U.S. ... BANKRUPT AND BLUFFING? (viaGoogleGroups)

[EagleRock]

Hello Everyone :cheesy:
I am looking into opening US bank A/C (simple one)...
Reasons:

1. GBP vs USD relationship I presume will see GBP decline eventually
2. IF (1) holds any water THEN is now a reasonable time to move some GBP's to USD's?
3. I am probably not alone in experiencing hassel when attempting to make purchases from US merchants (the 9/11 incident has not helped...)
4. Given (3) and to alleviate the draconian rules for offshore customers - it would seem resonable to have US bank A/C so that paying is not an issue.[/list=1] Via google "international personal finance" searchString, I landed on Wachovia. (the fourth largest bank in US)
   Opening an a/c with them appears to be very simple and can be done over the phone - 'course probably helps that I'm US citizen and many decades ago resident
   Now, I then did quicky google groups search on "Wachovia" and was rather intrigued by the quoted post shown below. Is over my head but I did locate Wachovia's 4th qtr '03 published accounts http://www.wachovia.com/file/wb4Q03pr.pdf and did a search on "derivatives" which gave 20 hits. That tho is as far as I can decipher the stuff!!!
   I admit to being out of my depth totally here however it is topic I really do need feedback/ideas/comments/... on and perhaps others have contemplated similar ideas - if even in passing
   
   T2W is as usual, a delight to read and all you 'bright sparks' out there always make my surfing the site a pleasureable time.... (ah shucks )
   Regards
   Tim
   
   Link to following posting:
   http://groups.google.co.uk/groups?q...d&selm=I0HWb.12572$_44.17760@attbi_s52&rnum=3
   

   Search Result 3
   From: Szaki ([email protected])
   Subject: U.S. ... BANKRUPT AND BLUFFING?
   This is the only article in this thread
   View: Original Format
   Newsgroups: soc.culture.magyar
   Date: 2004-02-12 00:43:21 PST
   
   
   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
   nearly hundred $billion ($100 Billion U.S. Dollars = $100,000,000,000) 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. economy.
   
   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,
   $1
   Billion U.S. Dollars = $1,000,000,000.
   
   RANK - BANK NAME - DERIVATIVES (in $US BILLIONS)
   
   1 - JPMORGAN CHASE BANK - 33,700 ($33 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 ($911 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 ($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 lose whatever they claim to "hold" for you because the
   FDIC
   and the "Fed" have no means to replace the losses with any intrinsic value.
   
   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.

 

[BBB]

hmmm

I not a fx expert, but they say that markets turn when the a top or bottom is in the public domain. i.e. you see bulls on the cover of Business Week at the end of a rally - when everyone knows there is a bull market and already owns stock - inverse for the end of a bear market - the journalists are saying when will this end etc - by which time everyone has sold and the next rally is beginning. Events in the stock market over the last 5 years are the perfect example.

I see no reason why fx should be any different - and guess what we are seeing on the news every day!

 

[sidinuk]

If the banks are sitting on losses of $100Bn in derivatives then who is the lucky trading sitting on a profit of $100bn in this zero-sum game? More importantly are they a member of T2W?

Hmmm..who was it that once said that bank traders were rubbish?

 

[Thirteen]

nothing to say that the other side of the 100bn isnt spread accross a load of traders. i dont rekon an order like that would be done in one go do you?

who knows dude - you could have taken the other side?

may be they are trash

 

[oatman]

This is not new, just conveniently ignored, like the $ decline.
The $ is junk.

 

[EagleRock]

BBB - interesting observation - as you say, so Greenspan's recent blurb has generated bullish dollar news and up-to-now lethargic bulls are feeling like jumping up and over high fences (must be spring's in the air or just maybe the possibility that 'I only fly make believe combat missions or go awol presi Bush' is perhaps history by end '04 )

sidinuk - yeah, too true... but I want my paltry dollar sums to remain 'claimable' at-any-time and not at the whim of some cabal of FDIC dudes

Thirteen/oatman - points taken but still seems like you are all indicating that their could/maybe be a situation down the road...

So - still confused... do ya think perhaps moving some uk pounds to usd's is a rash/illogical/just-plain-dumb/crazy or even... perhaps a typical yank abandoning HMs potentially-still-floating-(upwards?)-pound.....

Sorry to be a pain but please speaka 'da single syllable types to me cause my original Q's seem like Q's still... (well to me that is! )

Cheers
Tim