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Bailout Helps Fuel a New Era of Wall Street Wealth
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With fewer banks and securities houses remaining, the remaining banks like Chase and securties houses like Goldaman and Morgan Stanley are using the spreads between the price of buying and selling bonds- and the easy access to government money and FDIC guanrantees for their bonds- to make large profits. In effect the Fed is pouring money into the system to help financial institutions recover and in the process is making it possible for firms like Morgan and Goldman that were on the verge of collapsing to be able to make large profits through cheap money from the Fed. The resulting large bonuses are likely to upset a public and taxpayers who shoulder the dual burdens of a bailout of large banks, which is not making credit easier for small and medium businesses that form the backbone for employment. The smaller banks that support these businesses are failing and being closed by the FDIC. THe result- increasing joblessness and shrinking consumer demand. This is outlined by Ms. Lee in her op-ed article- The Banking System is Broken, WSJ, October 16, 2009. See this link. Meantime banks like Citigroup and Bank of America continue to see losses, so that even these profits are happening in only some parts of Wall Street.
The lack of action in the "too big to fail" and systemically important financial institutions area one year into the Obama administration.
04/21/2009
Regulatory reform proposals and other actions taken in the first 6 months still leave many banking and financial nstitutions that are too big to fail. Consolidations of banks have actually increasd their size. The dangers in additional bailout assistance if banks suffer huge losses.
Grouped Articles
GE Capital, AIG to Get More Government Oversight
Wall Street Journal 07/09/2013
Weâre All Still Hostages to the Big Banks
New York Times 08/25/2013
Wall Street Journal 05/01/2013
Economists Seek Breakup of Big Banks
Wall Street Journal 04/21/2009
Banks Need Fewer Carrots and More Sticks
Wall Street Journal 05/07/2009
What Does the Market Focus on After the Stress Tests?
Wall Street Journal 05/07/2009
Goldman Sachs CEO Blankfein.
10/10/2009
Goldman and its CEO continue to be unpopular with a public that is unhappy with the government help to the banks. Large bonuses make the situation even worse.
Grouped Articles
Goldman Bets Less and Takes Hit
Wall Street Journal 07/20/2011
Wall Street Journal 07/23/2013
Senior Executives at Goldman Had a Role in Mortgage Unit
New York Times 04/18/2010
Wall Street Journal 04/20/2010
Exit Shows Blankfein Still Rows Goldman
Wall Street Journal 10/22/2013
A Moot Effort to Burnish the Reputation of Goldman Sachs
New York Times 10/23/2013
JP Morgan Chase
10/17/2009
Grouped Articles
Bailout Helps Fuel a New Era of Wall Street Wealth
New York Times 10/17/2009
J.P. Morgan Chase: Low Interest Rates Will Hurt
Wall Street Journal 02/15/2011
New York Times 04/11/2011
Wall Street Journal 04/15/2012
Washington Post 05/12/2012
Red Flags said to Go Unheeded at Chase
New York Times 05/14/2012
The bailout and the Federal Reserve's infusion of cheap money are having unintended effects.
01/20/2009
One impact is that a few securties firms are making large profits even as the smaller banks are failing, banks like Citigroup and Bank of America are suffering losses, and the banks that were "too big to fail" are actually becoming larger. The Fed's infusion of money is not helping small and medium sized businesses with credit, as the smaller banks that lend to these businesses -as Ms. Lee points out- are not getting credit and are laying off people. This is setting off a vicious cycle of shrinking employment and shriking consumer demand.
Grouped Articles
How the Fed Can Avoid the Next Bubble
Wall Street Journal 10/06/2009
Recession Spells End for Many Family Businesses
Wall Street Journal 10/06/2009
Taking the National Debt Seriously
Wall Street Journal 10/12/2009
Steven Pearlstein - Don't Reinflate the Old Bubbles
Washington Post 10/14/2009
Financial-Services Regulation Fuels Tiff
Wall Street Journal 10/14/2009
That Promised Financial Reform
New York Times 10/14/2009
Geithner's close contacts with Goldman, Chase, Citigroup and BlackRock.
01/02/2009
Grouped Articles
New York Times 05/16/2010
A Conflict in Geithner's New Job- Not Exactly
New York Times 11/18/2013
Obama, Geithner Get Low Grades From Economists
Wall Street Journal 03/11/2009
New York Times 04/01/2009
Geithner's Plan: Loopholes Galore
BusinessWeek 04/01/2009
Book Review: 'Stress Test' by Timothy F. Geithner
Wall Street Journal 05/12/2014
Goldman Sachs analysts marketing its products and providing research- in dual roles.
10/14/2009
Is Goldman promoting another bubble and investments of speculative nature, when investments in the nation's future, in infrastructure, technology and other productive investment is badly needed to secure America's future?
Grouped Articles
Steven Pearlstein - Don't Reinflate the Old Bubbles
Washington Post 10/14/2009
Goldman's Soft Sell: Its Warm, Fuzzy Side
Wall Street Journal 10/15/2009
Bailout Helps Fuel a New Era of Wall Street Wealth
New York Times 10/17/2009
New York Times 10/24/2009
New York Times 11/11/2009
BlackBerry Readies iPhone Challenge
Wall Street Journal 08/03/2011
Morgan Stanley.
10/17/2009
Grouped Articles
Bailout Helps Fuel a New Era of Wall Street Wealth
New York Times 10/17/2009
Morgan Stanley Returns to a Profit
New York Times 10/22/2009
Charlie Rose Talks to John Mack
BusinessWeek 01/27/2011
Morgan Stanley Retools as Profit Drops
Wall Street Journal 04/22/2011
Morgan Stanley Struggles to Get Into Gear
Wall Street Journal 04/22/2011
Mitsubishi Deal Aids Morgan Stanley's Recovery
New York Times 04/22/2011
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