The Paul File

[Michael]

God damn it, my post just disappeared

Summary:
Do we agree if the FED comes to the rescue of a large banking institution that the Dodd's Frank Act does NOT end Too Big Too Fail? I'm thinking BofA

Joe, seriously, the Koch douche bags donate money and it's influence peddling but GoldmanSux does so it isn't? WTF kind of logic is that??? BOTH corrupt the system! And GoldmanSux is WAY WAY WORSE as Obama has given them the all important job of enslaving a generation of Americans under a mountain of debt. The only good thing is, I have a feeling Americans won't pay Or so I hope. I hope good Ole' American Can Do tells these Bankers to go F themselves and en mass default on their mortgages and/or start using alternative currency and/or start pulling their money OUT of corrupt banking institutions and put them into local credit unions or alternative currencies (like a State currency). One way or another, lets hope the cat is skinned

Lastly, when you see HUGE "donations" made by BIG Oil and BIG War (profiteers like Halliburton) and THEN you see Bush and Cheney rewarding these assholes with two+ wars in the middle east ... over OIL. It's pretty obvious what's going on here. YET, here we see Obama receiving WAY MORE than ANY OTHER candidate from the Big Banks and YOU seem to be blind to the influence peddling. Did you even see the list of ex-GoldmanSux employees Obama has hired??? He's got the most money and he's subsequently hired the most Goldies. It's pretty obvious what's going on here.


DID you happen to notice how many MILLIONS of "donations" Paul did NOT receive from GoldmanSux Joe? Let the FACTS stand for themselves.

FACT: Obama's taken the most money from Big Banks
FACT: After receiving MILLIONS in "donations" Obama's hired the most Goldies.
FACT: Paul has received NONE.



Lastly, you can't compare the 1800s with the 1900s. You do NOT KNOW that things would have been better without or with a Federal Reserve. It's IMPOSSIBLE to know. What I do know is competition usually works to make things better. Lets get competition into our "Money" and "Wealth". We don't need to take down the FED, just print alternatives.

With today's technology it's more than easy enough to do on the spot conversions using an iPhone linked to your account where your wealth is stored in a manner you are happy with.

A $100 federal reserve promissory note might be the cost of a steak in 2013 OR a quarter ounce of silver or $2.50 of another currency. The Swiss do it. They have WIR notes and they're pretty f*cking useful. They use them to build all sorts of public works INTEREST FREE.


INTEREST FREE.... probably sounds like an alternate universe to a Keynesian like yourself. Yes Joe, interest free Public Works outside of a Central Bank. Who'd of thunk it.... oh, wait, that's the way shit was done for the last 6000 years.

FACT: No fiat currency has lasted longer than a human life span (I know how you love them facts

TWO more FACTS:
FACT: GoldmanSux, Citi Group and BJ Morgan are in the top ten of Obama's "donors".
FACT: They can go F themselves

 

[joepistole]

God damn it, my post just disappeared

Summary:
Do we agree if the FED comes to the rescue of a large banking institution that the Dodd's Frank Act does NOT end Too Big Too Fail? I'm thinking BofA

Think of BofA all you want. Too big to fail is remedied in Dodds-Frank. As previously proven, Dodds-Frank outlines protocols to prevent "too big to fail" and to dismantel large institutions that do fail. Just because a bank participates or benefits in a Fed action, it does not mean that too big to fail is not a reality.

Joe, seriously, the Koch douche bags donate money and it's influence peddling but GoldmanSux does so it isn't? WTF kind of logic is that??? BOTH corrupt the system! And GoldmanSux is WAY WAY WORSE as Obama has given them the all important job of enslaving a generation of Americans under a mountain of debt. The only good thing is, I have a feeling Americans won't pay Or so I hope. I hope good Ole' American Can Do tells these Bankers to go F themselves and en mass default on their mortgages and/or start using alternative currency and/or start pulling their money OUT of corrupt banking institutions and put them into local credit unions or alternative currencies (like a State currency). One way or another, lets hope the cat is skinned

Yeah you'll show those nasty bankers. You will just blow up everthing. Well let's go through a couple of things. First you are creating a straw man. No one is saying that campaign donations from the Koch brothers is any more corrupting that campaign donations from Goldman Sachs.

