“We’re not that fussed about safety because, if we have an accident, it’s you who pays”
The $700 billion bailout of the banks in 2008 is the most grotesque example of the how the financial system has been consistently shielded from its mistakes while citizens have paid the price of those same mistakes. Despite the narrative we all hear from the Obama Administration about how successful the bailout was and how it will never need to happen again, the truth is different: the bailout didn’t work, it’s still going on, and it’s making things worse.
In this chapter we’ll investigate how the bailout was intended to work, why the outcome wasn’t even close to what was promised, and how the bailout morphed into our current system: the continual drip-feed of taxpayer money and obligation to an increasingly unstable financial system, a system that is, in many ways, more dysfunctional than it was before the financial crisis.
The Bailout Didn’t Work
The Situation at the Time of the Bailout
In the summer of 2008, banks were in full-bore crisis mode, especially when Lehman Brothers was allowed to fail. The extensive interconnectivity of contracts between the banks, as well as the complexity of the legal and financial obligations among so many massive institutions, meant that the failure of the mortgage-backed securities market on the one hand and Lehman, one of the largest players in the mortgage and credit default swap (CDS) markets (see more about CDS’s in the insert entitled CDO’s, CDS’s, and Magnetar Capital), on the other hand, was freezing all sorts of very short-term financing markets, putting all the institutions on the brink of illiquidity and insolvency at the same moment.
What are short-term financing markets and why are they so critical to the financial system? As was explained in The Bankers’ New Clothes , over the past few decades the banks slowly evolved out of many kinds of long-term agreements between each other – on the scale of years or decades – and into short-term agreements – on the scale of days and weeks. This was a way of reducing the presumption of trust and the expectation of long-term solvency among them, and it allowed for more and more risk-taking by each individual bank. The new mindset was something like this: ”I don’t have to trust this bank to be around forever, but it’ll probably survive another week”.
Rather than trying to understand the impenetrable accounting of the big banks (which would be needed for long-term investments), the system evolved to the point of depending crucially on overnight loans and very short-term financing by the time the financial crisis erupted in 2008. Indeed, the entire market hinged upon this fragile system of minimized trust to function, and once it failed, it came completely undone.
It’s still a convincingly terrifying memory to recall: if something wasn’t done immediately, we were at real risk of a situation in which businesses couldn’t meet payroll, so people couldn’t get their paychecks cashed, and possibly couldn’t even withdraw their cash from savings. Since we no longer live in a local community where, by reputation alone, we can borrow or write IOU’s until the system starts up again, this was indeed a menace to the citizens as well as to the politicians in this country. Have no doubt about it: when the Fed or Treasury tells politicians “Do this or the financial system will collapse,” there’s real power behind that.
So the largest private financial institutions may in fact have been too big to let fail entirely, and we were quite right to prevent a very short-term emergency situation as outlined above. However, that doesn’t mean we couldn’t have implemented it in a very different way, a way that was fairer and would have encouraged better conduct in the future. To name a few obvious possibilities:
1. We could have nationalized the banks since there was never any moment when the need for “banking as service” was more obvious. That this was never seriously considered is a testament to how strongly the Bush Administration, and since then the Obama Administration, have trusted the expertise of economists with a passionate belief in the “free market” when it comes to banks, except when bankers need help.
2. Since we are supposedly such free-market thinkers, we could have allowed real losses for the bond-holders of the institutions, which is to say the banks could have defaulted on their loans. Presumably the bondholders knew about the risk they were taking when they bought the debt in the first place. That’s what’s supposed to happen in the free market after all. And yes, some of those bond holders were pension funds, but bailing out pension funds directly would have been more honest, forthright, and palatable than not letting insolvent banks fail. The fact that we didn’t do this is evidence that our free-market ideologies only go so far.
3. At the very least, we could have negotiated a change of management for the banks we were bailing out. We could have fired all of the CEO’s, CFO’s, and CRO’s who got us into these outrageous messes and had them replaced.
