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Response to xchrom (Reply #32)

Sat Apr 21, 2012, 09:41 PM

38. Geithner’s ‘Dirty Little Secret’: The Entire Global Financial System is at Risk

Here's something Corporate McPravda and people banned from Kos don't want you to know about:



Geithner’s Dirty Little Secret

By F. William Engdahl, 30 March 2009

US Treasury Secretary Tim Geithner has unveiled his long-awaited plan to put the US banking system back in order. In doing so, he has refused to tell the ‘dirty little secret’ of the present financial crisis. By refusing to do so, he is trying to save de facto bankrupt US banks that threaten to bring the entire global system down in a new more devastating phase of wealth destruction.

EXCERPT...

The ‘Dirty Little Secret’

What Geithner does not want the public to understand, his ‘dirty little secret’ is that the repeal of Glass-Steagall and the passage of the Commodity Futures Modernization Act in 2000 allowed the creation of a tiny handful of banks that would virtually monopolize key parts of the global ‘off-balance sheet’ or Over-The-Counter derivatives issuance.

Today five US banks according to data in the just-released Federal Office of Comptroller of the Currency’s Quarterly Report on Bank Trading and Derivatives Activity, hold 96% of all US bank derivatives positions in terms of nominal values, and an eye-popping 81% of the total net credit risk exposure in event of default.

SNIP...

The Government bailouts of AIG to over $180 billion to date has primarily gone to pay off AIG’s Credit Default Swap obligations to counterparty gamblers Goldman Sachs, Citibank, JP Morgan Chase, Bank of America, the banks who believe they are ‘too big to fail.’ In effect, these five institutions today believe they are so large that they can dictate the policy of the Federal Government. Some have called it a bankers’ coup d’etat. It definitely is not healthy.

This is Geithner’s and Wall Street’s Dirty Little Secret that they desperately try to hide because it would focus voter attention on real solutions. The Federal Government has long had laws in place to deal with insolvent banks. The FDIC places the bank into receivership, its assets and liabilities are sorted out by independent audit. The irresponsible management is purged, stockholders lose and the purged bank is eventually split into smaller units and when healthy, sold to the public. The power of the five mega banks to blackmail the entire nation would thereby be cut down to size. Ooohh. Uh Huh?

CONTINUED...

http://www.engdahl.oilgeopolitics.net/Financial_Tsunami/Geithner_Secret/geithner_secret.html



Thanks, xchrom, for giving a damn! Means the world to me, my Friend!

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Octafish Apr 2012 OP
steve2470 Apr 2012 #1
Octafish Apr 2012 #15
banned from Kos Apr 2012 #2
1StrongBlackMan Apr 2012 #7
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Jim Lane Apr 2012 #31
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Octafish Apr 2012 #19
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xchrom Apr 2012 #32
LineLineNew Reply Geithner’s ‘Dirty Little Secret’: The Entire Global Financial System is at Risk
Octafish Apr 2012 #38
xchrom Apr 2012 #43
NNN0LHI Apr 2012 #33
Octafish Apr 2012 #41
progressoid Apr 2012 #34
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