Bail-Ins: The Legal Framework is in Place to Continue Looting the American Public.

At the expense of the American public (devastating austerity and elimination of the middle-class), 2008 ushered in government bail-outs in order to preserve Wall Street's corrupt and bankrupt system., but what about government bail-ins (confiscation of bank deposits), the likes of which we saw occur in Cyprus, Greece? In addition to bail-outs, so far, we've been witness to severe austerity measures targeted at the masses, including sequestration, a dog-and-pony-show government shutdown, and massive cuts to food stamp that essentially puts a stranglehold on economic recovery (for the masses), not to mention the threat of default. There is no doubt that the intention is to strip away what is left of the social safety net at a time when its most needed. Meanwhile, J.P. Morgan, Goldman Sachs, Bank of America, Citibank, Deutsche Bank, etc., have not only evaded any and all consequences of their egregious actions, they are generously rewarded as they continue to gamble with taxpayer money. It doesn't take a rocket scientist to see what's going on here.

These austerity measures disproportionately affect children, seniors, and people with disabilities. According to the Center on Budget and Policy Priorities (CBPP), this recent $5 billion cut will average less than $1.40 per person per meal and jeopardize the strength of the current economic recovery. Moreover, according to the Center for American Progress (CAP) "each $1 billion dollar reduction in the Supplemental Nutrition Assistance Program eliminates 13,718 jobs," resulting in more than 68,000 job losses in the coming year.

Keep in mind that programs such as SNAP have what economists call a "multiplier effect"—in other words, "a dollar given to an entitlement recipient has amplified economic benefits. In this case, those consist primarily of the grocers who benefit when food stamp users shop in their stores. The estimated multiplier effect for food stamps is as high as 2 to 1."

The report, "Nourishing Change: Fulfilling the Right to Food in the United States," released by the International Human Rights Clinic (IHRC) at the New York University School of Law is timely as our government cut at least $5 billion-with many more cuts to come-- from the government's already inadequate $80 billion food stamp program, Supplemental Nutrition Assistance Program (SNAP), in the Farm Bill.  This report cites a study by the Center for American Progress, that calculates the "hunger bill" for the country, which includes the costs of treating illnesses and other medical conditions related to food insecurity, the impact of hunger on educational outcomes and lifetime earning potential, and the costs of running charity-based emergency food programs. For 2010, that bill came to $167.5 billion. For about half of that, $83 billion, the Center says we could extend the SNAP program to all food insecure households.

Okay, back to bail-ins.  It's the Dodd-Frank Act that passed in 2010-- it took up 848 pages at the time, as of July 2012 an additional 8,843 pages of rules were added, representing only 30% of the rules to-be-written. The estimate for the final length of the Act is 30,000 pages --that provides the legal framework for bail-ins.

According to the April 24, 2012 IMF report, conversion of bank debt to stock is an essential element of bail-in included in Dodd-Frank. “The contribution of new capital will come from debt conversion and/or issuance of new equity, with an elimination or significant dilution of the pre-bail in shareholders. ...Some measures might be necessary to reduce the risk of a ‘death spiral’ in share prices.” In the language of Dodd-Frank, this will “ensure that unsecured creditors bear losses.”

Under the existing legislation, the FDIC has the power to impose losses on unsecured creditors in the process of resolving failing banks. For example, the FDIC resolved Washington Mutual under the least-cost resolution method in 2008 and imposed serious losses on the unsecured creditors and uninsured depositors (deposit amount above USD 100,000). The Orderly Liquidation Authority (OLA) established under the Dodd-Frank Act further expands the resolution authority of FDIC. Subject to certain conditions, the FDIC now also has the powers to cherry-pick which assets and liabilities to transfer to a third party and treating similarly situated creditors differently, eg: favoring short-term creditors over long-term creditors or favoring operating creditors over lenders or bondholders. -- Economist, Nouriel Roubini

The U.S. is far from the only nation with provisions for bail-ins:

Bail-In Rules for Eurozone Banks Should Start In 2016

Bondholders Bail-in Shows Alternative Method to Rescue Banks

Bank Bail-in Rules Confirmed


But who cares, right? The stock market's soaring to new heights while income disparity continues to widen at unprecedented levels.

