I am putting together a new ETF that consists entirely of companies that have become so large and systemically important that they are guaranteed survival regardless of their own incompetency.

It is a market cap weighted index (naturally) so that those names that represent the greatest threat to the overall economy have the highest weighting. Full universe of potential holdings are here:

Ticker symbol: TBTF

Top 10 Holdings
AIG*
Citigroup
Bank of America
Morgan Stanley
Goldman Sachs
Wells Fargo
Fannie Mae
JPMorgan
US Bancorp
Ally

…We expect trading to begin May 1. Full disclosures and documentation available on request…**

We will be following the domestic ETF with an international version: TBTFi (not to be confused with the BlackRock’s offering, iTBTF). It will be filled with ECB notes, Japanese banks, Sovereign debt from Greece and Cyprus, etc. For diversification purposes, it is important to own TBTF banks in various geographic regions in case of local central bank collapse or nuclear accident.

* AIG is really in there as a sentimental favorite, but they are no longer truly TBTF.

** No, not really, as this is sarcasm.

Barry Ritholtz has a background in math & sciences and a law school degree…He left Law for Finance, working as a trader, researcher and strategist before graduating to asset management…and sarcastic blogging.

He considers himself an independent voter and describes himself as a recovering Republican.



  1. deowll says:

    To big to fail? Break them up! The Federal government won’t! It’s been bought!

    • BigBoyBC says:

      Bought maybe. Sold-out more likely.

      I remember the break-up of Ol’ Ma Bell, service was all messed-up for years, Now she back (AT&T) bigger, badder, and more dominating than she ever was…

      • msbpodcast says:

        But now you’ve got a choice between Verizon and Sprint (and a few regional players.)

        I know, I know.

        Its like picking between heart attack, cancer or gangrene.

      • Cap'n Kangaroo says:

        And when it was broken up, there was also a myriad of local cable companies providing local cable TV.

        Now you have Time-Warner, Comcast, AT&T, Charter, and a few others.

        And they all want to sell you the same bundle of services (phone, TV, internet) at virtually the same price.

        And they call it competition.

  2. JD says:

    Karl Marx would be so proud of what we have achieved here in America!

  3. noname says:

    “We get the government we deserve”
    as Alexis de Tocqueville rightly noted in “Democracy in America”!!

    It’s not the government that has been brought, it’s “We the People”.

    You know, all those mind numbing TV commercials, unfortunately they have determines what American’s believe and vote for!

    We can only enjoy our constitutional gifts; only as “We the People” actively understand, defend and fight for the “Constitution of the United States against all enemies, foreign and domestic”.

    How many Americans even know what’s in our constitution?? And if they don’t know, what are they fighting for??

    With money and a desire to “own” America, I can create a pretense issue, create some 30 sec commercials, start a “Blue Collar Americans for Justice foundation” and I can manipulate you with some “dog and pony show & discussion” into voting your rights away in no time! American’s are that DUMB!

    *Americans have allowed republicans and their courts to violate constitutional amendments guaranteeing the people the right to vote.

    **Americans have allowed themselves to be lead into Wars and die, based on WASHINGTON LIES.

    ***Americans have allowed themselves to be poisoned with hexavalent chromium, until a non-politician Erin Brokovich “David” fought and won against “Goliath” (PGE). But now republicans and the courts are working to overturn our rights to safety & health.

    ****Americans have allowed themselves to be swindled by WALL-STREET and cover their bad bets and not prosecute but reward them!

    *****Americans have allowed themselves to be swindled out of their pensions by non-tax paying corporations

    ******Americans have allowed themselves to be defenseless against corporate greed by signing away Seventh Amendment rights to trial for redress of grievances. Accepting instead arbitration programs staffed by corporate loyalist.

    *******Americans have allowed themselves to forgo their 4th Amendment Search and Seizure rights. Government can take your cash for no reason (they just have to make up a story). They can monitor, photograph, track your every moment because it makes us feel safe.

    ********For all the reasons above and more, Americans have allowed themselves to manipulated, used and abused by corporations and government.

    “We get the government we deserve”
    as Alexis de Tocqueville rightly noted in “Democracy in America”!!

    • msbpodcast says:

      How many Americans even know what’s in our constitution??

      Unfortunately the owners’ manual is the most unread and/or selectively read/interpreted document in the arsenal.

      Reading it could/should be part of becoming a citizen, even if you were born here.

    • ± says:

      “We get the government we deserve”
      as Alexis de Tocqueville rightly noted in “Democracy in America”!!

