Tag Archives: Banking

10 Banks Own 77 Percent Of All U.S. Banking Assets: Too Big To Fail?

Too Big To Fail?: 10 Banks Own 77 Percent Of All U.S. Banking Assets

Courtesy of The Economic Collapse Blog

Back during the financial crisis of 2008, the American people were told that the largest banks in the United States were “too big to fail” and that was why it was necessary for the federal government to step in and bail them out. The idea was that if several of our biggest banks collapsed at the same time the financial system would not be strong enough to keep things going and economic activity all across America would simply come to a standstill. Congress was told that if the “too big to fail” banks did not receive bailouts that there would be chaos in the streets and this country would plunge into another Great Depression. Since that time, however, essentially no efforts have been made to decentralize the U.S. banking system. Instead, the “too big to fail” banks just keep getting larger and larger and larger. Back in 2002, the top 10 banks controlled 55 percent of all U.S. banking assets. Today, the top 10 banks control 77 percent of all U.S. banking assets. Unfortunately, these giant banks are also colossal mountains of risk, debt and leverage. They are incredibly unstable and they could start coming apart again at any time. None of the major problems that caused the crash of 2008 have been fixed. In fact, the U.S. banking system is more centralized and more vulnerable today than it ever has been before.

It really is difficult for ordinary Americans to get a handle on just how large these financial institutions are. For example, the “big six” U.S. banks (Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo) now possess assets equivalent to approximately 60 percent of America’s gross national product.

These huge banks are giant financial vacuum cleaners. Over the past couple of decades we have witnessed a financial consolidation in this country that is absolutely unprecedented.

This trend accelerated during the recent financial crisis. While the big boys were receiving massive bailouts, the hundreds of small banks that were failing were either allowed to collapse or they were told that they should find a big bank that was willing to buy them.

As a group, Citigroup, JPMorgan Chase, Bank of America and Wells Fargo held approximately 22 percent of all banking deposits in FDIC-insured institutions back in 2000.

By the middle of 2009 that figure was up to 39 percent.

That is not just a trend – that is a landslide.

Sadly, smaller banks continue to fail in large numbers and the big banks just keep growing and getting more power.

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Today, there are more than 1,000 U.S. banks that are on the “unofficial list” of problem banking institutions.

In the absence of fundamental changes, the consolidation of the banking industry is going to continue.

Meanwhile, the “too big to fail” banks are flush with cash and they are getting serious about expanding. The Federal Reserve has been extremely good to the big boys and they are eager to grow.

For example, Citigroup is becoming extremely aggressive about expanding….

Citigroup has been hiring dozens of investment bankers, dialing up advertising and drawing up plans to add several hundred branches worldwide, including more than 200 in major cities across the United States.

Hopefully the big banks will start lending again. The whole idea behind the bailouts and all of the “quantitative easing” that the Federal Reserve did was to get money into the hands of the big banks so that they would lend it out to ordinary Americans and get the economy rolling again.

Well, a funny thing happened. The big banks just sat on a lot of that money.

In particular, what they did was they deposited much of it at the Fed and drew interest on it.

Since 2008, excess reserves parked at the Fed have grown by nearly 1.7 trillion dollars. Just check out the chart posted below….

The American people were promised that TARP and all of the other bailouts would enable the big banks to lend out lots of money which would help get the economy going for ordinary Americans again.

Well, it turns out that in 2009 (the first full year after Congress passed the bailout legislation) U.S. banks posted their sharpest decline in lending since 1942.

Lending has never fully recovered since the crash of 2008. The big financial institutions like Goldman Sachs, Morgan Stanley and JPMorgan Chase have been able to get all the cash that they need, but they have not passed that generosity along to ordinary Americans.

In fact, the biggest U.S. banks have actually reduced small business lending by about 50 percent since the crash of 2008.

That doesn’t sound like what we were promised.

