FIVE U.S. BANKS ARE TOO BIG TO EXIST / SEEKING ALPHA ( SUGGESTED READING )

Five U.S. Banks Are Too Big to Exist

by: Jeff Nielson

July 28, 2009


Fitch Ratings released a stunning report a few days ago which disclosed that just five banks (all U.S. banks) hold 80% of all derivatives risk: Bank of America (BAC), Goldman Sachs (GS), JP Morgan (JPM), Morgan Stanley (MS), and Citigroup (C). Keep in mind that the global derivatives market has a notional value somewhere around 30 times global GDP. Put another way, each one of these five banks has derivatives risk that is much greater than the entire value of global GDP.

In 2008, when the reckless gambling of these greedy banksters destroyed their sector and threatened to destroy the entire international monetary system, the banksters (and their servants in the U.S. government) coined the phrase “too big to fail”. This implied that such banks were so “important” that they had to be saved at all/any costs (i.e. the $10 TRILION in hand-outs, loans and pledges to these banskters).

As 2008 wore on, and the global economy was subjected to an intentional take-down by these same ruthless oligarchs, some analysts came up with a counter-phrase to “too big to fail”: too big to exist. The Fitch report clearly illustrates that the “too big to exist” label has much more validity than the banksters' characterization of themselves.

The fact is that as long as these five banking oligarchies are allowed to continue to exist, then every time they threaten to destroy themselves through their reckless, greedy gambling, the entire global economy will be put at risk. There is only one possible solution to this situation: these five oligarchies must be smashed into little pieces.

As usual, we can expect the a cacophony of howling from pseudo-capitalists, complaining about “interference in the free market”. Almost all these same knuckle-draggers were surprisingly silent when government leapt in with the most massive intervention in capitalist history to keep these behemoths alive – or they would all already be bankrupt.

Furthermore, such criticism highlights the profound ignorance of pseudo-capitalists. Capitalist theory – going all the way back to Adam Smith – has predicted for centuries that in all maturing, capitalist economies, monopolies and oligopolies would always be the biggest threat to the well-being of the populace. The only way that a capitalist economy can ever be viable over the long-term is to prevent the evolution of such oligopolies/monopolies.

Otherwise, the monopolists and oligarchs will keep using their market-power to squeeze all the wealth out of a society, and into the hands of a small group of oligarchs – kind of like the $10 trillion which the banksters extorted from the U.S. government.

The fact is that if the U.S. government had any amount of accountability to the U.S. electorate, the first thing that the U.S. government would have done when they eventually discovered this derivatives time-bomb (on top of the banksters other highly-leveraged bets) would have been to start breaking up these oligopolies.

If there was ever a question of justification, the Fitch report is conclusive: with 80% of all derivatives risk in the hands of five banking oligopolies, these institutions must be destroyed, not simply for the well-being of Americans, but for all of humanity. Indeed, given the massive suffering inflicted all over the world by the gambling and scamming of these immoral predators, there is a good argument to make that they have committed “crimes against humanity”.

True, financially destroying tens of millions of people and causing severe hardship for billions doesn't have the same dramatic impact as (for example) the repeated use of torture by the U.S. government. However, in terms of total suffering, few monsters in all of human history can compare to these Wall Street banksters.

In contrast, breaking up these oligopolies would only turn these billionaire banksters into mere millionaires (with many millions). Yes, it would wipe out the shareholders of these companies. However, bear in mind that 56% of all U.S. equities are held by 1% of the population. Thus the hardship caused by destroying these evil institutions is totally insignificant in comparison to the crime of allowing them to continue to exist.

If there was ever any doubt, with the release of the Fitch report, the “verdict is in”. These five banks are too big to exist, and the most important priority of a responsible U.S. government (if/when Americans ever manage to produce one, with their two-party dictatorship) is to ensure that these five banking oligopolies cease to exist.