The purpose of the Great Financial Swindle of 2008 was destroying the notion of "implicit government guarantees" and paving the way for explicitly saddling the American taxpayer with countless trillions of worthless credit securities illegitimately created via the Wall Street - City of London axis of fraud. Key in this effort was allowing Lehman Brothers to fall into bankruptcy, so to create a psychological benchmark of financial pain awaiting realization were threats of insolvency of other "too big to fail" private enterprises made manifest. With that terror threat now well-established the push to "reform" the financial regulatory system brings any sane observer to ask:
Can this nation's woefully inept political leadership do anything other than increase by a couple orders of magnitude the dollar amount of hopelessly insolvent credit securities taxpayers explicitly are backing?
It seems this likelihood is implicitly affirmed by FDIC chairwoman, Sheila Bair in an interview with CNBC's Maria Bartiromo...
According to Bair, following financial reform, losses will be fully absorbed by shareholders and creditors. Well, glory be! Now, if only these claims represented such equity as could contain the damage done by a "too big to fail" institution's demise. If only a mere lack of regulatory authority were at the root of troubles leading to the swindle of '08.
Given the degree to which collateral assets have been leveraged, given the extent of financial interdependencies tied to the alphabet soup of technically insolvent credit-related securities clogging the books of financial enterprises of every stripe, and given the magnitude of fraud employed to disguise this fact, any proposal assuming there can be an orderly unwind of insolvent institutions without putting taxpayers at risk is, at first blush, an exercise in fantasy, and given a moment's thought, better suspected an act intending to usher in the next phase of a swindle whose purpose from the very beginning arguably has been to incapacitate the power of the U.S. government to exert its authority in a manner returning strict regulatory oversight to the financial sector.
Absent an honest accounting of assets and liabilities on financial institution balance sheets occurring prior to deliberations on reform measures, the specter is raised that, the axis of fraud will be left unchallenged, and so, unimpeded from imposing measures best suited for furthering its position over the financial affairs of both the private and public sectors. Indeed, given the qualities of political leadership whose careers have been an exercise in passive submission to the greatest fraud — Ponzi scheme (structured finance) — ever hoisted upon a gullible, trusting people, and given the fact every last representative in the House and many in the Senate face imminent extermination from the political scene come November, one ought ponder how another prospective swindle might be concocted before the guillotine blade falls, this in order that the reform process might be hastened by that core of contemptible cowards making up Congress' "leadership."
After all, were not these the essential elements of the same dynamic delivering "reform" in '08?
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