“WHICH BANKS WILL DIE?”
By Daniel at 5 June, 2009, 9:35 pm
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By Joel Skousen, Editor - World Affairs Brief
“Anand Chokkavelu says that “1,562 banks will be gone in the next few years. I heard this startlingly precise number from one of the panel members at the Wall Street Journal Future of Finance Initiative conference — a meeting which featured a keynote by Treasury Secretary Tim Geithner, as well as participation by such heavy hitters as George Soros, Meredith Whitney, Robert Shiller, and Paul Volcker.
Let’s put that prediction in perspective. Since the fall of Bear Stearns, only 61 banks have been taken over by the FDIC. If you believe this presenter, we’ve only seen 1/25 of the likely banking deaths. It may or may not come to pass that 1,562 banks go under. It’s merely a guess, after all, albeit an educated one. But what’s even more important than predicting how many banks are going down is predicting which ones are most likely to fail. And, for the greedy folks like me, which ones are most likely to succeed. The recent stress tests were the government’s golden opportunity to separate the winners from the losers — and nationalize the losers.
Instead, the government has effectively split banks into three classes: Big banks that passed the stress test [and got more bailout money] Big banks that failed the stress test [and got more bailout money] and Smaller banks [who won't get bailout money]. Only banks that have more than $100 billion in assets were subject to the government’s stress tests. These 19 largest banks (out of 8,246 FDIC-insured banks) comprise about two-thirds of all U.S. banking assets. Call them too big to fail if you’d like, but these are the banks that the government really cares about.”
Aside from the fact that all bailouts are unconstitutional, I continue to point out the utter impropriety of Congress giving the Treasury the power to arbitrarily bail out some banks while denying other smaller banks equal access. Government cannot play favorites, but it does.
The FDIC says there are 350 banks on the problem list. Bob Chapman asks, “Why can’t they be bailed out like the 19 money center banks?” Good question. It is clearly meant to allow the favored, most insolvent banks, to buy up the others using taxpayer funds. “The treasury will inject a fresh $50 billion in support of GM. GM debt will drop from 170 billion to 12. US treasury is bailing out Jp Morgan Chase and Citgroup of 100% of their GM debt by paying off all of the CDS they placed on GM bankruptcy. This is selective sheltering.” Indeed it is, and it is a violation of every principle of law the US has known for 200 years.”
The full article is at:
http://rense.com/general86/auto.htm
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