used to hit the jackpot for banks, what happens when some of these commodity prices suddenly fall sharply? Who bears the losses? Although for now bank bets aren't nearly as big as they were on real estate mortgages, there is no one but themselves to limit their speculation.

The 10 biggest U.S. banks now control 77% of the U.S. banking assets, a much bigger percentage than in 2008 when their collapse would have taken the global banking system with it. We Americans are now more vulnerable and more subject to being leveraged into another massive bailout.

But if another bailout is what they have in mind, the joke is on them. Unfortunately for the banks and their lobbyists, we don't have the money. We didn't have the money for the 1st bailouts either, and along with our military expenses, we are now wallowing in debt and in need of a bailout ourselves. Perhaps from their record profits and record bonuses, this time they could bail us out.

**For more details, please see "Big Banks Cash In On Commodities," The Wall Street Journal, (6/2/11),
http://online.wsj.com/article/SB10001424052702304563104576359704074143190.html

[Autumn]

We get to bail them out again

That's how it works.:shrug:

[Horse with no Name]

1. Let them go.

We can't keep giving in to these banksters...even if it harms us in the short term, it will save us in the long term.

I'm really curious what the status of AIG is? Anyone know?

[damntexdem]

2. No problem -- they're even bigger now.

So they can't fail until the whole economy crashes ... from keeping them from failing.

[Freddie Stubbs]

3. I don't think that Congress would ok another bailout

[DJ13]

4. We need a new program to deal with this

Save the banks, and take the executives out back and shoot them for being reckless.

I guarantee it would never happen again.

[No DUplicitous DUpe]

6. Harsh. But possibly effective. nt

[City Lights]

5. Time for the banks to pull themselves up by their own bootstraps!

My pockets are empty!

Fuck them!

[CrispyQ]

8. Your subject line would make a great bumper sticker!

And agreed: fuck them!

[JackRiddler]

7. Nationalize.

Seize the lot of them. Screw the shareholders. Watch the dominoes topple: tough shit. Bail out all depositors, of course. Carry out haircuts on all state debt, for which these banks were largely responsible in the first place. Help states all start their own state banks (like North Dakota), into which all pension and other public funds will be put. Offer low-interest loans but at old-fashioned conditions. Separate commercial and development from consumer banks, forever more. Help credit unions expand to pick up slack. Cut the Pentagon, the wars, the empire and the homeland terror complex in half (for a start). Raise taxes on the rich to the Clinton levels or a bit higher. Move half of the revenues saved into an infrastructure and renewable energy program, the other half into education (also a jobs program: hire many more teachers and professors at good pay). Be willing to print money for infrastructure projects (renewable energy and sustainable transport especially), since these do actually expand the economy and produce the most jobs (new taxpayers, fewer unemployed).

This isn't going to happen.

There will be an IMF-type plan for the US. The next TBTF failure will produce an austerity package the likes of which you've never seen. The banksters will again be responsible, but the government will more successfully be blamed. The bad guys will get more bailouts. There will be financial martial law and a stunning package of pension and other social welfare cuts will be pushed through rapidly in emergency sessions.

Actually, which happens is our choice. You think Americans will take to the streets like Egyptians or Greeks? If not: don't expect a change.

[Demeter]

9. It COULD Happen

We'd have to get Goldman Sach's sock puppets out of the White House, Congress, Cabinet and shut down the Fed Reserve. But it COULD happen.

If we teach everyone, all the people, it WILL happen.

And Gaddafi will get his money back, too.