Whoa there White House horsey

OK lets see if that embeds its self into the blog.  What is the vid about? you ask.  Well its about the bank bailout, financial reform bill and you.  


First off it starts with the line that goes something like this, "if you bought your home at the top of the market, you had to read and sign "complicated" mortgage documents before you got keys to the house.  These "unintelligible" docs came from the "big" banks".  Well no they didn't.  The docs came from the shadow banking system.  The big banks bought the mortgages from these shadow banks (they are called shadow banks because they are outside the normal deposit/investment/commercial type banking establishment), packaged them up and sold the cash flow to others (pension funds, retirement funds, endowments, etc.).  Now it took time to match and package these loans into larger chunks of gooeyness, so when the music stopped, the big banks held mortgages that quickly declined in value and thus quickly destroyed the balance sheet of the banks.  So because I couldn't afford the  million dollar house on my field hand wage and the "big" banks had "complicated" (I have yet to see any mortgage document that doesn't spell out the terms of the contract in high school english) language in the mortgage contract, its now not my fault for signing a contract that I apparently couldn't understand.  Woo Hoo, off scott free again.


Now don't get me wrong, I'm all for less complicated ways of communicating ideas.  The part about simplifying the language of credit cards, student loans, etc. is defiantly a step forward, but when does the part about ending financial naiveté start.

The next part "banks will be prevented from growing so large that they put the entire economy at risk if they were to fail".  Um no.  I'm no math whiz, but what I see happening now and then is that the dangerous banks got bigger after the bailout, and this legislation does nothing to change that. JPMorgan + Bear Sterns = bigger, Bank of America + Countrywide Financial(shadow bank) + Merrill Lynch = bigger.  No where in the prostituted financial reform bill did it address the breakup of these government sponsored shotgun weddings.  In fact, the bailouts gave a competitive advantage to the TBTF banks by conferring that moniker upon them.  By being TBTF you no longer have to worry about risk, profits, customer service, etc.  All you need to focus on is getting bigger so that you become even more integrated in main street economies and more likely to be bailed out further down the road.


And finally you can rest easy by knowing nothing you did (even though the house payments constituted 120% of your monthly income) is your fault.  "you can rest a little easier knowing that your home, your family and your future will be protected from the irresponsibility of others."  When you repeat the "others" be sure to look in the mirror America.