Mar 18, 2011


Adam’s first duty, according to the book of Genesis in the Christian bible, was the naming of everything. This makes a lot of sense, since the name we give anything also includes our attitude to it, and how it should be dealt with, if you think about it. (The “Global War on Terror,” named by George Bush, and justifying the slaughter of more people than the Japanese nuclear meltdown has managed to stack up, is a good example. What? War. Where? Global. On who and why? Terror.)

Goldman Sachs, and JPMorgan Chase were both about to go bankrupt in October 2009. Nothing could save them. Their debts and obligations simply exceeded their assets by too large a sum. How was the situation altered in their favor? Very simple. Both were given a new category. Instead of being “Merchant banks,” (or “Investment banks,”) who arranged deals and do all the things merchant banks do, they were moved to the category of “banks,” i.e., they were to be regarded as in the same category as the Bank of America, or Barclays, and granted the capacity to accept deposits from the public and make loans and so forth, which previously no merchant banks were allowed to do. They could then participate in the three stooges’ TARP and other hot shot scams to dump all their junk on the tax payer. Problem solved. Except for the tax payer, of course.

1 comment:

Wahyusamputra said...

"The government's proposed $700 billion rescue plan for financial institution, being voted on Monday by the House of Representatives, likely will prove of added benefit to Citi.

While the plan broadly aims to prevent banks from profiting on the sale of troubled assets to the government, there is an exception made for assets acquired in a merger or buyout, or from companies that have filed for bankruptcy.

This could allow Citigroup to sell toxic mortgages and other assets it gained from Wachovia for a higher price than the bank actually paid for them." ("Citigroup to buy Wachovia banking operations"

Huh?!? So Citi not only gets an army of depositors (the cheapest capital available!) but, at the same time, is going to be able to dump it's mortgage-backed junk on the taxpayer? And, guess what? The JP Morgan deal looks nearly identical.

Sarah Lepro (at Mike Whitney)