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If you've been reading the headlines, you know Bank of America Corp. (NYSE:BAC) is in trouble. It could be in really big trouble.
Thank goodness they're so big!
Thank goodness all the big banks in America are all much bigger now than they were a few years ago, before the financial crisis brought them to their knees, by their own doing, of course.
Don't you just love it when a plan comes together?
Yeah, it's all part of "The Plan" to eliminate pesky banking competition.
Let me show you how nicely it's working...
The Fed's 100-Year Plan
The Plan was hatched a long time ago. Back in 1913, as a matter of fact.
That's when Congress devised the Federal Reserve System for eliminating competition and making sure U.S. taxpayers would be the lender of last resort to big bankers.
It has taken a while, 100 years, in fact. But it is working.
The first sign it was working came in the 1980s and '90s, when the savings and loans got into serious trouble playing the greed game.
They weren't covered by the Federal Reserve System. So they were shut down, or rolled up by government-backed insiders (Congress' puppet-masters), and later sold to big banks for sweet profits.
Anyway, they're gone. No more pesky competition from S&L associations.
Now look who's next on the chopping block...
Community banks on their way out. They have been systematically undermined and undercapitalized on account of their inability to compete with all the big banks (that would be the Five banks, you know who they are). The big banks are obviously too big to fail, so therefore a safer place to put your money and with whom to do business.
Over the past 20 years, the number of community banks, those with assets of less than $1 billion, has been knocked down by half.
Meanwhile, in the past four years, the Big Five have grown exponentially. They now hold more than 50% of all banking assets in the United States.
There are a few hundred "regional" banks. But they're not part of the problem; they're part of The Plan. They will be bought by the big banks eventually.
So the bigger they get, the better for the Big Five, who will gobble them up in the final race to megabankdom.
If You're Not Part of "The Plan" It's Problem
It's the approximately 6,000 remaining community banks - the ones that are the local backbone lenders in small towns and communities - that have to go. They are being shrunk systematically and undermined emphatically.
How emphatically? Well, they account for 92% of all banks and have 30% of all branch locations. But they only account for 11.5% of all bank assets.
The big banks overshadowed community banks primarily by encroaching on their meat and potatoes, small-business loan financing (you know, those higher-risk loans to local businessmen and women creating the majority of jobs in America), on account of their shoveling credit cards into their mailboxes. (You may be surprised to learn that credit cards are now the principal means of financing used by small businesses.) As they did so, the poor and getting poorer community banks have had to turn more and more to commercial real estate lending.
Over the last 20 years, the percentage of community banks' assets represented by commercial real estate loans has risen from 30% to just over 53%, according to the American Bankers Association.
What's interesting is that those banks struggling with their commercial real estate loans were once in a position to compete with the big banks. But not for much longer. They're on the ropes - just where the Big Five want them.
And finally, I'll ask rhetorically, what's up with the de facto moratorium on handing out charters to any de novo (new) banks? The question may be rhetorical, but the answer is anything but theoretical.
There haven't been any new bank charters issued in the past three years.
There are no new banks, not because the regulators are afraid that they've already got their hands full with all the banks in the country now - though that's what they'll tell us. The reason there are no new banks is that we're at that part of The Plan where new competition isn't allowed to be created.
Everyone Saw This Coming
So, what's this all got to do with Bank of America being in trouble?
Everything.
Bank of America bought Countrywide back in 2008 - not a good deal for them, and now the cause of a lot of trouble.
Now BoA, along with 17 other financial institutions, is being sued by both Fannie Mae and Freddie Mac's government regulator, the Federal Finance Housing Agency, to make them cough up money for the crappy loans Countrywide originated, packaged, and sold them. The FHA really wants BoA to buy-back a lot of those mortgages, and are suing them to do so, and maybe throw in some other money in fines.
But Bank of America just got hit again, on Wednesday, by the government.