We didn’t do any of these things. Why? Because these bankers used to work for the Fed and the Treasury and were being protected by their friends in high places who were orchestrating the bailout.
We didn’t even ask the banks to explain what they were doing with the money. The terms of the bailout were virtually devoid of any accountability.
Whenever you hear someone wax poetic about moral hazard for dead-beat borrowers, people who owe large sums on their credit cards (often through medical debt), or through their mortgages (possibly through predatory loan practices), or through their student debt (quite probably through inflated tuition at a for-profit institution or because the college in question simply had to hire another set of assistant deans), remind that person about the analogous moment in the bailout when dead-beat banks were given money with no strings attached, with no accountability. Where’s the real moral hazard?
Think, for a moment, about why things had come to this. Over a 40 year period we permitted the retail and investment banks to capture a disproportionate piece of our economic lives. They did so with outrageous and unregulated markets in derivatives (see chapter 4), including the overgrown mortgage derivatives market, wild west accounting games played with repos , and enormous interconnected counter-party agreements which inextricably tied each individual institution’s fate to the fate of the larger market. Even the so-called boring and huge money market was at risk of collapse as the Treasury felt compelled to guarantee over $2 trillion in funds..
To make a comparison between banks that played this game and a dead-beat individual, we’d need to create that rare character who had filled out every credit card offer ever mailed to him, had bought and flipped 15 homes and was in the process of doing that with 20 more, and was borrowing student loan money to satisfy a cocaine habit. That’s the type of guy we gave our bailout money to.
How Big Was the Bailout?
The scale of the bailout that banks received is literally incomprehensible. This is painfully evident when we get confused between the words “billion” and “trillion”. Just to have one solid reference point, the total current student debt just surpassed 1.1 trillion dollars, and it also recently surpassed the total credit card debt in this country.
Because the bailout was so massive, it’s difficult to measure how big it ended up being. Given this, we’ll rely on two different sources. According to the New York Times, the total bailout commitment was over $12 trillion, with about $2.5 trillion already spent. 
But let’s be conservative and use the Bloomberg account from August 2011that calculates that the total outflow of the bailout at that time was 1.2 trillion dollars. Numerically, that’s $1,200,000,000,000!
Specifically, the bailout consisted of the $700 billion TARP program, which had an actual outflow of over $605 billion, and which we will describe in the next section, as well as other programs intended to boost lending and to provide emergency “liquidity”.
As the Bloomberg article notes, there were actually six different federal programs intended to keep the private credit markets–which allow for day-to-day financing of the economic system – functioning with taxpayer money in the fall of 2008 after the private lending markets had shut down. While we were being told that the 10 largest financial institutions had borrowed about $160 billion from the Treasury Department, we weren’t being told that the same ten firms were also borrowing an additional $669 billion in emergency funds from the Fed. For example, Morgan Stanley borrowed $107 billion, Citicorp borrowed $99.5 billion, and Bank of America borrowed $91.4 billion.
Almost half of the Fed’s top 30 borrowers were European – not American – firms, including Royal Bank of Scotland, which borrowed $84.5 billion, and UBS AG, which borrowed $77.2 billion. A few European institutions required emergency federal loans from the Fed to stay liquid well into 2010.
Given all of these facts, we’ll make the case that the Financial Sector used the opportunities presented by a crisis of their own making to secure even greater public advantages at taxpayer expense.
What We Said the Bailout Would Be Versus What it Actually Was
TARP was originally voted down by Congress. There wasn’t much support at the time for saving bankers from their own mistakes. Then the market went down by 9% in one day and Congress, under pressure from the Treasury and Fed, capitulated to the banks and approved the $700 billion bailout program.
There were a few stipulations. One of them was to have a Special Inspector General (SIGTARP) in charge of overseeing the allocation of funds and making sure TARP wasn’t defrauded and that the banks were held accountable. The second stipulation was that the banks would only get the first half‒$350 billion–and then they would have to come back for a second Congressional vote to get the second half.
