Big Banks Risking Your Financial Wellbeing (With Republican Help, Of Course)

With all the shiny objects to distract during the current reign of error, it's often the actions that largely go unnoticed that end up being the most damaging.  The Washington Post has another example this morning of the unholy alliance between Republicans, the banking industry and its "regulators" that began disassembling protections intended to avoid a repeat of the 2008 economic meltdown.  See if you notice a few familiar names:

Actions by federal regulators and Republicans in Congress over the past two years have paved the way for banks and other financial companies to issue more than $1 trillion in risky corporate loans, sparking fears that Washington and Wall Street are repeating the mistakes made before the financial crisis.

The moves undercut policies put in place by banking regulators six years ago that aimed to prevent high-risk lending from once again damaging the economy.

Now, regulators and even White House officials are struggling to comprehend the scope and potential dangers of the massive pool of credits, known as leveraged loans, they helped create.

Goldman Sachs, Wells Fargo, JP Morgan Chase, Bank of America and other financial companies have originated these loans to hundreds of cash-strapped companies, many of which could be unable to repay if the economy slows or interest rates rise.

“This means that the next downturn that we have could be more serious and longer-lasting and more difficult to deal with than it would have been if we had constrained these practices,” former Federal Reserve chair Janet L. Yellen said in an interview. 

Not to worry, though!  Those Masters of the Universe mentioned above -- who're playing with other peoples' money after all -- are doubtless comforted by recent history that they'll be bailed out (and golden parachutes for all!) should the economy tank and their loans default.  The Trumpists' near- sighted goal was to deregulate the Obama- era safeguards in order to "juice the economy." But even the Republican enablers don't really have a clue what the full impact of the banks' risk- taking might be:

Some former regulators have noted an eerie parallel between the subprime mortgage crisis and the leveraged-loan buildup. In the 2000s, banks and other finance companies took risky loans — certain mortgages — and packaged them into products that were sold off to investors. Financial companies also made other exotic instruments, known as collateralized debt obligations, tied to those securities. The products entangled financial companies with one another, allowing weak institutions to pull down stronger institutions when the value of these products cratered.

Today, regulators say they don’t have a firm grip on what the impact will be when the economy weakens or enters a recession.

In a regime rife with incompetents and crooks, you can be assured that they're never going to get "a firm grip" on this.  Meanwhile, the Masters of the Universe will use the opportunity to continue their short- sighted practices, knowing that the rotted out Republican Party shares their belief that sheep live to be fleeced.

We'll see if House Financial Services Committee Chair Maxine Waters (D-CA) will pursue this issue at an April 10 hearing with some of the aforementioned institutions.