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Forum Post: Dodd Frank Continues to Crush Smaller Banks

Posted 5 years ago on Feb. 17, 2015, 7:26 a.m. EST by turbocharger (1756)
This content is user submitted and not an official statement

Doing exactly what the system does, squeeze out the competition under the guise of tough restriction on the larger corporations.

And the people fall for it, time and time again.




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[-] 3 points by turbocharger (1756) 5 years ago

While some people continue to focus on non issues like what Sean Hannity is speaking about, others who are trying to actually work in this economy continue to get hammered.

[-] 2 points by lugano (1221) 5 years ago

Monopoly, Duopoly and Oligopoly are killing America! Your link with all those charts is fantastic and the reason 'community banks' are so under threat is because of (amongst other things) Regulatory Capture because the Big Banks write the laws - aided by their access to Revolving Doors between Congress and Banking. This goes to the heart of the changes we need + see, http://www.publicbankinginstitute.org/

[-] 2 points by StillModestCapitalist (343) 5 years ago

If you would stop for one second and consider the 1% mantra which OWS was founded on before Justine Tunney and Micah White sold it out for their own personal gain, you would realize that the issue is much more engulfing than bank regulation. It has been for over 35 years.

In 1976, the richest 1% held less than 20% of all privately held US wealth. This was less than 1/2 of their previous high of 44% in 1929, the first year of the Great Depression, which by the way was CAUSED by that obscene concentration of wealth and CURED with a partial redistribution of wealth which took place gradually over time.

In 1976, the bottom 99% of American households were sharing over 80% of all privately held US wealth. This was enough to sustain a strong and large middle class while keeping the majority of lower class households out of poverty. They weren't doing well but they were doing ok. The system was working. Most US households were able to make ends meet on the income of a single full time provider. Americans, in general, were thriving. They had home equity and money in the bank.

Right around 1976, probably the 3rd or 4th quarter, the privately held wealth of America began to concentrate all over again. At first, it was a slow concentration resulting primarily from automation, outsourcing, higher corporate profits, and a change of law regarding the trade of oil. Then, Reagan came along and granted huge tax breaks for the rich. While this was great for 'growth' in general, it was bad for the lower majority because it concentrated too much actual wealth and buying power. This along with the growing irresponsibility of the American consumer junkie concentrated more and more bottom line wealth while increasing consumer debt drastically. In fact, it literally multiplied.

As the share of wealth held by the richest 1% increased significantly from under 20% in 1976, the share of wealth held by the lower 99% dropped from over 80% in 1976 to significantly less. Our nation's privately held wealth was being transferred from poor to rich. AGAIN.

Within a few years, the equation was no longer working for the average American household. It became more and more necessary for American households to secure second incomes in order to make ends meet. Still the concentration of wealth was allowed to continue. The middle class was shrinking and the lower class was expanding. This effectively INCREASED the NEED for welfare and charity within the US.

By the early 90s, consumer debt had skyrocketed, home equity was down significantly and something had to be done in order to sustain the US housing market. But the bankers didn't want 'sustenance'. That was too boring. They wanted GROWTH and LOTS of it to CASH IN ON. Sub-prime is what the finance industry came up with. The laws requiring down-payments were changed as a FAVOR for the finance industry, the first sub-prime loans were made in 94, the housing market was artificially inflated, home sales were way up within a year or two, and corporate profits soared. This made the already rich even richer.

In 2005, Allen Greenspan issued the following warning to Congress: "The income gap between the rich and the rest of the US population has become so wide and is growing so fast that it may eventually threaten the stability of Democratic Capitalism itself."

By 2007, just as Allen Greenspan warned, BECAUSE of the growing concentration of income, the US economy had in fact, become unstable. The middle class had simply become too weak to sustain their share of the US economy. Meanwhile, the final batch of less valuable sub-prime paper had been sold to unsuspecting investors. The housing market collapsed because of and IN SPITE of sub-prime, market value was lost, the final batch of investments became worthless, Fanny Mae and Freddy Mac failed along with a number of smaller banks, jobs were in the process of being lost by the millions, the 780 BILLION DOLLAR bailout of 2008 became necessary, and Barack Obama was elected in order to right the ship. He did so in part, with more welfare and government stimulus. This is the 'printed money' that so many people have the GALL to complain about.

Unfortunately, the privately held wealth of America has been allowed to keep concentrating. In part, because our sold-out leaders have also done a number of favors for the rich and their respective industries. The concentration is not identical to that of 1929 but it's close enough.

The richest 1% currently hold over 40% of all privately held US wealth. As a DIRECT RESULT, there simply is not enough wealth circulating beneath them to make ends meet for the lower 99%. Sure, the top 20% is doing fine but most of that wealth is held by the richest 1%.

The lower majority of American households continue to struggle as they share a near record low of privately held US wealth. Many, in spite of multiple incomes. The lower class has expanded significantly increasing the need for welfare and charity even further. Meanwhile, the rich continue to get richer and richer EVEN AFTER you account for what they 'give back'.

