|Bank of America Image via Wikipedia|
What happened to screw over Americans? You see Bank of America got greedy and shoveled toxic derivatives out of their recently purchased Merrill Lynch and into the part of the bank that is insured by the U.S. government: taxpayers.
That way the Merrill Lynch unit of Bank of America will not be responsible for what could be as much as $75 TRILLION in this toxic dump. That's how much of this garbage they have in house. To get perspective on this, the annual American economy is only $15 trillion.
During the first bailout Bank of America received $45 billion. Right now, it has over $1.04 TRILLION on deposit by mid 2011, pushing it to the second in ranking for U.S. firms. "Do ya think?" this large flush of wealth has anything to do with dumping toxic dumps like the Merrill Lynch trash onto the American taxpayer?
Bank of America refuses to detail just what is in this toxic derivative dump. Are they credit default swaps, collateralized debt obligations or the usual suspects like when airlines want to protect themselves from an unexpected quick hike in jet fuel costs?
Of course, Bank of America is also not detailing just how much of their $75 TRILLION in toxic derivatives they have transferred to taxpayers.
Why the sudden move to get rid of these derivatives? Turns out Bank of America was recently downgraded and it spooked Merrill Lynch that wanted to transfer risk for the hedge funds and Wall Street banks it does business with onto the backs of taxpayers.
According to some unnamed source, "The Moody's downgrade spurred some of Merrill's partners to ask that contracts be moved to the retail unit, which has a higher credit rating. Transferring derivatives also can help the parent company minimize the collateral it must post on contracts and the potential costs to terminate trades after Moody's decision."
Where are the federal watchdogs on this one? Asleep at the wheel apparently. Either that or they are in bed with them and just as crooked.
The real issue is that the FDIC only has $4 billion in its fund. Looks like the average citizen's account may not get protected if these kinds of toxic derivative dumps continue to be allowed from Wall Street. They will literally suck all the financial oxygen out of the treasury.
Right now it's the Federal Reserve that looks crooked by pushing this transfer. The FDIC disagrees and is fighting it. And Bank of America? They believe they don't need regulatory approval. Sure sounds like "bought government" to the average person's ear.
Read that as they are covering their assets in more ways than one. The so-called "free market" has evolved into nothing more than corporate welfare, socialism for Wall Street, where everyone else pays for their bad investments and greedy bonuses.
This version of the free market is truly rigged to benefit the interests of large financial institutions. And our national leaders wonder why Occupy Wall Street is growing exponentially and the majority of Americans agree with the protesters?
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