      I’m guessing that you don’t hire DRs and so do not share responsibility for our current governance. I have always contributed more than I have taken and now I watch as my fellow American destroy our country by proxy every time they go to the polls.

      Although I always vote, I don’t help to hire RDs, so ***I*** don’t get the government I deserve.

    • getintouch says:

      absolutely correct, WE have allowed this to happen to ourselves by virtue of of our own greed and stupidity. And NOTHING will change (for the better) for us, the only answer is the one Ken Kesey said, just walk away and do your own thing, run your own life, don’t get caught in the web of capitalistic lies, just walk away…

      • noname says:

        Walking away… and where to? That is not a viable option!

        The native American Indians never invaded England, France, Spain, ……

        We live in a society and people in societies interact, they have too!

        It may not be you causing any harm to others, but someone or an entity like a government, or a polluter, or some random act of violence, ….. will cause you harm without you doing any wrong.

        What Martin Niemöller said in 1946 is still true today, 2013 and will be true in 2060 (when I am likely gone).

        The the names and players have changed, but today’s new players are just as capable, if not more so, with new technology to do the same if not worse!

        Martin Niemöller said in 1946:
        “When the Nazis came for the communists,
        I remained silent;
        I was not a communist.

        When they locked up the social democrats,
        I remained silent;
        I was not a social democrat.

        When they came for the trade unionists,
        I did not speak out;
        I was not a trade unionist.

        When they came for the Jews,
        I remained silent;
        I wasn’t a Jew.

        When they came for me,
        there was no one left to speak out.”

        What Martin Niemöller said is nothing more than a sound restatement of Alexis de Tocqueville “We get the government we deserve”

        The people who don’t understand what Martin Niemöller said is the same as what Alexis de Tocqueville said, nor act on it; those people are dragging our “all are needed for a healthy participatory democracy” down down down!

        Our forefather never imagined “we the people” wouldn’t have time or the knowledge to participate in our self-governance.

        • getintouch says:

          the one time we really tried to make a fundamental change in this country, ie., when communism was combined with the trade unions in the ’30s, the govt, then as now run by the oligarchs, came down really hard, using the police force to put down any real changes that might have resulted, regardless of the evil that was the soviet union version of communism. What Ken was saying is to release yourself from the capitalistic slavery that this country is, and exports around the world, is to not get involved in that economic bullcrap that we are assaulted with every day, don’t buy, and then by extension, become enslaved by, all that unneeded crap. Evolved away from the govt. and the oligarchs, don’t invest in wall street, try as much as possible to be debt free, take care of you and yours, don’t work for ass-fucking corps, like IBM (I did, was a bunch of ass-fuckers they are), don’t borrow from banks and credit cards as much as possible, learn to live lean. As far as protecting the people, as Niemoller said, yes, I agree there, but good luck with it!

          • noname says:

            Welcome to the new America, everyone screaming “self-preservation”, I must protect myself at all cost.

            I feel your pain, but; economically isolating yourself and “take care of you and yours” is the same as “I must protect myself at all cost” and makes you no better than the Washington elites.

            Good old Reagan started this country down the false primrose path of a fractured society, pitting one group against another.

            Instead of groups working and compromising together, he turned it into an US vs. THEM argument!

            The political elites have the power, the corporate elites have the money, a match made in heaven.

            Being the great Actor he was, Reagan made US believe it’s “them”, they are the ones causing us harm. The “them” changed to suite the elites, as they dominated one group and moved onto their next conquest.

            So much so, George W. Bush stated he’d prefer to be a dictator at least three times!

            Unfortunately the republicans most infected with this mindset where in office with a record setting surplus (after losing the election, excepting the Supreme Court) when 9/11 occurred.

            A perfect environment for US vs. THEM thinking. BUSH screamed self-preservation, the Pentagon screamed self-preservation, and Wall-Street screamed self-preservation,
            and with the early 2000s recession corporations screamed self-preservation.

            Who was screaming for the preservation of the Middle-Class, Ralph Nader?

            When the Afghanistan’s ruling Taliban rejected President Bush’s ultimatum and vowed to protect Osama bin Laden; Bush didn’t send in Seal Team Six to forcibly get Bin Laden, instead he sent the whole country to WAR.

            Then BUSH screamed self-preservation, IRAQ has nukes! We expanded our WAR!

            Democracy isn’t supposed to be about US vs. Them; it’s supposed to be about working for the “best” common solution, that is never best for any one group.

