Shocking Truth Behind BofA’s Trillion Dollar Derivatives Move!

[Andy9999]

http://tbwsdailyshow.com/2011/10/21/shocking-truth-behind-bofas-trillion-dollar-derivatives-move/

Ron Paul is talking about this in interview at this link .....end of first part

http://www.prisonplanet.com/ron-paul-sounds-off-on-gadhafi-14th-amendment-looming-economic-collapse-on-iowa-radio-show.html

[General of Darkness]

Here you go Andy, and thank you.


http://www.youtube.com/watch?feature=player_embedded&v=Lqr4EwOQY8A

[General of Darkness]

From the FDIC website

FDIC-Insured



Checking Accounts (including money market deposit accounts)


Savings Accounts (including passbook accounts)

Certificates of Deposit


Not FDIC-Insured



Investments in mutual funds (stock, bond or money market mutual funds), whether purchased from a bank, brokerage or dealer


Annuities (underwritten by insurance companies, but sold at some banks)

Stocks, bonds, Treasury securities or other investment products, whether purchased through a bank or a broker/dealer


http://www.fdic.gov/consumers/consumer/information/fdiciorn.html

EXACTLY. It's like a gambler trying to get insurance on all his losses.

[Neuro]

Yes FDIC doesn't secure derivatives. And the thing is that each bank has a portfolio of derivatives, most of them cancel each other out puts and calls of the same derivative, the net exposure may only be some 10% of all derivatives out, most probably even in the collapse of several major banks only 10% of these derivatives may be severely impacted, with lets say 30% of the notional value. Taken together in a near worst case scenario the exposure may be only 0.3%. if the overall amount of derivatives in the world is at a notional value of $600 Trillion, that would mean that $1.8 Trillion is at risk, which is of course a huge amount of money, but it would be manageable, however the biggest problem is the overview, no-one has really the ability to foresee where the losses will occur which means that financial transactions most likely will grind to a halt, because no one knows which banks/traders will exist the next day... This happened in 2008 with Lehman brothers, this time it will be even worse, because you have a string of countries PIIGS that will default/collapse, and bring several huge banks with them, and even a multi-trillion dollar central bank back stop may not be sufficient to restore confidence to resume normal trading, partly because they don't know where to put the back stops. With Lehman it was easier, they could just back stop Lehmans major trading counterparties. Try and back stop the major debt counterparties of Portugal Italy Ireland Greece and Spain, and further the major counter parties of those banks, you need to back stop the entire financial system, and things will happen so quick it will not be possible to do it, even if they tried...

[muffin]

My understanding is that there is not a precedence for deriv counterparties over FDIC insured creditors. I think the BofA transfer of the book to the bank holdco is just to take advantage of the better credit rating of the holdco. Reggie Middleton wrote a very long article on zerohedge where he argues that the deriv CP's would get first dibs on the assets and FDIC would be the bagholder, but I disagree with that.

[Neuro]

I think BofA's move is designed to save what they can. They put all the liabilities in one part and the assets somewhere else. Derivatives and bank acct's are liabilities.

[Andy9999]

let's keep thgis alive
Wake-Up Call - 10/24/11 listen to this he (Richard Martin address this in detail and moore
at this link... http://www.progressiveradionetwork.com/wake-up-call/

Bank Of America shifts its toxic assets and derivatives into FDIC-insured accounts! This could well be the straw that breaks the camel’s back, leading to financial Armageddon. Why is this legal? An account of various other illegal acts committed by the big financial organizations with impunity – no punishment, often no fines and no consequences. The latest ridiculous plans to “save” the European Union and its faltering currency. Why the various financial institutions collapsed and why this is about to happen again. The most effective “solution” to the European crisis: benign neglect.

[Andy9999]

Lot more interest on Kitco forum

https://www.kitcomm.com/showthread.php?t=94941

[gunDriller]

it seems like coin dealers are taking on the role of banks (the good kind) more and more.