OCC: top banks have 4 trillion in assets, 160 trillion in derivatives

[NKYKev]

According to the latest report from the Office of the Comptroller of the Currency, 3 top banks - Chase, BOA, and Citi - have a little over 4 trillion in assets - the value of which keeps declining - while they face a potential credit exposure of over 160 trillion in derivatives. Chase is facing a credit exposure to capital ratio of 400.2 to 1, BOA is at 177.6 to 1, and Citi is at 259.5 to 1. And that is for just 3 banks. Here is a link to the report with the numbers for the top 25 banks and an article discussing the situation. Too bad no one listened to Warren Buffett about derivatives. Facing losses at this level, I don't see what another "bailout" is going to accomplish, as the evidence keeps mounting about how badly the first one was handled.

[Shaze]

i've been saying it over and over. just let them fail. no amount of bailouts will save them because of the huge leverage they used when compared to the actual amount of cash/capital they have. and stay way from their stock, something i've also been saying for awhile when i see people saying it's time to buy now because they are so low and can't go any lower. yes, it is true the stock can't go any lower, but the companies can still go bankrupt and you will lose all your investment. until we actually see the stimulus packages propping up the economy and showing signs that they will actually help our economy i would stay away from financial stocks!

the only thing that can save these banks now is if the economy stops going down and gets better, and i don't see that happening anytime soon. not until maybe around the end of this year anyway, but most likely for another two to three years.

[Agent 488]

take a look at this chart to put it in perspective:

http://globalguerrillas.typepad.com/...-presiden.html

throwing money at the banks is a futile task.

[Shaze]

one other thing to worry about is if the government can't help these banks or the economy doesn't get better and these banks announce bankruptcy you'll know we are in really deep shit. the government is doing all it can right now to make these large banks not announce bankruptcy because there is not enough printed money to pay customers who have checkings and savings accounts in these large banks. and when customers realize they might not be able to get their cash out of their bank accounts "WATCH OUT THE SKY IS FALLING!!" mentality is going to take over and the real shit is going to start going down!

[nation-x]

Thank Bush for increasing the leverage limit soon after he entered office. The derivatives market is valued at $513 Trillion... while our GDP is somewhere around $13 Trillion... you do the math.

[KillerK]

yeah blame bush, cause one man was totally responsible for all this shit.

I blame the same fuckers who force me to wear a seat belt when I drive, or tell me I can't beat my kid if I want to.

[collegeboobies]

thats some crazy numbers

[spunkmaster]

I read the entire Gov't report and it says that derivatives are less risky then loans and pose less risk to the Banks ?

I looks like a never ending hedge against losses that gets sold over and over again so that $1 ends up with $10 in insurance to cover any losses ?

I still don't get how much exposure the Banks actually have ?

Is their exposure on the $1 or the $10 ?

[czarina]

Its not one man, its the green and lazyness of all men.

And I dont mean just men, women as well.

[Joshua G]

it's really sad that NASA stopped the apollo program in 1974. Rocket scientists moved on to wall street to create such complicated financial instruments, nobody has a clue how much exposure the banks really have. That's why banks are hoarding TARP cash instead of lending it. The economy will be resiliant but nobody can predict when the pain will end.

Meanwhile, man has not left earths orbit in 35 years, & good old Bush created a 5 year gap between when the space shuttle is mothballed & when NASA can next send a man into space. its unbelievable that the USA, which put a fucking man on the moon, won't be able to put a man into space for 5 years.

Very sad.

[NKYKev]

Originally Posted by spunkmaster

I read the entire Gov't report and it says that derivatives are less risky then loans and pose less risk to the Banks ?

I looks like a never ending hedge against losses that gets sold over and over again so that $1 ends up with $10 in insurance to cover any losses ?

I still don't get how much exposure the Banks actually have ?

Is their exposure on the $1 or the $10 ?

I think that is a major part of the uncertainty involved. No one, it seems, is able to calculate how secure or insecure some of these derivative bets are, nor the actual amount of assets involved, etc. With so much uncertainty, the banks are reluctant to make loans and part with whatever money they have, because whatever "bailout" funds they might be given pale compared to the amount of their potential exposure. Thing is, as all these institutions are making bets against themselves, one going down could take down several others.