The
answer is shocking. The $26 trillion was
little more than a temporary gasp for air by companies that are still drowning
in debt but which continue to gamble
recklessly in the derivatives market.
Thanks
to deregulation, such as the
repeal of the Glass-Steagall act, these institutions were allowed to
hold just one dollar in the bank while they gambled in the derivatives market as
if they had 5, 10, or even 30 dollars to backstop every hundred dollars of
loans and gambling.
To
put it into a kind of personal perspective, if you had ten thousand dollars in
your checking account, you would suddenly become a millionaire if you could
leverage it (borrow additional funds at 0% interest) at the "100X" rate for
each dollar in your account.
Conclusion:
These financial institutions have manipulated and abused "the system" in
a way that allowed them to do casino gambling on a global scale -- with hundreds
of billions of dollars of public money. And this reckless gambling, with public
money, continues to this day.
Reference article from which most of the statistics,
reasoning and links in this article were taken.
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