Bank of America is attempting to rob America blind with the help of the Federal Reserve

By End the Lie

Protesters burning a Bank of America card at an Occupy Seattle protest

Bank of America Corp. (BAC) is in trouble and any other business which would just go under without any help; the corrupt banksters, with the help of the private Federal Reserve, are attempting to pass off their failures to the American people. Again.

Only three years ago the American people had massive debts piled on our heads by being forced to bail out the biggest lenders in the United States.

During this bailout, Bank of America received a whopping $45 billion and as of midyear had deposits numbering some $1.04 trillion.

Now Bank of America is attempting to protect itself from its derivative exposure through its Merrill Lynch unit by moving derivatives to a subsidiary replete with insured deposits.

This means that if the bank were to fail, the Federal Deposit Insurance Corporation, or FDIC, would be on the hook for paying for the moved derivatives which could be in the neighborhood of $75 trillion, far more than the U.S. GDP.

If the derivatives remained in Merrill Lynch, which is not insured by the FDIC and thus the taxpayer, and the bank were to collapse, the money would be lost.

Unsurprisingly, the private Federal Reserve has absolutely no problem with the move, while the FDIC is objecting according to anonymous sources cited by Bloomberg.

Even more unsurprisingly, Bank of America thinks that no regulatory approval is needed, regardless of the fact that this is an openly fraudulent way of insuring items which should never be insured.

This is surreptitiously timed given Moody’s downgraded Bank of America’s long term credit ratings on September 21st, slashing both the holding company and the retail bank’s ratings by two notches each.

Section 23A of the Federal Reserve Act is supposed to act like a firewall, preventing the affiliates of lenders from gaining from the lenders’ federal subsidy and also to protect the bank from risks originating from the affiliate, according to Saule Omarova, a University of North Carolina at Chapel Hill law professor.

This section was created because, “Congress doesn’t want a bank’s FDIC insurance and access to the Fed discount window to somehow benefit an affiliate,” Omarova said to Bloomberg.

However, in September of 2010, Bank of America was officially given a letter of exemption from Section 23A, effectively ending what the Federal Reserve’s general counsel, Scott Alvarez, told Congress in 2008 “is among the most important tools that U.S. bank regulators have to protect the safety and soundness of U.S. banks”.

So, with the help of the Fed, Bank of America is already exempt from one of the most important impediments to banks going out of control.

And now the Fed is once again backing the Bank of America’s attempts to undermine what little regulation we have in the banking system by putting the American people on the hook for their derivative exposure.

Bill Black, a Professor of Economics and Law at the University of Missouri – Kansas City, summed the issue up nicely in an e-mail to Washington’s Blog:

1. The bank holding company (BAC) is moving troubled assets held by an entity not insured by the public (Merrill Lynch) to the Bank of America, which is insured by the public

2. The banking rules are designed to prevent that because they are designed to protect the FDIC insurance fund (which the Treasury guarantees)

3. Any marginally competent regulator would say “No, Hell NO!”

4. The Fed, reportedly, is saying “Sure, no worries” by allowing the sale of an affiliate’s troubled assets to B of A

5. This is a really good “natural experiment” that allows us to test whether the Fed is protects the public or the uninsured and systemically dangerous institutions (the bank holding companies (BHCs))

6. We are all shocked, shocked [sarcasm] that Bernanke responded to the experiment by choosing to protect the BHC at the expense of the public.

It is also worth noting that Bank of America has been guilty of refusing to let customers close accounts in what are essentially mini-bank runs. Unfortunately, this is not isolated to one branch as you can see in the following videos:

http://www.youtube.com/watch?v=tK0O30aFT7g

http://www.youtube.com/watch?v=KtI85Zc6Oik

http://www.youtube.com/watch?v=Db_P0wHsSz0

America’s poverty problem is worse than ever with 46.2 million Americans living in poverty in 2010 – the worst since record-keeping began over 50 years ago at the Census Bureau.

A record percentage of Americans are impoverished at 15.1% and even more disturbingly, 22% of children are living below the poverty line.

Hunger problems in America are already worse than China’s according to Gallup.

How long are we going to allow bankers to run roughshod over the American people?

How long are we going to allow the private Federal Reserve – which is rife with deception and corruption and can block internal investigations, audits and subpoenas by its own Investigator General via the Fed’s Chairman, Bernanke – to keep serving the banks while robbing the rest of us?

While the Occupy Wall Street movement is mostly accurate in targeting the criminals on Wall Street and in the banks, we must not forget that the private Federal Reserve is what makes it all possible.

