Fukushima and Obama - A Derivative Love Story

[WhiskeyGirl]

"Financial Fukushima: US Big Bank Derivative Bets Double in Six Years To $236 Trillion"

I was working on my own update, between the usual distractions, of the Sept 2012 BIS information, when Peter Miller sent this nice summary of the situation my way. A relatively small number of very large banks represent enormous counterparty risk to the world financial system because of the almost geometric growth of the largely unregulated and historically unprecedented derivatives market.

more here - http://www.marketoracle.co.uk/Article36859.html

According to the Bank for International Settlements (BIS), the notational value of derivatives at the end of 2011 was $648 trillion.

Wow, that's way more than Obama spends in a year...

America’s major banks now hold derivatives with a notational worth of $225 trillion – about a third of the world total. No kidding. Trillion.

And that’s up from a mere $120 trillion six years ago. Rather than being weened off derivatives, America’s big banks are more deeply entrenched then ever.

Where are they getting the money?  Would a bookie let you gamble with derivatives on credit?  In God We Trust, All Others Pay Cash?

First, unlike mortgages there’s no limit to the size of a derivative bet or the size of the derivative marketplace because none of the bettors actually are required to own the underlying asset. For instance you might bet that the price of oil will rise or fall without owning a single drop. The bet concerns the movement of value and not the ownership of the oil.

How to fix?

This can be done with regulations which restrict the ownership of derivatives and derivative interests to individuals and partnerships. Federally-regulated banks, savings associations and credit unions would be prohibited from originating, buying, selling, brokering, owning, trading, holding or financing derivative interests, directly and indirectly, for themselves or for another party.

Isn't this what destroyed the system in 2008?  Why did it double?  Why are banks, backed by US taxpayers on the hook?

more here http://www.ourbroker.com/news/big_bank_derivatives_double_100412/

Why does Obama brag about fixing anything?  More Obama investments?
What exactly is Obama bragging about? 

[WhiskeyGirl]

"FDIC To Cover Losses On $75 Trillion Bank of America Derivative Bets"

Potential losses on Bank of America’s massive $75 trillion book of risky derivative contracts has just been dumped onto the FDIC by the Federal Reserve.

The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.

Why do taxpayers get stuck with the losses?

The Dodd-Frank attempt to end “To Big To Fail” by giving the FDIC resolution authority has been a failure.  In another crisis, the FDIC does not have the resources to absorb potentially huge losses from Bank of America’s derivative bets.  Furthermore, without massive government guarantees, there would be no buyer for a failed Bank of America given the open ended risks involved.  To prevent complete panic by the public from a looming failure of Bank of America, the Fed, FDIC and US Treasury would again have to provide virtually unlimited financial support, courtesy of the U.S. taxpayer.

US taxpayers and the never ending QE...

read more here - http://problembanklist.com/fdic-to-cover-losses-on-trillion-bank-of-america-derivative-bets-0419/

[WhiskeyGirl]

At issue is BofA’s decision to shift what sources say is some $55 trillion in derivatives at Merrill Lynch to the retail bank unit, which houses trillions in deposits insured by the FDIC.

Critics say the move potentially imperils everyday depositors by placing their money and savings at risk should BofA run into trouble.

BofA officials who have talked privately say the move was requested by its counterparties and shouldn’t be perceived as problematic for the bank giant, sources said.

source - http://74.6.238.254/search/srpcache?ei=UTF-8&p=derivative+fdic&fr=yfp-t-701&u=http://cc.bingj.com/cache.aspx?q=derivative+fdic&d=5036545668875038&mkt=en-US&setlang=en-US&w=6a7ac51,87dd3f56&icp=1&.intl=us&sig=mlhIzlo4fvoIsZKzvXr91g--

Who are the counterparties?  Why should they be in front of taxpayers and depositors?

Where is Super Obama saving the working people?

[WhiskeyGirl]

At issue is BofA’s decision to shift what sources say is some $55 trillion in derivatives at Merrill Lynch to the retail bank unit, which houses trillions in deposits insured by the FDIC.

Critics say the move potentially imperils everyday depositors by placing their money and savings at risk should BofA run into trouble.

BofA officials who have talked privately say the move was requested by its counterparties and shouldn’t be perceived as problematic for the bank giant, sources said.

source - http://74.6.238.254/search/srpcache?ei=UTF-8&p=derivative+fdic&fr=yfp-t-701&u=http://cc.bingj.com/cache.aspx?q=derivative+fdic&d=5036545668875038&mkt=en-US&setlang=en-US&w=6a7ac51,87dd3f56&icp=1&.intl=us&sig=mlhIzlo4fvoIsZKzvXr91g--

Who are the counterparties?  Why should they be in front of taxpayers and depositors?

Where is Super Obama saving the working people?

more links-

http://problembanklist.com/bank-of-america-derivatives-timebomb-shows-system-is-corrupt-to-the-core-0426/

http://crooksandliars.com/karoli/truth-about-bank-americas-derivatives-trans

http://seekingalpha.com/article/300999-bofa-puts-taxpayers-on-the-hook-for-merrill-s-derivatives

[WhiskeyGirl]

"Derivative Meltdown and U.S. Dollar Collapse "

"The elegance of derivatives is that the rules that defy nature are not involved in intangible swaps. The basic value in the payment from the risk is always dumped on the back of the taxpayer. Ponzi schemes are legal when government croupiers spin loaded balls on their fudged roulette tables."

