Ben Bernanke Prepares to Rob My Mom

My mom’s pretty stubborn (I come by it naturally). So in spite of the fact that I have been warning her to move her primary banking out of Bank of America into a solvent bank for over a year, she has yet to do so.

Which is why I’m so troubled that Bank of America is about to use my mom’s savings to back its derivatives counterparties.

Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation.

The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.

Money’s fungible, right? That’s what the anti-choice people say, anyway. So what’s the big deal that BoA has taken Merrill Lynch’s exposure to the European mess and put that risk where mom keeps her retirement? Yves Smith explains. First, this will make it all-but-impossible to unwind Bank of America when it goes under without disrupting the personal accounts of people like my mom. Significantly, if those derivatives pay off (for example, if Greece defaults) or require more collateral (because BoA gets downgraded again), then counterparties would get their money before mom does.

The reason that commentators like Chris Whalen were relatively sanguine about Bank of America likely becoming insolvent as a result of eventual mortgage and other litigation losses is that it would be a holding company bankruptcy. The operating units, most importantly, the banks, would not be affected and could be spun out to a new entity or sold. Shareholders would be wiped out and holding company creditors (most important, bondholders) would take a hit by having their debt haircut and partly converted to equity.

This changes the picture completely. This move reflects either criminal incompetence or abject corruption by the Fed. Even though I’ve expressed my doubts as to whether Dodd Frank resolutions will work, dumping derivatives into depositaries pretty much guarantees a Dodd Frank resolution will fail. Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. So this move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral. It’s well nigh impossible to have an orderly wind down in this scenario. You have a derivatives counterparty land grab and an abrupt insolvency. Lehman failed over a weekend after JP Morgan grabbed collateral. [Yves’ emphasis]

As Yves points out, this will quickly result in the depletion of FDIC’s deposit insurance to pay my mom back for the money the banksters snatched. She suggests that Congress will quickly vote to fund the Treasury so it can pay my mom–and millions of other Americans–to replace their insured funds.

But it’s even worse than that. During the savings & loan crisis, the FDIC did not have enough in deposit insurance receipts to pay for the Resolution Trust Corporation wind-down vehicle. It had to get more funding from Congress. This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors. No Congressman would dare vote against that. This move is Machiavellian, and just plain evil.

She’s probably right that even the most Do-Nothing Congress in American history will eventually fund Treasury. I’m just not convinced it’ll happen quickly, or without some really big hostages demanded, first.

Now, mom’s in pretty decent shape for a retiree–between some pensions and other retirement funds, she could wait out the Do-Nothing Congress. And heck, I’m even willing to lend mom a few bob, even if she is so stubborn.

But most Americans are living paycheck to paycheck, and millions of them depend on what they’ve got deposited in Bank of America. It seems to me that Ben Bernanke has just unilaterally decided to make those BoA depositers lend banksters their life savings until such time as the Do-Nothing Congress gets around to fixing what are, as we speak, foreseeable and unacceptable consequences of this move.

Update: Jeebus I had a lot of typos in this. I hope I’ve gotten them all.

Marcy has been blogging full time since 2007. She’s known for her live-blogging of the Scooter Libby trial, her discovery of the number of times Khalid Sheikh Mohammed was waterboarded, and generally for her weedy analysis of document dumps.

Marcy Wheeler is an independent journalist writing about national security and civil liberties. She writes as emptywheel at her eponymous blog, publishes at outlets including the Guardian, Salon, and the Progressive, and appears frequently on television and radio. She is the author of Anatomy of Deceit, a primer on the CIA leak investigation, and liveblogged the Scooter Libby trial.

Marcy has a PhD from the University of Michigan, where she researched the “feuilleton,” a short conversational newspaper form that has proven important in times of heightened censorship. Before and after her time in academics, Marcy provided documentation consulting for corporations in the auto, tech, and energy industries. She lives with her spouse and dog in Grand Rapids, MI.

47 replies
  1. allan says:

    Risk is socialized while gains are privatized. We’re all Greek now.

    I especially like `The bank doesn’t believe regulatory approval is needed’.
    Can I try that gambit next time I get a parking ticket?

  2. Snarki, child of Loki says:

    BofA is evil, always has been, always will be.

