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Sun Jun 24, 2012, 02:47 PM

Derivatives at Morgan Stanley get moved to banking subsidiary


From Morgan Stanley's protfolio.

Some reasons for this being done: ability to have the government pay them off? And to make their firm look more successful?


http://firedoglake.com/2012/06/24/us-government-backstops-most-derivatives/

Joining the other too-big-to-fail banks, Morgan Stanley (MS) has been moving its derivatives portfolio from its holding company to its banking subsidiary. We saw this last November, when Bank of America moved a huge chunk of derivatives from its Merrill Lynch subsidiary onto the balance sheet of its bank subsidiary. This OCC report on derivatives suggests that the total amount currently supported by the FDIC is approximately$1.11 trillion.

Reuters reports:

The [MorganStanley] bank increased its notional derivatives positions at its bank unit to $2.57 trillion at the end of March from $1.72 trillion at the end of December, OCC data show. The portfolio has increased from $1.21 trillion at the end of March 2011.

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Reply Derivatives at Morgan Stanley get moved to banking subsidiary (Original post)
truedelphi Jun 2012 OP
Warpy Jun 2012 #1
truedelphi Jun 2012 #2
wordpix Jun 2012 #5
truedelphi Jun 2012 #6
Warpy Jun 2012 #7
truedelphi Jun 2012 #3
Sushi_lover Jun 2012 #4

Response to truedelphi (Original post)

Sun Jun 24, 2012, 02:56 PM

1. Bank of America also pulled this scam

These bastards know that the government will bail out the banks but let the speculative arms of the companies go under if need be.

If only we had a government with guts. Then the next step would be to nationalize the banks.

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Response to Warpy (Reply #1)

Sun Jun 24, 2012, 02:59 PM

2. Sleazoid policy man Tim Geithner was one of the main reasons

That those in power who were standing in opposition to the Bank of A doing this only failed in their attempts to stop Bank of A.

Such a shame that a man I believed in so heartily four years ago has surrounded himself with people like Geithenr.

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Response to Warpy (Reply #1)

Tue Jun 26, 2012, 11:12 AM

5. I'm not sure US citizens are ready for another round of bank bailouts in the billions

I know I'm not.

BoA had better rethink this strategy, bastards.

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Response to wordpix (Reply #5)

Tue Jun 26, 2012, 02:45 PM

6. If the Federal Government officials will give them the money,

The Big Banks have no reason not to participate.

So until the guy in the Oval Office decides to put Tim Geithner in the unemployment line, we will continue to have these policies.

And Obama has already indicated that he works for Tim, rather than the other way around.

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Response to wordpix (Reply #5)

Tue Jun 26, 2012, 03:08 PM

7. The derivatives casino is so huge that the US taxpayer

would not be able to support it, living in servitude to that debt in perpetuity.

The only possible way to salvage a situation like that would be to nationalize the banks, separate them from the speculative enterprises, and transfer the junk back where it belongs.

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Response to truedelphi (Original post)

Sun Jun 24, 2012, 03:01 PM

3. And in addition to considering the scope of all the backstopping -

there is this to consider:

A chart of US federal debt levels:
http://www.usgovernmentspending.com/federal_debt_chart.html

As it shows, the Federal debt is 16.4 Tn dollars, about the same as GDP. But the important figure is debt HELD BY THE PUBLIC, because debt that the government owes itself just cancels itself out (think about how much of a financial burden debt.

The debt held bv US citizens stands at over 9 TRILLION dollars.

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Response to truedelphi (Original post)

Tue Jun 26, 2012, 10:55 AM

4. So we can expect a new Moody's rating?

Seems like moving their gambling arm to the bank would provide them more protection, and a higher rating, right?

I'm on the edge of my seat waiting for Moodys to give us the scoop...

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