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Last month, the Bank of America Corporation received the latest in a series of credit downgrades. Those who had derivatives deals with BAC’s subsidiary, Merrill Lynch, became understandably worried about the health of the company, and began to demand additional collateral from Merrill Lynch as insurance against the possible failure of their deals.
Fortunately for the Bank of America Corporation, it also owns the commercial bank branded as Bank of America. Unlike the company’s investment bank Merrill Lynch, Bank of America holds the deposits—the checking and savings accounts—of millions of Americans. To insure these account holders against bank failure, BOA is a beneficiary of Federal Deposit Insurance Corporation protection—if the bank no longer has the money to cover withdrawals by its account holders, the federal government is required to use taxpayer money to make up for the losses. Because Merrill Lynch does not hold the deposits of ordinary account holders, it is not backed by FDIC insurance, and its shareholders would pay for any losses it suffers—an extremely distasteful proposition to BAC.
BAC has thus transferred $22 trillion of dangerous derivatives from Merrill Lynch to Bank of America, so that, should BAC’s poor decisions and risky behavior end up threatening its capital base, the corporation will—again—be rehabilitated by the United States government, at taxpayer expense. This $22 trillion supplements $53 trillion in derivatives already held by the Bank of America Corporation’s FDIC-insured commercial bank.
The only reason we know any of this is that anonymous sources risked their employment to tell us. Spokespersons for BAC, FDIC, and the Federal Reserve have so far refused to comment in any capacity on any of this.
Skeptics point out that this move is standard practice, not just for the Bank of America Corporation but for JP Morgan Chase, Citigroup, and Wells Fargo. They say that the risk involved is negligible compared to the possible profit. They argue that profit always generates social good. Indeed this is standard practice. But recent years have shown that the risk is in fact grave, and that the profit motive alone cannot take care of the vital interests of the American people.
Put aside for a moment the characteristically impenetrable details of this latest in an endless series of clandestine financial manipulations by the wealthy. The important thing is the pattern: once again, three years after the TARP bailouts, and four months after the Government Accountability Office’s discovery of a secret second bailout of $16 trillion for a handful of banks and corporations, a company unwilling to suffer the consequences of its gambling is passing its risk onto the American public. You were not consulted in this decision. Nor were your representatives in Congress. The information was kept from you by people who believe it is not your business what the banks you entrust with your money do with that money.
You do not have to entrust them with your money. People across the country are moving their money from these multinational banks to put it in more responsible institutions—credit unions and small, local banks. We urge you to join them. A mass transfer is proposed for November 5th, but the specific date is not as important as the act of transfer. This is the only form of speech these corporations understand. Let your voice be heard.
The only commercial I watch is Jon Stewert.
There have been ads on there by Chase about how we are opening small banks across the country to help out, because we are doing our part.
If you can read that without barfing, you are tough.
Is anyone organizing people to picket the local Chase banks, with signs saying something like: “These are the people who created the problem”?
Somme brainstorming could create signs that would carry the message better than my quick suggestion.
Is anyone working on this?
Thanks,
grant raddon
Hi Grant, I started both protesting in person against Chase Bank back in April of 2009 and I also started several Chase Bank Protest Blogs.
http://www.daily-protest.com
http://www.bloggersagainstchasebank.com
http://www.robotsagainstchase.com
http://www.thecatwhoatechasebank.com
http://www.parallelforeclosure.com
I believe your instincts are right and your protest sign idea a good one.
For those interested in keeping tabs on over 100 Occupy blogs that are constantly updating, you can do so by clicking on my name.
http://weareoregon.org/2011/10/nightmare-on-main-street-bank-divestment-day/
The big banks will lose my money? You mean like you lost $20k in donations? Yeah, okay.
It sounds like the Occupy group needs to keep a little better track of ITS money! LOL. Your missing $20k is hilarious – considering that you consider banks to be greedy and corrupt. Sounds like you’ve got plenty of your own problems.
eric and useyourwords–
I’m guessing you read the oregonian’s article, which got some facts wrong and misconstrued what has happened. the money is not lost. this post by denis theriault of the mercury (http://blogtown.portlandmercury.com/BlogtownPDX/archives/2011/10/26/taking-a-breath-over-occupy-portlands-finance-brouhaha) seems to have gotten it the clearest of all of the media channels.
Whatever has been reported, the situation is clearing up, and has largely been the result of miscommunication rather than malice.
I hope you keep in mind that all of this confusion has been the result of many people at OP working very hard trying to make sure that this movement stays transparent and clear, and that this very article which you commented on points out the utter lack of transparency or clarity in the administration at the big 4, the fed, and the FDIC.
Main Street lost at least 7.3 trillion dollars in home equity lines since the first quarter of 2006.
It could be as high as 8 or 9 trillion if we factor in the home foreclosures.
So my question is, what is more important, saving the remaining wealth of main street, or continuing to want instant vengeance against the banks?
Does the Occupy Movement care enough to help fight for the 5,000 to 10,000 homeowners who are being foreclosed upon each and everyday in the United States?
If the Occupy movement does care, than simply changing one banking law to “Debt Restructure shall not first require a default” would empower main street.
Just sayin.
There will also be a GA approved ACTION taking place on November 5th, which will include marches at 2 bank locations and onto a credit union that is staying open on Saturday specifically in solidarity with this event. (Route will be announced at the rally.) EVEN IF YOU ARE ALREADY A MEMBER OF A CREDIT UNION your presence is highly encouraged, as we need to keep our message to the big banks unified and strong. The facebook event can be found here http://www.facebook.com/event.php?eid=239004652821624.