    Best to nuke it from orbit, just to be sure.

  3. orionATL says:

    those who lived thru the savings & loans crisis of the early ’80’s

    remind those who did not

    that because your money is insured does NOT mean you can get your hands on it any time soon, once your bank fails,

    unless fdic works differently and faster these days.

  4. Sojourner says:

    I really felt my rectum pucker up yesterday when I read about this. I think that I am going to find a new bank this coming weekend! I have no way to get by even for a couple of weeks at this point if my money gets fouled up somehow.

    However, I am increasingly thinking about a strategic foreclosure since my house is underwater and I have a snowball’s chance in hell of selling it… BoA was who we financed through.

    I especially like Allan’s comment above: “I especially like `The bank doesn’t believe regulatory approval is needed’.”

  5. Sojourner says:

    I just have to wonder why this is not getting more attention… BoA has basically backstopped its losses against the entire US banking system, with the power to bring it all down, totally. I do not think it is a benign move by BoA. I wonder what our elected officials are going to say when the plug gets pulled?

  6. orionATL says:

    this is just hostage-taking by bank of america;

    there really is no other way to view it, the hostages being the bank accounts of ordinary folks and businesses.

    in fact we can say boa has engaged in robbery (mortgage mess) with hostage-taking:

    “ok, i’m walkin’ outta heah. any you feds make a move, and mom’s bank account gets it!

    unnuhstan! ”

    to which special agent bernanke responds:

    “sure, big boa.

    we understand.

    you go right ahead and walk.

    and have a nice day.”

  7. rg says:

    EW, I had the sinking feeling for some time now that we’re on a greased skid toward exactly this, and more. I just slugged my way thru Smith’s Econned, and though I learned a lot, most of it is goes over my head. So with that as credential, let me opine this: We were told in 2008 that there was a financial crisis so great that without massive govt intervention, the entire economy would collapse, and possibly the world’s as well. Thus the bailouts began. The problem I see is that the bailouts could not be large enough to manage the size of the crisis. The so-called unwinding process should take time to unfold, and as it does, more and more resources will be needed to cover the losses, or there will be institutional failures- like Lehman and Bear-Sterns. Rather than let the chips fall where they may (with all the damage that could do to the real economy), a decision has been made to gradually draw out the problem, and the backstopping measures implemented on an as needed basis. It will only end when all the debt is paid off, with interest of course. It reminds of an alcoholic gambler that keeps living on loans from a rich relative; as long as the payouts are available, the habits continue, until the relative goes broke. This move to get FDIC on the hook for the counterparty (right term?)losses is the latest trick to keep the payouts flowing.

  8. emptywheel says:

    @rg: Right. With the alcoholic gambler, the relative has a choice to intervene or walk away. Here, Ben Bernanke is deciding for the relative.

  9. rg says:

    @rg: I should add that the cognitive regulatory capture has the view that the debt-traders are the good guys and we the people, should do our patriotic bit to backstop the system. Maybe we need to get this point across to our teaparty “counterparties”.

  10. rkilowatt says:

    Indeed, the banking subsidiary of Bank Of America is the receiver of of SocialSecurity, pension and other electronic direct-deposits for millions of individuals. Any failure to make those funds available is backstopped by FDIC insurance.
    BUT, FDIC fund has only enough to cover a small bank. How can direct deposits be made and transferred to acccount holders if the bank’s doors close [bank run, bank holiday, etc]?…when the FDIC runs out of money? Congress will take weeks or months to act.

    IMO, this situation was anticipated by Treas and the Fed when BOA Holding Co. bought Countrywide’s crapped-out bank in a stealth bailout of the Fed ! Then MerrilLynch crap followed to help cover the mess.

    Would BOA have done those “clearly stupid, wink-wink” deals without some guarantee from the Fed? That would explain th Fed’s allowing crap derivatives to be taken from uninsured MerrilLynch subsidiaries and put into the BOA banking subsidiary…or the equivalent financial scamming if my details are inexact.

    Has s/o found ex-regulator BillBlack’s take on this?…meaning his unedited thoughts?

