Posted on 05/03/2023 7:11:39 AM PDT by SeekAndFind
Yesterday, I expected to submit an article entitled "In business, bigger is not necessarily better" for American Thinker. The ink wasn't dry on my article before the government took bids on First Republic Bank (FRB). JPMorgan Chase, the largest bank in the U.S., was the winner. The biggest gets bigger.
What? Does the Fed have the legal right to put a distressed bank on the market and effectively sell it to the highest bidder? In doing this, isn't the Fed playing favorites with the bank leadership that created the problem in the first place? Have FRB bank leaders been selling their FRB stock the way Silicon Valley Bank leaders did?
Since when has it become law that banks cannot go bankrupt? Troubled banks can be auctioned off, instead of going through bankruptcy like all other small, medium, and big companies.
Bankruptcy is a healthy thing. Using the court system, the debtor is responsible for developing a reorganization plan within 120 days. The plan includes how creditors will be repaid using assets and other items of value in the company. Often, the company can remain viable after bankruptcy, although much reduced in size. The plan must be approved by the court and the creditors.
Many large companies have gone through bankruptcy, including Delta Airlines. Why should banks be different?
In the 1970s, the U.S. Congress passed legislation encouraging financing for affordable housing. Then, in 1999, parts of the Glass-Steagall legislation in 1933 were repealed, which allowed financial institutions to commingle their commercial (risk-averse) and proprietary trading (risk-taking) operations. This led many banks to make loans with little or no down payments to homeowners. Within seven years, the portfolios of many large banks were overstated as many mortgages defaulted and banks left these assets overstated. Banks most affected were primarily investment banks.
(Excerpt) Read more at americanthinker.com ...
Banks have become Fed backed, slush funds for the politically connected and the Woke. Pray they all crash. We’ll pick up the pieces, and rebuild the right way.
While the media tried to tamp down concerns, the FRB ‘non scandal’ raised all the red flags for the rest of us.
The rich & feds are circling the wagons; the rest of us are in deep trouble.
They should have confiscated and auctioned off all of the bank execs property - physical as well as investments and savings. Once the last hammer dropped each exec would get 1 year’s average US worker wages from the auctions. The remainder would be divided up among the depositors.
“Since when has it become law that banks cannot go bankrupt?”
Since the banks bought all the politicians.
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