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Americans Still on the Hook for Trillions.

The global GDP is $65 trillion. The US GDP is $15 trillion. Guess how much the Federal Reserve is backstopping for Bank of America's derivatives? $75 trillion! Wells Fargo derivatives? $73 trillion! That's more than double the global GDP!

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Bank of America, Citigroup, Wells Fargo, JPMorgan Chase Report Billions in Profit

Must be nice. No federal tax expense and billions in profit.

Bank Of America Rakes In $6.2 Billion Profit

Bank of America reported net income of $6.2 billion, or 56 cents per share, for the third quarter of 2011, compared with a net loss of $7.3 billion, or 77 cents per share a year-ago period.

The nation’s largest bank reported total revenue of $28.5 billion, a 6% increase. Analysts’ consensus forecast for earnings per share of 20 cents on revenue of $25.9 billion.

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Sacrificing Real People to Boost an Illusion.

Despite Warren Buffet's huge $5 billion vote of "confidence" in Bank of America, the "too big to fail" institution is slashing 30,000 jobs - after it's already cut 6,000 jobs - in an effort to reverse a crisis of confidence in its investors. It's the single largest job reduction by a US company this year, since the post office cut 30,000 jobs, last year, since General Motors cut 47,000 jobs in 2009. The cuts which effect Bank of America's consumer businesses represent 10% of South Carolina's work force.  This year, when the real unemployment rate is over 20%.

Not to mention the poverty rate in America is rapidly increasing, especially for children under 18. And middle class wealth is falling. 

The government draws the line of poverety at an income of $22,314 a year for a family of four and $11,139 for an individual.  Oh, and Merck is also cutting 13,000 jobs. So, boosting investor confidence? In what? The only thing I can think of is that the uber rich' will continue to get uber uber rich. Because that's the only segment of the population that is benefitting.

Of course, this is nothing new. Banks and corporations often slash jobs in order to boost confidence, boost their bottom line, and whether we want to face it or not, boost the profits in order to line the already lined pockets of the powers behind these institutions. The results - the rich getting richer by the day - prove that this is true.

But isn't there something inherently wrong with a system that sacrifices its people, real people, for an illusion? For excessive profit? To maintain institutions that are too big to fail? Because, after all, confidence is not real. Confidence is often misleading and not congruent with reality, and that often leads to delusion and deception. In fact, over-confidence inflated the housing bubbles that burst in 2008, bringing our economy to its knees. And don't kid yourself, there are a few more bubbles yet to burst. Still, we're willing to sacrifice real people in order to create the illusion that everything is just fine...when, everyday, it seems, it gets worse and worse.

Then, there is the problem that if Bank of America collapses, there may not be enough money in the FDIC to cover the losses that will occur. That's right. Bank of America just might collapse the FDIC. In August, the FDIC rejected Bank of America's mortgage accord because it doesn't have enough money information to evaluate the settlement.

And I thought this was interesting. Adulos Huxley, from zerohedge posted a Goldman Sachs Case Study that may or may not predict

Buffett branding is just a first line of defense in the rescue plan.

9/15/2008 | GS=$131 | Lehman Bros files for Ch. 11

9/16/2008 | GS=$129 | AIG bailed out

9/23/2008 | GS=$121 | Buffett buys $5B of GS @ $115/share (under market)

10/3/2008 | GS=$124 | TARP made into law

10/28/2008 | GS=$91 | US Treasury buys $10B of GS @ $122.9/share (over market)

11/21/2008 | GS=$47.41 | low

11/24/2008 | GS=$65 | QE 1 begins; Fed buys MBS

For Banksters of America, we can expect same order of bailouts about a month apart with BAC falling 20-30% each interval:

8/25/2011 Buffett (private deal)

9/23/2011 US Treasury (federal)

10/28/2011 QE 3 (international overlord)

It does make one wonder why such a savvy investor like Buffet would invest $5 billion into what appears to be a powderkeg of debt.

