Does the federal reserve act permit bernanke to issue an exemption to 23a?



Edit...ahhhh, 23.a.f provides the authority to grant the exemptions.

In answer to the question posed by the thread title: "Abso****inglutely"!

****ing den of thieves.

As Trades suggested - it seems like there should be some congressional oversight here and doesn't Ron Paul have a committee to do it?

He has been MIA in many respects but this should be done BEFORE it blows. Of course they will say any such investigation or inquiry would CAUSE it to blow. Still, Ron, Ron... anyone...

http://www.cadwalader.com/assets/client_....

Check out page 14, second and third paragraphs. The way I read it, the FDIC has 60 days to object (and thus block) the section 23A exemption. From what I have read, B of A did this to keep from posting additional margin (I read $3 billion). Ya, well, it looks like they are going to have to come up with the money after all. Guess the boys on the other side of those derivatives didn't buy off everybody. I doubt this will sink the ship, but it will make it ride a little lower in the water.

Thank god BOA repaid TARP, whoo, if not we would really be on the hook....We can't let them get away with this one (this one is a planned setup job to move losses from the bondholders to the taxpayers). Frankly, Bank of America may really bring down America.

Karl, thanks for the answer earlier this morning. I think one could conclude that ponzi type excursions are mainly political failures based on your debt/GDP charts. With proper regulation the economy can grow or contract on its own merits. Drafted by Graham, signed by Clinton -a bipartisan ****job.

What happens if all depositors take their cash out??? Wouldn't they be forced to move it back due to leverage requirements?

If so, that would take the burden off of the taxpayers/FDIC, right???

The moving of the derivatives positions was instigated by a customer.

I wonder which customer it is or how big the derivative positions are in relation to the deposits.

Any have any ideas?

It was GS asking for collateral that sent AIG into a tailspin. Just throwing out the name of the usual suspect.

At first glance, the only things that surprise me are:

1. This even made the news, and
2. The FDIC is raising a stink about it

I mean, c'mon, the FDIC suddenly found religion and cares about depositors and regulation? Uh, why?

'Cuz they're broke?

Things to do before BOA earning

1) sell some assets so we actually have some cash for the balance sheet at the end of the quarter
2) reduce our leverage ratio to something almost acceptable
3) reduce our past write-downs and apply back to earning just enough to make the quarter
4) gloss over our legal exposure in the 10-q, add extra complex sophiscated words and legalese.
5) send high priced escorts over to CNBC and Bloomberg the night before earning.
5) release the rainbow ****ting unicorn precisely two seconds after the press release and hope for the best

I feel ready to be the next CFO of BOA.

Bah. This will probably be good for a BofA ramp job of another 10%.

Seriously, though. I'm surprised this was even reported. You'd think this would be "standard operating procedure" by now with all that we've seen over the years...

cuz they suspect the fecal matter is about to be propelled at warp speed and they do not want to be standing in front of that as that could end careers and bring many of them up for some uncomfortable grilling sessions.

o and some of them HATE Bernanke , go figure!

Actually it is SOP for the corrupt system we have built, the only diff I have seen is that the "contracts" stored in this BOFA **** pile are so bad that the other side was going to call for cash and BOFA can't have that.

The other big big boys have the same game , but they are said to be better quality crap contracts than the junk from Merrill,, the drunken bull criminals.


Yep, sadly SOP and the death of markets as they can't be allowed to work now it seems.

Thanks, Joe (6-pack?).

Now THAT makes sense. Ya know, folks say, well, the FDIC doesn't want to be blamed for any SHTF moment, but aren't they kinda putting themselves on the spot here anyway? That's more $billions that BofA doesn't have, and by golly, should those rat bastards over at FDIC get in the way of looting the depositors, why, the Fed will just argue that the FDIC is costing depositors more! The point is, the FDIC is damned if they do, damned if they don't. There's something more going on here. As Mish likes to say, "inquiring minds want to know..."

http://dailybail.com/home/holy-bailout-f....

"What this means for you is that when Europe finally implodes and banks fail, U.S. taxpayers will hold the bag for trillions in CDS insurance contracts sold by Bank of America and JP Morgan. Even worse, the total exposure is unknown because Wall Street successfully lobbied during Dodd-Frank passage so that no central exchange would exist keeping track of net derivative exposure.

This is a recipe for Armageddon. Bernanke is absolutely insane. No wonder Geithner has been hopping all over Europe begging and cajoling leaders to put together a massive bailout of troubled banks. His worst nightmare is Eurozone bank defaults leading to the collapse of the large U.S. banks who have been happily selling default insurance on European banks since the crisis began."

Another reply to above. I don't know much about finance, and look forward to Leverage. However, if the last quote in my prior reply is correct, it makes no sense that we should pay for any of this. Let them fail! What does BofA and JP Morgan, international banks allowed to commit fraud, have to do with the American taxpayer?

Another bailout should go over big with OWS in motion, let's throw some gas on the fire. Nobody is watching.

The dirivitives? Probably European related, and if those cannot be paid, GS or JPM would probably have to eat something that tastes bad. I doubt that the Fed is putting it's head on the chopping block for the sake of BoA here. They must be protecting a connected party.

Edit: Buddy you can download Leverage now and use free download kindle for PC on Amazon. I am just trying to figure out how Karl can sign my digital pages.

Thanks Bert, I'll probably get the digital version - already pre-ordered the hardback few months ago. What is really ironic is that it may be that OWS leads to the end of this b**l**** - especially with Bill Black taking an active role in the prosecutions.

Would Glass-Stegall have stood in the way of this?

Yes and claro que si!

"Would Glass-Stegall have stood in the way of this?"

If we had a Glass Stegall act for Congress we might still have had Glass Stegall for banking intact.

We cannot solve the brokenness of our system until we separate congress from the money. Everything boils down to fixing the problem at the root cause.

Any the idiots on Wallstreet wonder why people are protesting. If they even had a clue what was going on, they would be rioting..............

Only BAC transaction I have is my mortgage, and that wasn't my choice (think Steph's in the same boat). On the plus side, I finally went ahead to look at a refi, and it's taking my 5.25% down to 3.75%, but is starting the clock over again. The unknown is WHO the new loan would be with - I might just wind up with BAC again.

After asking here several times, and reading the Ticker for years, I had ONE stipulation - she MUST make sure it's a clear title, or all bets are off. She said she would, so here's to trusting someone in the mortgage industry.... (incidentally, I do in this case).

Karl,

I remember you saying in an earlier discussion that depositors are always safe. I questioned this, saying that it might not be true in other countries, or for those banks in the US with no bondholder buffer. What about Bank of America? Are these derivatives holders in front of depositors in case of liquidation, or at the same place in the queue?

Leic: There's some question on this. There shouldn't be, but there is.

There were relatively-recent legal changes that MIGHT impact this, putting derivative holders in front of depositors. The problem with such a situation under the present scenario is that there's a VERY solid argument of fraudulent conveyance and the government (FDIC) would have EVERY REASON to bring that suit were it to come up, because the company moved the "Assets" for this specific reason (to evade/avoid the risk of the claim becoming effectively unsecured post-hoc.)

That in the general case in a bankruptcy event makes the transaction avoidable by the court. The issue that will come up is that this sort of situation is severely-political and thus it is very difficult to determine how it would play out in "real time."

I would argue that at minimum what was done here was an intentional act of preemptive extortion aimed at the FDIC and government. This sort of bull**** IMHO should lead to prison sentences, not market rewards.