SUBSCRIBE TO OUR FREE NEWSLETTER
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
5
#000000
#FFFFFF
To donate by check, phone, or other method, see our More Ways to Give page.
Daily news & progressive opinion—funded by the people, not the corporations—delivered straight to your inbox.
On Monday, Bank of America (BofA) stocks briefly traded for under $5. Yes, you could buy a share of BofA for less than the noxious debit card fee they tried to force down your throat.
BofA is massive, with assets equivalent to 15 percent of U.S. GDP. So why is it trading for the price of a latte?
Because Wall Street's dirty little secret is that BofA is a zombie bank. Now the reek is getting too strong to ignore.
In 2008-2009, BofA publicly took $45 billion in TARP bailout funds and secretly took another $91 billion in emergency Federal Reserve loans. According to Bloomberg News, it made $1.5 billion in profits off of those loans. Yet, several analysts predict that BofA is woefully short of capital reserves.
A recent study by NYU's Stern School of Business ranks BofA as the most systemically risky firm in the United States. These analysts use public information and focus on the capital shortfall that would be experienced by the bank in the event of another crisis. BofA's weak condition means it is a position to "create or extend" such a crisis.
As if this were not enough, recent news reports indicate that BofA is trying to move $22 trillion in derivatives out of its Merrill Lynch subsidiary into its FDIC-insured bank. The Fed favors the move (naturally). The FDIC, which provides insurance to depositors if a bank fails, does not.
In this pile of derivatives, could be all sorts of problems including bad European debt, the same kind of debt that brought down Jon Corzine's derivatives firm, MF Global. Taxpayers don't backstop MF Global. We do backstop BofA through the FDIC and the Fed.
While public rage focused on the $700 billion TARP bailout bill at the height of the crisis, we have learned that far more went out the door from the Fed to aid the big banks. The Center for Media and Democracy tallies the bailout at$4.7 trillion under 35 federal programs. Bloomberg News puts the number closer to $7.7 trillion in loans plus guarantees, which generated $13 billion in profits for the banks.
With European Union countries teetering on the verge of default and no resolution in sight, the U.S. government needs to take decisive action to prevent another bailout of a major American firm - a move sure to generate explosive controversy in an election year.
When President Obama signed the Dodd-Frank Wall Street reform bill in 2010 he promised: "It will end taxpayer bailouts of Wall Street firms."
Yet, the "resolution authority" included in the Dodd-Frank Wall Street reform bill requires a joint decision by a group of bank regulators to break up a systemically risky institution. Bank regulators, like Tim Geithner and Ben Bernanke, who strongly prefer zero accountability and unlimited bailouts.
While some on Wall Street frame the financial crisis as events of the distant past, the 99% understand that crisis hasn't ended for millions of Americans out of work. It hasn't ended for small businesses who can't get credit. It hasn't ended for the millions of Americans facing foreclosure. And now we learn that a new bailout of BofA could be in the works.
We learned from Ron Suskind's new book Confidence Men that President Obama ordered the breakup of Citibank at the height of the crisis, but was stonewalled by Tim Geithner. The President's instincts were good. Now he has an opportunity for a redo.
Most American's have had it with bailouts of the big banks on Wall Street when so little has been done for Main Street. Banks that are "too big to fail" are too big to exist.
Tell President Obama, it's time to break up BofA before it breaks us.
Donald Trump’s attacks on democracy, justice, and a free press are escalating — putting everything we stand for at risk. We believe a better world is possible, but we can’t get there without your support. Common Dreams stands apart. We answer only to you — our readers, activists, and changemakers — not to billionaires or corporations. Our independence allows us to cover the vital stories that others won’t, spotlighting movements for peace, equality, and human rights. Right now, our work faces unprecedented challenges. Misinformation is spreading, journalists are under attack, and financial pressures are mounting. As a reader-supported, nonprofit newsroom, your support is crucial to keep this journalism alive. Whatever you can give — $10, $25, or $100 — helps us stay strong and responsive when the world needs us most. Together, we’ll continue to build the independent, courageous journalism our movement relies on. Thank you for being part of this community. |
On Monday, Bank of America (BofA) stocks briefly traded for under $5. Yes, you could buy a share of BofA for less than the noxious debit card fee they tried to force down your throat.
BofA is massive, with assets equivalent to 15 percent of U.S. GDP. So why is it trading for the price of a latte?
Because Wall Street's dirty little secret is that BofA is a zombie bank. Now the reek is getting too strong to ignore.
In 2008-2009, BofA publicly took $45 billion in TARP bailout funds and secretly took another $91 billion in emergency Federal Reserve loans. According to Bloomberg News, it made $1.5 billion in profits off of those loans. Yet, several analysts predict that BofA is woefully short of capital reserves.
A recent study by NYU's Stern School of Business ranks BofA as the most systemically risky firm in the United States. These analysts use public information and focus on the capital shortfall that would be experienced by the bank in the event of another crisis. BofA's weak condition means it is a position to "create or extend" such a crisis.
