The Banking system: Too big to fail has become a total farce

Ben Bernanke

Regardless of all the US Government rhetoric the "Wall Street Bandits" continue their dangerous manipulation of Global markets practically unopposed... with all the negative result for the world economic system.


When it comes to regulating banks, Europe is actually way ahead of the US, but unfortunately Europe still has not found a way to block speculative banks like Goldman Sachs, JPMorgan and others from operating on their shores. 

Recently Goldman Sachs Group Inc. bought euro 1.78 billion ($2.3 billion) worth of Italian sovereign debt during the first quarter, increasing its overall market exposure to troubled European countries.

Goldman Sachs's scheme and also that of some other "big banks" is to buy sovereign debt financed by the European Central Bank with European taxpayer money at close to 0 interest rates to eventually "lend" these funds with a very high interest rate to borrowers either in the open market or as often is the case, back to the original sellers. How much more crooked can this get? It basically can be described as the bank using taxpayers money to make profits for themselves.

Another dramatic example this week of this "free for all" game was that JPMorgan, the largest U.S. bank, said that it lost  euro 788 million ($2 billion) in the past six weeks in a trading portfolio designed to hedge against risks the company takes with what it calls its "own money", but which in fact is money they borrowed from the Government ( taxpayers money).

The company's stock plunged almost 7 percent in after-hours trading, and the unexpected loss at one of the world's most venerated banks undermined investor confidence. British banks were hit hard - Barclays, which has a large investment banking arm, was the biggest loser in London trading, down 2.9 percent by mid-morning.

Too big to fail has become a totally obsolete US Fed policy. In addition, if you really come down to it, most of the so called "big banks" CEO's should be prosecuted and put into jail. When is the US Government going to put an end to this nonsense and fire Bernanke?


EU-Digest