From Raw Story:
With the results of stress tests on the major banks about to be released, the Washington Post is reporting that nearly all the banks “now have enough money to weather the recession” and that this is an “outcome more positive than many investors had expected.”
However, political analyst Naomi Klein doesn’t trust the stress tests. “It still feels like they’re playing with the numbers,” she told MSNBC’s Rachel Maddow on Wednesday, “that they’re trying to delay the moment of truth — and I think that that’s why that confidence is really, really tentative.”
Klein is concerned that “the poorest and most vulnerable people in the country are being asked to bail out the most wealthy.”
“It really does fit the thesis of The Shock Doctrine,” she said, referring to her book in which she exposes how governments and powerful corporations use disasters and upheavals to gain even more power.
“Here we have just this transfer, this massive transfer of public wealth into private hands,” Klein explained, “and that’s continuing and it’s much, much larger, just on a much larger scale than any of the investments we’re seeing through the stimulus or the budget.”
Almost $12 trillion is being spent to bail out the financial sector compared to only about $1 trillion being spent on economic stimulus.
“My real concern is — has been my concern from day one — is that the crisis on Wall Street, created by deregulated capitalism, is not actually being solved,” continued Klein. “It’s being moved. A private sector crisis is being turned into a public sector crisis.”
“They are already cutting corners,” she told Maddow. “Now Aids funding in Africa is being cut by $6.6 billion. So who is paying for this? This is where the unfairness of it becomes very clear.”
Bank tests rigged? Bailout = Mass slavery? So many questions… Are any politicans going to answer them? Naomi is not the only one questioning the bank stress tests… Here an excerpt from an article on WSWS titled: US bank stress tests rigged to benefit Wall Street
The release of the bank “stress tests” on Thursday has provided further confirmation that what drives the Obama administration’s economic policies is a determination to protect the wealth of the financial elite.
The government’s report states that while ten of the 19 biggest US banks, all of which have received taxpayer funds under the Troubled Asset Relief Program (TARP), require a combined $74.6 billion in additional capital to withstand a deeper recession, all of the banks are at present adequately capitalized and the financial system as a whole is sound.
It makes this assertion even while acknowledging that should the recession deepen significantly, the 19 banks could suffer $599.2 billion in losses over the next two years, and that their total loss rate for loans would be 9.1 percent, exceeding the levels of the 1930s.
Federal Reserve Chairman Ben Bernanke said in a statement, “The results released today should provide considerable comfort to investors and the public.” The only basis for such “comfort” is the assurance given by the Obama administration that it will not allow any of the banks to fail and will provide whatever public funds are necessary to keep them afloat.
The report lays out provisions for the “healthy” banks—such as JPMorgan Chase and Goldman Sachs—to pay back their TARP money so they can escape the minimal restrictions on executive pay and curbs on dividends and stock repurchases attached to the government handouts. This amounts to a blank check to fully resume the speculative practices that precipitated the crash in the first place.
Those banks deemed in need of additional capital—such as Bank of America, Citigroup and Wells Fargo—are offered access to Treasury funds or, if they choose, the opportunity to exchange preferred stock owned by the government for so-called “mandatory convertible preferred shares.”
This new type of preferred stock—which does not give the holder voting rights—would convert into common shares only if the bank posts losses in the future. As the Wall Street Journal pointed out Thursday, “That would allow the US to recapitalize the banks without controlling them. By keeping the investments as preferred stakes, at least for the time being, the government would remain a passive investor…”
The Obama administration has invented this device for the express purpose of boosting the balance sheets of the banks without giving the government any say in their operations.
Related articles:
- Bank of England braced for third wave of financial crisis
- Obama’s bank tax is chump change – Celente
- Man who broke the Bank of England, George Soros, ‘at centre of hedge funds plot to cash in on fall of the euro’
- Leading US banks blamed for triggering financial crisis
- Big Bank Profits are Bogus! Massive public deception!
