There is ZERO chance the net obligation is anything like that. Surprised Alpha isn’t clear on that.
it’s still very bad for us.
...just like Ireland.
the Irish people,
were about the MOST debt-free,
in all of Europe.
then the politicians changed the law,
to make the taxpayers liable for the bank’s
derivitive screw-ups.
...the rest is history.
now, the same is happening to us.
>> There is ZERO chance the net obligation is anything like that.
What if the net obligation is only five percent of $75 trillion?
That’s still three trillion seven-hundred-fifty billion dollars of taxpayer exposure. Two full years of Obama-esque deficits.
Is that acceptable?
If you don’t like five percent as the number, then what number do you prefer?
*Whatever* the risk level of this crapola, I should think that BAC shareholders and bondholders ought to be on the hook — not depositors and the taxpayer by way of the FDIC.
Why? During the housing boom, trades were leveraged 100 to one in many cases, all based on the assumption that the boom would continue. When it crashed, those leveraged assets set off a chain reaction which amounted to the financial equivalent of an atom bomb. A huge percentage of the trades were done by computers, and this reckless orgy went on for years with no regulations or oversight. The true extent of the losses is yet to be known, but I've heard that the total debt worldwide is more than 1.5 quadrillion.