We must not lose focus on the head of the snake as cutting off the tail will just allow the snake to wriggle away and strike again.

America needs to step up to the plate and fight back against the private Federal Reserve and their buddies in the “too big to fail” banks that continue to take every single penny from hungry Americans’ pockets.

I hope the Fed reads this and detects “an ongoing trend of negative sentiment” – if you’d like to help them get the picture you can plaster anti-Federal Reserve language on every social network you are a part of.

We need to make them get the picture one way or another: we are sick and tired of a criminal banking cartel controlling our country’s finances. We want freedom. We will no longer stand for corporatism or crony capitalism. We want the Federal Reserve to be dismantled as there is no other way to dig ourselves out of the hole they’ve put us in.

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6 Responses to Bank of America is attempting to rob America blind with the help of the Federal Reserve

  1. Uncle B October 19, 2011 at 9:16 AM

    Old enough to remember the day: Oldsmobile’s, long steel hoods over great straight eights, all American made, all union made, all American union made steels, rubbers, even the paint, union made! Fueled with gasoline from America from wells in Texas. Packard’s, Hudson’s, Desoto’s, Pontiac’s, Nash, Studebaker’s, Mercury’s, Kaiser’s, Monarch, Edsel’s, We has it good! Folks saved money, got fair interest on it, bought cars for cash, not on credit, we all smoked cigarettes, Anyone who wanted to work could find a job. The “Golden Age” fueled by the Cheap Oil Era, passed now, leaving only pollution and the ruins of Detroit City as a monument, the tombstone to the vulture Capitalists, the corporatists, who robbed America of her glory, and sold us out for a few Super-Factories in Asia – Even Ford Motor Company of America builds three Uber-Large, Super-Factories in China as we speak, designed form the ground up to be “manned” by 98 pound Asian women, working 7 days a week, 12 hour shifts, fed in factory cafeterias on veggies and rice, bedded down on the same factory floors where they work, clothed in ‘company uniforms’ a new communist labor concept – they eat less food in a week than the cost for an American worker just to drive to work for one day! Even as we speak, American Uber-Rich squeeze the las few buck out of the American Middle Class, to move to Asian markets, Asian currencies – they know the collapse is coming, but not exactly when or even if it will occur suddenly and dramatically or as a slow death over decades, but they are certainly ‘jumping ship’ heading for higher ROI’s even if it is in foreign currencies, under communist rules. We witness now the latter days of the last the greatest Caucasian Empire the world will ever know, and the rise in the East of a Pan Eurasian Empire, even Putin re-emerges, re-educated, and calling for ‘unity”. This Empire already owns ‘balance of power”, over the U.S. Dollar, and can make or break it as they wish, and far beyond the reach of America and their abilities to control their own destinies – Proverbs 22:7 warns of this – even the ancients knew!

    Reply
  2. Anon October 19, 2011 at 5:31 PM

    Money talks! Withdraw your money, close your accounts and participate in a local credit union. It’s the only way to make these pigs get the picture.

    Reply
  3. Anonymous October 20, 2011 at 12:42 PM

    as a BAC shareholder owner ..i find the loss of 95 percent value and 95 percent income not to be much of a bailout, more a ruination………and the transfer of 75 trillion worth of risk not counting sticky fingers equal enough to BAC itself non …………………………………

    Reply
  4. sam October 20, 2011 at 4:11 PM

    Don’t close your account directly. Go to another bank, (see the “move your money list”) open an account, and over time write checks from the old bank to the new bank.

    Reply
  5. Robert Rubey October 21, 2011 at 7:56 AM

    REPEAL Gramm, Leach, Bliley Act ,S900 passed in 1999 and the banks will have to go back to making money the way they used to instead of cheating the customer and passing the savings on to their lobby to get even more concesions from our elected officials. Unbelievable not one legislator has promoted repeal of this piece of junk legislation.

    Reply
  6. Frankie October 21, 2011 at 11:27 PM

    Let’s see. Who was it that repealed Glass-Steagall back in the 90′s. Oh yes, it was BOTH parties, skipping hand in hand down the aisle, signed into law by the Demoblican/Republicrat President Bill Clinton (any Republicrat would have done the same). Who gave the most money to George Bush”s Presidential campaign? Goldman Sachs. Who gave the most money to Barrack Obama’s Presidential campaign? Goldman Sachs.

    Goldman doesn’t Sachs. Goldman Sucks.

    Reply

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