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US Deposits In Perspective: $25 Billion In Insurance, $9,283 Billion In Deposits; $297,514 Billion In Derivatives

Tyler Durden's picture


Earlier today, the American Banking Association reminded Americans that there is absolutely nothing to worry about when it comes to the sanctity of US deposits: after all there is a whopping $25 billion in the FDIC insurance fund which means "insured depositors are safe and their deposits are protected by a strong FDIC fund....The FDIC insurance fund has over $25 billion in reserves and the banking industry " Obviously supposedly "insured" depositors in Cyprus also though there was nothing to worry about, until they woke up on Saturday with a haircut between 6.75% and 9.9% on their money in the bank. Sadly, it may be the case that the ABA is being just modestly disingenuous in its statement. Why? Instead of explaining it in detail, here is a snapshot that does more than thousands of words ever could.

Chart drawn to scale.

The $25 billion in touted deposit insurance is supposed to preserve and protect (granted not in their entirety) some $9,283 billion in total US deposits. A far bigger problem, however, is when one considers the "asset" side of the US banks' ledger: remember deposits are unsecured liabilities. And for US banks, sadly, over the counter derivatives represent the vast majority of "off the books" assets. According to the latest OCC quarterly report, the total derivative notional outstanding of the Top 25 holding companies is $297,514 billion, or nearly $300 trillion. In other words there are 32 times more notional derivatives than there are total deposits, while the ratio of gross derivatives to deposit insurance is a concerning 11,900-to-1.

And with that, we hand it back to the ABA to comfort all US depositors that Cyprus could never possibly happen in the US.

Source: OCC, H.8


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Tue, 03/19/2013 - 10:43 | 3346917 Reptil
Reptil's picture



Tue, 03/19/2013 - 10:46 | 3346941 ar01
ar01's picture

I'm going to be honest here: I never knew the numbers were that bad.. $25bn insurance on $9.2tn in deposits... that's a 0.27% (yes, less than 1%) coverage... 

Tue, 03/19/2013 - 10:48 | 3346946 MillionDollarBonus_
MillionDollarBonus_'s picture

Honest question: If the government can't levy bank accounts to protect the integrity of the banking system, what do you think would happen to savers in the event of a bank run? Are you people also against the FDIC?

Tue, 03/19/2013 - 10:49 | 3346960 camaro68ss
camaro68ss's picture

Your whole collectivism mentality makes me sick

Tue, 03/19/2013 - 10:52 | 3346978 Pladizow
Pladizow's picture


From my earlier post: Tue, 03/19/2013 - 10:04 | 3346646




And further, as we have at least 1 cent in reserve for every dollar of deposits we insure, there's nothing to worry about!

And if we happen to fail we can go to the Treasury.

And if the Treasury needs money they can go to the FED.

And circle jerk complete!


Tue, 03/19/2013 - 10:57 | 3346994 hedgeless_horseman
hedgeless_horseman's picture



"We also have the ability to borrow from Treasury.  Indeed we have the ability to immediately access up to $500 Billion from our Treasury line..."

Printing press, bitchezz.  Get one.

Tue, 03/19/2013 - 10:57 | 3347034 Pladizow
Pladizow's picture

Does the FDIC protect against theft by the bank holding the deposits or by the government!

Tue, 03/19/2013 - 11:00 | 3347054 hedgeless_horseman
hedgeless_horseman's picture



No, nor does it protect against The Inflation Tax.

Tue, 03/19/2013 - 11:04 | 3347070 chunga
chunga's picture

I'm almost afraid to click that youtube link.

Tue, 03/19/2013 - 11:06 | 3347081 ParkAveFlasher
ParkAveFlasher's picture

gold, bitchez!

Tue, 03/19/2013 - 11:54 | 3347409 notbot
notbot's picture

At which bank is the FDIC's $25bn being custodied?  JPM's CIO group, I suppose?

Tue, 03/19/2013 - 12:03 | 3347463 eclectic syncretist
eclectic syncretist's picture

Maybe it's time to start banking at the local pawn shop.  They only charge 1% to cash a check.  I haven't done the math, but it might make more sense to do that than accept all the banking fees.

Tue, 03/19/2013 - 15:02 | 3348824 rajat_bhatia
rajat_bhatia's picture


Tue, 03/19/2013 - 18:33 | 3349980 TheFourthStooge-ing
TheFourthStooge-ing's picture

Where's the problem? There's no problem here unless someone starts doing math.

Algebra is the enemy here, and I think we all know why.

The word algebra comes from the Arabic language (al-jabr: restoration).

Strike one.

Muhammad ibn Musa al-Khwarizmi, a major contributor to the establishment of algebra as a mathematical discipline, was Iranian (Persian).

Strike two.

Many of algebra's methods came from Arabic/Islamic mathematics.

Strike three.

It is plain to see that algebra is a terrorist conspiracy that is out to get all Americans.

Still have doubts? Look again at the word al-jabr, or restoration. What is being restored? A worldwide, global Islamic caliphate to cover the whole planet!!!1!

Americans must steadfastly embrace their natural loathing for mathematics, as this is the only thing which will protect our way of life and our precious bodily fluids.

Tue, 03/19/2013 - 12:15 | 3347527 SafelyGraze
SafelyGraze's picture

fortunately, the $297,514 billion is just a notional amount that all nets to zero.

as far as the $25B insuring $9283B in liabilities, that's more than 0.26 percent.

which more than offsets the thousand-to-one risk of system failure

and when you look at the insurance industry overall, the picture is very reassuring.

nearly 90 percent of *their* assets are in bonds (corporate, municipal, treasuiry), common stock, and mortgages. the values of which can only go up.

if depositors need to deeply tap fdic because of bank failure (resulting from, say, cities in michigan being unable to pay their debts), it is reassuring to know that the insurance is back-stopped by bonds issued by, and property located in, those same cities, and by stocks invested in those same banks.



