The Vampire Squid Strikes Again: The Mega Banks' Most Devious Scam Yet

[unhappycamper]

http://www.opednews.com/articles/The-Vampire-Squid-Strikes-by-Matt-Taibbi-Banks_Economy_International_Megacorporations-140213-521.html



Banks are no longer just financing heavy industry. They are actually buying it up and inventing bigger, bolder and scarier scams than ever

The Vampire Squid Strikes Again: The Mega Banks' Most Devious Scam Yet
By Matt Taibbi
OpEdNews Op Eds 2/13/2014 at 20:42:41

Call it the loophole that destroyed the world. It's 1999, the tail end of the Clinton years. While the rest of America obsesses over Monica Lewinsky, Columbine and Mark McGwire's biceps, Congress is feverishly crafting what could yet prove to be one of the most transformative laws in the history of our economy -- a law that would make possible a broader concentration of financial and industrial power than we've seen in more than a century.

But the crazy thing is, nobody at the time quite knew it. Most observers on the Hill thought the Financial Services Modernization Act of 1999 -- also known as the Gramm-Leach-Bliley Act -- was just the latest and boldest in a long line of deregulatory handouts to Wall Street that had begun in the Reagan years.

Wall Street had spent much of that era arguing that America's banks needed to become bigger and badder, in order to compete globally with the German and Japanese-style financial giants, which were supposedly about to swallow up all the world's banking business. So through legislative lackeys like red-faced Republican deregulatory enthusiast Phil Gramm, bank lobbyists were pushing a new law designed to wipe out 60-plus years of bedrock financial regulation. The key was repealing -- or "modifying," as bill proponents put it -- the famed Glass-Steagall Act separating bankers and brokers, which had been passed in 1933 to prevent conflicts of interest within the finance sector that had led to the Great Depression. Now, commercial banks would be allowed to merge with investment banks and insurance companies, creating financial megafirms potentially far more powerful than had ever existed in America.

All of this was big enough news in itself. But it would take half a generation -- till now, basically -- to understand the most explosive part of the bill, which additionally legalized new forms of monopoly, allowing banks to merge with heavy industry. A tiny provision in the bill also permitted commercial banks to delve into any activity that is "complementary to a financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally."

[canoeist52]

1. Goldman Sachs wears the "one ring to bind them all".

"But banks aren't just buying stuff, they're buying whole industrial processes. They're buying oil that's still in the ground, the tankers that move it across the sea, the refineries that turn it into fuel, and the pipelines that bring it to your home. Then, just for kicks, they're also betting on the timing and efficiency of these same industrial processes in the financial markets – buying and selling oil stocks on the stock exchange, oil futures on the futures market, swaps on the swaps market, etc.

Allowing one company to control the supply of crucial physical commodities, and also trade in the financial products that might be related to those markets, is an open invitation to commit mass manipulation. It's something akin to letting casino owners who take book on NFL games during the week also coach all the teams on Sundays."

[adirondacker]

2. long read, but Highly Informative. kick for the depressing truth. nt

[dixiegrrrrl]

3. Interesting bit of info about Holder in this article..

the things you learn...

Article talks about the nefarious Marc Rich:

Rich made these reported deals while in exile from the United States, which he fled in 1983 after the U.S. government charged him with tax evasion, wire fraud, racketeering and trading with the enemy after being caught trading with rogue states like Iran, among other things.
The state filed enough counts to put him away for life, and he remained a fugitive until January 2001, when a little-known Clinton administration Justice Department official named Eric Holder recommended Rich be pardoned.
A report by the House Committee on Government Reform later concluded that Holder had not provided a credible explanation for supporting Rich's pardon and that he must have had "other motivations" that he didn't share with Congress.
Among other things, the committee speculated that Holder had designs on the attorney general's office in a potential Al Gore administration.

In any case, in 2010, a decade after the Rich pardon, Holder was attorney general, but under Barack Obama, and two Rich-created firms, along with two banks that have been major donors to the Democratic Party, all made moves to buy up metals warehouses.

[KoKo]

4. Recommend!