Tuesday, October 25, 2011

Bank of America – FDIC Robbery In Progress with Toxic Derivatives

People have been emailing me about this over the past week, and I'm still trying to wrap my brain around it - and not very successfully, I might add. But just like you don't have to be a Proctologist to know an asshole when you see one, you don't have to be an economics expert to grasp that this is a very bad thing in terms of risk to American taxpayers, and our entire economy.

The Following is from Veteran's Today:

BofA Putting $79 Trillion in Toxic Derivatives Onto Taxpayers Backs
by Jim W. Dean, VT editor

A new attack on the US has begun. It is not nuclear, no planes hitting buildings, no secret terror cells, not as we know them anyway but the results, we may wish for a nuclear attack. It might be more survivable.

The target is the FDIC, one of the rolling targets of remaining capital that the bankster coalition is seeking after having pushed America into full collapse during the Bush years of “looking the other way.”

No conspiracy theory can come close to matching the very real scope of the Bush era derivative fraud, hundreds of trillions of dollars of worthless securities created out of thin air, more money than a thousand world wars would cost, more money than social security checks for the entire world for a thousand years.

This week, Bank of America and its subsidiary, Merrill Lynch was caught trying to launder its admitted $79 trillion dollar debt.

One bank, bordering on collapse owes 5 times more than America’s national debt.

The problem? They are involved in a “stealth” or “end run” program, aided by the Republican Party, to push this debt inside America’s national debt, pushing it onto the American people although it is certain to collapse the dollar.

The other Wall Street banks, though surrounded by protestors, hold well over $400 trillion more in worthless toxic derivatives. We suspect this number could be even higher.

If you wonder how the “1%” made its billions (trillions), they did it the old fashioned way. They stole it. “Toxic” is a euphemism for “counterfeit.”

A “toxic derivative” is a “thing” a bank claims it has that is worth something when, in actuality, it is nothing at all. A derivative has no money behind it, no company that makes things, no gold or silver, not even vacant land on one of the moons of Saturn.



Years ago there was a famous banker named Carlo Ponzi. People would give him money and he would return that and a good profit, perhaps too good a profit. What he was doing, of course, was paying his first investors money he stole from suckers who got in at the back of the line.




Banks lent out money they said they had, based on “toxic derivatives,” and made huge profits on the interest they got when people paid back the money that actually never existed in the first place. In certain circles this is known as an ‘air deal’.

Nobody believed that every major bank in America would lie about something this simple or be allowed to commit such brazen crimes.

After all, were there laws and regulations? Oh, you say such regulations are “socialism” and restrict the free use of capital.

So the banks invented $500 trillion dollars and, finally, when the money coming in wasn’t enough to hide the fact that the banks assets were imaginary, it all exploded.

We have been getting briefings on this massive Wall Street fraud that went critical during the Bush II reign. Cracks in the dam are beginning to show again, their validity evidenced with the tepid mass media coverage, more a systematic coverup than “coverage.”

It seems that mega counterfeiting has been where all the big money was to be made on Wall Street. And of course the phony money, assets, have to be laundered into the the real stuff at some point to cash out, a la Ponzi. But we have two huge bank fraud stories for you today.

Harry Markopolos is famous for having broken the Madoff scam years before our paid SEC protectors did.

Last week his anti-fraud group went public on two custodial banks who have been cheating their pension and trust clients on every trade for decades. This routine theft increased their profits by 30% a year.

In the interview Harry stated that he would not be surprised if that all the other custodial banks had been doing the same as it was considered a bullet proof scam.

What they did is internally book all of their client trades at the end of the day so they could pick the high or low point of the stocks involved and pocket the buy or sell spread for the bank’s account.

Commodity traders also did something similar for many years, using straddles. If you wanted to juice a politician you match him in straddle trades with suckers the new guys brought in and give the winning side to the politician to get $25, 50, 100,000 to them. If you will remember Hillary Clinton had an Arkansas trading account that started with $2000 and went to $100,000. But she was probably just lucky.

Both the Bank of New York Mellon…and State Bank deny the charges but are delaying going to trial. Markopolos says insiders brought him the paperwork to nail them in coffins. The government is primed and ready.

I was surprised to learn that the regulators will not bring criminal charges in these bank fraud cases it would ‘kill the bank’ and wipe out the ‘innocent’ shareholders. The thieves know this of course so they negotiate to buy their way out of it using the banks/stockholders money. This is where the term ‘license to steal’ came from.

On Monday we find Bank of America with a big tummy ache from the toxic derivatives bomb that came from their takeover of Merrill Lynch.

With BoA’s recent credit rating recently downgrades they decided to move $79 trillion in toxic derivatives over to their FDIC insured unit. Bernacke at the Fed seems to be saying ‘Okay’, and the FDIC saying ‘No way Jose!!’

That was just the warm up. Now for the really bad news. Our National debt is at round $15 trillion. It will never be repaid of course. It is a Ponzi scheme now, also.

The real question is whether the interest can actually be paid once interest rates go up a couple of points as inflation cranks up from the money presses running and the economy continues contracting....See more and check out links here.

3 Comments:

Blogger Jefferson's Guardian said...

I think the following words from the author, Jim Dean, in reply to a commenter who wondered how this will affect the Occupy protests once public knowledge of this cataclysmic scheme spreads, speaks volumes:

"Thanks Kelli, Spread the word. People need to know this stuff and cover their behinds as best they can.

Pass this around to friends and relatives. Hell, we are all going to have to become macro economist interns just to survive...while we are canning vegetables.
"

It's apparent to me that it's too late to go through the normal channels. Our democracy is dead, and the last vestiges of our once great nation have been hijacked and stolen, and then held ransom, by a force more sinister than any enemy we've ever faced as a nation.

This shows, very dramatically, that the evil side of capitalism can be as destructive and incendiary as the most unimaginable weapons of mass destruction. Adam Smith probably didn't give it any thought, or could possibly comprehend, the ruinous capabilities that financial free-reign, i.e.,"free markets", could, and would, have over secondary markets. It was most definitely Smith's achievement to shift the burden of proof against those maintaining that the pursuit of self-interest does not necessarily achieve social good. When this financial shit-storm finally hits, no further proof will be needed.

In my most recent post on No Corporate Rule, I highlighted Richard Grossman's article where he says that Occupy Wall Street activists need to speak out beyond greed and corruption and focus on usurpation; that is, the illegal seizure of power by the corporation, from the people. To that end, he calls for the immediate taking back of that power through the criminalization of the corporation. He cites a hypothetical date of July 4, 2012. Maybe that time should be now.

5:15 PM  
Blogger Anna Van Z said...

To me, the implications of this are HUGE. Why aren't we seeing MSM coverage of this? (Never mind, I already know why).

10:36 AM  
Blogger Jefferson's Guardian said...

It's bigger than huge -- it's humongous!! This is Godzilla stomping through Times Square, destroying everything in his path and eating everyone he sees, while still insatiable and getting hungrier and angrier by the minute, all the while the media are busily reporting that Occupy Wall Street is littering, and querying whether the movement really understands the nature of our economic malaise.

As I've said before, if it's truly newsworthy and in the least bit an exposé of the symbiotic relationship between the corporate/banking world and our government, the corporate-owned media will omit it from its next broadcast or its next printed edition. The dissemination of propaganda of the modern corporate-state only differs in its methods from the traditional totalitarian state; the latter told blatant lies, while the former simply resorts to omission.

4:05 PM  

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