As if this were not enough, recent news reports indicate that BofA is trying to move $22 trillion in derivatives out of its Merrill Lynch subsidiary into its FDIC-insured bank. The Fed favors the move (naturally). The FDIC, which provides insurance to depositors if a bank fails, does not.
In this pile of derivatives, could be all sorts of problems including bad European debt, the same kind of debt that brought down Jon Corzine's derivatives firm, MF Global. Taxpayers don't backstop MF Global. We do backstop BofA through the FDIC and the Fed.
While public rage focused on the $700 billion TARP bailout bill at the height of the crisis, we have learned that far more went out the door from the Fed to aid the big banks. The Center for Media and Democracy tallies the bailout at$4.7 trillion under 35 federal programs. Bloomberg News puts the number closer to $7.7 trillion in loans plus guarantees, which generated $13 billion in profits for the banks.
With European Union countries teetering on the verge of default and no resolution in sight, the U.S. government needs to take decisive action to prevent another bailout of a major American firm - a move sure to generate explosive controversy in an election year.
When President Obama signed the Dodd-Frank Wall Street reform bill in 2010 he promised: "It will end taxpayer bailouts of Wall Street firms."
Yet, the "resolution authority" included in the Dodd-Frank Wall Street reform bill requires a joint decision by a group of bank regulators to break up a systemically risky institution. Bank regulators, like Tim Geithner and Ben Bernanke, who strongly prefer zero accountability and unlimited bailouts.
While some on Wall Street frame the financial crisis as events of the distant past, the 99% understand that crisis hasn't ended for millions of Americans out of work. It hasn't ended for small businesses who can't get credit. It hasn't ended for the millions of Americans facing foreclosure. And now we learn that a new bailout of BofA could be in the works.
We learned from Ron Suskind's new book Confidence Men that President Obama ordered the breakup of Citibank at the height of the crisis, but was stonewalled by Tim Geithner. The President's instincts were good. Now he has an opportunity for a redo.
Most American's have had it with bailouts of the big banks on Wall Street when so little has been done for Main Street. Banks that are "too big to fail" are too big to exist.
Tell President Obama, it's time to break up BofA before it breaks us.
On Monday, Bank of America (BofA) stocks briefly traded for under $5. Yes, you could buy a share of BofA for less than the noxious debit card fee they tried to force down your throat.
BofA is massive, with assets equivalent to 15 percent of U.S. GDP. So why is it trading for the price of a latte?
Because Wall Street's dirty little secret is that BofA is a zombie bank. Now the reek is getting too strong to ignore.
In 2008-2009, BofA publicly took $45 billion in TARP bailout funds and secretly took another $91 billion in emergency Federal Reserve loans. According to Bloomberg News, it made $1.5 billion in profits off of those loans. Yet, several analysts predict that BofA is woefully short of capital reserves.
A recent study by NYU's Stern School of Business ranks BofA as the most systemically risky firm in the United States. These analysts use public information and focus on the capital shortfall that would be experienced by the bank in the event of another crisis. BofA's weak condition means it is a position to "create or extend" such a crisis.
As if this were not enough, recent news reports indicate that BofA is trying to move $22 trillion in derivatives out of its Merrill Lynch subsidiary into its FDIC-insured bank. The Fed favors the move (naturally). The FDIC, which provides insurance to depositors if a bank fails, does not.
In this pile of derivatives, could be all sorts of problems including bad European debt, the same kind of debt that brought down Jon Corzine's derivatives firm, MF Global. Taxpayers don't backstop MF Global. We do backstop BofA through the FDIC and the Fed.
While public rage focused on the $700 billion TARP bailout bill at the height of the crisis, we have learned that far more went out the door from the Fed to aid the big banks. The Center for Media and Democracy tallies the bailout at$4.7 trillion under 35 federal programs. Bloomberg News puts the number closer to $7.7 trillion in loans plus guarantees, which generated $13 billion in profits for the banks.
With European Union countries teetering on the verge of default and no resolution in sight, the U.S. government needs to take decisive action to prevent another bailout of a major American firm - a move sure to generate explosive controversy in an election year.
When President Obama signed the Dodd-Frank Wall Street reform bill in 2010 he promised: "It will end taxpayer bailouts of Wall Street firms."
Yet, the "resolution authority" included in the Dodd-Frank Wall Street reform bill requires a joint decision by a group of bank regulators to break up a systemically risky institution. Bank regulators, like Tim Geithner and Ben Bernanke, who strongly prefer zero accountability and unlimited bailouts.
While some on Wall Street frame the financial crisis as events of the distant past, the 99% understand that crisis hasn't ended for millions of Americans out of work. It hasn't ended for small businesses who can't get credit. It hasn't ended for the millions of Americans facing foreclosure. And now we learn that a new bailout of BofA could be in the works.
We learned from Ron Suskind's new book Confidence Men that President Obama ordered the breakup of Citibank at the height of the crisis, but was stonewalled by Tim Geithner. The President's instincts were good. Now he has an opportunity for a redo.
Most American's have had it with bailouts of the big banks on Wall Street when so little has been done for Main Street. Banks that are "too big to fail" are too big to exist.
Tell President Obama, it's time to break up BofA before it breaks us.