Two, you have not proven that Goldman Sachs has donated money to the Obama campaign. Goldman Sach employees have donated, that is not the same as corporate donations.

Three the most corrupting form of money in government comes to us in the form of lobbying - something you have not yet touched.

Lastly, when you see HUGE "donations" made by BIG Oil and BIG War (profiteers like Halliburton) and THEN you see Bush and Cheney rewarding these assholes with two+ wars in the middle east ... over OIL. It's pretty obvious what's going on here. YET, here we see Obama receiving WAY MORE than ANY OTHER candidate from the Big Banks and YOU seem to be blind to the influence peddling. Did you even see the list of ex-GoldmanSux employees Obama has hired??? He's got the most money and he's subsequently hired the most Goldies. It's pretty obvious what's going on here.

Yes there is too much special interst money in Washington. That is why I have repeatedly pushed a constitutional amendment removing special interest money from our poltical system.

And as I have also pointed out repeatedly you need people who know what they are doing for the jobs you referenced. And Goldman Sachs has the best. So they get hired.

DID you happen to notice how many MILLIONS of "donations" Paul did NOT receive from GoldmanSux Joe? Let the FACTS stand for themselves.

FACT: Obama's taken the most money from Big Banks
FACT: After receiving MILLIONS in "donations" Obama's hired the most Goldies.
FACT: Paul has received NONE.

No those are not facts. Those are right wing fantasies. You don't seem to understand that an employee donation is not the same as a corporate donation.

Lastly, you can't compare the 1800s with the 1900s. You do NOT KNOW that things would have been better without or with a Federal Reserve. It's IMPOSSIBLE to know. What I do know is competition usually works to make things better. Lets get competition into our "Money" and "Wealth". We don't need to take down the FED, just print alternatives.

I showed you proof that economic cycles are much better since the creation of the Fed. Your refusal to acknowledge the proven advantages of our current system over the system you are advocating does not make those benefits or history go away. History just does not bear out your claims or those of Paul.

With today's technology it's more than easy enough to do on the spot conversions using an iPhone linked to your account where your wealth is stored in a manner you are happy with.

A $100 federal reserve promissory note might be the cost of a steak in 2013 OR a quarter ounce of silver or $2.50 of another currency. The Swiss do it. They have WIR notes and they're pretty f*cking useful. They use them to build all sorts of public works INTEREST FREE.

INTEREST FREE.... probably sounds like an alternate universe to a Keynesian like yourself. Yes Joe, interest free Public Works outside of a Central Bank. Who'd of thunk it.... oh, wait, that's the way shit was done for the last 6000 years.

FACT: No fiat currency has lasted longer than a human life span (I know how you love them facts

TWO more FACTS:
FACT: GoldmanSux, Citi Group and BJ Morgan are in the top ten of Obama's "donors".
FACT: They can go F themselves

A bunch of jibberish Michael, your repetition of dogma and refusal to acknowledge fact does not make your claims any more truthful. You have an extreme position which is not borne out by fact or reason. And that is why you and your leader, Ron Paul, will never be anything more than a cult following.

 

[Michael]

We'll see.
Seems like every time I say "We'll see"... we end up seeing.

Also, we can not know what 1920-2011 would have been like without the FED, perhaps much much MUCH better. Maybe no WWII as an example. Or No Great Depression. Or maybe MI would still be making cars. You seem to think that a controlled demolition of the US economy and way of life, is somehow good and short swift Depressions are bad. I disagree. I think it's BETTER to have short swift depressions.

History shows a few other things. Fiat currencies never last a generation (destroyed the Chinese Empire). History shows that when people get into deep arse debt to the Financiers/Bankers this deep, they often elect a populous who promises to kill the rich. History shows time and time again to ban usury (China, Europe, Japan, ME etc...). History shows all sorts of things.

Lets wait and see what happens.

 

[joepistole]

We'll see.
Seems like every time I say "We'll see"... we end up seeing.

Also, we can not know what 1920-2011 would have been like without the FED, perhaps much much MUCH better. Maybe no WWII as an example. Or No Great Depression. Or maybe MI would still be making cars. You seem to think that a controlled demolition of the US economy and way of life, is somehow good and short swift Depressions are bad. I disagree. I think it's BETTER to have short swift depressions.

