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

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

Post by gettheminNOVEMBER on Tue Oct 18, 2011 7:35 pm

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x2141081

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.

I just found this. Not sure if its crap or not. But I found it in a few places. This is why we need regulations.

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Federal Reserve and Bank of America Initiate a Coup to Dump Hundreds of Billions of Dollars of Losses on the American Taxpayer

Post by Guest on Tue Oct 18, 2011 9:40 pm

YOU HAVE GOT TO BE KIDDING!!! Evil or Very Mad

Bloomberg reports that Bank of America is dumping derivatives onto a subsidiary which is insured by the government – i.e. taxpayers.

Yves Smith notes:

If you have any doubt that Bank of America is going down, this development should settle it …. Both [professor of economics and law, and former head S&L prosecutor] Bill Black (who I interviewed just now) and I see this as a desperate move by Bank of America’s management, a de facto admission that they know the bank is in serious trouble.

The short form via Bloomberg:

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…

Bank of America’s holding company — the parent of both the retail bank and the Merrill Lynch securities unit — held almost $75 trillion of derivatives at the end of June, according to data compiled by the OCC. About $53 trillion, or 71 percent, were within Bank of America NA, according to the data, which represent the notional values of the trades.

That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.

Now you would expect this move to be driven by adverse selection, that it, that BofA would move its WORST derivatives, that is, the ones that were riskiest or otherwise had high collateral posting requirements, to the sub. Bill Black confirmed that even though the details were sketchy, this is precisely what took place.

http://www.zerohedge.com/contributed/federal-reserve-and-bank-america-initiate-coup-dump-hundreds-billions-dollars-losses-ame

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

Post by tristen303 on Tue Oct 18, 2011 10:09 pm

it's not getthem it is exacly what is happening and further other banks are in trouble and considering doing the same.

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Bank of America and 99%

Post by TR11005 on Tue Oct 18, 2011 11:31 pm

If you’re a Bank of America customer, beware, you deserve whatever you get down the line, whether it comes in the form of higher fees ($5) and costs assessed upon you or something worse.

Look at the house foreclosures!

Banks got a bailout! We got nothing!

Support the 99% Screw the 1%!!

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

Post by TR11005 on Tue Oct 18, 2011 11:35 pm

Run from Bank of America. Take your money out this morning!!!


Support the 99%!


Last edited by TR11005 on Tue Oct 18, 2011 11:41 pm; edited 1 time in total

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

Post by TR11005 on Tue Oct 18, 2011 11:39 pm

From article:

"Bank of America has repeatedly become insolvent due to fraud and risky bets, and repeatedly been bailed out by the government and American people. The government and banks are engineering an age of permanent bailouts for this insolvent, criminal bank (and the other too big to fails). Remember, this is the same bank that is refusing to let people close their accounts."


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

Post by Falcon7 on Wed Oct 19, 2011 3:21 pm

And not one damn thing will be done about BOA, the GOP and many Dems would go nuts, they are a sacred cow for some F-Uped reason! (Yea, I know, they pay politicians) Always propped up by the Gov. (Taxpayers)!
You are nuts to have a dime in this Fraud of a Bank!

Financial Reform did NOTHING about; "TOO BIG TO FAIL". THE GOP WOULD NOT ALLOW IT!

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

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