HOLY BAILOUT - Federal Reserve Now Backstopping $75 Trillion

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Egg
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HOLY BAILOUT - Federal Reserve Now Backstopping $75 Trillion

Post by Egg » Wed Oct 19, 2011 1:29 pm

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.

http://dailybail.com/home/holy-bailout- ... on-of.html


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Egg
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Re: HOLY BAILOUT - Federal Reserve Now Backstopping $75 Tril

Post by Egg » Wed Oct 19, 2011 1:34 pm

Better source and break down at the Washington Blog

http://www.washingtonsblog.com/2011/10/ ... payer.html


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Dr Exile
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Re: HOLY BAILOUT - Federal Reserve Now Backstopping $75 Tril

Post by Dr Exile » Wed Oct 19, 2011 3:38 pm

FDR made this illegal back in the thirties. Clinton lifted the ban.
Credo quia absurdum.

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Egg
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Re: HOLY BAILOUT - Federal Reserve Now Backstopping $75 Tril

Post by Egg » Wed Oct 19, 2011 3:40 pm

Dr Exile wrote:FDR made this illegal back in the thirties. Clinton lifted the ban.
I actually like Clinton. I do not know why he signed off on this and doing away with Glass Steagall. Two huge mistakes. HUGE. World destroying.


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Dr Exile
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Re: HOLY BAILOUT - Federal Reserve Now Backstopping $75 Tril

Post by Dr Exile » Wed Oct 19, 2011 3:44 pm

It aided his goal to make homes affordable to everyone, he was snookered by the banks.
Credo quia absurdum.

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Egg
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Re: HOLY BAILOUT - Federal Reserve Now Backstopping $75 Tril

Post by Egg » Wed Oct 19, 2011 3:49 pm

Those banks do some good snookering, don't they.

I like snooker. Used to love watching it when I was in London.


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Mur
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Re: HOLY BAILOUT - Federal Reserve Now Backstopping $75 Tril

Post by Mur » Wed Oct 19, 2011 8:30 pm

The "Occupy Wall Street" Movement would be better advised to protest the Fed and Congress rather than protest Wall Street and Bank of America because the Fed and Congress are responsible for the bailouts.
Moreover, and more importantly, the Fed and Congress are responsible for the housing boom-bust in the first place!
Wall Street profited, but the Fed and Congress are to blame.




http://globaleconomicanalysis.blogspot. ... -fear.html


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Egg
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Re: HOLY BAILOUT - Federal Reserve Now Backstopping $75 Tril

Post by Egg » Wed Oct 19, 2011 8:32 pm

I think people are getting hung up on the name of the movement as opposed to concentrating on the purpose of the movement.


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Pigeon
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Re: HOLY BAILOUT - Federal Reserve Now Backstopping $75 Tril

Post by Pigeon » Wed Oct 19, 2011 9:40 pm

The only remedy is for mobs to go and drag Congressmen and bankers out into the street and instill some fear. otherwise the game continues.

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Mur
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Re: HOLY BAILOUT - Federal Reserve Now Backstopping $75 Tril

Post by Mur » Wed Oct 19, 2011 10:33 pm

I'm not sure most understand what they are protesting other than they are angry.


Wall St abuses were not possible without being enabled by the Federal Reserve and Congress.

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