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Failing to Break Up the Big Banks is Destroying America

George Washington's picture




 

The Size of the Big Banks Is - Literally - Destroying the Rule of Law

Pulitzer prize-winning journalist Ron Suskind quotes Treasury Secretary Timothy Geithner as saying:

The confidence in the system is so fragile still... a disclosure of a fraud... could result in a run, just like Lehman.

In other words, Geither said that the big bankers are "too big to jail", because disclosing any portion of their massive fraud would cause bank runs.

Former IMF economist Simon Johnson notes:

The main motivation behind the administration’s indulgence of serious criminality evidently is fear of the consequences of taking tough action on individual bankers.

***

The message to bank executives today is simple: build your bank to be as big as possible – and then keep growing. If you manage to become big enough, you and your employees are not just too big to fail, but also too big to jail.

Glenn Greenwald notes:

To justify this lack of accountability for the nation's wealthiest lawbreakers, the all-too-familiar excuses long used to shield the politically powerful are trotted out on cue. Once again, we are told that prosecutions are too disruptive; that it's more important to fix the system than to seek retribution for the past; that because the wrongdoers' reputation is in tatters, they have already suffered enough; that we need the goodwill of financial titans to ensure our common prosperity; and so on.

Indeed, the Obama administration has made it official policy not to prosecute fraud.

Top economists, on the other hand, completely contradict Geithner and the rest of the administration ... saying that fraud caused the Great Depression and the current financial crisis, and that the economy will never recover until fraud is prosecuted.

Top economists and experts on fraud say that fraud is not only widespread, it is actually the business model adopted by the giant banks. See this, this, this, this, this and this.

Therefore, unless the big banks are broken up, financial fraud will grow exponentially like cancer, and the economy will be destroyed.

Their Size Allows Them to Rig the Market

The "father of free market economics" - Adam Smith - knew that monopolies hurt the economy.

As the Libor scandal shows, the size and concentration of the biggest banks allows them to commit massive manipulation in the world's biggest markets, and to engage in insider trading on a scale never before seen in history.

In addition, Richard Alford – former New York Fed economist, trading floor economist and strategist – showed that banks that get too big benefit from “information asymmetry” which disrupts the free market.

Nobel prize winning economist Joseph Stiglitz noted in September that giants like Goldman are using their size to manipulate the market:

“The main problem that Goldman raises is a question of size: ‘too big to fail.’ In some markets, they have a significant fraction of trades. Why is that important? They trade both on their proprietary desk and on behalf of customers. When you do that and you have a significant fraction of all trades, you have a lot of information.”

Further, he says, “That raises the potential of conflicts of interest, problems of front-running, using that inside information for your proprietary desk. And that’s why the Volcker report came out and said that we need to restrict the kinds of activity that these large institutions have. If you’re going to trade on behalf of others, if you’re going to be a commercial bank, you can’t engage in certain kinds of risk-taking behavior.”

The giants (especially Goldman Sachs) have also used high-frequency program trading which not only distorted the markets – making up more than 70% of stock trades – but which also let the program trading giants take a sneak peak at what the real (aka “human”) traders are buying and selling, and then trade on the insider information. See this, this, this, this and this. (This is frontrunning, which is illegal; but it is a lot bigger than garden variety frontrunning, because the program traders are not only trading based on inside knowledge of what their own clients are doing, they are also trading based on knowledge of what all other traders are doing).

Goldman also admitted that its proprietary trading program can “manipulate the markets in unfair ways”. The giant banks have also allegedly used their Counterparty Risk Management Policy Group (CRMPG) to exchange secret information and formulate coordinated mutually beneficial actions, all with the government’s blessings.

In other words, a handful of giants doing it, it can manipulate the entire economy in ways which are not good for the American citizen.

And the political system. No wonder Nobel prize-winning economist Paul Krugman thinks that we have to break up the big banks to stop their domination of the political process.

If We Break Up the Giants, Smaller Banks Will Thrive … And Loan More to Main Street

Do we need to keep the TBTFs to make sure that loans are made?

