The same banks that hold the derivatives hold the largest municipal deposits. And the collateral? It has been "re-hypothecated" -- meaning pledged and re-pledged down the chain of Wall Street's derivative deals. And when the music stops, the municipalities that thought they had a claim on that collateral will be standing in a long line, for a long time, in bankruptcy court, fighting for pennies on the dollar.
I said this catastrophe is inevitable, but perhaps not. We will know soon. When the Congress reconvenes it can take the first step to protect the financial security of the American people, by repealing the back door bail out it enacted in December.
It was a close vote, in the House especially, 219 for Wall Street and 206 for Main Street, a matter of changing seven votes.
And some brave souls in the Congress do want to make that fight. Republican and Democratic senators from Massachusetts, Connecticut, New Jersey, West Virginia, Louisiana, Ohio, Michigan, Washington State and Oregon took to the Senate floor in outrage.
Congressman Kevin Yoder is the Wall Street errand boy from Kansas who slipped the back door bail out language into the "Cromnibus" spending bill; language written by a Citicorp lobbyist, as reported by the New York Times and Mother Jones. It may have been hidden from the view of the American people, but in was in plain sight to members of Congress.
Yoder got pummeled by Kansas newspapers and constituents posting on his Facebook page. One called Yoder the "lowest of the low" and added, "Hope you burn in hell." Another called Yoder "one greedy immoral coward."
Gotta love Kansas. Direct.
So we shall soon see once for all whose side Congress and the administration are on, Wall Street or Main Street, and if those elected to serve have even a clue what course Wall Street is on.
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