Think About This Senator From Massachusetts — Think Long And Hard About What She Could Do

... in an office with a great deal more power.

One thing she could do is make my broker and yours sh!t their pants, and that's no bad thing...

Ain't We Got Funds?

There's nothing surer:
The rich get rich, and the poor get poorer.

- "Ain't we got fun," 1920, Whiting - Egan and Kahn
(wiki) (lyrics)

Yep, that's right, though some conservative singers rendered it "and the poor get children," which is IMO inhumanely inexcusable. But the canonical version, the one that rhymes properly, is the one that is to the point of this post.

Your bank account goes south

This post is about banks, and banksters, and how they're about to rob us all this time around. You know how they did it last time; they had to be bailed out by the government with our tax money, and then... and then, what? To all appearances, they didn't do a damned thing to correct the problems that got them in trouble in the first place, and they didn't do a damned thing to help people with their home loans; indeed, they... oh, you know, and this graf is getting out of hand.

So they're planning to get into trouble again. Yes, planning: it worked so well last time... for the banks and the banksters. But this time, things will be different. How? psychomax at Kos gives a good summary, citing Ellen Brown at The Web of Debt (the blog, not the book):

...

Since the financial crisis of 2008 central bankers and regulators have been busy drawing up plans for avoiding the next bank melt-down. Here in the US, banks considered by the government Too Big To Fail (TBTF) were bailed out six years ago with our tax money on the arguable rationale that if they were permitted to fail, they would take the entire economy down with them. The crisis led to a loud outcry from taxpayers and many savvy experts. ...

... the big banks, like Bank of America, Wells Fargo, JP Morgan Chase, were not broken up, contrary to the public interest. In fact, they are far larger today than they were in 2008, making the TBTF threat worse than ever.

So what plan have the geniuses come up with that both pacifies taxpayers and still saves the TBTF banks? You will be appalled.  ... Theoretically. deposit accounts are insured by the FDIC for up to $250,000. The wrinkle is that the amount of money in the FDIC insurance fund is approximately $25 billion, while the total of deposits at US commercial banks is approximately $9,300 billion, yes that's $9.3 trillion The failure of just one mega-bank would easily wipe out that fund. Since the FDIC would be unable to keep failing huge banks solvent an alternative is required.

...

(Bolded sentence original. - SB)

So what is this mysterious alternative? It's no wonder they're not loudly broadcasting their plans, as you'll soon see.

The Financial Stability Board (FSB), an unofficial international organization whose recommendations for maintaining banking system stability almost always become law in the G20 nations, has made a recommendation regarding bailouts. Here's psychomax again:

At the G20 meeting last month in Australia, the FSB presented and received approval for their latest plan for conducting the "resolution proceeding", i.e. bankruptcy, for a troubled TBTF bank. Cutting to the chase, the pertinent part for my dear readers is that instead of their tax money going to bail out the banks, it will potentially be their bank deposit money! The FSB recommended that governments make statutory the confiscation of depositors' money (also known as unsecured debt) if the assets of the bank plus all secured debt is insufficient to keep them afloat. This has come to be known as a bail-in.

Jeebus! IOW, if the bank's assets and the secured debt it holds, taken together, are not enough to keep them solvent, they can confiscate the money in your bank accounts to solve their bankruptcy. (NOTE: it is not clear to me that this is the only meaning of bail-in; see FT's lexicon entry on it.)

And indeed, Ellen Brown's current newest post, December 1, is this: New G20 Rules: Cyprus-style Bail-ins to Hit Depositors AND Pensioners. So your pensions could go bye-bye, too.

What gives? Have I misunderstood? If not, why is this not front-page news around the country? or have I simply missed such news?

Question And Answer On American Economic Policy

Reading Stiglitz's The Price of Inequality, I came to the following realization:

Q: What does Superman have, that the Federal Reserve
     is in sore need of?
A: Supervision.

Here's how Stiglitz puts it:

... It is evident now [2012] that the Fed failed to maintain economic stability — and after the crisis, it failed to restore the economy to health; it is evident, too, that the economic doctrines on which its policies were based were badly flawed. No policy is without risk. But the policies chosen by the Fed forced the brunt of the risk to be borne by homeowners, workers, and taxpayers, while the upside was captured by the banks. There were other policies, with other risks, in which the rest of our society would have fared far better, and the banks worse. We need to recognize that a central bank's decisions are essentially political: they should not be delegated to technocrats, and they certainly can't be left to those who disproportionately represent one of the vested interests.

From The Price of Inequality, p.254.

Holy (Bleep)ing (Bleep)! Could Banks Simply Take Your Deposits?

Read Lawrence E. Rafferty at Jonathan Turley's blog and Ellen Brown at Nation Of Change... but have a change of underwear handy before you read them.

Were you appalled at what happened to the bank depositors in Cyprus? Most of us were; one doesn't expect depositors to have their money confiscated... let's be blunt: stolen... to bail out failing banks. But it could happen in the US and the UK. Ah, you say, but the FDIC will save you? Uh-uh. It's the FDIC that is cooking up plans to raid the depositors' accounts. Your money would be at risk for all the shaky derivatives and such that the bank might have unwisely invested in. How do you like them rotten apples?

As a depositor, you already cede your money to banks in exchange for a promise to repay it to you in cash on request; that's the basic arrangement of ordinary banking. The threat now is to the second part of that. Under the proposed new arrangement, you would still cede your money to a bank, and in exchange receive not a promise to pay, but a sort of equity in the bank. If the bank went belly-up, you would be a "stockholder" in the failed bank, with all the losses... and responsibilities... that holding equity entails. And you would have no choice in the matter: you would have no option to retrieve your money in cash.

My mattress is beginning to look better all the time...