Banks and Banking

Imagine. You walk in a bank. Marble floors. Brass teller grills. Huge stainless steel vault.
Basically configured to impart the same awe as a cathedral.. Except it is a cathedral to money.
And just like the church to whom trust your soul, you hand over your money trusting it will be cared for.
Minor problem. Just like in the Wizard of Oz, there's a man behind the curtain pulling levers.
And what you perceive in the cathedral is all image.
What's going on with the charlatan behind the curtain is pure chicanery, misrepresentation and skull-duggery.
They take your money and give you a pittance of an amount of interest which is generally less than inflation.
They take this interest back by charging you money should you be so insolent as to want a book of checks.
Or possibly you have a penny less in your account than you thought you did.
You write a check a penny too big and they charge you $35 for overdraft.
If they really don't like you, they will "bounce" the check, destroy your reputation and charge you the $35.
Better yet, if you write ten checks that total a penny more then you have,
they have an algorithm that bounces the first check, charges you $35 and now you no longer have enough money for the second check either.
If they really pirouette well with their evilness, they can bounce all ten checks, charge $350 (10 x $35) and you still haven't paid your bills.
Some states are trying to rein in this behaviour, but they are meeting strong resistance form the banks.

Even if they can't vampire your money out of you, they still get to do shenanigans with it.
They can loan it to other people and charge five times the interest they pay you.
Actually, they can loan your money out ten times according to Federal Reserve Rules.
And in effect get a fifty times the interest that they pay you.
With all this abundant lucre, they invest in various schemes- not all of them clever. Or too clever by half.
Problem is, the wealthy have too much money chasing too few quality investments.
So they invest in foolish things in their greed.
When the pigeons come home to roost and these foolish ventures go belly-up, your money is lost as well.
Of course the Federal Government covers their foolish behaviour with depositor's insurance, but your claim could be tied up for some time.
Try going without groceries for a month!

This is why after the collapse of 1933, the sensible people put a wall beween commercial banking and investment banking.
Like a wall between going to your job versus getting drunk and going to a casino.
This is known as the Glass-Steagal Act.
Banks hated it and they brought all their wealth and power into play to repeal it.
They bought presidents, Congressmen, media companies and finally got their way.
Within a heartbeat, they had abused it so badly, the market collapsed again in 2008.
It was "sugar-coated" and called the "Great Recession" instead of the "Great Depression".
But far more wealth was lost in 2008. Even adjusted for inflation.
A gentleman named Obama did what he could (and even he wasn't perfect) and put things back on track
to the longest run of uninterupted slow, steady, consistent growth ever.
And still they resist the re-implementation of Glass-Steagal and even the imperfect protections of Dodd-Frank they want removed.
Well, their investment in buying politicians paid off because
the current crop is setting about gutting all impediments to casino banking with YOUR money.

This brings up the terminology "too big to fail" and "too big to jail".
"Too big to fail" refers to the assumption that if a gargantuan bank should topple,
all the riple effects from its failure will drag down the rest of the economy with it,
That is "horse puckey".
If the big banks miss a beat, all their competitors will rush in with glee to scoop up the business.
If thier loans go sour, they will be scooped up at big discounts by vulture to resell at a profit.
Medium-size regional banks, who operate much more leanly, will particularly relish the opportunity.
Likely, they will have tidier balance sheets and can digest acquisitions.
And if the big banks do fail their exist safety nets for depositors.
There just don't exist safety nets for greedy bankers who make bad decisions and therein lies the rub.

"Too big to jail" is a tongue in cheek expression that aptly describes the conditions whereby big banks
have so much power and influence, they do not have to answer for their predatory and illegal actions.
This why laws must be rigorously enforced with no little wrist slaps for wayward behaviour.
Jail time and the threat of it would certainly clarify some people's thinking.
Stealing is stealing and fraud is fraud.
One's wealth or influnce should not dimish that.
If you or I pilfered a pack of gum at Walmart and were caught on camera, we'd be led away in handcuffs.
If a bank trashes an entire pension fund by selling it worthless bundled mortgages at a profit and which then fail
and have simultaneously bet on their failure and reap a profit on this (yes they do this),
they should be led to the public stocks for a beating and then thrown in prison. Period.

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