  11. posaune says:

    Like Hjalmar Schact? who inflated german currency for Hitler? (he used bonds), and kept it up until 1941, when Hitler asked for more (Operation Barbarossa), and Schact replied that he couldn’t print money fast enough to pay for an invation of Russia. So he went to Dachau. (and that was why he was one of three acquitted at Nuremburg).

  12. floundericious says:

    my first thought upon completing this article was: “wait…isn’t this reason for a run on BoA????”

  13. Susan says:

    God, this is complicated. What does it do to Merrill Lynch customers who have money market accounts combined with a brokerage account? Do ML customers with cash in there get in line behind the counterparties, behind your mom even, and come up empty?

  14. rkilowatt says:

    Bill Black’s thoughts from George Washington’s contribution at yesterday: [extract]

    …Bill Black said that the Bloomberg editors toned down his remarks considerably. He said, “Any competent regulator would respond: “No, Hell NO!” It’s time that the public also say no, and loudly, to this new scheme to loot taxpayers and save a criminally destructive bank.

    Professor Black provided a “bottom line” summary in a separate email:

    1.The bank holding company (BAC) is moving troubled assets held by an entity not insured by the public (Merrill Lynch) to the Bank of America, which is insured by the public

    2. The banking rules are designed to prevent that because they are designed to protect the FDIC insurance fund (which the Treasury guarantees)

    3. Any marginally competent regulator would say “No, Hell NO!”

    4. The Fed, reportedly, is saying “Sure, no worries” by allowing the sale of an affiliate’s troubled assets to B of A

    5. This is a really good “natural experiment” that allows us to test whether the Fed is protects the public or the uninsured and systemically dangerous institutions (the bank holding companies (BHCs))

    6. We are all shocked, shocked [sarcasm] that Bernanke responded to the experiment by choosing to protect the BHC at the expense of the public.

  15. emptywheel says:

    @maxomai: I called her at 7 to try to elicit a promise she’d do so today. Didn’t quite get that, though.

    Gonna have to fly 3 states away to get her money out of BenBernank’s hands.

  16. rkilowatt says:

    Schacht was the key person in stopping the 1920s hyperinflation before Hitler came to power in 1933.

    Then he left the government. Hitler asked him to return in 1933/34.Schacht did, and resigned in disgust with Hitlers’ policies in run-up to [before] WW2.

    For awesome explanation of how Schacht stopped the hyperinflation, suggest read English translation of Schacht’s Account Settled.
    He simply [!] applied correct diagnosis and corrected the stealthy financial fraud practices…re applied fairness to his overview that the general population should benefit, and not be victim of, from financial cleverness.

    A taste:
    From Account Settled, Hjalmar Schacht 1949
    . . . By the autumn of 1923 the unrestricted depreciation of the currency had reached such a pitch that it threatened to break up the whole structure of Germany’s national life. Wage-earners’ wives were in despair. Whenever they went out to buy food they were involved in a hopeless struggle against the depreciation of the mark. The wages of their menfolk ran through their fingers like water even when, as was finally the case, they were paid daily, In this extraordinarily difficult situation the authorities called upon me to put a stop to the depreciation of the mark and stabilize the currency. . . .

  17. rugger9 says:

    One wonders how Obama will explain this craven sellout to his daughters, along with the targeted executions of Americans without any process. They know he’s taught Con Law and would therefore know better.

  18. posaune says:

    thanks kilowatt, but question: didn’t schacht convert boatloads of currency into bonds in the 20’s? And then re-inflated in the 30’s when Hitler needed the cash for armaments they were behind in building?

  19. GulfCoastPirate says:

    This is frakking unbelievable but should have been entirely expected (as someone noted by defining it as a wink-wink deal with the Fed over the takeover of Countrywide/ML). None of this nonsense is going to stop until there is so much pressure put on politicians by voters that they have no choice but to stop it. OWS is the beginning but it is going to have to grow much, much larger and people are going to have to be prepared to bring economic activity in this country to a virtual halt. This is precisely why Obama should have been throwing bankstas in jail from day 1.

