Oy, the Fed strikes again w/ another bad idea, in a bizarre twist, theyve dumped municipal bonds from the list of protected bonds in a crisis, but theyve added corporate bonds and the Russell 1000 bonds - which thus protects corporatins and wall street from crisis, but not actual cities, which (since our bankers whine over regulating their grift) leaves our country ripe for the Detroit-ification of the other towns, strip-mining them for assets to the highest bidder. From the article: That the Fed and its regulatory cohorts have to resort to this implausible plan – which crimps the ability of states and localities to raise essential funds to operate – in a strained effort to pretend that they’ve found a means of avoiding another massive bailout of Wall Street in a crisis, is just further proof that the only way to seriously deal with too-big-to-fail banks is to restore the Glass-Steagall Act and break up these complex creatures before they strike again. Gordon Gekko Goes Muni? The rule change may not have much effect in a crash, but where it will have a major effect is on the cost of credit, which will increase for municipal governments and decrease for corporate and financial institutions. The result will be to further shift power and financial resources from the public sector to the private sector. Why would regulators dangerously jeopardize state and local government budgets in this way? Skeptical observers speculate that the intent is to Detroit-ize municipal governments, so that assets can be stripped as is being done in that imperiled city. The international bankers got away with asset-stripping Greece. Why not make the US itself a wholly-owned subsidiary of private banking interests?
Posted on: Fri, 12 Sep 2014 22:08:42 +0000