This is a good example of your not paying attention to little things like reality Michael. Per the evidence previously provided, economic recessions have been fewer and shorter in duration after the creation of the Federal Reserve than in the periods prior to the creation of the Federal Reserve.

Michigan is still making cars and the auto industry is adding thousands of jobsright here at home in the states. And all you can do to defend yourself is ignore the evidence, pretend it doesn't exist, and create straw man arguements. Just were is your proof that I think a controlled demolition of the US economy and its way of life is somehow good? No Michael that is you making stuff up again. If I wanted to blow up the US economy, I would be in your boat. Just because someone disagrees with you it does not follow they want total destruction. The bottom line here is that you cannot support your positions, in no small part because they are not supportable based on evidence and reason.

History shows a few other things. Fiat currencies never last a generation (destroyed the Chinese Empire). History shows that when people get into deep arse debt to the Financiers/Bankers this deep, they often elect a populous who promises to kill the rich. History shows time and time again to ban usury (China, Europe, Japan, ME etc...). History shows all sorts of things.

Lets wait and see what happens.

Another example of you making things up again Michael. The world has been using fiat currencies and it has worked well. Periods in which we used commodity backed currency were also marked with periods of defaltion and inflation as well as more frequent and longer lasting recessions and depressions. That is what history shows Michael. And that is why any economist worth his/her salt does not support Paul and why Paul is viewed as a freak. As I said to you before, if you can make a reasoned arguement to support your claims, I am all ears. But throughout this long thread, you have not been able to do so. You have not even made a third rate attempt to defend the many claims people like Paul have made. And you have repeatedly refused to acknowledge evidence and reason to debunk your claims. That means you are emotionally attached Michael. It is clear you will not listen to reason and have no need or want for rational discourse.

 

[adoucette]

another example of you making things up again arthur.

lol

 

[Michael]

This is a good example of your not paying attention to little things like reality Michael. Per the evidence previously provided, economic recessions have been fewer and shorter in duration after the creation of the Federal Reserve than in the periods prior to the creation of the Federal Reserve.

Joe, please pay attention. I said it's BETTER to have short swift deep depressions rather than a slow controlled destruction of our economy. YOU'RE taking it as apriori that short deep depressions are worse than long drawn-out recessions. You have NO Proof of that.

What did you think of the ghetto you went and visited the other day? Oh, you didn't go down there did you? Why Joe? Don't you want to see the shit hole the FED has helped to create?

Second, the "Economic Cycle" isn't the same as the "Carbon Cycle" so stop trying to pretend it is.

Thirdly, did we have a FED when we went through the GREAT DEPRESSION? Yes or No. I don't seem to remember hearing of GREAT DEPRESSIONS happened in the USA prior to the FED. Did they Joe?

Michigan is still making cars and the auto industry is adding thousands of jobsright here at home in the states. And all you can do to defend yourself is ignore the evidence, pretend it doesn't exist, and create straw man arguements. Just were is your proof that I think a controlled demolition of the US economy and its way of life is somehow good? No Michael that is you making stuff up again. If I wanted to blow up the US economy, I would be in your boat. Just because someone disagrees with you it does not follow they want total destruction. The bottom line here is that you cannot support your positions, in no small part because they are not supportable based on evidence and reason.

Joe, MI is gutted. You really have no idea what you're talking about.

Another example of you making things up again Michael. The world has been using fiat currencies and it has worked well. Periods in which we used commodity backed currency were also marked with periods of defaltion and inflation as well as more frequent and longer lasting recessions and depressions. That is what history shows Michael. And that is why any economist worth his/her salt does not support Paul and why Paul is viewed as a freak. As I said to you before, if you can make a reasoned arguement to support your claims, I am all ears. But throughout this long thread, you have not been able to do so. You have not even made a third rate attempt to defend the many claims people like Paul have made. And you have repeatedly refused to acknowledge evidence and reason to debunk your claims. That means you are emotionally attached Michael. It is clear you will not listen to reason and have no need or want for rational discourse.

Do you have an example of a Fiat currency lasting longer than a single generation? NO need for ad hoc post hoc strawman blah blah blah just post the "evidence".


