Official ATP&N Bank of America & Citigroup Deathwatch

[LegendKiller]

Originally posted by: SagaLore

Originally posted by: Skoorb

Originally posted by: sactoking
Hmmm.....

I have no accounts at BofA or any major bank, except a credit card with BofA that has a high balance. If BofA goes under, I may be able to benefit with my cc balance.......

You wish! I'm sure they'll sell that account to somebody. My primary CC is also with BoA.

I have a BoA credit card as well. What happens to the debt on my card if BoA goes under? Does Visa sell off my account to another bank?

Visa is merely the network. Your BoA card is owned by BoA, the balance is most likely included in a securitization, sold to investors as bonds. Somebody will buy your card and the millions of others, making money off of them.

 

[PokerGuy]

If it wasn't for the fact that people who don't know any better get duped by the conspiratorial BS spewed forth by folks like dissipate, it would be funny. If you're going to have a real discussion about a real issue, perhaps you should consider educating yourself instead of using youtube and conspiracy sites that see all bankers as "criminals" to guide you.

OP, I would not be surprised to see BoA get in much worse shape, but the fed will do anything needed - including waving the magic 'trillion dollar creation' wand to make sure they don't go under. What that means in the long run is big-time inflation, and punishment to those who save.

 

[TallBill]

http://www.bloomberg.com/apps/...83m46r6Up3s&refer=home $400m from citi to the Mets.

 

[jman19]

Originally posted by: TallBill
http://www.bloomberg.com/apps/...83m46r6Up3s&refer=home $400m from citi to the Mets.

This was announced years ago. The question is will the pact be broken?

 

[The-Noid]

No they already announced they would not try to break the contract.

 

[Dissipate]

Bank of America down another 9% today!

Text

At what point is the government going to intervene?

 

[jman19]

Originally posted by: Dissipate
Bank of America down another 9% today!

Text

At what point is the government going to intervene?

At what point are you going to stop making a fool of yourself?

 

[Dissipate]

Originally posted by: jman19

At what point are you going to stop making a fool of yourself?

Did you go long BAC? If so, that explains your attitude.

 

[jman19]

Originally posted by: Dissipate

Originally posted by: jman19

At what point are you going to stop making a fool of yourself?

Did you go long BAC? If so, that explains your attitude.

No, I didn't. Wrong as usual.

 

[Dissipate]

Gold prices could hit $1,500, fears Merrill Lynch CIO
Gold prices may hit $1,500 (Dh5,509) an ounce in the next 12 to 15 months, Gary Dugan, the Chief Investment Officer (CIO) of Merrill Lynch, said yesterday.

Dugan termed his apprehensions of gold striking such a high as a "fear" that may come true. He reasoned that such a price would mean the other commodities and streams of investments have been shunned by investors.

With confidence in currencies shaken to the core, the yellow metal is increasingly assuming the role of "the most trusted currency", Dugan said. "We have never seen such a rush to buy gold. It's bringing in security and it's still affordable."

Merrill Lynch commodity price forecast authored by Dugan showed that gold prices can rise from the currently prevailing $913/oz to $1,100/oz in the first quarter of 2009 and to $1,150/oz in the second quarter. "While demand for gold has been rising production has been declining. South Africa, which accounts for the major share of global gold production, is facing political issues and has energy problems," Dugan said.

With reports of declining returns from other investment options, "cash" ? keeping money safe in banks and investing in government bonds ? is the option in front of investors, Dugan said.

"Fear" and eventual decline of the greenback are the two factors that will drive gold prices, he said. While commodity markets could also bounce back in the first half of the year, a rebound is likely to be short-lived in the absence of strong US consumer demand...

Text

 

[GTKeeper]

Originally posted by: Dissipate

Gold prices could hit $1,500, fears Merrill Lynch CIO
Gold prices may hit $1,500 (Dh5,509) an ounce in the next 12 to 15 months, Gary Dugan, the Chief Investment Officer (CIO) of Merrill Lynch, said yesterday.

Dugan termed his apprehensions of gold striking such a high as a "fear" that may come true. He reasoned that such a price would mean the other commodities and streams of investments have been shunned by investors.

With confidence in currencies shaken to the core, the yellow metal is increasingly assuming the role of "the most trusted currency", Dugan said. "We have never seen such a rush to buy gold. It's bringing in security and it's still affordable."

