BetterMarkets.com publishes report on bailouts totaling $27 trillion. Can’t we do better than this?

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Out of sign, out of mind. This report correctly describes the total in “bailouts” that went not to depository institutions but to risk-takers and frankly law violators on Wall Street. And part of the “bailout” was that those same businesses were suddenly chartered overnight to be licensed as commercial banking institutions — so that the “bailouts” could be received by them.

Analogy: that single change in chartering competent financial institutions was like taking a murderer and then licensing him to perform surgery thus allowing the defense that the victim died from negligence instead of first-degree murder.

But something is missed by nearly everyone because they all subscribe to the false national narrative under which the weapons of mass financial destruction were created that destroyed the economy in 2008 and might still again.

There was no bailout. No money was lost resulting from either loan defaults or a decline in value of certificates that were falsely labeled as Mortgage-Backed Securities (MBS) or Collateral Backed Securities (CBS).

The money given to the six major banks was the result of what I believe to be deceit and extortion. President George W Bush had it right initially when he refused to do the “bailout.” He caved because eventually believed that the stories coming out of Wall Street were true and that therefore the economy would collapse if the investment banks were not given what they wanted.

In contrast to the policies that led to printing money on a grand scale, the opposite policy of providing relief under existing laws, rules, and regulations was ignored. The $8 trillion given to the investment banks and $27 trillion in total could have been better spent or not spent at all.

The evolution of the TARP plan shows that policymakers became deeply aware of the law. they understood that the investment banks had no losses — not from so-called loan defaults and not from so-called losses incurred by the investment banks on the certificates they were selling. The latter was true because the investment banks were selling and not buying and therefore the only “loss” they incurred consisted of profits they ould have generated had the selling of fake certificates been continued (which eventually occurred anyway).

Appraisals were known to be hyper-inflated — something that was known by the Federal and state governments since the inception of the securitization era. This enabled the investment banks to pick up a handy bloated yield spread premium immediately upon the consumers’ execution of loan documents. The viability of many loans was virtually nonexistent. Iceland simply cut household debt and jailed the bankers who committed the various acts of fraud and deception.

Iceland’s recession was over in 3 months. 12 years later we are still recovering. Had we simply done what was required, the fiscal stimulus to the main street economy would have been in the trillions of dollars without taking one dime from taxpayers. The dollar would not have been diluted and American power would have maintained its peak.

By reducing household debt that was created by false appraisals and failure to comply with generally accepted and statutory rules governing the viability of loans, the economy would have received a stimulus far in excess of anything that was distributed or even proposed.

Eventually, this inequity might be resolved. But as Winston Churchill said, “You can always count on the Americans to do the right thing — after they have exhausted all other options.” Once again we have politicians who remain and even insist on being out of touch with the people who vote in elections, most of whom understand full well that they should not have been required to pay for Wall Street misbehavior.

3 Responses

  1. It is not the bailout that is homeowner victim problem. The fake RMBS were not valid collateral thus destroying the capital of the big banks. Their fault and investor stupidity. Bailout would not have been so horrible had the true victims been addressed – the homeowner victims. It was the “settlements” under Obama that destroyed any hope of resolution for victim homeowners. The Settlements concealed the true nature of the claimed “CRISIS LOANS” fraud and blocked investigation of the crimes. As the article points out – loan mods were invalid and few and far between. People took the bait, and were further conned. None of this, or foreclosure fraud, is presented here. Obama and his “group” hoped all would work out for homeowners. They hoped wrong. They left homeowners to battle in court – alone – against the massive fraud. Neil is correct – the politicians abandoned us. JohnR– I can’t find either. But whatever you find — it is never the whole truth and nothing but the truth.

  2. I tried the link for the original article and get a bad address message. Tried going to https://bettermarkets.org/ and doing a search for the article… no joy there either. I’m wondering if the backdoor bailouts were included in their $27T estimate. If you can still find the link I’d appreciate it if you’d send it to me. Thanks!

  3. The 6 TBTF crime families bosses threatened Bush to collapse the stock market , not the economy, of which they are just a small part. They should have been arrested on the spot.

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