How to put the final nail in the coffin of all the "too big to fail" insolvent banks‏

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Will's picture
Will
Status: Bronze Member (Offline)
Joined: Oct 27 2008
Posts: 81
How to put the final nail in the coffin of all the "too big to fail" insolvent banks‏

Thanks to Chris, most of us now know that the "too big to fail" large banks like Citi,
Bank of America, J P Morgan, etc. are technically insolvent and failed
businesses.  Propping them up with tax payer dollars and more borrowed
and printed money is utterly insane and I cannot help but grow
increasingly angry and frustrated with each passing day (and I know many of you
feel my pain).

I felt helpless to do much about it until a couple weeks ago when I
realized that one thing I do have control of is who I choose to do my
banking with.  So, I joined a local credit union last week and I am no
longer a customer of Bank of America.  If everyone who is angry about
the bailouts and is a customer of Bank of America did what I have done,
then Bank of America would surely fail once and for all and the
healthier financial institutions would then be free to pick up the
remaining surplus business.  I mean, how could the government possibly
continue to bailout and prop up an already technically insolvent bank
that has now lost 50 - 75% of their customer base and accompanying
reserve deposits?  Surely the stock would tank and the government would
then be forced to seize the bank and force it into bankruptcy
reorganization or liquidation, right?  Of course some honest people are
probably going to lose some of their money in such a scenario, but if
we continue throwing away good money (that we don't really have) in a
vain attempt to keep these large failed businesses on life support ,
every single American is going to lose A LOT of money on this deal, not just a
few.

I thought this might be something many of you might find interesting and I'm curious to hear your feedback.  I think It's just one possible example of how we the people
are individually and collectively capable of empowering ourselves to by
pass Washington and Wall Street to effectively enforce a healthy free
market balance on our own.

Mike Pilat's picture
Mike Pilat
Status: Platinum Member (Offline)
Joined: Sep 8 2008
Posts: 929
Re: How to put the final nail in the coffin of all the "too ...

Too big to fail bothers me, but I am most enraged by JP Morgan in particular. That bank came out of one of the creators of the Federal Reserve and has greatly supported and encouraged wars simply for the purpose of making bigger profits. The latest news is that JPM appears to be the most intertwined with the gold shorting that presently limits the ability of the gold price to reflect the level distrust and fear in this economy.

 

mainecooncat's picture
mainecooncat
Status: Gold Member (Offline)
Joined: Sep 7 2008
Posts: 488
Re: How to put the final nail in the coffin of all the "too ...

Hi Mike,

Glad you're so frank about war profiteering as a past time in America. I recommend Kevin Phillips' "Democracy and Wealth" for a devastating analysis of this from colonial times on.

RE JP: A guy I went to school with works at JP in Boston. Those guys really think they're Masters of the Universe, laughing about the bailouts, etc. He was saying that everyone at the office was scooping of BofA last week when it was really low.

It's hard not to want to see those guys "go down."

djhester1940's picture
djhester1940
Status: Bronze Member (Offline)
Joined: Sep 22 2008
Posts: 35
Re: How to put the final nail in the coffin of all the "too ...

I just paid off our mortgage with Chase home finance after receiving a generous offer from Chase to borrow $417,000. I ran the numbers on this loan and if I took 30 years to pay it off it would cost me nearly $3000 a month with a total payout of almost $1 million. This so enraged me that I decided right then and there that I would pull out Chase as soon as possible. We completed that transaction yesterday. at first I thought I was somebody special getting such an offer. But then as I was discussing it in the barber shop the other day I found out that the female barber that works in the shop also got a loan offer of $417,000. She actually had the paper there in the shop and showed it to me. It was identical to mine. Somehow, if I'm not mistaken, isn't this the kind of thing that got us into this mess in the first place?

I'm with Will on this. If everybody started pulling out their money from these banks that are too big to fail, I'm pretty certain we would see that they really aren't too big to fail.

Don

 

mainecooncat's picture
mainecooncat
Status: Gold Member (Offline)
Joined: Sep 7 2008
Posts: 488
Re: How to put the final nail in the coffin of all the "too ...

Don,

Regarding those identical offers, you're right, that's what got us in trouble in the first place. Here at our house the offers keep pouring in: credit card offers, refi's, etc. The desperate car dealership down the street even sent a gimmicky fake key taped to his over-sized glossy flyer basically saying that now is the time to go massively into debt to buy an SUV. My jaw just drops at this stuff, which just goes to show that the industry itself still hasn't grasped what's happening. Of course, as the government continues to condone and incentivize this behavior through the bailouts the various industries are unlikely to substantively change their models.

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