Merrill Lynch commodity price forecast authored by Dugan showed that gold prices can rise from the currently prevailing $913/oz to $1,100/oz in the first quarter of 2009 and to $1,150/oz in the second quarter. "While demand for gold has been rising production has been declining. South Africa, which accounts for the major share of global gold production, is facing political issues and has energy problems," Dugan said.

With reports of declining returns from other investment options, "cash" ? keeping money safe in banks and investing in government bonds ? is the option in front of investors, Dugan said.

"Fear" and eventual decline of the greenback are the two factors that will drive gold prices, he said. While commodity markets could also bounce back in the first half of the year, a rebound is likely to be short-lived in the absence of strong US consumer demand...

Text

No, commodities will fall 10-20% across the board.

 

[JS80]

Originally posted by: GTKeeper

Originally posted by: Dissipate

Gold prices could hit $1,500, fears Merrill Lynch CIO
Gold prices may hit $1,500 (Dh5,509) an ounce in the next 12 to 15 months, Gary Dugan, the Chief Investment Officer (CIO) of Merrill Lynch, said yesterday.

Dugan termed his apprehensions of gold striking such a high as a "fear" that may come true. He reasoned that such a price would mean the other commodities and streams of investments have been shunned by investors.

With confidence in currencies shaken to the core, the yellow metal is increasingly assuming the role of "the most trusted currency", Dugan said. "We have never seen such a rush to buy gold. It's bringing in security and it's still affordable."

Merrill Lynch commodity price forecast authored by Dugan showed that gold prices can rise from the currently prevailing $913/oz to $1,100/oz in the first quarter of 2009 and to $1,150/oz in the second quarter. "While demand for gold has been rising production has been declining. South Africa, which accounts for the major share of global gold production, is facing political issues and has energy problems," Dugan said.

With reports of declining returns from other investment options, "cash" ? keeping money safe in banks and investing in government bonds ? is the option in front of investors, Dugan said.

"Fear" and eventual decline of the greenback are the two factors that will drive gold prices, he said. While commodity markets could also bounce back in the first half of the year, a rebound is likely to be short-lived in the absence of strong US consumer demand...

Text

No, commodities will fall 10-20% across the board.

Yup, worthless shiny metals should fall. I'll be loading up on DZZ when gold pops up on fear buying.

 

[LegendKiller]

Originally posted by: JS80

Originally posted by: GTKeeper

Originally posted by: Dissipate

Gold prices could hit $1,500, fears Merrill Lynch CIO
Gold prices may hit $1,500 (Dh5,509) an ounce in the next 12 to 15 months, Gary Dugan, the Chief Investment Officer (CIO) of Merrill Lynch, said yesterday.

Dugan termed his apprehensions of gold striking such a high as a "fear" that may come true. He reasoned that such a price would mean the other commodities and streams of investments have been shunned by investors.

With confidence in currencies shaken to the core, the yellow metal is increasingly assuming the role of "the most trusted currency", Dugan said. "We have never seen such a rush to buy gold. It's bringing in security and it's still affordable."

Merrill Lynch commodity price forecast authored by Dugan showed that gold prices can rise from the currently prevailing $913/oz to $1,100/oz in the first quarter of 2009 and to $1,150/oz in the second quarter. "While demand for gold has been rising production has been declining. South Africa, which accounts for the major share of global gold production, is facing political issues and has energy problems," Dugan said.

With reports of declining returns from other investment options, "cash" ? keeping money safe in banks and investing in government bonds ? is the option in front of investors, Dugan said.

"Fear" and eventual decline of the greenback are the two factors that will drive gold prices, he said. While commodity markets could also bounce back in the first half of the year, a rebound is likely to be short-lived in the absence of strong US consumer demand...

Text

No, commodities will fall 10-20% across the board.

Yup, worthless shiny metals should fall. I'll be loading up on DZZ when gold pops up on fear buying.

Same here. Much stronger case for deflation than inflation. Funny, Dissipate can't even see the inherent conflict that the banks *STILL* have when they release this info.

 

[JS80]

Originally posted by: LegendKiller

Originally posted by: JS80

Yup, worthless shiny metals should fall. I'll be loading up on DZZ when gold pops up on fear buying.

Same here. Much stronger case for deflation than inflation. Funny, Dissipate can't even see the inherent conflict that the banks *STILL* have when they release this info.

I totally agree on deflation. I mean, I would not be surprised if there was some rush to buy gold that pushed it into the 1k's on fear that govt borrowing would cause inflation, but I'm pretty convinced right now that deflation is what will likely occur. I wouldn't mind holding a gold short at 1k even through some pain to 1.5k.

heh, reminds me of that Goldman analyst that "forecasted" $200 oil.

