TBTF: “Too Tall for Law”



Editor’s Comment: If there is one thing we can plainly see now it is that the bigger the bank, the bigger the oil corporation, the bigger the enterprise, — it all means that the rule of law will not be followed. What applies to smaller companies and individuals who would be prosecuted criminally, required to make restitution and all the rest simply does not apply if you grow big enough to buy your way into government.

Even the judiciary is intimidated by the sheer size of the TBTF banks. While they inch their way to finding that there are indeed causes of action for wrongful foreclosure that should result in return of the home and millions in compensatory and punitive damages, they continue to ignore the slaughter on main street, the corruption of title, and the requirements of reporting, registering, and filing documents for recording.

All of those things were done using other people’s money like you or your neighbor who is receiving a pension that is under management by the same banks that sold the bogus mortgage bonds. None of that matters if you have a trillion dollar balance sheet even if half of it represents assets that are either nonexistent or should be written down to their real value.

Too Big To Fail should be renamed just like Libor was renamed either LieBore or Lie-More. They are tinkering with our lives when they breach the trust of other banks and people and small companies. TBTF should be renamed “Too Tall for Law.”

What to do? My answer is that ANYONE who is taking money from the banks that created this largest economic crime in human history should be voted out of office regardless of party affiliation. Think about that the next time a pollster asks you a question. We have stopped talking about foreclosures, which lie at the heart of the illusion of a recession made too real on normal people, while the banks continue to report record profits and bonuses.

Think about it. Banks are supposed to be the intermediaries in transactions, not the transaction itself. But they broke all the rules, laws and regulations, and we still have them operating as though they were king of the hill. Maybe they are the king, but they don’t have to stay that way — YOU CAN MAKE  A DIFFERENCE.

The Size of the Big Banks Is – Literally – Destroying the Rule of Law


Pulitzer prize-winning journalist Ron Suskind quotes Treasury Secretary Timothy Geithner as saying:

The confidence in the system is so fragile still… a disclosure of a fraud… could result in a run, just like Lehman.

In other words, Geither said that the big bankers are “too big to jail”, because disclosing any portion of their massive fraud would cause bank runs.

Former IMF economist Simon Johnson notes:

The main motivation behind the administration’s indulgence of serious criminality evidently is fear of the consequences of taking tough action on individual bankers.


The message to bank executives today is simple: build your bank to be as big as possible – and then keep growing. If you manage to become big enough, you and your employees are not just too big to fail, but also too big to jail.

Glenn Greenwald notes:

To justify this lack of accountability for the nation’s wealthiest lawbreakers, the all-too-familiar excuses long used to shield the politically powerful are trotted out on cue. Once again, we are told that prosecutions are too disruptive; that it’s more important to fix the system than to seek retribution for the past; that because the wrongdoers’ reputation is in tatters, they have already suffered enough; that we need the goodwill of financial titans to ensure our common prosperity; and so on.

Indeed, the Obama administration has made it official policy not to prosecute fraud.

Top economists, on the other hand, completely contradict Geithner and the rest of the administration … saying that fraud caused the Great Depression and the current financial crisis, and that the economy will never recover until fraud is prosecuted.

Top economists and experts on fraud say that fraud is not only widespread, it is actually the business model adopted by the giant banks. See this, this, this, this, this and this.

Therefore, unless the big banks are broken up, financial fraud will grow exponentially like cancer, and the economy will be destroyed.

Their Size Allows Them to Rig the Market

The “father of free market economics” – Adam Smith – knew that monopolies hurt the economy.

As the Libor scandal shows, the size and concentration of the biggest banks allows them to commit massive manipulation in the world’s biggest markets, and to engage in insider trading on a scale never before seen in history.

In addition, Richard Alford – former New York Fed economist, trading floor economist and strategist – showed that banks that get too big benefit from “information asymmetry” which disrupts the free market.

Nobel prize winning economist Joseph Stiglitz noted in September that giants like Goldman are using their size to manipulate the market:

“The main problem that Goldman raises is a question of size: ‘too big to fail.’ In some markets, they have a significant fraction of trades. Why is that important? They trade both on their proprietary desk and on behalf of customers. When you do that and you have a significant fraction of all trades, you have a lot of information.”

Further, he says, “That raises the potential of conflicts of interest, problems of front-running, using that inside information for your proprietary desk. And that’s why the Volcker report came out and said that we need to restrict the kinds of activity that these large institutions have. If you’re going to trade on behalf of others, if you’re going to be a commercial bank, you can’t engage in certain kinds of risk-taking behavior.”

The giants (especially Goldman Sachs) have also used high-frequency program trading which not only distorted the markets – making up more than 70% of stock trades – but which also let the program trading giants take a sneak peak at what the real (aka “human”) traders are buying and selling, and then trade on the insider information. See this, this, this, this and this. (This is frontrunning, which is illegal; but it is a lot bigger than garden variety frontrunning, because the program traders are not only trading based on inside knowledge of what their own clients are doing, they are also trading based on knowledge of what all other traders are doing).

Goldman also admitted that its proprietary trading program can “manipulate the markets in unfair ways”. The giant banks have also allegedly used their Counterparty Risk Management Policy Group (CRMPG) to exchange secret information and formulate coordinated mutually beneficial actions, all with the government’s blessings.

In other words, a handful of giants doing it, it can manipulate the entire economy in ways which are not good for the American citizen.

And the political system. No wonder Nobel prize-winning economist Paul Krugman thinks that we have to break up the big banks to stop their domination of the political process.

If We Break Up the Giants, Smaller Banks Will Thrive … And Loan More to Main Street

Do we need to keep the TBTFs to make sure that loans are made?


9 Responses

  1. …. Have you ever heard of the phrase … “Bring Them Down A Notch or Two” ? Or how about this one …”The Taller They Are…The Harder they Fall” ? Sure You have! Somebody is being Silly!

  2. https://www.lenstar.com/ServAttList.asp?listName=attorneyList&state=IL

    found an interesting link that lists the law firm doin’ the representin’ in that there RESCAP action. check it out. different states yield different….combinations, etc. Shows the heads of the snakes and where the paper comes from……I suspect.

  3. @ ALL: sign up petition to AG- Holder http://www.bankercrimespree.org/petition_ca

  4. C-Span right now

    Geithner: “The derivatives complicated things to a point where we couldn’t intervene any longer…”

    The derivatives were NOT allowed under Glass Steagall!!! Not in the form they took!!! The derivatives were not possible under antitrust laws!!!

    Let’s go back to basics, for Pete’s sake!!!

  5. Q: like the Batman massacre leading to: http://nagr.org/UN_PB_Video1.aspx?pid=gam01 ???

  6. FDR: “In politics nothing ever happens by accident, and if does you can be sure it was planned.”

  7. This has been going on since before the time of Jesus!

    President Jefferson: “The end of democracy and the defeat of the American Revolution will occur when government falls into the hands of lending institutions and moneyed incorporations.”
    ― Thomas Jefferson

    President Jackson
    : This was the only President in U.S. history to ever reduce the Federal debt to zero. “…unless you become more watchful…and check this spirit of monopoly and thirst for exclusive privileges you will in the end find that the most important powers of Government have been given…away, and the control over your dearest interests has passed into the hands of these corporations.”
    —Andrew Jackson, Farewell Address to America, 1837

    My favorite :
    “Dissent is the highest form of patriotism.”
    ― Thomas Jefferson

  8. “The “father of free market economics” – Adam Smith – knew that monopolies hurt the economy.”

    Duh! That’s why we used to have antitrust laws. Is this piece an exercise in self-evidence…?

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