Ten years after the last financial meltdown, very few spotted and mentioned (even until today) an astonishing admission by the Financial Crisis Inquiry Commission (FCIC).
In the conclusions on chapter 20 of the report, the Commission implies that trillions (with a T) of taxpayer dollars were mobilized to stabilize the system.
Yet, perhaps the most astonishing conclusion that drawn very little attention, lies in the last sentence in which the Commission actually confirms that the financial sector is even more concentrated in the hands of very few powerful institutions:
A series of actions, inactions, and misjudgments left the country with stark and painful alternatives—either risk the total collapse of our financial system or spend trillions of taxpayer dollars to stabilize the system and prevent catastrophic damage to the economy. In the process, the government rescued a number of fi- nancial institutions deemed “too big to fail”—so large and interconnected with other financial institutions or so important in one or more financial markets that their failure would have caused losses and failures to spread to other institutions. The government also provided substantial financial assistance to nonfinancial corporations. As a result of the rescues and consolidation of financial institutions through failures and mergers during the crisis, the U.S. financial sector is now more concentrated than ever in the hands of a few very large, systemically significant institutions. This concentration places greater responsibility on regulators for effective oversight of these institutions.
And while everyone sits and waits for the next, almost certain, big crisis, the banksters are getting ready to take advantage of it ... again. In 1929 they did it. In 2008, they took more. Not only they've been rescued with trillions, not only they eliminated competitors, but they sacrificed entire nations to retain their parasitic nature.
Recall that, Deutsche Bank was one of the major drivers of the collateralized debt obligation (CDO) market during the housing credit bubble from 2004 to 2008, creating about $32 billion worth. The 2011 US Senate Permanent Select Committee on Investigations report on Wall Street and the Financial Crisis analyzed Deutsche Bank as a case study of investment banking involvement in the mortgage bubble, CDO market, credit crunch, and recession. It concluded that even as the market was collapsing in 2007, and its top global CDO trader was deriding the CDO market and betting against some of the mortgage bonds in its CDOs, Deutsche bank continued to churn out bad CDO products to investors.
Well, guess how this zombie mega-bank rewarded: in 2009, Mrs. Merkel experienced a big shock. Some of her advisers called her and told her that the Frankfurt banks (especially Deutsche Bank, having exposures of more than 30 times the German GDP) had bankrupted as a consequence of the huge financial crisis that has started from Wall Street and the collapse of Lehman Brothers.
So, Mrs. Merkel was forced to 'swallow a glass full of political poison' by going to Bundestag to ask for 500 billion euros for the German banks which until a few months ago were swimming in profits. She was very angry, she couldn't accept it because she was a politician that actually represented principles like saving resources, not spending taxpayers' money, and suddenly, she had to take 500 billion from the taxpayers to save the bankers. She thought, 'I did, it's over, let's move on.'
A few months later, the same people called her and told her that they want another 300 to 500 billion for the same banks. They said (as an excuse apparently), that this time we have Greece that is bankrupted, so if Greece default on its debt Italy will be next and we will need another 500 billion.
So, what happened then is very simple: Merkel went again to Bundestag, yet she didn't dare to request again money for the German and the French bankers. She requested money in the name of 'solidarity' to Greece. Therefore, the money ended to save the Franco-German banks through the Greek Ministry of Finance. This was the first memorandum for Greece.
Indeed, from October 2009 to early May 2010, there were a number of meetings between the European institutions, the IMF, bankers and the new government of the socialist PM George Papandreou, who had won the elections on 4 October 2009 with 43% of the votes, which is a very high rate. They were to finetune a new bail-out programme for the Greek banks and their creditors. Greece did not have enough financial resources to help them out.
What should have been done is the opposite of what Papandreou did, siding as he did with private banks that were responsible for the crisis: namely refuse point-blank to give new public money to the banks and avoid increasing the public debt for this nefarious objective. If Papandreou had adopted an attitude that suited the interests of a majority of Greece’s people, we would have avoided the social and political drama that ensued.
The banking parasites, which are even more powerful, are free to play their games again under zero regulations, until the next financial crisis. And then, while some of you hope that at least you may see the end of parasitic capitalism, the parasites may become more powerful than ever.