Here's one for you Joe:
FDIC To Cover Losses On $75 Trillion Bank of America Derivative Bets

HOW's THAT for EVIDENCE JOE?
The Fed’s approval to move derivatives from Bank of America’s holding company to the depository unit directly puts the U.S. taxpayers on the hook. The FDIC cannot handle any large banking failure with its depleted Deposit Insurance Fund and would have to immediately tap its line of credit with the U.S. Treasury. The Dodd-Frank attempt to end “To Big To Fail” by giving the FDIC resolution authority has been a failure.

Thank the Gods we have the FED right Joe? You know, wouldn't want BofA to go bust it might cause a short but deep depression. Much better to enslave a generation for the fault of a few wealthy New York socialites gambling on ever more grotesque profits. Guess what, we're not going to pay it back So, run back into those strong chocolate arms Joe, you're going to need them


Liquidate the Debt VOTE Ron Paul

 

[joepistole]

Joe, please pay attention. I said it's BETTER to have short swift deep depressions rather than a slow controlled destruction of our economy. YOU'RE taking it as apriori that short deep depressions are worse than long drawn-out recessions. You have NO Proof of that.

I suggest you go back and read previous posts. It was proven to you quite conclusively that prior to the creation of the Federal Reserve the United States had frequent, severe and prolonged recessions and depressions.

Since the creation of the Fed we have seen less frequent; less severe and shorter recessions. So if you mean what you say, then you should be a fan of the Fed.

What did you think of the ghetto you went and visited the other day? Oh, you didn't go down there did you? Why Joe? Don't you want to see the shit hole the FED has helped to create?

NOT at all relevant.

Second, the "Economic Cycle" isn't the same as the "Carbon Cycle" so stop trying to pretend it is.

Another straw man.

Thirdly, did we have a FED when we went through the GREAT DEPRESSION? Yes or No. I don't seem to remember hearing of GREAT DEPRESSIONS happened in the USA prior to the FED. Did they Joe?

If you would have read the previously posted links and understood those links, you would have seen other great depressions. The Great Depression of the last century is notable because it caused a sea change in how we manage our economy (creation of the FDIC, unemployment insurance, bank regulation, etc.). The Great Depression started in 1929. The Federal Reserve was created in 1913 if I recall correctly...roughly sixteen years before the Great Depression. And as previously pointed out to you, the Fed at the time did not cause the Great Depression, but in did not act appropriately. It did what you are claiming the Fed should now do. It didn't work. Instead of expanding the monetary supply, the Fed pursued a policy of tight money. Which as we now know was wrong and exactly what the Fed is not doing now.

Joe, MI is gutted. You really have no idea what you're talking about.
Do you have an example of a Fiat currency lasting longer than a single generation? NO need for ad hoc post hoc strawman blah blah blah just post the "evidence".

Michigan has been gutted for a long time. Nothing new there. If you consider that a generation is generally considered to be 30 years. Our currency has lasted much longer than that.

For most of this history of man kind, we did not have modern medicine either; nor did we have computers or space vehicles or cars or planes, or many other things that are now common place.

Here is the really rough truth for you Michael, mankind has never before know the kind of prosperity we have know these last 100 years -ever. And you and yours want to return us to a time when we driving horse carts from point a to point b.

Here's one for you Joe:
FDIC To Cover Losses On $75 Trillion Bank of America Derivative Bets

HOW's THAT for EVIDENCE JOE?
The Fed’s approval to move derivatives from Bank of America’s holding company to the depository unit directly puts the U.S. taxpayers on the hook. The FDIC cannot handle any large banking failure with its depleted Deposit Insurance Fund and would have to immediately tap its line of credit with the U.S. Treasury. The Dodd-Frank attempt to end “To Big To Fail” by giving the FDIC resolution authority has been a failure.

Thank the Gods we have the FED right Joe? You know, wouldn't want BofA to go bust it might cause a short but deep depression. Much better to enslave a generation for the fault of a few wealthy New York socialites gambling on ever more grotesque profits. Guess what, we're not going to pay it back So, run back into those strong chocolate arms Joe, you're going to need them


Liquidate the Debt VOTE Ron Paul

Why am I not suprised? More garbage from right wing web sites. The Fed has nothing to do with this issue. If the bank wants to transfer assets, it can. If it defaults, it gets dismantled under Dodds-Frank. And the FDIC only insures depositors. It does not insure the bank or it's stockholders.

