Federal Reserve and Bank of America Initiate a Coup to Dump Billions of Dollars of Losses on the American Taxpayer

George Washington's picture

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goldinpenguin's picture

Why have the banks been so opposed to exchange trading these exotic instruments?

Germans are reluctant to do more Greek bailing, Euro banks want to be insured against greek soverign losses, BAC probably waited too long to offload their Euro soverign and euro bank risk exposures so they might be locked into terminal losses already. It could be all over in a couple weeks, these things unwind quickly like we saw with bear, Lehman, AIG.

Woodyg's picture

So the 2 banks hold derivities worth 70+ trillon each........

The world economy is only 60 trillon........

My question is: Where the hell did all the money go? Which individuls actually benefitted the most from these derivitive moves?

And if that amount has been siphoned out WHY wouldn't they simply let these banks die? They already stole the money -

And does anyone here think we can unravel 600+ trillion in worldwide derivitives without dire consequences?

Republicae's picture

A derivative is nothing more than a contract obligation that covers an underlying asset. There is not the actual amount of money securitizing the derivative, only the obligation if the contractural agreement, as with a futures contract, the underlying asset increases or decreases in value. Since there is usually a very high leverage associated with such contracts, the actual amount of money placed against the contract is relatively small. So, no money has gone anywhere, at least not in the usual sense of the word, but if the underlying asset takes a dive then the obligation to pay the person or entity holding the contract can be, as we see, substantial. Thus, in the case of Bank of American, and perhaps many other financial institutes, the risk of extreme loss is substaintial.

waterhorse's picture

"Even worse, the total exposure is unknown because Wall Street successfully lobbied during Dodd-Frank passage so that no central exchange would exist keeping track of net derivative exposure."


Is this true?

NvrGivUp's picture

The price says it all.... BAC 6.66...



Bob's picture

I suspect that the banksters have recognized their BAC peer as the weakest kid in the gang and most likely to go down.  That being the case, he's been selected as the first guy to be sent into the battle . . . wired with explosives. 

The leaders of the gang, e.g. GS, are meanwhile milling around pretending to not know him or have any kind of connection whatsoever.  This impression is being reinforced by suddenly distinguishing themselves as the guys who AREN'T making money, as with their recent earnings. 

It looks to me like this shit is going to hit the fan pretty damn soon.  GS management doesn't casually pass up the opportunity to book profits (even if accounting gimmickry required) that are needed to support further personal sacking of the corporate assets, a.k.a., "bonuses." 

the rookie cynic's picture

BAC should be re-tickered BOAB. Bank on America's Back.

waterhorse's picture

BAC - Bastardization of American Capitalism

A_MacLaren's picture

I wrote my Senator who is on the Senate Banking Cmte about this yesterday. 

Likely impact: zero, zip, zilch, null, nada, nothing.  But what is the cost? Essentially nothing but some wasted electrons and a few minutes of my time.

Since this type of detail cannot be put on an #OWS cardboard protest sign, I remain of the opinion that those of us who are knowledgeable must act in appropriate channels to continue the effort to break the WS abuses by acting thru our DC representatives.



krispkritter's picture

If I could sober up for a couple of weeks I'd write 'Buxnet'.  A piece of software that would completely wipe all computers used by banks, traders, and government financial entities and thereby alleviate the 'crisis' due to these f'tards in the world's economic realm using 1's and 0's to create billion and trillions. Really, if the Sun took a dump tomorrow and EMP'd the whole f'ing thing we'd all be back to the bills in our wallets and the gold in our sock drawer, er, safe deposit boxes. How can these retards keep conjuring these insane numbers which no one can truly comprehend and then contrive schemes like the above to try to fix what they made up out of thin air to begin with? Is the absurdity of this reaching through to anyone? I can't imagine the alterered reality that politicians and financial-types must exist in for them to believe that they have any control over this now that Spendora's box is open. Really? I need an f'in drink...must be 5o'clock here...

Lord Welligton's picture

One question worth asking, apart from the obvious, is if they have $75tn and $53tn has been pushed onto Depositors/FDIC/Taxpayer ....

How did they pick and choose what to dump?

Plata con Carne's picture

End the Fed! Donate to Ron Paul's Black THIS Out moneybomb today!  http://www.ronpaul2012.com/

DosZap's picture

As much as I love Ron Paul,voting for him, will guarantee Obama a second term.(then we see NO America.)

Herman Cain, is really the front runner, and Herman ain was also on the Federal Reserve Board (which is common in the 12 District Branches),as they have  major city business men and city officials sitting on all 12.

Problem is, we will likely have a split,and that will give Barry the win.

Mitt/Cain/Paul, splitting the votes will screw the GOP's chances,O wins again.

Escapeclaws's picture

Vote for who you want and ignore this bad advice.

