Where is the outrage

It seems that corporations have done what is always attributable to the devil, convince people that they don’t exist, or more accurately that they’re not responsible for the mess we are currently experiencing.

Read this article on Mother Jones and then come back and read my comments.

First this:

“People don’t know what to do with the anger they do have,” says Marttila, because they feel blocked by “senators, representatives, and [Treasury Secretary] Timothy Geithner, who speaks gobbledygook.” Wall Street, in other words, is protected by the people’s representatives.

Some of us can see through the gobbledygook. Our representatives need to be taught a lesson. Let us make a commitment to keep voting them out until they get it right. By ‘right’ I mean that they take their marching orders from us, not corporate interests.

“But they are constantly told by all the respected voices that if we don’t protect and preserve the institutions on Wall Street, we’ll be fighting for rat meat on the streets.” And this fearmongering works.

And sometimes it doesn’t work. I have a solution in mind, start by fracturing the big banks into tiny little pieces, do the same for medical insurance companies. Use government power to level the playing field.

But the financial issues involved appear “incredibly arcane and difficult to penetrate. How do you regulate derivatives when 99 percent of the public don’t understand it?”

Derivatives aren’t hard to understand. In essence it is a methodology for looting the general public. Let me explain.

A bank has on hand a batch of what are called toxic assets. They’re toxic because they represent a loss on the banks balance sheet that offsets profitability. Those toxic assets btw, risky mortgages and other loan instruments.

So the bank packages them up all pretty and insures them. They then sell these derivatives to other organizations. The deception involved is interesting. Rememberthe insurance aspect? That’s what the Credit Default Swap is all about. In essence it’s the insurance industry being deceived enough to think they can make a buck on these derivatives.

You see where I’m going here. When those derivatives started tanking, it was up to the insurers to cover losses, except the insurers weren’t liquid enough to settle all debts. In other words, they couldn’t pay claims on those junk derivatives.

Now to complete the circle. Who benefited from this? The bank that was able to get a toxic asset off it’s books, that is who was the main benefactor in all of it. The banks, well, Citibank, Bank of America, et al.

Just some food for thought. Why the hell aren’t we rioting in the streets?

One thought on “Where is the outrage

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