It's one of the most cliched Hollywood endings you can imagine: The monster you think has been killed always gets one more chance to lurch back to life and scare the bejesus out of everybody.
It's also become a cliched ending for Washington, DC: the too-big-to-fail problem we were told was behind us is as alive and frightening as ever. More frightening, actually: According to Federal Reserve officials quoted by Bloomberg, five banks -- JPMorgan Chase, Citigroup, Bank of America, Wells Fargo and Goldman Sachs--now hold assets equal to MORE THAN HALF THE SIZE of the ENTIRE U.S. ECONOMY ($8.5 trillion or 56 percent). That's vastly larger than the proportion controlled by these same banks before the financial crisis (43 percent). These behemoths are now about twice as big as they were a decade ago.
As I've been writing fairly breathlessly for more than a year -- see Is Wall Street Castrated, or Just Lying Low, and The Resurrection -- the American people are today the victims of a confidence game even bigger and more elaborate than the subprime securitization scam. The Obama administration, the Congress and the Federal Reserve are all engaged in the pretense that the next big banks to get themselves in trouble won't be bailed out at taxpayer expense but instead will be "unwound" according to "living wills."
Yes, and there are zombies in real life.
Very nice poost
ReplyDelete