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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slightlyskeptical's picture

I think they are indeed like the bookies.Tthey take bets on both sides and make their vig from both sides. For every buyer there is a seller, so don't assume becasue these derivates exist that they net out at much more than zero. One institution's gain will indeed be anothers loss.

“It's only when the tide goes out that you learn who's been swimming naked.”

Warren Buffet

Jack Burton's picture

After the 2008 crisis the Fed moved to undertake the greatest wealth transfer in American history via ZIRP, Bank Bailouts, Money printing and market manipulations. They succeeded spectacularly!

America now resembles Russia after the US Chicago Economists got done directing the sale of Soviet State assets to a select elite. A select favored few have it all now, and some call it a free market selecting the hardest working and most productive as the winners. Come on! Those days are over, our current system is a manipulative feeding frenzy carried out from the Fed for the benefit of the connected elites. The results are all the evidence you need.

This is not capitalism or a free market.

booboo's picture

Well now, it's a "free market" for some folks and I don't think you could convince them other wise. See, therein lies the problem, perspective, they don't think like you or me, hence Lloyd Blankfeins "doing gods work" sentiment. Staying clear of sociopaths is not so easy anymore since they have filled the halls of power and this is why they only understand one thing and one thing only, brute fucking force delivered at the end of a gun barrel when they send their minions to reap what is left of your earning capacity which will be your living body.

Beam Me Up Scotty's picture

"brute fucking force delivered at the end of a gun barrel when they send their minions to reap what is left of your earning capacity which will be your living body"

That will happen when the government is consuming 100% of everything everyone earns.  Those who are left in the workforce are already working 6 days out of 10 for the government when you factor in income taxes, sales taxes, property taxes, gas taxes, and the other plethora of government fees.  Its actually probably more like 7 days out of 10.  When it goes to 10 days out of 10 you are working for the government, what are they going to do to generate MORE revenue?  Whip you even harder to make you work faster?

And we "think" this is the land of the free.....More like the home of the slaves.

Actually, an after thought...., the government is already consuming OVER 100% of everything everyone earns.  It needs to print another trillion+ on top of that.

centerline's picture

Unfortunately, there is more to take.  Which means more time on the clock.  More games.  What is impossible to tell is where the tipping point exists.  It is out there though.  The more this theater of the absurd continues, the more unstable everything becomes.

I still like to use the analogy of cash flow as opposed to stock.  It is when the cash flow siezes up that the shit hits the fan.  Same thing will happen with supply chains at some point.  

Totentänzerlied's picture

"the government is already consuming OVER 100% of everything everyone earns."

Anything to grow the total amount of debt owned by the Fed.






tip e. canoe's picture

just wait when they untangle the deeds from all those MBS's they've been collecting.

pods's picture

They will be like little kids trading baseball cards.
And just like baseball cards, they will find out that alot of them have the same (unique) cards.


prains's picture

there is no such thing as "free"

gould's fisker's picture

I'm sure glad financial assets are centralized and inter-connected, it worked out so well last time.  Talk about a complete lack of critical analysis and follow through--welcome to the post-modern world where we think that we can figure it all out or just make shit up as we please.  Seems to be working out very well.

Fix It Again Timmy's picture

And yet you could put Tim or any other fraudster in front of Congress or in front of 100,000 Americans and within 30 minutes, the Congress and crowds would be cheering and saying, Yes, Yes, You're absolutely right, Oh Great One!  And that is because they have no KNOWLEDGE!

Knowledge makes a man unfit to be a slave. ?– Frederick Douglass

klockwerks's picture

That is the reason why big brother needs to control the internet as some have way to much knowledge so it must be taken away.Watch for it

ptoemmes's picture

...neither fail nor be sued nor have senior officers prosecuted much less even indicted,...

I fixed it up for you.

Never One Roach's picture

No wonder my Banker is always so Happy.

Aurora Ex Machina's picture

Pay attention...

Belgian MP Laurant Louis goes postal over Mali & Syria [use Captions, makes Nigel Farange look tame]

Britam, Halliburton constractor, hacked with Qatar emails suggesting faking evidence of chemical weapons usage [Emails only suggest offer via Qatar, although "with US approval" - contains many authentic passport scans, as well as passing technical legitimacy for the internal emails]

Anonymous claim to have "warheads" of incriminating data on DoJ Judges [although many claim false flag over "cyber war" legislation soon to be introduced, given that CNN and Fox News are running with it, but curiously are ignoring the Britam leak]



All of these are 2 days old.

CH1's picture

Anonymous claim to have "warheads" of incriminating data on DoJ Judges

No more Wikileaks-style teases. If you have the shit, release it. The last battle for control of the Internet is almost lost anyway: The Internet Is Being Slaughtered In The Back Room

Aurora Ex Machina's picture

It is known.

4chan archived thread containing a lot of the passport scans [including Ukranians] from Britam

However, the whole Aaron Swartz suicide has irked a lot more than the usual script-kiddies. 


