December 8th, 2014

Tails, you lose, tails you lose...

From the journal of madman101

"Derivatives" are a new-fangled Wall-Street gamble, played by all the banksters and rich people who have way too much money on their hands, because their tax rates have been lowered, and they don't reinvest much money into their businesses.... derivatives are not like regular market investments, because there is no real value behind them. Basically, they are BETS.
... Now the bubble is up to $2000 Trillion. What happens when, say, China slows down, (like it is), and, say, prime interest rates go up a little - or, say, companies and banks and rich people have to cover their losses from falling oil investments??? They rush in to cash their derivatives - their bets.

That's when the bubble will burst. Suddenly, there will be a tidal wave of people trying to cash in the derivatives. Remember, there isn't the slightest amount of money to cover these - or even a fraction of these.

But, the most powerful, at least, will DEMAND that their bets be cashed. So, what are they trying to do? They are trying to do what I warned they would try to do. They are trying to get USA taxpayers to pay for their losses. And, then, it will also be taken out of our bank $$$ accounts, which, #1, have recently been deemed the PROPERTY OF THE BANKS, and, #2, are only protected by the FDIC by a fraction, (and only up to a certain amount) - meaning a full bank run will mean most people will lose their money, (after going through what Cyprus went through).

It is their planned coup-de-gras. They ride a wave of privilege and corruption, and use this temporal power to make sure that when they crash, the crash is transferred to the rest of humanity.

They have already tried to sneak this legislation through, while everyone is all riled up about black-versus-white, post-ISIS, post-Ebola, post-ping...



Wisdom is the retention of innocence through adversity. - Tails, you lose, tails you lose...

And they will claim it is due, not to their own doing, but to the irresponsibility of college students and middle class and working class home buyers who cannot pay off their loans because they (the corporations and their officers) have created an economy which is not responsive to the needs or abilities of the vast majority of society's people.  They tried to blame the recession on bad loans, but this might not be a  recession or a depression; it could be the end Collapse )

New Law Would Make Taxpayers Potentially Liable For TRILLIONS In Derivatives Losses

New Law Would Make Taxpayers Potentially Liable For TRILLIONS In Derivatives Losses
By Michael Snyder, on December 7th, 2014

"......According to multiple Democratic sources, banks are pushing hard to include the controversial provision (to make FDIC responsible for banks losses on derivatives in funding legislation that would keep the government operating after Dec. 11. Top negotiators in the House are taking the derivatives provision seriously, and may include it in the final bill, the sources said.

Sadly, most Americans don’t understand how derivatives work and so there is very little public outrage.

But the truth is that people should be marching in the streets over this.  If this provision becomes law, the American people could potentially be on the hook for absolutely massive losses…

The bank perks are not a traditional budget item. They would allow financial institutions to trade certain financial derivatives from subsidiaries that are insured by the Federal Deposit Insurance Corp. — potentially putting taxpayers on the hook for losses caused by the risky contracts.

This is not the first time these banks have tried to pull off such a coup.....

But that is the thing with bank lobbyists.  They are like Terminators – they never, ever, ever give up.

And they now have more of a sense of urgency then ever, because we are moving into a period of time when the big banks may begin losing tremendous amounts of money on derivatives contracts.

And commodity derivatives are just part of the story.  Over the past couple of decades, Wall Street has been transformed into the largest casino in the history of the world.  At this point, the amounts of money that these “too big to fail” banks are potentially on the hook for are absolutely mind blowing.

As you read this, there are five Wall Street banks that each have more than 40 trillion dollars in exposure to derivatives.  The following numbers come from the OCC’s most recent quarterly report (see Table 2)…

JPMorgan Chase

Total Assets: $2,520,336,000,000 (about 2.5 trillion dollars)

Total Exposure To Derivatives: $68,326,075,000,000 (more than 68 trillion dollars)


Total Assets: $1,909,715,000,000 (slightly more than 1.9 trillion dollars)

Total Exposure To Derivatives: $61,753,462,000,000 (more than 61 trillion dollars)

Goldman Sachs

Total Assets: $860,008,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $57,695,156,000,000 (more than 57 trillion dollars)

Bank Of America

Total Assets: $2,172,001,000,000 (a bit more than 2.1 trillion dollars)

Total Exposure To Derivatives: $55,472,434,000,000 (more than 55 trillion dollars)

Morgan Stanley

Total Assets: $826,568,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $44,134,518,000,000 (more than 44 trillion dollars)


Do you want to be on the hook for all of that?

New Law Would Make Taxpayers Potentially Liable For TRILLIONS In Derivatives Losses