Are banks hiding profits off balance sheet?

[miller]

They claim there are $680 trillion of derivatives off balance sheets. Why is even $1 off the balance sheet?

There is never a peep about $680 trillion. Will there ever be an amount that creates a story? What does $680 trillion relate to? Are Americans too stupid to question this or are they brainwashed zombies who have been rendered thoughtless by the daily propaganda avalanche?

Can anyone be this stupid? Its hard to believe.

 

[uscitizen]

Not really hard to believe. this is the kinds of stuff that led to our downfall and no regulations have been implemented to prevent it from happening again.

 

[boedicca]

I'd appreciate a source link for this claim. It is highly unbelievable.

I doubt that banks have $680 TRILLION of off balance sheet assets.

Bank of America, one of the world's largest banks, has only $2.2 Trillion in total assets. For the $680 Trillion figure to be real, one would have to assume that the banking system has more off-balance sheet assets than it does on balance sheet.

Or, the derivatives are not assets, they are liabilities - this aspect is somewhat horrifyingly plausible.

In either case, derivatives are not profits.

 

[Toro]

The banks were behind 9/11. Especially the Jewish banks. And of course, the Fed.

 

[miller]

If you quit watching Glenn Beck and start watching Congressional hearings you will learn there are $680 trillion of derivatives off balance sheets of the banks.

I've traded derivatives for 41 years but you folks know more about derivatives than I do.

I also wrote a book titled JUST CAUSE JUST FACTS. You can read excerpts on Amazon.

Buy the book, I need the money. Its about a derivative case in Federal criminal court.

It doesn't matter what you believe or want to believe. It matters what really happened.

America is in the shit house big time.

You people keep electing the Democrat Republican Crime Family. Its your fault. Take a look in the mirror so you can see who screwed up America.

 

[boedicca]

I found the source of the $680 Trillion figure, and the OP has completely misrepresented the statistic.

Quelle Surprise.

At the time, the derivatives market was relatively small. But it soon exploded, and the face value of all derivatives contracts across the world — a measure that counts the value of a derivative’s underlying assets — outstanding at the end of last year totaled more than $680 trillion, according to the Bank for International Settlements in Switzerland. The market for credit-default swaps — a form of insurance that protects debtholders against default — stood around $38 trillion, according to the international swaps group. That represents the total amount of insurance that has been written on various kinds of debt, but the amount that would have to be paid out if the debt went into default is considerably less.

http://www.nytimes.com/2009/05/14/business/14regs.html?_r=1


And note, that the EVUL Credit Default Swaps were slightly more than 5% of the total global market.

The global derivatives markets include future and options often used by companies to lock down supply costs - i.e. fuel futures for airlines, pork futures for meat processors etc. Speculation is only a part of the market - but the Big Government Types want to destroy the effectiveness of derivatives for anyone because a fraction of the market turned toxic.

Furthermore, market mechanisms in an of themselves are dealing with CDS. They peaked in 2008 at $62 T, dipped to $38 T in 2009, and are most likely even lower this year.

CDSs -- now a $38 trillion market that peaked in 2008 at $62 trillion -- are now so dangerous because Gramm's legislation made it possible for the same bond to be insured hundreds of times without requiring each insurer to maintain reserves in case of a claim or to report their contracts to anyone. Last September, a credit downgrade of AIG triggered a $14.5 billion margin call related to the CDSs on the books of AIG's financial products group. Since it couldn't pay, the U.S. bailed AIG out to the tune of $173 billion. Such margin calls also led to the collapse of Lehman Brothers, Fannie Mae, and Freddie Mac.

http://www.dailyfinance.com/story/i...t-phil-gramms-mistake-on-derivatives/1545826/

 

[miller]

The privileged class will gladly starve and screw the entire country. The right wingers fantasize being invited into the privileged class while the progressives whine and whimper.

The bankers make my point best. They get to gamble with the depositors cash on derivatives. They embezzle bonuses when they win and when they lose. The privileged class never admits their crazy mistakes. They just claim they’re too complicated for anybody else to understand.

It’s the complexity defense.

There is an easy solution.

 

[miller]

This is a pure lie.

"Derivatives are hard to value. They are virtually hidden from investors, analysts and regulators, even though they are one of Wall Street’s biggest profit engines. They do not trade openly on public exchanges, and financial services firms disclose few details about them. The new rules are meant to change most, but not all, of that opacity."

