On television, in interviews and in meetings with investors, executives of the biggest U.S. banks — notably JPMorgan Chase & Co. Chief Executive Jamie Dimon — make the case that size is a competitive advantage. It helps them lower costs and vie for customers on an international scale. Limiting it, they warn, would impair profitability and weaken the country’s position in global finance.

So what if we told you that, by our calculations, the largest U.S. banks aren’t really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S. taxpayers?

Granted, it’s a hard concept to swallow. It’s also crucial to understanding why the big banks present such a threat to the global economy.

  1. bobbo, the pragmatic existential evangelical anti-theist says:

    Too Big to Fail: A house of cards built on reclaimed land in a fault zone. Its not a question of if, but rather when, they will fail (Again).

    Next time: I hope the Government isn’t still corrupt from bottom to top and bails them out again. Alternative: government funds the banks that are too small to be corrupt and let them take over the credit/loan business vacated by the dinosaurs.

    Won’t happen….because the fix is in. Failure to put Bank Execs in Jail, break up the Banks, Reregulate the Industry===a locus of the biggest and glaring malfeasance by Obama. Most of the other complaints are the Pukes trying to mislead everyone from their own perfidy, but this one is Obamas pretty much on his own.

    …. and yet it is hardly ever mentioned===such as in this piece of crap reportage linked above.

  2. ± says:

    Can’t tell if you are for or against bailing out lying, thieving, evil, incompetent big banks, and then wanting to do it again, from how you stated your position.

    But here is my belief, we should have let them fail, flop, collapse, bring down the world economy and so forth (as per whatever would have happened or not and that includes my business failing and other good people too) and sold the filing cabinets and desks and the bricks and mortar to recoup as much as possible for the people whose holdings were in the bank. No bonuses for executives, no golden parachutes, nothing. If not enuff money from that to make everyone whole, life’s a bitch and then you die. Lesson to be learned (but probably not) is not to continue to hire RDs.

    And if that if we had let them fail, then right now we would be in the nascent stages of the greatest economic renaissance the world would ever see.

  3. Supreme Ultrahuman (I see the comment system is still designed for retards.) says:

    Enjoy what you can while you can. We’re all screwed.

  4. mharry860 says:

    Read the stuff over at ZeroHedge, it causes excessive drinking.

  5. deowll says:

    That the WH and Congress would put their biggest supporters on life support is about what I’d expect. When these guys can’t make money when the Fed is giving them free money and they pay depositors virtually nothing takes talent or rather a lot of dead wood is getting paid big money as money managers when they should be trash collectors.

    Maybe it doesn’t matter so much. I don’t give the country 4 more years before we implode anyway.

    • msbpodcast says:

      …money managers when they should be trash collectors.

      Hey, trash collectors do something useful for society. You can go for ever using banking machines, but you can’t go for more than a week letting trash pile up before it starts to stink and gather vermin.

      I’d put the lot of these narcissistic socio-psychopaths in prison and let the small-time dope dealers out instead.

      Its would cost us billions of dollars less…

  6. MikeN says:

    That financial reform bill was written by big banks and puts them in a stronger position with all the new regulations that makes it harder for smaller banks to compete.

  7. mal says:

    wtf is up with pictures of broken piggybanks?

    Here in the Netherlands is virtually impossible to buy a piggybank without some kind of rubber plug in the pigs belly to facilitate removing the money. There’s no frigging need to smash it with some hard object.

    Now i don’t know about piggybanks in the USA, but i don’t imagine those very different.

    Just go for the softer underbelly, it might even work for the biggest banks!

    • msbpodcast says:

      it might even work for the biggest banks

      I just got a visual of slitting the bailout and tax-fattened belly of a banker open.

      Not a pretty sight… Satisfying, just not pretty. 🙂

  8. Sarah Park says:

    Is this for real? I can’t believe this.

  9. orchidcup says:

    Let’s pretend the Federal Reserve Act of 1913 did not establish a public cartel of private banks (also called a banking cartel).

    Let’s pretend the Federal Reserve System exists to protect the financial interests of the common public and not the interests of specific individual aristocrats.

    Let’s pretend our representative democratic republic is safe in the hands of Wall Street aristocrats and let’s also pretend the judicial, legislative, and executive branches of our government are not owned and operated by corporations and the aristocrats that control them.

    Let’s pretend we are not slaves, but merely “human resources” with certain “rights” granted by the aristocrats.

    So long as we can pretend all of these things with sufficient force and fervor, we can be convinced that we are a free people and all is well.

    While we are pretending to be free, let’s pretend we like it.

