Forum Post: ***Bank Accounts No Longer Protected by FDIC etc ***
Posted 12 years ago on Dec. 6, 2011, 11:40 a.m. EST by bill1102inf2
(357)
This content is user submitted and not an official statement
"Recently Bank of America transferred a bunch of derivatives into their banking arm. "A bunch" means somewhere around $80 trillion worth.
Now pay very careful attention, because part of the bankruptcy "reform" law in 2005 placed derivative claims in front of depositors in a business failure - including a bank failure.
What JP Morgan is claiming in the MF Global case is that the derivative trade (which is exactly what a "Repo to Maturity" trade is - it's a derivative) is entitled to preference in the case of MF Global over those who had cash there for safekeeping either as a margin deposit or just as free cash as you would hold free cash in a bank.
If a major bank blows up this very same claim, supported in existing Bankruptcy Law with the changes signed by George Bush in 2005, will be used to steal the entirety of your bank account, and if you detect the impending blowup shortly before it happens -- say, 90 days before -- you're still exposed to the risk through clawback!"
http://market-ticker.org/akcs-www?post=198650
**THIS IS THE REAL DEAL PEOPLE, not some made up BS, you can easily confirm the #'s.
Yes, 80 Trillion, YES, its more than the money in the world. BOA SOLD basically INSURANCE in THAT amount, they can never repay it, but they will try, WITH YOUR MONEY, the FDIC does not have ANYTHING like that to 'insure' your pathetic $250,000 deposits!
Your going to get done without lube if you bank the big banks.
Sbould there be a Global Day of Action whose major theme is moving money out of the banks?
Hells to the yes there should be. It cannot be emphasized enough how much these banks need and deserve to be torn apart and invested locally.
I think it sawesome this thread is still here
This country is falling apart, I am really not surprised by this article.
The Banksters must be brought down. They are a bunch of economic hit man who did a smashup job on our economy. These guys should be in jail. Instead they are still screwing over the American people and others in more ways than you could count.
Sad, just very, very sad!
Buy silver. Gogogogo.
$80 trillion? That would mean that Bank of America has far more than the entire national debt of all the past decades (about $15 trillion). And that would only be a portion of their funds. It would also mean the $40 billion they took in bailout money was a sneeze too small to even take the dust off their books. I think someone needs to take a better look at the numbers before posting them. They don't add up.
By 2007 Bank of America (whom I hate) had $570 billion in total assets. (I highly doubt that after this far into the great recession the value of that has gone up when bank stocks have plummeted, B of A's most of all. Remember that total assets includes ALL deposits, all money from its own income on investments, and the value of all of its bank buildings and other property it owns. So, where does the other 78.5 trillion come from. Obviously someone is feeding lies here or grossly misinformed. No bank in the world has anywhere near that much money.
--Knave Dave http://thegreatrecession.info/blog
Those are the numbers Knave, seriously - the REAL numbers. They sold 80 Trillion in derivatives (sort of like insurance but different) and they did it off balance sheet. Well, now they moved some on balance sheet and if they go, so do all the bank accounts at BOA
Well, even if the numbers were only billions, it would be far too much; but I see you are talking about the derivatives they sold, not the companies net worth or even the profit they made off those derivatives. Still, point well taken: it was a lot of volume doing the wrong thing.
Personally, I think Bank of America is the greediest bank in the world:
http://thegreatrecession.info/blog/2009/01/downtime-part-6-bailing-out-the-biggest-bullies/
--Knave Dave
--Knave Dave http://TheGreatRecession.info/blog
I know that law gives derivatives priority over bonds in a bankruptcy but do they have priority over retail bank deposits or insurance policies? If AIG had gone bankrupt they would have by law owed the CDS counter parties in those swaps deals before bond holders, AIG stockholders and bond holders would have got nothing but where do the policy holders fit into the equation? Need to know the answer --------just for my own info.(trying to put this all together in my head)
Corzines Repo to maturity trade should be a simple conservative trade what made it a big exploding mess was the leverage he was using. I've read different numbers 44 was one. In other words for every 1 million dollars he had in collateral he borrowed 43 million to purchase those bonds. I think he had 6.5 billion in those bonds. The bonds only had to go down by 3% for Corzine to be in serious trouble. If he had been conservative and used 10 to 1 leverage, he would have had %10 room to move and probly would have been fine. The excessive use of leverage was how all of our big banks got in such trouble from a small percent of foreclosures, well that and the fact that those mortgages had been securitized and no one knew WTF was in the mortgage bonds.
Frightening. Personally I have already made sure my money is out- no stock market, no big banks... it's like a ticking time bomb.
You mean I should actually research and only give my money to an institution I trust? SAY IT AIN'T SO!
The problem here is Risk Analysis. Or in current, real terms: the lack of Risk Analysis.
The Over the Counter Credit Market was a very good market, in the its beginning. This market spread the risk to those who want, for a price. This market helped lower interest rates. This market turned ugly by one event: a trade off between market stability toward one of increased liquidity. The increased liquidity resulted in an increase of market participants toward "Gambling".
The Fed's insistence to keep interest rates low by a secret bailout, to the tune of $16 trillion dollar$, was a misdirected effort. The Over the Counter Credit Market is Insolvent, not illiquid. There are no "Financial Walls" between contracts. A down turn in the economy spreads through out the Over the Counter Market.