            We lost that ability to compromise and work towards a common goal when Reagan was elected.

            One direct result of Reagan; air traffic controllers slumped over and sleeping at their stations because of long hours, poor staffing and sleep deprivation …

            Just so some corporate elite can squeeze more profits out of people’s hides!

  4. Glenn E. says:

    I believe the part of the spirit of the Anti-Trust and Anti-Monopoly laws, was to prevent the abuses that come from industries and institutions that have “too many eggs in one basket”. So when they’re not taking advantage of their monopoly power, to goose their competition out of every deal. They’re taking advantage of the government’s fear, that their financial collapse will somehow cripple the economy. Though, that’s never really been proven that it would. I mean, where is it written we must always have three domestic automakers in business (minimum), or it’s curtains? And why not four, five or six? If having only three is so precarious.

    Seems to me that the “too big to fail” argument, automatically calls for diversification. Immediately!! All this pie-in-the-sky talk about seeding mankind onto other planets, to save the species. And what happens on Wall Street and in the Banks? Just the opposite. The wealthy always seem to consolidate, if there’s some advantage to it, they can count on. And apparently, counting on the government to bail them out, is their unwritten stratagem now. They just have to hope a huge meteor doesn’t wipe them out, like the dinosaurs. :)

    • msbpodcast says:

      Seems to me that the “too big to fail” argument, automatically calls for diversification. Immediately!!

      Its sounds like you’ve never lived in Japan…

      There they have keiretsu which are a loose familial association of businesses.

      The member companies own small portions of the shares in each other’s companies, centered on a core bank; this system helps insulate each company from stock market fluctuations and takeover attempts, thus enabling long-term planning in innovative projects. It is a key element of the automotive industry in Japan.

      There even the mob (the Yakuza) have a code of conduct and some social expectations.

      —-

      The problem we have here in the ‘States is that we have let mere managers (CEOs, partners and other corporate minions, [and politicians],) walk away with the store.

      Compensation is totally out of what with what is actually produced.

      That’s why we have so many billionaires. (I would cap salaries at $1 million per year and tax 100% of the rest should anybody be stupid enough to ask for more*,) but since billionaires develop an enormous sense of entitlement and lack a committal sense of responsibility, they are just drains on our commonwealth.

      *) Who’se specie is it? Its not the billionaires.

      —-

      The ownership of the commonwealth is:
      • none (it should belong to everybody, usually called communism, [not found anywhere on this planet,]),
      • one (usually called the monarch or the dictator, [the rest of humanity should just be bootlicks or they should hurry up and die,]) or
      • many (an oligarchy or in quasi eternal corporate entities.)

      In the organization of the many we have:
      • fascism (the ‘States is fundamentally a fascist republic,) and
      • corporatism (corporations are eternal, multi-national and make lousy citizens, à la Wal*mart or every tax dodging Caiman island corporation…)

      We made a mistake and let the accountants run the show for too long.

  5. Admfubar says:

    These arent too big to fail, but too corrupt to fail.

  6. Trex says:

    I’m gonna open a hardware store that sells only Pitchforks and Torches. I’m about to become fabulously wealthy.

    The Democrats are absolutely Horrible. And the Repubs are slightly worse.

    • noname says:

      “fabulously wealthy”, I don’t think so.

      Unless you can compete with the likes of no-tax paying Amazon. They have some sweet deals on Self Igniting Propane Torch Lights and free front door delivery!

      The Angry Mob Council has a bulk deal (with kickbacks) with Amazon and strongly recommends Amazon Self Igniting Propane Torch Lights to all it’s members.

      That is one crowd you do not want to cross!

      Maybe if you started a catalog business. Created a “Torch and Pitchfork” catalog with a “Tar & Feather” holiday supplement, you would have an awesome business. I might even help you get started and invest in it! :)

      • pedro says:

        Am I correctly correctly that you are pro internet sales tax? Figures.

        • noname says:

          What are you asking “Am I correctly correctly”?

          To answer you, no it’s not very “correctly”!

  7. pedro says:

    Because there are no rich Demagogues. How stupid can an editor be?

    Yawn!

  8. pam says:

    Why wait for the government? Everyone should break ties with the TBTF monsters. I removed my finances from BOA last year. It was a PIA to do but now that it is done and I am with a CU I feel much better. My mortgage was sold to Citi, so I’ll work on refinancing that this year.

    We say we don’t want government dominance in our lives, but then we wuss out and expect it to handle everything for us.