The Trumpets are Roaring
The Banks – Part 3 Continued
President Reagan raised the government guarantee for deposits of savings banks to $100,000 up from a mere $10,000.
This gave the aggressive savings banks a license to steal, because the government would pay $100,000 for each depositor. This led to the savings and loan crisis of 1990. Congress investigated with all kinds of legislation insured to protect depositors during the crisis the President said we should earn our way out of it.
The bottom line was that directors went wild with all kinds of perks which had to be paid back or go to jail.
The next crisis was also man-made. Robert Rubin Secretary of the Treasury under President Clinton decided to lower the capital gains tax to senior citizens with a long term holder of five years to a mere 15%.
Then number one phobia to the general public was paying taxes. So seniors would hold on to their long term holdings with sizable gains to avoid taxes. But 15% meant they could keep 85% of their gains for themselves. An avalanche of sell orders and buy orders hit the market place as seniors switched into more income oriented securities.
Underneath all this hoopla was a sneaky perk for the government. The capital gains taxes skyrocketed and the president’s budget deficits disappeared and the Republican Party lost its number one issue and The President easily won re-election.
The Republicans who rode President Bush’s coattails proved to be the same greedy bastards that the Democrats had been in the past. There were just new pigs sloshing around in their pig pens.
With banks now able to buy brokerage firms AND SOME PAID outrageous fees just to become “too big to fail” (Bank of American – how headquartered in North Carolina buying Merrill Lynch).
The president lied to Congress which has proven Mr. Thain’s testimony before the same committee.
This was a tip off that bankers were now being paid with “Pac moneys” or now legal funds that would forever put them in “their corner”. Under present laws it was legal, but morally and ethically very wrong.
Major Banks were now in control of the Credit Card business and would never have to worry about the Usury Law resurfacing to protect the consumer. Man’s greatest invention (Albert Einstein’s quote) was working for the banks. Brokers were now becoming known as “bankers”. Brokers want their money working for them night and day. A real banker would be more cautious, but they now were in control of everyone’s life style from the ATM money machine to Credit cards.
Ben Bernanke the Federal Chairman was called “helicopter Ben” because of a speech he gave about a future crisis, he would fly all over dumping dollars from helicopters. But when President Obama was elected along with democratic majorities in both houses Bernanke lowered Interest rates to zero, so the bankers could replenish. They continued to hoard and cheat in markets to feather their own nests.
So the general public was left out, except for stocks and bonds.
When there are more buyers in stocks than sellers stocks will go up. More sellers than buys and stocks tend to go down. This can be manipulated by the use of computers and High Frequency Trades (HFT) in stock and commodity markets. This is also illegal, but the continual steady rise in the stock indexes, one had to believe the Federal Reserve; the Treasury Department along with POTUS knew all. They will tell you it is to protect the dollar. The government has the authority to protect the dollar by any means available under the Federal Reserve act of 1913 – but to do it illegally. I doubt that was the intention of the 2013 Congress.
So the bottom line is that the recessions that President Eisenhower used by “pushing on a string”had become worse with each one.
Since we have become so powerful financially almost every nation on earth had copied us bank wise.
Next _ the coming disaster in Money Market Funds.
Poor Richards Report
