Is Capitalism too big to fail? Because that should be the question, not are big banks too big to fail? All the previous administrations and now Obama and his administration have already answered that question and the answer is yes, the biggest banks and insurance and investment conglomerates ARE too big to fail because they’ve been bailed out once too many times and are now going back to business as usual, even making bigger gambles then they previously have.

In the current financial climate the big are getting bigger, the weak are getting weaker and non-banks without strong ties to a depository should consider buying one, partnering with one, or getting out of the business because today two mega-banks, BOA and Wells Fargo both now have a 20% share of the origination and servicing of loans market and could have over half of it by the end of next year. Both banks combined in the second quarter of this year to own 42% of the market; using loan brokers to help boast that number. These banks are both too big to fail and they know it and they are both warehouse lenders and know that if they stop warehouse funding, the majority of small mortgage banks and brokers will either go out of business or be swallowed up by one of these two coming conglomerates. Both these giants are lenders and servicers of their own loans and are so enormous that they take little risk to begin with and no risk when the government bailout program is factored in. They will not soon just run America they will BE America.

Can we learn anything from history: I say yes and the face of free-market Capitalism today is Henry Paulson or Dick Cheney; take your pick. Both men are reported to have holdings approaching a billion dollars and both men used government as much as they possibly could to further enrich themselves; Cheney, the CEO of Halliburton garnered all the government contracts for his company and this is the same company that Gerry-rigged faulty electrical conduits that electrocuted more than one soldier in Iraq; all because of their hiring electricians who weren’t really electricians and paying them less. Paulson worked for Goldman/Sachs for 32 years and was the one who bailed them out and also AIG, which profited Goldman to the tune of $13 billion dollars.

NEW YORK – Aug. 10, 2009 – A February survey of 1,300 real estate agents by Campbell Communications reveals that only 23 percent of short sales close, and over 90 percent of respondents blame lenders for delaying the process.

US banks stand to collect a record $38.5bn in fees for customer overdrafts this year, with the bulk of the revenue coming from the most financially stretched consumers amid the deepest recession since the 1930s, according to research. The fees are nearly double those reported in 2000.

“Banks are returning to a fee-driven model and overdraft fees are the mother lode,” said Mike Moebs, the company’s founder. Banks say that the fees compensate for the risk they incur when they pay on behalf of customers who do not have enough money in their accounts.
“Overdraft fees are there for a reason, we take on a lot of risk,” a senior banker said. “It’s a service to our customers, they want us to pay their overdrafts.” A LOT of risk? Someone double-dipping the last $6.95 in their bank account at Starbucks is not the same sort of risk as loading up on exotic financial instruments which eventually imploded on all of them now is it? I may be sketchy on the details but I seem to recall the taxpayer having to cover that risky little venture for the big investment banks, hedge funds and Wall Street brokers?

Let's say you have $50 left in your account and know you are going to be paid in two days. You write three different checks for $15, $25, and $100. The bank can choose to clear the $100 check first - instead of the $15 and $25 checks first, which would leave you with only one overdraft fee and (-$60) - and levy two overdraft fees against you.
This has been standard practice for banks, of course, and they defend the behavior saying customers prefer it this way. Huh? Apparently larger checks, like mortgage payments, are more important than littler fees racked up at the local convenience store.

In a complaint filed in Manhattan, the SEC alleges that BofA told investors in proxy documents related to the Merrill acquisition that Merrill agreed it wouldn’t pay discretionary bonuses without BofA’s consent. In reality, though, the SEC said BofA had already
“contractually authorized” Merrill to pay $5.8 billion in bonuses, which
would seem to contradict Lewis’ testimony in Congress in February 2009, shortly after the deal was finalized: “They were a public company until the first of the year,’” he said, speaking of Merrill. “They had a separate board, separate compensation committee, and we had no authority to tell them what to do just urged them what to do.”
The implication is that Lewis was powerless to control Merrill’s bonuses payouts.

More recently, Lewis told Congress that he had felt pressure from Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke to complete the deal last winter, despite his concerns that Merrill’s fourth-quarter losses were much greater than he had first anticipated. Again, Lewis spread the blame for a deal that cost BofA shareholders billions in losses and led to $20 billion taxpayer bailout.
If these are the faces of market Capitalism today, brother, please, I’d like to try Democracy out; for a change, y’know? Oh well … just sayin’ … and may the angels protect you, your neighbors respect you, trouble neglect you and heaven accept you.