Tue, 03/19/2013 - 12:51 | 3347846 ParkAveFlasher
ParkAveFlasher's picture

I love "net".  "Net" is my friend.  If I bet that apples will rise in price, I will hedge with oranges with an offsetting bet.

I need not regard bananas, grapefruits, pears, berries, and mangos in any equation, as they are not actually fruit.

Where's my nobel prize?

Tue, 03/19/2013 - 15:42 | 3349127 lolmao500
lolmao500's picture

the values of which can only go up.

Are you on drugs? When there's a panic, people will withdraw deposits + your ``assets`` will crash... all of them.

Tue, 03/19/2013 - 14:55 | 3348789 merizobeach
merizobeach's picture

"I'm almost afraid to click that youtube link."

Don't worry: it's such mindless babble that you won't listen to its entirety.

Tue, 03/19/2013 - 11:13 | 3347052 prains
prains's picture

That my friends is the 18 inch red dildo of pain

Tue, 03/19/2013 - 11:18 | 3347160 ParkAveFlasher
ParkAveFlasher's picture

I kinda liked the misspelling.  It had a Ned Flanders-like "did-lee-O" twist to it.

Tue, 03/19/2013 - 11:11 | 3347096 Banksters
Banksters's picture


Bankers are parasites.  Whether charging usurious interest rates(off of money created from nothing!),  devaluing currencies, or seizing savings, the result is the same: THEFT OF LAND, LABOR, RESOURCES AND LIBERTIES.

Revolt now or pay later, citizens of the world.


Tue, 03/19/2013 - 12:05 | 3347476 Chupacabra-322
Chupacabra-322's picture

@ Banksters,

Fuck that,


at this point. Pac a Gun and pay no Income Tax. 


Aaron Russo's Documentary ''America Freedom To Fascism'' Dir cut.
Tue, 03/19/2013 - 13:47 | 3348300 Bogdog
Bogdog's picture

For every tilt of her head, I detect a lie.

Tue, 03/19/2013 - 14:57 | 3348797 merizobeach
merizobeach's picture

Was that about two tilts per sentence?

Tue, 03/19/2013 - 11:01 | 3347046 TheSilverJournal
TheSilverJournal's picture

It's very scary to see that most people still actually believe the FDIC has the ability to insure their deposits. In fact, most people will be mentally destroyed when they learn what a fool they were for believing their wealth is safe in the banks and a green piece of paper and digital code in their bank account are reliable stores of wealth. For them to accept reality, they first have to admit their own follies. When someone becomes so tied up in the lie, they often support the lie so as not to appear as though they were taken. Never underestimate the power of denial.

Tue, 03/19/2013 - 11:04 | 3347075 EscapeKey
EscapeKey's picture

Far more scary is that in the event of collapse, MF Global showed us that deposits rank BELOW derivatives, hence all depositors will have their faces ripped off.

Tue, 03/19/2013 - 11:53 | 3347404 NotApplicable
NotApplicable's picture

Ummm... you forgot the "#winning" tag.

Tue, 03/19/2013 - 13:30 | 3348185 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

I hope the $250,000 FR note comes with the face of "The Honorable John Corzine".  That will be awesome!

Tue, 03/19/2013 - 14:18 | 3348492 Pure Evil
Pure Evil's picture

If anything, we can always add his face to Mount Rushmore, right next to Evil Lincoln.

Tue, 03/19/2013 - 12:06 | 3347483 eclectic syncretist
eclectic syncretist's picture

Exactly, your savings are nothing more than a Vegas style gambling chip to the banks.  In fact they are less than that since a real gambling chip can be levered into a 10X plus bet.

Tue, 03/19/2013 - 12:31 | 3347671 Miffed Microbio...
Miffed Microbiologist's picture

This was my epiphany moment on ZH. For 45+ years I had believed when I deposited my money in a bank I had " money in the bank". Then I learned here I did NOT have money in the bank but instead was OWED the money I had deposited. Everything fell into place then and the scam discussed here finally became clear. I finally realized the only way to fight back at my level was to engage only in tangible realities. This is the only hope to escape the " Poof.....and it's gone"


Tue, 03/19/2013 - 12:50 | 3347840 TheSilverJournal
TheSilverJournal's picture

Yup, it's a worldwide fiat monetary ponzi 100+ years in the making that's soon to implode. Never before has the entire world gone through currency collapse at the same time. It will be the most significant event in human history and will be the largest / swiftest transfer of wealth ever.

Tue, 03/19/2013 - 10:52 | 3346992 MillionDollarBonus_
MillionDollarBonus_'s picture

It's realism. We need government. Tax is necessary, and so are bank account levies. If you can't handle these facts, then I suggest you join the kiddies table, and leave the adults to discuss real, progessive solutions to the problems we face.

Tue, 03/19/2013 - 11:04 | 3347072 glenlloyd
glenlloyd's picture

your "fairness doctrine" makes me want to puke...

Tue, 03/19/2013 - 11:11 | 3347090 nope-1004
nope-1004's picture

You mean we "face problems"?


What happened to green shoots?  What happened to housing recovery?  What happened to modest economic growth?  LOL...... MDB admits we face serious problems.  Now that in itself is funny coming from a troll.

Aside from that tidbit, I stopped reading MDB quite a while ago.  At first the comedy routine was funny.  Now he just shows how stupid he is.  Nothing funny about stupidity.


Tue, 03/19/2013 - 11:21 | 3347183 MillionDollarBonus_
MillionDollarBonus_'s picture

We are on the road to recovery, but that doesn't mean we don't face the threat of instability. We need to put in Federal safe-guards against this type of problem. The FDIC takes care of depositors, but which department is underwriting the equity of our banking institutions? This is just another piece of the puzzle in the quest to build a stronger, safer, more liberal economy. 

Tue, 03/19/2013 - 11:29 | 3347247 Schmuck Raker
Schmuck Raker's picture

"...which department is underwriting the equity of our banking institutions?"

