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Presenting The $303 Trillion In Derivatives That US Taxpayers Are Now On The Hook For
Zerohedge ^ | 12/12/2014 | Zerohedge

Posted on 12/12/2014 6:25:55 AM PST by coloradan

Courtesy of the Cronybus(sic) last minute passage, government was provided a quid-pro-quo $1.1 trillion spending allowance with Wall Street's blessing in exchange for assuring banks that taxpayers would be on the hook for yet another bailout, as a result of the swaps push-out provision, after incorporating explicit Citigroup language that allows financial institutions to trade certain financial derivatives from subsidiaries that are insured by the Federal Deposit Insurance Corp, explicitly putting taxpayers on the hook for losses caused by these contracts. Recall:

(more at link)

(Excerpt) Read more at zerohedge.com ...


TOPICS: Business/Economy; Crime/Corruption; Government; Politics/Elections
KEYWORDS: bailout; bank; banks; citibank; derivatives; fdic; omnibus; spendingbill; taxpayer
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$300 trillion notional backed by about 350 million Americans is just under $1 million for every man, woman and child in the country.
1 posted on 12/12/2014 6:25:55 AM PST by coloradan
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To: coloradan

very nice


2 posted on 12/12/2014 6:28:02 AM PST by servantboy777
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To: coloradan

boehner and co. are crying about this no doubt all the way to the bank

why bother to vote at all


3 posted on 12/12/2014 6:32:51 AM PST by SteveH
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To: SteveH

One more reason why the next election is going to be won by an anti-banker populist.


4 posted on 12/12/2014 6:35:40 AM PST by Buckeye McFrog
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To: coloradan

Who is John Galt??


5 posted on 12/12/2014 6:41:35 AM PST by eyeamok
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To: coloradan

If I hand the feds $1M, will they leave me alone?


6 posted on 12/12/2014 6:42:18 AM PST by oblomov
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To: SteveH

Just like Obama. All of our rulers are angry about it, too.


7 posted on 12/12/2014 6:43:43 AM PST by oblomov
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To: coloradan

At this point, why not. It’s not like it matters. This thing (America) doesn’t last past 2020.


8 posted on 12/12/2014 6:43:45 AM PST by Lazamataz (I miss the good old days, when there were two political parties. We are now in one-party-rule.)
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To: coloradan

Title should be ‘opens the door to underpinning up to 300 trillion in derivatives’, looks like a title written to be more explosive than reality.

That being said, you can be sure this will cause the US Government to loose over a trillion dollars.

What should have been done, is the banks need broken up. They need to be deregulated but we can never allow banks that are too big to fail again. We need this kind of leader that will take on this task.


9 posted on 12/12/2014 6:44:47 AM PST by dila813
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To: oblomov
If I hand the feds $1M, will they leave me alone?

Just as soon as they're finished going through your couch cushions and turning you upside down to shake the change out of your pocket.

10 posted on 12/12/2014 6:45:13 AM PST by Stentor (Maybe the Goldman Sachs thing is just a coincidence. /S)
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To: oblomov

One can only dream of getting off so easy...


11 posted on 12/12/2014 6:46:25 AM PST by SZonian (Throwing our allegiances to political parties in the long run gave away our liberty.)
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To: Buckeye McFrog
One more reason why the next election is going to be won by an anti-banker populist.

Sounds just like Elizabeth Warren.
12 posted on 12/12/2014 6:46:37 AM PST by lump in the melting pot (Half-brother is Watching You!)
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To: Buckeye McFrog
One more reason why the next election is going to be won by an anti-banker populist.

The progressive nanny state is built on the Federal Reserve and their ability to issue fiat currency, monetize debt and control interest rates. No FED means the Federal Government is forced to shrink - drastically.

13 posted on 12/12/2014 6:48:09 AM PST by PGR88
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To: oblomov

Of course not...where did you get all that money?


14 posted on 12/12/2014 6:48:49 AM PST by mac_truck ( Aide toi et dieu t aide)
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To: dila813

Either the taxpayers are on the hook if the derivatives blow up, or they aren’t. At the moment the derivatives aren’t blown up, so there is no present bill due. But given oil’s slide and rapid currency revaluations (e.g. the Yen) the odds that derivatives might start blowing up is, well, let me put it this way: likely enough for cronies in Washington to insert language getting them off the hook if/when they do blow up.


15 posted on 12/12/2014 6:49:20 AM PST by coloradan (The US has become a banana republic, except without the bananas - or the republic.)
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To: coloradan
" It is important to note that the CDS contract is not actually tied to a bond, but instead references it. For this reason, the bond involved in the transaction is called the "reference obligation." "

This is should not be allowed.

16 posted on 12/12/2014 6:50:16 AM PST by Paladin2
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To: coloradan

If the text highlighted is representative of what they actually did, I think it is good. It permits them to execute a derivatives/ swaps to offset risks already on their books. It is my understanding that the credit risk derivatives, where big banks and insurance companies essentially took the credit risk off the originating lender’s books and put it on their own (for a fee), were the main problem in the big bank/ insurance company failures/ bailouts. In the end, they took more credit risk than they could cover, and of course should have been allowed to fail and not be bailed out. That doesn’t appear to be what this legislation is addressing or permitting again.

Derivatives and swaps for the purpose of reducing risk exposure ALREADY ON A BANK’S BOOKS from ordinary deposit and lending transactions is a good thing for both the bank AND taxpayer . . . IMHO. As posted here, I am perfectly fine with it. But it has to be done correctly. In my regulator days, I saw a case where a bank claimed to be hedging, whereas they were actually “doubling up to catch up”, and that is VERY, VERY bad.


17 posted on 12/12/2014 6:51:02 AM PST by RatRipper (No need to rob others; democRATS will steal and share a tiny bit with you.)
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To: coloradan

In other words, bend over taxpayers.

Perhaps Uncle Sugar will be kind enough to give us a voucher for lube in bulk from Sam’s or Costco? Because one day we are all going to need it.


18 posted on 12/12/2014 6:51:31 AM PST by The South Texan (The Drive By Media is America's worst enemy and American people don't know it.)
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Comment #19 Removed by Moderator

To: Buckeye McFrog

One more reason why the next election is going to be won by an anti-banker populist.


Paul Ryan is all ready to roll out his corporate tax cuts plan. GOP walking right into the Dem populist game plan trap. GOP is gonna get crushed. Bye Bye majority.


20 posted on 12/12/2014 6:54:07 AM PST by lodi90
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