Nope.

USA Today points out:

Banks that received federal assistance during the financial crisis reduced lending more aggressively and gave bigger pay raises to employees than institutions that didn’t get aid, a USA TODAY/American University review found.

***

The amount of loans outstanding to businesses and individuals fell 9.1% for the 12 months ending Sept. 30, 2009, at banks that participated in TARP compared with a 6.2% drop at banks that didn’t.

Dennis Santiago – CEO and Managing Director of Institutional Risk Analytics (Chris Whalen’s company) – notes:

The really shocking numbers are in the unused line of credit commitments of banks to U.S. business. This is the canary number I like to look at because it is a direct expression of banking and finance confidence in Main Street industry. It’s gone from $92 billion in Dec -2007 to just $24 billion as of Sep-2010. More importantly, the vast majority of this contraction of credit availability to American industry has been by the larger banks, C&I LOC from $87B down to $18.8B by the institutions with assets over $10B. Poof!

Fortune reports that smaller banks are stepping in to fill the lending void left by the giant banks’ current hesitancy to make loans. Indeed, the article points out that the only reason that smaller banks haven’t been able to expand and thrive is that the too-big-to-fails have decreased competition:

Growth for the nation’s smaller banks represents a reversal of trends from the last twenty years, when the biggest banks got much bigger and many of the smallest players were gobbled up or driven under…

As big banks struggle to find a way forward and rising loan losses threaten to punish poorly run banks of all sizes, smaller but well capitalized institutions have a long-awaited chance to expand.

BusinessWeek notes:

As big banks struggle, community banks are stepping in to offer loans and lines of credit to small business owners…

At a congressional hearing on small business and the economic recovery earlier this month, economist Paul Merski, of the Independent Community Bankers of America, a Washington (D.C.) trade group, told lawmakers that community banks make 20% of all small-business loans, even though they represent only about 12% of all bank assets. Furthermore, he said that about 50% of all small-business loans under $100,000 are made by community banks…

Indeed, for the past two years, small-business lending among community banks has grown at a faster rate than from larger institutions, according to Aite Group, a Boston banking consultancy. “Community banks are quickly taking on more market share not only from the top five banks but from some of the regional banks,” says Christine Barry, Aite’s research director. “They are focusing more attention on small businesses than before. They are seeing revenue opportunities and deploying the right solutions in place to serve these customers.”

Fed Governor Daniel K. Tarullo said:

The importance of traditional financial intermediation services, and hence of the smaller banks that typically specialize in providing those services, tends to increase during times of financial stress. Indeed, the crisis has highlighted the important continuing role of community banks…

For example, while the number of credit unions has declined by 42 percent since 1989, credit union deposits have more than quadrupled, and credit unions have increased their share of national deposits from 4.7 percent to 8.5 percent. In addition, some credit unions have shifted from the traditional membership based on a common interest to membership that encompasses anyone who lives or works within one or more local banking markets. In the last few years, some credit unions have also moved beyond their traditional focus on consumer services to provide services to small businesses, increasing the extent to which they compete with community banks.

Thomas M. Hoenig pointed out in a speech at a U.S. Chamber of Commerce summit in Washington:

During the recent financial crisis, losses quickly depleted the capital of these large, over-leveraged companies. As expected, these firms were rescued using government funds from the Troubled Asset Relief Program (TARP). The result was an immediate reduction in lending to Main Street, as the financial institutions tried to rebuild their capital. Although these institutions have raised substantial amounts of new capital, much of it has been used to repay the TARP funds instead of supporting new lending.

On the other hand, Hoenig pointed out:

In 2009, 45 percent of banks with assets under $1 billion increased their business lending.

45% is about 45% morethan the amount of increased lending by the too big to fails.

Indeed, some very smart people say that the big banks aren’t really focusing as much on the lending business as smaller banks.

Specifically since Glass-Steagall was repealed in 1999, the giant banks have made much of their money in trading assets, securities, derivatives and other speculative bets, the banks’ own paper and securities, and in other money-making activities which have nothing to do with traditional depository functions.