I believe that falls under the purview of the Fed, and CNBC.

Tue, 03/19/2013 - 11:29 | 3347252 TheSilverJournal
TheSilverJournal's picture

A strong economy would be built on institutions that don't depend on the backing of the government. We are on the road to max pain because when the credit bubble bursts and the government goes bankrupt, the credit / government dependent economy will be utterly devastated to the likes of which has never been witnessed.

Tue, 03/19/2013 - 11:44 | 3347350 gdiamond22
gdiamond22's picture

That liberal economy you 'Progressives' dream brought Argentina from a top 5 economy to its knees. You know about Europe, now you want the same in the USA. When will you realize that the only thing Government has a fantastic track record of is controlling and killing people. Everything else they do turns to rubble  - sometimes instantly, sometimes slowly. You are a mindless, worthless sheep MDB. I actually have pity for your lack of intellect.

Tue, 03/19/2013 - 12:12 | 3347529 eclectic syncretist
eclectic syncretist's picture

Dear Million Dumb Bloviations

YOU CAN"T COUNTERFEIT YOUR WAY TO UNIVERSAL PROSPERITY, you shit for brains asshole.  Your vacuous bullshit has quit being mildly entertaining and is now merely tedious and dull.  Get yourself together so at least you'll look good going down with the ship over the next several months.

Tue, 03/19/2013 - 14:21 | 3348508 Pure Evil
Pure Evil's picture

Ok Harry, I think its time you give up and go sit in the corner and spank your Wanger.

Tue, 03/19/2013 - 11:24 | 3347207 TheSilverJournal
TheSilverJournal's picture

Clearly, a federal tax is not necessary because the US went most of its history without one. Likewise, clearly a central bank (and therefore a bank levy) is not necessary because the US went most of its history without one.

What's necessary is capitalism and freedom, and there will never be capitalism with the central planning of the currency because money is 1/2 of every transaction.

Tue, 03/19/2013 - 11:33 | 3347276 akarc
akarc's picture

"Adam Smith focused on understanding how people can freely make a living, which was what Brits had been doing with considerable success for hundreds of years. He grasped the concept that people prosper when they can freely choose the terms of their business or their work and trade freely, unhampered by government or monoplies, and protected by the rule of just law from unprincipled exploiters."

Freedom and Capitalism do not necessarily go hand in hand

Tue, 03/19/2013 - 11:44 | 3347347 TheSilverJournal
TheSilverJournal's picture

I don't see how your quote has anything to do with the your statement at the end, but yes, freedom and capitalism do go hand in hand. Capitalism simply means you have the freedom to keep what you earn, and you have the freedom to do whatever deals you please. What capitalism does not mean you have the freedom to commit fraud and the freedom to impeed on other people's property (not free to pollute, steal, injure). If you don't have capitalism, you are not free because then your life (labor) and property are not your own.

Tue, 03/19/2013 - 12:44 | 3347730 akarc
akarc's picture

when I see people mention capitalism I am always reminded that "true" capitalism can not exist in a corrupt and unprincipled society, e.g our Klepotocratic banking/government alliance.

To many people equate capitalism as allowing apple to offshore jobs to cripple, exploit and create slavery in another country. Which does absolutely nothing to promote freedom. 

Tue, 03/19/2013 - 12:45 | 3347808 TheSilverJournal
TheSilverJournal's picture

Unfortunately, that is very true. Many will blame the coming collapse on capitalism, when it is the exact opposite of capitalism that's the cause (central banking, government debt, government involvement in housing markets, government dependency on entitlements, student loans backed by government, government regulation, government bailouts, government picking winners and losers). My main concern is not if the collapse will come...the collapse is inevitable and may be entering the eminent stage. My main concern is that capitalism gets the blame. When the real pain comes, cries for the government to help will grow the loudest and if these cries are answered, the US may literally be no more. On the other hand, if capitalism, freedom, and the constitution are returned to, we may shortly see prosperity that is almost unimagineable. Which path will we choose?

Tue, 03/19/2013 - 12:52 | 3347849 akarc
akarc's picture

Agreed. In my little corner of the world the terms freedom, constitution and capitalism have become almost Orwellian. Redefined in such a manner asw to suit ones own political agenda. This scares me as how many crimes will be committed in these names and called just.

My fear, or I am pretty much convinced, at this stage of the game is that "We the People" will choose the path we are told to follow. 

Tue, 03/19/2013 - 13:12 | 3348027 TheSilverJournal
TheSilverJournal's picture

I would be very sad to see my friends and family live through that. Personally, I won't subject myself to an ultra repressive state. Hopefully freedom and capitalism win out.

Tue, 03/19/2013 - 11:58 | 3347430 NotApplicable
NotApplicable's picture

Well, you don't understand what capitalism is then (note the lower-case "c").

Capitalism is NOTHING more than owning your own labor as well as any means of production you require, in order that you can produce more than you consume, in order that you can take your surplus (savings) and use it to invest in further productive tasks.

Without freedom, there can be no capitalism. without capitalism, there can be no freedom.

Tue, 03/19/2013 - 12:52 | 3347770 akarc
akarc's picture

I submit that for most of the public, capitalism has been redefined. I would go so far as to say the legislature as redined it.

Tue, 03/19/2013 - 11:11 | 3347105 EscapeKey
EscapeKey's picture

Oh yeah banks are there to serve us, right?

So today, I had to go swap British Pounds for another major currency - one which all High St banks DEFINITELY have in notes (so, yeah, you can narrow it down to about 3). As part of my business, I already have an account denominated in this currency. It's business travel, so it's all kosher.

Can I get notes of this currency paid out from my foreign-currency-denominated (FCD) account? NO! There's a 24 hour wait, AND they charge 1% to give me what is essentially MY money. I could - on the spot - have this currency and pay for it via my GBP account, OR I could exchange my FCD money on the spot and have it exchanged (so essentially, they'll rip me off twice in the process) into the desired currency. But, alas, they insisted that regardless of what I do, I get ripped off, or they have no interest in doing business.

