[P2P-F] Not enough money to bail speculative world economy out ? - $235 trillion of OTC derivative leverage by just 4 US Banks

Sat Nov 26 15:31:59 CET 2011

Please read: “13 Bankers” Simon Johnson/ “Freefall” Joseph Stiglitz / “Reckless Endangerment” /Gretchen Morgenson /“Econned” Yves Smith and “Griftopia” Matt Taibbi ..for starters. Don’t you remember TARP??? People wanted to let the banks fail. Congress/Treasury/FED insisted on the  bailout.

From: Dante-Gabryell Monson 
Sent: Saturday, November 26, 2011 4:55 AM
To: econowmix at googlegroups.com ; p2p-foundation 
Subject: [P2P-F] Not enough money to bail speculative world economy out ? - $235 trillion of OTC derivative leverage by just 4 US Banks

Perhaps someone else can help verify such figures :

If we need to fill the gap for 12 thousand trillion in debt derivatives,
that would represent
1'714'286 dollars per person on this planet ... !?
( one million seven hundred thousand dollars per person on this planet - considering seven billion people )

How much of these debt derivatives have gone bad ?
Why not let the banks go bankrupt, after they created so much leveraged derivative debt to make profits with ?
Why do we try to bail them out with tax payers money ?
Is this a way to get everyone bankrupt... to the financial institutions? ( while they are the ones that are initially bankrupt ? )

Who has some kind of count on real figures ?
( excerpted some figures below )

//

If so much money gets printed out as to bail out / "recapitalize" the banks,
what is the effect on the value of money ? Are these currencies being debased ? ( see comparison between worth of dollar or euro Vs swiss frank or gold ? )  
Is this part of currency wars ?
http://en.wikipedia.org/wiki/Currency_war

What is the parallel with the pre-second world war period ? ( hyper inflation potential ? depression ? ... )

/// 

http://usawatchdog.com/four-biggest-banks-in-america-have-huge-leverage/

excerpts :

According to the latest report from the Comptroller of the Currency, 

just four U.S. banks have an eye popping $235 trillion of OTC derivative leverage. (Click here for the complete Comptroller of the Currency report.)  As a nation, U.S. banks have a total OTC derivative exposure of $250 trillion. So, the fact that just four U.S. banks have this much leverage and risk is astounding!  The banks are listed below in order of size and approximate OTC exposure:

1.)     JP MORGAN CHASE BANK NA OH

           $78.1 trillion OTC derivatives 

2.)    CITIBANK NATIONAL ASSN

           $56.1 trillion OTC derivatives

3.)    BANK OF AMERICA NA NC

           $53.15 trillion OTC derivatives

4.)    GOLDMAN SACHS BANK USA NY

           $47.7 trillion OTC derivatives

Considering that the total assets of these four banks are a little more than $5 trillion, I see a frightening amount of risk with a total derivative exposure of $235 trillion! 

///

The Bank of International Settlements pegs the total world over-the-counter (OTC) derivative exposure at around $600 trillion, but many experts say the real figure is more than twice that amount. No matter which figure you use, it is a gargantuan sum.  OTC derivatives are an unregulated dark pool of money with no public market.  These are basically debt bets between two entities on things such as credit risk, currencies, interest rates and commodities. 

In effect, the Federal Reserve bailed out the world financial system. Now, we are right back to square one facing another financial meltdown with European banks and sovereign debt.  If the Fed spent $16 trillion, why in the heck is this problem not fixed and why isn’t the world economy taking off like a rocket?”  The simple answer is it wasn’t enough money.  

Further googling :

http://www.google.be/search?gcx=w&sourceid=chrome&client=ubuntu&channel=cs&ie=UTF-8&q=235+trillion+derivatives

as for the 16 trillion the fed spent ( revealed only after a new law enabled auditing of the fed ? )

http://www.google.be/search?gcx=w&sourceid=chrome&client=ubuntu&channel=cs&ie=UTF-8&q=16+trillion+fed

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