Eliot Spitzer speaks out about USA Financial Games

Eliot Spitzer speaks out in Slate magazine in article titled "Eliot Spitzer: 5 Ways to Make Banks Pay for Their Secret $7 Trillion Free Ride?".

I can't reprint the article, but her is a teaser section, I encourage everyone to read the entire article:

The total numbers are staggering: $7.7 trillion of credit—one-half of the GDP of the entire nation. $460 billion was lent to J.P. Morgan, Bank of America, Citibank, Wells Fargo, Goldman Sachs, and Morgan Stanley alone—without anybody other than a few select officials at the Fed and the Treasury knowing. This was perhaps the single most massive allocation of capital from public to private hands in our history, and nobody was told. This was not TARP: This was secret Fed lending. And although it has since been repaid, it is clear why the banks didn’t want us to know about it: They didn’t want to admit the magnitude of their financial distress.

Now to put this into perspective, lets get to the heart of the matter.  All of the money is supposedly repaid.  So what harm is there in above?  Well the institutions benefited by net pocketing 13 billion dollars by keeping money that would have been paid out at normal rates.

So while "net" the entire lending situation was extreme, the net in-their-pocket-profit was 13 billion, what amounts to be a gift from taxpayers to the financial institutions.  Considering the USA is debt spending over 1.7 trillion a year, it isn't that huge comparably.

What IS a big deal is it was all done in secret, and it took years of Bloomberg reporters working the court system to get at the information.  And this one point IS A BIG DEAL.

The precedence is now set.  The government can give huge sums of money to companies it sees needs help, with promise of payback in the future.....in secret....and its OK!   I say OK because I predict zero prosecutions for Bloomberg's efforts.  And without prosecutions , it sends signal, it is fine to do.

Therefore when buying or selling stocks, or participating in anyway in a capitalistic business, be aware that the opponent, or the target business is subject to government sponsorship, secretly.  Hardly the stuff that makes for a fair playing field.   It renders public financial information difficult to matter in assessing corporate distress or competitive edge.  For example, if you bet big on Ford becoming the largest USA car manufacturer back in 2007, the events later prevented that from occurring when the government decided to fund General motors and become part owners.  Every business is now subject to the government deciding how events unfold.  They are in effect, no longer law enforcers, but corporate competitors.

So the trick now is to get the government to view your business as worthy to secret gifts.  This is the road to currency issues, the USD cannot withstand unlimited abuse before it breaks.

This makes this event worthy of my series of Financial Ground Zero events, documenting the events that are leading to a currency crisis. (2013-2017).  Thanks to my brother for the article link