The only real mistake the bankers and their lobbyists made in orchestrating the bailout came when they allowed Neil Barofsky to become the SIGTARP. Barofsky, formerly an assistant district attorney in the Southern District of New York, had just spent years prosecuting cases against Colombian drug lords that resulted in the indictment of the top 50 leaders of the Revolutionary Armed Forces of Columbia (FARC) on narcotics charges, the largest narcotics indictment filed in U.S. history. Barofsky was also a member of the Securities and Commodities Fraud Unit, where he prosecuted white collar crimes, including the accounting fraud case that led to the convictions of the top officers at Refco Inc.
In other words, Barofsky was just too honest and too tough to capitulate to Timothy Geithner, even when Geithner told Barofsky that was his job. In particular, Geithner wouldn’t allow Barofsky to require the banks to explain what they were doing with the bailout money, essentially threatening Barofsky with the “utter collapse of the entire financial system” if he tried.
Neil Barofsky’s book, entitled Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street, was published in July 2012. It is an excellent account of the bailout from the inside. Barofsky explains that when the time came, Congress was reluctant to give Treasury access to the second half of TARP funds unless it was earmarked directly to help people stay in their homes. After all, the “TA” in TARP stands for “Troubled Assets,” and the program was sold to Congress and the public (a) to prop up the mortgage market directly so that the investments people had made in their homes wouldn’t be lost and (b) to renegotiate predatory or unrealistic mortgages directly, so that people could remain in their homes.
One of the first efforts the Obama Administration made towards cleaning up the financial mess was called the Home Affordable Modification Program (HAMP). Sadly, HAMP was nothing more than a token nod towards helping homeowners take advantage of the second half of the TARP money. It has been a failed project, to date only helping 1.1 million people stay in their homes and denying millions more, although the program was originally intended to help 4 million homeowners. Indeed, it is possible that HAMP was more harmful than helpful because of the perverse incentives it created for banks to string homeowners along without ever actually remediating their mortgages.
The way HAMP worked ultimately made more profit for banks if they got desperate homeowners to try to qualify for the program while, at the same time, foreclosing on those same homeowners and accruing fees. Why? Because the fee structure set up through HAMP was perverse: if, at the end of the HAMP application process, a homeowner’s application was denied, the bank got to collect all the accrued late fees. If the application went through, they didn’t.
If this all seems completely crazy, there’s one last kicker: it was intentional. Members of Congress may have been earnest when they said they wanted the second half of TARP to go towards keeping people in their homes, but Geithner, the Treasury Secretary, once admitted to Barofsky that the real goal was to “foam the runway for the banks” (see Barofsky’s Bailout). In other words, he wanted to slow down the entire process for the sake of the banks – ignoring the pain of homeowners entirely.
Specifically, the plan was to compare rates of profit and loss: the profit that banks would make through cheap Fed loans versus the losses that they would realize as they slowly acknowledged the true depleted value of their mortgage-related investments. If they could lower the rate of losses enough, on the one hand, while keeping the rate of profit high on the other, then the banks would never need to go bankrupt. That’s what Geithner’s plan had been all along.
But Didn’t the Banks Return the Money?
Lots of people argue that the bailout “worked” and that the banks paid back the money, so no harm was done.
This is nonsense. We’ve already argued that the bailout was utterly misrepresented to Congress and to the American people, with disastrous consequences for desperate homeowners and millions of people who lost their jobs and are living under the weight of debt while the economists and bankers responsible for this mess are being honored as national heroes.
