The over/unders were 5. It’s a push. Five banks failed.

“My feet hurt” and “I’m tired of giving in.”*

Citigroup agreed to pay $75 million in fines. When the subprime problem began to unravel Citi lied to regulators, claiming they only had $13 billion in exposure to subprime loans when they really had closer to $43 billion in exposure. When Citi’s losses started to cascade, the government ultimately bailed them out. In reaching the settlement, Citi did not admit or deny wrongdoing. Only real people go to jail, not corporations.

Usury is Regressive Taxation – Usury Hammers the Rest of Us

Usury modifies certain behavior, the same as taxation modifies behavior, but usury is regressive taxation. The burden of usury hits hardest on the poor, the working class, and the middle class but it imposes no burden on the wealthy. That’s right – no burden on the wealthy, because the tax is passed on to the poor in the form of usury.

Friday Night Frights

July 23, 2010

The over/unders were 5. The overs win. Seven banks failed today. The year-to-date total has already climbed over 100 bank failures. One day we’ll sit around and reminisce about local banks where the client was known by name and not just account number.

Why are the smaller, local banks in such trouble? The “too big to fail” banks made dangerous gambles in many arenas, including the real estate market, which ultimately collapsed. The small banks were not able to slough off risk through the use of derivatives; that was a game for the big banks which ultimately passed the risk to taxpayers. Financial reform legislation is supposed to mitigate this moral hazard. It won’t be long before the reform is put to the test.