Too Big to Fail – Again

Remember too big to fail? The 2008 government bank bailout? That worked out really well. And today? 6 banks still run everything. Determine the global markets. Shape the American economy. CitibankBank of America, Goldman Sachs, JP Morgan Chase, Morgan Stanley and Wells Fargo. Their CEOs say that they have ample liquidity available for lending this time around in a strange set of calls from Treasury Secretary Mnuchin. And we should believe them?

Mnuchin is forming a group including these six banks, the Fed and the SEC, the same assemblage as in the financial crisis of 2008. Calling it a “Plunge Protection Team”.   Danger. Danger.

And. Oh yeah. Merry Christmas!

Too Big To Manage

Glass-Steagall resurrection won’t heal the banking system. Segregating commercial and investment entities never worked. Senior executives were always able to peer over the so-called Chinese wall. Amalgamations have caused unwieldy national behemoths.

Incompetence at the top. Incestuous Boards. Obscene compensation assured. Cue Stumpf. Wells Fargo’s dufey CEO. Typical of the genre. Isolated from business units. De-centralized disparate cultures left to their own devices. By the time the OCC gets involved at least 5 years of fraudulent practices to rein in. Fire a bunch of low-level guys as a PR stunt.

Too big to manage. Too big to fail.