Actually, it was hit by a former executive vice president's whistleblower suit, which the Justice Department joined. They're seeking $1 billion from the bank for "brazen" fraud in originating crappy prime mortgages (as opposed to the crappy subprime mortgages they originated) and systematically funneling them to the government-sponsored entities Fannie and Freddie, who unwittingly bought them and then had to be bailed out by, you know who, us, the taxpayer.
Everyone saw this coming. Especially the Federal Reserve Bank.
Everyone knew there would be blood to be paid by the banks that wrecked the economy. So the Fed has been funneling cash to the big banks to make them flush so they can fight these legal onslaughts, pay their fines, and get bigger in the process.
It's all about survival of the biggest.
There's no help for community banks. They can't tap into the Fed's toffee trough.
This is where this is going. The big banks are getting bigger, and the government is not just letting it happen, no, they are actually aiding and abetting The Plan. They, our legislators and regulators (heard of regulatory capture?), are bought and paid for by the big banks.
This is power at its most obvious and ugly intersection. And it's going to control us in the process of crushing us for their profitability. It's already happened and it's happening still.
Where are the presidential candidates on the subject of big banks getting bigger, more powerful, and being ever protected by the Fed, which is not a government body but owns the government? Where are they? What are they saying about it all?
That would be nothing. That's because they are both bought and paid for, too.
We need to end the Fed, break up the big banks, get corporate money out of politics and facilitate localized community banking for the benefit of America's real job creators.
Is anyone listening?
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About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.
Of the two candidates, I believe Romney knows what needs to be done but also knows he can't campaign on it. He DID say in the debates that the Frank-Dodd act is crushing the community banks. To say that NEITHER candidate has mentioned the banks in the debates is an inaccurate statement. Romney also mentioned cuttting government spending by 5% – once. Cutting the budget is another topic he cannot speak too much about campaigning. I believe that Romney and Ryan would give great consideration to repealing Dodd-Frank and restore Glass-Steagall in one form or another. I believe that many bankers would support this as well – those who believe in capitalism anyway…
You are a brave man to take on the Fed. I wish more citizens were concerned with this and that we could again regain control of our money. Thanks for your valuable insights!
Dear Shah, good article, please be advised that the federal reserve bank act was never passed by congress as we have come to know it, but rather by seven men who drafted the bill at secret meeting in November 2010 at a private resort of J P Morgan on Jekyll Island. The rest they say is history.
The con at the taxpayers expense has and still is serving its original mandate.
Yes, the Fed and banks are all in collusion, and we, as depositors and tax payers, are the losers ultimately. What should people do with their accounts now that "the plan" has put their savings in grave danger, the contents of their safety deposit boxes possibly subject to confiscation? Who cares that billionaires are dumping their stocks, or a privileged few are buying property in South America? You money-men on the internet spin rumors of loss of Social Security pensions and VA benefits. Some give specific dates like Dec. 23 (Merry Christmas) and Jan. 1 (Happy New Year). What do people do who don't have any 401Ks, IRAs. etc? What about some advice for those who will suffer the most when everything goes patas arriba? That's Latino for belly-up.
You are so right on. Thanks for this
I can tell you've been reading The Creature From Jekyll island. As Griffin points out in Creature, one of the main reasons for the establishment of the Fed was to crush competition to the NY banks from smaller local banks and companies themselves, who were doing so well well they were self-funding growth needs with cash surpluses. The banksters could have that!
It's all about indenturing the plebes to the banking "elite"…paying interest in perpetuity.
It's all part of the plan to be sure.
We know that Romney will not interefere with anything corporate.
He does not have to be bought, he is a true believer.
We can hope that Obama might do what you recommend, if given an even chance.
Fat chance of that.
The country is on the verge of repealing the right to vote, among other rights.
Corporations will have all rights, citizens will have none.
Get used to it.
THERE WILL BE BLOOD IN THE STREETS LIKE NEVER BEFORE SEEN.
And the last rites are being read to Workers Unions in Michigan,even as thousands of protesters marched outside the capital building, as they've been read to unions in most of the rest of the states.Unions in my opinion are what gave a lot of us construction workers a very good wage and comfortable lifestyle.And our rights against unreasonable search and seizure are a thing of the past.I speak from experience,all they have to say is they considered the situation an emergency and no warrant is needed But government has gotten so HUGE,that I believe its gonna take a lot of intelligence and blood to get it back to right.
like this story
I am listneing!