Fuck banks, and fuck those deluded assholes who apologize for them (facetious or not).

Tue, 03/19/2013 - 11:15 | 3347134 Confundido
Confundido's picture

Realistically speaking, we do not need taxes. The fact that they enforce them on us with the threat of jail should be proof enough for you that I am right.

Bank account levies on day 1 leave banks with ZERO deposits by day 2. I hope YOU can handle that, should your income depend on having deposits by day 2.

I sincerely do not see levies as a solution, and even less as a progressive solution. 



Tue, 03/19/2013 - 11:17 | 3347154 harry555
harry555's picture

Typical socialist moron.  Your so called "progressive" solutions have completely fucked over Western civilization.  You're just to dumb to realise it.

Tue, 03/19/2013 - 11:27 | 3347232 Schmuck Raker
Schmuck Raker's picture

Kudos MDB_

I particularly like your use of the word 'progressive', that's a nice touch.

Tue, 03/19/2013 - 11:47 | 3347363 NoTTD
NoTTD's picture

Shove your "real, progressive" solutuions up your ass, thief.

Tue, 03/19/2013 - 10:48 | 3346961 BlueCheeseBandit
BlueCheeseBandit's picture

Those who made the right decision and put their money in a sound bank win while those who made the wrong decision and put their money in an unsound bank lose?

Making people face the consequences of their actions. Craziness!

Tue, 03/19/2013 - 10:59 | 3347045 Cognitive Dissonance
Cognitive Dissonance's picture

The real problem, at least as I see it, is understanding which banks are "sound" and which are not. At some level every bank becomes unsound during a system wide failure.

Worse, the government is encouraging "unsound" banks not to mark to market their bad loans and investments and are allowing them to reduce loans reserves below even "known" losses. B of A comes to mind in this case, but there are plenty of others.

Tue, 03/19/2013 - 11:16 | 3347141 BlueCheeseBandit
BlueCheeseBandit's picture

Given that today ppl have the choice between banking systems all over the world, not to mention gold and silver as an alternative store of wealth, I remain unsympathetic.

Tue, 03/19/2013 - 11:33 | 3347270 Cognitive Dissonance
Cognitive Dissonance's picture

While I agree completely with the gold and silver alternative store of wealth the average Joe Blow has little to no access to banking systems all over the world.

Not saying we should be 'sympathetic', but we should truly understand how trapped (mentally and financially) the average wage slave really is within the present day socioeconomic system.

Tue, 03/19/2013 - 15:11 | 3348898 merizobeach
merizobeach's picture

Yep; they're trapped.  And I think more by their mentality than anything else.  Even poor people can stand up and leave if they have the mental wherewithall.  So sympathy for the mindless?  Not a chance.

Tue, 03/19/2013 - 10:49 | 3346964 toys for tits
toys for tits's picture



I'm happy to see the bankers have established reasonable leverage.

Tue, 03/19/2013 - 10:50 | 3346970 tarsubil
tarsubil's picture

LOL. Yeap, there is no escape within the system. Like an interstate with a 20 big rig pile up. All the lanes suck. Only option is to go off road. Buy gold and silver.

Tue, 03/19/2013 - 10:50 | 3346971 BandGap
BandGap's picture

MDB, one man's poison is another man's pleasure.

Really, it doesn't matter what chaos looks like at this point.

Tue, 03/19/2013 - 10:55 | 3346972 Ham-bone
Ham-bone's picture

Premise of your question...the government can steal your money to save their money...hmmm.

Tue, 03/19/2013 - 10:50 | 3346980 Dr. Engali
Dr. Engali's picture

Quite frankly I don't give a shit. If you're stupid enough to hold your money in a bank after all that's happened then you deserve what you get.

Tue, 03/19/2013 - 10:59 | 3347049 BandGap
BandGap's picture

The only hope I have at this point is for the time to get my finances aligned as best as possible.

Keep the sheep moving and don't panic them yet.

Tue, 03/19/2013 - 11:09 | 3347094 Pseudo Anonym
Pseudo Anonym's picture

as from tyler's post

remember deposits are unsecured liabilities.

and the vast majority of people still think that their money in the bank is some special, sacrosanct, private property they have a right to.  no they dont:

...“depositors” “are” aware of what is done with their money since interest is paid on it. In actuality what they are saying is that such customers are “deemed” to have constructive knowledge of the fact that their money is lent out, since they “ought to” know...

Tue, 03/19/2013 - 10:51 | 3346982 Everybodys All ...
Everybodys All American's picture

A better question is what happens when the fiat is no longer trusted as worth the paper it is written on?

Tue, 03/19/2013 - 11:03 | 3347064 Au_Ag_CuPbCu
Au_Ag_CuPbCu's picture

" worth the paper it isn't printed on." 


Fixed it for ya.

Tue, 03/19/2013 - 10:51 | 3346985 LynRobison
LynRobison's picture

You mean are we against the false sense of security that the FDIC provides? Yeah, guess you could say that. 

Tue, 03/19/2013 - 10:53 | 3347000 Al Huxley
Al Huxley's picture

So you're advocating the 'we had to steal your money from you to save it for you' position then?

Tue, 03/19/2013 - 11:05 | 3347022 The Invisible Foot
The Invisible Foot's picture

Let them steal your money and then we'll see how you feel.

Tue, 03/19/2013 - 11:00 | 3347053 James
James's picture

MDB- Honest answer: As your question is starting from a false premise it cannot be answered.

Their is no integrity in the banking system.

Your sentence structure using the word "if" was the giveaway.

But thanks for playing anyway

Tue, 03/19/2013 - 11:04 | 3347073 myptofvu
myptofvu's picture

Resulting from the 2008 crash thousands of banks closed. How many people received cks from the FDIC? None, instead they cut deals with other banks to take over the accounts by promising to pay the bad debts for 8 years. What happens after 8 years? Why didn't the FDIC do what is was supposed to do and insure the depositors of the failed banks? Why didn't they just cut cks and give them to the people? Why were they praised for the way they handled the crisis when they didn't even do what the are supposed to do?