Links:

Bankrate.com
Poverty Call to Conscience Tour

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Bank of America's Dead Drop to Rick Perry and Goldman Sachs VP Changes Name to Lobby From Inside.

Bank of America is cutting 3,500 jobs this quarter according to an internal memo, as the biggest U.S. bank grapples with its $1 trillion problem-loan portfolio and growing economic concerns. Upon wider review, at least 10,000 jobs are likely to be eliminated in total.

Meanwhile, from Zero Hedge:

Right after Texas Governor and Republican presidential candidate Rick Perry spoke at a Politics and Eggs breakfast in Bedford, New Hampshire, an unknown gentlemen approaches a casual Perry like an Ian Flemming character, and proceeds to dead drop the following: "Bank of America... We will help you out"... and silently moves on. At least we know now who is funding what, and whose interests potential future president Perry will be paid to defend.



Full event can be found here. Before someone pulls it, that is.

Then, come to find out that a former Goldman Sachs VP, named Peter Simonyi (who previously worked for the SEC) changed his name to Peter Haller to lobby Congress from the inside. He ended up working as a top staffer for Rep. Darrell Issa (R-CA) on the Oversight Committee, and went on to argue against regulations on Wall Street.

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Too Above the Law to Fail.

The phrase "Too big to fail" is hogwash. It was coined in order to instill fear into the public. Why? To avoid backlash when the government claims they must rescue the elitist banks and corporations from the consequences of their criminal behavior.

Do you think pressure and protest from American citizens will change anything? Well, if enough people participate...Hell yeah! And, by enough, you mean? Oh, maybe...100 million people.

Here are some people who are starting the ball rolling.

On behalf of Grass Roots Organizing (GRO) in conjunction with National People's Action (NPA), as many as 900 clergy, homeowners and union members from across Ohio and the Midwest gathered to protest the JPMorgan Chase shareholders meeting at corporate park outside Columbus, Ohio as part of a national campaign called  Showdown in America



And in Colorado, a group of people targeted Bank of America.

Stapel bought her home in Johnstown about six years ago while she had a good job at Colorado State University.

Since then, she said, she was struck with a disability, is no longer able to work and is burning through her savings and an inheritance to pay her loan.

She has tried to get her loan modified but says Bank of America has given her the runaround and claims never to have received documentation that she said she has proof she sent.

“I want to pay them back,” she said, and just needs help.

And up until a protest in the rain Wednesday, she says the company did not respond to her requests.

Links:

Foreclosing on Ohio

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Taking a Stand Against the Banksters.

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If Big Banks Are Terrorists, It's Even More Important We Don't Give In.

In an attempt to explain why the government needed to bail out the troubled banks, President Obama said that AIG is like a suicide bomber.

“We had to step in, it was the right thing to do, even though it is infuriating. The same is true with AIG. It was the right thing to do to step in. Here’s the problem. It’s almost like they’ve got — they’ve got a bomb strapped to them and they’ve got their hand on the trigger. You don’t want them to blow up. But you’ve got to kind of talk them, ease that finger off the trigger.

While that may be true, it is the policy of the United States not to give in to terrorism. We've already eased their fingers off the trigger. At this point, as we enter the second or third phase of the bailout, it's important that we, the people take a stand and tell the financial sector that they do not run this country. We can start by standing up to Goldman Sachs, JP Morgan, Citigroup and Bank of America.

Take Goldman Sachs, who wants to pay back the $10 billion it borrowed from the Troubled Asset Relief Program (TARP). Sounds like a good thing, right?

Wrong, according to former International Monetary Fund chief economist, Simon Johnson, currently Professor of Entrepreneurship at MIT's Sloan School of Management, in addition to senior fellow at the Peterson Institute for International Economics, co-founder of BaselineScenario.com, and a member of the Congressional Budget Office's Panel of Economic Advisers

Initially, the government wanted to carefully manage the flow of information regarding the results of the stress tests that Obama ordered on 19 banks, because any time that kind of sensitive information is revealed, the risk of destabilizing the markets becomes much greater, and increases the pressure on rival banks, who are not ready to pay back TARP funds, by undermining their business models and hindering thier ability to raise capital, possibly putting them in a position of needing more TARP money.

