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Thread: weekend commentary - have US banks turned into Casinos ?

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    Banned Melonie's Avatar
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    Default weekend commentary - have US banks turned into Casinos ?

    With yesteday's extremely weird action with the US dollar, oil prices, gold prices, bond prices, and Wall St stock valuations, it might be time to re-read this little tidbit ...


    Cooking the Books: U.S. Banks are Giant Casinos

    by Michael Edward


    While media financial reporters keep the current focus of the public eye on Martha Stewart, the insolvency of U.S. banks due to their derivative holdings is being swept under the carpet.

    Because banks have not been making a profit from traditional lending, derivatives became a fantastic way for them to net huge gains by trying to guess (gamble on) future prices of commodities or stocks. They were able to take these gambling risks because the Fed is supposed to back them from losses that would make them insolvent (more liabilities than assets). The worst part is that derivative transactions stay off the books and away from the prying eyes of investors and analysts.

    U.S. interest rates being kept low by the Federal Reserve System (which is neither Federal nor does it have any intrinsic reserves) is to simply hide the hundreds of $Billions ($100 Billion U.S. Dollars = $100,000,000,000) of derivative losses and the true insolvency of U.S. banks. The moment interest rates start to run up, U.S. banks will be left holding little paper value assets to offset their vast derivative gambling losses.

    U.S. stock markets are being manipulated to show overall value gains and "profits" is to keep U.S. banks "paper solvent". In reality, the public is being conned into thinking that U.S. banks are still solvent because they show "gains" in their stock "paper" value. If the U.S. markets were not manipulated, U.S. banks would collapse overnight along with the entire U.S. economy.

    U.S. banks are merging with each other to hide their derivative losses with "paper asset" bookeeping that incorrectly shows they are solvent with enough "assets" to overcome their losses. In reality, this is smoke and mirror accounting, a scam worth $Trillions.

    U.S. banks - with the privately owned Federal Reserve System at the helm - have turned into giant casinos by running a Casino Economy that is splintering into vast piles of insolvent firewood. The kindling was lit in the early 1990's, but now a bonfire is raging with great plumes of red-ink smoke. Can the Fed and the Fed-controlled media keep the public from seeing that red smoke with their manipulative mirrors? If the public would just open their eyes and wake up, they would see what's really going on, so here's something to focus your eyes on:


    The top 25 U.S. banks with the largest derivatives holdings (estimate based on OCC Q3-2003 report and updated from news releases since 10/03). Remember, $1 Billion U.S. Dollars = $1,000,000,000.

    RANK - BANK NAME - DERIVATIVES (in $US BILLIONS)

    1 - JPMORGAN CHASE BANK - 33,700 ($33 Trillion, 700 Billion)

    2 - BANK OF AMERICA - 13,800

    3 - CITIGROUP - 11,000

    4 - WACHOVIA CORPORATION - 2,457

    5 - BANK ONE CORPORATION - 1,133

    6 - HSBC - 1,043

    7 - WELLS FARGO BANK NA - 911 ($911 Billion)

    8 - FLEET BOSTON - 494

    9 - BANK OF NEW YORK - 496

    10 - COUNTRY WIDE FINANCIAL - 410

    11 - STATE STREET - 320

    12 - TAUNUS - 307

    13 - NATIONAL CITY - 203

    14 - ABN AMRO - 188

    15 - MELLON - 153

    16 - KEYCORP - 98 ($98 Billion)

    17 - SUNTRUST - 82

    18 - FIRST TENNESSEE BANK NA - 58

    19 - U S BAN CORP - 54

    20 - PNC BANK NATIONAL ASSN - 45

    21 - DORAL - 31

    22 - NORTHERN TRUST - 25

    23 - CIBC DELAWARE - 25

    24 - METLIFE - 22

    25 - UTRECHT-AMERICA - 20


    If you want to get a hint at how much red ink your U.S. bank casino is swimming in, look at their latest financial report and keep an eye out for an entry such as, "adjustment of derivative financial instruments" or "adjustment of non-interest instruments". If they list such an "adjustment" (most do not), this means they have written off the losses incurred from their derivative gambling.

    If you bank with one of the 25 banks listed above, you can expect worse than the 1986-1990 Savings & Loan bank collapses when people were unable to remove all or most of their money from their accounts until years later. This time, you can expect to loose whatever they claim to "hold" for you because the FDIC and the "Fed" have no means to replace the losses with any intrinsic value.

    If you choose to keep accounts with these U.S. banks, you have just become a high-stakes gambler, and the odds are stacked against you.


    Non-commercial reproduction allowed, otherwise copyright 2004 by WorldVisionPortal.Org

  2. #2
    Star_bare_elegance
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    Default Re: weekend commentary - have US banks turned into Casinos ?

    so where should i keep my money :-( i have citibank & bank of america

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    Banned Melonie's Avatar
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    Default Re: weekend commentary - have US banks turned into Casinos ?

    there are thousands of smaller S&L type banks and credit unions that don't participate in the 'derivatives market' the way that these major commercial banks do.

  4. #4
    Yekhefah
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    Default Re: weekend commentary - have US banks turned into Casinos ?

    That's frightening. My bank isn't on the list but now I'm worried anyway.

    My boyfriend banks with Wells Fargo. I'll show him this.

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    Default Re: weekend commentary - have US banks turned into Casinos ?

    Meh, I have accounts at a couple of these places. My mortgage is through one as well. Fortunately my employer is not any of these.

    But this is true "tin-foil" crowd stuff. I wouldn't rush to hoarde my money under the mattress yet.

    I still plan on getting a gun and learning how to use it so I can pillage from others once society collapses. The dollars will be used to wipe my ass and as kindling.

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
    "And do the cats give a shit? No, they do not. Why? Because they're cats."-from The Onion

    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Default Re: weekend commentary - have US banks turned into Casinos ?

    The dollars will be used to wipe my ass and as kindling.
    I see that you've read the history of the Weimar German ReichsMark !

    I still plan on getting a gun and learning how to use it so I can pillage from others once society collapses
    Katrine, I doubt that either of us has the conscience or the temperament to successfully 'compete' in the pillaging department if/when the 'tin foil hat' crowd's economic doomsday scenario arrives. But I have several guns and know very well how to use them if anybody decides to try bringing the rape and pillage scenario to my house (and so do all of my neighbors !!!)


    Back on topic, I'm really not sure what the true implications will be should these banks who are holding trillions of dollars worth of derivatives exposure be faced with a 'meltdown'. All I can point to is examples like LTCM and more recently Ameranth, where a rapid move in the derivatives' underlying commodity caused a liquidity squeeze thus a forced selloff to raise cash regardless of falling price. If that were to happen to these major commercial banks, we would conceivably get a replay of the 1933 'bank holiday' ... "yes your money is still safe, but no you can't withdraw any of your money right now" ... but this time instead of 'come back next week' we're likely to hear 'come back next month / next year' ! .

    On the other hand, the Federal Reserve could simply decide to print up a quadrillion dollars worth of brand new dollar bills and 'give' them to the commercial banks too. In that scenario we'd get 'here's your $1000 withdrawl ma'am - sorry though it will only buy $500 worth of goods and services compared to last week !' In that scenario you're much better off being in debt up to your eyeballs and having zero savings ... which given the economic state of most Americans makes this scenario a more probable outcome !

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