How US Banks Are Lying About Their European Exposure; Or How Bilateral Netting Ends With A Bang, Not A Whimper

Tyler Durden's picture

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eureka's picture

Next to fall - US/DC/CIA/WALL STREET mafia-ponzi...

Motorhead's picture

Indeed.  Not if, but when.

LawsofPhysics's picture

I agree, but do not underestimate an intelligent, desperate, thug with a modern arsenal at his disposal.  Got physical, know your neighbors?  You better.

Don Birnam's picture

"...banks will always honor their own derivative exposure."

I.e., the Fed: Banker, Honorer, and Printer of last resort.

redpill's picture


I'll sell you a million dollar life insurance policy for $5 a month.  What a bargain!


Looks great on paper but here's the thing: I don't actually have a million dollars.  So you better not die :)


Pladizow's picture

And this is a surprise to who?!?!

Smithovsky's picture

Bloomberg, welcome to the fringe.  Would you like some coffee?  

JW n FL's picture



Bloomberg Thugs!


Celebrate the Fraud!

Celebrate the Criminality!!

Just like New York's Finest DO!


NYPD Fake Drug Charges for Arrest Quotas

Eight officers from the New York Police Department are facing trial for allegedly fabricating drug charges to make their arrest quotas


FBI arrest NYPD Officers for gun running and smuggling cigarettes into New York.

Who Do the White Shirt Police Report to at Occupy Wall Street Protests?

Financial Giants Put New York City Cops On Their Payroll

If you’re a Wall Street behemoth, there are endless opportunities to privatize profits and socialize losses beyond collecting trillions of dollars in bailouts from taxpayers.  One of the ingenious methods that has remained below the public’s radar was started by the Rudy Giuliani administration in New York City in 1998.  It’s called the Paid Detail Unit and it allows the New York Stock Exchange and Wall Street corporations, including those repeatedly charged with crimes, to order up a flank of New York’s finest with the ease of dialing the deli for a pastrami on rye.

The corporations pay an average of $37 an hour (no medical, no pension benefit, no overtime pay) for a member of the NYPD, with gun, handcuffs and the ability to arrest.  The officer is indemnified by the taxpayer, not the corporation.

New York City gets a 10 percent administrative fee on top of the $37 per hour paid to the police.  The City’s 2011 budget called for $1,184,000 in Paid Detail fees, meaning private corporations were paying  wages of $11.8 million to police participating in the Paid Detail Unit.  The program has more than doubled in revenue to the city since 2002.

The taxpayer has paid for the training of the rent-a-cop, his uniform and gun, and will pick up the legal tab for lawsuits stemming from the police personnel following illegal instructions from its corporate master.  Lawsuits have already sprung up from the program.

 See how breaking the Law effects business men.



CClarity's picture

Also, recalling AIG, the way most banks protect against this contingency, is to buy CDS on the counterparty itself, thereby layering netting concerns on netting concerns, and pushing even more net exposure onto the strongest credit in the link:

Ala, Germany holding up the rest of Eurozone.  

And our solution to debt saturation is with more debt. 

Truly, the magical thinking of trying to outlast this rumbling approaching storm is not working.

NewThor's picture

Euro Markets down 5-6% tidal waves outflows beginning?

ZerOhead's picture

Bernanke apparently.

My guess is that as CEO of Bankster Inc. , rather than see his boys take an obviously forthcoming big dirt nap on this, he is more likely than ever to backstop the European sovereign/bankster crisis early while trying his level best to keep his fingerprints off it.

And fortunately for GS Morgan and friends... that one time audit that showed up $16.1 trillion reasons NOT to trust the Fed is now over.

$2T or so of very quietly arranged currency 'swaps' to the Chinese Central Bank to lend on to Europe should be enough to kick this Europroblem down the road for a couple of more years without creating so much as a ripple in the markets.

Stupid idea huh?

NewThor's picture

I wouldn't be surprised to see Bernanke have the balls to flat out announce QE3 tomorrow.

vocational tainee's picture

Oh, why is it ,that I can only spend as much ,as is in my posession?..

jekyll island's picture

Because you don't have a printer like Big Ben

gmj's picture

Why don't you sign up for 50 new credit cards, max them out, and then buy CDSes on yourself? 

Hard1's picture

Nothing to worry, US banks main counterparty are banks from France, a AAA rated CDO squared country.

knukles's picture

Well, I'm hedged, what with all the CDS's on my books (carried at cost) from Bear Stearns, Lehman and MF Global.  What could go wrong?

knukles's picture

Whaddya mean that because I bought my CDS's on Lehman from Lehman they're no good anymore?  ISDA didn't say anything about that.  Quit picking on me.  What the Bear STearns one from Bear and MF Globals from themselves too?  What is this, a fraud?

slewie the pi-rat's picture

bilateral banksterism, BiCheZ!

Deadpool's picture

or you better get 17,000 paying customers.

TruthHunter's picture

I'll sell you a million dollar life insurance policy for $5 a month.  What a bargain!