These “too big to fail” banks have been able to borrow gigantic amounts of money from the Fed for next to nothing and yet they still refuse to let credit flow to local communities. Instead, the big banks have found other purposes for all of the super cheap money that they have been getting from the Fed as Ellen Brown recently explained….

It can be very profitable indeed for the big Wall Street banks, but the purpose of the near-zero interest rates was supposed to be to get banks to lend again. Instead, they are, indeed, paying “outrageous bonuses to their top executives;” using the money to engage in the same sort of unregulated speculation that nearly brought down the economy in 2008; buying up smaller banks; or investing this virtually interest-free money in risk-free government bonds, on which taxpayers are paying 2.5 percent interest (more for longer-term securities).

What makes things even worse is that these big banks often pay next to nothing in taxes.

For example, between 2008 and 2010, Wells Fargo made a total profit of 49.37 billion dollars.

Over that same time period, their tax bill was negative 681 million dollars.

Do you understand what that means? Over that 3 year time period, Wells Fargo actually got 681 million dollars back from the U.S. government.

Isn’t that just peachy?

Meanwhile, the big financial giants have not learned their lessons and they continue to do business pretty much as they did it prior to 2008.

The big banks continue to roll up massive amounts of risk, debt and leverage.

Today, Wall Street has become one giant financial casino. More money is made on Wall Street by making side bets (commonly referred to as “derivatives”) than on the investments themselves.

If the bets pay off for the big financial institutions, mind blowing profits can be made. But if the bets go against the big financial institutions (as we saw in 2008), firms can collapse almost overnight.

In fact, it was derivatives that almost brought down AIG. The biggest insurance company in the world almost folded in 2008 because of a whole bunch of really bad bets.

The danger from derivatives is so great that Warren Buffet once called them “financial weapons of mass destruction”. It has been estimated that the notional value of the worldwide derivatives market is somewhere in the neighborhood of a quadrillion dollars.

The largest banks have tens of trillions of dollars of exposure to derivatives. When the next great financial collapse happens, derivatives will almost certainly be at the center of it once again. These side bets do not create anything real for the economy – they just make and lose huge amounts of money. We never know when the next great derivatives crisis will strike. Derivatives are essentially like a “sword of Damocles” that perpetually hangs over the U.S. financial system.

When I start talking about derivatives I get a lot of people in the financial community mad at me. On Wall Street today you can bet on just about anything you can imagine. Almost everyone in the financial world has gotten so used to making wild bets that they couldn’t even imagine a world without them. If anyone even tried to put significant limits on futures, options and swaps it would cause Wall Street to throw a hissy fit.

But someday the dominoes are going to start to fall and the house of cards is going to come crashing down. It is an open secret that our financial system is fundamentally unsound. Even a lot of people working on Wall Street will admit that. It is just that people are so busy making such big piles of money that nobody wants the party to stop.

The world is dangerous. Are you prepared? Get a Safety Kit and Stay Safe Today!

It is only a matter of time until some of these big banks get into a huge amount of trouble again. When that happens, we might really find out whether they are “too big to fail” or whether we could get along just fine without them.

SOURCE

Wow, That Was Fast! Libyan Rebels Have Already Established New Central Bank Of Libya

Wow, That Was Fast! Libyan Rebels Have Already Established New Central Bank Of Libya

By 21st Century Wire

The rebels in Libya are in the middle of a life or death civil war and Moammar Gadhafi is still in power and yet somehow the Libyan rebels have had enough time to establish a new Central Bank of Libya and form a new national oil company. Perhaps when this conflict is over those rebels can become time management consultants.

They sure do get a lot done. What a skilled bunch of rebels – they can fight a war during the day and draw up a new central bank and a new national oil company at night without any outside help whatsoever. If only the rest of us were so versatile! But isn’t forming a central bank something that could be done after the civil war is over? According to Bloomberg, the Transitional National Council has “designated the Central Bank of Benghazi as a monetary authority competent in monetary policies in Libya and the appointment of a governor to the Central Bank of Libya, with a temporary headquarters in Benghazi.” Apparently someone felt that it was very important to get pesky matters such as control of the banks and control of the money supply out of the way even before a new government is formed.

