Good video below providing an overview of the MAJOR news story that occurred this week involving Bank of America. (missing from main stream media news)
In simple terms, they took their $1 trillion+ in deposits, American's savings accounts, and combined them with their $75 trillion toxic derivatives portfolio. This now makes their derivatives portfolio stronger by backstopping future losses with the capital of American savings, and it allows them to continue making even larger bets. They are paid per transaction, like a real estate agent, so the larger the derivatives portfolio, the larger the annual bonuses.
Some of these $75 trillion in derivatives are Credit Default Swaps (a recurring topic here on this site), insurance that they have issued against any losses in European sovereign debt.
If anything goes wrong, the FDIC (which also has no money) guarantees the deposits of Americans. Who backstops the FDIC? The US government, also known as the US tax payer.
The FDIC is outraged over the move, but it had the blessing of the Federal Reserve and Ben Bernanke.
Well played chess move by Bank of America. We can only hope that those making these decisions, and the politicians that back them, some day get what they deserve.
