Eight years of encouragement by regulators, a taxpayer funded bailout, federal government policy designed to help them not only get back on their feet but hand them enormous profits… and they’re still a corrupt, awful mess.
A new review commissioned by regulators called the “living will” test showed that these too-big-to-fail (TBTF) institutions are in fact still sick and would fail disastrously should anything like the crisis of 2007 happen again.
They were supposed to reorganize and by their own claims are no longer TBTF. Jamie Dimon, the CEO of No. 1 JPMorgan Chase, said that very thing just days before this report came out. Yet the Federal Reserve and the Federal Deposit Insurance Corporation both said that if necessary, five of nation’s top eight banks still couldn’t be wound down into bankruptcy without taxpayer assistance.
The folks running these institutions are getting paid tens of millions of dollars a year and after eight years they have yet to figure out how to run their institutions without protecting its customers. These are the very same banks that led us into the financial crisis and have gotten bigger, not smaller in the past eight years: JPMorgan Chase, Bank of America, Wells Fargo, State Street and Bank of New York Mellon.
How is this possible?
Easy. No one – not regulators or politicians – has the guts to stand up to the banks because they’re all in their pockets.
Here’s a dirty little secret about the way D.C. works:
- Smart ambitious people go to work for the industry, in this case, we’ll say banking, but it’s not limited to just banking by any stretch of the imagination.
- They move up, get to certain level and then after making the right connections and showing their employer they have the goods, they switch over to the government, whether in a regulatory role or working on Capitol Hill directly with politicians.
- There, they craft policy that is favorable to their former bank employers.
- Then, after a few years, they go back to the banks with all sorts of D.C. connections and get a huge paycheck. That cycle might repeat itself two or three times.
Don’t be fooled; the regulators and the ones writing the laws are insiders. Their only interest is getting a bigger paycheck when they get back to Wall Street.
And all this plays out without you or me really ever being clued in as to what is going on. Even if we get the feeling something is up, the media make sure we never catch on to the very old and well-played game by political servants and banker masters.
So what happens now that the banks have proven they can’t take care of themselves? Well, as far as the banks are concerned, nothing!
They have everything they want and they’re looking for new ways to make money out of nothing and hold taxpayers accountable.
What can we do?
We can steer clear of these financial institutions. They are dangerous on many levels. If you want to keep accounts, keep them with local banks and credit unions.
Avoid most publicly traded banks because they’re not in the traditional banking business, they’re in the shareholder business. That means they’re more interested in growing earnings than serving customers and the community.
Also, avoid home equity loans, car loans and lines of credit right now if possible, especially with big banks.
— GS Early