Cooking the Books: U.S. Banks are Giant Casinos
by Michael Edward
While media financial reporters keep the current focus of the public eye on
Martha Stewart, the insolvency of U.S. banks due to their derivative
holdings is being swept under the carpet.
Because banks have not been making a profit from traditional lending,
derivatives became a fantastic way for them to net huge gains by trying to
guess (gamble on) future prices of commodities or stocks. They were able to
take these gambling risks because the Fed is supposed to back them from
losses that would make them insolvent (more liabilities than assets). The
worst part is that derivative transactions stay off the books and away from
the prying eyes of investors and analysts.
U.S. interest rates being kept low by the Federal Reserve System (which is
neither Federal nor does it have any intrinsic reserves) is to simply hide
the hundreds of $Billions (0 Billion U.S. Dollars = 0,000,000,000) of
derivative losses and the true insolvency of U.S. banks. The moment interest
rates start to run up, U.S. banks will be left holding little paper value
assets to offset their vast derivative gambling losses.
U.S. stock markets are being manipulated to show overall value gains and
"profits" is to keep U.S. banks "paper solvent". In reality, the public is
being conned into thinking that U.S. banks are still solvent because they
show "gains" in their stock "paper" value. If the U.S. markets were not
manipulated, U.S. banks would collapse overnight along with the entire U.S.
U.S. banks are merging with each other to hide their derivative losses with
"paper asset" bookeeping that incorrectly shows they are solvent with enough
"assets" to overcome their losses. In reality, this is smoke and mirror
accounting, a scam worth $Trillions.
U.S. banks _ with the privately owned Federal Reserve System at the helm _
have turned into giant casinos by running a Casino Economy that is
splintering into vast piles of insolvent firewood. The kindling was lit in
the early 1990's, but now a bonfire is raging with great plumes of red_ink
smoke. Can the Fed and the Fed_controlled media keep the public from seeing
that red smoke with their manipulative mirrors? If the public would just
open their eyes and wake up, they would see what's really going on, so
here's something to focus your eyes on:
The top 25 U.S. banks with the largest derivatives holdings (estimate based
on OCC Q3_2003 report and updated from news releases since 10/03). Remember,
Billion U.S. Dollars = ,000,000,000.
RANK _ BANK NAME _ DERIVATIVES (in $US BILLIONS)
1 _ JPMORGAN CHASE BANK _ 33,700 ( Trillion, 700 Billion)
2 _ BANK OF AMERICA _ 13,800
3 _ CITIGROUP _ 11,000
4 _ WACHOVIA CORPORATION _ 2,457
5 _ BANK ONE CORPORATION _ 1,133
6 _ HSBC _ 1,043
7 _ WELLS FARGO BANK NA _ 911 (1 Billion)
8 _ FLEET BOSTON _ 494
9 _ BANK OF NEW YORK _ 496
10 _ COUNTRY WIDE FINANCIAL _ 410
11 _ STATE STREET _ 320
12 _ TAUNUS _ 307
13 _ NATIONAL CITY _ 203
14 _ ABN AMRO _ 188
15 _ MELLON _ 153
16 _ KEYCORP _ 98 ( Billion)
17 _ SUNTRUST _ 82
18 _ FIRST TENNESSEE BANK NA _ 58
19 _ U S BAN CORP _ 54
20 _ PNC BANK NATIONAL ASSN _ 45
21 _ DORAL _ 31
22 _ NORTHERN TRUST _ 25
23 _ CIBC DELAWARE _ 25
24 _ METLIFE _ 22
25 _ UTRECHT_AMERICA _ 20
If you want to get a hint at how much red ink your U.S. bank casino is
swimming in, look at their latest financial report and keep an eye out for
an entry such as, "adjustment of derivative financial instruments" or
"adjustment of non_interest instruments". If they list such an "adjustment"
(most do not), this means they have written off the losses incurred from
their derivative gambling.
If you bank with one of the 25 banks listed above, you can expect worse than
the 1986_1990 Savings & Loan bank collapses when people were unable to
remove all or most of their money from their accounts until years later.
This time, you can expect to loose whatever they claim to "hold" for you
because the FDIC and the "Fed" have no means to replace the losses with any
If you choose to keep accounts with these U.S. banks, you have just become a
high_stakes gambler, and the odds are stacked against you.