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Break up the Bank of America before it breaks US!

post #1 of 8
Thread Starter 
Bank of America has racked up $75 Trillion in high risk gambling debts... a.k.a. "derivatives". The people B of A owe the money to are not convinced they'll be able to pay them back, so to reassure them, B of A has moved a big proportion of the debt into an FDIC protected subsidiary. Put simply, B of A think their nut-job gambling debts deserve the same protection as our savings and checking accounts; they want $53 Trillion to be guaranteed by the FDIC, the government, and ultimately by we the tax payers.

In 1929, corporate greed and and fraud caused the stock market crash that led to the Great Depression. To stop history repeating itself, laws and agencies were put into place; the Glass Steagall Act created a firewall that separated investment banking from speculative banking. Sadly, bankers and their cronies in government gradually whittled away this safeguard, finally disposing of it in 1998, under the Clinton Administration.

One protection that is still in place, is the FDIC. The FDIC insures that when we deposit money in a bank, it will still be there when we wish to withdraw it, or if the bank fails. The good news is that the FDIC has worked, but the bad news is that it has cost we-the-long-suffering-taxpayer countless $Billions. For instance, in the 1980s S&L fiasco, and estimated $150 Billion was needed to resolve the crisis. Bloomberg analysts calculate that in 2009, the U.S. lent, spent or guaranteed as much as $12.8 Trillion to rescue the economy... and the potential coming crisis could be far uglier than that.

B of A's total $75 trillion exposure is more than the annual GDP of the entire world, which The Economist magazine estimates, is around $65 Trillion. All FDIC backed institutions state: "Deposits are backed by the full faith and credit of the United States Government". Where will the government get the money which cannot be met by the huge insurance liabilities that cannot be met by the FDIC? Answer: We the tax payer, yet again.

In June 2010, the most recent figures available, the FDIC had access to $18 Billlion in the DEF (Deposit Insurance Fund), $19 Billion cash and U.S securities, and the ability to borrow up to $500 Billion from the US Treasury. That's $537 Billion... in itself a lot of money, but only a fraction of whats required to cover B of A's reckless gambling liabilities, and still protect your checking and savings accounts.

Break up this dinosaur before it breaks us, yet again. A good idea is move your money to a local bank or credit union.
"We've never made the case, or argued the case that somehow Osama bin Laden was directly involved in 9/11. That evidence has never been forthcoming". VP Cheney, 3/29/2006. Interview by Tony Snow
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"We've never made the case, or argued the case that somehow Osama bin Laden was directly involved in 9/11. That evidence has never been forthcoming". VP Cheney, 3/29/2006. Interview by Tony Snow
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post #2 of 8
Wow. Madness. I thought I was doing alright with my "The Fed Reserve sucks" thread and then a simple real life event occurs and blows me away yet again.

Can you imagine, each depositor is guaranteed $250,000 by the FDIC per depositor per bank.

IE., a "normal person" only gets guaranteed up to $250,000 for that bank from the FDIC.

Now BofA wants to be guaranteed trillions of dollars of risky assets?
post #3 of 8
Quote:
Originally Posted by nvidia2008 View Post

Wow. Madness. I thought I was doing alright with my "The Fed Reserve sucks" thread and then a simple real life event occurs and blows me away yet again.

Can you imagine, each depositor is guaranteed $250,000 by the FDIC per depositor per bank.

IE., a "normal person" only gets guaranteed up to $250,000 for that bank from the FDIC.

Now BofA wants to be guaranteed trillions of dollars of risky assets?

Regulate all these banks once and for all. They are screwing us royally with their fees and their clandestine ways to obtain money. These assets are not worth the paper they are written on.
post #4 of 8
Do you know the actual liabilities on the money?

As far as I'm aware it's likely to be less than 1% overall, maybe even much less than that, not sure. I had thought , rightly or wrongly that the worlds total of these derivatives was aproximately ten times the global gdp. That would mean BoA would own a very big slice.

*Sorry, I've not read your links yet because I'm out of data nearly. Will on the 2nd though.
"Islam is as dangerous in a man as rabies in a dog"~ Sir Winston Churchill. We are nurturing a nightmare that will haunt our children, and kill theirs.
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"Islam is as dangerous in a man as rabies in a dog"~ Sir Winston Churchill. We are nurturing a nightmare that will haunt our children, and kill theirs.
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post #5 of 8
Quote:
Originally Posted by Hands Sandon View Post

Do you know the actual liabilities on the money?

As far as I'm aware it's likely to be less than 1% overall, maybe even much less than that, not sure. I had thought , rightly or wrongly that the worlds total of these derivatives was aproximately ten times the global gdp. That would mean BoA would own a very big slice.

*Sorry, I've not read your links yet because I'm out of data nearly. Will on the 2nd though.

"The BIS estimates that the total gross notional value of OTC derivatives outstanding globally almost doubled to USD 592 trillion in the three years to December 2008, although gross mark-to- market exposures are only around six per cent of this figure."

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/REP158_SurveyOfTheDerivatives.pdf/$file/REP158_SurveyOfTheDerivatives.pdf

As for Bank Of America:
post #6 of 8
post #7 of 8
"As my Aunt Eva used to tell me, there is never just one roach!"
-- http://boombustblog.com

Other banks may be doing as he says "hide the hot sausage" in mom and pop accounts. Check out the blog.
post #8 of 8
Quote:
Originally Posted by nvidia2008 View Post

"The BIS estimates that the total gross notional value of OTC derivatives outstanding globally almost doubled to USD 592 trillion in the three years to December 2008, although gross mark-to- market exposures are only around six per cent of this figure."

http://www.asic.gov.au/asic/pdflib.nsf/LookupByFileName/REP158_SurveyOfTheDerivatives.pdf/$file/REP158_SurveyOfTheDerivatives.pdf

As for Bank Of America:



Losses and profits balance out at 6%?

That's huge, but very, very unlikely too. I'd be surprised anyone would hold more than a 1% loss at the very most.
"Islam is as dangerous in a man as rabies in a dog"~ Sir Winston Churchill. We are nurturing a nightmare that will haunt our children, and kill theirs.
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"Islam is as dangerous in a man as rabies in a dog"~ Sir Winston Churchill. We are nurturing a nightmare that will haunt our children, and kill theirs.
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