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Bailed Out Banks Threaten Systemic Collapse

MoGal

Well-known member
http://www.zerohedge.com/article/racketeering-101-bailed-out-banks-threaten-systemic-collapse-if-fed-discloses-information
The declaration by Norman Nelson is also included with that link
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Racketeering 101: Bailed Out Banks Threaten Systemic Collapse If Fed Discloses Information
Tyler Durden's picture
Submitted by Tyler Durden on 08/27/2009 10:35 -0500

* Bank of America
* Banks
* Bloomberg
* Capitalism
* Cash
* Credit
* Discount Window
* FED
* Federal Reserve
* Federal Reserve System
* HSBC
* JP Morgan
* Liquidity
* Racketeering
* Speculation
* The Clearing House Association
* US
* Wells Fargo



And so the guns come out blazing. The Clearing House Association, another name for all the banks that were bailed out over the past year with the generous contributions from all of you, dear taxpayers, are now threatening with another instance of complete systemic collapse if Bloomberg's lawsuit is allowed to proceed unchallenged, let alone if any of the "Audit The Fed" measures are actually implemented.

As a reminder, The Clearing House Association consists of ABN Amro, Bank Of America, The Bank Of New York, Deutsche Bank, HSBC, JP Morgan Chase, US Bank and Wells Fargo.

In a declaration filed in the Bloomberg Case (08-CV-9595, Southern District of New York), the banks demonstrate no shame in attempting to perpetuate the status quo with regard to the Federal Reserve and demand that the wool over the eyes of the general population remain firmly planted in perpetuity.

The Clearing House submits this declaration because the Court's Order threatens to impair the ability of our members to access emergency funds through the New York Fed's Discount Window without suffering the severe competitive harm that public disclosure of their identity will cause.



Our members have accessed the New York Fed's Discount Window with the understanding that the Fed will not publicly disclose information about their borrowing, especially their identity. Industry experience, including very recent and searing experience, has shown that negative rumors about a bank's financial condition - even completely unfounded rumors - have caused competitive harm, including bank runs and failures.

Surely transparency would facilitate rumor-mongering to an unprecedented degree. After all rumors spread much easier when everyone knows the true financial condition of banks.

And here, in plain written Times New Roman, you see what racketeering by a major bank consortium looks like:

If the names of our member banks who borrow emergency funds are publicly disclosed, the likelihood that a borrowing bank's customers, counterparties and other market participants will draw a negative inference is great. Public speculation that a financial institution is experiencing liquidity shortfalls - which would be a natural inference from having tapped emergency funds - has caused bank customers to withdraw deposits, counterparties to make collateral calls and lenders to accelerate loan repayment or refuse to make new loans. When an institution's customers flee and its credit dries up the institution may suffer severe capital and liquidity strains leaving it in a weakened competitive position.

Pardon me if I am a broken record here, but would rumors not spread much less if there was more transparency, if investors and other financial intermediaries were fully aware of the conditions of their counterparties, if banks did not have to cover their billions in reserve losses by pretending they are viable and essentially being constant wards of the state?

The Banks' racketeering has gone on for far too long.

And yet, it does not stop: the conclusion from the banks' letter:

In sum, our experience differs from the factual conclusions the Court appears to have reached about the nature of competition in the banking industry:

* The competitive harm to institutions that are publicized as needing emergency funding is not "speculative," but demonstrated by the recent multiple failures of financial institutions whenever information about their funding difficulty has been disclosed.
* The disclosure does not involve mere "embarassing publicity" but information that could result in the immediate demise of an institution.
* The disclosure would not merely "stigmatize [ ]"the institution or make it "look [ ] weak," but goes to its very viability.
* The disclosure of accessing emergency funding is not an "inherent risk" of market participation, but an extraordinary risk in extraordinary circumstances.
* Competitors can use the disclosure to advertise or publicize that they are financial stronger because they don't need emergency funding.