Fannie and Freddie were increasing their portfolio from a few billion to over $2 trillion dollar$. During this period they were commenting accounting fraud. In particular, they were misrepresenting their Credit Risk. $2 trillion dollar$ of fraudulent securities is enough to change both lenders' and borrowers' behavior. The common element is called the User Cost of Capital with respect toward housing prices. They changed what was suppose to be a local economic activity to a national activity.
During this same period G. W. Bush's stance that Reagan Proved that Debt Did Not Matter was infused in ALL MARKETS. If one is a believer that the markets are efficient and operate with current knowledge then one has to conclude that G. W. Bush did informed the markets that the US of A Government WILL PROTECT THEIR DEBT.
"Don't run any crap about FDIC insurance in this sort of event either -- in the singular case of Bank of America we're talking about $77 trillion in face value of derivatives. While "notional" values are wildly beyond what anyone would have to pay (as that figure assumes the reference all goes to a literal value of zero) the fact remains that with even a 5% loss the amount of money required would be roughly equal to the entire US Federal Budget, which the FDIC clearly does not have -- nor could it acquire. "
http://market-ticker.org/akcs-www?post=198650
"After seven consecutive quarters of negative balances, the DIF became positive in the second quarter of 2011, standing at $3.9 billion at June 30. The DIF balance has increased for six quarters in a row, following seven quarters of decline. Cumulatively, the DIF balance has risen by almost $25 billion from its negative $20.9 billion low point at the end of 2009."
http://www.fdic.gov/news/news/press/2011/pr11161.html
FDIC Hits Record "Default" Level As Deposit Insurance Fund Plunges By $12.7 Billion To NEGATIVE 20.9 Billion http://www.zerohedge.com/article/fdic-hits-record-default-levels-deposit-insurance-fund-plunges-127-billion-negative-209-bill
FDIC Still As Bankrupt As Ever, DIF-to-Deposit Ratio At -0.38% http://www.zerohedge.com/article/fdic-still-bankrupt-ever-dif-deposit-ratio-038
FDIC Discloses Deposit Insurance Fund Is Now Negative http://www.zerohedge.com/article/fdic-discloses-deposit-insurance-fund-now-negative
Weren't people already warned to get their money out of these bigger banks and put it in more trustworthy smaller banks and credit unions? I don't really understand the implications of what you're saying...but if these big banks are still trying to pull another 'fast-one' on the common people, shouldn't there be agencies out there with enough 'balls' and legal power to make sure this shit doesn't happen and will never happen again?
I have a question. Do you know how long those swaps contracts are usually for? What if banks were no allowed to originate any more, how long would it take to unwind what's out there? I guess this is why we keep pushing Europe to do their own bunch of money printing, it's that mystery bunch of swaps sitting in the casino wings of our banks. God I want banking to be boring again.
That sounds insane.
Can we get both clarity and confirmation on this issue?
Is the FDIC insurance, by implication, done?
How does this affect banking co-ops as opposed to banking institutions?
these links substantiate some of the information in the article above. others at least provide a backdrop of what I think the article is getting at... and you might have already seen some of these articles too, i cannot be certain.
FDIC To Cover Losses On $75 Trillion Bank of America Derivative Bets
http://problembanklist.com/fdic-to-cover-losses-on-trillion-bank-of-america-derivative-bets-0419/
"OTC (OverTheCounter) derivatives market activity in the first half of 2011."
http://www.bis.org/publ/otc_hy1111.pdf
$707,568,901,000,000: How (And Why) Banks Increased Total Outstanding Derivatives By A Record $107 Trillion In 6 Months
http://www.zerohedge.com/news/707568901000000-how-and-why-banks-increased-total-outstanding-derivatives-record-107-trillion-6
:::::Money Found in Britain May Belong to MF Global at JPMorgan Chase:::::
By BEN PROTESS and AZAM AHMED - New York Times
http://finance.yahoo.com/news/money-found-britain-may-belong-115508178.html
-November 28, 2011-
UPDATE: JPMorgan Denies That It's Holding The Missing MF Millions
http://articles.businessinsider.com/2011-11-04/wall_street/30358645_1_mf-global-custodial-account-cnbc
Further to MonetizingDiscontent's Gr8 post (as usual), please also see :
a) http://rt.com/programs/keiser-report/ - in general,
b) http://rt.com/programs/keiser-report/episode-216-max-keiser/ - in particular &
c) No Link YET : Look out for today's 'Episode 220' which was also to this very point !
d) http://www.storyofstuff.org/movies-all/story-of-broke/ - serious but animated ...
e) http://www.informationclearinghouse.info/article28189.htm = "Inside Job" (2010) : Video - Full Movie.
radix malorum est cupiditas ...
LOL!!!! Someone has been hitting the crack pipe hard. Money up to $250,000 is fully insured and no one has or will lose a penny up to that limit if insured by FDIC. Please stop passing on lies.
Your a fucking moron.
What about MF global and Celente losing his money? Wake up stooge. The govt isnt your friend, Its the enemy of mankind. It kills, enslaves, and robs who it wants, when it wants. Nice little sock puppet acct you got , now go eff off.
Maybe I should become a homeless ows loser? Would that wake me up? Would that make me one of your mindless sheeple? The horror of you is telling me to eff off, back at you, loser.
Nope, reading a book might wake you up, but I doubt that. Maybe 1000 books, still doubt it as knowledge isnt really gained thru books, and if you arent born with the ability to absorb it, you are kinda stuck.