Federal Reserve Now Backstopping $75 Trillion Of Bank Of America's Derivatives Trades , page 1

posted on Oct, 19 2011 @ 02:48 AM

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Federal Reserve Now Backstopping $75 Trillion Of Bank Of America's Derivatives Trades

This means that the investment bank’s European derivatives exposure is now backstopped by U.S. taxpayers. Bank of America didn’t get regulatory approval to do this, they just did it at the request of frightened counterparties. Now the Fed and the FDIC are fighting as to whether this was sound. The Fed wants to “give relief” to the bank holding company, which is under heavy pressure.

This is a direct transfer of risk to the taxpayer done by the bank without approval by regulators and without public input. You will also read below that JP Morgan is apparently doing the same thing wit

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edit on Oct-19-2011 by xuenchen because: (no reason given)

xuenchen

posted on Oct, 19 2011 @ 02:48 AM

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It looks like BofA is trying to set up a funnel to recover even more mounting losses.

Another major "stimulus" is gonna be needed to get out of this one !

The FDIC will go broke again and force a taxpayer funded strategy.

Nothing new I guess, since most legislation under Obama has been directed to help small special interest groups and NOT the majority of American citizens !

What's Next?

Maybe that $5 debit card fee ain't so bad after all

cryptogon.com
(visit the link for the full news article)

edit on Oct-19-2011 by xuenchen because:

ShortMemory

posted on Oct, 19 2011 @ 02:55 AM

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banks are the scum of the earth
pyschopathic war machines causing devistation and poverty
i cant wait till every bank is burnt to the ground

silent thunder

posted on Oct, 19 2011 @ 03:14 AM

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This is one of the most blatant, in-your-face moves by a major bank yet. This should be sending major alarm bells off. To use a metaphor, it is as if a thief who had been hauling cash away under cover of night for several years suddenly decides to start carting sacks of money out of the vault and into the street in broad daylight.

Either they have concluded that people are so spaced-out and ignorant that they can do whatever they want, or they see the writing on the wall and are expecting the imminent meltdown of the whole ball of wax, and thus no longer care about keeping up appearances. Or a combo of the two...

xuenchen

posted on Oct, 19 2011 @ 03:18 AM

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The trick might actually click...

Here's how they're doing it.

This changes the picture completely. This move reflects either criminal incompetence or abject corruption by the Fed. Even though I’ve expressed my doubts as to whether Dodd Frank resolutions will work, dumping derivatives into depositaries pretty much guarantees a Dodd Frank resolution will fail. Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. [color=;imegreen]So this move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral. It’s well nigh impossible to have an orderly wind down in this scenario. You have a derivatives counterparty land grab and an abrupt insolvency. Lehman failed over a weekend after JP Morgan grabbed collateral.

But it’s even worse than that. During the savings & loan crisis, the FDIC did not have enough in deposit insurance receipts to pay for the Resolution Trust Corporation wind-down vehicle. It had to get more funding from Congress. This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors. No Congressman would dare vote against that. This move is Machiavellian, and just plain evil.

Investments we can count on !

All the way FROM the bank

I wonder if the White House and Harry Reid are working overtime on this new "Bill" to you and me

MathiasAndrew

posted on Oct, 19 2011 @ 06:57 AM
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Very disturbing and this is probably the kind of thing that has been going on for a long time.

It's just that more people willing to sound the alarm are keeping a closer eye on these matters.

Not that we can do much about it. The whole timing of this move is probably not a coincidence.

xuenchen

posted on Oct, 19 2011 @ 07:30 AM
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Many people think that the FDIC is solely funded by banks through insurance premiums paid.

The sad truth is the FDIC is backed in the end by the taxpayers.

The FDIC has a high funding ceiling by the US Government !

(Aug 17, 2009 09:50 EDT)

With the FDIC insurance fund running low, there’s a fair amount of confusion out there about whether the FDIC can run out of money. The answer is no, it can’t. The insurance fund might be down to its last $13 billion, but that number is really useful only for accounting purposes. There’s a government guarantee on bank deposits; the FDIC is merely the arm of the government which administers that guarantee and tries to make sure, by charging banks insurance premiums, that it doesn’t cost the taxpayer any money over the long term.

Joe Weisenthal, this morning, says that we needn’t worry about the FDIC’s money running out because “Congress will replenish the FDIC instantly” — implying that there’s at least the possibility that Congress wouldn’t replenish the FDIC. But that’s not the case. [color=;imegreen]In May, President Obama signed a bill providing the FDIC with as much as $500 billion in credit at the Treasury — more than enough to cover anybody’s bank-failure worst-case scenario. That bill is now a law, which means that Congress needs to do nothing in the event that the FDIC’s funds go to zero. Why the FDIC won’t run out of money

Yes, it says "credit" to the FDIC, but what if they can't pay it back?
Then the Govt just prints more currency and sells more bonds to place even more interest payments on all of us and the unborn too !

In the end, the banks will/are simply raising fees and service charges to cover the expense.

All at the expense of citizens.

Angelicdefender2012

posted on Oct, 19 2011 @ 11:19 AM
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reply to post by xuenchen

You are kidding me!!!! After all the bad publicity they have been getting for bailouts with them having connections to the corpos they have bailed out?????? WTF?
We have to do something...we as taxpayers can NOT sit back and let this continue, holy crap!

Angelicdefender2012

posted on Oct, 19 2011 @ 11:21 AM
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reply to post by silent thunder

I totally agree! It's as if they are saying nah nanana nah....in your face idiots! What a load of S_ _ T!! When will this stop and who in the hell will stop them????

neo96

posted on Oct, 19 2011 @ 11:52 AM
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I seem to remember the Frank Dodd Act of 2010 was suppose to stop this kind of thing makes you wonder what the real deal is or what i think is the power grabs thus far was setting the stage for more power grabs blame the Fed if you want blame Bank of America if you want.

I blame Government which allows this and makes this possible.

xuenchen

posted on Oct, 19 2011 @ 12:13 PM
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Originally posted by neo96
I seem to remember the Frank Dodd Act of 2010 was suppose to stop this kind of thing makes you wonder what the real deal is or what i think is the power grabs thus far was setting the stage for more power grabs blame the Fed if you want blame Bank of America if you want.

I blame Government which allows this and makes this possible.

Ya,

One link kind of explains that.

But it's a bluff call....They did it anyway.

Govt lawsuits may be necessary to actually stop it.

The move seems to be aimed at bankruptcies more.

The "assets" pay certain preferred creditors first.

It's complicated, that's why they did it. Buys time when they need it.

A big investigation and legal study has to be undertaken to determine which law supersedes which others.

Could be an "oversight" by Dodd-Frank law scholars.

marg6043

posted on Oct, 19 2011 @ 12:26 PM
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reply to post by xuenchen

The derivative mess started in the US and the biggest player and with more links to the demise of Greece over all is Goldman Sach, the derivative is worth about 600 trillions US fed since the 2008 market crash has fund 17 trillions in loans to the EU central banks, in unaccounted money, the only accountability kept is the quota to the IMF.

So yes the mess started in the US and now the Fed is doing whatever it can so the mess doesn't come back home, now is going around in circles in the EU and hitting their banks.