Tue, 03/19/2013 - 12:26 | 3347630 aerojet
aerojet's picture

Because back in 2008, the FDIC was stressed badly and we were all worried that it would crack.  People on here and on Denninger's site were making daily trips to pull out cash.  We were very close to collapse that year.

Tue, 03/19/2013 - 11:15 | 3347133 harry555
harry555's picture

Think about it MDB.  The bankrupt bank would go to the Fed and the Fed would print it. Why do you think people keep droning on about owning Gold FFS?

If it wasn't for the brainless idea of the Euro then the Cypriot govt/central bank would be able to do the same thing.


Tue, 03/19/2013 - 12:29 | 3347656 D-2
D-2's picture

"Honest question:...."


I take that to mean the rest of your posts are not honest. Whew! What a relief!

Tue, 03/19/2013 - 10:48 | 3346954 BandGap
BandGap's picture

Has to be pretty easy to be honest looking at that steaming shit pile, huh?

Tue, 03/19/2013 - 10:50 | 3346974 Sheeple Shepard
Sheeple Shepard's picture

So if about 4 million Americans turned up to collect they would have to bring down the shutters, wow.

Tue, 03/19/2013 - 10:59 | 3347043 Coke and Hookers
Coke and Hookers's picture

There's no real need for insurance. The US and the EU could adopt the emergency law Iceland used in the 2008 crash, granting depositors precedence over other bank creditors and stockholders. Under that scheme, banks would be allowed to fail, their assets converted into cash and deposit owners compensated (usually in full). Everybody else would get the rest or get 100% burned.

I'm sure everybody would be willing to do this since it's only fair and in spirit of capitalism.


Tue, 03/19/2013 - 12:28 | 3347651 aerojet
aerojet's picture

It's a shyte sight better than having your head sawed off with a rusty hacksaw.

Tue, 03/19/2013 - 10:47 | 3346952 prains
prains's picture

MDB ??....paging MDB

Tue, 03/19/2013 - 10:47 | 3346953 BKbroiler
BKbroiler's picture

yeah that seems normal.

Tue, 03/19/2013 - 10:49 | 3346967 aint no fortuna...
aint no fortunate son's picture

and of course that 300 Trillion in derivatives is ALL fully collateralized

Tue, 03/19/2013 - 10:52 | 3346988 Croesus
Croesus's picture

Happiness returns to the world when bankers jump (or are pushed) off the fucking rooftops.

Tue, 03/19/2013 - 12:15 | 3347549 Mr. Magoo
Mr. Magoo's picture

All I see is red, usually a bad thing especially when its on a flag

Tue, 03/19/2013 - 10:43 | 3346918 Dealer
Dealer's picture

What could possibly go wrong?

Tue, 03/19/2013 - 10:51 | 3346973 akarc
akarc's picture

Nothing, 2008 never happened, the eu is just having a minor tif and the democrats and republicans took a break this am to sing Kum-by-ya.....

Tue, 03/19/2013 - 10:51 | 3346975 Cdad
Cdad's picture

So...what Tyler is saying that a problem could crop up in the $300 trillion [eyes rolling into back of head] opaque derivatives market, and that the TBTF banks might then approach the people [Congress] and suggest a buy-in...OR ELSE?  That couldn't happen, could it Bazooka Ben?  I mean, is there a precedent for a super banker demanding a trillion dollars real quick...or everything goes bust?  

Tue, 03/19/2013 - 11:24 | 3347147 akarc
akarc's picture

I think the rules say it has to happen on a  Sunday while everyone is in church with a major football game on in the afternoon. Otherwise the people would get wind and never allow it.

Tue, 03/19/2013 - 10:56 | 3347027 xtop23
xtop23's picture

Every day I say a little prayer of thanks that I started taking an interest in finance in time to see the writing on the wall and pull my skin out of this fucking greek tragedy. That chart is insane. 

Before this is over, a lot of folks are going to get fucked harder than they would have thought possible in their most vivid drug induced hallucination.

It boggles the mind.

Tue, 03/19/2013 - 10:43 | 3346922 swissaustrian
swissaustrian's picture

The FED is the unofficial US deposit insurance - until it isn't when tptb pull the plug.

Tue, 03/19/2013 - 10:44 | 3346936 Dr. Richard Head
Dr. Richard Head's picture

With all of the various government agencies coming out to "comfort" the flock, I would say the plug pull be coming soon.

Tue, 03/19/2013 - 10:50 | 3346981 swissaustrian
swissaustrian's picture

It's definitely time for another big bank to be sacrificed for the benefit of JPM and GS.

Tue, 03/19/2013 - 10:49 | 3346968 machineh
machineh's picture

The FED is the unofficial US deposit insurance - until it isn't when tptb pull the plug.

Unfortunately, the Fed is leveraged more than 50-to-1.

When interest rates 'normalize,' the Fed expects to lose up to $500 billion -- more than seven times its capital.

If you think little Cyprus has a problem, wait till the Federal Reserve blows out.

Tue, 03/19/2013 - 11:06 | 3347078 swissaustrian
swissaustrian's picture

There's an academic debate going on on how negative equity would limit the abilities of a central bank.

They can always print money ( ), so I guess they can keep going for a while even in an insolvency scenario.

The only thing that could really bust a central bank is a hyperinflation, ie a complete loss of trust in the currency.

Tue, 03/19/2013 - 12:30 | 3347664 aerojet
aerojet's picture

We will already be in a big war, nobody will hardly notice.

Tue, 03/19/2013 - 10:44 | 3346926 Dr. Richard Head
Dr. Richard Head's picture

Math is a bitch when the lies are flying from various government entities.

Tue, 03/19/2013 - 10:44 | 3346932 herpderp
herpderp's picture

Gold price looking tasty today!

