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BofA Dumps $75 Trillion In Derivatives on U.S. Taxpayers

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ProfessionalLeftist Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 04:31 PM
Original message
BofA Dumps $75 Trillion In Derivatives on U.S. Taxpayers
"If you thought TARP and the 700 Billion dollar bailout was bad..... you aint seen nothin yet! - " Bloomberg reports that Bank of America (BAC) has shifted about $22 trillion worth of derivative obligations from Merrill Lynch and the BAC holding company to the FDIC insured retail deposit division. Along with this information came the revelation that the FDIC insured unit was already stuffed with $53 trillion worth of these potentially toxic obligations, making a total of $75 trillion."


http://www.mediaroots.org/bac-dumps-$75-trillion-in-derivatives-on-u.s.-taxpayers.php
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annabanana Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 04:31 PM
Response to Original message
1. So. They got away with it after all. . . . .n/t
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Warpy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 04:33 PM
Response to Original message
2. The problem is that there is not enough wealth left in the country to pay for that stuff
and I'm astonished regulatory agencies let them get away with it.

I do hope that if they start to expect taxpayers to start coughing up a dime, that bank will be nationalized and most of its executives jailed.

I knew when they took Merrill Lynch on it was going to be bad news.
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lunatica Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 04:36 PM
Response to Original message
3. Forgive my ignorance. What does this mean to people like me?
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JDPriestly Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 05:05 PM
Response to Reply #3
10. This means you owe $83,000 or thereabouts, and they are going
to take it from you in the form of taxes, fees and less Social Security.
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benld74 Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 04:45 PM
Response to Original message
4. This makes WEEK 3 showing on DU, haven't seen it anywhere else
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banned from Kos Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 04:50 PM
Response to Reply #4
5. Because its pure bullshit - no respected financial news would report on it
Bloomberg only said they SHIFTED the derivatives - not that they "dumped them on the taxpayer/FDIC".
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inna Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 05:00 PM
Response to Reply #5
8. keep defending the banks and those who do NOT need your defense

that's all I've seen you do here; no wonder you got banned elsewhere
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banned from Kos Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 05:06 PM
Response to Reply #8
11. I am not defending the banks. I defend Obama, reality, and good regulation
For every one post of mine trying to explain regulation there are 100 falsely calling President Obama a "friend of Wall St."

The fact is $75 trillion was NOT dumped on the FDIC or taxpayers. The number is absurd. Our entire national debt is only $15 trillion.
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dkf Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 05:01 PM
Response to Reply #5
9. The taxpayer is obligated to pay FDIC insurance if BOA uses the deposits to pay off the derivatives.
If BOA failed, it would take down the FDIC anyway even without the CDS.
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banned from Kos Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 05:14 PM
Response to Reply #9
12. Dodd-Frank won't allow that.
D-F measures risk weighted assets and tier 1 capital and seizes the bank if they fall below guidelines.

D-F will also put the derivatives into an exchange to monitor them. Its vital we keep Mr. Obama in office for these reasons.

D-F is far stronger than Glass-Steagall ever was.
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leveymg Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 05:21 PM
Response to Reply #12
15. Isn't seizing the bank the same as a bail-out, as far as the taxpayer is concerned?
Just because derivatives have a market don't make them liquid or give them a bottom value. Only a federal guarantee does that. It's vital we keep Obama in office to maintain a Pangloss market for Credit Default Swaps? F-ck nay.

How is D-f stronger that G-S if there's no firewall between securities trading and commercial banking? Do tell.

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dkf Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 08:12 PM
Response to Reply #15
22. They moved the derivatives into the FDIC insured banks.
And they are not securities.
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robinlynne Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 11:17 PM
Response to Reply #15
24. good question.
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dkf Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 08:08 PM
Response to Reply #12
20. Well they say that the CDS are offset. But if the counterparty fails then they are exposed.
Does D-F account for that? I doubt it.
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leveymg Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 05:17 PM
Response to Reply #5
13. Must we explain the difference? One set of books is federally insured, the other isn't
That's trillions of dollars of exposure that FDIC can't cover. I call BS on you to show that isn't significant. Extremely significant.

I still can't believe the Fed and the Treasury let BoA get away with this.
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banned from Kos Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 05:28 PM
Response to Reply #13
16. Well, now we're getting somewhere. We have gone from $75 trillion to $1 trillion
the $1 trillion being the DEPOSITS the FDIC insures.

Now look at the Bloomberg article. The deposit bank already had $53 trillion in derivatives on it. The shift was Merrill's $22 trillion to it.

