Good news everyone. Goldman Sach's lost some money!!

The latest developments in destructive crack-addict behavior and de-facto corporate socialism:

HOLY BAILOUT -

Federal Reserve Now Backstopping $75 Trillion Of Bank Of America's Derivatives Trades

http://cognitivedissonance.tumblr.com/post/11738989530/holy-bailout-federal-reserve-now-backstopping-75

This story from Bloomberg just hit the wires this morning. Bank of America is 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 investment bank’s European derivatives exposure is now backstopped by U.S. taxpayers. Bank of America didn’t get regulatory approval to do this, they just did it at the request of frightened counterparties. Now the Fed and the FDIC are fighting as to whether this was sound. The Fed wants to “give relief” to the bank holding company, which is under heavy pressure.

This is a direct transfer of risk to the taxpayer done by the bank without approval by regulators and without public input. You will also read below that JP Morgan is apparently doing the same thing with $79 trillion of notional derivatives guaranteed by the FDIC and Federal Reserve.

What this means for you is that when Europe finally implodes and banks fail, U.S. taxpayers will hold the bag for trillions in CDS insurance contracts sold by Bank of America and JP Morgan. Even worse, the total exposure is unknown because Wall Street successfully lobbied during Dodd-Frank passage so that no central exchange would exist keeping track of net derivative exposure.

Yeah, sure Republicans...what these companies need is less regulation.

And they scorn and wonder why there is currenly a massive and ever-growing OWS/99% movement afoot.

If this were fair, I could have a business wherein I would get all of the profits when I was successful, but make everyone else pay for my losses when I lost money.

Wouldn't that be great for me, but suck for everyone else?

Yeah, it would. The world we are in has been busy coming for a long time, and places like Goldman Sachs long ago figured out that the best way to insulate themseleves against a downturn was 1)to market themselves as the gold standard of bankers; 2) to scare clients into thinking that they would be leaving money on the table if they did not use Goldman; 3)to represent as many major clients in as many business aspects as possible, so that they would be represented on both side of every major deal in some capacity; and 4)to pay staff enough so that they could afford to leave banking and go work in government, in an act of altruism, later on in life passing laws to further protect Goldman and its interests.

To date, they have been very sucessful at this.