Now that the economy has crashed, the big banks are making very few loans to consumers or small businesses because they still have trillions in bad derivatives gambling debts to pay off, and so they are only loaning to the biggest players and those who don’t really need credit in the first place. See this and this.

So we don’t really need these giant gamblers. We don’t really need JP Morgan, Citi, Bank of America, Goldman Sachs or Morgan Stanley. What we need are dedicated lenders.

The Fortune article discussed above points out that the banking giants are not necessarily more efficient than smaller banks:

The largest banks often don’t show the greatest efficiency. This now seems unsurprising given the deep problems that the biggest institutions have faced over the past year.

“They actually experience diseconomies of scale,” Narter wrote of the biggest banks. “There are so many large autonomous divisions of the bank that the complexity of connecting them overwhelms the advantage of size.”

And Governor Tarullo points out some of the benefits of small community banks over the giant banks:

Many community banks have thrived, in large part because their local presence and personal interactions give them an advantage in meeting the financial needs of many households, small businesses, and agricultural firms. Their business model is based on an important economic explanation of the role of financial intermediaries–to develop and apply expertise that allows a lender to make better judgments about the creditworthiness of potential borrowers than could be made by a potential lender with less information about the borrowers.

A small, but growing, body of research suggests that the financial services provided by large banks are less-than-perfect substitutes for those provided by community banks.

It is simply not true that we need the mega-banks. In fact, as many top economists and financial analysts have said, the “too big to fails” are actually stifling competition from smaller lenders and credit unions, and dragging the entire economy down into a black hole.

We Do NOT Need the Big Banks to Help the Economy Recover

Do we need the Too Big to Fails to help the economy recover?

No.

The following top economists and financial experts believe that the economy cannot recover unless the big, insolvent banks are broken up in an orderly fashion:

  • Dean and professor of finance and economics at Columbia Business School, and chairman of the Council of Economic Advisers under President George W. Bush, R. Glenn Hubbard
  • The leading monetary economist and co-author with Milton Friedman of the leading treatise on the Great Depression, Anna Schwartz
  • Economics professor and senior regulator during the S & L crisis, William K. Black
  • Professor of entrepreneurship and finance at the Chicago Booth School of Business, Luigi Zingales

In addition, many top economists and financial experts, including Bank of Israel Governor Stanley Fischer – who was Ben Bernanke’s thesis adviser at MIT – say that – at the very least – the size of the financial giants should be limited.

Even the Bank of International Settlements – the “Central Banks’ Central Bank” – has slammed too big to fail. As summarized by the Financial Times:

The report was particularly scathing in its assessment of governments’ attempts to clean up their banks. “The reluctance of officials to quickly clean up the banks, many of which are now owned in large part by governments, may well delay recovery,” it said, adding that government interventions had ingrained the belief that some banks were too big or too interconnected to fail.

This was dangerous because it reinforced the risks of moral hazard which might lead to an even bigger financial crisis in future.

And as I noted in December 2008, the big banks are the major reason why sovereign debt has become a crisis:

BIS points out in a new report that the bank rescue packages have transferred significant risks onto government balance sheets, which is reflected in the corresponding widening of sovereign credit default swaps:

The scope and magnitude of the bank rescue packages also meant that significant risks had been transferred onto government balance sheets. This was particularly apparent in the market for CDS referencing sovereigns involved either in large individual bank rescues or in broad-based support packages for the financial sector, including the United States. While such CDS were thinly traded prior to the announced rescue packages, spreads widened suddenly on increased demand for credit protection, while corresponding financial sector spreads tightened.

In other words, by assuming huge portions of the risk from banks trading in toxic derivatives, and by spending trillions that they don’t have, central banks have put their countries at risk from default.

Similarly, a study of 124 banking crises by the International Monetary Fund found that propping banks which are only pretending to be solvent hurts the economy:

Existing empirical research has shown that providing assistance to banks and their borrowers can be counterproductive, resulting in increased losses to banks, which often abuse forbearance to take unproductive risks at government expense. The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance.