As for the actual money, it’s true that the largest banks have returned the money, with some interest. But, as it turns out, this comes with a bunch of caveats, and whether or not the banks have returned the money is actually the wrong question to ask. These are the caveats:
1. Many people have argued (sometimes in satire and sometimes with rigorous analysis ) that we didn’t get nearly enough of a return on our investment. In other words, we gave the money to the banks at extremely low interest rates, much like you might loan your daughter money to go to college and tell her to pay it back when she has a good job and can afford it, at little or no interest.
Indeed it would be very difficult to measure the correct level of risk that was present at the time of the bailout and to infer what the appropriate interest rate should have been, because there were simply so few institutions or individuals other than taxpayers that could have lent the money to the banks. Improbably, some combination of China, rich oil guys from the Middle East, and Carlos Slim (the richest man in the world) might have gotten together eventually to loan money to the banks, but they certainly would have charged a lot more interest than we did.
2. Fannie Mae and Freddie Mac haven’t paid back all the money, nor has AIG. So it’s incorrect and unreasonable to say “We got our bailout money back” unless we consider every institution we bailed out.
3. The banks paid back the money primarily for the sake of appearances, and in collusion with Treasury. For the same reason that the so-called “stress tests” have been orchestrated to make it seem like the banks are sturdy and solvent, the banks returned the TARP money in part for PR purposes, to look strong, and in part so they could go back to giving huge bonuses to their risk-takers, which was unacceptable under TARP. So the money was returned before it was actually available – in other words, before the banks could truly afford to pay it back – with the undercover agreement that the bank could always borrow it from Treasury or the Fed again if it were needed.
Given all of this, it’s clear that when people bring up the “They paid back the money” argument, we shouldn’t be talking about the money, we should be talking about the risk.
What really happened when the taxpayers bailed out the banks - and what didn’t stop happening when the banks “paid back the money” before they could actually afford to do so – is that we, the taxpayers, have taken on the risk of the banks. We are firmly on the hook for that risk, and any money which happens to be attached to that risk, whenever the time comes. And although risk is harder to measure than money, it’s much more dangerous. You can print money and you can destroy it at will, but you can’t create or destroy risk at will.
Next time someone says to you, “They paid back the money,” tell them, “Yeah, they gave us back our money but we didn’t give them back their risk.”
What Did We Save?
Another important thing to remember when people talk about the so-called success of the bailout is that our current financial system is borderline dysfunctional and may not have been worth saving.
There are fewer banks now and they are bigger than before. Their power is massive and their lobbyists are incredibly powerful and act as information conduits to politicians. Indeed the complexity of the financial system acts in favor of the big banks in more than one way: first, because it allows more trickery and imprecise risk measurements, and second because it makes it difficult for smaller banks to compete.
What we have now is an international system of intensely confusing and complicated legal and financial rules that no one person can possibly understand, regulators that don’t have the resources or political power to force simplicity or transparency, and a political system that is afraid to push back.
What even happened to the original goal of banking, anyway? Wasn’t the financial system originally intended to help grease the machine of commerce? How can that case be made when small and medium-sized businesses still have trouble getting loans and when people are being disenfranchised from their own money?
Next time we go all-out to save the financial system, let’s do ourselves a favor and get rid of the complicated, corrupt, and/or greedy aspects that do more harm than good.
The Bailout Is Still Going On: Backdoor Bailouts
In additional to skewed incentives, the financial crisis and ensuing bailout gave birth to a series of backdoor bailouts for the banks. These are settlements that, on the surface, look like they take the banks to task for improper or illegal behavior or are neutral to banks, but they actually serve to inflate bank profits at the expense of taxpayers. Examples of backdoor bailouts are as follows:
As Yves Smith anticipated months before the rest of the world caught on, the recent mortgage settlements, in which the banks were supposedly fined $35 billion to correct mistakes from their shoddy paperwork and foreclosure process, was actually a backdoor bailout for those banks. Indeed the amount of actual money they needed to hand over was only $5 billion, and they managed to “pay off” their debt in part by writing down other people’s debts.
