[Diwokfkq]

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


This story from Bloomberg just hit the wires this morning. Bank of America is shifting derivatives in its Merrill investment banking unit to its depository arm, which has access to the Fed discount window and is protected by the FDIC.

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 with $79 trillion of notional derivatives guaranteed by the FDIC and Federal Reserve.
What this means for you is that when Europe finally implodes and banks fail, U.S. taxpayers will hold the bag for trillions in CDS insurance contracts sold by Bank of America and JP Morgan. Even worse, the total exposure is unknown because Wall Street successfully lobbied during Dodd-Frank passage so that no central exchange would exist keeping track of net derivative exposure.

This is a recipe for Armageddon. Bernanke is absolutely insane. No wonder Geithner has been hopping all over Europe begging and cajoling leaders to put together a massive bailout of troubled banks. His worst nightmare is Eurozone bank defaults leading to the collapse of the large U.S. banks who have been happily selling default insurance on European banks since the crisis began.

link to full story: http://dailybail.com/home/holy-bailo...illion-of.html

[kSmica]

More for us... None for you... Bwahahahaahaha!

[imnaone]

The smug look on those banksters pisses me off! The ropes and pikes await those who dishonor the peoples trust!

[JRixlcvF]

hey,

this is not dollar positive,

the fed balance sheet is about to absorb upto $75 trillion more in worthless paper

remember when they ate up part of the paper real estate market, how bad it hit the dollar and their balance sheet...

this is a bad one, seriously bad.

China has what, perhaps 2 $trillion in reserves?

the rest of the world perhaps another trillion?

this is a pretty serious load of shit the fed is swallowing...

[Seilehogshell]

When it all goes to hell because of these way street psychos

just remeber the jingle



http://www.youtube.com/watch?v=6gKlB...e_gdata_player

[alfredtaniypnx]

Why isn't this shit all over the news?

And this isn't legal, so the FDIC can basically say FUCK YOU when it comes down to it.

[RerRoktoido]

[Qutlsilh]

Fvck them bankers and fvck the fed, they are going to do what they do, we are not involved. I used to understand the ass kissing but now I just ponder "why?" They pump paper to prop insolvent banks, so what is the purpose? The elite are rubbing each others ass, it makes no difference to us, we are not going to pay this paper we are going to live on as we have been. Their end goal is to own everything that has been touched by their fraud and rent lease the world into more usury, the same crap they stole from us. It just is not going to work out the way they plan.

[LoohornePharp]

That's about 6 fucking years of GDP.

Man...this collapse is going to be a mother.

[sbrscnds]

It seems that this would be a good reason to be in physical possession of some precious metals, a surplus of food and supplies, and maybe some form of personal protection. Call me crazy.

[leangarance]

To NOT have what you just said is absolutely crazy and MILLIONS are going to be caught flat footed

[Gintovtosik]

Yes, no way that amount can be absorbed or hidden by the media. Things just got very real, reading this. If Europe goes down...so does the US. Welcome to the Greatest world depression, and it's just around the corner.

Also, Geithner's an asshole, a complete hammerhead. Him over there in Europe is the worst thing for this situation.

the losses from derivatives in 2008 were a small fraction of their notional value.

they are naked insurance policies.

sort of like a game of Pick-up Stix. you move the wrong one, the whole thing falls down. but that doeesn't mean they all disappear.

that's not to say it's in any way healthy. if the US gov. ended up back-stopping just $5 Trillion in derivative losses, in one fell swoop the official US national debt jumps to $20 Trill+.


even Doonesbury is pissed off about it. in today's comic, the most conservative character decides to give the Wall Street Bankers the $ in his checking account. he makes the check out to "Blood Sucking Scum".