HOLY BAILOUT - Federal Reserve Now Backstopping $75 Trillion Of Bank Of America's Derivatives Trades (Title of Daily Bail Post)
To which I replied: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.
For the Full Story in DailyBail.com...click here
HOLY MOTHER OF BAILOUTS, Financial Napalm!The DailyBail took its information from a Bloomberg story which can be found at the DailyBail.com
I have believed for the better part of 3 years that Bank of America has been insolvent. They have stayed in business by the grace of our Feds (government and privately owned Fed Reserve) by virtue of "creative" bookkeeping (phony books).
If what you and DailyBail say is true (I have no reason to believe it is not) this is just another example of illegal activity for the betterment of the institution not the people.
The Derivatives business was no more then a "crap shoot" with better odds at the craps table of any casino in the world.
Banks were double and triple dipping when they created the entire slew of MBS's, CDO's CDS's - all those exotic sounding products - which were in reality fraudulent.
As to JP Morgan, I also believe that they are or will do the same. You see, most of the TBTF banks(ters) created the products, sold their products and even bought their products using the temporary - pre bubble - appreciation to meet their capital requirements. SMOKE!
Now I say, "LET THEM FAIL".
There is no shortage of local and regional banks, credit unions and S &L's that will take our money and give us a checking account so that we can pay our bills - which is what most Americans use a bank for. Why, with the influx of all of that additional cash, they might even do something very unusual - like making loans.
As a supporter of Occupy Wall Street - I say,
LET THEM FAIL
You can read the entire Bloomberg story, BofA Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit...click here
Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation.
The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.
...Bank of America, which got a $45 billion bailout during the financial crisis, had $1.04 trillion in deposits as of midyear, ranking it second among U.S. firms. (emphasis added)There is much more to this story. BofA, I believe, is attempting to pass off their losses and those of some of their clients by using "our" money from the FDIC fund. Another very shady transaction if allowed by "our" government regulators. The FED seems to be in favor but of course. They will merely print more money which in turn earns more interest whihc goes to "the owners" of this private corporation.
The FDIC, it appears is publicly going along with the FED but privately arguing against it. Both The FED and the FDIC seem to not want to comment. I can understand the FED not commenting, they are a private company but the FDIC answers to the public and MUST comment and make its real position known.
This is not a matter of national security, it is a matter of misuse of taxpayer money. Wrongful by any stretch of the imagination and un Constitutional as well.
Here are subheadings for the article.
One final comment. "Screw the people, feed the greed"
How did Bank of America buy Merrill Lynch at a time when they were saying they were broke? How does a broke company buy another broke company and become profitable?
Answer: With the taxpayers money and the government actually cutting the deal. That deal was orchestrated by then Treasury Secretary, Hank Paulson and current U.S. Secretary - then President of the NY Federal Reserve Bank - Tim Geithner. Hmmmm? How the wheels of fortune revolve around one and only one goal - screw the people, feed the greed.