Arkansas Bank Not "Too Big To Fail"
Rumors continue to swirl that First Southern Bank of Batesville has purchased fradulent securities. When Goldman Sachs or JP Morgan Chase do that, they take them to the Fed's discount window and exchange them for cash or Tbills, possibly at or near face value. Not so the smaller banks. They have to pay for their mistakes, whereas the big NY banks that are cozy with the government simply dump their bad bets on the taxpayers via the Fed. The Federal Reserve is shaping up to be a shell corporation where the banks can trade their bad stuff for good stuff, ultimately at the expense of the taxpayers.
If the report is true, First Southern is in trouble.
If the report is true, First Southern is in trouble.
posted by Mark Moore (Moderator) at Sunday, December 05, 2010
1 Comments:
The Batesville Guard reported yesterday that First Community Bank of Batesville loaned Kevin Lewis close to $2 million, apparently with the bogus bonds as collateral, although one loan was secured by a Lexus, and another may have been secured by other vehicles. My question is, if the Lexus was paid for - why would Lewis need a loan on it? And if it wasn't paid for, why didn't the bank catch the earlier lien on it? As to the bonds, I'm wondering how difficult it is to verify their validity. Is it so difficult that the bank couldn't make a few phone calls, or doing a little digging/checking to find out?
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