In fact, the truth is this: Given the activities U.S. banks have been involved in during the past two decades, and the actions they've taken, we'd be justified in labeling these institutions as "criminal enterprises." The billions of dollars in penalties the banks have had to pay during this stretch are evidence of such activities, but are really only token payments given the magnitude of the damage these enterprises have caused.
And until banks stop acting as criminal enterprises, and outside agencies thoroughly investigate and fully prosecute banks and their executives for criminal activity, we will continue to move towards a government of the banks, by the banks and for the bankers.
The Bank of America SettlementThe Bank of America settlement offers us a real-life illustration of what I'm referring to.
BofA is close to settling with 22 large investors over failed mortgage-backed securities (MBS). But it may only have to pay $8.5 billion to investors who claim that Countrywide Financial Corp. - which BofA acquired in 2008 - lied to them about the value of the mortgage-backed securities they purchased.
If you do the math, the Bank of America settlement would result in payments of less than 5 cents on the dollar. But what's even more grotesque about this proposal is that it would "wall off" the bank from any other suits or losses on the pools in question - even though hundreds of other investors were also harmed by the sunken securities.
We'll soon see if a court approves the settlement. All hell will break lose if that happens.
And it should. But that's just one case.
The big picture is downright ugly.