Now, we are well on our way to another Great Depression. It will come by 2020. Sooner and more severe if we end up with more conservative (wealth concentrating) economic policies.


[-] 3 points by StillModestCapitalist (343) 5 years ago

The first sub-prime loans were issued in 1994. It was a gimmick to sell more homes, artificially inflate the market, sell more homes at higher profits, foreclose on those who could not pay when the ARM rates readjusted, take their homes leaving them with nothing to show for their payments, resell the homes at a higher profit and so on. It was a cruel and calculated plan to sell more homes and artificially inflate the market. Those loans were incredibly profitable for well over a decade before the house of cards finally collapsed. In the meantime, bankers got richer along with the richest one percent who made off with higher dividends. It was a sham.

The biggest player in the game was Countrywide. Endorsed by Oprah Winfrey, Ellen Degeneres, and Dr Phil. If you have their shows from '04' to '06' on tape, watch them again. All three were paid millions specifically to endorse Countrywide, a known predatory lender by name. The biggest sub-prime player in the game. They issued more ARM loans than anyone else. Foreclosing on those who could not make their monthly payments when the rates suddenly went through the roof. It was a cruel and calculated plan to sell more homes, artificially inflate the market, foreclose, and resell for a higher profit. The sham worked like a charm for 12 years before the house of cards finally fell in.

At this approximate time, the final batch of worthless paper was sold to unsuspecting investors.

So where did the money go? Again, it went to the rich. That's where. It went to the rich for approximately 12 years uninterrupted until the market finally collapsed. The difference was simply lost in market value which again, was artificially increased to begin with.

By the way, there never would have been such a market for sub-prime to begin with if it weren't for the relentless concentration of wealth and income. That underlying cause still hasn't been resolved and it never will be but the $780 billion dollar bank bailout in 2008 along with over a trillion in government stimulus since then has been keeping the economy on life support.

We do have the illusion of a recovery which is better than nothing short term but it's not a true recovery. The lower majority have not gained any ground whatsoever. Not one inch in terms of net worth or actual buying power. There will be no true recovery without a significant redistribution of wealth. If we are to keep treading water, then government stimulus will be necessary for years to come.

I don't see that happening. I fully expect another crash followed by another Great Depression. It will take place in the near future. Certainly within 5 years. Sooner and more severe if we end up with more conservative policies.

Either way, the resulting hardship will be endured almost entirely by the lower majority. Not the rich. Just like it was during the first Great Depression.

You may be asking yourself how we ever recovered from the first if what I say is true.

That's easy. Because of a massive infusion of new currency under FDR, government stimulus paid primarily to the low end, WWII, and higher taxes, primarily on the rich to help pay for it, we had a significant and absolutely necessary redistribution of wealth (double digits) from the late 30's to the mid 70's. By 1976, most households were able to make ends meet with money to spare on just one provider. They had home equity and money in the bank.

This was the recovery. A TRUE recovery. A partial redistribution of wealth. Otherwise, there would have been no recovery at all.

Unfortunately, all of that progress has been reversed because of tax breaks for the rich and their golden corporate geese, the bloated PIG health care industry, the energy and finance industries, the entertainment industry, the corrupt government, and the dumbest generation of celebrity worshiping, pill popping, 'gotta have it', consumer junkie morons ever.

Now, we are well on our way to another Great Depression. It will come by 2020. Sooner and more severe if we end up with more conservative (wealth concentrating) economic policies.

For that reason, those of you who actually care should take advantage of your right to vote in addition to protest. You should also stop giving so much of your money to the rich and stop making exceptions for celebrities and computer programmers. It all adds up.

By the way, a number of high profile celebrities endorse the horribly corrupt finance industry. It makes them richer. And of course, google sells ad space to the horribly corrupt finance industry. Otherwise, Justine Tunney's boss and personal choice for CEO of America would not have become a multi-billionaire.

[-] 4 points by lugano (1221) 5 years ago

So what do you think "amongst other things" may mean in my initial comment? Perhaps I should have spelled out 'Moral Hazard'. 'Perverse Incentives', 'Conflicts Of Interest' as well as ''Regulatory Capture'' and "Revolving Doors" - but then again I was replying to and on turbocharger's thread and not yours.

How could I possibly know that you would come along with your essay, especially after your reply to me here on this thread http://occupywallst.org/forum/one-of-the-elect/#comment-1057050 - but no reply here http://occupywallst.org/forum/visitors-beware-the-best-rated-comments-are-almost/#comment-1057047 ?

Your long reply is not without merit but questioning my integrity in previous replies and then expecting me to read your long essay and respond as if you weren't some kind of paranoid, self-appointed sheriff on these boards, is really a kind of patronising, wishful thinking hypocrisy, on your part, in my opinion.

You seemed to not get the point of my comment or notice http://www.publicbankinginstitute.org/ - but you clearly like the sound of your own voice as judged by your overly long monologue at me above.So keep imagining that all you describe somehow has nothing to do with 2 Democratic Presidents, or the Democratic Party being captured by Wall Street. Fooling yourself is your right but fooling others is not.