Banks Look for Next Bailout Via Obama Executive Order

Wednesday, 03 Sep 2014 08:14 AM

By Patrick Watson

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
Vladimir Putin may have just handed American bankers their next bailout opportunity. Alleged Russian hack attacks on JPMorgan Chase (JPM) are giving bankers the excuse they need to demand yet more of your tax dollars.

An Obama executive order could authorize a multi-billion dollar bank bailout within weeks — a bailout so cleverly disguised that most Americans will never notice. Our Congress certainly won't stop it, either, but I can tell you how it will unfold.

Vote Now: Do You Approve Or Disapprove of President Obama's Job Performance?

Two months ago the Securities Industry and Financial Markets Association (SIFMA) engaged retired National Security Agency Director Keith Alexander to "consult" with the trade group on cybersecurity matters. I said at the time that Alexander's main job would be to divert taxpayer money toward covering what should be normal overhead costs for the banks.

Their logic is that top banks are so critical to the American economy, yet so exposed to cyberattacks, that protecting the banks is essential to the national defense. All they needed was an example. Now they have one.

We don't know for sure if last month's attack on JPMorgan originated in Russia, but Russia is a perfect villain for the dramatic steps that bank lobbyists want Congress to take. Consider this quote from Edward DeMarco, general counsel of the Risk Management Association, a professional group of the banking industry.

"I can't foresee a situation where the president wouldn't do something via executive order," DeMarco said, according to Bloomberg. "All we're talking about is the difference between the destruction of tangible property and intangible property."

Ah, yes. "All we're talking about," according to Mr. DeMarco, is a statute duly passed by Congress that is now the law of the land. He wants this law changed by an Obama executive order, in the unlikely event Congress fails to do his industry's bidding.

We think of Wall Street bankers as swashbuckling risk takers. They are actually quite the opposite. Top bankers become wealthy by transferring their risks to unwary people who don't understand what they are buying.

The insurance industry has hiked the rates for cyber terrorism insurance to a level Wall Street doesn't want to pay. To reduce this cost, the bankers seek to amend the Stafford Act, which governs the Federal Emergency Management Agency's disaster insurance programs. FEMA presently covers only "tangible" property losses. Bank profits don't qualify.

Should U.S. taxpayers have to rebuild beachfront mansions owned by people who knew a hurricane would strike someday? I don't think so — nor should taxpayers protect banks looted by hackers.

Alert: IRS Insider Reveals How to Save as Much as $355,000

The bankers who freely chose to build systems vulnerable to cyberattacks are big boys. They can pay their own security costs and buy their own insurance. If they don't like the price tag, they should find another business. What they should NOT do is stick taxpayers with the bill yet again.

© 2014 Moneynews. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

MercBloc's Dicker: Oil 'On Its Way to $140' a Barrel

Wednesday, 01 Oct 2014 18:59 PM

U.S. crude oil prices fell to a 17-month low Wednesday at $90.73, but Dan Dicker, president of money manager MercBloc an . . .

Dow Falls 238 Points as Airline Shares Sink

Wednesday, 01 Oct 2014 13:10 PM

U.S. stocks declined, with the Russell 2000 Index approaching a correction, amid concern over weaker economies in Europe . . .

Airlines in Contact with Government About Ebola Concerns; Stocks Fall

Wednesday, 01 Oct 2014 15:26 PM

Several leading U.S. airlines said on Wednesday they were in close contact with federal health officials about Ebola-rel . . .

Most Commented
Top Stories

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved