The following is an excellent article from the demonocracy.info website titled “Derivatives: The Unregulated Global Casino for Banks” and I quote:
|LONG STORY: A derivative is a legal bet (contract) that derives its value from another asset, such as the future or current value of oil, government bonds or anything else. Ex- A derivative buys you the option (but not obligation) to buy oil in 6 months for today’s price/any agreed price, hoping that oil will cost more in future. (I’ll bet you it’ll cost more in 6 months). Derivative can also be used as insurance, betting that a loan will or won’t default before a given date. So its a big betting system, like a Casino, but instead of betting on cards and roulette, you bet on future values and performance of practically anything that holds value. The system is not regulated what-so-ever, and you can buy a derivative on an existing derivative.
Most large banks try to prevent smaller investors from gaining access to the derivative market on the basis of there being too much risk. Deriv. market has blown a galactic bubble, just like the real estate bubble or stock market bubble (that’s going on right now). Since there is literally no economist in the world that knows exactly how the derivative money flows or how the system works, while derivatives are traded in microseconds by computers, we really don’t know what will trigger the crash, or when it will happen, but considering the global financial crisis this system is in for tough times, that will be catastrophic for the world financial system since the 9 largest banks shown below hold a total of $228.72 trillion in Derivatives – Approximately 3 times the entire world economy. No government in world has money for this bailout. Lets take a look at what banks have the biggest Derivative Exposures and what scandals they’ve been lately involved in. Derivative Data Source: ZeroHedge.
|One Hundred Dollars|
|$100 – Most counterfeited money denomination in the world.
Keeps the world moving.
|Ten Thousand Dollars|
|$10,000 – Enough for a great vacation or to buy a used car.
Approximately one year of work for the average human on earth.
|100 Million Dollars|
|$100,000,000 – Plenty to go around for
everyone. Fits nicely on an ISO / Military
standard sized pallet.
$1 Million is the cash square on the floor.
|1 Billion Dollars|
|$1,000,000,000 – This is how a billion dollars looks like.
10 pallets of $100 bills.
|1 Trillion Dollars|
|$1,000,000,000,000 – When they throw around the word “Trillion” like it is nothing, this is the reality of $1 trillion dollars. The square of pallets to the right is $10 billion dollars. 100x that and you have the tower of $1 trillion that is 465 feet tall (142 meters).|
|$100 Million Dollars = 1 year of work for 3500 average Americans|
|It takes 3500 Americans 1 year of work to make $100 Million dollars. The 155 million Americans who worked with earnings in 2005 on average made $28,567 / year.
In front of the 3500 people is the $100 Million pallet that they all have to work for 1 year to earn.
|Bank of New York Mellon|
|BNY has a derivative exposure of $1.375 Trillion dollars.
Considered a too big to fail (TBTF) bank. It is currently facing (among others) lawsuits fraud and contract breach suits by a Los Angeles pension fund and New York pension funds, where BNY Mellon allegedly overcharged the funds on many millions of dollars and concealed it.
|State Street Financial|
|State Street has a derivative exposure of $1.390 Trillion dollars.
Too big to fail (TBTF) bank. It has been charged by California Attorney General (among other) lawsuits for massive fraud on California’s CalPERS and CalSTRS pension funds – similar to BNY (above).
|Morgan Stanley has a derivative exposure of $1.722 Trilion dollars.
Its a too big to fail (TBTF) bank. It recently settled a lawsuit for over-paying its employees while accepting the
tax payer funded bailout. Vice Chairman of Morgan Stanley had a license plate that said “2BG2FAIL” on his Porsche Cayenne Turbo. All this while $250 million of bailout money ended up in the hands of Waterfall TALF Opportunity, run by the Morgan Stanley’s owners’ wives– Marry a banker for a $250M tax-payer cash injection.
The bank also got a SECRET $2.041 Trillion bailout from the Federal Reserve during the crisis, beyond the tax payer bailout.
|Wells Fargo has a derivative exposure of $3.332 Trillion dollars.
Its a too big to fail (TBTF) bank. WF has been charged for its role in allegedly pursuing illegal foreclosures and deceptive loan servicing. Wells Fargo was just slapped with a $85 million fine by Federal Reserve for putting good credit borrowers into bad-credit rating (high rate) loans.
In March 2010, Wachovia (owned by Wells Fargo) paid $110 million fine for allowing transactions connected to drug smuggling and a $50 million fine for failing to monitor cash used to ship 22 tons of cocaine. It also failed to monitor $378.4 billion (that’s $378400 millions dollars) worth of transactions to Mexican “casas de cambio” (think WesternUnion, anonymous cash transfer) usually linked to drug cartels. Beyond that, WF lets its’ VIP employees live in foreclosed mansions. WF knows how to cash your legit check, then claim “fraud” and close your account. WF also re-orders your transactions to create more overdraft fees. Wells Fargo’s Wachovia also got a SECRET $159 billion bailout from the Federal Reserve.
Wells Fargo paid NO taxes in 2008-2010 and had a tax rate of NEGATIVE 1.4% while making
|HSBC has a derivative exposure of $4.321 Trilion dollars.
HSBC is a Hong Kong based bank and its original name is
The Hongkong and Shanghai Banking Corporation Limited.
You will find HSBC working a lot with JP Morgan Chase.
|Goldman Sachs has a derivative exposure of $44.192 Trillion dollars.
The $1 Trillion pillars towers are double-stacked @ 930 feet (248 m).
The White House is standing next to the Statue of Liberty.
Goldman Sachs has advantage over other banks because it has awesome
Mitt Romney’s top donor is Goldman Sachs, and one of Obama’s best donors.
|Bank of America|
|Bank of America has a derivative exposure of $50.135 Trillion dollars.
BofA is sticking the tax-payers with a MASSIVE bill, by moving derivatives to
Bank of America paid $22 million to settle charges of improperly foreclosing on active-duty troops
|Citibank has a derivative exposure of $52.102 Trillion dollars.
The $1 Trillion dollar towers are double-stacked @ 930 feet (248 m).
Citibank customers have been arrested for trying to close their accounts, while in in Indonesia a man was interrogated to death in Citibank’s special “questioning room”. In 2011 Citibank paid a fine of $285 million for selling home-loan backed bonds to investors, while betting they would lose value (think derivatives/insurance). The man in charge of the unit at Citibank became Obama’s Chief of Staff. 2 weeks before getting hired by Obama he got $900,000 from Citibank for great performance. This was after Citigroup took out $45 billion in bailout money.
Citigroup also received a SECRET $2.513 trillion dollar bailout from the Federal Reserve.
|JP Morgan Chase (JPM)|
|JP Morgan Chase has a derivative exposure of $70.151 Trillion dollars.
$70 Trillion is roughly the size of the entire world’s economy.
The $1 Trillion dollar towers are double-stacked @ 930 feet (248 m).
JP Morgan is rumored to hold 50->80% of the copper market, and manipulated the market by massive purchases. JP Morgan (JPM) is also guilty of manipulating the silver market to make billions. In 2010 JP Morgan had 3 perfect trading quarters and only lost money on 8 days. Lawsuits on home foreclosures have been filed against JP Morgan. Aluminum price is manipulated by JP Morgan through large physical ownership of material and creating bottlenecks during transport. JP Morgan was among the banks involved in the seizure of $620 million in assets for alleged fraud linked to derivatives. JP Morgan got $25 billion taxpayer in bailout money. It has no intention of using the money to lend to customers, but instead will use it to drive out competition. The bank is also the largest owner of BP – the oil spill company. During the oil spill the bank said that the oil spill is good for the economy.
|9 Biggest Banks’ Derivative Exposure – $228.72 Trillion|
|Note the little man standing in front of white house. The little worm next to lastfootball field is a truck with $2 billion dollars.
