Lazy SOBs just sitting around with their hands out waiting for the goverment to help them
Goddamnit. Fuck. Damnit. Damnit. Fuckashitpiss.
This just makes me goddamn livid:
In the lead-up to the financial crisis that crippled the American economy and plunged the country into a recession, the Federal Reserve made trillions in undisclosed loans to struggling banks and financial institutions, according to official documents obtained by Bloomberg News. Six of the country’s largest banks then turned those loans into more than $13 billion in previously undisclosed profits.
Whee! You thought the bailout we knew about was bad; this is literally ten times worse. The TARP bailout was $700 billion; this little shenanigan was to the tune of $7.7 TRILLION. AND the bastards made money off of it! $13 billion they didn't feel they had to let anyone know about, yet they continue to impose new charges on account holders. BoA wanted to charge you to access your own goddamn money they held, on the grounds that they needed the additional revenue, while quietly having socked away billions in profit from these loans. Isn't that nice?
And why did they have to be secret? Because, for one, if people had known about them, the banks might have been reluctant to hit the government up for more money:
The Fed, headed by Chairman Ben S. Bernanke, argued that revealing borrower details would create a stigma -- investors and counterparties would shun firms that used the central bank as lender of last resort -- and that needy institutions would be reluctant to borrow in the next crisis. Clearing House Association fought Bloomberg’s lawsuit up to the U.S. Supreme Court, which declined to hear the banks’ appeal in March 2011.
And, better yet, the banks didn't have to worry about that mean ol' Congress doing anything to regulate them or break them up, since Congress didn't know jack shit about the program!
Lawmakers knew none of this.
They had no clue that one bank, New York-based Morgan Stanley (MS), took $107 billion in Fed loans in September 2008, enough to pay off one-tenth of the country’s delinquent mortgages. The firm’s peak borrowing occurred the same day Congress rejected the proposed TARP bill, triggering the biggest point drop ever in the Dow Jones Industrial Average. (INDU) The bill later passed, and Morgan Stanley got $10 billion of TARP funds, though Paulson said only “healthy institutions” were eligible.
Mark Lake, a spokesman for Morgan Stanley, declined to comment, as did spokesmen for Citigroup and Goldman Sachs.
Had lawmakers known, it “could have changed the whole approach to reform legislation,” says Ted Kaufman, a former Democratic Senator from Delaware who, with Brown, introduced the bill to limit bank size.
Kaufman says some banks are so big that their failure could trigger a chain reaction in the financial system. The cost of borrowing for so-called too-big-to-fail banks is lower than that of smaller firms because lenders believe the government won’t let them go under. The perceived safety net creates what economists call moral hazard -- the belief that bankers will take greater risks because they’ll enjoy any profits while shifting losses to taxpayers.
If Congress had been aware of the extent of the Fed rescue, Kaufman says, he would have been able to line up more support for breaking up the biggest banks.
Byron L. Dorgan, a former Democratic senator from North Dakota, says the knowledge might have helped pass legislation to reinstate the Glass-Steagall Act, which for most of the last century separated customer deposits from the riskier practices of investment banking.
“Had people known about the hundreds of billions in loans to the biggest financial institutions, they would have demanded Congress take much more courageous actions to stop the practices that caused this near financial collapse,” says Dorgan, who retired in January.
These are the poor struggling entities that Michael Bloomberg was so angry with OWS for criticizing.
Plus, breaking them up would have been "punishment":
Lobbyists for the big banks made the winning case that forcing them to break up was “punishing success,” [Sen. Sherrod] Brown says.
Yeah, well, ignoring the fact that the banks GODDAMN WEREN'T SUCCESSFUL AT ALL and in fact were in financial trouble, only getting their asses pulled out of the cellophane by OUR DAMN MONEY.
Employees of the banks weren't hurting at the time, either:
Employees at the six biggest banks made twice the average for all U.S. workers in 2010, based on Bureau of Labor Statistics hourly compensation cost data. The banks spent $146.3 billion on compensation in 2010, or an average of $126,342 per worker, according to data compiled by Bloomberg. That’s up almost 20 percent from five years earlier compared with less than 15 percent for the average worker. Average pay at the banks in 2010 was about the same as in 2007, before the bailouts.
Think of that when you contemplate how much YOUR paycheck has gone up recently.
Still another reason lawmakers didn't need to know about the bailouts was the fact that it just would have been too goshdarn complex:
At the meeting with [Sen. Ted] Kaufman, [New York Fed president Timothy] Geithner argued that the issue of limiting bank size was too complex for Congress and that people who know the markets should handle these decisions, Kaufman says
That would be the same Timothy Geithner who is now Secretary of the Treasury. Wheee! Yes, let's leave keeping an eye on the henhouse to the foxes and weasels who are familiar with things like this. I mean, Congress deals with trade issues and foreign policy and treaty negotiations and federal law, but understanding banks would be just too difficult for them. Tee hee! Macroeconomics are hard!
Oh, and the whole idea of punishing these bastards by pulling your money out and changing over to credit unions? Evidently those nice people at the Fed will make up for your irresponsibility by propping up your former bank until someone can come along and purchase it:
Wells Fargo bought Wachovia Corp., the fourth-largest U.S. bank by deposits before the 2008 acquisition. Because depositors were pulling their money from Wachovia, the Fed channeled $50 billion in secret loans to the Charlotte, North Carolina-based bank through two emergency-financing programs to prevent collapse before Wells Fargo could complete the purchase.
“These programs proved to be very successful at providing financial markets the additional liquidity and confidence they needed at a time of unprecedented uncertainty,” says Ancel Martinez, a spokesman for Wells Fargo.
So, to recap: These banks, which lied to Congress and the American people about their solvency, received over $8 trillion in taxpayer loans, interest free, minimal strings attached, then proceeded to successfully lobby against the same government that they had taken money from imposing any kind of regulations on them. And, far from suffering for all this, they have continued to post massive profits, some of which they felt they didn't even have to reveal. (Think - how would the IRS react if they found out YOU were hiding income?)
As Talking Points Memo puts it:
The nation’s largest banks have turned more in profit in the last 30 months than they did in nearly eight years preceding the crisis, all while spending millions to derail significant reform legislation. And since the Dodd-Frank Act became law, they have spent millions more to weaken its rules and prevent certain regulations from taking effect. Bank lobbying, in fact, is now on pace to reach a record high this year.
And yet we're to believe it's the dirty hippies of OWS who are the whiny children sitting around waiting for a handout from the government.