Of course it is probably safe to assume that the new Central Bank of Libya will be 100% owned and 100% controlled by the newly liberated people of Libya, isn’t it?
Libyan rebels

BANKERS REBELS: Western-backed Libyan rebels managed to liase with Goldman Sachs and form a bank? Smells like a City rat.

Most people don’t realize that the previous Central Bank of Libya was 100% state owned. The following is an excerpt from Wikipedia’s article on the former Central Bank of Libya….

The Central Bank of Libya (CBL) is 100% state owned and represents the monetary authority in The Great Socialist People’s Libyan Arab Jamahiriya and enjoys the status of autonomous corporate body. The law establishing the CBL stipulates that the objectives of the central bank shall be to maintain monetary stability in Libya , and to promote the sustained growth of the economy in accordance with the general economic policy of the state.

Since the old Central Bank of Libya was state owned, it was essentially under the control of Moammar Gadhafi. But now that Libya is going to be “free”, the new Central Bank of Libya will be run by Libyans and solely for the benefit of Libyans, right? Of course it is probably safe to assume that will be the case with the new national oil company as well, isn’t it?

Over the past couple of years, Moammar Gadhafi had threatened to nationalize the oil industry in Libya and kick western oil companies out of the country, but now that Libya will be “free” the people of Libya will be able to work hand in hand with “big oil” and this will create a better Libya for everyone.

Right?

Of course oil had absolutely nothing to do with why the U.S. “inva—” (scratch that) “initiated a kinetic humanitarian liberty action” in Libya. When Barack Obama looked straight into the camera and told the American people that the war in Libya is in the “strategic interest” of the United States, surely he was not referring to oil. After all, war for oil was a “Bush thing”, right? The Democrats voted for Obama to end wars like this, right? Surely no prominent Democrats will publicly support this war in Libya, right? Surely Barack Obama will end the bombing of Libya if the international community begins to object, right? Obama won a Nobel Peace Prize. He wouldn’t deeply upset the other major powers on the globe and bring us closer to World War III, would he?

Russian Foreign Minister Sergei Lavrov has loudly denounced “coalition strikes on columns of Gaddafi’s forces” and he believes that the U.S. has badly violated the terms of the UN Security Council resolution….

We consider that intervention by the coalition in what is essentially an internal civil war is not sanctioned by the U.N. Security Council resolution.

So to cool off rising tensions with the rest of the world, Obama is going to call off the air strikes, right? Well, considering the fact that Obama has such vast foreign policy experience we should all be able to rest easy knowing that Obama will understand exactly what to do.

Meanwhile, the rebels seem to be getting the hang of international trade already. They have even signed an oil deal with Qatar! Rebel “spokesman” Ali Tarhouni has announced that oil exports to Qatar will begin in “less than a week“. Who knew that the rag tag group of rebels in Libya were also masters of banking and international trade? We sure do live in a strange world.

Tonight, Barack Obama told the American people the following….

Some nations may be able to turn a blind eye to atrocities in other countries. The United States of America is different.”

So now we are going to police all of the atrocities in all of the other countries around the globe? The last time I checked, the government was gunning down protesters in Syria. Is it time to start warming up the Tomahawks? Or do we reserve “humanitarian interventions” only for those nations that have a lot of oil? In fact, atrocities are currently being committed all over Africa and in about a dozen different nations in the Middle East.

Should we institute a draft so that we will have enough young men and women to police the world with? We all have to be ready to serve our country, right? The world is becoming a smaller place every day, and you never know where U.S. “strategic interests” are going to be threatened next. The rest of the world understands that we know best, right? Of course the rest of the world can surely see our good intentions in Libya, can’t they?