There is no government in the world that has this kind of money. This is roughly 3 times the entire world economy. The unregulated market presents a massive financial risk. The corruption and immorality of the banks makes the situation worse.
If you don’t want to bank with these banks, but want to have access to free ATM’s anywhere– most Credit Unions in USA are in the CO-OP ATM network, where all ATM’s are free to any COOP CU member and most support depositing checks. The Credit Unions are like banks, but invest all their profits to give members lower rates and better service. They don’t have shareholders to worry about or have derivatives to purchase and sell.
Keep an eye out in the news for “derivative crisis”, as the crisis is inevitable with current falling value of most real assets.
(WHILE THE 9 BIG INVESTMENT BANKS SEEM TO BE ON TOP OF THE ISSUES, IS IT FAKE BECAUSE THEY ARE A SECRETLY-RUN ORGANIZATION, DELIBERATELY KEEPING THE INFORMATION AWAY FROM THE STOCKHOLDERS THEMSELVES, AS STATED ON PAGE 278 IN THE BOOK “THE AGE OF UNCERTAINTY” BY JOHN KENNETH GALBRAITH. THE BIG INVESTMENT BANKS GOT SO BIG IN THE BIGGEST CITIES, THEY THEMSELVES BECAME A METROPOLIS AND UNCONTROLLABLE, TAKING VIRTUALLY MOST EVERYTHING OF VALUE AWAY FROM PUBLIC INTEREST, JUST TO CREATE DOWN THE ROAD A MUCH BIGGER BUBBLE THAN THEY HAD IN 2008. IT’S GOING TO BE HARD TO DO BUT THE SOONER THE “BIG IS BETTER” THEORY IS BROUGHT UNDER CONTROL, THE BETTER IT’S GOING TO BE AND WE’RE GOING TO HAVE TO HAVE THE PRESIDENTIAL CANDIDATES LIKE SENATOR ELIZABETH WARREN TELL US JUST EXACTLY HOW SHE’S GOING TO DO THIS, LIKE PRESIDENT FRANKLIN ROOSEVELT DID WITH THE GLASS-STEAGALL ACT. I QUOTE FROM CHAPTER 11 TITLED “THE METROPOLIS” ON PAGE 322 OF THE GALBRAITH BOOK AND I QUOTE:
“Where Capitalism Fails – As a legacy of classical liberalism there is a marked unwillingness to socialize design, to specify overall architecture styles to which the subordinate units must conform. It is an unjust interference with property rights and personal preference. But there is no place where the substitution of social for classical liberal expression is more urgent and where, paradoxically, the result serves better the classical utilitarian goal of the greatest good for the greatest number.
The interference with property rights is real. One solution lies in extending the public ownership of urban land. This too accords with the inherently social character of the city and the inescapably socialist character of housing. I’ve long wondered why European socialists or American liberals, when gathering on occasions of high ceremony to affirm their faith, give so little attention to the public ownership of urban land. For no other form of property is the public case so clear.
The Tyranny of Circumstances – To speak of the social character of the Metropolis and of the necessarily socialist character of its important services is to arouse instant suspicion. There is advocacy here. A socialist is speaking. The proper discounts should be applied.
To suspect advocacy in such matters is not a bad precaution but it is not appropriate in this case. As often in these matters, we imagine choice–scope for ideological preference–where, in fact, there is little or none. The social character of the Metropolis derives not from preference. It follows, as earlier noted, from the far harder circumstances that millions of people live in close proximity to each other with all the friction, all the antisocial opportunity, all the social needs that this ordains. It is this that forces upon the city its social character. This is not the product of preference. it is, once again, the tyranny of circumstance.
Had one wished to forestall this tyranny, there would have been only one way. That would have been to forestall the people. The Metropolis should have been aborted long before it became New York, London or Tokyo.”
LaVern Isely, Overtaxed Independent Middle Class Taxpayer and Public Citizen and AARP Members