Tue, 03/19/2013 - 10:44 | 3346933 Stuck on Zero
Stuck on Zero's picture

Don't worry.  Ben has a printing press and helicopters.


Tue, 03/19/2013 - 10:44 | 3346934 Bazinga
Bazinga's picture

"...a strong FDIC fund...    "Strong", now THAT is funny!

Tue, 03/19/2013 - 11:12 | 3347113 McMolotov
McMolotov's picture

Strong as in "strong smell." Like the strong smell of shit.

Tue, 03/19/2013 - 10:47 | 3346944 BandGap
BandGap's picture

Those numbers have to be adjusted. Just sayin'.

Tue, 03/19/2013 - 10:47 | 3346945 clagr
clagr's picture

But, the fact that the derivatives are big, they are not insured by the FDIC. True, they may trigger the need for the insurance to be paid out, but derivatives won't be paid off with insurance.

Tue, 03/19/2013 - 12:03 | 3347461 YC2
YC2's picture

Definitely good to note and should have been mentioned above for those that might make an erroneous connection. The main thrust of the article still completely stands with this clarification

Tue, 03/19/2013 - 10:47 | 3346948 Gunga
Gunga's picture

 Starve the beast.

Withdraw what you can from the financial services industry. Buy what you need from locally owned shops and stores.

Tue, 03/19/2013 - 11:02 | 3347062 Momauguin Joe
Momauguin Joe's picture

Black market's thriving in most U.S. cities. Every weekend at "flea markets" nationwide, fruit, produce, name brand clothing, auto parts, autos, home goods, tools, anything and everything in between legal and illegal, is available for a price.

Tue, 03/19/2013 - 12:31 | 3347674 aerojet
aerojet's picture

There's not much difference between black market and free market.

Tue, 03/19/2013 - 10:47 | 3346949 BlueCheeseBandit
BlueCheeseBandit's picture

We're gonna need a bigger boat.

Tue, 03/19/2013 - 10:47 | 3346950 tarsubil
tarsubil's picture

Just think about how Kyle Bass bought Japan risk for 1 bps. Yeah, the derivatives are perfectly balanced. Don't worry.

Tue, 03/19/2013 - 10:56 | 3347020 Al Huxley
Al Huxley's picture

That must be because Japan is such a super-safe, super-conservative society that NOTHING COULD EVER GO WRONG there.

Tue, 03/19/2013 - 11:53 | 3347400 tarsubil
tarsubil's picture

Yeap. Housing has never gone down. Nothing to worry about.

Tue, 03/19/2013 - 10:48 | 3346956 frenchie
frenchie's picture

modern finance & banking rules

Tue, 03/19/2013 - 10:48 | 3346958 KingdomKum
KingdomKum's picture

we few,  we happy few,  we band of silver holders  .  .  . 

Tue, 03/19/2013 - 10:57 | 3347031 Kaiser Sousa
Kaiser Sousa's picture

exactly...picked up some Libertads yesterday...

hell, with 25 billion in insurance, 300 trillion in toxic bullshit, and 9 trillion in worthless debt coupon dollars held by people who dont know that that shit aint money, what could possibly go wrong....... 

Keep stacking........................

Tue, 03/19/2013 - 10:49 | 3346963 larry david
larry david's picture

If this doesnt make you want to stock up on bottled water, TP, guns, ammo, gold, silver, nickels...not sure what to tell you.


Probably not a bad idea to have at least 1-2 months living expenses in physical cash readily available as well outside the banking system. Might need it when things start breaking down. 

Tue, 03/19/2013 - 10:56 | 3347018 LFMayor
LFMayor's picture

How long do you think that cash is going to be worth anything after this breaks?  I'll give you 2 weeks before people stop accepting it. 

Go brass, lead and dried lentils.  And the cheapest vodka you can find.   Those will be the new currency.

Tue, 03/19/2013 - 11:31 | 3347261 larry david
larry david's picture

If you hold mostly nickels and the rest paper currency you'll be fine...

Tue, 03/19/2013 - 12:32 | 3347681 Bingfa
Bingfa's picture

Pre 64 coins....I buy quarters/dimes ....90% silver

Tue, 03/19/2013 - 11:06 | 3347085 Henry Chinaski
Henry Chinaski's picture

Better idea to keep several months of living expenses in "cash."  Roughly, 1/3 in a local bank, 1/3 in a local credit union and 1/3 in the matress, for example.  If one bank goes down, it is merely an inconvenience.  If both go, there are still options. If the house burns down, or is buglarized, there are options.  Don't put all your eggs in one basket.


Tue, 03/19/2013 - 11:18 | 3347162 scatterbrains
scatterbrains's picture

1 to 2 months ?  Looks to me like if the average american stopped eating out of the fast food drive through and instead all at once bought a week's worth of groceries that thin layer of deposits would go *poof*

Tue, 03/19/2013 - 10:51 | 3346965 Cognitive Dissonance
Cognitive Dissonance's picture

This is your deposit. This is the banking system. This is your deposit after nation wide (global) bank failures.

<Any questions?>

Tue, 03/19/2013 - 10:49 | 3346966 optionsman
optionsman's picture

clearly this is another evidence that powers that be dont expect any major bank to fail. and the major banks know it. the rest is a show to keep people trust in the rule of law ))))))))

Tue, 03/19/2013 - 10:51 | 3346986 Al Huxley
Al Huxley's picture

That's fantastic - 297,514 billion in assets against a lousy 9,283 billion in liabilities!  That's like a 30:1 ratio!  We can all relax now, everything's totally covered - looks like the bankers aren't the evil, self-serving pricks they've appeared to be over the past 10+ years, turns out they were just lookin' out for us all along.  No wonder they get the big bonuses.  Thanks Jamie.