Tensions with Russia, China and the rest of the Arab world are certainly going to subside after they all see how selfless our “humanitarian intervention” has been in Libya, don’t you think? In all seriousness, we now live in a world where nothing is stable anymore. Wars and revolutions are breaking out all over the globe, unprecedented natural disasters are happening with alarming frequency and the global economy is on the verge of total collapse.

By interfering in Libya, we are just making things worse. Gadhafi is certainly a horrible dictator, but this was a fight for the Libyan people to sort out.

We promised the rest of the world that we were only going to be setting up a “no fly zone”. By violating the terms of the UN Security Council resolution, we have shown other nations that we cannot be trusted and by our actions we have increased tensions all over the globe.

http://21stcenturywire.com/2011/03/29/wow-that-was-fast-libyan-rebels-have-already-established-new-central-bank-of-libya/

Monday, March 28, 2011

Libya: War for World Government


“It is a test that the international community has to pass. Failure would shake further the faith of the people’s region in the emerging international order and the primacy of international law
.” -Brookings Institute’s “Libya’s Test of the New International Order,” February 2011.

Peaceful protesters become tank commanders and fighter pilots?

Tony Cartalucci, Contributing Writer
Activist Post

While a parade of politicians and pundits cite the “international community,” the UN, and the “Arab street” as giving them the justification to not only wage illegal war on Libya, but to threaten illegal war against Syria as well, it should be remembered that it was neither the UN nor the “international community” that laid the ground work for this campaign.

What started out, supposedly, as spontaneous, simultaneous uprisings across the Middle East, has transformed clearly into an aggressive Western-backed blitzkrieg of destabilization and regime change. This was a plan that was years in the making, talked about in 2007 by then, presidential hopeful, CFR member, and International Crisis Group trustee Wesley Clark.

As hard as our “leadership” tries to act surprised, the current Middle Eastern conflagration has been years in the making.

We now know that the protesters from Tunisia to Egypt had been trained by US created and funded CANVAS of Serbia. We have learned that the US State Department openly admits to providing funding to tech firms to assist protesters across the Middle East and Northern Africa to circumvent cyber-security inside target nations. Perhaps most alarming of all, we now know that the US State Department is also funding corporations like BBC to undermine the governments of China and Iran, revealing the full-scope of their ambitions.

The “international community” that feckless stooges like Joe Lieberman talk about, or his French equal in impotency, Nicolas Sarkozy’s “new post-UNSC 1973 model of world governance” are concepts not born of these “elected representatives,” but rather the product of the corporate think-tanks that hand them their talking points. It is the corporate-financier oligarchy that constitutes the “international community” and who aspires to rule through “world governance.” Their goal is to eliminate national sovereignty and assert their agenda and the laws & regulations to achieve it homogeneously across all national borders.

To see who Lieberman and Sarkozy are channeling, we look to the Brookings Institute report “Libya’s Test of the New International Order” back in February 2011. In it, it talks about the primacy of international law over national sovereignty and considered it being at stake in Libya. Allowing Libya to defy the “international community,” they worried, could ultimately threaten its “resolve and credibility.

Another telling Brookings Institute report, “Bifurcating the Middle East,” mentions rallying “the Arab street” to confront defiant states like Libya, Syria, and Iran, all of which are mentioned by name. Nowhere was oil mentioned, nor the tremendous profits defense contractors would surely reap, and while these are primary motivators to garner support for the regional campaign within the corporate combine, they are by no means the primary motivators for the campaign itself. The final goal is world government, the elimination of borders, and a monopolistic corporate-financier cartel that can systematically eliminate all challenges to its hegemony – in other words, the dream of all oligarchs since the beginning of time.