Mr. Magniloquent's picture

You're clearly confused. Hermain Cain is the lasted FED-shilling, cluless, neocon of the month. How many "front-runners" has the public been spoon fed before Cain? Cain is just the latest "anyone but Dr. Paul" candidate. The GOP would rather lose to Obama by anyone else than win with Dr. Paul. That says everything--about both Obama & every other GOP candidate.

Abiotic Oil's picture

Are you high?  You are saying Herman being a Chairman of the KC Fed is a good thing?  Seriously?

Herman Cain wants to tax the poor and middle class (many of whom are not currently paying federal income taxes due to not making enough $) with his "Nein, Nein, Nein" plan.  This would be a tax in addition to the hidden inflation tax that is causing food prices to soar to the point that we have a peanut butter shortage because that's all people can afford to eat.

Herman supported TARP for god's sake!  He thinks TARP was a good idea.  He doesn't even understand the economic problems we face let alone issues like foreign policy and how our foreign policy influences our economy.

Ron Paul has forgotten more about economics and foreign policy than Herman has ever known.

Ron Paul will destroy Obama in one on one debates.

rcwhalen's picture

Tell em George.  My question as per Yves Smith is why are we making these changes now???  What was wrong with a year ago?? Smells like Lehman in the Morning, to paraphrase Robert Duval in "Apocalypse Now"

EB's picture

What was wrong with a year ago??

Schneiderman was not all over Moynihan's rear.

pendragon's picture

the complicit fed officials should be indicted

Shizzmoney's picture

Speaker FTD is right on point....the thing is so much shit is fucked up, that it maybe too late to focus on just one thing to fix.

But this is obviously one of them.  OWS has been focusing on it, but the movement has gotten off rail thanks to anarchists and lefty who, I agree with, find the only way to retake and fix the system is to hijack it. 



nah's picture

the whole line that the fed is some imparcial entity setting 'interest rates' to manage the economy backed by some regulation authority is a total fraud... seriously end the fed


the federal reserve is just a banking appointed body explicitly backing the banks that is as powerful as the Congress of the United States of America


this is just a magic show where the taxpayer gets endlessly sawed in half


end the fed

Shizzmoney's picture

The American people will be stuck in nightmare of a never-ending depression (yes, we are currently in a depression) and fascism (or socialism, if you prefer that term)

 LOL at people thinking this is a Socialist state.  last time i checked, they get FREE healthcare in socialist states, and investment banks and commerical banks don't fuck each other at night behind their spouses' (taxpayers) backs.

We live in a quasi-fascist state now.   We are still allowed free speech, but that won't last for long when the big bank led gov't and their business cronies use occupy wall street and civil unrest to cut off our communication balls like twitter and internet message boards.  We'll be "allowed" to keep Facebook, but they'll censor content from users (as long as they play on FarmVille).

Escapeclaws's picture

Free speech is a privilege, not a right. If you abuse the privilege it will be taken away from you. Just like your driving "privilege"

/Sarc off

SheepDog-One's picture

'See, we have to dump trillions of bad debt on the taxpayers, or else the markets might get 'upset'!'

Gee cant have THAT!

iNull's picture

You're correct. But we still need them. In their brains are the answers to what happened, and if we split 'em open now we lose all those delicious answers. Wait till we extract the fucking answers from their brains, then you can grab an axe.

Dude, I'm just fuckin' around. Not serious. Please don't split somebody's head open with an axe in attempt to get at the meaning of life, and then when they are sweating you down at the police station say "well I read it on the internet. This guy called iNull said if we just split this guy's head open the secrets of the universe...." Dude, please don't be that guy. Thank you.

Georgesblog's picture

I loved that scene in "The Longest Yard".  If the public doesn't call a different play on defense in the debt game, it's going out on a stretcher.

If people understood what I'm saying, I wouldn't have to write them.

http://georgesblogforum.wordpr ess.com/2011/10/19/different-worlds/

blueridgeviews's picture

This outrageous act is all tthe proof I need that this administration and their appointments will sell the American public down the road before they will fix what is so blatantly broken.

Denninger is correct when he says this is a depression.  Instead of soup lines we have 50 million Americans on food stamps or whatever nice name they give it now.

America is on a slow death march and nothing will be done till everyone feels the financial pain. Poor people feel it first, rich people feel it last.

MacGruber's picture

Well said, that's why I'm in favor of a black swan. I want the system to faulter to shake people from their debt-serf slumber.

Reality is what we collectively make it, and right now the reality is productive people carry the unproductive (bansters, etc). The formerly productive people (the unemployed and underemployed) are demonized in a way that should be reserved for the banksters and their cronies. 

With a small catalyst I think millions could awake and rightfully riot for being so disenfranchised. The ether sponge just has to be removed from the patient's face.

