Ten
years after the last financial meltdown, very few spotted and
mentioned (even until today) an astonishing admission by the
Financial Crisis Inquiry Commission (FCIC).
In the
conclusions
on chapter 20 of the report, the Commission
implies that trillions (with a T) of taxpayer dollars were mobilized
to stabilize the system.
Yet, perhaps the
most astonishing conclusion that drawn very little attention, lies in
the last sentence in which the Commission actually confirms that the
financial sector is even more concentrated in the hands of very few
powerful institutions:
A
series of actions, inactions, and misjudgments left the country with
stark and painful alternatives—either risk the total collapse of
our financial system or spend trillions
of taxpayer dollars to stabilize the system and prevent catastrophic
damage to the economy. In the process, the government rescued a
number of fi- nancial institutions deemed “too big to fail”—so
large and interconnected with other financial institutions or so
important in one or more financial markets that their failure would
have caused losses and failures to spread to other institutions. The
government also provided substantial financial assistance to
nonfinancial corporations. As a result of the rescues and
consolidation of financial institutions through failures and mergers
during the crisis, the U.S. financial sector
is now more concentrated than ever in the hands of a few very large,
systemically significant institutions.
This concentration places greater responsibility on regulators for
effective oversight of these institutions.
And
while everyone sits and waits for the next, almost certain, big
crisis, the banksters are getting ready to take advantage of it ...
again. In 1929 they did it. In 2008, they took more. Not only they've
been rescued with trillions, not only they eliminated competitors,
but they sacrificed entire nations to retain their parasitic nature.
Recall
that, Deutsche Bank was one of the major drivers of the
collateralized debt obligation (CDO) market during the housing credit
bubble from 2004 to 2008, creating about $32 billion worth. The 2011
US Senate Permanent Select Committee on Investigations report on Wall
Street and the Financial Crisis analyzed Deutsche Bank as a case
study of investment banking involvement in the mortgage bubble, CDO
market, credit crunch, and recession. It concluded that even as the
market was collapsing in 2007, and its top global CDO trader was
deriding the CDO market and betting against some of the mortgage
bonds in its CDOs, Deutsche bank continued to churn out bad CDO
products to investors.
Well,
guess how this zombie mega-bank rewarded:
in 2009, Mrs. Merkel experienced a big shock. Some of her advisers
called her and told her that the Frankfurt banks (especially Deutsche
Bank, having exposures of more than 30 times the German GDP) had
bankrupted as a consequence of the huge financial crisis that has
started from Wall Street and the collapse of Lehman Brothers.
So, Mrs.
Merkel was forced to 'swallow a glass full of political poison' by
going to Bundestag to ask for 500 billion euros for the German banks
which until a few months ago were swimming in profits. She was very
angry, she couldn't accept it because she was a politician that
actually represented principles like saving resources, not spending
taxpayers' money, and suddenly, she had to take 500 billion from the
taxpayers to save the bankers. She thought, 'I did, it's over, let's
move on.'
A few
months later, the same people called her and told her that they want
another 300 to 500 billion for the same banks. They said (as an
excuse apparently), that this time we have Greece that is bankrupted,
so if Greece default on its debt Italy will be next and we will need
another 500 billion.
So, what
happened then is very simple: Merkel went again to Bundestag, yet she
didn't dare to request again money for the German and the French
bankers. She requested money in the name of 'solidarity' to Greece.
Therefore, the money ended to save the Franco-German banks through
the Greek Ministry of Finance. This was the first memorandum for
Greece.
Indeed,
from October 2009 to early May 2010, there were a number of meetings
between the European institutions, the IMF, bankers and the new
government of the socialist PM George Papandreou, who had won the
elections on 4 October 2009 with 43% of the votes, which is a very
high rate. They were to finetune a new bail-out programme for the
Greek banks and their creditors. Greece did not have enough financial
resources to help them out.
What
should have been done is the opposite of what Papandreou did, siding
as he did with private banks that were responsible for the crisis:
namely refuse point-blank to give new public money to the banks and
avoid increasing the public debt for this nefarious objective. If
Papandreou had adopted an attitude that suited the interests of a
majority of Greece’s people, we would have avoided the social and
political drama that ensued.
Conclusion:
The
banking parasites, which are even more powerful, are free to play
their games again under zero regulations, until the next financial
crisis. And then, while some of you hope that at least you may see
the end of parasitic capitalism, the parasites may become more
powerful than ever.
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