Bailed Out Banks Threaten Systemic Collapse If Fed Discloses Information - GoFuckYourself.com

teomaxxx · 08-27-2009, 05:32 PM

simple translation of following article from someone else on another board:

"The banks that are in trouble will not be able to keep gullible depositors from withdrawing their money if we are forced to tell the truth about our financial situation. If we are allowed to keep it a secret, however, we can stay alive a bit longer so our top executives can continue to get paid outrageous salaries and bonuses. Yes, we realize we will fail eventually, but at least our executives will live to see a few more big pay days to fund their retirement after the bank fails.""

http://www.zerohedge.com/article/rac...es-information

And so the guns come out blazing. The Clearing House Association, another name for all the banks that were bailed out over the past year with the generous contributions from all of you, dear taxpayers, are now threatening with another instance of complete systemic collapse if Bloomberg's lawsuit is allowed to proceed unchallenged, let alone if any of the "Audit The Fed" measures are actually implemented.

As a reminder, The Clearing House Association consists of ABN Amro, Bank Of America, The Bank Of New York, Deutsche Bank, HSBC, JP Morgan Chase, US Bank and Wells Fargo.

In a declaration filed in the Bloomberg Case (08-CV-9595, Southern District of New York), the banks demonstrate no shame in attempting to perpetuate the status quo with regard to the Federal Reserve and demand that the wool over the eyes of the general population remain firmly planted in perpetuity.

The Clearing House submits this declaration because the Court's Order threatens to impair the ability of our members to access emergency funds through the New York Fed's Discount Window without suffering the severe competitive harm that public disclosure of their identity will cause.

Our members have accessed the New York Fed's Discount Window with the understanding that the Fed will not publicly disclose information about their borrowing, especially their identity. Industry experience, including very recent and searing experience, has shown that negative rumors about a bank's financial condition - even completely unfounded rumors - have caused competitive harm, including bank runs and failures.

Surely transparency would facilitate rumor-mongering to an unprecedented degree. After all rumors spread much easier when everyone knows the true financial condition of banks.

And here, in plain written Times New Roman, you see what racketeering by a major bank consortium looks like:

If the names of our member banks who borrow emergency funds are publicly disclosed, the likelihood that a borrowing bank's customers, counterparties and other market participants will draw a negative inference is great. Public speculation that a financial institution is experiencing liquidity shortfalls - which would be a natural inference from having tapped emergency funds - has caused bank customers to withdraw deposits, counterparties to make collateral calls and lenders to accelerate loan repayment or refuse to make new loans. When an institution's customers flee and its credit dries up the institution may suffer severe capital and liquidity strains leaving it in a weakened competitive position.

Pardon me if I am a broken record here, but would rumors not spread much less if there was more transparency, if investors and other financial intermediaries were fully aware of the conditions of their counterparties, if banks did not have to cover their billions in reserve losses by pretending they are viable and essentially being constant wards of the state?

The Banks' racketeering has gone on for far too long.

And yet, it does not stop: the conclusion from the banks' letter:

In sum, our experience differs from the factual conclusions the Court appears to have reached about the nature of competition in the banking industry:

The competitive harm to institutions that are publicized as needing emergency funding is not "speculative," but demonstrated by the recent multiple failures of financial institutions whenever information about their funding difficulty has been disclosed.

The disclosure does not involve mere "embarassing publicity" but information that could result in the immediate demise of an institution.

The disclosure would not merely "stigmatize the institution" or make it "look weak," but goes to its very viability.

The disclosure of accessing emergency funding is not an "inherent risk" of market participation, but an extraordinary risk in extraordinary circumstances.

Competitors can use the disclosure to advertise or publicize that they are financial stronger because they don't need emergency funding.

In a nutshell - the banks want their complete opacity cake and eat it too, or else, the racket goes, the transparency that will somehow promote massive rumor mongering will again destroy capitalism. In the meantime, the Ken Lewises of the world can continue touting how stable their businesses are based on optimistic future projections, while implicitly, they continue to survive merely thanks to the cash granted them by you, taxpayers.

Blackamooka · 08-27-2009, 05:59 PM

Of course banks don't want transparency. Then people would know that our entire economy is one giant Ponzi scheme.

DonovanTrent · 08-27-2009, 06:03 PM

Quote:

Originally Posted by Blackamooka

Of course banks don't want transparency. Then people would know that our entire economy is one giant Ponzi scheme.

As it has been for quite awhile. No great news there.

dyna mo · 08-27-2009, 06:05 PM

wow, i wonder what that will do to the case.

StickyGreen · 08-27-2009, 06:10 PM

The fact that Obama won't make the privately controlled Federal Reserve "transparent" and is actually giving them MORE power should show the average Obama worshipper that it's just business as usual in Washington...

The FED is shaking in it's boots right now. I hope to God they are forced to open up their books so that maybe, just maybe the public will finally see what is going on.

Dcat · 08-27-2009, 06:11 PM

Blackamooka · 08-27-2009, 06:16 PM

Quote:

Originally Posted by StickyGreen

The FED is shaking in it's boots right now. I hope to God they are forced to open up their books so that maybe, just maybe the public will finally see what is going on.

Please hook me up with your dealer, because I'd love to live in a fantasy world too.

StickyGreen · 08-27-2009, 07:59 PM

Quote:

Originally Posted by Blackamooka

Please hook me up with your dealer, because I'd love to live in a fantasy world too.

What are you talking about? You don't also hope that the Federal Reserve will be forced to open it's books? What "fantasy world" am I living in? Should I hope that the Federal Reserve's books are forever kept secret?

Blackamooka · 08-27-2009, 08:47 PM

Quote:

Originally Posted by StickyGreen

What are you talking about? You don't also hope that the Federal Reserve will be forced to open it's books?