Do you include credit unions in "community banks"? Credit Unions appear to be only a minor player, so are they also targeted for elimination by the big banks?
I went to my credit union for a refi- for my home and they told me we do not make mtg. loans anymore. The government has ran them into the ground with regs and new laws where they cant function or compete. I beleive its all part of the NWO plan. You better buy guns if you want to keep your freedom.
We are listening, and voting. Bill Moyers did an excellent piece on the bank Bailout last night, check his website. He interviewed a federal prosecutor who worked on the bailout and who has just had a book published on this. He's getting the word out, too. You are in brave company.
We don't " have the vote" anymore. The left with OB have the manipulation of
the voting booths well in hand. Geo. soros, money,
I'm listening, too!
From your article:
Fannie and Freddie, who unwittingly bought them and then had to be bailed out by, you know who, us, the taxpayer. To which I answer is a total LIE !
If memory serves me right and it does, both Fannie and Freddie were run by democrat insiders with powerful friends in Congress. Hearings were held by Republicans in Congress who questioned the actions of both Fannie and Freddie by lending money to people who by all means could never pay back those loans (even if the housing industry did not collapse). Republicans were called names (like racist) time and time again when they tried to make efforts to stop or at least limit Fannie and Freddie actions.
Franklin D. Reines, who ran Fannie, cooked the books so he could make quota (raise their stock prices) and make himself a nice paycheck. Ohio's public employees retirement sued Fannie for manipulating the books. These legal actions were all dismissed against these democratic Washington insiders and they walked away with Millions of Dollars in their pockets.
Both Fannie and Freddie were embroiled in lawsuit after lawsuit and together they spent 10's of millions of dollars fighting off corruption charges. The taxpayers did pay their legal fees so they Fannie and Freddie could drag on their legal fight on forever without any cost to themselves. Maybe the Fed played a large part; but it appears none of this would not have occurred without direct intervention by some politically motivated democrats who wanted to play the RACE card. Youtube has many of these hearings if you care to look for yourself. Here are just a couple.
http://www.youtube.com/watch?v=9-lMT_cnRTI
Oh let's not forget Barney Frank. A housing bubble? Nope, not here.
http://www.youtube.com/watch?v=iW5qKYfqALE&feature=related
http://www.youtube.com/watch?v=Lr1M1T2Y314&feature=endscreen&NR=1
That's final with banks mistakes! why should we all pay for their incompetence views and greed in extreme? is like sending money to a broken bag -to the void…they are not recovering any credibility as far as I am concerned, tax payers ( I AM ONE THAT HAS BEEN ALREADY PAYING TO FOUR GOVERNMENTS DIRECTLY AND IT IS NEVER ENOUGH!!!) From England at present, my credit card was cloned twice when my money disappeared from the Royal Bank of Scotland twice in less than 4 years I CHANGED TO LLOYDS TSB just to see that a lady in charge of the Fraud Department was the one shifting as much funds as she could to her siblings, so let us remind ourselves of the power of people united, like in FUENTEOVEJUNA -TODOS A UNA! a very wise play in Literature by Lope De Vega in the Golden Age of Education (a whole village joined forces against a corrupt Government and won) – We need a fearless strategy to brake even from the coming collapse of the Pyramid scheme…because let's face it, we are in the hands of unscrupulous "people" thieves, murders like the king of those Spaniards, he got away killing his elder brother when he was already old enough to
know the hazard of a gun, he shot his brother and got away by saying that he didn't know the gun was loaded…a very convenient accident for his pocket, his brother was going to inherit ALL and so it goes, he is cheating constantly because he is like a human disgrace, isn't it TIME to speak loud and clear? THE BASQUE GOVERNMENT REDUCED THEIR SALARIES UNANIMOUSLY BY 10% 3 years ago in order to cope best with this recession and the major of my hometown Bilbo/Bilbao followed their example like many other majors…although in comparison with the rest of citizens they are well off to even consider further reductions. But PLEASE let us target those responsible for this huge crack and downfall – do not victimize the victims any more!