 

[GTKeeper]

Originally posted by: JS80

Originally posted by: LegendKiller

Originally posted by: JS80

Yup, worthless shiny metals should fall. I'll be loading up on DZZ when gold pops up on fear buying.

Same here. Much stronger case for deflation than inflation. Funny, Dissipate can't even see the inherent conflict that the banks *STILL* have when they release this info.

I totally agree on deflation. I mean, I would not be surprised if there was some rush to buy gold that pushed it into the 1k's on fear that govt borrowing would cause inflation, but I'm pretty convinced right now that deflation is what will likely occur. I wouldn't mind holding a gold short at 1k even through some pain to 1.5k.

heh, reminds me of that Goldman analyst that "forecasted" $200 oil.

The question will be, how fast the general flight from commodities occurs. If Gold starts skyrocketing H1 of this year, H2 will be ugly and 2009 will be uglier still when it comes crashing down.

 

[child of wonder]

Originally posted by: Yoxxy

Originally posted by: GTKeeper

Originally posted by: Yoxxy

Originally posted by: GTKeeper

Originally posted by: Yoxxy

Originally posted by: child of wonder
"Too big to fail" is a load of shit.

Let's say Citigroup or BoA fails. What happens then? Other banks buy up their assets for cheap, employees lose their jobs, other entrepreneurs start new businesses to target the new customer/job market vacuum left from the big bank's collapse, new business hires employees, etc.

Read what counterparty risk is and you will understand what too big to fail means.

Right on. This is what Dissipate and all other financial expert wannabies don't understand. I don't expect the average person to get it, but once you do you realize why the gov't had to pump 140 billion into AIG itself.

This is also the reason why the failure of Long Term Capital Management back in 1998, who lost "only" 4.6 billion was SOOOOOOOOOOOOOOO huge. It affected the market in a significant way. Know the answer to that, and you know the answer to today's calamity.

LTCM had over a trillion dollars of derivatives exposure.

The sad part about AIG is most of the money is just sitting in cash in that they need to hold a certain amount of collateral to stop the triggering event on the majority of their CDS's.

With the implosion of Fannie, Freddie and Lehman the CDS market actually provided the support it should have. Lehman only came out to 3.6B even though in the great world of the internet there was $500B that was going to come through. There are strains in the market and I won't try to sugar coat that, but I don't believe the government will let another financial institution fail that has large systemic implications.

I think part of the solution here is to find out who are the big players in the derivative market and to reduce their positions. This is the only way we are going to reduce the 500+ trillion dollar derivative market. Now, the flip-side of that is that some institutions will be against that especially if they feel like someone out there is about to fail, and they are about to get paid.

This is a fairly misleading statistic as this is based off two things I will try to explain here.

1.) The value of a derivative is based off the underlying security. We will use a plain vanilla interest rate swap here as this is the most common type of privately traded derivative and banks use these all the time. I will be swapping my floating rate loan from JPMORGAN which is based on 5 years of semi-annual payments of 1 month LIBOR + 100bp for an interest rate swap of 6.5% fixed for 5 years to CITI GLOBAL Markets on a notional value loan of $10,000,000. One would think that the derivatives position would be based on the interest rate of the loan or the interest rate of the swap. Say the difference is 150bp * 10,000,000 for the first payment or $150,000. In actuality when they give these figures out they are taking the loan amount of $10,000,000 and multiplying it by 10 payments equaling a derivatives notional value of $100,000,000. This is for a single transaction, which in itself is 10 transactions. Now take CITI GLOBAL they will also buy an interest rate swap hedging themselves against rates going above 6.5% from another counterparty who buys hedges from another counterparty and so on and so forth creating a significant amount of notional value that in all actuality works out to fractions of pennies on the dollar as even the first contract started out with a spread of only 150bp.

2.) After a year goes by interest rates have come down significantly on LIBOR and I want to get out of the contract. Logic would say I would simply give CITI money and they would forgo the contract. Not the case. I have to write a derivative contract that is the opposite of my first contract saying that CITI Group will pay me LIBOR + 100 bp for the remaining number of payments (8), this then creates another 80,000,000 of notional value in the derivatives sphere. CITI then does the same with counterparties thus crossing their hedges and again almost doubling the fictional notional value that is outstanding.