Goldman Sachs, by announcing that they plan to pay back the TARP money, contingent upon the results of the stress test, sent a strong signal that they were going to ace it. This, of course would greatly tilt the playing field to Goldman Sachs' advantage, something we don't want at a time when "too big to fail" is something we are trying to discourage, especially considering that big financial players are even bigger now that Bear Stearns and Lehman Bros. have been eliminated.

Goldman Sachs still receives government assistance created last Fall when the crisis came to a head, that take several forms - access to credit from the Federal Reserve made possible by government allowing them to change legal forms in the midst of the crisis; government (FDIC) backing or guarantee of loans; $13 billion dollars that they received through the AIG bailout, due to thier counter party status to AIG that Goldman will never have to pay back, etc. At the same time that Goldman Sachs receives the continuing support of the government, by paying the TARP money back, Goldman Sachs can remove all the constraints set by the government, including the restrictions on executive pay, the very thing that contributed to the current finanical meltdown.

The very nature of these compensantion schemes encouraged and greatly rewarded the risk taking that brought our financial system to the brink of disaster.

In Simon Johnson's article "The Quiet Coup" in the May issue of The Atlantic Monthly, Johnson explains that in order to improve our economy, we must break the power of the financial oligarchy that is blocking reform. If we do not break this power structure, and allow the financial sector to take back its authority America could face a crisis that in Johnson's words, "could, in fact, be worse than the Great Depression — because the world is now so much more interconnected and because the banking sector is now so big."

"We face at least two major, interrelated problems. The first is a desperately ill banking sector that threatens to choke off any incipient recovery that the fiscal stimulus might generate. The second is a political balance of power that gives the financial sector a veto over public policy, even as that sector loses popular support." - Simon Johnson

If we've learned anything from this financial crisis, it should be that big business is only interested in bigger business, nothing else, therefore we should ask Goldman Sachs, "What's in it for you, and what do we have to lose?" The answer is: everything... to both questions.

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Protect Yourself from Credit Protection Plans!

Credit card "credit protection plans" - an insurance plan that is supposed to cover your minimum payments should the customer lose his job, is admitted to the hospital, becomes disabled or dies - are the biggest rip-off going, yet they get very little bad press, more than likely, because of their "affiliation" with the big credit card companies. "Affiliation", more than likely, means the credit protection plan is just another division of your bankcard company, although they will do their very best to make you believe otherwise. After asking several times, in several different ways I finally found out my parent's credit card "credit protection plan" was with the same bank that issued their credit card, Bank of America.

Having worked for a bank card company at one time, I know a good percentage of customer inquiries are from customers who signed up for credit card protection plans who were not aware of being enrolled until they saw the charge on their statement. This has happened to me several times. I will have to call, cancel the service and have them credit the charge back to my account. I did not agree to enrollment because why would I want to add, what would be the equivalent of 10%, to my APR for absolutely no reason? No matter what the credit protection plan advertises, the eligibility requirements are so restrictive, the chances of the customer collecting are slim to none.

I also have personal experience with the so called "benefits" advertised by these plans...

After discovering a $69 charge on her credit card statement for a "credit protection plan", my mother knew nothing about, but had been paying on since 2003, we inquired to see if - since they could not reverse the charges - we could cash in on the benefits considering my mother (71-years old) had just been released from the hospital less than one month ago. We were told we had only 30 days from the time she was admitted to the hospital to request, collect the necessary proof, and then submit the forms. So, after paying a couple of thousand dollars, at least, my mother and father (77-years old) never collected a penny, even though they have been hospitalized repeatedly over the last five years.

One could definitely argue my parents should have paid closer attention to their credit card bill, but in their defense, with as much as they've gone through; it's amazing their bills were paid at all. I'm sure even if my mother knowingly enrolled in 2003, she was sold a bill of goods.

The sad truth is the credit card industry targets the elderly because they know they are the most vulnerable. Even if one takes the time to read the "mouse print", barely readable with 20/20 eyesight, there are so many loopholes that allow the bank to deny claims under credit protection policy, that there is no way to comprehend what would be covered. We need protection plans protecting us from "credit card protection plans"!

