Wall St. To Be Bailed Out Again
Here we go again...
...So the Glass-Stegall Act was passed and the FDIC was created so that people could still put their money into a bank and be assured it wouldn’t disappear. It also made sure that banks with FDIC protection couldn’t use that protection to engage in high risk gambling.
Well, That block on gambling with peoples’ money went away when Congress overwhelmingly passed the Gramm–Leach–Bliley Act of 1999. Now the banks were free to turn Wall St. back into a casino but it would be even better this time! Now the government would have to save their bacon when their number came up. And so we got the Great Recession after the Wall St. collapse of 2008.
What does that have to do with Europe and a new round of bailouts? Simple. Because the GOP took great pains to ensure that the banks were not broken into discrete, smaller, less dangerous entities, the banks are still free to take insane risks with our money. And they certainly did. Oh, sure the new Dodd-Frank regulations are supposed to have fixed this but that didn’t stop Bank of America and JP Morgan from taking their about-to-explode European derivatives (the same derivatives the GOP would not let Obama regulate) from their vulnerable “separate” investment arm and dumping them in the nice, safe, FDIC insured commercial arm. Which means that when those derivatives collapse just like they did last time, the banks will just hold their hand out to the government under the guise of “making sure the average American doesn’t lose their savings.”
The Obama administration is questioning the legality of this move for the obvious reason that it violates the spirit of the new regulations if not the actual word (which is debatable)...
http://www.addictinginfo.org/2011/10/19/wall-st-to-be-bailed-out-again/
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