Tue, 03/19/2013 - 10:54 | 3347003 Taint Boil
Taint Boil's picture



What could possibly go wrong ……

Tue, 03/19/2013 - 10:54 | 3347006 toys for tits
toys for tits's picture

It won't be long before we'll be measuring this shit in light-years.

Tue, 03/19/2013 - 10:55 | 3347014 orangegeek
orangegeek's picture
US Deposits In Perspective: $25 Billion In Insurance, $9,283 Billion In Deposits; $297,514 Billion In Derivatives.


But if you seasonally adjust these numbers it's $297,514 Billion in Insurance, $9,283 Billion in deposits and $25 Billion in derivatives.


....which is just excellente!!!

Tue, 03/19/2013 - 10:56 | 3347015 Byte Me
Byte Me's picture

Looks good to me.

What could POSSIBLY go wrong?

Tue, 03/19/2013 - 10:56 | 3347024 MFLTucson
MFLTucson's picture

Gold has no counterparty risk!  Wake up people!!

Tue, 03/19/2013 - 10:56 | 3347026 the not so migh...
the not so mighty maximiza's picture

we are so fucked

Tue, 03/19/2013 - 10:57 | 3347030 MsCreant
MsCreant's picture


Easiest post you ever "researched and wrote."

Tue, 03/19/2013 - 12:17 | 3347565 eclectic syncretist
eclectic syncretist's picture

And who is on the other side of all those derivitive bets?  Other banks!

That's how they've created this "sword of Damocles" they keep threatening our governments and citizenry with.  Fuck them, withdraw everything, and let them disappear into the void from which they emanated.

Tue, 03/19/2013 - 10:57 | 3347035 Benjamin Glutton
Benjamin Glutton's picture
Senate Censors Part of Report on JPMorgan About Its Stock Trading

By Pam Martens: March 18, 2013 

The 307-page report the Senate released last Thursday on JPMorgan’s cowboy culture was deeply unsettling; the testimony under oath at the related Senate hearing on Friday was equally shocking with eyewitness accounts confirming that CEO Jamie Dimon ordered the withholding of  financial data to a regulator while both he and the Chief Financial Officer at the time, Douglas Braunstein, presented an Alice in Wonderland version of facts to the public in April 2012. 

But it now appears that the worst of this story may be so unsettling to the markets and the public perception of Wall Street that it must be censored from public viewing. Throughout the Senate Permanent Subcommittee on Investigation’s 98 exhibits of emails and internal memos on the wild trading schemes at JPMorgan, the word “Redacted” appears.  In a high number of the areas where the material is censored, it concerns trading in the stock market, not the credit market where Bruno Iksil, the trader known as the London Whale, was causing giant ripples and eventual mega losses for the largest bank in the U.S. To date, there has been no media attention to the issue of stock trading within the Chief Investment Office nor has the issue been raised by investigators. 

That the words equity trading (meaning stock trading) appear at all in this investigative report raises more serious red flags for JPMorgan. As Wall Street on Parade has repeatedly reported, the Chief Investment Office at JPMorgan, which oversaw the London Whale trades, was using insured deposits of the bank to place its casino bets. Senator Carl Levin, Chairman of the Senate Permanent Committee on Investigations, confirmed on Friday that JPMorgan used insured deposits as well as funds corporations had placed on deposit. That’s clearly not compatible with the Nation’s safety and soundness rules for banks and likely explains why the FBI is involved in an investigation. 

To date, Jamie Dimon has attempted to present the giant bets in the credit markets as a hedging operation to offset risks in the company’s overall balance sheet. The credibility of that stance has lost its luster as Levin revealed that the Chief Investment Office in the first quarter of last year had actually taken on more exposure to credit risk rather than hedging it. 

The reason for the existence of banks is to make business loans to help grow new industries, jobs and the economy. If one genuinely wants to hedge that risk, as opposed to gambling for the house with proprietary bets, a credible hedge would be to short corporate loan exposure – not buy more of the same exposure. But that is what the Chief Investment Office did – it purchased billions of additional exposure via an illiquid credit index from which it could not untangle itself. 

The $6.2 billion in losses thus far acknowledged by JPMorgan from the trading of credit derivatives within the Chief Investment Office is bad enough. But trading stocks with customers’ savings deposits – that truly has the ring of the excesses of 1929 and inexplicable to explain as a hedge against the corporate loans made by the bank. 

Although the “Redacted” stamp has censored much of the relevant information on this stock trading, a few snippets can be pieced together. We learn, for example, that the original budget proposed for stock trading in 2006 was twice that for credit trading. The plan was to trade a maximum of $5 million in credit derivatives and $10 million in stock trading – the specific type of stock transactions have been redacted from the document while those for credit trading have been left in. Since the notionals (face amount) of the credit derivatives eventually grew to hundreds of billions of dollars by early 2012, one has to wonder what the stock-related trading grew to from a proposed $10 million since it was originally slated to be twice as large as credit trading.


Tue, 03/19/2013 - 11:16 | 3347144 Al Huxley
Al Huxley's picture

Wow, well if it's really unsettling news, I'm glad they didn't tell me, otherwise I might worry about it.  This whole 'we're disconnecting the smoke detectors because the house is a really dangerous firetrap - maybe already on fire, and we don't want people to panic' bullshit is really starting to get to me.  For fucks sake, if the house IS on fire, PANIC is the appropriate reaction.  And if they're not telling me something BECAUSE ITS SO FUCKING BAD, THEN THEY'VE ALREADY TOLD ME EVERYTHING I NEED TO FUCKING KNOW.


Fuck, I never used to be an all-caps kind of guy, but after so many years of this shit...

