By turoksonofstone 10 Comments
File this one under: "How the Gosh Darn Heck are they getting away with this shizzle?"
After the credit downgrade in September, Bloomberg reported that Bank of America “moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits…” Taibbi said the transfer involved trillions of dollars in risky derivatives contracts.
According to Bloomberg: 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.
So, BoA deliberately moved $79 TRILLION in bad debt in to a FDIC insured business so that when it fails, the taxpayers will be left holding the bill. That's a crazy number when you consider that the GDP of planet Earth is $58 trillion.
Read about it:
http://timesfreepress.com/news/2011/oct ... ver-banks/
http://jonathanturley.org/2011/11/06/ba ... -transfer/