 

[Michael]

I suppose we'll just have to see what the patient does. Well, YOU will, I already saw Part I, it ended in Detroit

That aside, it really just comes down to the type of America one wants to live in. I happen to think we've been on the wrong track (actually we have been) and that a day of reckoning is going to come. You seem to think we're on the right track and a few twists and turns and we'll be right as rain.



Why is everything I post you ad hominin attack as "Right Wing"? I'm not Religious, I think being homosexual is genetic and perfectly natural, not only do I think a woman has a right to choose but as part of medical research have handed aborted fetuses and ES cells, I don't own a gun, and I'm against the wars. I'm as far from right wing as you could get.

The Link was to the Problem Bank List which under "About" Tab says this:
This site is intended to provide you with information and news about the FDIC’s Problem Bank List. The Problem Bank List is the FDIC’s internal list of financial institutions that the FDIC believes are in danger of failure. Since there is a great deal of information that must be reviewed in providing up to date and accurate information, we cannot be responsible for any inaccuracies.

The Author provided a link to the OCC's quarterly report which is HERE. Instead of labeling everything that pops your internal delusion-bubble .... try reading first ALL I'm thinking is damn, our Universities are doing an even better job of brainwashing students than even I had given them credit for You're so Keynesian I doubt it's even possible for you to understand a different POV let alone adopt one.



TWO Questions:
(1)
What did you think when Paul Krugman called for space aliens to attack Earth to fix the U.S. economy? Does that sort of LOGIC make good sense to you :shrug:

(2)
How do you propose we get rid of GoldmanSux and BofA? I mean, what are the logical economic means by which we as a society lead them to their demise? See, I think that in 2008 they should have been taken out and shot then, but, you OTOH jumped right onto a mini-skirt and started Cheerleading for Bush Jr's save the Banks screw the Citizen Cheer.... which, I find pretty sad.

 

[Michael]

Is Bloomberg chalked full of "Right Wing" conspiracy theorists? Not that it would really matter, all that matters is if the information is true, or not true.

Right? I mean, that IS what evidence is all about. Finding out the truth.

So, why did BofA move it's Merrill Derivatives to it's Banking Unit Joe? Could it be that the banking unit is insured?


BofA Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit

The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.

Oh, and Joe, I want you on the record now: WILL the US Taxpayer have to bailout ANY MORE Banks? Yes or No?

 

[joepistole]

Is Bloomberg chalked full of "Right Wing" conspiracy theorists? Not that it would really matter, all that matters is if the information is true, or not true.

Right? I mean, that IS what evidence is all about. Finding out the truth.

So, why did BofA move it's Merrill Derivatives to it's Banking Unit Joe? Could it be that the banking unit is insured?


BofA Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit

Oh, and Joe, I want you on the record now: WILL the US Taxpayer have to bailout ANY MORE Banks? Yes or No?

You are changing the story. First is was the Fed going to bail out Bank of America. Now it is the American tax payer. I have repeatedly told you that the government is not bailing out Bank of America.

The FDIC will only bail out demand deposit holders. It will not bailout the bank. And it will only bailout depositors to the tune of 250k per account. And the FDIC is not funded by the tax payer but rather by the fees it charges to banks for the insurance.

So you are barking up the wrong tree here Michael.

 

[Michael]

Just as long as BofA sees ZERO money from the Treasury and the American taxpayer isn't stuck paying for BofA AGAIN through the devaluation of our nearly worthless fiat currency.


So, why do you suppose BofA moved it's TRILLIONS of USD worth of Merrill Derivatives over to it's Banking Unit? Any ideas Joe?

 

[786]

The question is can FDIC sustain 'bailing out demand deposit holders'? (Already more than a $1 Trillion for BAC alone, not counting the derivative transfer)

The FDIC is a corporation and, like any other corporation, technically it can go bankrupt. In fact, there have been many stories circulating that have suggested this possibility. However, the FDIC has additional resources to draw upon to avoid such a drastic measure. In addition to demanding special assessments from FDIC-insured banks, as discussed above, the FDIC has the ability to borrow up to $500 billion from the U.S. treasury.

