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Geithner's Legacy: The "0.2%" Hold $7.8 Trillion, Or 69% Of All Assets; And $212 Trillion Of Derivative Liabilities

Tyler Durden's picture




 

As of this morning Tim Geithner is no longer Treasury Secretary. And while Tim Geithner's reign of clueless pandering to the banks has left the US will absolutely disastrous consequences, an outcome that will become clear in time, the most ruinous of his policies is making the banks which were too big to fail to begin with, so big they can neither fail nor be sued, as the recent fiasco surrounding the exit of Assistant attorney general Lanny Breuer showed. Just how big are these banks? Dallas Fed's Disk Fisher explains.

It is important to have an accurate view of the landscape of banking today in order to understand the impact of this proposal.

 

As of third quarter 2012, there were approximately 5,600 commercial banking organizations in the U.S. The bulk of these—roughly 5,500—were community banks with assets of less than $10 billion. These community-focused organizations accounted for 98.6 percent of all banks but only 12 percent of total industry assets. Another group numbering nearly 70 banking organizations—with assets of between $10 billion and $250 billion—accounted for 1.2 percent of banks, while controlling 19 percent of industry assets. The remaining group, the megabanks—with assets of between $250 billion and $2.3 trillion—was made up of a mere 12 institutions. These dozen behemoths accounted for roughly 0.2 percent of all banks, but they held 69 percent of industry assets.

What does this mean numerically?

As the most recent weekly H.8 statement shows, there was $11.25 trillion in total assets at domestically chartered commercial banks. Which means that just 12 banks now control some $7.76 trillion.

And that is Tim Geithner's true legacy: the "0.2%" now control 69% of everything.

But wait, this is just the asset side. What about the liabilities that these assets support, and especially the over the counter derivative side?

Well, according to the latest Q3 OCC report, the total amount of derivative exposure at just the Top 4 banks is now some $212 trillion, or 93.2% of the total $227 trillion in outstanding US derivatives.

 

To summarize: the top 12 banks control 69% of all financial assets, some $7.8 trillion yet just the top 4 are responsible for 93.2% of all derivative exposure.

A job well done, Mr Geithner.

And now, can you please head the Federal Reserve when Bernanke retires in one year to finish your job of completely dismantling these here United States and destroying the country's middle class?

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Sat, 01/26/2013 - 14:55 | 3187922 mikla
mikla's picture

That's what you get when there is no accounting, no reserve requirements, and banks merely print money to seize assets.

Sat, 01/26/2013 - 15:00 | 3187930 Death and Gravity
Death and Gravity's picture

93% of all derivative liabilities - doesn't this mean that as soon as the shtf, these people will be cut off from their debt?

Hold the phone!

Sat, 01/26/2013 - 15:05 | 3187936 Kitler
Kitler's picture

No no no... it doesn't work like that.

They just get access to even more free money. After all the (shit) show must go on, bonuses to pay, politicians to buy... I'm sure you are getting the idea.

Sat, 01/26/2013 - 17:19 | 3188105 SafelyGraze
SafelyGraze's picture

Geithner's Legacy: The "0.2%" Hold $7.8 Trillion, Or 69% Of All Assets; And $212 Trillion Of Derivative Liabilities

bless his heart! http://www.youtube.com/watch?v=R3h2mOgCaiQ

 

Sat, 01/26/2013 - 18:18 | 3188190 walküre
walküre's picture

Well then the objective is to expose the lies, uncover the truth and spread the word.

0.2% won't be able to hold out for long when more and more of 99.8% ask questions and want to see some semblance of fairness and lawfulness restored.

Who remembers the names of the French aristocracy today that ended very publicly on the proverbial chopping block? See, in a couple hundred years nobody will remember the names of the current crop of crooks either but the next 200 years will potentially see a sharp correction from this unsustainable financial path we're on and give next generations a chance to get it right.

