Today, the Fed decided to put U.S. Taxpayers on the line for Bank of America's $75 trillion European derivative market. http://dailybail.com/home/holy-bailout-federal-reserve-now-backstopping-75-trillion-of.html Thoughts? Does Congress even matter?
Any wonder why the US dollar is considered the reserve currency? And no, congress does not matter at all. The bankers behind the reserve said so themselves:
Congress could stop it if they wanted to. Would House Republicans even want to stop it though? This seems like an issue that Obama should address.
it seems like an issue that people should actualy read about for themselves rather than rely on 3rd hand info of a message board repost of some clown's blog post.
I was reading a Reuters editorial and a couple other articles about it. I don't think it's quite the armageddon the dailybail would like it to seem, but I do think it is significantly worrisome, especially considering FDIC's objection. Let's see if I can find the Reuters one again... here it is, on a different website: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/10/20/bloomberg_articlesLTBZHS1A1I4J.DTL
The reason I posted The Daily Bail's take on it is because they do a good job of concisely explaining the ramifications of the subject of the Bloomberg article. For a person who doesn't have a background in financial markets, money and banking, the Bloomberg article might not adequately explain what happened in terms the average person can relate to. But, I agree, people should definitely do their own research rather than relying on a third-party explanation.
BTW I think $75 trillion exceeds the world's GDP. Is the world too big to fail? Are we all ****ed. Somehow I still feel like life will continue. Hopefully.
Actually they didn't - their headline (and even worse, your post title) severely misrepresents what actually is occurring (squabble between over-lapping regulators about what bank can or can't do under Dodd Frank), further the whole "$75 trillion dollar bailout" figure is kind of a made up number - there is no situation or set of facfts in which Bank of America would go to the federal reserve and ask for $75 trillion because most of these positions are hedged/offsetting/temporary (nor would the federal reserve have that money in any event). It's like if you have $50,000 dollars invested in the stock market and actively trade it weekly/daily - over the course of the year, you would have staked out tens of millions of dollars worth of positions, but the amount you would have at risk, even if you traded on margin/leverage, would be way way lower than that.
It may not be a bailout in the sense of TARP, but the fact is, the Fed put taxpayers on the line in the European derivatives market. It's the same sort of situation as the federal government's implicit backing of Fannie and Freddie. If there are defaults, the Fed will provide liquidity in the same manner as the federal government did for Fannie and Freddie. It's the same sort of moral hazard.
ironic coming from someone who goes around posting blogs that they admit are P.O.S. that they didnt even read. you hypocrite. samfisher faints - he did the exact same thing in my thread about the libertarian koch brothers supporting herman cain. posted a blog that he admitted he didnt even read to make his argument.
Dude, are you serious? I have linked to tons of dogsh-t on this board, and tons of sh-t that I didn't read. You don't have to read something to use it as an exhibit to prove that something exists. I did not read the blog about the b****fight between the kochs & the paulistas over who is THE FAIREST LIBERTARIAN OF THEM ALL because I'm not offering it to prove the truth of the matters asserted therein (accordingly, not hearsay, look it up). I'm not a nuthugger for either side, (they're both tools IMO, so I'd just as soon kickk them both in the groin). I posted it as proof that an intra-movementarian b****-fight exists at all, as if that were even needed, considering that a certain true blue Paulista on this message board is compelled to prove on a regular basis, howling and whimpering anybody who will listen about how the Kochs aren't part of his little libertarian club, that the fiery red Austrian blood of Hayek and Mises does not pulse through their veins, that civil rights Pioneer Lew Rockwell wouldn't eat at their lunch counter, that Republican Ron Paul wouldn't stoop to obtain an earmark for them if they were the last two libertarians on earth (unless they lived in Galveston...then...), that they don't get to wear magic libertarian underwear..... The fact that you and other Paulistas feel all these things to be true is not a matter for debate - it's what you're freaking doing on a message board right now! I truly have no idea what you are arguing about.
The article doesn't specify (because it's not known) whether the regulatros have resolved their differences on this move yet, but you are arguing in the past tense like this bailout is fait accompli. Clue 1 that your agenda may be influencing your perception of the facts. The fact of the matter is that this whole thing is new to both sides in the wake of Dodd-Frank so maybe it's wiser to wait to see how the regulatory struggle works rather than to begin railing about how the evil Fed has bankrupted the country again.
Having read extensive reports on this subject, the OP and this blog is not totally accurate. True...BOA has at LEAST $53 trillion in derivitave exposures. And yes, those scumbags have moved the exposure from their just above junk graded holding company to the retail banking division, which has just over $1 trillion in deposits. Or are attempting to... What this would mean is that if BOA gets wiped out on the derivitaves and decide to declare bankruptcy, the derivitave holders will be first in line and will wipe out the $1 trillion in deposits. The FDIC would then cover the $1 trillion to retail depositors up to $100k per account. So this isn't a $75 trillion dollar bailout in any way, shape or form. More like a $1 trillion dollar FDIC bailout if in fact BOA goes belly up due to the exposures. Obvoiusly the FDIC is not happy about this attempt but the Fed is on board with it. (Shocker) But what it appears to be is BOA moving the exposure over to it's much better rated retail banking arm and basically putting it's depositors at risk IF they declare bankruptcy at some point, which should be illegal but is not. This is why I am closing my BOA accounts in the next 30 days. Don't care about debit card fees but this is just total crap. I am not worried that the FDIC wouldn't end up being able to pay the retail depositors but how long would it take?
Because I think the Fed will back BoA. There is a lot of pressure in Europe to avoid further bailouts according to a knowledgeable friend of mine from France. Hence, Timothy Geither's recent tour of Europe in support of a stronger effort by the E.U. At any rate, you're right. It would be wise to wait and watch before proclaiming it the bailout of all bailouts.
No, I will not calm down. I'm going to continue to post as long as you contest this matter. Maybe 8x in a row 10x a day. If that's what's required, than I will go to that length.
and of course the irony of libertarians complaining about the commercial bank being at risk when they free markerters wanted to break down the walls between commercial and investment banking. be careful what you ask for
