tyb
fuck with yer facecum links.
Citibank Has Sold Protection on $858 Billion of Credit Default Swaps
According to the latest derivatives report from the Office of the Comptroller of the Currency (OCC), Citibank, the federally-insured, taxpayer-backstopped bank owned by Citigroup, has sold protection to other banks, hedge funds, insurance companies or corporations on a staggering $858 billion of Credit Default Swaps. When a federally-insured bank sells protection to others on Credit Default Swaps, it is effectively taking on the risk of a default event. At a time of unprecedented levels of debt in the system and growing warnings about leveraged loans, that seems like a very unwise move by Citigroup.
The OCC notes that Citibank has bought protection via a larger amount of Credit Default Swaps – a total of $898.8 billion. (See Table 12 in the Appendix of the report.) There is no guarantee, however, that these bets are properly aligned and will not, once again, blow up this bank along with a chunk of Wall Street firms or insurance companies that may be its counter-parties. Credit Default Swaps played a central role in the 2008 financial collapse on Wall Street, as did Citigroup. It is an indictment of every federal banking regulator in the United States, as well as Congress, that Citigroup has been allowed to return as a major player in this market while using its federally-insured Citibank once again as a pawn in this game.
Adding to the outrage, it was Citigroup that was responsible for overturning the portion of the Dodd-Frank financial reform legislation of 2010 that would have pushed these derivatives out of federally-insured banks. It may also help to explain why the New York Fed continues to fling hundreds of billions of dollars each week at the trading houses on Wall Street while the Federal Reserve Chairman, Jerome Powell, insists that everything is just fine on Wall Street.
The official report from the Financial Crisis Inquiry Commission, following an in-depth investigation of the 2008 collapse, wrote this about Credit Default Swaps:“OTC derivatives contributed to the crisis in three significant ways. First, one type of derivative—credit default swaps (CDS)—fueled the mortgage securitization pipeline. CDS were sold to investors to protect against the default or decline in value of mortgage-related securities backed by risky loans…
Citigroup’s derivatives exposures rendered it a financial basket case during 2008. Not only did Citigroup receive $45 billion in equity infusions from the Troubled Asset Relief Program (TARP) approved by Congress and announced publicly but it went hat in hand and received a bailout from the same federal regulators who had allowed this house of cards to engage in absurd levels of risk. The government guaranteed over $300 billion of its dodgy assets; the Federal Deposit Insurance Corporation guaranteed $5.75 billion of its senior unsecured debt and $26 billion of its commercial paper and interbank deposits. And the New York Fed secretly hid from the public’s view that it had funneled $2.5 trillion (yes, trillion) to Citigroup and its trading units from December 2007 to at least July 21, 2010. That last information only became public after more than two years of court battles with the Fed.
There are more than 5,000 federally-insured banks and savings associations in the U.S. The Federal Deposit Insurance Corporation’s Deposit Insurance Fund had $104.9 Billion in its Deposit Insurance Fund to cover all of those banks’ insured deposits as of the end of the first quarter of 2019.
That means that no bank should be making risky gambles to the tune of more than three-quarters of a trillion dollars.
The OCC report also shows that the federally-insured banking unit of JPMorgan Chase is also a big player in the Credit Default Swap market, having bought $612.2 billion and sold $597 billion of Credit Default Swaps.
rest a tlink
https://wallstreetonparade.com/2020/01/the-doomsday-machine-returns-citibank-has-sold-protection-on-858-billion-of-credit-default-swaps/
linky to OCC report.
cap #2 from page 36
https://www.occ.treas.gov/publications-and-resources/publications/quarterly-report-on-bank-trading-and-derivatives-activities/files/q3-2019-derivatives-quarterly.html
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o7
Army Eurocopters out of Fairchild AB-Spokane, both are looking for something it appears
hope that "discussion" goes away soon. Already tired of it.