$53 trillion or $75 trillion? - both could sink the bank if by the .00001% chance they all went bad simultaneously. Now the advantage is that BoA can sell Merrill without the cloud of derivatives - thus MAKING THEM SMALLER!
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robinlynne Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 11:16 PM
Response to Reply #5
23. The point is they shifted the derivatives from stock agencies, which are NOT insured
to FDIC insured banks. That is halfway to getting the taxpayers to fund their loss. It is a matter of connecting dots.
banks are banks. Banks do not buy and sell stocks. Much less derivatives!!!!!!!
That is why banks can be FDIC insured. You cannot have the federal government insuring LAs vegas gamblers, which is exactly what this move does.
Their intent is pretty obvious.
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ProfessionalLeftist Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 04:56 PM
Response to Reply #4
6. Not sure what you mean?
Edited on Sat Nov-12-11 04:58 PM by ProfessionalLeftist
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JDPriestly Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 04:58 PM
Response to Original message
7. Is this the junk Wall Street unloaded on us?
Did Obama call giving us this heap of trash "repayment"?

OBama must be more scared of Wall Street than he is of us.
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Bonobo Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 05:18 PM
Response to Original message
14. I'm confused.
What does this have to do with Sandusky and Pen State?

This hurts my brain.
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Autumn Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 06:25 PM
Response to Reply #14
18. It's a metaphor
Sandusky is BOA and the taxpayer is the 10 year old. Obama would be the college staff that failed to take action. I think that's right, my brain is hurting from everything.
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Bonobo Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-13-11 03:26 AM
Response to Reply #18
29. Good one! nt
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DianaForRussFeingold Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 06:23 PM
Response to Original message
17.  $75 Trillion?! how's that break down per person...?! OMG
Honestly, this is beyond my comprehension.:blush:

Cenk Uygur explains "Bank of America Dangerous Derivatives" Video-
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x627602
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Turbineguy Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 07:25 PM
Response to Original message
19. OK basically Bof A took over these
Edited on Sat Nov-12-11 07:30 PM by Turbineguy
insurance policies. People bought these thinking that if Greece defaults they will get rich. They gave Merrill Lynch some tiny amount of money as compared to the notional value. Merrill Lynch gave the money away in bonuses to people who spent it in tittie bars just like they did at AIG. If something triggers these therefore ML can't pay. ML moved them to BofA to give the buyers the perception somebody can pay something.

Actually if the BofA has these on the books they would have to meet capital requirements. They would have to raise 7.5 trillion in cash. But the great thing about banking is that you can say that the money you have on hand is an asset and the money people owe you is an asset. And then the money you owe others is also an asset. You may include monopoly money and Confederate money in this as well.

So let's say you're a homeless guy and you have 3 dollars hidden in your shoe. If you change your name to "Bank of America" you will instantly be worth $83 trillion (more or less). So why are you standing there with a cardboard sign saying "God Bless" when you could be sitting in the back of a limo with a "Fuck the World" bumper sticker and smoking a big cigar?

So these so-called investors instead of have bought this worthless crap could have invested in real businesses, but then we would not have any homeless people to complete the circle.

I hope that's clear.
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bvar22 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-13-11 01:23 PM
Response to Reply #19
32. Perfectly Clear.
Thanks.
NOW, I understand.

Herman Cain's remark,
"If you aren't rich, it is YOUR fault"
makes perfect sense.

"Its the Uniquely American Solution!"




You will know them by their WORKS,
not by their excuses.
Solidarity99!
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sarcasmo Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 08:10 PM
Response to Original message
21. Government takeover NOW!
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robinlynne Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Nov-12-11 11:19 PM
Response to Reply #21
25. I second that.
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Ikonoklast Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-13-11 08:16 AM
Response to Reply #21
30. Uh, no, that is the exact opposite of what we want to happen.
Make derivatives illegal, wind own any that are currently out there, and THEN break up the banks.
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bvar22 Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-13-11 01:34 PM
Response to Reply #30
33. And if any of these banks fail in the meantime,
....then let the "Invisible Hand" do its thing!
Let the bankruptcy courts and the accountants track every Nickle & Dime,
and go after "personal assets" to the extreme where ever fucking possible to cover the losses.





You will know them by their WORKS,
not by their excuses.
Solidarity99!
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HCE SuiGeneris Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-13-11 12:36 AM
Response to Original message
26. Shhh.
Nobody wants to hear this.

:kick:
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Marr Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-13-11 12:39 AM
Response to Original message
27. This *somehow* slipped right by our corporate media outlets.
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OnceUponTimeOnTheNet Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-13-11 01:30 AM
Response to Original message
28. slicker than snot, the way they get away with it all
just stunning. knr.
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Harmony Blue Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-13-11 08:26 AM
Response to Original message
31. I am outraged that they will dump this on the public
:mad: :mad: :mad: :mad: :mad: :mad: :mad: :mad:
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theophilus Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-13-11 01:43 PM
Response to Original message
34. If BofA is a corporation and if corporations are people......BofA should be executed. n/t
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SammyWinstonJack Donating Member (1000+ posts) Send PM | Profile | Ignore Sun Nov-13-11 01:46 PM
Response to Original message
35. I guess Obama can't do anythingabout this either, since he's not a King or Dictator.
:evilgrin:


That's okay, his super theft committee will insure this transaction through cuts to entitlement programs and the 1% won't suffer from that nasty shared sacrifice bs.
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