An URGENT request of DUers re: OWS & BofA's $75 Trillion Heist of U.S.Treasury

We need a winning strategy to stop this $75 TRILLION heist by Bank of America from the US Treasury dead in it's tracks, or it's simply over,
and we may as well just go get in the nearest breadline now while we can: can you say 2nd Great Depression?

http://www.bloomberg.com/news/2011-10-18/bofa-said-to-split-regulators-over-moving-merrill-derivatives-to-bank-unit.html
http://www.nakedcapitalism.com/2011/10/bank-of-america-deathwatch-moves-risky-derivatives-from-holding-company-to-taxpayer-backstopped-depositors.html
http://www.zerohedge.com/contributed/federal-reserve-and-bank-america-initiate-coup-dump-hundreds-billions-dollars-losses-ame

SO HERE'S THE DEAL: This crime-in-broad-daylight goes WAY beyond signing petitions and/or politely getting in line "talk with
Congressional representatives" ... THIS IS PRECISELY THE KIND OF WALL STREET FRAUD AND TAX PAYER ABUSE THAT
OCCUPY WALL ST. IS TALKING ABOUT!!!!! Yet here it is, happening again, right under our noses, and oh so quietly too from
all indications.

ACTION REQUESTED: I'm asking that anyone on DU who has connections with the OCCUPY WALL ST. actions please convey this message
ASAP. When it comes right down to it, THEY MAY WELL BE OUR LAST BEST HOPE OF STOPPING THIS IN IT'S TRACKS, BEFORE IT BECOMES A
COMPLETELY DONE DEAL.MASSIVE SIT INS AT THE BANK OF AMERICA ON WALL ST. COULD BRING THIS TO THE LIGHT OF DAY OVERNIGHT, AND
RIVET THE NATIONAL SPOTLIGHT ON IT!!!

I'M ASKING, BEGGING, THAT IF YOU HAVE ANY CONNECTION TO THE OCCUPATION, TO GET THIS TO THE VERY NEXT GENERAL ASSEMBLY FOR
DISCUSSION ABOUT A PLAN OF ACTION TO ADDRESS THIS ASAP (SUCH AS A SIT-IN FOCUSED AT BANK OF AMERICA(s), or whatever folks on
the ground decide at the GA] DESIGNED TO GET NATIONAL ATTENTION FOCUSED ON IT -- WHILE THERE IS STILL TIME, if that's even true.

THIS IS URGENT, THIS IS NOW OR NEVER IMHO. PLEASE HELP IF YOU CAN.

THANK YOU FOR READING AND RESPONDING AS YOU SEE FIT.

because if it happens, OWS will take the blame when it all comes crashing down and taxpayers are holding the bag.

It's hard to even wrap my mind around the amounts we're talking about here, getting put on backs
of US taxpayers. $75 Trillion is more than our GNP even.

But I think OWS would be at the very back of a very long line of villains palpably responsible for
this outrageous behavior on part of the Fed and our so called "regulators".

It's as though the BofA execs got to thinking about when a good time to do this is, and they figured that if it goes south, the MSM will likely try to make a connection between OWS and BofA's failure

I'm talking a simple-minded (the sort the MSM loves) explanation

You actually have a good point, hadn't even thought of that perverse way of looking at it.

Do you think that means OWS should NOT try to focus Nat'l attention on the situation?

So that when it fails, the failure cause will be very clear, that it was NOT due to OWS. The message needs to get out preemptively. After the fact, it's too difficult, once talking points are established.

They did it to themselves.

Those are incredible thoughts. I think this topic deserves a thread of its own--and see where the discussion goes.

If you listen to right-wing hate radio--you get clues about what these bastards just might try to pull.

One of their memes---and it's a concerted meme that is being spread on Beck, Limbaugh, Hannity, etc--is that
OWS is trying to take down the banks and OWS's actions will cause the failure of banks and harm to Wall Street
and the American financial system.