No. Actually, I don't. As much as I would love to see those guys fall, I'm not prepared to open Pandora's Box to do it. These guys have financed every side of every war since the fall of Napolean. After all the billions of lives they've helped murder what makes you think they wouldn't kill off a few billion more to hold on to the power they've acquired? Philosophically speaking, I agree with you 100%. But the reality is that these guys have already fucking won. Check.... Mate.

08-27-2009, 05:32 PM	#1
teomaxxx Confirmed User Join Date: May 2003 Posts: 2,734	Bailed Out Banks Threaten Systemic Collapse If Fed Discloses Information simple translation of following article from someone else on another board: "The banks that are in trouble will not be able to keep gullible depositors from withdrawing their money if we are forced to tell the truth about our financial situation. If we are allowed to keep it a secret, however, we can stay alive a bit longer so our top executives can continue to get paid outrageous salaries and bonuses. Yes, we realize we will fail eventually, but at least our executives will live to see a few more big pay days to fund their retirement after the bank fails."" http://www.zerohedge.com/article/rac...es-information And so the guns come out blazing. The Clearing House Association, another name for all the banks that were bailed out over the past year with the generous contributions from all of you, dear taxpayers, are now threatening with another instance of complete systemic collapse if Bloomberg's lawsuit is allowed to proceed unchallenged, let alone if any of the "Audit The Fed" measures are actually implemented. As a reminder, The Clearing House Association consists of ABN Amro, Bank Of America, The Bank Of New York, Deutsche Bank, HSBC, JP Morgan Chase, US Bank and Wells Fargo. In a declaration filed in the Bloomberg Case (08-CV-9595, Southern District of New York), the banks demonstrate no shame in attempting to perpetuate the status quo with regard to the Federal Reserve and demand that the wool over the eyes of the general population remain firmly planted in perpetuity. The Clearing House submits this declaration because the Court's Order threatens to impair the ability of our members to access emergency funds through the New York Fed's Discount Window without suffering the severe competitive harm that public disclosure of their identity will cause. Our members have accessed the New York Fed's Discount Window with the understanding that the Fed will not publicly disclose information about their borrowing, especially their identity. Industry experience, including very recent and searing experience, has shown that negative rumors about a bank's financial condition - even completely unfounded rumors - have caused competitive harm, including bank runs and failures. Surely transparency would facilitate rumor-mongering to an unprecedented degree. After all rumors spread much easier when everyone knows the true financial condition of banks. And here, in plain written Times New Roman, you see what racketeering by a major bank consortium looks like: If the names of our member banks who borrow emergency funds are publicly disclosed, the likelihood that a borrowing bank's customers, counterparties and other market participants will draw a negative inference is great. Public speculation that a financial institution is experiencing liquidity shortfalls - which would be a natural inference from having tapped emergency funds - has caused bank customers to withdraw deposits, counterparties to make collateral calls and lenders to accelerate loan repayment or refuse to make new loans. When an institution's customers flee and its credit dries up the institution may suffer severe capital and liquidity strains leaving it in a weakened competitive position. Pardon me if I am a broken record here, but would rumors not spread much less if there was more transparency, if investors and other financial intermediaries were fully aware of the conditions of their counterparties, if banks did not have to cover their billions in reserve losses by pretending they are viable and essentially being constant wards of the state? The Banks' racketeering has gone on for far too long. And yet, it does not stop: the conclusion from the banks' letter: In sum, our experience differs from the factual conclusions the Court appears to have reached about the nature of competition in the banking industry: The competitive harm to institutions that are publicized as needing emergency funding is not "speculative," but demonstrated by the recent multiple failures of financial institutions whenever information about their funding difficulty has been disclosed. The disclosure does not involve mere "embarassing publicity" but information that could result in the immediate demise of an institution. The disclosure would not merely "stigmatize the institution" or make it "look weak," but goes to its very viability. The disclosure of accessing emergency funding is not an "inherent risk" of market participation, but an extraordinary risk in extraordinary circumstances. Competitors can use the disclosure to advertise or publicize that they are financial stronger because they don't need emergency funding. In a nutshell - the banks want their complete opacity cake and eat it too, or else, the racket goes, the transparency that will somehow promote massive rumor mongering will again destroy capitalism. In the meantime, the Ken Lewises of the world can continue touting how stable their businesses are based on optimistic future projections, while implicitly, they continue to survive merely thanks to the cash granted them by you, taxpayers.

08-27-2009, 05:59 PM	#2
Blackamooka Confirmed User Industry Role: Join Date: Nov 2008 Location: In Your Mind Posts: 495	Of course banks don't want transparency. Then people would know that our entire economy is one giant Ponzi scheme. __________________ The only way to comprehend what mathematicians mean by infinity is to contemplate the extent of human stupidity. - Voltaire

08-27-2009, 06:10 PM	#5
StickyGreen . Industry Role: Join Date: Oct 2003 Posts: 13,076	The fact that Obama won't make the privately controlled Federal Reserve "transparent" and is actually giving them MORE power should show the average Obama worshipper that it's just business as usual in Washington... The FED is shaking in it's boots right now. I hope to God they are forced to open up their books so that maybe, just maybe the public will finally see what is going on. __________________ Refer Cam Girls and Take Home 10% of Everything They Make For Life

08-27-2009, 06:05 PM	#4
dyna mo The People's Post Industry Role: Join Date: Dec 2008 Location: invisible 7-11 Posts: 64,791	wow, i wonder what that will do to the case.

08-27-2009, 06:11 PM	#6
Dcat Confirmed User Industry Role: Join Date: Aug 2003 Location: Mexico Posts: 1,607