The Next Time

As we move towards the final passages and subsequent gutting of any and all financial reforms what we are hearing from bank lobbysts are these tidbits:

"Breaking up big banks would actually increase system risk"
"Curtailing US Bank Swap/Derivative Activity would leave US Banks in a competitive disadvantage"

Now there is some truth in the above two statements but let me just state these facts:

Royal Bank Of Scotland at the height of the credit frenzy had a balance sheet that equaled 1.5X the entire British Economy.

Three Irish banks combined assets were more than 200% of the Irish Economy.

Icelandic Banking Institutions at one point were 11-13X the entire Icelandic economy.

What do all of these banking institutions have in common? They were all partially or in the case of Iceland fully nationalized.

We keep having Wall Street and the lobbyists alert us that the world will come to an end if any of these new rules are legislated. As a former bond trader let me tell you its a naked threat that make no sense. Wall Street is just trying to keep their ponzy game going until the next time. Its corporatocracy at its best and kleptocracy at its worst. To keep a ponzy/corporatocracy going we need the following:

1-Corporations - CHECK!
2-International Banking Institutions - CHECK!
3-Corrupt Governments  - CHECK!

Kleptocracy in all its glory is soon to follow. This is the blueprint that many civilizations have taken.
As we move towards another major win for Wall Street and the subsequent loss of another 25M more jobs in the coming depression, the failure of breaking up the big banks and shrinking their bank balance sheets will be the biggest domestic policy error in the history of our country.  The next time we have a crisis you don't have to look anywhere except DC and the Obama Administration.  This is Obama's mess front and center. It wasn't his fault that the economy fell off the cliff in 2008, but any future economic collapse has his fingerprints along with Geithner, Summers, and Bernanke all over it.