  10. orchidcup says:

    The two enemies of the people are criminals and government, so let us tie the second down with the chains of the Constitution so the second will not become the legalized version of the first.

    I consider the foundation of the Constitution as laid on this ground that “all powers not delegated to the United States by the Constitution, nor prohibited by it to the states, are preserved to the states or to the people.” … To take a single step beyond the boundaries thus specially drawn around the powers of Congress is to take possession of a boundless field of power, no longer susceptible of any definition.

    The incorporation of a bank, and the powers assumed by this bill (chartering the first Bank of the United States), have not been delegated to the United States by the Constitution.

    The true theory of our Constitution is surely the wisest and best, that the States are independent as to everything within themselves, and united as to everything respecting foreign affairs.

    Let the General Government be reduced to foreign concerns only, and let our affairs be disentangled from those of all other nations, except as to commerce, which the merchants will manage the better, the more they are left free to manage for themselves, and our General Government may be reduced to a very simple organization, and a very inexpensive one; a few plain duties to be performed by a few servants.

    And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.

    Government can do something for the people only in proportion as it can do something to the people.

    — Thomas Jefferson (1743-1826), US Founding Father, drafted the Declaration of Independence, 3rd US President

    • noname says:

      It “states’ rights” if you recall, that enforced humans as property of the rich! The states are nothing better than the Federal Government accept it’s easier for the wealthy to divide and conquer (Look at Boeing’s decision to move to South Carolina!)!

      America is again not far from a modern reincarnation of “American work-craft as property of the rich”, except it’s currently animated by client acolytes of the wealthy in our federal government enforcing and guarding wealth transfer to the rich!

      It’s our federal government that is denuding any check on the power of the wealthy! Such, wealthy or Wall Street now have the power to enslave governmental powers to its beck and call. Just look at the Republican Party and some specific Democrats! Look at how the President and congress still bails out Wall Street!

      Any grass roots attempt to empower the middle class is lambasted by the many clients of the wealthy! The mass media is largely enslaved by many commercial chains that the wealthy yank at their beck and call.

      Our Government is becoming destructive to its cause of securing rights of its masses, its people they derived by their own consent (one man, one vote) through their governmental representatives. Many of our representatives, have now been corrupted by “campaign contributions” to the cause of the wealthy against the wishes of the masses!

      And the masses are corrupted by entertainment and believe in celebrity “30 sec” commercials!

      By allowing any entity grow and become “too big to fail”, American’s are empowering Wall Street to be their puppet master!

    • msbpodcast says:

      What part of that actually was a quote. (Citation rules exist for a reason. Use <blockquote> and </blockquote> tags in your text.)

      I despair that we’re not likely to see such a deep thinker into the nature of governance as Jefferson again.

  11. dusanmal says:

    Another class warfare, lying, distorting spin job. In true Orwell/Progressive style: what the heck is “implicit subsidy” newspeak!? And who and how can calculate something that does not exist!?

    Give me exact amount money we pay to the Government that directly goes to the banks. That is subsidy. Not BS “well, effectively, maybe somehow they benefit this much”.

    As for real subsidies and giveaways, try billions for dead Solyndras, battery factories that haven’t produced a single product after receiving truckloads of REAL money directly form us, car manufacturers who make cars that dealers plead not to be sent any (Volt),… corporations that use REAL money given to them by corrupt top executive of US to… ship jobs to China (GE),… Kill that first. Than think of “effective indirect unmeasurable” stuff (that current administration ideologically hates).

  12. Uncle Patso says:

    So the biggest banks get slightly better rates on borrowing — where exactly does the taxpayer money come in?

  13. Bob says:

    Unlike the OP, I’m not some anti-capatilist anti-banking… well lets not get into insults 🙂

    However, I will ask this as someone who was against all the bailouts (and yes the includes the banks and GM). What did you really expect? The banks work in a free market system like everyone else. That system is based on a risk vs reward system where you have to balance the risk against the reward. Once you take away the risk (ie not allowed to fail), then of course Banks (hell any business) would start taking more and more outlandish risks, to get larger rewards.

    Think about it, if you ran a self financing car dealership, you probably wouldn’t sell that new One-77 to a middle manager earning only $150K a year. However, if I came to you and said if he doesn’t pay off the loan then I will cover the loss, then that would change your opinion. You would probably take the chance, I mean their is a chance he could pay it off after all, and its not like you will have to eat the loss.

    Risk vs reward to very important in a capitalistic society. You take that away, and self correcting parts of capitalism stop working.

  14. MikeN says:

    The real disaster waiting to happen is ObamaCare. New government report says it will add 6.2 trillion to the deficit.


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