What’s also unsettling is that the banks were excluded from liability from those with whom they settled (such as state Attorney Generals, Department of Justice, U.S. Department of Housing and Urban Development) on the practices named in the settlement, although this still allowed for private rights of action.
As for the future, there are “threshold error rates” which dictate the servicing standards and allow for a minimum threshold of the same conduct up to and including foreclosing with false documents.
In reality, if there have been new illegal foreclosures – and there have been – any federal prosecutor worth his or her salt could ignore the threshold error rates and sue under a new case, and, if need be, open up the terms of the original settlement. There’s ample precedent for that in cases where the guilty party goes back to the same illegal conduct after settling out of court.
So it’s really a question of will. And there is none.
SEC “Do Not admit Wrongdoing” Settlements
It doesn’t make sense to make a financial penalty so minor that the expected profit from the crime, if discovered, is still positive. But that’s exactly what the SEC has done with their recent settlements with the mega-banks. For example, the SEC settlement for the HSBC decades-long facilitation of money laundering to drug cartels and terrorists, at $1.9 billion, is only a small fraction of the firm’s profits. There were no prosecutions, either of the firm or the individuals who allowed it to happen, despite their admission to serious crimes. In addition to not having to pay a financial price, there seems to be no political price either: the former CEO and chair of HSBC, Lord Stephen Green, is now UK Minister of Trade, and there seems to be no pressure on him to resign.
This means that there will be even less hesitation in the future when mega-banks pursue a profitable criminal activity because they now face nothing more than a “regulatory wrist-slapping fee” as a consequence.
Given our disappointment in Treasury’s ability to use HAMP to help homeowners threatened with foreclosure, we might have held out some hope that, through its monetary policies, the Fed would somehow be able to revive our economy and people would be able to get back to work.
That hasn’t happened. And it’s not totally the Fed’s fault. They’ve lowered the interest rates to essentially zero, but the banks have been hoarding money and still don’t make loans. Indeed the discrepancy between what banks charge for loans and what they pay has never been wider, which is one reason we can see the Fed policy as yet another bank bailout.
“Cheap money” has created a very bad value proposition for the investing class. People who might have invested in U.S. Treasury bonds are now investing in junk bonds and stocks in search of a return. Fed policy has had the obvious effect of bailing out the banks and of inflating stocks and junk bonds. Nevertheless, both are at risk of falling and, while smart money insiders have made considerable profit on these investments, little has been done to help the average person.
The Bailout Is Making Things Worse: Skewed Incentives
The narrative that we hear from most mainstream media goes like this: The banks got themselves into a huge pickle by dint of their interconnectivity and patently stupid assumption that housing prices would always go up.
It’s time to point something out. Namely, it wasn’t a stupid assumption at all, but rather a calculation made by each individual banker that going along with the market in this respect would earn him more bonus money than going against it. In truth, there were not many bankers on the inside who thought housing prices would continually go up and there weren’t many credit rating agency experts who thought the mortgages were all getting paid, either.
The truth is, “the market” isn’t a person and banks aren’t people (whatever the Supreme Court may claim about the personhood of corporations). If we think about them as people, we will get the wrong impression. For instance, fining a company won’t have a deterrent effect if the people in that company can benefit from the illegal acts for which they were fined. For example, in the LIBOR scandal, many traders manipulated interest rates to increase the profits of their trading desks. It is far from clear this benefited the banks as a whole, but it certainly did increase the traders’ bonuses – which is all they cared about.
Assumptions about the market are, in this case, used as a front for something far more sinister. In reality, the financial system is a big complicated web of people who are each trying to make money for themselves. Once in a while they seem to work together, if their agendas align as they did with inflating home prices. But keep in mind that it can happen again, in a different setting, that aligned agendas and greed will distort the markets to the detriment of investors and/or homeowners.
Of course, a few smart bankers figured out how to make money by timing the bursting of the bubble, but don’t feel too sorry for the ones that lost money in the end because most of them were already rich.
