Bank of America Trying To Stick Taxpayers With A $74 Trillion Bill By...

[WillyT]

Bank of America Trying To Stick Taxpayers With A $74 Trillion Bill By Moving Derivatives Into FDIC-Insured Accounts
By Susie Madrak - C&L
October 21, 2011 07:00 AM

I don't have any idea how to format this nested post here, so you'll just have do go to the link.

Link: http://crooksandliars.com/susie-madrak/bank-america-trying-stick-taxpayers-7

:wtf:

:mad:

:nuke:

:kick:

[orpupilofnature57]

1. Too big to bail ,let them go the way of the Dodo.

[elocs]

2. This story was posted here last Tuesday with 228 Recs:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x2141081

[WillyT]

3. Yeah... Just Saw That...

:shrug:

[FarCenter]

4. They are actually moving about $22 trillion of Merrill Lynch derivatives to Bank of America

This will bring the total up to about $75 trillion for Bank of America.

http://www.occ.gov/topics/capital-markets/financial-markets/trading/derivatives/derivatives-quarterly-report.html
is an index to the OCC quarterly reports on derivatives.

Table 1 of each report is NOTIONAL AMOUNT OF DERIVATIVE CONTRACTS - TOP 25 COMMERCIAL BANKS AND TRUST COMPANIES.

Table 2 of each report is NOTIONAL AMOUNT OF DERIVATIVE CONTRACTS - TOP 25 HOLDING COMPANIES IN DERIVATIVES

If you look at the 4Q08 versus the 1Q09 report, you will see that BofA derivatives increase from $38.3 to 39.1 trillion, while BAC derivatives jump from 39.1 to 77.9 trillion, representing the effects of the Merrill Lynch merger.

Subsequently, the total derivatives of the holding company are relatively constant at around 75 trillion, while the BofA bank derivatives (Table 1 by quarter) climb to 52.5 trillion by the end of 1Q11. This represents a gradual shift of the derivatives buisines to the bank.

Then looking at 2Q11, the last quarter released, you can see that BofA derivatives are 53.2 trillion, while the BAC derivatives are 74.8 trillion.

The action being taken by Banc America Corporation is to move the remaining Merrill Lynch derivatives to BofA, so that the entire $74.8 trillion will be in the bank and not at the holding company level. As you can see from Tables 1 and 2 of the 2Q11 report, this is the same situation as for JPMC, Morgan Stanley, Citigroup and Goldman Sachs.

[snappyturtle]

5. I think this is the most important story by far to come out of last week. Glad you posted it.

I don't think it can be posted enough. I don't listen to much teevee news anymore but what I did tap into had nada to say about this issue.

[Fire Walk With Me]

6. I hope this stays kicked or re-posted until each and every DUer knows about it.

This is economy-killing stuff, don't let them do it!

[tkmorris]

7. Let's be clear about this shall we?

BoA is not going to stick anyone with a $74 Trillion bill. Those derivatives will NOT be insured by the FDIC. This is still a bad thing though, because if those derivatives go south they will be paid off using deposits which ARE insured by the FDIC, leaving the FDIC to pay off those depositors. I believe I heard those FDIC insured deposits ran to the tune of around $1 trillion or so. That is what the FDIC would be responsible for, and that is plenty bad enough.

[bayareamike]

8. Yeah the title should be changed.

Errors like that make legitimate concerns look foolish. The whole thing smells like sh*t though.