We'll see on Monday if the Anon thing is just a smoke-screen.



Cryptome showing LulSec "Sabu" still fishing for the FBI

CH1's picture

However, the whole Aaron Swartz suicide has irked a lot more than the usual script-kiddies. 

Yeah, myself included.

We'll see on Monday if the Anon thing is just a smoke-screen.

Fair enough.


Totentänzerlied's picture

What are they gonna? Try themselves? You and I both know the justice system is a giant fraternity with no rational interest in "self-recrimination" and takes greats pains to give free passes to its own. In other words, nothing will come of this because judges are effectively above the law and the legal system is a bad ***damn joke.

suckerfishzilla's picture

Resistance is not futile.  Silver bitchez.

They Tried to Steal My Gold's picture

This has taken Reward the Incompetent to whole new level.... 


A Monopoly you say? "TO BIG TO DE-MONOPOLIZE"


Jim Rogers: We're taking the money away from the competent people and giving it to the imcompetent people to reinvest again.....

news printer's picture

Army of Mali after training ready for offensive


Aurora Ex Machina's picture

Been on LiveLeak for two weeks now - actually a common training tactic for Operations, the joke of "poor black Africans" is only made by those ignorant of western trainers btw.

French Air Strike

Results of one of those air strikes [warning: crispy bodies]

Mali rebels split; offer peace talks [surprise: The Tuaregs against the Salafi Jihadists. No-one, just no-one, saw that one coming]


Bit late to the game, old chap.


Oh, and the joke is in the title: OPERATION FLINTLOCK.



p.s. is down at this time. Oops.

news printer's picture

No wonder the islamist took over? 2/3 of the country

Miramanee's picture

RE: "...clueless pandering..." NOT clueless at all!!!!! Very conscious; a conscious effort to create as much "wealth" as is possible, so that if/when things fall apart, there is a resource buffer that will keep the USA from falling apart too quickly.

rwe2late's picture

 Those numbers cannot be correct.

Why, just a few days ago, the Geithner legacy was discussed on the PBS News Hour.  

Mark Shields made no mention of any bank handouts other than the $700 billion TARP (under Bush, and which we all are told was mostly paid back).

Could PBS be just another fount of disinformation?

I am appalled.


falak pema's picture

well if it goes bust,  it'll go with a mega bang! 

70% of assets; 0.2% of holders and >200 T of incestuous electronic derivative assets that mean NOTHING in the real world but EVERYTHING in the Oligarchy financialista world as its the teat on which they suck; this cancerous derivative bubble! 

Geithner will say for posterity if it blows up  : I told them, I told them, but they wouldn't listen, so I did my best!

Them being his buddies in GS, scions of the Clinton/GWB age of deregulated WS initiated by you know whoooo.

resurger's picture

All hail the ESF & the OCC, no wonder when you issue swaps (pay floating and recieve fixed) you need to keep the ZIRP near zero or below.

ArkansasAngie's picture

By pumping in newly printed money into banks that grows the pie and dilutes everybody but themselves ... thereby increasing their control at the same time. 

Moral hazard cannot be denied forever.

Focus like a lazer beam on the criminals who are running our government.

AldoHux_IV's picture

The real stupid thing about this all is that China adopted a lot of this behavior as well-- not too smart and definitely will be worse than any opium epidemic.

This is what a leveraged buyout looks from a macro perspective, and a very dangerous and malicious one at that-- you can't hide the fraud and conspiracy much longer and these bankers amd economists will have nowhere to hide because the politicians will be their first line of defense and an easy one to mow down.

earleflorida's picture

'The land of Mao and Lenin under the auspices of Marx's(TM)'

"911" .... for[e]war[n]'d

outofideas's picture

On one hand they may "own" everything, but can they control what they own?  Don't we always say you only own what you can touch and defend with rifle?  When push comes to shove and people had enough of it, the banks might find themselves owning bits of paper claim ownership of real assets, but they'll have a hard time actually controlling said asset.

Bunga Bunga's picture

and Faber said Timmy was OK....

Spectre's picture
  • I'm in hopes during the coming days of recollection, that angered, homeless and starving people in the streets go find "Tim Geithner" and give him justice.
Atomizer's picture

Turbo Tim falls under the illegal guideline called, ”non-cash goodwill impairment charge”.

Caterpillar uncovers internal fraud

January 22, 2013

Caterpillar is carrying out an internal investigation after claims of misconduct at one of its recently acquired companies. The mining machinery manufacturer stated that it "has uncovered deliberate, multi-year, coordinated accounting misconduct concealed" at the recently acquired ERA Mining Machinery company's subsidiary Zhengzhou Siwei Mechanical & Electrical Manufacturing, in China. "Caterpillar’s investigation determined several Siwei senior managers engaged in deliberate misconduct beginning several years prior to Caterpillar’s acquisition of Siwei," it said. It went on to stress that "the misconduct at issue commenced at Siwei well in advance of Caterpillar’s acquisition. We believe it was perpetrated without the knowledge of any Caterpillar employee who did not come over to Caterpillar as part of the Siwei acquisition". Due to the fraud at Siwei, Caterpillar expects to suffer a "non-cash goodwill impairment charge of approximately $580 million, or $0.87 per share, in the fourth quarter of 2012". Following the investigation Cat removed several senior managers at the company, installing its own new leadership team.