The housing prices narrative is a simple example of skewed incentives. What’s important to understand, here, is that there are lots of other versions of this specific market foible that serve as fronts for other skewed incentives. And, unfortunately, some of these fronts have been born out of the bailout itself. Note the following examples of skewed incentives:
The Financial Sector Has Used the Crisis as a Growth Tool
The number of big banks has dramatically decreased in the aftermath of the crisis and bailout, as the above graphic demonstrates. From the perspective of a given survivor like JP Morgan Chase, the disaster which they helped create has been perversely rewarded—they are now the biggest bank in the U.S..
Power and influence. It’s not just a growth in the size of the banks, but also in the relative amount of power the heads of the banks have over Congress and the regulators. Judging from the recent JP Morgan “whale trade” fiasco, where the London CIO office lost more than $6 billion through a risky and hidden trade, there doesn’t seem to be much power regulators can reasonably wield over too-big-to-fail bankers.
Increasing risk from artificial protection. Just as today’s carbon dioxide emissions bring about global warming, today’s bail-out assumptions are seeding future bail-outs by allowing and incentivizing banks to increase their risk rather than diminish it.
One way to see that banks are being given extra room for risk is by examining the credit risk ratings of the banks. Moody’s rating agencies make it clear that they expect governments to bailout megabanks in the future. They give the banks substantially higher ratings than they would on a “standalone” basis based solely on the credit-worthiness of the banks without implicit government support. In addition to being an unfair government subsidy, this actually encourages the megabanks to take more risks.
Future taxpayer support is assumed to be open-ended. For instance, Moody’s assigns “standalone” ratings of Baa3 to Bank of America, to Citigroup, and to Morgan Stanley. Baa3 is the lowest “investment grade” rating – a rating below Baa3 is termed “non-investment grade” or “junk.” However, Moody’s assigns ratings of A3 to the FDIC-insured bank subsidiaries of Bank of America, Citigroup, and Morgan Stanley, citing future taxpayer support as the rationale for the “rating uplift” of three notches from “standalone” ratings.
With higher ratings, banks borrow more money, book more derivative trades, and post less collateral than would be the case without the future bailout assumption. In turn, those activities enable banks to self-cannibalize, i.e. book profits today against derivative risk that will persist for 10 years, 20 years, 30 years or more. It’s a tricky accounting method which allows bankers to pocket bonuses today and then leave the building.
And with the five largest U.S. banks controlling 90% of the U.S. derivatives market, none can reap the folly of self-cannibalization without destabilizing the whole system yet again.
Implicit Subsidies. In a series of recent Bloomberg editorials, a price has been put on the current taxpayer subsidy of the too-big-to-fail banks. The price was estimated to be $83 billion. Although that exact figure has been disputed by various other parties, including Dean Baker on the value of implicit subsidies and others, one thing is clear: the majority of people believe that the enormous taxpayer subsidy exists and the market appears to give the mega-banks a lower borrowing cost.
Too big to jail. The too-big-to-fail status has translated into something even more perverted: too-big-to-jail. This was evident last year when HSBC was slapped on the wrist for large-scale money laundering on behalf of drug lords and terrorists. Even Attorney General Eric Holder admitted the “too big to jail” problem recently, although he’s backtracked under pressure, no doubt from bank lobbyists.
Conclusion: Shifting the Blame, a Threat to Democracy
One disturbing trend coming out of the financial crisis and ensuing bailout is how we’ve seen the narrative of blame gradually shifting from the bankers onto the public. This shift has recently threatened dramatically expanded privatization of public goods in the midst of municipal bankruptcies.
Sequestration, austerity, attacks on public sector employees, and the dismantlement of pensions (both public and private) can all be traced back to the fact that we raided the public piggy bank when we bailed out the financial system, and it still has a slow leak as the bailout continues.
One goal of this book is to give you, the reader, the ammunition to fight back against that shifting narrative of blame and remind people of what actually happened and what is still happening.