Tue, 03/19/2013 - 10:58 | 3347038 Skin666
Skin666's picture

That's great, it starts with an earthquake, birds and snakes, an aeroplane -
Lenny Bruce is not afraid. Eye of a hurricane, listen to yourself churn -
world serves its own needs, regardless of your own needs. Feed it up a knock,
speed, grunt no, strength no. Ladder structure clatter with fear of height,
down height. Wire in a fire, represent the seven games in a government for
hire and a combat site. Left her, wasn't coming in a hurry with the furies
breathing down your neck. Team by team reporters baffled, trump, tethered
crop. Look at that low plane! Fine then. Uh oh, overflow, population,
common group, but it'll do. Save yourself, serve yourself. World serves its
own needs, listen to your heart bleed. Tell me with the rapture and the
reverent in the right - right. You vitriolic, patriotic, slam, fight, bright
light, feeling pretty psyched.

It's the end of the world as we know it.
It's the end of the world as we know it.
It's the end of the world as we know it and I feel fine.

Six o'clock - TV hour. Don't get caught in foreign tower. Slash and burn,
return, listen to yourself churn. Lock him in uniform and book burning,
blood letting. Every motive escalate. Automotive incinerate. Light a candle,
light a motive. Step down, step down. Watch a heel crush, crush. Uh oh,
this means no fear - cavalier. Renegade and steer clear! A tournament,
a tournament, a tournament of lies. Offer me solutions, offer me alternatives
and I decline.

It's the end of the world as we know it.
It's the end of the world as we know it.
It's the end of the world as we know it and I feel fine.

The other night I tripped a nice continental drift divide. Mount St. Edelite.
Leonard Bernstein. Leonid Breshnev, Lenny Bruce and Lester Bangs.
Birthday party, cheesecake, jelly bean, boom! You symbiotic, patriotic,
slam, but neck, right? Right.

It's the end of the world as we know it.
It's the end of the world as we know it.
It's the end of the world as we know it and I feel fine...fine...

Tue, 03/19/2013 - 11:02 | 3347061 Downtoolong
Downtoolong's picture

Sadly, it may be the case that the ABA is being just modestly disingenuous in its statement.

It may also be the case they are a bunch of lobbying propagandist whores. No offense, but, I’ll give anyone ten to one odds in favor of my opinion, and no, I won’t write you a default swap on the bankster morality index to hedge your bet.


Tue, 03/19/2013 - 11:04 | 3347071 yogibear
yogibear's picture

Derivatives are the ticking financial 200 megaton thermo nuke.

Tue, 03/19/2013 - 11:11 | 3347108 MsCreant
MsCreant's picture

You posted that statement as collateral. I will now take it and post it as collateral elsewhere. I will also buy insurance against your statement failing.

I find I have become addicted to all news Cyprus.


Tue, 03/19/2013 - 11:10 | 3347097 LawsofPhysics
LawsofPhysics's picture


Tue, 03/19/2013 - 11:10 | 3347098 magnetic
magnetic's picture

I asked this before but nobody proferred an opinion.  in the event of a confiscation, would corporations fare any better than individual depositors.   In other words, would it make sense to incorporate oneself now in the hopes that they would leave business accounts untouched?   I realize this is very theoretical at the moment, but any layer of possible protection would be welcome.

Tue, 03/19/2013 - 11:17 | 3347158 Winston Churchill
Winston Churchill's picture

Good question.

I have to keep about 6 weeks of payroll and AP in the system.Memories of 2008

are fresh and painfull;.Every client just stopped paying.

No,your business accounts will be stolen first if you are a 'small business'.

Its only fair as you didn't build that. I can hear it now.

Tue, 03/19/2013 - 12:30 | 3347670 Nehweh Gahnin
Nehweh Gahnin's picture

Yup.  +++

Tue, 03/19/2013 - 11:20 | 3347177 Al Huxley
Al Huxley's picture

LARGE corporations will be fine - small corporations like the one you propose would get fucked.  Nice try, but they're way ahead of you on that.  There's plenty of precedent already for differential treatment of corporate entities based on size.

Tue, 03/19/2013 - 11:21 | 3347100 WallowaMountainMan
WallowaMountainMan's picture

from the same report:

'Four large commercial banks
represent 93% of the total banking industry notional amounts and 81% of industry net current credit exposure.'


Tue, 03/19/2013 - 11:16 | 3347139 Mediocritas
Mediocritas's picture

Bernanke just called and said not to worry because gross isn't net.

I asked him about liquidity risk, duration risk, settlement risk, concentration risk, etc. I suggested to him that the net value paints a picture of false confidence when all these risks are accounted for because realized risks destroy netting.

He was quiet for a while, then muttered something about being late for a meeting and hung up. I enjoyed the silence for a while until this annoying distant buzzing started up, like some plane circling in the sky. Took a look outside but couldn't see anything. Probably nothing.

Tue, 03/19/2013 - 11:16 | 3347146 marcusfenix
marcusfenix's picture

skynet must have stumbled across this post cause the morning ramp is dead, NASDAQ and S&P just went red and the DOW is desperately clinging to green...

as a side note it appears that the western media darling freedom fighters in Syria just lobbed a chemical weapons grenade into the most militarized, tense, ready to explode region on the face of the planet...

sure am glad our government spent hundreds of millions of tax dollars supporting them.

Cyprus and the EU fiasco is important just don't get caught staring to hard at one train, or you just might miss the one coming from the other direction.  

Tue, 03/19/2013 - 11:19 | 3347169 Atomizer
Atomizer's picture

This brings back memories of Happy FDIC Fridays.

Tue, 03/19/2013 - 12:36 | 3347733 aerojet
aerojet's picture

It was fun, but I was nervous on a lot of Fridays--I had an account at Netbank, which was the very first domino to fall back then.  FDIC had my back, but my biggest problem was that I was using their online bill pay to pay my bills and had a huge mess on my hands when it all fell apart. 

Tue, 03/19/2013 - 11:19 | 3347172 Bingfa
Bingfa's picture

That derivative exposure is everything....

EVERYTHING, and it's way more than that number

Tue, 03/19/2013 - 11:24 | 3347214 f16hoser
f16hoser's picture

I prefer to be 6 months early than 1 day late to the "RUN on US Banks"

Best to own Gold/Silver Bullion as opposed to Bernanke Bucks!

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