Blackmailers, Banking and Who's Holding the Money

Deep Throat: "No, I have to do this my way. You tell me what you know, and I'll confirm. I'll keep you in the right direction if I can, but that's all. Just... follow the money".

The trail of money will usually confirm where a crime has been, or is about to be, committed.

Take for instance former Illinois Governor Rod Blagojevich when he stated

the state will suspend business with Bank of America Corp. until the lender restores credit to the shuttered Republic Windows & Doors company in Chicago where workers are staging a sit-in.

Having crossed BofA the next day his scandal broke (midtowng posted a very good article on this)

Who is the bankers bank? The Federal Reserve. And who is the latest person to cross the bankers bank? Ken Lewis.
In an article by Patrick Heller, Bank of America's Ken Lewis sought to back out of the buyout of Merril Lynch.

Bank of America CEO Ken Lewis testified under oath for New York Attorney General Andrew Cuomo that last December he had notified the federal government that the bank had discovered huge new losses ("material adverse changes") at Merrill Lynch and was going to exercise an escape clause to cancel the bank's takeover of the brokerage firm. Upon hearing this, then Treasury Secretary Henry Paulson blatantly told Lewis, at the behest of Federal Reserve Chair Ben Bernanke, that Bank of America had to go through with the takeover or all of the bank's directors and senior management would be fired. The federal government did not want the public to become aware of the weakness of Merrill Lynch and the U.S. banking system that the cancellation of the transaction might expose. Bank of America then closed the Merrill Lynch purchase deal.

Paulson's testimony to Cuomo largely confirms the details of Lewis's testimony.

In effect, Lewis labeled Paulson and Bernanke as blackmailers. Their actions in this matter also show them as liars in repeatedly stating that the U.S. banking system is sound and solid.

Liars! Pretty strong words to describe a Fed Governor and former Treasury Secretary. However that's only from one guy now being ran out of his job. Sourgrapes?

How about another example from last weeks news stories? Afterall we have recently heard about the FED conducting stress tests on the banks but slim on details.

: The federal government has conducted "stress tests" of individual banks to help find out which were financially strong, or average, or in serious trouble. It was reported that these tests were completed a few weeks ago, but the government was slow to release the results.

On April 19, the Turner Radio network reported that it had obtained a copy of the results of the stress tests and passed along a summary of more than 10 points. Among these summaries were statements that 16 of the nation's largest banks were already technically insolvent and that the failure of any two of these institutions would wipe out the current assets of the Federal Deposit Insurance Corporation.

On April 20, the Treasury Department issued a statement claiming that it was not possible for Turner to have had the information as the Treasury Department itself had not yet seen the information. Release of the information was promised for April 24.

Meanwhile, the Federal Reserve prohibited any banks from discussing the results of their stress test.

In mid-week, the Associated Press reported that it also had obtained a copy of the bank stress test report and confirmed the information reported by Turner Radio. It also said that the Treasury Department was lying when it claimed on the 20th to have not yet seen the test results.

Again with the lying?

Ever notice that rats always seem to have foresight about the time to abandon ship?

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outrageous brazen news and theft?

Oh ho hum, they all will just get all in a flurry about those socialists or say at best executive pay.

It is an amazingly outrageous post and the idea that just two of the Zombie banks being exposed as insolvent would shut down the FDIC is incredible!

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Insolvent FDIC? Never.

The FDIC will never be insolvent as Congress will ALWAYS vote to re-fund it, even if all they can do is print money to do so.

They will understand that they have no other choice: Were a single FDIC claim to go unpaid, every single bank in the world would instantaneously be beset by the mother of all bankruns, and life as we know it would be over. And that would not bode well for their re-election hopes.

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True enough as far as it goes

But how far can they do that? After all, if they end up printing enough money to cause massive inflation, then the banks are going to be beset with the mother of all bankruns also.

At some point, the whole system is going to break down.
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Executive compensation is inversely proportional to morality and ethics.

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The system is de facto

The system is de facto insolvent, including the FDIC which itself relies on funding via the treasury. The TARP funds have covered the insolvency. However, we've been told that the purpose of TARP was to recapitalize the system and add new liquidity to the ossified/frozen credit markets. The fact is, really, the system is insolvent.

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