CheapBastard's picture

"Why steal less.....when you can steal more....lots more...."


Is that what his exit speech said?

joego1's picture

To bad someone couldn't hack all that derivative shit and make it squirt out checks to the 99% for  a while. Let Dimon wonder what the fuck went wrong with the jet engine he built.

Yen Cross's picture

 Geithner's Legacy?   Are you hung over Tyler?  The headline should read-  "Geithners Travesties": (ad hoc) the chart porn.

 Excellent post Tyler ;-)

Hulk's picture

2012 and 2013 will usher in the end game (or the scariest presentation ever)


Hmm, didn't the oldest bank in Europe just get toasted due to derivatives???

Raoul Pal is starting to look like  a genius...

devo's picture

I'm not convinced the FED is buying 40 tril per month like they say. Pretty sure they're just saying that to get money flowing. Haven't checked the balance sheet in a few months, but last I did check it wasn't growing despite all the supposed purchasing. This could be something the doomsdayers are missing...the power of talking the market into a desired action.

I mean, it looks like end game to me too, but I like to keep an open mind.

Yen Cross's picture

Timmahs bending over for another Bernanke < injection< Nice work Billy#7.

Bicycle Repairman's picture

Let's just cut to the chase.  The 0.2% own 100% of the power and did before Geithner came along.

Bicycle Repairman's picture

Let's just cut to the chase.  The 0.2% own 100% of the power and did before Geithner came along.

evernewecon's picture






Transfer of liabilities to the taxpayers might be 

challengeable under different circumstances, with

right arguments.


Derivatives based on legally dubious foundations

may not be enforceable.


The government's supposed to be protecting

depositors, not bank holding companies.


When a bank holding company goes bankrupt it's like

a person falling off a cliff.  After the first

90 feet it might as well be a mile down.


The banks should have been recapped, taken 

control of.


I personally don't consider offering ever more

protection for ever greater risk with ever less

reserve coverage for ever greater bonuses a

legitimate business absent someone checking 

net equity at risk, exactly in the manner of 

your typical household discount broker.


So I would've simply annulled the whole lot of the 

derivatives if they were to impact the taxpayer

even only indirectly economically.


Somewhere within any of these suggested right

steps is where a democratic leadership might

get control.


People should learn not to do business with

shady banks.

pragmatic hobo's picture

geithner, ... wasn't this the guy who literally allowed the credit bubble to form? if he didn't, then doesn't it only point to the fact that he must be the most inept regulator ever? either way how did he ever become treasury secretary of biggest economy in the world? what does that say about obama administration?

Tsar Pointless's picture

Just think of how bad it would be if a class war were being waged by the rich against the rest of us.

Good thing there isn't one.

Yes, that is sarcasm.

All Out Of Bubblegum's picture

I don't see what the problem is. Timmy was hired by to hasten the demise of its antique Federal Reserve Note scheme in favor of a more modern, streamlined scheme.

Mission accomplished.

Cosimo de Medici's picture

Geithner's legacy?  Which one, NYFed or Treasury?  The double negative, unlike in speech where it becomes a positive, is a turbo-timmy-charged negative in the fields of finance and "public service".  As Daniel Hannan says, a "generational offense".

Bruce Krasting gave the perfect example of what hell hath wrought.  AAPL loses in "value" the equivalent of a Lehman or Fannie/Freddie, and the market probes multi-year highs, unaffected and unscathed.  How can this be?  One is the leverage the financial sector carries that, for all its argued faults, AAPL lacks.  Two is the entire interwoven web of derivatives and re-hypothecated "assets", where everyone's pants are held up by the same belt.  One break in the belt and everyone's goods are exposed, and the world can thus see that acting like a BSD doesn't mean one really has a BSD.  Jamie and Lloyd, that Hampton's water is actually really cold, isn't it, when Timmy and Ben don't enhance the myth?  As Nassim Taleb pointed out, in 2007/2008, the finance sector lost more money than it had made in its entire history.  For that achievement they get $33 million homes and a combined $140 billion in yearly bonuses.

Now certainly I am not qualified to offer the kind of sound estate planning someone of Timmy's caliber deserves, and I only state the following as an opinion held by a very common and ever-peaceful man, but to paraphrase Lloyd Bridges character in "Airplane", "I picked the wrong week to give up SS protection and bullet-proof cars."  Lucky for him he's only varmint-sized.