  20. rkilowatt says:

    @posaune: From my notes from Schacht[hilites/underline/[[[all brackets]]] are mine]

    In the inflation of 1923 there were three main measures which were decisive to the stabilization of the mark. They were the
    [1] abolition of private paper currency ; [[[kill abuse of unofficial currency issue]]]
    [2] the diminution of the volume of legal means of payment ; [[[kill speculation]]] and
    [3] the credit bar. [[[kill excessive credit]]]
    As the volume of bank-notes officially issued by the Reichsbank proved unable to keep pace with the rapid rate of currency depreciation, and a shortage of notes developed everywhere, both municipal administrations and large-scale industrial undertakings began to print their own paper money, which nominally had the same value as the notes officially issued by the Reichsbank. Naturally, this unofficial paper money depreciated at the same rate as the official notes printed by the Reichsbank, and the printing of such paper money thus proved a very profitable business, since when it was issued its value was considerably higher than when it was later redeemed [[[from the issuer by the bank. Predictability, by a private issuer, of lesser valuation upon Reichsbank redemption meant a type of “self-created insider” fraud]]] . This unofficial paper money was, of course, not legal tender, but if economic life was not to break down altogether then the banks, including the Reichsbank itself, had to accept it in just the same way as they accepted the official notes. Some firms ruthlessly exploited the situation by paying in the biggest possible sums of the money they had themselves printed to one branch of the Reichsbank whilst drawing out an equivalent sum at a neighbouring branch in official bank-notes[[[also a form of “self-created insider” fraud]]], which were, of course, the only legal tender and could therefore be used abroad, or, at least, could be used abroad more readily than the unofficially printed paper money. . .

    [1 abolition of private paper currency ] My first measure as Reich’s Currency Controller was to issue instructions that no more of this emergency currency was to be accepted by the Reichsbank. This undermined the entire basis of the private issue of currency. Notes which the Reichsbank refused to accept were valueless. This first measure was quite sufficient to make me very unpopular both with the municipalities and with the large-scale industrial undertakings. For the latter the fact that the blow was delivered by a man whom they regarded as one of themselves, the Director of a big bank, added insult to injury. I was practically mobbed. They threatened me ; they pleaded with me ; they painted the probable consequences in the most violent colours. But I remained adamant. I was determined at all costs to put an end to the misery of the great masses of Germany’s working people and to guarantee them a stable wage once more.

    [2 the diminution of the volume of legal means of payment ] My second measure was directed against speculation in foreign exchange.[[[speculation as fraud ]]] On November 20th, 1923, the Reichsbank had let the exchange rate of the United States dollar climb to 4.2 billion marks with the firm intention of maintaining it at that level. However, private speculators continued to buy dollars at an even higher rate. The groups who indulged in this speculation did not believe that I would succeed in keeping the exchange rate at its official level, and so they merrily went on buying foreign exchange on a rising market, paying up to 12 billion dollars [sic; marks] ‘per Termin’, which meant that at the end of the month the dollars had to be paid for with legal tender, that is to say, with Reichsbank notes. When settlement day came round at the end of the month the dollar purchasers needed marks from the Reichsbank to meet their commitments, but the Reichsbank refused to give them Reichsbank notes and handed out Rentenbank notes instead. This Rentenbank had been established as an auxiliary institution to assist in the stabilization of the mark, and the notes it issued did not have the character of official bank-notes. In short, they were not normal legal tender. But naturally, the foreign groups who had sold the dollars demanded payment in money which was legal tender, and the German dollar purchasers were now unable to comply. Nothing remained for them but to sell their stores of foreign currency to the Reichsbank which now secured dollars, which had been bought speculatively for as much as 12 billion marks, at the official rate of 4.2 billion marks. Speculators lost many millions on this unprofitable transaction. Naturally, my unpopularity was greatly increased, but the well-being of the great mass of the German people meant more to me than the troubles of individual speculators. The dollar rate of exchange, officially fixed by the Reichsbank at 4.2 billion marks, had to be maintained at all costs. I was not prepared to allow private speculation to drive it up again. It was, in fact, held.

