Do you know what this means?

So what we see happening now is this little blurb out of 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.

Okay you say.. what's so bad about that? Ahh the plot thickens. Merril's derivative unit is loaded to the gills with tens of billions worth of exposure to European nightmares. If European banks were to start failing and defaulting, Merrill's people would be on the hook for an amount that couldn't possibly be covered. So, Bank of America has quietly moved these holdings to it's depositary arm of the bank.. yes folks, the arm that is COVERED BY FDIC INSURANCE. Yes you read that right. Not only that, apparently JP Morgan is doing the same exact thing with somewhere north of 79 TRILLION worth of derivatives. Are you getting these numbers? Trillions folks.

Now the FDIC who would be on the hook for all this, and who is already broke beyond repair is saying "this isn't right you can't take speculative junk and put it in the deposit arm of the bank that is insured". Well guess who's fighting them? The Federal Reserve! Yes check this, also from Bloomberg...

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.

So what's the take away here? The bottom line is that Wall Street and our Federal Reserve have abandoned any and all things you could consider rational, and decided that they should be absolved of their risk taking by placing the mess right on YOU. This is so outrageous, I cannot believe it is not on every single talking head channel on TV. Yet, not a peep. Not a word. Nothing. It's like it's not happening.

There are somewhere around 700 TRILLION worth of derivatives floating around out there. No one knows their true worth and no one knows all the parties that are connected to them. The idiots that drafted Dodd Frank didn't think it necessary to create a clearing house to monitor who and were all these time bombs reside. Well I'll tell you where they're going to end up! Right in the General fund! And we're seeing them do it right now under our noses.. and no one mentions a word of this on main stream media. No one on CNBC. Not a word of this from the Politicians.

Excerpted from the financial Intelligence report.

Wowoeewow ... Ummm that's not what the FDIC is for??

Like I said. We're going to have a Depression that will make the Great Depression seem like the good old days.

Sounds like there needs to be some regulations in place for this kind of situation. It also sounds more and more like the Federal Reserve should be reformed into a public-only entity rather than a private-public hybrid.

My only real gripe with the Fed is the heavy banker influence, and this seems to be an example of that influence IMO.

mame said:

It also sounds more and more like the Federal Reserve should be reformed into a public-only entity rather than a private-public hybrid.

My only real gripe with the Fed is the heavy banker influence, and this seems to be an example of that influence IMO.

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your getting there bud. Nice to see you come around on this a bit.

deprave said:

your getting there bud. Nice to see you come around on this a bit.

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I've kind of always disliked the whole public-private make up of the Federal Reserve. I'd retain the appointee system rather than expose officials to votes, but I wouldn't give the bankers any say on monetary policy because they skew policy towards price stability for their own gains. I understand there are a few of these inflationista/price stability types in the Federal Reserve right now, essentially blocking the Bernanke camp from further action on the economy(according to the Washington Post if I remember right, I'll see if I can find that article again).

Q- Do you know waht this means?
A- That I should be expecting to give the Govt and the banks a larger portion of my income and that the portion I am allowed to keep withbe worth less and buy fewer goods and services?
And the fundementals for Silver have again improved?

That's enough to cripple the world economies 20 times over. Holy crap, were screwed back to the dark ages.

DE REGULATE

there's consequences to how we let our banks do business....

redivider said:

DE REGULATE

there's consequences to how we let our banks do business....

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So The saying,,, "The Bank's" are the problem is true.,,,There more powerful and have more power than any "Government",,,anyway so give them more power? Good deed's are turned against us all to protect the "Bank's influence of greed",,,Fuck Big Bank's join a credit Union.,,,It's our money not there's!

Carne Seca said:

Like I said. We're going to have a Depression that will make the Great Depression seem like the good old days.

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yay ill get the hoola hoops someone grab some stick so we can keep hitting them and see who can get one the furthest.

ZOMG! we're all gonna die and money will be worthless and there will be a revolution!

ZOMG!

the "massive depression"

Carne Seca said:

Like I said. We're going to have a Depression that will make the Great Depression seem like the good old days.

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Probably the most heinous crime in 300 years and only 12 responses.

NoDrama said:

Probably the most heinous crime in 300 years and only 12 responses.

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Most people are dumb and don't care, that's why most of us will get exterminated and most of those who remain will be enslaved.

Are they under different regs than us? My shit is only insured by the FDIC for up to $100,000, not that it matters 'cuz I aint got that in the bank anyway.

I may be naive, but the only way out as I see it is to call everything due, let the house of cards come tumbling down and re-group from there. Yes, it will devastate those who are heavily vested in stocks, banks and such, but anything less is just letting them fleece the market even more. I don't even stash cash away anymore. It's gold, Diamond and Emeralds that will hold value. The dollar won't be worth shit.

Carne Seca said:

Like I said. We're going to have a Depression that will make the Great Depression seem like the good old days.

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Things would have to get a tremendous amount worse for that to happen. Over the four years from 1929 to 1933, production at the nation’s factories, mines and utilities fell by more than half. People’s real disposable incomes dropped 28 percent. Stock prices collapsed to one-tenth of their pre-crash height. The number of unemployed Americans rose from 1.6 million in 1929 to 12.8 million in 1933, so the number of unemployed went up to eight times as much as just previous to the crash.

If things got so bad that they made The Great Depression look like "the good old days" people would be murdering each other for the last Chiclet or Tic-Tac. There would be total anarchy, the complete collapse of society, life would be like "The Road Warrior."

NoDrama said:

Probably the most heinous crime in 300 years and only 12 responses.

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I've been too dumbfounded to respond. I still don't know what to say. We are so screwed.

NoDrama said:

Probably the most heinous crime in 300 years and only 12 responses.

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When it comes to the most heinous crime in 300 years it tops The Holocaust and The Rape of Nanking and Pol Pot's Killing Fields and other similar stuff for sure!

You should change your name from NoDrama to UltimateExtremeDrama.

The Bank of America thing is not exactly Kool and the Gang, but try to keep things in perspective.

Brick Top said:

Things would have to get a tremendous amount worse for that to happen. Over the four years from 1929 to 1933, production at the nation’s factories, mines and utilities fell by more than half. People’s real disposable incomes dropped 28 percent. Stock prices collapsed to one-tenth of their pre-crash height. The number of unemployed Americans rose from 1.6 million in 1929 to 12.8 million in 1933, so the number of unemployed went up to eight times as much as just previous to the crash.

If things got so bad that they made The Great Depression look like "the good old days" people would be murdering each other for the last Chiclet or Tic-Tac. There would be total anarchy, the complete collapse of society, life would be like "The Road Warrior."

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I think Carne is right though, can you imagine the Deficit all of a sudden going from $14 trillion to $160 Trillion and what that would do? What would the interest on that amount be assuming 3% average? $4.8 Trillion? What is the total revenue by Government? $4.3 Trillion? Pretty sure that would totally kill the markets because it is an instant default. Of course if the Fed ramps up money creation with more QE, then they might be able to inflate it all away. Either way I think we are in for tough times ahead.