Give me control over a nations money, and I care not who makes its laws.
Is this that,..New World Order coming into veiw…H. W. (fascist nazi) Bush spoke of?
Exactly, the marxist/fascist liberals have the backing.
LESS PIE, AND THAT'S NO LIE
Reminds me of the "Big 8" Accounting Firms once Upon a Time . Then it was the "Big 6", followed by the "Final 4". The plan is simply less business and less competition. Less pie, and that's no lie.
Yeah, I'm listening. Very well written and intelligent articles. Good luck with ending the Fed and breaking up the big banks, though. One World Govt coming soon to a city near you.
So right on! Very good article. I would simply add a great quote made by a Democratic strategist Mr Carvel, "ITS YOUR GOVT…. STUPID". My opinion in short, is that your despotic federal govt policies designed the entire financial collapse to happen pushing the nation over the 2008 financial cliff. (And, here we go again possible in 2013, all govt orchestrated). The 2008 financial collapse began with govt "forcing" the mortgage companies and banks to make home mortgage loans to anyone, a simple recipe for a devastating financial disaster. If the banks did not loan they could not borrow money from the Fed and would be out of business within a week. The govt is not that stupid, it was done on purpose. Yes, Wall Street banks repackaged & had to know the loans were of bad quality (& so must have the fed govt) on a mega scale and sold them around the world as high quality investment instruments. FHA which is a suedo-federal govt agency (basically a federal agency run by congressional cronies favorites taking direction directly from the congress) was directed to buy them up also knowing they were of poor quality! Or would shortly be shortly problematic i.e. how can an individual pay their mortgage without money, a job or enough cash flow??? Apparently there were no govt regulators in the field doing their jobs monitoring or flagging this govt sanctioned enterprise in action. At least not until the total collapse. Why you may ask, the answer probably lies within the walls of congress. Then we witnessed all the congressional dog-n-pony shows, for the benefit of the ignorant public, wherein the leadership shifted blame from govt to mortgage companies and banks which everyone on main street has swallowed as the truth. Everyone in govt & big business knew what really happened and where the blame truely lay. Not one CEO or CFO pointed their finger at the govt in fear of the govt crushing them and their business. Who really suffered in all this? The poor have nothing to lose. The rich elitists make the rules, taxes, tax loop holes for rich, govern and able to protect their fortunes. The middle class is the only class you can rob. They paid dearly losing 50% of house value, jobs, 30-50% savings in stock market, lost their jobs causing them to burn the rest of their savings for next 2-3 years, not able to save money for that time or longer, lost medical benefits & pay out of pocket or go without and retirements benefits and some lost everything including destroying families. They likely will never recover. This was a massive redistribution of wealth destroying the working middle class of which the poorer class benefited which is further exaserbated by the huge tax of the Obama Health Care directly hitting the middle class the hardest. And you can bet the Obama wish to tax the rich is again going to fall directly back to the middle class hardest. One must realise the govt is a monster socialist organization driving the country in that direction. A nation of the Haves(govt & rich) & Have Nots (poor indebted serfs). Worst of all "opportunity" is being stifled in our country. The opportunity to rise out of poverty and become something or someone successful and independent is being crushed. You have to be born rich to succeed now. Remember just this……. if the govt didn't want the country to suffer like it is…. it wouldn't be. Period.
One other opinion point I would like to make? Why is any of this happening? Because the U.S.A. is too rich on average by world standards in its middle class against countries we have significant trade with. Jobs have been going off shore to 3rd world countries for decades. The U.S.A is uncompetitive in that world & there is only one way to change that. Dummy down & drive down the working middle class financially in the U.S. and build up 3rd world countries. It’s working beautifully. And sadly the people just don’t get it.
It's all about getting the sheeple under control. Give them no chance to think because they are too busy making a mere living; frighten them with bogeymen, and then you can control them.