6 Responses to Too Big to Fail

  1. Cha Annie says:

    This was a fantastic read! Learnt SO much in such little time, yay haha!

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  2. toritto says:

    Hi Annie – glad you liked. Thanks for reading and commenting. Come again! 🙂
    Regards

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  3. The late investigator Sherman Skolnick researched the demise of Continental Bank – and its links to the Vatican and the Mafia – shortly after its demise. He blames the run on Continental on their failure to repay a $20 billion debt to the Japaneze Yakuza: http://www.skolnicksreport.org/popes3banks.html

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    • toritto says:

      Hi Doc – The immediate cause for the insolvency and liquidation of Continental was it’s inability to continue funding itself in the inter-bank money markets. It’s stable deposit base was insufficient (due primarily to the fact that Illinois was a “unit” bank state) therefore it took “deposits” everyday from other banks, foreign and domestic, which had excess deposits. This was all “hot” money – it was available so long as your credit was outstanding and the rates were right. When Continental began losing money due to it’s terrible loans purchased from Penn Square Bank the hot money was no longer available. Continental had to borrow big time from the Fed and that’s something you can’t do too often. The Fed closed Continental down, put together a syndicate headed up my Morgan to continue the funding while the good assets and retail deposits were sold off. No doubt Continental owed Japanese banks and other Japanese depositors tens of millions (none covered by FDIC) but they all eventually got their money.

      The Vatican had (and still has) a real bank – Instituto per le Opere di Religione – the Institute for the operation of religion. It was private and accountable to no one except the cardinals. The CIA used it regularly to fund the Solidarity movement in Poland. The financial advisor to IOR was Michele Sindona , Chairman of Franklin National Bank. When Franklin collapsed due to fraud the Vatican Bank probably lost Sterling 20 million. The Vatican Bank was also involved in the collapse of Banco Ambrosiano in Milan through Roberto Calvi, found hanging under a bridge in London. Calvi was a member of P2 “Propaganda Due” – a secret organization of mostly neo-fascists including Silvio Berlusconi in his younger days. P2 was uncovered during the investigation of Calvi’s death. But hey – that’s for another post! Regards.

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  4. Aquileana says:

    Such an interesting and well document post, dear Toritto… I totally agree when you say at the end that In the government should seize those that can’t meet their obligations and take them through bankruptcy in order to sell off the viable pieces.
    Also the auto regulation seems a logical and thus effective tool!.
    By the way, I nominated you for a Black Blogger Award. You can check out the nomination at the end of this post: https://aquileana.wordpress.com/2014/10/16/greek-mythology-phaeton-helios-son/
    Thank you and best wishes to you, Aquileana 😀

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  5. Pingback: The Six Too Big to Fail Banks in the U.S. Have 278 Trillion Dollars of Exposure to Derivatives | An Outsider's Sojourn II

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