Some pork was added, some threats and strong-arming was performed, and Congress has now allowed pretty much any bank in the world to dump their toxic sludge at our doorstep.
The bill just got passed, but already there are some ugly Easter eggs popping out.
Remember, this entire paragraph 12 was not supposed to go into effect until 2011.
Foreign banks were not in the definition of depository institutions until they changed the effective date from October1, 2011 to October 1, 2008.
If we rewrite the opening of the paragraph to use the words “foreign banks” it reads
Balances maintained at a Federal Reserve bank by or on behalf of a foreign banks may receive earnings to be paid by the Federal Reserve bank at least once each calendar quarter, at a rate or rates not to exceed the general level of short-term interest rates.
So, to summarize, by changing the effective date the following is now in effect.
Banks don’t have to have cash on hand.
The Fed does not have to maintain an Earnings Protection account for the supplemental reserve fees they charge banks which means they don’t have to give any of the money back to those banks.
They now include foreign banks as institutions they can pay earnings to. Let’s not forget, earnings is really just more American debt. Federal Reserve Notes are really debt, but that’s a topic for another monster blog entry.
The basic plan is to set up a federal money laundering operation. Bad assets come in, get laundered by the Treasury and put in a new AAA “wrapper” (as it’s termed on the call), and good assets go out, issued as Treasury guaranteed securities. Whether the final value of the legislation this week is $700 billion or $150 billion is irrelevant as long as the laundering operation can accommodate the throughput, as that number is only a cap on total extensions at any one time.
So we’ve basically opened up the magic money machine for anyone holding crappy derivatives or pretty much anything else they don’t want anymore… and now we taxpayers are guaranteeing it all. So much for letting the ‘free market’ work things out. Some businesses have been tapped to survive, and the rest will be eaten.
I wish I could muster the outrage to be mad about this. Unfortunately, it’s the way things are. All the voter outrage that was mustered earlier this week accounts for naught. If you’re truly pissed off about this, the best thing you can do is vote against your incumbent rep or senator if he or she is up for election this fall. Blame falls equally on both sides, and is further proof to me that both parties are working together to support a certain group, and it sure ain’t the average citizen.
There will be more surprises coming out of the bill… just wait. This is just like the Patriot Act… don’t read, just vote for it… we are always acting in the best interests of America… right?