    [3 credit bar ] The third of the decisive measures adopted to put an end to inflation came into operation at the beginning of April, 1924. Big business interests had once again used the excessive credits [[[ form of credit fraud]]] they had asked for and obtained to start hoarding foreign exchange. In order to make them realize once and for all that they must subordinate their operations to the monetary policy of the Reichsbank, I suddenly barred all further credit against bills. In normal times these bills were the usual means of obtaining credit from the Reichsbank. It was unprecedented that the Reichsbank should refuse to discount good commercial bills. When its credit was called on to an excessive degree, that is to say, when too many bills were presented, the Reichsbank would merely raise the discount rate, and continue to raise it, until the deduction was more than the bill holders cared to pay and they preferred to do without the credit. However, in times of currency depreciation such as we had just experienced, this discount screw necessarily failed to operate effectively. It did not matter in the least whether the presenter of a bill had to pay 10 or 15 per cent discount when within a few weeks, or even within a few days, money itself would depreciate by 50 per cent and even more. This was the reason why I did not have recourse to the usual method of raising the discount rate, but adopted instead the harsh but only really effective means of blocking all credit. The measure was immediately successful. To the extent that business interests needed money they had to surrender their hoarded sums of foreign exchange to the Reichsbank, and within the space of two months equilibrium had been restored so successfully that throughout my whole subsequent period of office the mark remained stable. . . .

  21. orionATL says:


    this is extremely interesting.

    sounds like the sort of general approach we need in tbe u.s. with regard to our banks, their tradings, their capitalization, and the margins within which they must operate.

  22. jo6pac says:

    This nothing to get excited about until they do it then ever other TBTF follows along. This just another way crazy ben and the wh says F*&^ You to the citizens of this nation. I’ve read more then once the derivatives market could be as large as 600+ trillion for the world and 2/3 is held by the TBTF. Think Shock Doctrine.

  23. rkilowatt says:

    @orionATL: BTW, the Rentenmark was only good for trade [purchase] for German products. Because it had no international standing as legal tender, it was useless in currency speculation [exchange for other currencies]. Thus when a speculator bought a contract for USD payable in Reichmarks [at spot price + profit and risk premiums] after 1 month term, the spec had to exchange the USD for Reichmarks and pay for the contract by month’s end. When the expected exchange for cheaper [further-devalued] Reichmarks failed [got unchanged-price Reichmarks], the spec lost heavily.

    Also note: The “credit bar” was instituted bec the usual means to monitor availability of credit would not work. Namely, raising the discount rate to discourage credit activity could not overcome the much faster increase in money devaluation. As excssive credit [cf. liar loans, CDS pseudo-insurance, etc.] was a key to hyperinflation, NO credit [e.g. stop accepting Bills Of Lading as loan collateral] was chosen as only viable strategy .

  24. rkilowatt says:

    @allan: Wow. Greatest link on this subject. I repeat [email protected] link:’s-death-rattle/?

  25. rkilowatt says:

    Bill Black’s key question:

    Who within the Fed approved this deal and the exact composition of the assets and liabilities that were transferred.

  26. orionATL says:


    what floored me was black’s comnents about boa’s ceo’s.

    in his recounting, not only were the ceo’s not intersted in acting in the nation’s interest, they weren ‘t even intetested in acting in the interest of their own organization – boa.

    their interest was personal and financial, they wanted impressive sounding, but fundamentally weak, short-term profits so they could claim enormous salaries and bonuses.

    there’s a term for what was done to boa by its leaders. that term is “looting” – over several years they looted boa for their salary and bonuses.

  27. readerOfTeaLeaves says:

    EW, best to your mum.
    My Ancient Father has a pile of money with Merrill Lynch and has banked with BoA since Jesus was a baby.
    After some recent complications (basically, ML fuckups on his accounts), this is **very** emotional for me. I couldn’t even make it through Yves’s thread.

    I suspect that Ritholtz link is going to get a very wide readership.

    This nonsense may be the thing that finally gets my Libertarian siblings, cousins, kids, and I all talking in agreement about a political issue: break up the banks, turn them into utilities, we’re done with these asshats.

  28. Quanto says:

    What is to stop the FDIC from doing like any other insurance company when you take undue risk, they just drop your insurance. FDIC should just be able to tell BOA “Open up your books and show what these derivatives are priced at mark to market. If the risk is too great we will cancel your insurance and you will have to notify all your depositors of the fact.”