Forwards and swaps are not like futures, the market is very complex and can be significantly overinflated because it is private. There are literally Trillions of dollars of currency swaps that have been canceled years ago in Europe on currencies that no longer exist...

I hate to sound like a Ron Paul bot, but isn't this just using the same methods that created this mess to fix it? Aren't we just making things easier to bear now by making it harder in the future? Doesn't that reflect a massive failure on our part and we should be looking at fixing the problems that created this mess instead of addressing the symptoms?

 

[Double Trouble]

Originally posted by: child of wonder

Originally posted by: Yoxxy

Originally posted by: GTKeeper

Originally posted by: Yoxxy

Originally posted by: GTKeeper

Originally posted by: Yoxxy

Originally posted by: child of wonder
"Too big to fail" is a load of shit.

Let's say Citigroup or BoA fails. What happens then? Other banks buy up their assets for cheap, employees lose their jobs, other entrepreneurs start new businesses to target the new customer/job market vacuum left from the big bank's collapse, new business hires employees, etc.

Read what counterparty risk is and you will understand what too big to fail means.

Right on. This is what Dissipate and all other financial expert wannabies don't understand. I don't expect the average person to get it, but once you do you realize why the gov't had to pump 140 billion into AIG itself.

This is also the reason why the failure of Long Term Capital Management back in 1998, who lost "only" 4.6 billion was SOOOOOOOOOOOOOOO huge. It affected the market in a significant way. Know the answer to that, and you know the answer to today's calamity.

LTCM had over a trillion dollars of derivatives exposure.

The sad part about AIG is most of the money is just sitting in cash in that they need to hold a certain amount of collateral to stop the triggering event on the majority of their CDS's.

With the implosion of Fannie, Freddie and Lehman the CDS market actually provided the support it should have. Lehman only came out to 3.6B even though in the great world of the internet there was $500B that was going to come through. There are strains in the market and I won't try to sugar coat that, but I don't believe the government will let another financial institution fail that has large systemic implications.

I think part of the solution here is to find out who are the big players in the derivative market and to reduce their positions. This is the only way we are going to reduce the 500+ trillion dollar derivative market. Now, the flip-side of that is that some institutions will be against that especially if they feel like someone out there is about to fail, and they are about to get paid.

This is a fairly misleading statistic as this is based off two things I will try to explain here.

1.) The value of a derivative is based off the underlying security. We will use a plain vanilla interest rate swap here as this is the most common type of privately traded derivative and banks use these all the time. I will be swapping my floating rate loan from JPMORGAN which is based on 5 years of semi-annual payments of 1 month LIBOR + 100bp for an interest rate swap of 6.5% fixed for 5 years to CITI GLOBAL Markets on a notional value loan of $10,000,000. One would think that the derivatives position would be based on the interest rate of the loan or the interest rate of the swap. Say the difference is 150bp * 10,000,000 for the first payment or $150,000. In actuality when they give these figures out they are taking the loan amount of $10,000,000 and multiplying it by 10 payments equaling a derivatives notional value of $100,000,000. This is for a single transaction, which in itself is 10 transactions. Now take CITI GLOBAL they will also buy an interest rate swap hedging themselves against rates going above 6.5% from another counterparty who buys hedges from another counterparty and so on and so forth creating a significant amount of notional value that in all actuality works out to fractions of pennies on the dollar as even the first contract started out with a spread of only 150bp.

2.) After a year goes by interest rates have come down significantly on LIBOR and I want to get out of the contract. Logic would say I would simply give CITI money and they would forgo the contract. Not the case. I have to write a derivative contract that is the opposite of my first contract saying that CITI Group will pay me LIBOR + 100 bp for the remaining number of payments (8), this then creates another 80,000,000 of notional value in the derivatives sphere. CITI then does the same with counterparties thus crossing their hedges and again almost doubling the fictional notional value that is outstanding.

Forwards and swaps are not like futures, the market is very complex and can be significantly overinflated because it is private. There are literally Trillions of dollars of currency swaps that have been canceled years ago in Europe on currencies that no longer exist...

I hate to sound like a Ron Paul bot, but isn't this just using the same methods that created this mess to fix it? Aren't we just making things easier to bear now by making it harder in the future? Doesn't that reflect a massive failure on our part and we should be looking at fixing the problems that created this mess instead of addressing the symptoms?

That's not being a Ron Paul bot, I think your post makes sense. The harder question is, how do you unwind the mess that has been growing and festering without brining down the US economy in the process?

