Banks like the Bank of America (BOA) and JP Morgan sell insurance to holders of bonds and such by selling said holders “Credit Default Swaps”, or CDS. These bond holders pay the bank a monthly premium, or interest, for this protection. As risk in the financial system rises, bond holders need more protection. Unfortunately, the time is rapidly approaching when they won’t be able to afford the level of protection that they need. Here is what that will look like:
… In an obscure, but well reported 2011 event, Bank of America announced it was shifting derivatives in its Merrill investment-banking unit to its depository arm, which has access to the Fed discount window and is protected by the FDIC. …
This “means that the Bank of America’s European derivatives are now going to be ‘insured’ by U.S. taxpayers (via) the Federal Reserve and the FDIC.” The bad news is this derivatives liability will receive,
‘super priority’ when it comes to the disbursement of FDIC insurance payments to failed banks. Where do the rest of us stand in terms of reimbursement for a failed bank? We, the account holders in our banks, are in last place.
In short, your deposits really are not FDIC insured. … Oh, you don’t bank with BOA?) “JP Morgan Chase is receiving the same undue government benefit.”
This also means “that when Europe finally implodes and banks fail, U.S. taxpayers will hold the bag for trillions in insurance derivatives contracts, labeled as credit default swaps (CDS) which were sold by Bank of America and JP Morgan.” As for the banks:
They are delaying the inevitable crash which will take them down with us. So, they are trying to keep their heads above water by stealing your bank accounts, your pensions and 401K’s. When your money is gone and your life is destroyed, the one solace we can take is that Wall Street will follow us right into the gates of hell …
Posted here by https://icliks.wordpress.com
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