Credit insurance -- This "perk" preys on fear and is as necessary as a bee suit in Alaska. For an exorbitant premium, the insurer agrees to make minimum payments on your debt should you become unable to. You'll pay $13 a month to get a credit protection plan for a $2,000 balance. The laws of probability -- and the FTC -- are on your side anyway. And they're free.

Here are a few of examples of the millions of people scammed by credit protection.

Assad of Miami FL (02/12/08) says, "I have been paying for credit protection on this credit card in case of an emergency. Last year I lost my job in part because I was sick. I called and emailed washington mutual about my problem so said they would send me paperwork to activated the credit protection plan I have been paying every month. They never sent me anything and sent me to a collection company. This is after almost $50.00 they charged me every month for the credit protection..."

FIA card services added what they called a credit protection plan to my closed account that took a 3k bal to 7 k since 2002 with no purchases. This company is a scam! They do not even have a credit protection department, I have called over 20 times trying to get this problem solved....

I called FIA Card Services on 9/11/07 to transfer balances to their FIA Card Services Account/Sovereign Bank Card account. I got my first statement end December 07. In fact I have been out of home at the time I received the statement and I saw this statement first week January. I immediately called and made a phone payment. Approximately two weeks after I made the payment, I noticed an amount of $ 61.77 on the statement against credit protection Plan. Then, I called FIA Card Services who directed me to the Credit Protection Plan Customer Services Rep who informed me that I have committed myself for a Credit Protection plan and began explaining benefits of Credit Protection Plan (“If you die or lose your job you are being protected”) which words I am hearing for the first time. I requested him to kindly cancel the Plan which he did without any hesitation. When I asked to be reimbursed, I was told that this is not possible, because 30 days have lapsed since the enrollment in November 07....

I was charged for protection plan monthly that i did not authorized or trial on.

I am steaming mad about being lied to or treated unfairly...I received the bill I noticed that my min payment was for 168.00..and 44.00 was going to go to some program called 'credit protection plan'....I immediately questioned this, called the 800 number on my bill..it was really weird because there was no Bank of America greeting it was pretty generic and did not identify the company I had to call at least two times to verify I actually dialed the correct number....

When I signed up for my First Equity Credit Card I also signed up for their credit protection plan as well. It stated that by signing up for the plan it would cover my monthly bill for me in the case of disabilty from my job, that was one of about 10 different situations. Well I called the company to activate it and it was. 1 month later I recieved my bill with no credits paid towards it late fees and they still charge me for my credit protection coverage. I paid anywhere from $35 to $55 a month for this coverage and for it not work for me...

Please let everyone know...If someone calls during your dinner to sell you a Citibank Credit Protection Plan- JUST HANG UP! It is not the cardholders credit that they are protecting. It is another corporate ploy to exploit those who can least afford it...

After receiving my mastercard...statement (closing date 11/08/2001) I noticed a very high charge for credit card protection (insurance) for $100.99...

In addition, Federal law limits every credit card customer to a maximum of $50 liability for unauthorized use of his or her credit card. Every credit card bank must have procedures in place for disputing unauthorized charges.

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Most Prestigious Banks

999 banking professionals were surveyed in order to rank the top 50 firms in commercial and investment banking. Here are the top 25:

1 Goldman Sachs & Company

2 The Blackstone Group

3 Morgan Stanley

4 Lehman Brothers

5 JPMorgan Investment Bank

6 Merrill Lynch

7 Citi Markets & Banking

8 Lazard

9 Credit Suisse Investment Banking Division

10 UBS Investment Bank

11 JPMorgan Chase - Commercial Bank

12 Deutsche Bank

13 Bear Stearns & Co.

14 Citigroup Inc. (Citi)

15 Bank of America

16 Greenhill & Co.

17 Barclays Capital

18 Wachovia Corporation

19 Rothschild

20 HSBC

21 Houlihan Lokey

22 Jefferies

23 Perella Weinberg Partners

24 Wells Fargo

25 Royal Bank of Scotland

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