Joyce America Speaks Periscope @11am Financial Instability. History Repeats.

 

 

 

I resent politicians, including our President, throwing out phony numbers to justify bad policy.

1. There are many credit unions in our country.  The largest belongs to the Navy which has $82 Billion in assets with 7+ million members.  Thousands of credit unions average $3 Billion in assets.

2. Most (1000’s) of community banks have $100 Million in assets and a few 100 have $200 Million.  This is Millions, not Billions.

3. The change in Dodd Frank will deregulate banks with up to $250 Billion in assets.  That includes 6500 banks with less than $50 Billion and the 1% with more. that is 38 of the largest banks.  Remember, We the People bailed out AIG, that large insurance company, with systemic risk, with $250 Billion.

4. If you liked the affects of the fiscal crisis of 2008, you’ll love the sequel.  Only next time, Americans will not be able to afford to bail out the Banks. Banks,  bank-like entities, and hedge funds are no longer too big to fail.  Their CEO’s and upper management must be responsible.  Unfortunately, if you’re part of a pension plan or a 401K, you might lose if you sell.  When the next downturn occurs, hang on and don’t sell, unless you have a limit order at 10% to protect against risk.  It’s a choice.

5. Years ago I met Peter Orszag, head of the Office of Management and Budget from 2009-2010.  I was quite upset when he stated you don’t need Regulation if banks are well capitalized.  I asked what did he mean and how much?  Alan Greenspan later stated & clarified his criteria for bank safety.  Banks must put aside 25% of their assets as a cushion against potential loan failures or risky derivative transactions.  Now the banks will have neither the capital buffer or the regulations to prevent risks.

6. Not convinced?  Read The Age Of Greed by Jeff Madrick or Reckless Endangerment by Gretchen Morgenson.  Both are enlightening books that detail the events leading up to the Financial Crisis of 2008, ushering in our Age of Inequality!  Lest you’ve forgotten that in 1998 we gutted Glass Steagall, 38 pages created during FDR’s Presidency to preserve our Monetary System.  It was gutted to accommodate the Banks’ appetite for diversification and risk. They got it and Main Street has never recovered.

7. The trade deficit? Should we worry? We import $2.3 Trillion in goods.  Our economy is in excess of $20 Trillion. What’s $50 or $100Billion when we’re speaking Trillions.  It’s 2%.  Not a large amount to create a trade crisis and start trade wars.  The last time a Republican Congress started a trade war under George Bush, America backed down and America lost 200,000 jobs.  So we should worry. 

8. Why is Trump so confident that our allies will just roll over and take a hit to their economies?  Has he always been gracious in his dealings with them?  A charm offensive perhaps?  I don’t think so!  This is another bad policy at the wrong time.

I will see you later and we’ll chat.

“The heart and pulse of the Middle Class”


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