Bank of America dumps European derivatives into FDIC accounts

[Brehvolution]

Feds say OK

FDIC says WTF!!!!

http://www.businessweek.com/news/2011-10-19/bank-of-america-bosses-find-friend-in-the-fed-jonathan-weil.html

Unfortunately, none of the actors here went on the record to explain what’s going on. We don’t know what kinds of derivatives these are, or even the dollars at stake, only that they are big enough to make the FDIC upset. The entire story would be playing out in secret were it not for some unidentified whistleblowers who seem to have this crazy idea that the public should be informed about what the regulators and Bank of America are up to.

There is speculation that TRILLIONS of $$$ are involved. Potentially more than the FDIC could insure. Why this isn't anywhere in the news is beyond me.

[Phoenix Dark]

Hit the panic button! Yeah it'll be pretty bad if it's more than the FDIC can back, basically put BoA in a position to hold the entire world economy hostage if they're about to fail. Yipee!

10-100 trillion allegedly. The FDIC couldn't insure all that. This is economic blackmail of the highest degree.

[Mupepe]

talk about too big to fail

lol

am i rite??

[Joe Molotov]

BoA to world: prop me up or I'll fall on all of you.
Federal Reserve to world: yes, do

World: Please stop raping us.
Wall Street: No.
World:

[Phoenix Dark]

Two things to note here: First Derivatives aren't insured by the FDIC and other banks have been using their main banking arms to run derivatives for years.  Second: If the derivatives blew up on the Merrill branch we'd be fucked anyway.  These things aren't exactly separate.

Thirdly you guys are dumb.  Isn't PD some sort of business major?  Seems sad he is throwing around the huge numbers everyone is getting so scared of.

This is tied directly to the Europe debt situation though; if their economic system goes bust, tax payers WILL have to do more bailouts. That's not economic scare tactics, it's reality. I think Europe will get their act together, but this is still a dangerous event...

[Phoenix Dark]

If Europe crumbles it doesn't matter who is stuck holding the ball, a BoA subsidiary or BoA itself, there's going to be some serious repercussions.  This move doesn't really effect the larger picture that much.  How many of you know how much in derivatives is held by JPM-Chase for example?  A lot.  This shit is fairly common, and without long term regulation we will keep seeing things like this.

JP Morgan has also moved large amounts of derivatives from Europe recently as well.

You're right, if Europe crumbles we're going to have major problems regardless. But the difference here is if the bank fails the FDIC has to step in, and they won't be able to cover it all. Which would most likely mean US taxpayers bailing out Europe. 

I know many people are saying this isn't the end of the world, I'm just trying to point out this is serious business. The FDIC is pissed and nobody is talking about this publicly. On a side note this is the type of stuff that shows just how irrelevant Dodd-Frank is in many regards.

I'm gonna give you a pass for throwing shots at me, cuz I like you

[Beezy]

<-- doesn't know what this means

[Great Rumbler]

<-- doesn't know what this means

It's shuffling the deck chair on the Titanic. Once Europe hits the iceberg, we're all screwed either way.

[Dickie Dee]

Well it is a big deal because the though the FDIC isn't on the hook for Euro-Derivative shite, since it's now moved into into their consumer division, it'll likely to sink it along with all it's consumer accounts, which the FDIC really has no ability to back atm.

[Human Snorenado]

SO WHAT YOU'RE SAYING IS THAT WE OWE THESE FUCKERS A BRAZILION DOLLARS

BRAZILION I MEAN WTF REALLY

[Joe Molotov]

Mmmm...brazillions.

[Brehvolution]

The shit is fucked up and bullshit.

[fomalhaut]

global finance is some of the stupidest shit ever concocted, it's government backed ponzi schemes and nonsense. 

[lennedsay]

And here I am trying to figure out why they didn't schedule my payments and transfers correctly this morning. Well no fucking wonder they can't properly pay my car payment.

[Brehvolution]

Isn't this weird timing?

Obama is appointing a new FDIC head.

http://money.cnn.com/2011/10/21/news/economy/banks_hoenig/index.htm?iid=HP_LN