Last night a gentleman at the protest was kind enough to give a quick overview about what is going on in this country in terms of our financial situation. Never mind the debt and deficit on the nations accounting books but look at what is going on in the private sector with our big banks. First let me say that even after being bailed out and some supposed changes to the system nothing really changed. The banks have yet to deal with all the subprime mortgages as well as most of the empty properties that they hold as assets, but what is worse is all the bad paper they hold from the unscrupulous selling of those mortgages, sliced and diced until no one knew who owned what. These wonderful pieces of paper when added up amount to a financial time bomb for our nation as a whole. Below is a very brief summary of what they are doing.
Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation…
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 shorter translation of what's going on here is that they are taking worthless investments and rather than keeping it on their books and eventually writing it off as a loss against their bottom line are dumping it on the American taxpayer (FDIC). Now stop to think that the country's annual budget is only $15 trillion.
And these were the banks that took bail out money to the tune of $2 trillion and gave their CEOs some very sweet bonuses. God Willy Horton was right if you want to rob something go to a bank but in this case if you want to rob a nation be a bank.