Cross-country analysis to date also shows that accommodative policy measures (such as substantial liquidity support, explicit government guarantee on financial institutions’ liabilities and forbearance from prudential regulations) tend to be fiscally costly and that these particular policies do not necessarily accelerate the speed of economic recovery.

***

All too often, central banks privilege stability over cost in the heat of the containment phase: if so, they may too liberally extend loans to an illiquid bank which is almost certain to prove insolvent anyway. Also, closure of a nonviable bank is often delayed for too long, even when there are clear signs of insolvency (Lindgren, 2003). Since bank closures face many obstacles, there is a tendency to rely instead on blanket government guarantees which, if the government’s fiscal and political position makes them credible, can work albeit at the cost of placing the burden on the budget, typically squeezing future provision of needed public services.

The big banks have been bailed out to the tune of many trillions, dragging the economy down a bottomless pit from which we can’t escape. See this, this, this and this. Unless we break them up, we will never escape.

The Failure to Break Up the Big Banks Is Dooming Us to Depression

All independent experts agree that unless we rein in derivatives, will have another – bigger – financial crisis.

But the big banks are preventing derivatives from being tamed.

We have also pointed out that derivatives are still very dangerous for the economy, that the derivatives “reform” legislation previously passed has probably actually weakened existing regulations, and the legislation was “probably written by JP Morgan and Goldman Sachs“.

We've noted:

Harold Bradley – who oversees almost $2 billion in assets as chief investment officer at the Kauffman Foundation – told the Reuters Global Exchanges and Trading Summit in New York that a cabal is preventing swap derivatives from being forced onto clearing exchanges:

There is no incentive from the moneyed interests in either Washington or New York to change it…

I believe we are in a cabal. There are five or six players only who are engaged and dominant in this marketplace and apparently they own the regulatory apparatus. Everybody is afraid to regulate them.

That’s bad enough.

But Bob Litan of the Brookings Institute wrote a paper (here’s a summary) showing that – even if real derivatives legislation is ever passed – the 5 big derivatives players will still prevent any real change. James Kwak notes that Litan is no radical, but has previously written in defense in financial “innovation”.

Here’s a good summary from Rortybomb, showing that this is yet another reason to break up the too big to fails:

Litan is worried about the “Dealer’s Club” of the major derivatives players. I particularly like this paper as the best introduction to the current oligarchy that takes place in the very profitable over-the-counter derivatives trading market and credit default swap market. [Litton says]:

I have written this essay primarily to call attention to the main impediments to meaningful reform: the private actors who now control the trading of derivatives and all key elements of the infrastructure of derivatives trading, the major dealer banks. The importance of this “Derivatives Dealers’ Club” cannot be overstated. All end-users who want derivatives products, CDS in particular, must transact with dealer banks…I will argue that the major dealer banks have strong financial incentives and the ability to delay or impede changes from the status quo — even if the legislative reforms that are now being widely discussed are adopted — that would make the CDS and eventually other derivatives markets safer and more transparent for all concerned…

Here, of course, I refer to the major derivatives dealers – the top 5 dealer-banks that control virtually all of the dealer-to-dealer trades in CDS, together with a few others that participate with the top 5 in other institutions important to the derivatives market. Collectively, these institutions have the ability and incentive, if not counteracted by policy intervention, to delay, distort or impede clearing, exchange trading and transparency

Market-makers make the most profit, however, as long as they can operate as much in the dark as is possible – so that customers don’t know the true going prices, only the dealers do. This opacity allows the dealers to keep spreads high…

In combination, these various market institutions – relating to standardization, clearing and pricing – have incentives not to rock the boat, and not to accelerate the kinds of changes that would make the derivatives market safer and more transparent. The common element among all of these institutions is strong participation, if not significant ownership, by the major dealers.

So Bob Litan is waving a giant red flag that the top dealer-banks that control the CDS market can more or less, through a variety of means he lays out convincingly in the paper, derail or significantly slow down CDS reform after the fact if it passes.

