Don't Listen to the GAO – "Too Big to Fail" Is Bigger Than Ever

Shah Gilani

Last week the U.S. Government Accountability Office (GAO) released a report titled "Large Bank Holding Companies: Expectations of Government Support."

And wouldn't you know it – all the "Too Big to Fail" banks broke out their crack pipes.

The highly anticipated report didn't surprise anybody. After all, we all already know that big banks are government bootlickers… when they need to be.

But that's not all the report said.

Keep reading, and I'll reveal the report's "shocker."

Too Big to Fail: It's Never Over

Lawrence Evans, director of financial markets and community investment at the GAO, said, "Our analysis suggests that large bank holding companies had lower funding costs than smaller ones during the financial crisis but provides mixed evidence of such advantages in recent years."

Essentially, the GAO is saying banks aren't accountable for the subsidy they received. And anyway, they don't get that subsidy anymore, because they don't need to be saved… at least not today.

The GAO is saying that the subsidy the Too Big to Fail banks enjoyed when the you-know-what hit the fan and they were all bailed out is over.

The subsidy, which amounted to a government and U.S. Federal Reserve put option (their insurance against failure) for big banks, is over.

And the advertised fact that these banks won't be allowed to fail, which drives depositors into their waiting arms… that subsidy is over.

The GAO is saying the flow of funds from depositors that gives big banks a tremendous advantage over all other banks that would be "allowed" to fail isn't there anymore.

How stupid do these morons think we are?

The six Too Big to Fail banks that got bailed out are all bigger now than they were before the crisis they helped cause.

How much bigger?

Shah Gilani

About the Author

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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.

He helped develop what has become known as the Volatility Index (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 10X Trader, Shah presents his legion of subscribers with the chance to earn ten times their money on trade after trade.

Shah is also the proud founding editor of The Money Zone, where after eight years of development and 11 years of backtesting he has found the edge over stocks, giving his members the opportunity to rake in potential double, triple, or even quadruple-digit profits weekly with just a few quick steps.

Shah is a frequent guest on CNBC, Forbes, and Marketwatch, and you can catch him every week on Fox Business's "Varney & Co."

He also writes our most talked-about publication, Wall Street Insights & Indictments, where he reveals how Wall Street's high-stakes game is really played.

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