In addition, the FDIC is backed by the "full faith and credit of the United States government." This means that the resources of the U.S. government stand behind FDIC-insured depositors and, even if the FDIC loses all of its money due to bank failures, the federal government will cover any losses.

Source: http://banking-law.lawyers.com/consumer-banking/The-FDIC-Can-It-Go-Bankrupt.html

Can FDIC pay off the BAC FDIC backed deposits, $1.04 Trillion, if BAC were to fail due to the high risk associated with the transfered derivatives? Will American taxpayers then be on the hook for BAC gambling.

More importantly does this mean that anyone can screw over the people, go bankrupt since the gig didn't work out, and tie them over to the taxpayers? :shrug:

The further implications of BAC going bankrupt followed by a bankrupt FDIC, followed by a Government bailout of FDIC equal a unheard of massive bailout of our complete financial system. Remember FDIC insures more than $14 Trillion! If it goes bankrupt not being able to even pay off BAC's $1.04 Trillion deposit, we're on hook for the rest of that $14 Trillion, which could be triggered due to BAC failure since we don't know how many other banks have exposure to BAC and these derivatives. Any other bank that fails on top of BAC would be the governments responsibility to pay up. This is MASSIVE taxpayer risk.

It seems to me that before the government only bailed out banks, now it will desert them and have to bail out FDIC,which insures all banks, and then guess what, government will be the only one left standing, which insures the insurer of all banks (hehe). Who's gonna bail out the government?

 

[joepistole]

Just as long as BofA sees ZERO money from the Treasury and the American taxpayer isn't stuck paying for BofA AGAIN through the devaluation of our nearly worthless fiat currency.

So, why do you suppose BofA moved it's TRILLIONS of USD worth of Merrill Derivatives over to it's Banking Unit? Any ideas Joe?

http://seekingalpha.com/article/301...risk-from-merrill-lynch-to-bofa-is-really-for

Bank of America is the stronger firm. Merrill Lynch is a troubled firm which like Countrywide was purchased by Bank of American durring the Banking Crisis of 2008. Those accquisistions have been nothing but trouble for Bank of America but were done in large part to help strengthen the financial system. Both Countrywide and Merrill would have gone bankrupt were it not for the shareholders of Bank of America.

This has everything to do with strengthening perceptions in the dealer markets. The risk of a Bank of America default is very low. Bank of America has a lot of cash and assets sitting on it's books as it has been steadily selling assets and raising cash.

And despite your claims and those with your POV, the US dollar is not worthless. How are you paying your bills if not with the US fiat currency? If you truely believe your dollars are worthless I have a number of charities that will gladly accept them.

 

[786]

http://seekingalpha.com/article/301...risk-from-merrill-lynch-to-bofa-is-really-for

Bank of America is the stronger firm. Merrill Lynch is a troubled firm which like Countrywide was purchased by Bank of American durring the Banking Crisis of 2008. Those accquisistions have been nothing but trouble for Bank of America but were done in large part to help strengthen the financial system. Both Countrywide and Merrill would have gone bankrupt were it not for the shareholders of Bank of America.

And.... we're allowing them to then transfer that risk, which Merrill Lynch took (and subsequently BAC when they bought'em out), to be transferred onto BAC, that risk which impacts its deposits insured by FDIC which are backed up by the Federal Government? Isn't that bailing out Merrill Lynch and putting the risk, ultimately, on taxpayer?

 

[adoucette]

And.... we're allowing them to then transfer that risk, which Merrill Lynch took (and subsequently BAC when they bought'em out), to be transferred onto BAC, that risk which impacts its deposits insured by FDIC which are backed up by the Federal Government? Isn't that bailing out Merrill Lynch and putting the risk, ultimately, on taxpayer?

Ah, the Federal Govt created the FDIC but the Deposit Insurance Fund comes from assessing depository institutions an insurance premium.

The amount each institution is assessed is based both on the balance of insured deposits as well as on the degree of risk the institution poses to the insurance fund.

Well before they would borrow from the Treasury they would simply raise premiums to the banks.

And ONLY Deposits are insured, this talk of the trillions of risk from ML Derivitives is BS.

