HOLY BAILOUT - Federal Reserve Now Backstopping $75 Trillion Of Bank Of America's Derivatives Trades

The Daily Bail ^ | Oct 18, 2011 | The Daily Bail

[EasySt]

HOLY BAILOUT - Federal Reserve Now Backstopping $75 Trillion Of Bank Of America's Derivatives Trades

Bank of America is shifting derivatives in its Merrill investment banking unit to its depository arm, which has access to the Fed discount window and is protected by the FDIC.

[EasySt]

More like Un-Holy Bailout.

Like he says, this is a recipe for Armageddon.

[Paladin2]

Derivatives need to stand on their own.

[RatRipper]

That is tantamount to the federal government making the Solyndra stockholders whole. Does the FDIC have no nads anymore. This places the deposit insurance fund at risk.

[EasySt]

"Derivatives need to stand on their own."

Not anymore, apparently.

What is this, about another $230K exposure for every man, woman and child in the country, ON TOP of however much it is that we already owe?

[RatRipper]

Screw the parent company. Many times have holding companies been allowed to bankrupt leaving the underlying bank minimally affected. This does a 180 on long-standing regulatory policy. If the Fed wants to backstop derivatives, find another way besides exposing the bank depositors/ FDIC to the liability.

[ken21]

most dire.

[EasySt]

Making the Solyndra stockholders whole would cost at most a few billion.

This is a $75 Trillion Dollar Exposure we're talking about...

I don't recall any of us giving our permission to this lawless government, or the Fed, or the Banksters to gamble our future like this... And on top of that, what's in it for us?

We're all being robbed and enslaved, at the same time.

[G Larry]

uh....by definition, “Derivatives” derive their value from....and can NOT “stand alone”!

[cicero2k]

This is why the OWS guys may get traction.

Why is B of A too big to fail?

Why can't Barney Frank (and others) be prosecuted for recklessly encouraging a housing bubble?

Why can't congress be prosecuted for enabling an illegal immigration wave?

At least the Enron and World Com guys were ostracized.

[Paladin2]

e to the u du/dx. Derivatives should boomerang on the bundler.

[Moonman62]

This is a $75 Trillion Dollar Exposure we're talking about...

How do you figure that?

[TheOldLady]

Thank you, humblegunner

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[RoadGumby]

Ummm, perhaps by reading the title as well as the opening lines?

Reading comprehension much Moonman?

[Moonman62]

Ummm, perhaps by reading the title as well as the opening lines? Reading comprehension much Moonman?

How do you calculate it, or do you trust everything you read?

[Toddsterpatriot]

Forget it, he's rolling.

http://www.youtube.com/watch?v=V8lT1o0sDwI

[Toddsterpatriot]

I heard it was $75 bajillion.

[TruthConquers]

http://www.zerohedge.com/news/bank-america-forces-depositors-backstop-its-53-trillion-derivative-book-prevent-few-clients-dep

From the article:
“...it (BOA) shifted anywhere up to the total of $53 trillion of the total derivatives it held as of June 30 (as Zero Hedge previously reported) on its books at Q2 from the Holding Company, which was downgraded last by Moody’s from A2 to Baa1 (the third-lowest investment grade rating) to its retail bank, ...”

and futher in: “the FDIC, which is the entity backstopping the deposits in a worst-case scenario, is not happy with this move for obvious reasons. Yet even it is hopeless to override the Fed, which as Bloomberg reports, “has signaled that it favors moving the derivatives to give relief to the bank holding company.” And so, once again, we see just how much more important to the Federal Reserve are interests of US taxpayers and savers, over those of the banks that effectively run the Fed.”

[NonValueAdded]

Merrill was crammed down BoA’s throat. Whatever faults BoA might have, we need to look at who was rescued by whom and not let the guilty ML folks slink away unnoticed.

[ResearchMonkey]

bump for more commentary. ...because I don’t have enough cash to cover this.

[RatRipper]

So . . . Dodd-Frank eliminated “too big to fail” huh? ? ? ? I wasn’t holding my breath. The ICBA will be so pleased. /sarc

This is big enough to make the whole country fold. You Occupy Wall Street folks, if you were honest people and had a clue, you would have a new bogeyman . . . Ben Bernanke.