***

If you thought we’d at least get our arms around credit default swap reform from a financial reform bill, you should read this report from Litan as a giant warning flag. In case you weren’t sure if you’ve heard anyone directly lay out the case on how the market and political concentration in the United States banking sector hurts consumers and increases systemic risk through both political pressures and anticompetitive levels of control of the institutions of the market, now you have. It’s not Matt Taibbi, but it’s much further away from a “everything is actually fine and the Treasury is in control of reform” reassurance. Which should scare you, and give you yet another good reason for size caps for the major banks.

53246864840716464 2380196514216991388?l=georgewashington2.blogspot The Only Way to Save the Economy:  Break Up the Giant, Insolvent BanksMoreover, the big banks are still dumping huge amounts of their toxic derivatives on the taxpayer. And see this.

And the extreme concentration of power and control over the entire global economy of a handful of large banks means that the entire system is extremely vulnerable.

Why Aren’t They Be Broken Up?

So what is the real reason that the TBTFs aren’t being broken up (and why are they  now than before the financial "reform" law was was passed)?

Certainly, there is regulatory capture, cowardice and corruption:

  • Joseph Stiglitz (the Nobel prize winning economist) said recently that the U.S. government is wary of challenging the financial industry because it is politically difficult, and that he hopes the Group of 20 leaders will cajole the U.S. into tougher action

Guess which institutions are among the biggest lobbyists and campaign-finance contributors? Surprise! None other than the TBTFs [too big to fails].

  • Manhattan Institute senior fellow Nicole Gelinas agrees:

    The too-big-to-fail financial industry has been good to elected officials and former elected officials of both parties over its 25-year life span

  • Investment analyst and financial writer Yves Smith says:

    Major financial players [have gained] control over the all-important over-the-counter debt markets…It is pretty hard to regulate someone who has a knife at your throat.

  • William K. Black says:

    There has been no honest examination of the crisis because it would embarrass C.E.O.s and politicians . . .Instead, the Treasury and the Fed are urging us not to examine the crisis and to believe that all will soon be well. There have been no prosecutions of the chief executives of the large nonprime lenders that would expose the “epidemic” of fraudulent mortgage lending that drove the crisis. There has been no accountability…

    The Obama administration and Fed Chairman Ben Bernanke have refused to investigate the nature and causes of the crisis. And the administration selected Timothy Geithner, who with then Treasury Secretary Paulson bungled the bailout of A.I.G. and other favored “too big to fail” institutions, to head up Treasury.

    Now Lawrence Summers, head of the White House National Economic Council, and Mr. Geithner argue that no fundamental change in finance is needed. They want to recreate a secondary market in the subprime mortgages that caused trillions of dollars of losses.

    Traditional neo-classical economic theory, particularly “modern finance theory,” has been proven false but economists have failed to replace it. No fundamental reform can be passed when the proponents are pretending that there really is no crisis or need for change.

  • Harvard professor of government Jeffry A. Frieden says:

    Regulatory agencies are often sympathetic to the industries they regulate. This pattern is so well known among scholars that it has a name: “regulatory capture.” This effect can be due to the political influence of the industry on its regulators; or to the fact that the regulators spend so much time with their charges that they come to accept their world view; or to the prospect of lucrative private-sector jobs when regulators retire or resign.

  • Economic consultant Edward Harrison agrees:Regulating Wall Street has become difficult in large part because of regulatory capture.

But there is an even more interesting reason . . .

The number one reason the TBTF’s aren’t being broken up is [drumroll] . . . the ‘ole 80?s playbook is being used.

As the New York Times reports:

In the 1980s, during the height of the Latin American debt crisis, the total risk to the nine money-center banks in New York was estimated at more than three times the capital of those banks. The regulators, analysts say, did not force the banks to value those loans at the fire-sale prices of the moment, helping to avert a disaster in the banking system.

In other words, the nine biggest banks were all insolvent in the 1980s.

