Rule Manipulations for IBanks?

Just when I thought I was caught up, Morgan and Goldman are approved by the Federal Reserve to become bank holding companies. What I suspect this means is that they will now look to acquire banks that can provide stable depositor based funding. The Federal Reserve just relaxed the regulations prohibiting bank holding companies from using federally insured deposits to fund investment banking assets so we end up with FDIC (taxpayer) guaranteed deposits funding investment banking operations. I hope I am wrong, but if this is the case it is a shameless manipulation of the rules to use unsuspecting taxpayers in a bail out for equity and bond investors in these banks and it should not be allowed to proceed without full and honest disclosure and approval from Congress. If these banks are insolvent the fix should be that equity and then, as necessary, debt gets wiped out, not that a roundabout free taxpayer guarantee provides the means for funding.

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