November 2nd, 2011
Beware of Bank of America bearing “gifts”
We’re all happy about the banks backing down from their new fees for customers, right? Bank of America decided to not charge customers the $5 fee to use their debit cards in places other than the bank. Big deal, now you have access to YOUR money. The change in the cold, cold corporate heart at B of A is considered a consumer win. But at what price?
While reversing the $5 fee made mainstream headlines, B of A, with approval and encouragement from the Federal Reserve (that exists by and for banks, not the U.S. government), moved $53 TRILLION of derivative contracts from the gambling reckless risk-taking side of the behemoth corporation (the bank holding company, investment house) to the retail consumer side Bank where funds are insured by the FDIC. That means that the massive losses by Merrill Lynch and the junk derivatives that had a Baa1 rating (the third lowest investment Moody grade) become overnight A2 rated because now the American taxpayers will cover the risk of these gambles failing. That’s you and me, the 99%-ers.
Remarkably, the entire financial system loves the dumping of risk onto the unsuspecting and unaware American public. While distracted by the $5 fee return, Bank of America just flaunted regulators. Of course, since the the Glass-Steagall Act was rendered obsolete by Alan Greenspan’s Fed in 1996, and formally repealed in 1999, the firewall separating retail banking functions that use customer money (and always backed by the FDIC) and investment businesses that play risky games to make incredible profits.
Said investigative reporter Matt Taibbi who has been following the underlying stories about the recession:
So the primary regulator of the banking industry is encouraging a functionally insolvent megabank to respond to a credit downgrade by pushing its most explosively risky holdings onto the laps of the taxpayer. This is lunacy…. Remember that story about the Chinese man who had a world-record 33-pound tumor removed from his face? This would be like treating that patient by removing the tumor and surgically attaching it to the face of a new patient, in this case the U.S. taxpayer.
Despite Occupy and the message that we reject control by the 1%-ers over so much of our lives, NYC Mayor Bloomberg had the audacity to claim on Nov. 1 that the banks and Wall Street cannot be blamed for the recession and global economic crisis.
Watch the outrageous video clip.
The facts do not support Bloomberg’s assertions (lies). Read the careful refutations by Mike Konczal. These are the points never known to the public. They are facts not disseminated by the media because financial reporters do not want to be seen siding the the 99%-ers.
This entry was posted on Wednesday, November 2nd, 2011 at 12:55 pm and is filed under Fairness & Social Justice Denied. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.