Indeed, Richard C. Koo – former economist at the Federal Reserve Bank of New York and doctoral fellow with the Fed’s Board of Governors, and now chief economist for Nomura – confirmed this fact last year in a speech to the Center for Strategic & International Studies. Specifically, Koo said that -after the Latin American crisis hit in 1982 – the New York Fed concluded that 7 out of 8 money center banks were actually “underwater” and “bankrupt”, but that the Fed hid that fact from the American people.

So the government’s failure to break up the insolvent giants – even though virtually all independent experts say that is the only way to save the economy, and even though there is no good reason not to break them up – is nothing new.

William K. Black’s statement that the government’s entire strategy now – as in the S&L crisis – is to cover up how bad things are (“the entire strategy is to keep people from getting the facts”) makes a lot more sense.

 

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Mon, 07/23/2012 - 06:46 | 2641798 Ghordius
Ghordius's picture

Thank you for your goodwill and your forgiveness for my sometimes clumsy arguments.

the way I see it is that Jon Corzine's "vaporization" is a crime that is not being tackled because the Big Five are simply too powerful, politically.

I see it as directly related to the fact that they are engaged in a "TBTF" cartel (also thanks to their derivative's shenigans), for which the "orthodox" continental ordo-liberal answer would be "break 'em into less dangerous pieces".

I'm not claiming that after a break-up the world is hanky-dory, and the Rockefeller example is quite good: the big Tyrex is gone, but the woods are full of vipers, and some of the pieces still behave like raptors, particularly after some later mergers.

And yes, in the Seventies StateSec decided that the "Iran problem" had to be tackled by the formation of a new cartel, the "Seven Sisters", a wonderful gang of raptors that delighted us all for a while, all with the USgov's blessing.

Yet I sincerily don't see how Standard Oil could have morphed into a "gentle giant", I sincerily don't see how the Rockefeller Nexus gained raw power by the breakup and I don't see how leaving the Five Headed Hydra in this form would have any upside.

To put it in other terms, would you applaud a merger of the Five Top MegaBanks into let's say OneBank? It's CEO could, since we are there, immediately take over the functions of SecTreasury and/or FED chairman...

Or, the other way round, if this merger would have already happened, would you insist in not breaking up OneBank? If yes, why? Because this would give us a shady five-party cartel?

Please bear with me, I'm (very clumsily, yes) trying to understand how you frame those principles and where you make exceptions.

Mon, 07/23/2012 - 10:17 | 2642382 JOYFUL
JOYFUL's picture

I'm going to give some careful thought to yur closing questions Ghordius, and see if I can answer then in a concise and meaningful manner on a forthcoming thread on this forum.

till then

Sun, 07/22/2012 - 09:27 | 2640021 JOYFUL
JOYFUL's picture

Too rich...

here we have -"Bank of Israel Governor Stanley Fischer"\Bob Litan of Brookings Institute\the Bank of International Settlements...and last but by no means least[of the minions of the beast] Paul Krugman all lined up onside for George's supposed solution to the woe's of the west!

RE-GUL-ATE! ...if ever an anti-statist needed a "red flag" to tell them to run the other way from George's travelling flea circus of circumcised truth tellin, this is it!

Just what the doctor ordered for a socio-economic breakdown brought on by a kabal-istic kollective dictatorship of lawyers, legislators, legalized lawbreakers and lying mediacrats, all feeding like a nest of nasty gnats on the festering flesh of a wounded and weary body politic....................more laws!!!!!!!!!!

Is this some kind of sick joke? Have GW and MDB mind-melded into some kind of prog borg?

Break up the big banks~! Brilliant! ...just like breaking up the big
conglomerates was, back in the day, allowing them to metastatize into the many layers of foundations, interlocking directorships, and intra-governmental alliances that effectively cemented their control over all aspects of the Euromerikan economies. You'd have to be a Wall St lawyer to dream up something so insidiously effective! And a paid shill of same to prosletyize for something so invidious!

But let's be positive! Maybe George, in his apparent role of controlled opposition gatekeeper, is actually, like a character from a John Le Carre novel, working all sides of the street...and has quietly passed us the keys to unlocking the puppetmasters' program, the psy-op designed to confuse and mislead the honest seeker, rendering resistance futile!

