Saturday, November 26, 2011

Federal Reserve Puts Tax Payers on the Hook for $75 Trillion of BofA Toxic Derivatives

From Bloomberg: B of A Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit This is old news (October 18, 2011) but it never got half the press it deserved. What has also not been well publicized is American banks are no where near out of the woods. While they may have payed off the so called TARP loans, they still have not disposed of the trillions of toxic mortgage derivatives (Credit Default Swaps) that they still show as assets. But the day of reckoning is coming due as Moody continues to down grade these banks, so B of A wants to move these worthless instruments from their investment side, Merrill Lynch to their FDIC insured banking side.

B of A, 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.
However, this is completely illegal.

Keeping such deals separate from FDIC-insured savings has been a cornerstone of U.S. regulation for decades, including last year’s Dodd-Frank overhaul of Wall Street regulation.

But, to no ones surprise, the Federal reserve is all in favor of this,

The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting.
The issue here is the Fed is a private organization who's board members include those that run B of A and Merrill Lynch! In a blog called Seeking Alpha Avery Goodman explains,

The Federal Reserve is an institution largely controlled by those who are probably the counter-parties to the Merrill Lynch derivatives. No doubt, its approval of the transaction, in spite of the prohibitions of section 23A arise out of a claim that Merrill is not a "bank" as defined under the Act, and, therefore, not an affiliate.

And while this transfer is obviously illegal,

Congress has given ultimate power to the Federal Reserve to ignore its own enabling Act legislation...The FDIC opposed the move, but there is nothing the FDIC can do, except file a petition for a writ of mandamus in court, against the Federal Reserve, seeking a declaration that the approval was illegal. But, the FDIC would lose, because Congress has given the Federal Reserve Board ultimate power to do whatever it wishes.

So there is no stopping this form of thievery unless we abolish or severely restrict the Federal Reserve. This has got to stop!

Tuesday, November 15, 2011

Why Liberals have to lie Part 6; it's still blame Bush

The following was a response to Mitt Romney flip flopping letter to the editor. However if you read into it you realize the real message is "the Republicans platform will destroy the country."

Mitt is the real flip-flopper

Republican presidential front-runner Mitt Romney, has the audacity to say fellow Republican Rick Perry has flip-flopped on Social Security. Romney will probably win the Republican presidential nomination, but in order to do so, he's lost most of his principles. Mitt has shamelessly renounced his former positions on abortion, gay rights and immigration, making himself indistinguishable from the tea party crowd. Now Mr. Romney is telling us how he will tackle spending and debt. He will abolish Obama's health program on his first day in office by executive order leaving 40 million Americans in a lurch and once again uninsured. Mitt Romney, as president, will eliminate subsidies for Amtrak, leaving millions of rail passengers stranded. Mitt will enact deep reductions in the subsidies for the National Endowment of the Arts, the National Endowment for the Humanities and the Corporation for Public Broadcasting. And this man wants to be president.

Ron Lowe, Santa Cruz

My Response: I'm no great fan of Mitt Romney, but Ron Lowes letter is typical of the left espousing that if the Federal Government doesn't pay for it, it will never be funded. First of all California pays $90 million a year subsidizing Amtrak. Perhaps the Federal Government can take less from the states and let them use their money as they want to. Ron Lowes Health Insurance rant is a total fallacy. First, even if you want ObamaCare it has yet to be implemented, so those 40 million people don't have any insurance yet to be "lurched" away. Further there have never been 40 million people in the US without health insurance. This again is where the left likes to create numbers to suit their argument. The real number of American citizens that are uninsured is 10-12 million. Yes that's a lot of people, but you don't have to re-create government to insure them. The real issue are the illegal aliens that account for about 10 million more uninsured. But when discussing the drain illegal aliens have on the US economy, the left will claim there are only 10 million, but when they estimate those uninsured, it grows to 30 million.

As far as defunding NPR and the NEA, this is the price they pay for ignoring their mandate to be politically neutral and propagandizing for the left.

Then from under a rock comes the typical blame bush diatribe.

Ca pays more into fed than it receives. The states that receive more than they send to the fed are red states. I am not a fan of illegals being here. Radical right starting wars for PNAC agenda, spending trillions, loaning 14 trillion to foreign banks, death of literally thousands of American soldiers, and running deficits to subsidies family friends needs to be balanced by centrists. The centrists you call lefties, are more conservative than republicans of 20 years ago. Romney s staff is largely radical extremist members of the PNAC authors. Look at what destruction that has done to America. History is false promises like the GOPs unfulfilled Contract with America are just hot air talking points. How about you pay your debts to America for previous fabrications before you get any seats anywhere.

International studies on productivity showed the most productive countries spent less on health care by providing universal coverage. If a job made you crazy hateful of fellow human beings, you could change jobs. Doing something enjoyed raises productivity. Californians spend billions more on health care annually because costs of uninsured is passed onto ratepayers. You would save money by providing universal coverage. So some uninsured patient does not go untreated for TB, and you interact with them making you sick. Deep subject.

Kris Miller

My response: Kris Miller If you paid attention you would know that the Bush TARP money was only $700 billion of which only $432 billion was disbursed and all but $19 billion has been returned with interest. It was the Fed, headed by Chairman Ben S. Bernanke under the Obama administration that opened the flood gates of $1.2 trillion to investment bankers all over the world, mainly through AIG. At the Tim Geithner, was transitioning from the head of the New York Federal Reserve Bank to President Obama's Treasury Secretary; Giethner tried to insulate himself by saying he was in limbo at the time (between jobs) and was not involved or aware of the trillion dollars that was distributed by AIG, but emails from lawyers at the New York Fed at the time, instructed AIG not to discuss how the funds were distributed. When congress wanted to know exactly were the money went, Bernanke told our elected officials he did have to tell them how the funds were distributed,  so wasn't going to tell them. Further, no party is immune from war causalities; the Democrats overwhelmingly endorsed the invasion of Iraq, and over a thousand US soldiers have died in Afghanistan since Obama became commander and chief.

What history tells us is the method of implementing socialism is to promise much more than any country can ever deliver and then "reluctantly" impose austerity measures. This is the same for socialized medicine. The US has the most advanced medical care in the world, but when the WHO rates medical care they rate all those with socialized medical care over the US; regardless of the true care delivered and the other systems that ranks the US poor such as Infant mortality are equally as flawed. Socialized medicine is now bankrupting every first world country where it exists;. In the US medical procedures such as MRI's and surgeries are determined by the patient's needs, in countries such as Canada and Britain they ration these medical and surgical procedures; in Britain they have NICE to determine if you will live long enough to justify the expense of any medical procedures.

You also seem to have quite a problem with history, such as the GOPs Contract with America; every aspect of the contract was approved by the House and forwarded to the Senate and President Clinton, where it died. I also will take you to task on the false belief that somehow the country has moved extremely to the right. The reality is the US has been moving left for decades and the recent Tea Party movement of putting the people back in charge of the government and following the Constitution (of all things) has caused a re-aliment to the center, reveling the media and educators as the progressive ideologues that they are.