what happens when criminal meets incompetent?

...a big fat meal is what happens:

...The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting..

What, objecting to be stuck holding the bag on $75 Trillion's worth of bad bets by the Big B.o'A.? The main$tream can't see what the fuss is all about...



So B.o'A. wraps more coils around you:

...This move reflects either criminal incompetence or abject corruption by the Fed. Even though I’ve expressed my doubts as to whether Dodd Frank resolutions will work, dumping derivatives into depositaries pretty much guarantees a Dodd Frank resolution will fail. Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. So this move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral. It’s well nigh impossible to have an orderly wind down in this scenario. You have a derivatives counterparty land grab and an abrupt insolvency. Lehman failed over a weekend after JP Morgan grabbed collateral.

But it’s even worse than that. During the savings & loan crisis, the FDIC did not have enough in deposit insurance receipts to pay for the Resolution Trust Corporation wind-down vehicle. It had to get more funding from Congress. This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors. No Congressman would dare vote against that. This move is Machiavellian, and just plain evil...

But seriously, this should not be seen as a deathwatch of the B.o'A. unless you mean watching while the Big Snake strangles the country while our government is being drowned in Grover Norquist's bathtub.

None of this is an accident, and if you think it is, you haven't been paying attention.

These aren't zombie banks falling apart as they stagger after you.

These are predators, big reptilian, and lethal if you let them wrap their coils around you.