Topic: Open Government (242)

It’s STILL The Derivatives, Stupid


Stupid has arisen as the byword of banking. Last week I pointed out [Let’s Do Stupid All Over Again!] that banks were loosening their lending standards and taking on more risk, reminiscent of the years prior to the financial collapse of 2008. Almost a year ago, in a piece entitled It’s The Derivatives, Stupid!, I wrote that the Office of the Comptroller of the Currency [OCC] had reported that “insured U.S. commercial banks and savings associations had exposure to $192.2 trillion notional (face amount) of derivatives.” (Translation: Derivatives = Shit) With all that risk out there, most think their funds are protected by the Federal Deposit Insurance Corporation (FDIC). Not so. In an article for Wall Street on Parade on 27 December, Pam and Russ Martens write that eight years after the crash of 2008 the FDIC has $80.7 billion in its Deposit Insurance Fund. Sounds like a hefty amount but there are almost $7 trillion of “insured” deposits.

How did we get there? The Martens explain: “In 1999, Clinton signed the repeal of the Glass-Steagall Act which had kept the nation’s banking system safe for 66 years. This allowed Wall Street’s speculative trading activities in its investment banks and brokerage firms to merge with commercial banks holding insured deposits that are backstopped by the U.S. taxpayer. But Clinton did two other horrendous banking deeds: in 1994 Clinton signed into law the Riegle-Neal Interstate Banking and Branching Efficiency Act. This permitted bank holding companies to acquire banks anywhere in the nation and invalidated the laws of 36 states which had allowed interstate banking only on a reciprocal or regional basis. And, finally, Clinton signed into law the Commodity Futures Modernization Act of 2000, allowing trillions of dollars of OTC derivatives [AKA Shit] on Wall Street to escape regulation.”

Today, the Martens updated an article on derivatives they published last January in a piece entitled “Shhh! Don’t Tell this Bank Regulator We’ve Got a Derivatives Problem. The problem is that the total amount of notional derivatives on the books of these banks, more notably the U.S. banks ( Citigroup, JPMorgan Chase, Goldman Sachs Group, Bank of America and Morgan Stanley) now have $252 trillion in notional derivatives (AKA Shit) on the books. Clearly the OCC is failing in its regulatory duties and the FDIC cannot possibly respond to the deposit insurance demands of depositors.

But on a more day-to-day level, what can we do as consumers who need banking services? We can stop doing business with these banks. I closed my accounts with one of these giant banks last year and opened new accounts in a local credit union.

About Dick Conoboy

Citizen Journalist and Editor • Member since Jan 26, 2008

To comment, Log In or Register

It’s STILL The Derivatives, Stupid

By Dick ConoboyOn Dec 28, 2016

Stupid has arisen as the byword of banking. Last week I pointed out [Let’s Do Stupid All Over Again!] that banks were loosening their lending standards and taking on [...]

Assassins, Fake News, and Asymmetric War

By David CampOn Dec 20, 2016

The man who assassinated the Russian ambassador to Turkey was a twenty-two year-old policemen who had lost his job in the riot police in a purge of political enemies in [...]

Amendment to Planning Commission Ordinance Passes Unanimously

By Dick ConoboyOn Dec 05, 2016

A month ago I wrote that there were changes in the offing with the composition of the Planning Commission to avoid possible group bias. [My original article can be found [...]

2 comments, most recent 3 years ago

The Great Deceleration

By Dick ConoboyOn Dec 04, 2016

That is the title of Alex Jensen’s article in Counterpunch on December 2nd. He first posits that we are now deeply into the “Great Acceleration” with respect to the [...]

PDC Staff Suggests Gentle Wrist Pat for Campaign Violations

By John ServaisOn Dec 03, 2016

Washington state’s Public Disclosure Commission staff has completed a year-long investigation into how Whatcom County’s three top elected officials ran the campaign for last year’s jail bond. [...]

6 comments, most recent 3 years ago

A Brief Primer on Neoliberalsim

By Dick ConoboyOn Nov 16, 2016

The name Friederich* Hayek is not a household name, bandied about during dinner conversation, but it ought to be for we are seeing with the present election the very manifestation [...]