In Syria, resistance to the Western-backed opposition is a similar direct challenge to the corporate-financier oligarchs. Nations like Syria, Iran, Libya, Burma, Belarus, and many others are demonized and systematically isolated and undermined not because they are a threat to the world, but because their independence and refusal to acquiesce is an obstacle before a corporate-financier ruled world government.

We are given childish explanations that prey on the most ignorant and feeble of minds as to why we are fighting in Libya, and why we are threatening war with Syria and Iran. Nowhere in Lieberman or Sarkozy’s ranting statements is talk of who these rebels are; that they’ve been fighting on and off against Qaddafi for nearly three decades with US help, that their opposition is based in London and the United States, and that they have overt ties to Al-Qaeda, with rebel leaders themselves openly admitting their affiliations to the terrorist group. We are now told that recently returning to Libya to lead the rebels is Khalifa Hifter, who has spent the last 20 years in “suburban Virginia,” and has spent his time in America lending support to anti-Qaddafi groups.

We will protect your privacy…guaranteed!

After fighting a decade in Afghanistan and Iraq at the cost of nearly 6,000 US lives, supposedly to stop the ubiquitous “Al Qaeda,” an organization the US itself created in the mountains of Afghanistan in the 1980’s to fight the Soviets, we have come full circle, with CIA/Al-Qaeda assets fighting side-by-side in Libya, complete with US air support.

Do regular folks forget that Syria was mentioned as part of George Bush’s “Axis of Evil” and that Obama is merely carrying on a continuous agenda that has transcended administrations up to this very day? Considering the agenda revealed by Wesley Clark in 2007, we see how seamlessly “Obama’s war” against Libya fits in. If we are to believe Obama and Bush are ideological opposites, what other explanation can be given as to why this agenda, scorned by the political left under Bush, has now found a new home in Obama’s administration?

Quite clearly politics in America is but a mere illusion. So to is the “War on Terror,” as the US helps Al-Qaeda sweep westward towards Tripoli. It is all empty rhetoric carrying the agenda of global government forward. Despite losing nearly 6,000 of their brothers in arms, the US military carries on, following orders despite the absolute, overt absurdity of their mission. They are literally providing air support now for the men that helped send their buddies back in pine boxes from Iraq. They do this while the media that lied them into a decade of war now celebrates their enemy, these rebels of Benghazi, as heroes of democracy. Again – we come full circle as the Mujaheddin fighting the Soviets were once “heroes” of the West as well.

None of this makes any sense from the political left or right perspective. None of this makes sense from a West verses “Muslim extremist” perspective. The only perspective from which it makes sense, is if a cartel of corporations has been lying to us all along, saying anything and everything to get us to jump through the appropriate hoops. With their plans becoming bolder, perhaps even desperate, they have begun to mix up their narratives to the extent that they are bombing “Al Qaeda” in Pakistan and giving “Al Qaeda” air support in Libya. They are admittedly strafing civilians from the air in Pakistan, but imposing no fly zones on Qaddafi over unverified claims of doing the same.

As the globalists admittedly strafe civilians in Afghanistan and Pakistan, they have lobbied for war with Libya over verified lies of doing the same.

Indeed, this is not a war of America, the UN, NATO, or the European Union. The feckless politicians that pose as our leadership are merely taking orders from the powers that be – the corporate-financier oligarchs. If we are to frustrate these oligarchs, we would be wise to waste little time on their front men and instead get straight to the issue. Boycott these corporations and systematically replace them on a local level. While they wage war to eliminate the nation state, from its borders down to our own individual rights and liberties, we must wage a campaign to undermine and eliminate them, from their crass consumerist networks that infest our towns, to the parasitic monstrosity that is the international banking system which infests this planet.

While they must wage their battle through murder, lies, and deceit, we must wage our battle through constructive pragmatic solutions, ingenuity, hard work, community, and self-sufficiency. This is not a war for Libya – this is a war for world government, that if won by the globalists, means our defeat as well.

http://www.activistpost.com/2011/03/libya-war-for-world-government.html