Months ago I predicted here that part of the Obamanations' relection strategy, post success of the OWS scam, would be to 'throw the big banks under the bus'...to use a populist ruse of seeming to be siding with the peeple against the power...all the while, of course, guided in this Machiavellian gambit by the same eminences grise who guide the TBTF banks in theirs!

The script calls for much crowing about 'fairness' and reform, and impressive promises of post election crackdowns, and whatever soothing words are necessary to guide whatever opposition is left to the ongoing CampFemerika transition into a quiet corner for the duration of Merika's final fantasy election.   

And here's all the confirmation we needed! With this lineup of lying lunatics[aka "top economists"] banded together to spout off about stuff way too simple for their understanding...while yu can use a thief to catch a thief, yu can't make 'good' laws to catch bad people. Nor can u employ 'the State' to mitigate the larceny and lusts of those who own the 'State'

...the jury is still out on just who's yur Daddy, George, but the deep game yu would appear to be playing is likely to leave yu hung up somewhere on a barbed wire fence, as the seachlights sweep out in yur direction!

 

edit: strange days on the ZH top banner! Not only do we have to suffer a double testosterone dronefest from the wolfman all yesterday, today this GW posting disappeared for about 6 hours in the merikan night...right about the time I got my original in..then I couldn't do my regular editing when it came back up!>?!?...oh well, think I'll leave this double up...if yu can't beat em at skullduggery, join em!

Sun, 07/22/2012 - 09:21 | 2640002 i-dog
i-dog's picture

 

"Maybe George ... [is] working all sides of the street"

Nailed it, my joyous friend! The sheepdog in sheep's clothing.

I [now] have no doubt who George's Daddy is: Omnes viae Romam ducunt.

George, who is also a regular contributor to Alex Jones' daily 'Voice of the Vatican' megaphone, is foreshadowing the imminent takedown of the banks.

Though it seems that the banks will be taken down due to an 'outcry' from the likes of GW, Max Keiser and others, in reality they were to come down anyway -- at the appropriate moment, which I believe is now imminent. But it had to be made to look like it was "demanded by the public"!

There will be no banks or private capital in the NWO.

There is no purpose for banks, foreign exchange dealings, interest rate arbitrage, credit cards, or other forms of financial finangling, when there is just a single world electronic currency being centrally distributed as 'credits' for obedient behaviour and 'Agenda 21' projects ONLY. That is their plan ... the only question is when will they flip the switch?

The current 'exposés' of the corruption and manipulation of banks, regulators and politicians is just the setup they need to get rid of them all when the switch is flipped. The public will cheer ... the sheepdogs will claim victory on behalf of the sheep ... the Khazakz behind the khurtain will flash an "illuminated" grin ... and the brave new world of cashless living described by George Orwell will unfold! Chokolat rationz for all....

Fucking great, eh!?!

The only thing that can stop them -- or at least slow them down for a few more years/decades -- is for the EZ to fracture back to 17 national currencies, or at least a decent subset of that, before the big US banks are taken down.

If they bring the system down, as I have described, then we lose all capital.

If we bring the system down, by fracturing back to multiple currencies and in the process wipe odious government debt, then they lose much of their capital.

Who will act first, people?

Sun, 07/22/2012 - 13:15 | 2640411 JOYFUL
JOYFUL's picture

...George, who is also a regular contributor to Alex Jones' daily 'Voice of the Vatican' megaphone...

very timely disclosure, Dawg! I did not know that GW was kontributing to the kampaign of the kiddle-diddlin krew* - which probably goes far in explaining why his posts here never manage to nail any of the actual perpetrators of the pogrom against our peeples...sheepdawg indeed....that's Alex's schtick in a nutshell...

and provides further proof that yur konjecture about the konvergence of the krypto klowns & the jesuitical jokers[Profane Klown Posse?] is coming kloser to a lock everyday...damn good sniffin! Looks like the nose has another kase klosed!