 Looks great on paper but here's the thing: I don't actually have a million dollars.  So you better not die :)


If this weren't a kleptocracy, wouldn't the Insurance Regulators step in and say CDS are our turf this crap isn't legal?

So,  give back $5, pay a fine and maybe do some jail time.

El Viejo's picture

Didn't congress have to have a special meeting to explain to those geniuses just how CDS work?

"When the people lead the leaders will follow." Some real genius said.

Kayman's picture

No reserve Insurance policies.  What's not to like ?  Premiums are today's income.  Losses are "go fuck yourself".

Ned Zeppelin's picture

Tell that joke to Brooksley Born.

peekcrackers's picture


You can insure your bunk insurance  from me for 1 million for $2.50   and I'll sell it to some guy in Iceland as a money fundfor $20.00 a month and take out Put Ops against it.

mccoyspace's picture

But that isn't fraud because your a "sophisticated investor" who would be aware of risks.
And how could it be fraud if everybody does it?


peekcrackers's picture

Hey let me add in a some of these Prime un-real estate ops I mean real estate markets ,, they are booming  in Detroit , ya appraised value  $68.00 ops I mean 680k.. great deal.. dont worry we will do CDS and sell it off to Bank in Canada they will throw it in to a pention hedge... all good!

Oh regional Indian's picture

This thread above, with your line of thinking peek, is exactly how it DOES work. An eighth grader could understand it.

Insurance, one of THE biggest scams pulled on general humanity. Scum sucker business. Death, Fear business.

Most banks have strong insurance ties. Lying is in their DNA. Money for nothing. 

It all makes sense to me anyway. See Buffet....Banks and Insurance companies. 

And recently, what has the world of finance been dominated by? 

Writing policies on Money Bets.




Toroidal Vortices and Stillness

peekcrackers's picture

Thanks  Oh regional

I am glad I stoped at grade 3 .

Yup a smiple little scam of  fancy words like "Insurance" to sell SHIT with nothing to back it up but a huge mess of suits finger pointig at each other.

RafterManFMJ's picture



And if he dies, how's he to know you don't have the cash? You, sir, are brilliant! Although I fear you may in fact be a bankster by the way you think.

Ahmeexnal's picture

No need to worry.  Just as Japan raised the limits on "dangerous levels of radiation exposure" so will the banks proclaim that their exposure to toxic assets will be within reasonable levels.

That's one of the fist lessons on Kick the can 101.

DosZap's picture

Just as Japan raised the limits on "dangerous levels of radiation exposure"

Yeah,now their Importing RADIOACTIVE cars...............

Going to a Japanese dealer?, carry a Geiger counter.

GeezerGeek's picture

Shop at night. Don't buy a car that glows in the dark.

RafterManFMJ's picture



a car that glows in the dark

No Sir! That's not a defect, that's a feature! Normally we charge extra for that eerie green glow, but I can see you are a man of distinciton, and I really need to sell two more cars this week...tell you what I'm gonna go...

UP Forester's picture, when you go down a dirt road, you don't have to worry about the tubes breaking on your neon under-lights!

TheFourthStooge-ing's picture

Cop: What you got in the trunk?

J. Frank Parnell: Ohhhh ... you don't want to look in there


legal eagle's picture

Come on now!  Banks misleading and misrepresenting?  Say it aint so Charlie.

A local real estate lawyer just sent me some mortgage assignments Bank of America submitted in a foreclosure case - from a make believe pretend trust that doesnt exist to one that does.  They will try anything.

Stop playing their game!

Mitzibitzi's picture

They'll dig out the biological and chemical weapons before they deign to fight you on the streets. There are too many of you and you're too well armed. Too many of you are veterans who know how to use those arms not just effectively but tactically and strategically. A straight up fight would degenerate into a decades long guerrilla campaign and TPTB know VERY well by now how well those turn out.

Going NBCR on the domestic population will engender a lot of outrage from the rest of the world, though, so it'll be essential that we get properly fucked by the same means at the same time, sadly. Welcome to the apocalypse.

fnord88's picture

Why would NBCR cause outrage? It was the terrorists. Cause they hate our freedoms. Although Chavez has lots of oil. So maybe it will be the commies. They hate our freedoms too.

RafterManFMJ's picture

Going NBCR on the domestic population will engender a lot of outrage from the rest of the world, though, so it'll be essential that we get properly fucked by the same means at the same time, sadly. Welcome to the apocalypse.


You could not be more mistaken; the rest of the world will laugh themselves into convulsions if the US imbecile mass gets gassed.  

disabledvet's picture

Who could that be I wonder?

gojam's picture

Maestrom pulling everything and everyone down !


PS, Maestrom is a cool word isn't it ?

Popo's picture

LOL.   It's   "M A E L S T R O M".

You're an idiot.

gojam's picture

Typo. dickhead.

I don't mind being corrected. but you go to far to assume i'm an idiot and by assuming you show yourself up.

I'm at the end of a long day.

Popo's picture

LOL at your excuse too.

The same "typo" TWICE in a two-sentence post?  



legal eagle's picture

Liked it better before you edited your post.