Sat, 01/26/2013 - 19:23 | 3188309 Fredo Corleone
Fredo Corleone's picture

“I believe that banking institutions are more dangerous to our liberties than standing armies.”

Thomas Jefferson.

Sun, 01/27/2013 - 04:51 | 3188822 Boris Alatovkrap
Boris Alatovkrap's picture

"If people is see how bank is screw people, something is bad happen tomorrow"

Henry T. Ford

Sun, 01/27/2013 - 12:06 | 3189069 Urban Roman
Urban Roman's picture

Long rope & pitchforks

Sat, 01/26/2013 - 15:20 | 3187943 mikla
mikla's picture

Liabilities don't exist.

(1) Current numbers are "fictitious" (they do not account for risk)

(2) Realized liabilities can't happen until there is accounting, and we don't do that anymore.

(3) Should realized liabilities occur, they will be transferred to the taxpayer, or a "good-bank/bad-bank" scenario (also transfering to the taxpayer), with the "favoured-elite" keeping their bonuses and running the "good-bank".

Last, and most important:

(4) The concept of "liabilities" is only important for the sake of "increased-leverage", where "more liabilities" are "Good".  That's *how* banks print-and-seize-assets.

For "normal" people, liabilities are "bad".  Not for banks.  More liabilities means more leverage, more power, more influence, and (most importantly) more ability to "skim" the cash flows for bonuses and secondary self-enrichment (e.g., trading insider info, influencing businesses and industries).

Remember, at a "bank", your demand-deposit account ("checking-account") is recorded as a "bank liability".  They are "liable" to give your cash back to you (it's your checking account).  It is not their money.  It never was.  But, they transferred that cash to their day-trading operations, and that cash isn't there (it's a liability to the bank for accounting purposes).  Banks want even more liabilities from even more people so they can, "lever-up".

Liabilities are Good (for banks, not for you).  You can't "lever-up".

Sat, 01/26/2013 - 19:24 | 3188310 Stuntgirl
Stuntgirl's picture

You couldn't make this shit up.

Sun, 01/27/2013 - 04:54 | 3188823 Boris Alatovkrap
Boris Alatovkrap's picture

Boris disagree, most "this sh¡t" is looking pretty much man made.

Sun, 01/27/2013 - 10:28 | 3188973 old naughty
old naughty's picture

Not-man made.

Sat, 01/26/2013 - 16:56 | 3188067 unrulian
unrulian's picture

i'd argue that the 1% only hold 1% of the guns...which leads to the obvious question...who hold the rest?

Sat, 01/26/2013 - 15:50 | 3188000 resurger
resurger's picture

and when the shtf, they mark all their assets to face value according to FASB, IFRS ... they all part of the ponzi .. there is no escape...

the biggest crook of them all is ISDA, good luck on having a credit event (they will have one , once everyone is short the Credit Spreads)

Fuck those suckers, +5 ZH

Sun, 01/27/2013 - 04:54 | 3188824 Boris Alatovkrap
Boris Alatovkrap's picture

SHTF = BTFD?

Please is help Boris with esoteric acrymonies!

Sat, 01/26/2013 - 16:04 | 3188012 Dre4dwolf
Dre4dwolf's picture

Thats the fucking problem, these banks take no risk on loans anymore, THEY ARE PAID TO LOSE MONEY BY THE FEDERAL RESERVE.

SO the banks just exchange worthless CREDIT for ASSETS, the end - result

ALL REAL-ESTATE

ALL CARS

ALL BUSINESSES

ALL CITIES AND MUNICIPALITIES 

WILL BE OWNED BY BANKS, AND SOCIETY WILL BE RENTING ITSELF FROM BANKS.

 

ITS IDIOTIC TO SAY THE LEAST ITS GOING TO BECOME ANARCHY AND PEOPLE WILL JUST START SQUATING IN ALL THE FORCLOSED PROPERTIES (WHICH IS GOOD BECAUSE ATLEAT IT WILL GO TO USE).