  29. orionATL says:


    i encourage anyone reading black’s article to also read the comments of “carter the examiner”. they are thoughtful and they represent the ONLY sensible explanation i have found for the very conservative actions (i do not mean politically conservative) supported by bernanke, geithner, obama.

    there has to be a reason why these leaders are not unloading on the banks. i suspect the reason is they are all scared schiessless of a colossal credit freeze.

    i keep waiting for an explanation for why they won’t go after bank leaders and banks, but one never comes.

    they repeatedly fail provide us citizens with a straight forward answer to “why we can’t/won’t?”

    the personna “carter the examiner” also showed up at naked capitalism and made similar points there.

    i don’t need to buy everything he’s selling to appreciate his important contribution to this discussion.

    so, read dr. black, read yves smith, and read “carter the examiner” in comments at both places.

  30. readerOfTeaLeaves says:

    @emptywheel: Oh, I’m certain they’re churning my Ancient Dad’s accounts to cream fees.

    For a bit of sanity this evening, I’m listening to a Dylan Ratigan podcast with Prof Wm Black, posted today at
    There are also two #OWSers in the interview who are brilliantly insightful.

    Here’s the link to the same audio file on Ratigan’s web page, with more background on the interview:

    Whoever ‘Calvin’ is in this interview, the man’s incredibly articulate and he sure speaks for me — WTF is with all these damn gutless, bought politicians?! It really feels like voting has become completely useless. Hence, #OWS.

  31. readerOfTeaLeaves says:

    @orionATL: It started as ‘live and let live’; it got co-opted by assholes into ‘screw you’, but the people that I know actually value government infrastructure and follow politics. They care more about economic issues than social issues.

    The irony to me is that since I know these people, I know how much money, effort, and talent they put into their communities (churches, professional organizations, cities). They’re actually absolutely wonderful people who do value community.

  32. orionATL says:


    that is my experience exactly with my (extended) family – wonderful, caring people, unmoored from their personal caring for reasons i can not comprehend, unless it be watching fox news day-after-day, and night-after-night.

    propaganda does do its work on peoples’ minds – that’s why
    it is so pervasive.

  33. rkilowatt says:

    @orionATL: Thanks yr data.

    Re the “Why” of it all… it almost seems that when AIG,GS, Leh, et al began the cascade of financial out-of-control liabilities circa late 2007,the Fed and/or FDIC understood the global system consequences would be overwhelming [e.g., at least, the FDIC would surely be overwhumped] via the next crims in line, Countrywide and MerrillLynch.

    An acute crisis. Panic ensued, and Bernanke et al devised an anti-social clever-stroke to delay the imminent predictable consequences on some of TheVeryBestFamilies.

    Thus, having BOA swallow CW’s toxic paper, followed by BOA swallowing ML’s liabilities would give the temporary relief…at the expense [who cares?]of growing the problem.

    [The next acute crisis shortly arrived and was pseudo-handled with another “insane” temp relief, namely, TARP.]

    As usual, each pseudo-handling becomes the problem.

    So i posit a deal was made [w or w/o BOA Lewis or Board of Dirs awareness]to set-up BOA for climactic Grand Fail, allowing 1 or 2 years for global insiders to prepare for it. [Perhaps Lewis was an unwelcome upstart, an interloper/intruder into the Big Club of Financial Families…that equates to an easy mark]

    Recall his meeting w Paulson and Bernanke wherein they force-fed the pate de fois-gras [aka plan] down his gullet. If he did not know before, upon leaving the room he knew he was the mark…and could not fight back. Really, Moynihan’s moves after taking over from Lewis, seem to follow a script designed arrive at BOA’s doom.

  34. earlofhuntingdon says:

    To echo the sentiment, fuck the counterparties. As you say, this is a backdoor way to elicit another measureless government guarantee for investors, to immunize them from the routine business risk that the bank they did business with – on an uninsured, but presumably hedged basis – might be FUBB and unable to keep its side of their deal(s).

    This is another example of publicizing risk and privatizing gain. It is not about the “stability” of US banks or the US banking system. It is a means to pull this (and inevitably other banks) out of the fire of molten deceit it and they have thrown themselves into, at the cost of everyone who did not engage in such massively, such systemically risky behavior. To say this is bad public policy, a rewarding of financially and physically lethal high-risk behavior, is an understatement even by the standards of the Obama administration.

Comments are closed.