So, the news is full of the foibles and follies of the drunken clown-car that is the Republican candidates to face President Obama in 2012. Bachman's a lunatic, Perry's as dumb as a stump, Cain may be dumber and Romney - the eventual candidate - is loathed by the base. So much drama, so much distraction.
Meanwhile, in Gotham City, Bank of America (playing the role of the evil mastermind) moved their depositor's accounts to the part of their bank that gambles in derivatives. Holy horse shit, Batman! This means a crime is happening!
Yes, a crime, and one that should be punished. And, the cops were on the beat. Part of our government, the FDIC (Federal Deposit Insurance Corporation) swooped in and said "stop!" They realized that this move by B of A put US taxpayers in a terrible position. Then, their good works were foiled by the evil villain's best friend - the rest of the US government.
The Fed told the FDIC to stand down. Told them to shut up, and let B of A move their depositor's money to the risky, casino side of their banking operations.
What does this mean? It means that if you are a B of A customer, YOUR money is now being used to gamble in the derivatives market. What this means for B of A is that they have lots more money to gamble with, and to cover losses with. You see, they get to gamble way, way more than they have on deposit. This is also part of the reason why banks are not loaning out all that money they got from the Fed in the first place - our money - which was what they were supposed to do. Loaning money to you at usurious rates still pays less than if they score gambling on derivatives. In this way, your money is used as leverage for huge bets that pay huge bonuses for the gamblers.
Now, if they don't score while gambling, well, they get to go to the government's Federal Insurance Deposit Corporation and say "shit - we lost all of those depositor's money." Then, the FDIC, backed up by OUR TAX DOLLARS, replaces the lost money - depositor's money. Then, B of A has leverage again and goes right back to the casino.
How fucking awesome would it be, if you could go to your local B of A branch and pull out other people's money? Wait, wait...then, go to the casino (I know of three near where I live) and gamble like a high roller? If you win, you keep all the winnings. But if you lose, go to the government and have them cover your losses, then gamble again. How fucking awesome? Or, how fucking stupid?
No, no, no...this is the stupidest thing I've ever heard of. Even if B of A employees are really, really good gamblers in the derivatives market, they are going to lose sometimes. The derivatives market is largely unregulated, and it's huge - easily in the tens of trillions of dollars. Being off by just a percent of trillions could wipe out billions of depositors' money.
So, check this: B of A, who pays you virtually NO INTEREST on your savings, is going to use YOUR MONEY to profit mightily in the short term, and then use YOUR TAX DOLLARS to cover their losses when they LOSE ALL OF YOUR MONEY. Wow.
But I'm sure Tim Geithner is on this. (Where is my snark font?)
