New Law Would Make Taxpayers Liable For Trillions In Bank Derivatives Debt

If the quadrillion dollar derivatives bubble implodes, who should be stuck with the bill? Well, if the “too big to fail” banks have their way it will be you and I.

Right now, lobbyists for the big Wall Street banks are pushing really hard to include an extremely insidious provision in a bill that would keep the federal government funded past the upcoming December 11th deadline. This provision would allow these big banks to trade derivatives through subsidiaries that are federally insured by the FDIC.

What this would mean is that the big banks would be able to continue their incredibly reckless derivatives trading without having to worry about the downside. If they win on their bets, the big banks would keep all of the profits. If they lose on their bets, the federal government would come in and bail them out using taxpayer money. In other words, it would essentially be a “heads I win, tails you lose” proposition.

Just imagine the following scenario. I go to Las Vegas and I place a million dollar bet on who will win the Super Bowl this year. If I am correct, I keep all of the winnings. If I lose, federal law requires you to bail me out and give me the million dollars that I just lost.

Does that sound fair?

Of course not! In fact, it is utter insanity. But through their influence in Congress, this is exactly what the big Wall Street banks are attempting to pull off. And according to the Huffington Post, there is a very good chance that this provision will be in the final bill that will soon be voted on….

By Michael Snyder – Activist Post –

Foreclosure Fraud?

Since the Great Recession officially started in December of 2007, millions of people have lost their homes to foreclosures. It turns out that many of those foreclosures may have been fraudulent or in violation of foreclosure laws. According to the Southern Essex County, Massachusetts Register of Deeds, John O’Brien, a forensic audit of his recording files suggests that at least 75% of the mortgage assignments were invalid.

“My registry is a crime scene as evidenced by this forensic examination. The Audit makes the finding that this was not only a MERS (Mortgage Electronic Registration Systems) problem, but a scheme also perpetuated by MERS shareholder banks such Bank of America, Wells Fargo, JP Morgan and others. I am stunned and appalled by the fact that America’s biggest banks have played fast and loose with people’s biggest asset – their homes. This is disgusting, and this is criminal.” Nation of Change

It has been almost 7 years since the financial markets failed and yet the foreclosure crisis continues. In some respects the crisis is unabated. Yes, the foreclosure numbers are now down from their historic highs, but many of the completed foreclosures included these questionable documents and tactics by the banks in question. Plus, the use of these tactics started even before the Great Recession hit. Is there a cost to the economy when Banks allegedly use these “robo-signings”?

….Mr. O’Brien’s experience in Essex County is just one county in one state. However, when the nation’s Attorneys General were poised to settle with various banks in 2012 over the nation-wide foreclosure fraud allegations, O’Brien voiced his concerns to the Massachusetts Attorney General.

[O’Brien wrote] “I implore you not to agree to any settlement that would give criminal immunity to MERS and its member-banks. A settlement that includes this feature will not help the homeowners of MA and will permanently damage chains-of-title and property rights forever, with no hope of resolving the permanent damage that these institutions have caused to titles across the state.”’

It probably should not surprise anyone that the Attorneys General did sign the settlement with the banks and they did not heed Mr. O’Brien’s warning. While the national settlements did provide some relief to homeowners, it has had limited impact on clearing up the title concerns voiced by Register O’Brien and arguably provided limited financial recoveries for the victims of the banks allegedly fraudulent activities.

As expected, no one at any of the banks who signed the Joint State-Federal National Mortgage Servicing Settlements were indicted and brought to justice….

By Lawrence E. Rafferty – JonathanTurley.Org –

Vatican Calls For Central World Bank –

From WorldTruthTV.com –

The Vatican called on Monday for the establishment of a “global public authority” and a “central world bank” to rule over financial institutions that have become outdated and often ineffective in dealing fairly with crises.

A major document from the Vatican’s Justice and Peace department should be music to the ears of the “Occupy Wall Street” demonstrators and similar movements around the world who have protested against the economic downturn.

The 18-page document, “Towards Reforming the International Financial and Monetary Systems in the Context of a Global Public Authority,” was at times very specific, calling, for example, for taxation measures on financial transactions.

“The economic and financial crisis which the world is going through calls everyone, individuals and peoples, to examine in depth the principles and the cultural and moral values at the basis of social coexistence,” it said.

It condemned what it called “the idolatry of the market” as well as a “neo-liberal thinking” that it said looked exclusively at technical solutions to economic problems.

“In fact, the crisis has revealed behaviors like selfishness, collective greed and hoarding of goods on a great scale,” it said, adding that world economics needed an “ethic of solidarity” among rich and poor nations.

“If no solutions are found to the various forms of injustice, the negative effects that will follow on the social, political and economic level will be destined to create a climate of growing hostility and even violence, and ultimately undermine the very foundations of democratic institutions, even the ones considered most solid,” it said.

It called for the establishment of “a supranational authority” with worldwide scope and “universal jurisdiction” to guide economic policies and decisions.

Such an authority should start with the United Nations as its reference point but later become independent and be endowed with the power to see to it that developed countries were not allowed to wield “excessive power over the weaker countries.”

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