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Major banks say they are ready to go under

Oh, I can hear it now ... I need a bail out so I can stay a float

Major banks say they are ready to go under

The US Federal Deposit Insurance and Federal Reserve released public summaries of plans for quick liquidation of nine of the world’s largest banks in the case of an emergency, without government bailouts.
Complex financial firms with more than $250 billion in nonbank assets including J.P. Morgan Chase, Bank of America, Citigroup Inc., Goldman Sachs Group Inc., Morgan Stanley, Barclays PLC, Deutsche Bank, Credit Suisse and UBS were the first to prepare the worst case scenarios by July 1. In total, about 125 banks are expected to submit plans to the regulators by the end of 2013.
Public summaries reveal that Morgan Stanley and Goldman Sachs plan to sell assets or stand-alone businesses to other financial firms, private-equity investors or insurance companies in the event of a collapse. Citigroup said its banking business could be split off from the parent company and recapitalized as a smaller bank. Credit Suisse plans to sell its businesses to hedge funds, banks and securities firms.

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This is all just a scam. It's

This is all just a scam. It's hardly an honest attempt at risk planning.

Trouble is that these plans address single bank failure events, but in a bubble bursting event such as 2008, large scale failure would still mean huge losses not only for investors (who should know better and be willing to accept the loss) but for depositors too, who are under the illusion that the FDIC will protect them from losses. In a sytemic event, banks wouldn't be able to sell their assets for anything approaching the value they'd need to avoid large scale depositor losses. These banks, and the Fed, know this, which makes these "plans" nothing more than eyewash.

This exercise is just designed to extend the illusion that your money is safe in banks no matter what.

Don't be fooled by this BS. The FDIC would have been overwhelmed in 2008, and despite these "plans", would be overwhelmed still today were a similar event to take place. If fedgov were to actually allow wide scale debt failure to occur, AND protect bank depositors from losses as they promise, they'd have to print a lot of money. Yea, bank depositors would get their money, but it would not have the same value after the massive money infusion.

No, the problem of 2008 wasn't the lack of risk panning, the problem was, and still is, the system itself, based on fiat money and fractional reserve banking. The only solution is sound money and the recognition by courts that fractional reserve banking is fraud.

Neither is likely to happen anytime soon, which means we're all continuously at risk of another bailout style ripoff or whatever other scam they come up with to save the system next time.

I must be willing to give up what I am in order to become what I will be. Albert Einstein

Just consolidating under the

Just consolidating under the Rothschild tentacles. Hello New World Bank.

SteveMT's picture

The sooner the better. Next week would be nice.

The banks failing would give Ron Paul incredible momentum to take this nomination without even lifting a finger.

My bet is that this is just a way to take the loot they have

stolen from the public and leave the liabilities behind for the FDIC and the US public to absorb. No way this is an honest attempt to workout the failure of these financial institutions. It just doesn't happen that way when thugs are in charge.

"Bend over and grab your ankles" should be etched in stone at the entrance to every government building and every government office.

Both O'Bomb'a and Romney would

gladly hand them billions of dollars and charge it to taxpayers.

Pretty Smart Idea

In the absence of a government protection from risk (aka bailouts), this type of activity would be taken care of naturally by the banks. They would want to have a backup plan in case of liquidity problems and bankruptcy.

Still, all in all, this a pretty good idea. I just dislike the fact that it was required by regulators.

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