FDIC deposit insurance covers deposit accounts, which, by the FDIC definition, include:
demand deposit accounts (checking accounts), and negotiable order of withdrawal accounts (NOW accounts, i.e., savings accounts that have check-writing privileges)
savings deposit accounts (savings accounts), and money market deposit accounts (MMDAs, i.e., higher-interest savings accounts subject to check-writing restrictions)
time deposit accounts including certificates of deposit (CDs)
outstanding cashier's checks, interest checks, and other negotiable instruments drawn on the accounts of the bank.
accounts denominated in foreign currencies[39]

http://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corporation

 

[786]

Did you read anything. I never said anything about derivatives being covered. Go back and read slowly this time.

 

[adoucette]

Did you read anything. I never said anything about derivatives being covered.

You most certainly suggested that the derivitive risk was being transfered to the bank and covered by the FDIC.

If not, then what is it exactly that you are worried about?

The FDIC handled Wachovia's failure and WAMU's failure in the same week and it didn't cost the FDIC's Deposit Insurance Fund anything.

A bank like BofA, even if it is failing, ie. not suffient cash to remain viable, still has a huge amount of assets and it would be broken up and sold, just like Wachovia and WAMU were.

Additionally interest bearing deposits are only insured up to $250k, and thus in banks the size of BofA there are huge amounts uninsured, unsecured liablites and these incur the losses based on the statutorily prescribed priority for the payment of claims, so saying things like the FDIC is on the hook for the entire Deposit base at BofA is silly in the extreme.

But from your posts, I don't think truth has anything to do with what or why you are posting, the only thing I think you are trying to do is spread FUD.

Arthur

 

[786]

You most certainly suggested that the derivitive risk was being transfered to the bank and covered by the FDIC.

If not, then what is it exactly that you are worried about?

Which is a statement of fact that RISK is being transfered to the Bank. Hence why FDIC objected.

That doesn't mean that derivatives are 'covered' by FDIC. RISK (read this word over and over again) is transfered to the bank, if those derivatives make huge losses for the bank- then the DEPOSITS will be directly impacted by that RISK. FDIC covers the DEPOSITS only, but those deposits will be exposed to massive risk of those derivatives. THAT risk can jeopardize the deposits which amount to more than $1 Trillion that the FDIC must cover.

The FDIC handled Wachovia's failure and WAMU's failure in the same week and it didn't cost the FDIC's Deposit Insurance Fund anything.

A bank like BofA, even if it is failing, ie. not suffient cash to remain viable, still has a huge amount of assets and it would be broken up and sold, just like Wachovia and WAMU were.

Additionally interest bearing deposits are only insured up to $250k, and thus in banks the size of BofA there are huge amounts uninsured, unsecured liablites and these incur the losses based on the statutorily prescribed priority for the payment of claims, so saying things like the FDIC is on the hook for the entire Deposit base at BofA is silly in the extreme.

FDIC had been goin' in the negative for many of those quarters, I think 7 quarters straight. You're sayin' it didn't cost them anything?

And although you're correct that FDIC probably isn't insuring the whole $1.04 Trillion but if we're going to estimate then according to data on FDIC's site FDIC-insured commercial banks have roughly $7.3 Trillion dollars of domestic deposits of which the estimated insured deposits are roughly $5.7 Trillion. That is roughly 80% of 'deposits' are actually 'insured deposits'.. If we use this 80% just as a measure of estimation then we're talking about $800+ Billion of insured deposits for BAC. Does FDIC have the funds to handle $800 Billion by itself?

To put this in perspective currently the total insured-deposits (everything fdic-insured) are $6.5 Trillion. And how much balance do they have in the Deposit Insurance Fund? ONLY $3.9 BILLION. And let me remind you again we're talking about $800 Billion BAC FDIC-insured deposits which will be handled by $3.9 Billion?

As for BAC assets off-setting the deposits. The liabilities (i.e risk) due to the derivatives would be far greater than the assets. In other words if they do fail due to derivatives collapsing, they would be left with net debt.

Also if we look at bank failures in 2010 and what FDIC says and do an analysis on that:

Total 157 banks failed with total deposits of $79.5 Million, total assets of $92 Million (assets more than deposits ), YET Estimated total loss to FDIC of $24.1 Million. That is about 30% loss in relationship to deposits. If we use this as an estimation for BAC that would mean $240 Billion dollar loss, assuming 30% loss with respect to deposits, and as I said before they only have $3.9 in the Deposit Insurance Fund!