If you think about it, none of this bailout was done democratically, in spite of the pride we take in living in a free democracy. To some extent, when Congress initially voted against the bailout, we were witnessing the democratic process in action, but then when the market responded badly and Congress capitulated, that was kind of the end of that. To see how democracy could have worked differently, consider the recent history in Iceland where they forced banks to default and prosecuted bankers.
One can look elsewhere in Europe, Greece in particular, to see how far the politicians have strayed from the democratic process. When is the last time the public was asked how to deal with ultimatums from some group of unelected economists or given the opportunity to understand and choose one policy initiative over another?
The bailout has taken a heavy toll on the democratic process in the US and globally. The current and growing aggregation of wealth in America’s Financial Sector is a large part of that story, as, indeed, is the heightened indebtedness and wealth-dissipation affecting the 99%. It’s hard to address cause and effect here, although we can absolutely point to one smoking gun, namely the Supreme Court’s decision in Citizens United, which closely linked financial expenditures and political activity. If we want to address too-big-to-fail, we need to address political influence, and if we want to address political influence, we must address Citizens United.
  John Lancaster, “I.O.U.:Why Everyone Owes Everyone and No One Can Pay”, SimonandSchuster, 2010. The quote is meant to illustrate the typical banker’s attitude, not his own.
 Anat Admati and Martin Hellwig, “The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It”, Princeton University Press, 2012
 See the work of POGO, the Project on Government Oversight including http://pogoarchive.pub30.convio.net/pogo-files/alerts/financial-oversight/er-b-20090312.html
 Tom Selling, “FASB Could Have Easily Stopped the Repo Accounting Games: They Should Explain Why They Haven’t”, AccountingOnion.com, April 25, 2010
 See John Carney, “Treasury’s Secretive $2.4 Trillion Mutual Fund Guarantee”, August 10, 2012, cnbc.com
 “Adding Up the Government’s Total Bailout Tab”, New York Times, July 24, 2011
 Bradley Keoun and Phil Kuntz “Wall Street Aristocracy Got $1.2 Trillion in Secret Loans”, Bloomberg, August 22, 2011
 Les Christie, “Mortgage holders’ aid plan gets extension”, @CNNMoney, May 30, 2013
 “Reissuance of the Introduction of the Home Affordable Modification Program, HomeSaver Forbearance™, and New Workout Hierarchy”, Fannie Mae, April 21, 2009
 Neil Barofsky, “Bailout”, Free Press, 2013.
 Barry Ritholtz,“How Good an Investment Were the Bailouts?”,ritholtz.com,September 25th, 2012
 TARP Congressional Oversight Panel Report: Valuing Treasury’s Acquisitions, 02/06/09,
 taken from “Bank Merger History”, Mother Jones http://www.motherjones.com/politics/2010/01/bank-merger-history
 In Moody’s words of June 21, 2012, “Moody’s systemic support assumptions for firms with global capital markets operations remain high, given their systemic importance…While Moody’s recognizes the clear intent of governments around the world to reduce support for creditors, the policy framework in many countries remains supportive for now, not least because of the economic stress currently stemming from the euro area and the potential systemic repercussions of large, disorderly bank failures and the difficulty of resolving large, complex and interconnected institutions.”
 Dean Baker and Travis McArthur, “The Value of the ‘Too Big to Fail” Big Bank Subsidy”. Center for Economic and Policy Research, September, 2009. http://dspace.cigilibrary.org/jspui/bitstream/123456789/25806/1/Too%20big%20to%20fail%20-%20bank%20subsidy.pdf?1
 see Candice Bernd, “Detroit: Donald Cohen Warns of Privatization, Calls for Bailout”, Truthout, July 25, 2013 http://www.truth-out.org/news/item/17785-the-future-of-detroit-donald-cohen-warns-of-the-dangers-of-looming-privatization