This is a false claim. The NYT reporter who wrote this is ignorant. I began trading futures and option in 1969 to survive the stock market crash while I worked for
EF Hutton. If they are, "one of Wall Street's biggest profit engines" why are they off the balance sheet? Are they hiding the profits from the IRS?

I wrote a book about an actual derivatives criminal case in Federal Court. The title is
JUST CAUSE JUST FACTS.

You can read excerpts of the story on Amazon. It is a fascinating, entertaining story that will give you a real incite into our corrupt judicial branch, my 9 years in Federal prison along with many encounters with real mob guys including Gene Gotti, Joe Gambino and many others.

The story reveals my background as a broker and trader of derivatives for 41 years.

 

[iamwhatiseem]

Just goes to show you, you can never stop learning in this life.
And today - I learned that I was wrong about the last person I thought was the stupidest human on the planet. There is someone even dumber.

 

[KissMy]

Does the term "Shadow Banking System" ring a bell???

 

[Toro]

You can read excerpts of the story on Amazon. It is a fascinating, entertaining story that will give you a real incite into our corrupt judicial branch, my 9 years in Federal prison along with many encounters with real mob guys including Gene Gotti, Joe Gambino and many others.

The story reveals my background as a broker and trader of derivatives for 41 years.

Really? That's kinda interesting. What were you in the clink for?

Extortion?

[ame]http://www.amazon.com/Just-Cause-Facts-Government-Corruption/dp/1419609068/ref=sr_1_1?ie=UTF8&qid=1290223356&sr=8-1#reader_1419609068[/ame]

 

[william the wie]

The banks were behind 9/11. Especially the Jewish banks. And of course, the Fed.

Giant fail it was opus dei, the masons and the illuminati.

 

[Toro]

The banks were behind 9/11. Especially the Jewish banks. And of course, the Fed.

Giant fail it was opus dei, the masons and the illuminati.

No, no, no. I'm a member of The Illuminati. We weren't involved.

 

[iamwhatiseem]

The banks were behind 9/11. Especially the Jewish banks. And of course, the Fed.

Giant fail it was opus dei, the masons and the illuminati.

No, no, no. I'm a member of The Illuminati. We weren't involved.

Hey what the...I am a mason...it wasn't us either..it was them damn fake masons...yeah those nights of columbus.

 

[william the wie]

Giant fail it was opus dei, the masons and the illuminati.

No, no, no. I'm a member of The Illuminati. We weren't involved.

Hey what the...I am a mason...it wasn't us either..it was them damn fake masons...yeah those nights of columbus.

I don't believe either of you.

 

[iamwhatiseem]

No, no, no. I'm a member of The Illuminati. We weren't involved.

Hey what the...I am a mason...it wasn't us either..it was them damn fake masons...yeah those nights of columbus.

I don't believe either of you.

uh-huh...ya see...obviously one of the knights of columbus right here...sneaky bastards.

 

[CrusaderFrank]

They're hiding the fact that the $680 Trillion is only worth 70 cents on the dollar, if that

 

[william the wie]

They're hiding the fact that the $680 Trillion is only worth 70 cents on the dollar, if that

Actually it is about sextuple counting or worse.

 

[KissMy]

[ame="http://www.youtube.com/watch?v=v3rfgkTAlho"]"Shadow Banking System"[/ame]
[ame="http://www.youtube.com/watch?v=_mq1Nh1hIXk&feature=related"]Shadow banking: still big, still dangerous[/ame]

 

[william the wie]

Good video but dated. TALF mentioned in the first video sank relatively quickly so the data comes from the first half of 2009. Tax law changes in Europe and the Far East are constantly changing the nature of the shadow banking system so I suspect that some of the simplification was deliberate and necessary. For example the collapse of monoline bond insurance companies due to undercapitalization in mid 2008 was the proximate reason for the collapse or near collapse of all investment banks on Wall St. in Oct. 2008. Merril Lynch, Citigroup and Lehman Brothers all had a large fraction of their hedges collapse in a matter of months. forcing huge writedowns. Likewise Berkshire Hathaway had one of its better recent years bailing out Goldman Sachs. Yet the idea that Berkshire Hathaway is an insurance company/industrial bank still strikes people as odd since regulated industrial banks do not exist in the US. And each of those layers of shadow banking matters.