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By barry s Tue Oct 18, 2011
The venal incompetents at Bank of America are shamelessly attempting to foist but literally tens of trillions in derivatives exposure onto the back of the taxpayer.
Bank of America Corp. (BAC), 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.
The FDIC is opposing the move while the FED favors the move. The brain trust at BAC simply says that we don't need no stinkin' approval.
No doubt Erin Burnett, Rush Limbaugh will claim this a boon for the taxpayers. Cain, Mitts, Bachman will say this is bad and blame Jimmy Carter for not anticipating this in in 1979.
This is President Obama's Inchon, his Battle of Britain, his Emancipation Proclamation, his Louisiana Purchase.
The President should order his Secretary of Treasury to announce that the FDIC will seize control of BAC forthwith if the derivatives are moved to the backs of the taxpayer from the bank holding company. Further, the FDIC will use all resources of the United States of America to recoup any loss to the taxpayer from the assets of any officer with rank of Senior Vice President or above or any director or board member. And to protect the interests of the USA, the assets of all board members and executive officers of BAC are hereby frozen pending further review.
BAC can avoid these steps by immediately certifying to the FDIC that no derivatives positions have been transferred from the bank holding company to the bank.
This one action will send a signal that were are a nation of laws and forever eliminate the shameful 'too big to fail' that has hung like a sword of damocles over the taxpayer.
