Even with the attention Wall St. is getting right now, bad and good, they are still doing busy as usual. Well, at least Wall St. is figuring out new ways to screw the American public, again. Last time the American public bailed out Wall St. and it may possibly be the same American tax payers that bail them out again, along with their European banks and debts.
Before we get into how that might happen, we are going to offer you a little history on banking. Once upon a time, way back when, banks actually took people's money and were not allowed to gamble on the stock market the way other institutions could. As an example Bank of America would not be able to issue securities because they were a commercial bank. This is because of the Glass-Stegall Act of 1933, that was passed into law in response to the last time Wall St. ruined the world economy (The Great Depression Era).
This is pretty simple and basic and very logical really. These banks take money from hardworking taxpaying citizens, to keep their earnings and life savings safe. Those banks cannot be allowed to gamble with that money and possibly loss it all (as they did already). Now prior to the Great Depression Era, that is precisely what banks did. They gambled with that money the hardworking taxpaying citizens had given them. Well guess what, they lost that gamble and that money. Now those banks were in a situation where they found themselves owing more money then they had on hand. This in turn forced these banks to shut down. So, those hardworking taxpaying everyday citizens found out they had no money, no savings, no nothing. All gambled away by Wall St.
So in 1933 the Glass-Stegall Act was passed and the FDIC was created, so that people could once again put their money and savings into banks with some sort of assurance it would not just disappear. This act was also in place to make sure that these banks with FDIC protection could not use that protection to engage in risky gambling of that money.
Well, in 1999 the Gramm-Leach-Bailey Act was passed and so the block on gambling with people's money went by the waste side. The banks, again, were free to turn Wall St. into the world's largest casino. Actually this time the gambling by the banks would be even better for them, because they now know that the government (our government) would have to save their asses when they lose the people's money again. The ironic thing here is, as in the history lesson we just showed, in the past these banks would gamble away the people's money and would be forced to close. A lose, lose situation for the banks and the people. But now the banks can gamble away the people's money, but instead of being forced to close (because the bank actually has no money) our government bails them out to keep them open to only gamble more money away. Welcome to the recession of 2008...
So what does this have to do with the banks and money in Europe. Since our government made sure that the banks were not broken and collapsed, the banks are still free to take crazy and insane risks with the people's money. Banks like Bank of America and JP Morgan have taken their highly volatile European derivatives and dumped them into the nice, safe, and FDIC insured commercial arms. Which means when those derivatives collapse, just like they have been doing all over Europe, the banks will just ask with their hands out and get bailed out by the people again. Because the will say they must make sure the average American doesn't lose their savings.
The president is looking into the legality of this as we write this article.
What we need to know is that as of right now banks are allowed to dump risky bets into the secure and insured FDIC part of their operations. If this is continued to be allowed the taxpayer will once again be forced to bail out the banks and corporations.
So what are the Occupy Wall St. protests about you ask? They you go.....
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