Why isn't there a major upheaval over this? It is outrageous.
I thought the FED had acquired these phony derivatives when they transferred 16 trillion in loans, repos, aid to bailout the banks. Now we have a new precedent where Merrill Lynch who should be bankrupt but was acquired by BofA moves 70 trillion derivatives to the BofA commercial bank that is FDIC insured. Is it to destroy the whole FDIC banking system or is it to make BofA a really bad bank ready to declare bankruptcy. In any case another example of major fraud.

When I read about this last week, I sent it to my Dad and he said "is that a typo...it's not Billions instead of Trillions"?

The FDIC should (have) plain refused this bailout. Seems like the Oligarchs are firmly in control and work around (repeal) any laws that get in their way like the Dodd Frank Act.

Sigh...

The FDIC DID try to refuse it, but were railroaded as usual.

See www.bullionbullscanada.com/index.php?opt...catid=6&id=12929

Some lip service (but I doubt anything will come of it):
insurancenewsnet.com/article.aspx?id=293288

From yours and Jeff's discussions on this earlier...talk about something that REALLY chaps my hide:

"Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs."

I thought the Federal Depository Insurance Corporation was for "Depositors" not gamblers?

Samak wrote:


From yours and Jeff's discussions on this earlier...talk about something that REALLY chaps my hide:

"Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs."

I thought the Federal Depository Insurance Corporation was for "Depositors" not gamblers?

Samak, for me THIS is the real "outrage" from this news story. From a practical standpoint, there is no way the FDIC can "insure" (i.e. backstop) BoA's $70 trillion mountain of derivatives feces. So while it was certainly an ambitious example of WISHFUL THINKING by BoA, I don't think Americans have to worry about being handed a $70 trillion bill (or anything close to it).

However, WHY/HOW could the U.S. government and its traitor-politicians ever allowed DERIVATIVES-HOLDERS to jump to the front of the line as creditors in the first place???



There is no possible "business interest" or "societal benefit" from protecting derivatives-holders, since LITERALLY all that derivatives are are massive BETS placed by bankers in their private casino.

Making the indemnification of compulsive gambling addicts the "highest priority" in U.S. bankrutpcy law could be the most perverse legislation I have ever seen.