 

Banks SUCK BALLZ

Sun, 01/27/2013 - 19:04 | 3189630 css1971
css1971's picture

What do you mean "WILL BE"? That's exactly how it works now. You rent your money from banks. So they get N% of everything.

Sun, 01/27/2013 - 12:47 | 3189118 Remington IV
Remington IV's picture

It's like living in Chimp City ... Geithner's the mayor

Sat, 01/26/2013 - 14:54 | 3187923 q99x2
q99x2's picture

They owe me at least another $7,800 punk M'Fers.

Sat, 01/26/2013 - 14:55 | 3187925 THX 1178
THX 1178's picture

<----Banking cartel

<----Socialism

Sat, 01/26/2013 - 15:38 | 3187980 CH1
CH1's picture

What gets me is not concentration, per se, but the fact that the scam is worshiped as a "capitalist system," or "free markets" or "our way of life," or as "democracy."

It's simply a mass fraud, pulled off on hundreds of millions at once... people who can't bear to see it, because they'd have to admit that they got suckered.

Sat, 01/26/2013 - 15:51 | 3188001 THX 1178
THX 1178's picture

But then again it was the free markets of the late 1800's early 1900's that generated all the banks and their Federal Reserve. The free market created the cartels. Hmmm.... how do we sort this one out? Do we acknowlege that free market capitalism is a monopoly/cartel generating engine? If we do... then what? I understand what you're saying... we were all complicit in our own enslavement. Its quite a pickle.

Sat, 01/26/2013 - 16:26 | 3188033 walküre
walküre's picture

Free markets of late 1800's early 1900's were established by who had the biggest shot gun.

Then came the pillage and now the enslavement.

What is a free market anyway?

Sat, 01/26/2013 - 16:49 | 3188058 THX 1178
THX 1178's picture

Biggest shotgun? A free market is survival of the fittest. Forming a cartel makes you more fit than competing. Basic economics.

Sat, 01/26/2013 - 18:22 | 3188192 walküre
walküre's picture

I think we're talking about two different things. "Free" market is less regulated by government and therefore giving all participants a better chance to compete on a level playing field. Poltics and lobbyism brings regulations and distorts the "free" markets.

Sat, 01/26/2013 - 18:33 | 3188217 THX 1178
THX 1178's picture

Well, no, because Free markets necessarily generate monopolies and cartels. So early in the game, yes the playing field is equal, or relativesly so, but in the long run, cartels and monopolies emerge. Monopolies like monsanto and debeers. Cartels like the Private banking cartel... LIBORgate shit... and the Military industrila complex, which is a defense cartel. So yes, on paper free markets give all participants an equal chance, and in real likfe in the short run, they do. But not in real life in the long run. That is where we are-- real life. This is when we are-- the long run. This is what REAL LIFE free markets do, not the ones on paper.

Sat, 01/26/2013 - 18:49 | 3188247 walküre
walküre's picture

the pen is mighter than the sword

I think is what you're describing.

Sat, 01/26/2013 - 21:05 | 3188456 THX 1178
THX 1178's picture

no

Sat, 01/26/2013 - 21:43 | 3188524 Totentänzerlied
Totentänzerlied's picture

"Well, no, because Free markets necessarily generate monopolies and cartels."

Yeah, uh, you're a shill.

Sat, 01/26/2013 - 19:34 | 3188324 CH1
CH1's picture

Free markets necessarily generate monopolies and cartels.

Y'all must have learnt that part in a gubbermint school!

Markets kill monopolies, states support them.

Free markets are inherently anti-state and anti-monopoly - that's why they are always placed in chains!

Sat, 01/26/2013 - 21:06 | 3188462 THX 1178
THX 1178's picture

No, I didn't learn that in school. I learned it from private independent research. And you must understand the difference between ON PAPER and IN REAL LIFE. ON paper, free markets don't allow monopolies... in real life they crop up PDQ. Same with cartels.

