oh this is not good at all
Oct. 20th, 2011 12:15 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
solarbirdIf I'm reading this right - and I reserve the possibility of not understanding something, since a lot of people are declining to release details - THIS IS VERY BAD. Crossing-the-streams bad.
I was trying to find time to make another econ post, but if I understand what's going on, this is an "everyone should know about this" event - not because of the Dead Bank Walking (Bank of America), but because of the way they're trying to backstop their derivatives losses and transfer those losses to you.
Basically, they're moving all their CDS and similar instruments over from Merrill Lynch (the investment bank) to the deposit bank's books. What this does is makes their Merrill Lynch holding look technically better, by using their own retail banking as a "bad bank" to hold the liabilities. Normally when this is done, the "bad bank" is intended to die. Keep that in mind.
Also, it uses all deposits - insured deposits - as backstop for the overall corporation's derivatives. If Europe implodes, BoA retail now falls over dead unless bailed out again. By taking those deposits out with them, they're either 1) putting a lot more pressure on the US to bail them out again if they fall over, and 2) transferring their Merrill Lynch CDS losses to the FDIC!
The numbers are more than large enough to bankrupt the FDIC. Of course, the FDIC will have to be backstopped by the US government to prevent total panic, which is to say, these losses will again be picked up by you, the taxpayer.
The FDIC is saying "fuck you, no!" while the Fed is saying "sure, go ahead," which shows you yet again how completely the Fed is owned by the agents they are supposed to regulate.
Here's the article that got me started; follow the links to Bloomberg to see their coverage as well.
I was trying to find time to make another econ post, but if I understand what's going on, this is an "everyone should know about this" event - not because of the Dead Bank Walking (Bank of America), but because of the way they're trying to backstop their derivatives losses and transfer those losses to you.
Basically, they're moving all their CDS and similar instruments over from Merrill Lynch (the investment bank) to the deposit bank's books. What this does is makes their Merrill Lynch holding look technically better, by using their own retail banking as a "bad bank" to hold the liabilities. Normally when this is done, the "bad bank" is intended to die. Keep that in mind.
Also, it uses all deposits - insured deposits - as backstop for the overall corporation's derivatives. If Europe implodes, BoA retail now falls over dead unless bailed out again. By taking those deposits out with them, they're either 1) putting a lot more pressure on the US to bail them out again if they fall over, and 2) transferring their Merrill Lynch CDS losses to the FDIC!
The numbers are more than large enough to bankrupt the FDIC. Of course, the FDIC will have to be backstopped by the US government to prevent total panic, which is to say, these losses will again be picked up by you, the taxpayer.
The FDIC is saying "fuck you, no!" while the Fed is saying "sure, go ahead," which shows you yet again how completely the Fed is owned by the agents they are supposed to regulate.
Here's the article that got me started; follow the links to Bloomberg to see their coverage as well.
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no subject
Date: 2011-10-20 08:21 am (UTC)no subject
Date: 2011-10-20 08:29 am (UTC)Of course, that assumes rules apply, which we know they don't, but there's no way to backstop that much no matter what, so.
no subject
Date: 2011-10-20 09:26 am (UTC)no subject
Date: 2011-10-20 02:17 pm (UTC)Good thing my wife and I have moved our deposits out of BofA into a local credit union.
My two step plan to solve the problem!
Date: 2011-10-20 02:49 pm (UTC)Gitmo without trial for the executive suite.
Re: My two step plan to solve the problem!
Date: 2011-10-20 05:08 pm (UTC)Re: My two step plan to solve the problem!
Date: 2011-10-20 07:28 pm (UTC)no subject
Date: 2011-10-20 09:24 pm (UTC)But no matter which pocket it comes out of, BofA is going to be backstopped by some part of the US government.
Re: My two step plan to solve the problem!
Date: 2011-10-20 09:31 pm (UTC)no subject
Date: 2011-10-21 12:10 am (UTC)Also, may I repost this?
no subject
Date: 2011-10-21 12:15 am (UTC)no subject
Date: 2011-10-23 03:53 am (UTC)Nov. 5, 2011 Bank Transfer Day!
Together we can ensure that these banking institutions will ALWAYS remember the 5th of November!! If the 99% removes our funds from the major banking institutions to non-profit credit unions on or by this date, we will send a clear message to the 1% that conscious consumers won’t support companies with unethical business practices.
• Research your local credit union options
• Open an account with the one that best suits your needs
• Cancel all automatic withdrawals & deposits
• Transfer your funds to the new account
• Follow your bank’s procedures to close your account before 11/05
FIND A CREDIT UNION
USA: http://www.findacreditunion.com/
CANADA: http://locator.cucentral.com/
UK: http://www.findyourcreditunion.co.uk/
Done recently (20111020 Th - 1025 Tu)
Date: 2011-10-26 03:24 pm (UTC)