 

[Paraguay11]

I for one believe the swaps and forwards market is fairly well regulated by market participants. I have never heard of a defaulted contract. There is simply no way to provide the customization that is needed on exchange trade futures markets.

 

[LegendKiller]

Originally posted by: Paraguay11
I for one believe the swaps and forwards market is fairly well regulated by market participants. I have never heard of a defaulted contract. There is simply no way to provide the customization that is needed on exchange trade futures markets.

You haven't? Either you're not participating in the market a lot, or you need to clean your ears out and buy new glasses.

 

[JS80]

Originally posted by: GTKeeper

Originally posted by: JS80

Originally posted by: LegendKiller

Originally posted by: JS80

Yup, worthless shiny metals should fall. I'll be loading up on DZZ when gold pops up on fear buying.

Same here. Much stronger case for deflation than inflation. Funny, Dissipate can't even see the inherent conflict that the banks *STILL* have when they release this info.

I totally agree on deflation. I mean, I would not be surprised if there was some rush to buy gold that pushed it into the 1k's on fear that govt borrowing would cause inflation, but I'm pretty convinced right now that deflation is what will likely occur. I wouldn't mind holding a gold short at 1k even through some pain to 1.5k.

heh, reminds me of that Goldman analyst that "forecasted" $200 oil.

The question will be, how fast the general flight from commodities occurs. If Gold starts skyrocketing H1 of this year, H2 will be ugly and 2009 will be uglier still when it comes crashing down.

And DZZ will return 1000%.

 

[Paraguay11]

Lehman was the biggest failure of all time in the CDS market and there was still not a single failure.

 

[The-Noid]

Originally posted by: LegendKiller

Originally posted by: Paraguay11
I for one believe the swaps and forwards market is fairly well regulated by market participants. I have never heard of a defaulted contract. There is simply no way to provide the customization that is needed on exchange trade futures markets.

You haven't? Either you're not participating in the market a lot, or you need to clean your ears out and buy new glasses.

I have to agree with you, although you will have to agree that the way the media portrays the SWAPS and Forward market you would think that 99/100 contracts were being defaulted on and there is a gigantic bubble of derivatives.

The good thing is you can sell CDS on the US 2 year for 3bp now. That is as close to a legal ponsy scheme as you are ever going to get.

 

[LegendKiller]

Originally posted by: Paraguay11
Lehman was the biggest failure of all time in the CDS market and there was still not a single failure.

So all swaps and forwards are CDS? Huh, didn't know that.

 

[LegendKiller]

Originally posted by: Yoxxy

Originally posted by: LegendKiller

Originally posted by: Paraguay11
I for one believe the swaps and forwards market is fairly well regulated by market participants. I have never heard of a defaulted contract. There is simply no way to provide the customization that is needed on exchange trade futures markets.

You haven't? Either you're not participating in the market a lot, or you need to clean your ears out and buy new glasses.

I have to agree with you, although you will have to agree that the way the media portrays the SWAPS and Forward market you would think that 99/100 contracts were being defaulted on and there is a gigantic bubble of derivatives.

The good thing is you can sell CDS on the US 2 year for 3bp now. That is as close to a legal ponsy scheme as you are ever going to get.

I've seen one default personally, on a IR swap. It's pretty rare, but not unheard of. Even the best DD on a counterpary can still result in problems.

I hope they start regulating CDS as insurance, it should have been done long ago.

 

[Dissipate]

BRIEF: Another LaSalle exec jumps ship at Bank of America
Tue. February 03, 2009; Posted: 06:44 PM

Feb 03, 2009 (Chicago Tribune - McClatchy-Tribune Information Services via COMTEX) David Rudis, a former longtime LaSalle Bank executive who became the public face in Illinois for new parent Bank of America Corp., has left the institution.

Rudis, who stayed on at BofA as Illinois president after its purchase of LaSalle in October 2007, joins a parade of former high-level LaSalle executives who stayed on in prominent roles in the combined company but who have left BofA abruptly in recent months.

Others include Mark Sander, head of commercial lending, and Mary Jo Herseth, market executive for its private-wealth-management arm.

A BofA spokeswoman couldn't immediately be reached for comment, including on whether the layoffs were timed to a less-generous severance package that took effect after Jan. 1.

Text

Execs are leaving BofA now. I guess the pastures are greener elsewhere, in an environment where there aren't really any green pastures. Folks, this is going to get ugly.