So--that has been spread during the past several days.

Suddenly--we all read about outrageous, criminal behavior at BofA--that is so openly disgusting. At the same time
OWS is gathering steam and numbers. It's as if they want OWS to react. Maybe call for people to pull their money
from BofA or hold protests at BofA.

BofA might be vulnerable anyway. They've always seemed like the runt of the big-bank litter. They've got a ton
of bad mortgages on their books, and this bank looked like it might fail after the 2008 bailout. Recently, they've
announced their unpopular $5 monthly fees on debit cards.

So maybe this bank was on its way out, anyway. Wouldn't that be convenient if Wall Street, the corporatists
and the rest of the 1 percenters could get an existing protest movement angered at BofA? They could suggest
that BofA failed because of OWS protests and backlash that caused a run on the bank.

I wouldn't put it past these types.

The most frightening statistic to the corporatists/neocons/one percenters---OWS approval rating in America 67 percent.
They know it's going mainstream, and when that peaks--their games are over.

They're capable of anything, I'd say.

I find it hard to believe.

For example, suppose that BofA sells a CDS on $100 million of a specific bond issue. Later BofA buys a CDS on $100 million of the same bond issue.

It now has $200 million of derivatives contracts, even though the two derivatives contracts offset each other.

You need to know how the contracts offset each other, any differences in the terms and conditions of offsetting contracts, the creditworthiness of the counterparties, and the probability that the contracts could be triggered in order to calculate how much actual risk there is in the portfolio.

IIRC, the Lehmans derivatives settled for less than $10 billion after all the offsets were netted out, although there may still be some litigation outstanding.

It's like saying that if the lottery sells a million tickets for a $10m jackpot, thehn they have a trillion dollar exposure, but people like to shock with big dcary numbers I suppose. Just the same as that "16 trillion dollar loan to the banks" Shiny Object of Doom last week. Nobody gave a crap that the vast majority of it was simply transactional overnight loans paid back the next day, and that a bunch of the rest was counting the full value of the loan as a separate amount every day it was outstanding - so that a $1b loan for 30 days was a $30b loan.

So since you apparently know the formula for how to approximate the ACTUAL risk to the USTreasury,
how much would it be if you started with $75 Trillion instead of $100 million?

And does your comment mean you think this is "no big deal"?

See "America's Big Bank $244 Trillion Derivatives Market Exposed"
at http://seekingalpha.com/article/293830-america-s-big-bank-244-trillion-derivatives-market-exposed

I'm just curious if you feel this BofA deal to get taxpayers to back all these derivatives is a

good deal for taxpayers, or just an insignificant "no big deal" kind of thing?

Bear in mind that the other financial institutions have already moved their derivate books into the bank. BofA is just doing what JPMC, Citi, Wells, et al have already done.

Depending on what defaults, how well balanced the portfolios are, and whether counterparties fail and make portfolios more unbalanced, it could be a "big deal" on the order of a few trillion.

according to him, the derivatives in question were some of the absolute riskiest on Merrill's books.

The majority of the BoA derivatives were already in the bank.

though it's probably safe to assume they did. We know from Bill Black that the biggest pieces of shit are now being backstopped by taxpayers. The downgrade threw a major wrench into Merrill's operation.

"The majority of the BoA derivatives were already in the bank. "

What Bank of America derivatives are you referring to? Please clarify this statement.

‘The Normal Course’
Bank of America’s holding company -- the parent of both the retail bank and the Merrill Lynch securities unit -- held almost $75 trillion of derivatives at the end of June, according to data compiled by the OCC. About $53 trillion, or 71 percent, were within Bank of America NA, according to the data, which represent the notional values of the trades.

That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.

The moves by Bank of America are part of “the normal course of dealings that we’ve had with counterparties since Merrill Lynch and BofA came together,” Thompson said today.

http://www.bloomberg.com/news/2011-10-18/bofa-said-to-split-regulators-over-moving-merrill-derivatives-to-bank-unit.html

Let me help you out.