5 comments, most recent 3 years ago

Changes May Be In Store For The City Planning Commission

By Dick ConoboyOn Nov 07, 2016

Update Sun afternoon, Nov 13: We have added a link below Dick’s article to a 4 page pdf by the Responsible Development organization that provides an action plan on the issue [...]

4 comments, most recent 3 years ago

The “Smoking Gun” to Provide Amnesty for Illegal Housing Units

By Anne MackieOn Nov 04, 2016

On October 24, our City Council voted 5 to 2 (with Terry Bornemann and Gene Knutson opposed) to accept Policy H-18 of the Comprehensive Plan. Policy H-18 is a mere 47-word statement playing [...]

2 comments, most recent 3 years ago

Surly Citizens Object to Backroom Deals

By Anne MackieOn Oct 19, 2016

Anne Mackie guest writes about the Monday, Oct 17, Bellingham City Council meeting. She is a community leader who lives in the York neighborhood. What does it look like when a [...]

3 comments, most recent 4 years ago

Whatcom Chief Ferry: Urgent Questions

By John ServaisOn Sep 30, 2016

The Whatcom Chief went back into service last night, connecting Lummi Island to the rest of Whatcom County. It just came out of a three week yearly maintenance and had [...]

22 comments, most recent 4 years ago

MNAC Paddy Whack Give the Dog a Bone

By Dick ConoboyOn Sep 12, 2016

Guest writer Anne Mackie lives in the York Neibhborhood and is a community leader on residential planning processes. She has organized the Sep 14 community forum. Oddly, the month of August [...]

1 comment, most recent 4 years ago

A Big “Never Mind”

By Anne MackieOn Aug 31, 2016

Anne Mackie guest writes. Anne has lived in the York neighborhood for many years and is a community leader on issues of neighborhood planning. Saturday Night Live’s Roseanne Roseanna [...]

5 comments, most recent 4 years ago

Chapter 2:  Playing the race card

By Dick ConoboyOn Aug 23, 2016

After the “Shout Down” by Council President Pinky Vargas on August 8, Anne Mackie and Dick Conoboy received the following email from Council Member April Barker, author of the [...]

7 comments, most recent 4 years ago

Options High School: Great idea, wrong site

By Guest WriterOn Jun 06, 2016

Tim Paxton guest writes. Tim's testimony and evidence caused the Hearing Examiner to deny permits for Options HS last week. Tim knows of what he writes. We are all [...]

5 comments, most recent 4 years ago

Greenways may reverse heron colony buffer purchase this evening

By John ServaisOn Jun 03, 2016

Updated late night, June 2 I went to the Greenways Advisory Committee meeting at 7 pm this evening, based on the agenda posted online at the city website. That agenda now displays [...]

10 comments, most recent 4 years ago

Proposed over-water walkway is dead

By John ServaisOn May 21, 2016

It can now be reliably reported that the long planned over-water walkway, running from the north end of Boulevard Park to the Cornwall Avenue landfill, has been cancelled by the [...]

11 comments, most recent 4 years ago

Missing Options High School traffic study

By Guest WriterOn May 17, 2016

Patrick McKee, a leader in the Sunnyland Neighborhood, guest writes. Bellingham School District did not accurately answer questions contained in the Environmental Checklist submitted as part of their application to [...]

2 comments, most recent 4 years ago

Don’t speak at tonight’s Districting Committee hearing

By Ralph SchwartzOn Apr 13, 2016

Let me start by saying I'm a big fan of public participation in politics. It's at the foundation of how government is supposed to work. And it does [...]

3 comments, most recent 4 years ago

Bellingham Planning tries to sneak one through

By John ServaisOn Apr 11, 2016

Eleven days - 11 days - for the public to comment on a huge neighborhood impacting building project. March 28 to April 11 - with 4 days being weekends. The Sunnyland folks are only [...]

11 comments, most recent 4 years ago

Voting guide for Whatcom Conservation District

By John ServaisOn Mar 16, 2016

NWCitizen is maintained by the generous donations of readers like you. Please support citizen journalism by donating $15, $45 or more: click here. Donations maintain and improve this site as a forum [...]