Sat, 01/26/2013 - 21:44 | 3188526 Totentänzerlied
Totentänzerlied's picture

You've been researching things which never happened? Do you consult for the "Ancient Aliens" production staff?

Sat, 01/26/2013 - 23:02 | 3188636 CH1
CH1's picture

Monopolies: The Fed, electric utilities. phone utilities, cable TV, police departmnts, legal jurisdictions.

What is it that they all have in common: Open competition or government's violent exclusion of competition?

Sun, 01/27/2013 - 12:53 | 3189124 ElTerco
ElTerco's picture

Exactly the opposite.  The gub'ment taught *you* that monopolies can't form in a free market.

In reality, there is always a small fraction of individuals that accumulate more than they produce, by hook or by crook, and the wealth and power accumulate with those people until the country collapses.

Sat, 01/26/2013 - 20:17 | 3188376 Radical Marijuana
Radical Marijuana's picture

The bigger context is as I already replied below, "free markets" in organized crime take control over "free markets" that are supposed to be under the rule of law. The best organized gangs of criminals take control over the government, and that is, paradoxically, a higher order kind of "free market," namely, a free market in crime, like there was a free market in militarism, where there are no rules, and no referees.

What needs to be understood is the paradoxical ways that human realities are ALWAYS organized lies, operating organized robberies. Governments were always the best organized territorial gangsters, and behind them were the international banksters, as even better organized gangsters.

My view is that power is always distributed, because everybody has some power to rob and to kill. Those powers got assembled and channelled into states with governments, due to the ways that the history of militarism made War King. That then continued to develop in ways that made Fraud King. The biggest banks are now within that system of Fraud Kings. Those banks effectively control the power of We the People, to rob, and to kill to back up that power to rob. The systems of constitutional checks and balances have broken down. The power to make money out of nothing, as debts, was captured by the private banks, which were then able to become more wealthy, and more powerful, and more able to engage in frauds and robberies, because their frauds are backed up by the power of governments.

However, that is NOT being effectively resisted because almost all the oppostion is controlled to continue to promote the same old false fundamental dichotomies, and associated impossible ideals, as somehow being able to provide real solutions. One of the reasons that the USA has failed was that too many of the People were brainwashed to believe in false fundamental dichotomies, and the corresponding impossible ideals. There are no easy solutions, but to muddle through the madness that money is backed by murder, and those who were the best at deceits and destruction in the past now dominate the established systems ... That continues to be the case, despite the debt slavery, backed by wars based on deceits, is more and more becoming debt insanity, backed by the threats of even more insane wars.

Sat, 01/26/2013 - 18:57 | 3188265 legorf
legorf's picture

I'm not sure I can agree with that (well I certainly do for the lobbyist part)

 

A free market is one where regulations allow other participants to enter one market and compete on a level playing field or to reduce the pricing power of natural monopolies. That doesn't mean less regulation ... less regulations may, or may not lead to free markets.

 

If you have a market without regulations or bad regulations, what you will get is the strongest will use all of his power to eliminate the competition and not allow potential competitors to enter the market. Not only natural monopolies will benefit from this, but unatural monopolies are likely to emerge too.

 

You cannot have a free market without regulations. Therefore, the question is, does the regulation in place favors more competition or less?  Does the regulation in place favors some individuals/corporations at the expense of others? I think we all all know the answer to this simple question right now.

 

Government, in itself, is not good or bad. Actually, you need the government, to some extent. Otherwise, you live within a tribal-like state. Just go to Africa to convince yourself. Thus, a more accurate statement would be: a government instituting bad regulations is a bad government. As simple as that.

Sat, 01/26/2013 - 19:35 | 3188327 CH1
CH1's picture

Government, in itself, is not good or bad.

Government is organized theft. Pretty hard to not call that "bad."

Sat, 01/26/2013 - 21:03 | 3188450 legorf
legorf's picture

I respect your opinion but I disagree.

