Instapundit Nails It

Too Big to Fail

Compare and contrast what they’re doing to the deplorables of Palestine, OH and what they’re doing for their donors and election riggers at busted banks.

Again, why do we not have a provision in law to recapitalize a bust bank with a debt-for-equity swap?

Note, we learned that well-connected Democrats do not get prosecuted when Jon Corzine and the embezzlers at MF Global faced no criminal charges. Corzine got hit with a fine from the Commodity Futures Trading Commission amounting to a single-digit % of his net worth.and a regulatory decree which debarred him from working in futures-and-options trading. He was 69 years old and not debarred from other financial sector enterprises, so it was a punishment as severe as Bilge Clinton having to surrender the Arkansas law license he never used.

Almost everything you hear on cable TV is wrong.

Art,

Who would come up with the money for that?

In Accounting they call that a ‘reorganization.’

They don’t need legislation. If that was available at SVB management would have done it.

I think they could have offered the $150 billion uninsured customers say 25% of their balances as equity. They need to agree.

That could have been temporarily better than waiting for the FDIC to liquidate the assets.

Latest: OTHER PEOPLE’S MONEY. SVB was moved from deposit insurance national bank into a bridge bank. All depositors’ money is available, and they will be made whole. From FDIC press release, “Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.”

Unjust and not free market.

Making them pay would be a start.

More important different regime is ensuring bank managements stop repeating the same unsafe and unsound practices that cause these financial crises.

The current FDI Act worked for 90 years and among other incidents it saw us through the Ag/Oil banking crisis of the 1980’s, the S&L crisis, the great recession beginning in 2008.

Not the first time DC insiders have shown they’ve got a second set of rules for themselves and their friends.

Recall the scandal involving banking giant HSBC during Obama’s administration — a whistleblower inside the bank documented HSBC executives had violated numerous US laws laundering cartel money, doing business with Saudi banks tied to Al Queda, etc.

By law, the SEC should have revoked HSBC’s license to do business in the USA. Instead, as the Obama DOJ Assistant Attorney General Lanny Breuer publicly declared, actually enforcing the law would have created a ‘dislocation’ in the banking industry. Both HSBC and its executives are too important to be held accountable, in other words. Instead, the Obama DOJ opted to impose a fine of $1.9 billion dollars— which sounds impressive, but HSBC had recorded profits of about $22 billion the previous year, so the fine was not so much a punishment as it was an inconvenience.

As part of the bargain the DOJ struck with HSBC, no bank executives were prosecuted, nor were any fired. In fact, the only HSBC employee to lose his job in the whole affair was, of course, the whistleblower.

It’s also interesting to recall that when the news broke about HSBC’s crimes, the bank’s stock stayed steady— in fact, its price rose as the DOJ worked out its “too big to fail, too big to jail” agreement.

Leona Helmsley went to jail for saying: “Only little people pay taxes.”

One of the jurors in the case appeared on Nightline with a reporter who made the claim that that testimony was the most salient moment of the trial. The juror denied it and said it was never a topic of deliberation. He said what convicted her was the documentation. (It does seem strange in retrospect that Mrs. Helmsley was subject to criminal prosecution for a series of accounting maneuvers which reduced her tax bill by all of 4%. You do wonder why the IRS didn’t just demand the additional $2.2 million plus interest and penalties).

Thank you Art Deco. Your comment was enlightening. I did not follow the court case.