Larry Summers Opens Mouth, Proves All His Critics Are Correct
Courtesy of Tyler Durden, Zero Hedge
Larry Summers, whose days in the Obama administration are thankfully numbered, presents the most incoherent rambling defense of our monopoly banking system, yet to appear in the public domain. When asked if US mega banks should be broken up, reports the HuffPo, "Summers said no. He added that it’s not significant. But that’s not the important issue," Summers said during the interview, adding to his answer as to why the U.S. shouldn’t break up megabanks. "[Observers] believe that it would actually make us less stable, because the individual banks would be less diversified and, therefore, at greater risk of failing, because they would haven’t profits in one area to turn to when a different area got in trouble. And most observers believe that dealing with the simultaneous failure of many — many small institutions would actually generate more need for bailouts and reliance on taxpayers than the current economic environment."
We dare you to reread the above from Larry the Hutt and not have your frontal lobe disintegrate into antimatter. Sure, 4 out of 5 Goldman CDO traders totally agree that Goldman’s monopoly in the capital markets is terrific, and, in fact, if someone could "organize" a liquidity event at RBC, Barclays, UBS and CS, they would really apprciate it, doubly so if, like JPM, they could then acquire the firms for a dollar over their Fed guaranteed debt. As for everybody else, well, if you have any doubt that Larry Summers is having his future personal assistant organizing his corner office at 200 West, we hope this should resolve it.
Yet there may still be hope that not all of America is run by corrupt demagogues. HuffPo writes:
A bill championed by Democratic Senators Ted Kaufman of Delaware, Sherrod Brown of Ohio, Robert P. Casey of Pennsylvania and Sheldon Whitehouse of Rhode Island proposes to break up financial behemoths. Observers say the proposal is gaining steam.
A test vote in the Senate Budget Committee on Thursday, which essentially would have expressed support for breaking up megabanks, failed by just a 12-10 vote. The small margin was surprising, one Senate aide said.
HuffPost posed the following questions, which were based on Summers’s remarks, to the White House:
– Does Mr. Summers and/or the administration wish to see a Canadian-style banking system in the U.S. in which a handful of firms dominate the market in exchange for tougher oversight?
– Does Mr. Summers and/or the administration believe that larger institutions pose less risk to the financial system, due to their diversity?
– And for clarification’s sake, how does "the simultaneous failure of many — many small institutions…actually generate more need for bailouts and reliance on taxpayers than the current economic environment"?
In response, an administration spokesman e-mailed the following statement:
"The Administration has made clear its commitment to comprehensive Wall Street reform. The Administration’s approach to ending Too Big To Fail includes stronger, more comprehensive regulation, higher capital requirements, new resolution authority to allow failing firms to fail, and restrictions on the size and scope of financial institutions. We cannot and will not go back to the status quo that caused the financial crisis."
Once the ponzi blows up, we hope that all those "representatives" who voted against Kaufman’s bill will have long since moved to non-extradition countries. For their sake.
Fast Forward to the 4:34 mark in the video below:
Photos courtesy of Jr. Deputy Accountant