 

The reason why a governement should exist is to tend towards equal chances for everybody from the start. Then, let them run, may the best win if they play by the rules.

I sincerely invite you to visit some countries where the government is non-existent and see what happens there. Historically speaking and relatively to other countries , the USA has always put up a strong law-enforcing government which regulations were aiming at encouraging entrepreuneurship and free markets. I'm not saying it is perfect, I'm saying that relatively speaking, they have done a better job on that front then most other countries in the world.

Now, too much government is bad, too less is bad too. Saying otherwise doesn't fit with historical lessons humans should have learned by now ...

You may disagree with Obama, I do. That doesn't mean no government at all is better. I disagree with almost all governments on this planet, just normal. That's probably only beacause I'm not THE President/Prime Minister/Dictator of these countries :P. Like every retard on this planet (99.9% of the population), I think I would do better than they do.

As for theft, I guess when you look at the absolute numbers, you are right. But we all live it what we call "the world" . On that front, you have to compare with other countries. Thus I suggest you have a look at this table from the OECD.

http://stats.oecd.org/Index.aspx?QueryId=21699#

At 25% of GDP in 2011, the US tax rates are much lower than almost anywhere else in the world. Agreed, not all the countries are included in this table but I don't feel like searching world databases simply to prove my point on a blog ...

Thus, if the US government is stealing your money, it is stealing much less than other governments around the world. But then, these are 2011 numbers. We'll see how it evolves in 2013.

Sun, 01/27/2013 - 15:53 | 3189399 CH1
CH1's picture

legorf: I appreciate the civil discourse.

I have visited dozens of countries, on several continents, and have spent extended periods in several.

The essential operation of government is to forcibly remove production from producers. If I do that to you, I am (fairly) called a criminal. I refuse to grant a separate and higher morality to a group of politicians - known moral inferiors - not matter how many creative uses of language their minions create.

Taking money by force is immoral. Period. Government is therefore organized crime. All arguments to the contrary must evade, insult, ridicule, or otherwise dishonestly side-step this basic fact.

If you want to cooperate with organized crime, that is, of course, your choice. But if you force me to comply, you become a thug.

These facts can either be honestly accepted or dishonestly evaded.

Peace.

Sat, 01/26/2013 - 19:55 | 3188331 Radical Marijuana
Radical Marijuana's picture

"Free market capitalism is" NOT "a monopoly/cartel generating engine!"

It was the application of the methods of organized crime to the political processes that transformed the system of relative free market capitalism into being a runaway fascist plutocracy juggernaut.

Politicians were systematically bribed and intimidated, and assassinated if they refused to become the banksters' puppets. The success from doing that became a vicious spiral, whereby profits from fraud were reinvested in more frauds. Control over the mass media was purchased, and then the most scientific brainwashing that money could buy was perfected and used against the American people. The monopoly/cartel was built by covert organized crime, applied within the political processes for more than a Century. The bread and circuses mentality of the masses of muppets, resulting in enough of them being fooled to vote for puppet politicians, was the result of the triumphs of dishonesty, backed by violence. It was NOT the result of "free market capitalism." Fascist plutocracy is what we get AFTER we add fraud and murder to "free market capitalism," since fraud and murder then are able to corrupt everything, as they covertly take control.

It is easy to say that "we are complicit in our own enslavement." That is superficially true. However, those who were not complicit were discredited and destroyed, and therefore, the current slave society is one that is made up of those who survived, by adapting to become "successful" within their slavery.

P.S. The single simplest symbol, and most extreme particular example of that process was taking the single best plant for people, hemp, and rebranding it as "marijuana that is almost as bad as murder" and thereby criminalizing the cultivation of all cannabis. Remember that the first American flag, and the Bill of Rights, were both made from hemp, and one has an illustration of what happens when the fascist plutocracy, monopoly/cartel system, takes over society through triumphantly getting away with huge lies, backed by lots of violence, thereby forcing everyone else to adapt to live inside of that established slave society.