UGrev's picture

in 1930, they jumped.. in 2011 they get pushed.. 

Republicae's picture

Yeah, at the end of a bayonet!

FEDbuster's picture

Well there have been calls for them to jump, "Jump You Fuckers":


If you like that, you may enjoy seeing the singer/songwriter, Gene Burnett, recently singing this in front of his local JP Morgan Chase bank:


Fuck these fuckers.  I'll take Kyle Bass's advice and keep buying guns and gold (plus lots of food and seeds) with any investment funds.

Close your accounts with these assholes while you still can.  Don't bring a sign, because you can't be a protester and customer at the same time (according to BofA management).

LawsofPhysics's picture

We can only hope.  I don't know about the American dream, but the dollar died in 1971.

Republicae's picture

It did indeed die in 1971, but it was infected with the carcinogen called the Federal Reserve back in 1913!

NuYawkFrankie's picture



A bathroom-attendant named TOTUS

Was employed to retrieve Wall St floaters,

He let them mature

'til they smelled like manure,

Then he sprayed all that sh!t on the voters

stacking12321's picture

that's very poetic.

i am a free man.

but you are NUMBER TWO!

NuYawkFrankie's picture

Nope - I am No. 6

Who is Number One?

moonman's picture

I am not a number. I am a free man.

Oh wait, no I am not


Taint Boil's picture

Are you this guy from patrick.net:  Vicente

stacking12321's picture


yes officer that's him!

that's the man i saw saying frightening things, talking about getting off the island.

saying strange, terrifying things, UNMUTUAL things!


honestann's picture

Hang the banksters, all of them.  Start at the federal reserve, then continue with all the "too big to fail", then probably one or two levels below, then all other large financial corporations who have manipulated the government into covering their ass and shifting their losses to others.  Hang them all, and leave their skeletons hanging everywhere to remind future predators what should and hopefully will happen to them.

dalkrin's picture

Bank of Countrywide Lynch

Republicae's picture

Ah, there has beenmore than little manipulation of our government, our government is in on the corruption, the crime and think nothing of the American People! So, you best save some rope for those in the government as well. The regulations proposed and passed by Congress has made all of this croney capitalism possible with privatized profits and socialised risks.

honestann's picture

Yup.  Hang everyone at high levels of government too.  We might need to make an exception for Ron Paul.  Otherwise, hang them all: administration, congress, courts, and probably the top several levels of every department of the federal government... at least.  I'm not sure how far down the hierarchy the "oath to protect the constitution" is applied, but perhaps all who have taken the oath should be hung.  They certainly deserve to be hung for treason and crimes against humanity.

bernorange's picture

Don't worry.  I'm sure our esteemed attorney general will enforce the rule of law and look after the interests of the American people.

Yeah - I'm "laughing" too.


HD's picture

You know Ken Lewis is sitting on a beach somewhere getting blown by $2000 a hour call girls laughing his ass off...

AldousHuxley's picture

Fed > Goldman > Bank of America


I think Ken Lewis is being used as a scapegoat to some degree given power structure above, but he definitely is not sitting with a call girl....he is sitting with a $2000 an hour team of lawyers.


The Schwab S&P 500 Index investment fund filed a multibillion-dollar lawsuit against Bank of America and its former CEO Ken Lewis this week


This lawsuit, brought by Bank of America shareholders, claims that Bank of America and its executives, including its former chief executive, Kenneth D. Lewis, failed to disclose what would be a $15.31 billion loss at Merrill in the days before and after Bank of America's acquisition.



HD's picture

 Good post.

  It does give me a warm feeling to know that at least there is someone that can feast on the bones of bankers - lawyers.

AldousHuxley's picture

greed vs. greed...keeps greed in check.


now when this kind of "clawback" is possible, why are attorney generals not pursuing bankster bonuses the same way?


Oh that's right, they character assassinated Eliot Spitzer off, before shit hit the fan as if he is the only one on wall st.




the part owner of a Major League Baseball team who "loves Kelsey"

the CEO of one of the country's largest private equity firms who met "Cameron" at the Peninsula Hotel

a major New York real estate developer who, according to the list, "will come to the door wearing women's panties," and who spent nearly $100,000

a partner at the Wall Street law firm Cravath Swaine Moore "looking for a party girl to come fully equipped" and spent a total of $20,000

an investment banker from Lehman Brothers who saw "Kelsey and Keely together" and later saw "Aria and Skyler at the same time"

an investment banker at JP Morgan Securities who "loves Brooke" and spent $41,600

an investment banker at Goldman Sachs who "only wanted all-American girls" and spent $27,000

a managing director from Merrill Lynch who saw "Lana" using the name "Nataly"

a managing director from Deutsche Bank "who called about seeing Nataly again"

Everybodys All American's picture

This will definately cause a bank run.