These are the same derivatives that were just transferred (in part or in full) from the Holding Company to the retail bank.

But at this point the derivative book is backed by the depositors if BoA. The ball is in their court. Every BoA depositor who sits still for this is saying "I'd be happy to provide funding for your derivatives. If they blow up, no worries...I'm insured by FDIC!"

Every insured depositor who leaves lessens the risk to FDIC

Remember, FDIC insures the depositors, not the bank.

FDIC insures DEPOSITS not the bank!

According to FDIC website total BogA deposits = 1.060 trillion
57% of those deposits are insured by FDIC. They insure deposits up to 250000 per acct holder

That gives about 540 billion. And that's max. If. BofA just went poop and evaporated with zero recoveries.

We all know what will happen if the depositors are wiped out.

And we all know what will happen if those deposits don't cover the counterparty losses.

In the words of Dick Durbin, the banks "frankly own the place."

And you, of all people should be unconcerned. According to MMT we just print up 75 trillion bucks, no harm no foul . No?

There is a difference between what the Treasury/Fed MIGHT CHOOSE to do in the event if a BofA meltdown and what FDIC is OBLIGATED to do . And frankly what the Treasury/Fed Might do is effected very little by where the derivative book sits.

FDIC is obligated to pay off the insured deposits only. That max number is something like 540 billion. Which is a really big number. And that number assumes that the bank just vaporized. No recoveries.

In fact, Modern Monetary Theory explains precisely why this would be a terrible idea, and why the original bailouts created so much systemic turmoil.

Not only do you not understand the nature of our banking system, you also deliberately misinterpret the most precise available description of our monetary system.

No, the assumption is not that the bank would have to be vaporized with no recoveries. Since the derivatives counterparties are the very first in line to be paid in a wind down, the $540 billion would be first at risk. And of course Congress would most likely step in to cover the other $500 billion. And of course the counterparties would get bailed out of any additional losses. Same old song and dance until we see some radical changes at the Fed and in Congress.

(1) Match derivatives which cancel each other.
(2) Feed in paper shredder

Do those two things and $74.99 Trillion of market exposure vanishes overnight.

The commodities markets have been run this way for decades, the open interest in futures and the options on those futures FAR exceed the actual number of contracts that physically settle. It's all a game, pitting a bullish speculator against a bearish speculator until the contracts are settled. HOWEVER, the futures and options markets are settled (marked to market) every day at the end of trading. See the movie 'Trading Places' if you are unclear on that concept.

I'm surprised that this derivatives bullshit has been allowed to go on this long. Someone who was inaugurated in January of 2009 should have dropped the hammer and had his attorney general and treasury secretary FORCE the miscreants to mark to market IMMEDIATELY and see who was a winner and who was a loser.

I don't think protesting in from of the Wall Street Offices will do much of anything

Bank of America Tower at One Bryant Park is a 1,200 ft (366 m) skyscraper in the Midtown district of Manhattan in New York City, in the United States. It is located on Sixth Avenue, between 42nd and 43rd Street, opposite Bryant Park.

http://en.wikipedia.org/wiki/Bank_of_America_Tower_(New_York_City)

The derivatives moved uptown from Four World Financial Center, the Merrill Lynch Headquarters.

it's been there since they took over Nations Bank

I don't see how they think they can get away with stealing $75 Trillion dollars.

BofA simply got the Fed to put Taxpayers on the hook for any of these "highly risky derivatives" that prove in fact to be worthless or only worth
pennies on the dollar.

I don't think ANYone really knows for sure exactly how worthless they are, but since BofA is dumping them doesn't bode well for the Public
Purse, and amounts to grossly negligent "Corporate Welfare" if you ask me, to force US Taxpayers to assume responsibility for super risky financial
instruments created by private banks. It's simply nuts, in my view, and why OWS exists is exactly this kind of irresponsibility on Wall St.