There are deeper reasons to understand WHY the best organized criminals, the biggest gangsters, the banksters, WERE able to take control over the government of the USA, and thereby the USA end up becoming a system of debt slavery, backed by wars based on deceits. The "pickle" we are in was due to there being no practical way to prevent the best organized gangs of criminals from being able to gradually apply their methods to take control of the government. We are NOW in a situation where more than 90% of all politicians are puppets, and more than 90% of the people are muppets. However, that took a long time to gradually develop! It was not due to "free market capitalism," it was due to the bigger context of human realities being organized lies, operating organized robberies.

What was done to the natives of North America, and then the African Americans, is now being done to the white middle classes of North America. There are millions and millions of individual battles, inside the context of an overall war that the vast majority of the American people are losing. What they need is a drastic change in their perception of militarism, and the concepts of death control, in order that they can understand how the debt control, or money system, ended up producing a handful of enormous banks that own more than half of everything, and are effectively above the law, while they can continue to gamble with more money made out of nothing, which approaches the magnitude of $QUADRILLIONS!

Sat, 01/26/2013 - 14:55 | 3187926 williambanzai7
williambanzai7's picture

SIPHONAPTERA FINANSUS

Sat, 01/26/2013 - 15:31 | 3187973 Xibalba
Xibalba's picture

don't insult that flea

Sat, 01/26/2013 - 15:40 | 3187983 wee-weed up
wee-weed up's picture

You need to show him sucking our blood.

Sat, 01/26/2013 - 16:49 | 3188055 joego1
joego1's picture

actually I think he is more of a tick by the way he embeds himself.

Sat, 01/26/2013 - 16:57 | 3188072 unrulian
unrulian's picture

I'd say virus and we've all been infected

Sat, 01/26/2013 - 17:32 | 3188124 Yen Cross
Yen Cross's picture

 Timmah the  " Bed Bug" aka "Sand flea" Geithner.

Sat, 01/26/2013 - 18:50 | 3188249 walküre
walküre's picture

upside down like our nation's finances.

fuck you timmay!

Sat, 01/26/2013 - 15:01 | 3187929 Pure Evil
Pure Evil's picture

I guess when all the assets reside in the megabanks it'll make it that much easier for the US Gov to steal the rest of the middle classes savings.

Sat, 01/26/2013 - 15:01 | 3187931 BurningFuld
BurningFuld's picture

Since the top 4 Banks have 93% of derivatives it would be a perfect time to set these four aside and dismantle them. Easy as pie.

Sat, 01/26/2013 - 16:13 | 3188021 AgAu_man
AgAu_man's picture

Kidos to ALL the above blog postings.  Spot on, friends!

Just remembered somebody's posting from some days ago (last week?), where it was pointed out the "Derivaties" are not Assets" or even Financial Intruments in the traditional sense of the word.  Rather, they are 100% PURE GAMBLING.  THEY ARE BOOKIE BETS!

Bets should be segregated and firewalled from the rest of the financial and investments -- by LAW! 

I say:  No more coupling of Tera-Betting to stocks, bonds and (fiat) money!  Which itself is leveraged on real, primary assets and (promise of) work, goods & services.

3 Predictions: 

     1. When TSHTF, it will be due to the Tera-$ size of the Derivaties market, dominated by the TBTF gorillas.  It'll be a sh!t-storm of their own making & baking.

     2. When TSHTF, the Elite/TBTF are guaranteed to re-direct the root-cause away from themselves and toward the "useful fools":  Foreign powers.  A very specific (Middle-East) foreign power... I'm guessing: Iran.  A la TV series Last Resort.

     3. When TSHTF, the Elite/TBTF and those on the GravyTrain.Gov will not want the populace to topple them -- the real culprits of systemic failure!  They will not want 'We The People' to physically revert the hijacked-Republic-cum-rotten-Empire back into the Constitutional Republic.  They KNOW what's coming, so they want to literally disarm the populace beforehand.

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