Tag Archives: bail-out

Finally, the Truth About the A.I.G. Bailout – NYTimes.com

29 Sep

Lincoln talked of government “for the people, of the people, and by the people.” He didn’t say anything about too-big-to-fail banks.

Starr contends that the government could have spent less money on A.I.G. — and therefore imposed less onerous terms on the company — had the bailout’s architects directed some of their tough love at the Goldmans and Deutsche Banks of the world. And Starr is hardly alone in making these claims. Ever since the details of the A.I.G. rescue entered the popular consciousness, everyone from members of Congress to financial commentators to Occupy Wall Street protesters and Tea Party activists have fulminated against the “backdoor bailout” of Goldman et al. By fully litigating the issue, the Starr trial may finally help heal this festering wound.

At the heart of the controversy is the fact that the government has never provided a plausible explanation for why the Federal Reserve Bank of New York, which had enormous leverage over banks like Goldman thanks to its role as their regulator, didn’t lean on them to accept less than 100 cents on the dollar in their payouts from A.I.G.

via Finally, the Truth About the A.I.G. Bailout – NYTimes.com.

Bank of America: Too Crooked to Fail | Politics News | Rolling Stone

14 Mar

It’s been four years since the government, in the name of preventing a depression, saved this megabank from ruin by pumping $45 billion of taxpayer money into its arm. Since then, the Obama administration has looked the other way as the bank committed an astonishing variety of crimes – some elaborate and brilliant in their conception, some so crude that they’d be beneath your average street thug. Bank of America has systematically ripped off almost everyone with whom it has a significant business relationship, cheating investors, insurers, depositors, homeowners, shareholders, pensioners and taxpayers. It brought tens of thousands of Americans to foreclosure court using bogus, “robo-signed” evidence – a type of mass perjury that it helped pioneer. It hawked worthless mortgages to dozens of unions and state pension funds, draining them of hundreds of millions in value. And when it wasn’t ripping off workers and pensioners, it was helping to push insurance giants like AMBAC into bankruptcy by fraudulently inducing them to spend hundreds of millions insuring those same worthless mortgages.

But despite being the very definition of an unaccountable corporate villain, Bank of America is now bigger and more dangerous than ever. It controls more than 12 percent of America’s bank deposits (skirting a federal law designed to prohibit any firm from controlling more than 10 percent), as well as 17 percent of all American home mortgages. By looking the other way and rewarding the bank’s bad behavior with a massive government bailout, we actually allowed a huge financial company to not just grow so big that its collapse would imperil the whole economy, but to get away with any and all crimes it might commit. Too Big to Fail is one thing; it’s also far too corrupt to survive.

via Bank of America: Too Crooked to Fail | Politics News | Rolling Stone.