*no pious outrage, thanks in advance progdylites~!...no personal aspersions cast bout the G-man...only interested in where his heart and his head be at, not the rest of him!

Sun, 07/22/2012 - 11:44 | 2640275 1Inthebeginning
1Inthebeginning's picture

Facts is facts.  The structure of the currency and the legislation in place will concentrate power at the top of the pyramid.  Most people seem more interested in the promise of free stuff.  The time to act is when their is plenty of time.  The way to act is in the highest decorum of civilized behavior.  The key to winning any negotiation is to have options.  If we stopped buying products by large interests that violate our basic rights, and started producing our own goods then we would have options.  

The equilibrium point will be when inflation devours purchasing power and it is cheaper for people to switch to local production.  I suggest that we GET AHEAD OF THE CURVE and start being independent NOW.  

The unaware and unprepared may respond to severe market dislocations by less than genteel methods.  This will be repressed and obviously cause greater repression.  If you want to win and permanently win then you need to produce and be super responsible.

Sun, 07/22/2012 - 10:28 | 2640131 lamont cranston
lamont cranston's picture

I remember watching Demolition Man back in the 90s and laughed it off as BS. Now I don't. 

Sun, 07/22/2012 - 04:01 | 2639889 LowProfile
LowProfile's picture

duplicate post

Sun, 07/22/2012 - 01:05 | 2639821 LowProfile
LowProfile's picture

FUCK YOU BERNANK

FUCK YOU DIMON, PANDRIT, BLANKFIEND, ETC.

DIE YOU FUCKING FUCKS

 

...Funny, I thought that would make me feel better...

Sun, 07/22/2012 - 11:50 | 2640287 1Inthebeginning
1Inthebeginning's picture

One minute of hate from Orwell's 1984 is not going to help you.  It will only dissipate you.  If you really want to dismantle the system then go grow something or make something.  Make your own system.  Are you a player or just the prey?

Sun, 07/22/2012 - 02:09 | 2639860 Precious
Precious's picture

I pledge allegiance to the banks of the United States of America, and to the republic for which they canned, once a nation under gold, indefensible, with usury and stimulus for all.

(You read it here on ZH first - God bless Tyler)

Sun, 07/22/2012 - 11:31 | 2640242 imbrbing
imbrbing's picture

Can we rehypothicate this?

Sun, 07/22/2012 - 11:12 | 2640210 buckethead
buckethead's picture

C/P'd and distributed. Will give link for 24 hrs, then i steals it.

Sun, 07/22/2012 - 02:14 | 2639865 George Washington
George Washington's picture

Brilliant ... Well done

Sun, 07/22/2012 - 03:53 | 2639888 zhandax
zhandax's picture

Failing to Break Up the Big Banks is Destroying America

Failing to Break Up the Big Corporations is Destroying America

But banks first, of course

There, fixed it for ya

Sun, 07/22/2012 - 16:08 | 2640788 CompassionateFascist
CompassionateFascist's picture

No. Amerikwa itself desperately needs to be destroyed. I've lived through eight numbered decades, and I do not recognize this place anymore. All the institutions - economic, cultural, and political - have been penetrated and captured by a savage, nomadic Tribe that has been corrupting nations and civilizations for 3,000 years. To kill this parasite, the host must die....Then be reborn, cleansed by fire and sword.  


Sun, 07/22/2012 - 04:01 | 2639890 LowProfile
LowProfile's picture

Thought he covered that with

The "father of free market economics" - Adam Smith - knew that monopolies hurt the economy.

But yes, banks first - That may well start to break up the big corporations by denying them capital...

Sun, 07/22/2012 - 10:14 | 2640103 engineertheeconomy
engineertheeconomy's picture

Failing to break up the big Military Banking Complex is destroying America

fixed it for you

Sun, 07/22/2012 - 13:20 | 2640425 LowProfile
LowProfile's picture

ETE takes it one logical step further...

Fortunately this monstrosity is beginning to appear like Jenga, yank one block too many and TIMMMBERRRR..!

Do NOT follow this link or you will be banned from the site!