In a nutshell - the banks want their complete opacity cake and eat it too, or else, the racket goes, the transparency that will somehow promote massive rumor mongering will again destroy capitalism. In the meantime, the Ken Lewises of the world can continue touting how stable their businesses are based on optimistic future projections, while implicitly, they continue to survive merely thanks to the cash granted them by you, taxpayers.

Full filing here:
 

MoGal

Well-known member
also here's Denningers take on it:

http://market-ticker.denninger.net/archives/1386-The-Real-Issue-Behind-Fed-Secrecy-Lying.html


Its taxpayer money the (non)Federal Reserve is throwing about and we're to be kept in the dark??????
 

Ben H

Well-known member
The bigger the bubble, the bigger the burst.

The great depression happened because of the Federal Reserve trying to manipulate interest rates in the time leading up to the depression, all they did was grow the bubble bigger, the rest is history. Compare that to today.
 

MoGal

Well-known member
Yep I agree...... and Congress is doing absolutely nothing about dissolving the Federal Reserve and restore the money back to the people.

In fact if you do some checking, the very same ones who own the federal reserve also own the IMF and also the BIS so you tell me how the United nations calling for a global currency under the IMF is gonna be any different????

It will make the USA less sovereign and we'll all be reduced to 3rd world country status putting up our resources and land as collateral.
 

MoGal

Well-known member
Joseph Stiglitz, the Nobel Prize- winning economist, said the U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers Holdings Inc.“In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview today in Paris. “The problems are worse than they were in 2007 before the crisis.”Stiglitz’s views echo those of former Federal Reserve Chairman Paul Volcker, who has advised President Barack Obama’s administration to curtail the size of banks, and Bank of Israel Governor Stanley Fischer, who suggested last month that governments may want to discourage financial institutions from growing “excessively.”A year after the demise of Lehman forced the Treasury Department to spend billions to shore up the financial system, Bank of America Corp.’s assets have grown and Citigroup Inc. remains intact. In the U.K., Lloyds Banking Group Plc, 43 percent owned by the government, has taken over the activities of HBOS Plc, and in France BNP Paribas SA now owns the Belgian and Luxembourg banking assets of insurer Fortis.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aYdgQkXu9eBg
 

jigs

Well-known member
I was told that if you investigate ever President who has been assassinated that there is a direct link to him trying to shut down the Fed. there is a power in this nation that is not voted into power. they pull the strings and the Congress and White House dance away.....
 

nonothing

Well-known member
jigs said:
I was told that if you investigate ever President who has been assassinated that there is a direct link to him trying to shut down the Fed. there is a power in this nation that is not voted into power. they pull the strings and the Congress and White House dance away.....


Jigs,you are now on the Illuminati's radar...You best ask hypo on what your next step should be.....
 

TexasBred

Well-known member
reader (the Second) said:
I couldn't read The DaVinci Code myself. But I know a lot of people loved it. As fiction... I just finished Sea of Poppies by Amitav Ghosh about the opium industry in Colonial India. And am finishing Infidel by Ayaan Hirsi Ali who actually now works in a conservative think tank about growing up as a Muslim woman in Somalia, Kenya and Saudi Arabia. Very very eye opening. Both extremely well written.

Sounds like they books you're reading are much better than the DaVinchi code which is nothing but fiction as are all his books. But he's made about a billion bucks off folks buying them. I bet the "Infidel" makes you glad you're not a muslim woman. Sounds like something I might enjoy reading.
 

hypocritexposer

Well-known member
You know Reader, I really feel you need some happiness in your life. I've noticed that it hasn't been going too well for you the last few days on PB, so....

....I thought I'd give you some "Happiness Pie" (video format)

Happiness Pie

http://www.youtube.com/watch?v=W5xZ2NTq3CU

Hopefully this brings you out of your slump, and you are better able to cope with the facts and logical debates on PB.

Maybe it might even bring to mind some new names to call people, instead of the same old tired ones, you have been using for 5 years.
 
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