No matter how you cut it. The risk being transfered to BAC has devastating consequences if the derivatives take down the company. Taxpayers will be again left to clean up after the banks.

http://www2.fdic.gov/qbp/2011jun/dep3b.html
http://www2.fdic.gov/qbp/2011jun/fund.html
http://www2.fdic.gov/hsob/hsobRpt.asp

 

[adoucette]

Which is a statement of fact that RISK is being transfered to the Bank. Hence why FDIC objected.

That doesn't mean that derivatives are 'covered' by FDIC. RISK (read this word over and over again) is transfered to the bank, if those derivatives make huge losses for the bank- then the DEPOSITS will be directly impacted by that RISK. FDIC covers the DEPOSITS only, but those deposits will be exposed to massive risk of those derivatives. THAT risk can jeopardize the deposits which amount to more than $1 Trillion that the FDIC must cover.

Then if you KNEW that then you shouldn't write totally misleading BS like this:

we're allowing them to then transfer that risk, which Merrill Lynch took (and subsequently BAC when they bought'em out), to be transferred onto BAC

Because the implication is that it is the RISK of the ML Derivitives, not that the risk in the Derivitive market puts some additional risk on the BofA deposits.

FDIC had been goin' in the negative for many of those quarters, I think 7 quarters straight. You're sayin' it didn't cost them anything?

The big banks typically don't, as I pointed out, Wachovia and WAMU didn't cost them anything. More to the point, if the FDIC DIF goes negative they borrow the money and repay it from ongoing premiums, raising them if they have to, which is why the 2nd Quarter FDIC CFO report (latest) showed a positive Balance in the DIF of $3.9 Billion.

And although you're correct that FDIC probably isn't insuring the whole $1.04 Trillion but if we're going to estimate then according to data on FDIC's site FDIC-insured commercial banks have roughly $7.3 Trillion dollars of domestic deposits of which the estimated insured deposits are roughly $5.7 Trillion. That is roughly 80% of 'deposits' are actually 'insured deposits'.. If we use this 80% just as a measure of estimation than we're talking about $800+ Billion of insured deposits for BAC. Does FDIC have the funds to handle $800 Billion by itself?
http://www2.fdic.gov/qbp/2011jun/dep3b.html

First of all, for big banks like BofA the ratio won't be as high as for small banks so 80% is over stating it, secondly though the bank may fail, the huge amount of loans on their books and their other assets (branches, equipment, operation centers etc) have huge value and would be sold, so no even when both WAMU and Wachovia failed in the same week they didn't cost the FDIC ANYTHING.

And that's what you are missing.
Failure of BofA would be much more like the failure of those other big banks then the SMALL banks which are causing a drag on the FDIC (which have far fewer salable assests)

During the second quarter of 2011, the FDIC was named receiver for 22 failed institutions. The combined assets at inception for these institutions totaled approximately $9.6 billion with a total estimated loss of $2.0 billion. The corporate cash outlay during the second quarter for these failures was approximately $1.3 billion.

But even for the SMALL banks, the Failures are only costing them 15c on the dollar, not 80c, so again you are far over stating the risk.

So yes, the FDIC can handle it.

Arthur

 

[adoucette]

Total 157 banks failed with total deposits of $79.5 Million, total assets of $92 Million (assets more than deposits ), YET Estimated total loss to FDIC of $24.1 Million. That is about 30% loss in relationship to deposits. If we use this as an estimation for BAC that would mean $240 Billion dollar loss, assuming 30% loss with respect to deposits, and as I said before they only have $3.9 in the Deposit Insurance Fund!

Again you are using the losses related to SMALL banks to a COMMERCIAL bank like BofA. Apples and Oranges. BofA has plenty of assets to sell so no, it wouldn't be the same ratio that you are using.

No matter how you cut it. The risk being transfered to BAC has devastating consequences if the derivatives take down the company.

No it doesn't have "devastating consequences".

Taxpayers will be again left to clean up after the banks.

So far it hasn't cost the Taxpayers anything to do so. We've made money on the TARP funds.

The FDIC would break up BofA and sell it and like WAMU and Wachovia their costs would likely be zero to marginal.

Again, quit with all the fear mongering, you just aren't that good at it.

Arthur