Moody's Investors Service downgraded Bank of America's long-term credit ratings Sept. 21, cutting both the holding company and the retail bank two notches apiece. The holding company fell to Baa1, the third-lowest investment-grade rank, from A2, while the retail bank declined to A2 from Aa3....So the free market isn't really "free." Wall Street depends upon hard-working Americans to keep them from the negative results of taking bad risks in an effort to turn large profits and big bonuses. If you own a small business and take such risks and they fail, you go bankrupt. If you run a Wall Street bank "too big to fail," average Americans cover your losses. Call it Wall Street socialism.
Bank of America's rating is now four grades below the one Moody's assigned to JPMorgan Chase & Co. (JPM), the biggest U.S. bank by deposits at midyear, and a level below the rating given to Citigroup Inc. (C), the third-biggest. Bank of America is the only U.S. lender that lacks a rating of A3 or higher among the five firms listed by the Office of the Comptroller of the Currency as having the biggest derivatives books.
Ominously, in regards to that $75 trillion dollars that we are now backing with our dollars, a Reuters columnist recently wrote a commentary headlined, "Is Bank of America preparing for a Chapter 11?"
It would be great to go to Vegas and have all your gambling debts covered by the house. That's the Wall Street way - and the US government is the house.
The taxpayers are holding up Wall Street, not the other way around.
Mark Karlin
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