It should be self-evident that additional U.S. Treasury bailouts with unlimited Federal Reserve claims against every asset of collateral that can be attached, is obscene in its nature. Hedging is equivalent to reassigning betting risk to unfunded insurance underwriters that would never be able to pay off the claim. Governments are broke by almost any financial standard. Central banksters accumulate titles to real property and assets by hook or crook.

Nation states held hostage to financial manipulation are slaves to the central banks. With the demise of the Dollar, the fake debt obligations of the United States must be repudiated....Interacting commerce in Dollars with American companies will continue, but the yoke of Federal Reserve Notes legal tender will be rejected when the derivative meltdown explodes.

Meltdown before or after election? 

read more here - http://www.marketoracle.co.uk/Article37058.html

Why didn't Obama fix this?  Stop the borrowing?  Debt?  Derivatives?  Why is he saddling generations of Americans with this debt?

more here - Source : http://www.batr.org/negotium/101712.html

I don't think Obama's financial reforms are working.  For some reason, American taxpayers keep getting stuck with the bill.  The bad debt.  The gambling debts of high rollers and international big banks.  What's wrong with this picture?

[WhiskeyGirl]

The quadrillion dollar question is what is motivating the Chairman of the Federal Reserve Bank, Ben Bernanke, to implement what is called QE3...Quantitative easing is new for the U.S. since the Great Recession of 2008 and it now allows the Fed to buy other financial assets of whatever the banks want to unload, such as very risky sub-prime mortgages and derivative securities.

Why would taxpayers want to buy derivatives unloaded by banks? Derivatives seem to be bad debts, failed from the start unless you are the one on the receiving end of the money...

Who get's rich when the debts/derivatives are called in?  Who gets rich while taxpayers suffer in poverty?  Lose everything?

Today the Federal Reserve continues to serve its real masters: The U.S. banking cartel. Whenever there is a conflict concerning the best interest of the people, the public will usually be sacrificed.

A simple example of putting banks ahead of people is that five years after the worst financial crisis of the U.S. since the 1930’s Great Depression, the banks “seem” to have returned to financial health and profitability, while the American people are still struggling with high unemployment, low wages, home foreclosures and a Great Recession that keeps dragging on and on.

Why is all of this happening on Obama's watch?  Where is Obama?  Why isn't he out saving the little people?  Americans?

Whatever the case, QE3 is not a good sign for the economy, the political process or the vast majority of people who have been adversely affected by the Great Recession through no fault of their own. They are the ones that have been waiting for 5 years for trickle down relief. President Obama and Chairman Bernanke, please look out the window; it is not trickling down outside yet. It is way past time to give people some real bottom up financial recovery for a change we can all believe in.

What is Obama promising?  Nothing?  Four more years of the same, only worse?

read more here - http://therealnews.com/t2/component/content/article/170-more-blog-posts-from-david-william/1253-the-quadrillion-dollar-question

[WhiskeyGirl]

Q. Or to summarize: It is a bet. It's like Vegas, but with more graphs and pie charts ... and we use your Grandma's pension.

Q. Or to summarize: It is a bet. It's like Vegas, but with more graphs and pie charts ... and we use your Grandma's pension.

 ::snipping2::

But here is a slightly more troubling fact: Gambling is illegal.

 ::snipping2:: if you and I write a contract saying "I bet you $100 the Jets will win this weekend," and they win and you don't pay me, and I sue you, courts will throw my case out because gambling contracts are not enforceable.

Derivatives contracts mostly are.* That's important! Banks, by the magic of derivatives, transform a thing that doesn't work under the law — "betting" — into something that does work — "hedging" or "speculating" or whatever.

"  ::snipping2:: Derivatives are tools for hacking the tax code, or the securities laws, or U.S. generally accepted accounting principles. This is called "regulatory arbitrage." "

Didn't Obama run on closing the loopholes?  Making the rich pay more?  For some reason I don't think that covers dumping gambling debts on tax payers.  A deception?  Bait and switch?

There are lots of examples that talk about how to make lots of money.  What happens when they lose?  Why are the losses being socialized onto the backs of taxpayers? 

read more here - http://wbaa.org/post/ask-banker-derivatives-gambling-and-getting-around-regulation

[WhiskeyGirl]

Derivatives only seem to make everything better for Main Street - Thank you Barack Obama.

Instead of curtailing derivative trading, the major banks have expanded their risky trading.  Bank of America, with a massive position of $75 trillion in gross derivatives, suddenly has a crisis on its hands. Nervous counter parties are demanding more cash collateral after downgrades of Bank of America’s credit rating.   It’s 2008 all over again, nothing has changed and the risk of losses are once again being transferred to taxpayers as explained by Bloomberg.

http://problembanklist.com/fdic-to-cover-losses-on-trillion-bank-of-america-derivative-bets-0419/

read more -

Although the FDIC currently insures deposits at 8,195  banks and savings associations, 8,175 of those institutions are almost irrelevant since the top 20 banks have 70% of the entire banking system’s assets.   Even more astonishing is the huge concentration of assets at the “Top Five Mega Banks”.   The most recent FDIC Depository Report as of June 30, 2009 shows a total of $13.3 trillion dollars in assets held by the 8,195 FDIC insured institutions.  The Top Five Mega Bank’s total assets of $8.29 trillion represent a staggering 62.3% of total banking industry assets.

BOA is on the list.  Assets - Liabilities = ?

Why aren't the liabilities included in the list?  Underwater?  Why are taxpayers getting stuck again?

more here - http://problembanklist.com/will-too-big-to-fail-banks-crash-the-financial-system/