Now, it is becoming very clear why the US Banks will be back at the US Government’s public feeding trough. As is made very clear in the final quoted paragraph of this article, their Trillions of Dollars of CDS’s will NOT cover their losses if any of the GIIPS debt is “voluntarily” written off!
Anyone wish to hazard a really wild guess, just who will be forced to cover these BAD-BETS of these BAD-DEBTS of these BAD-Bankers?
That’s right!
You and me – the American taxpayer will once again fund their losses totally by allowing the FED to print tens of Billions of more electronic book-entry cash and just giving it to these extremely needy supplicants!
U.S. Banks Face Contagion Risk From Europe Debt
Bloomberg; By Dakin Campbell - Nov 17, 2011 7:30 AM ET
“…Unless the euro zone debt crisis is resolved in a timely and orderly manner, the broad credit outlook for the U.S. banking industry could worsen,” the New York-based rating company said yesterday in a statement. Even as U.S. banks have “manageable” exposure to stressed European markets, “further contagion poses a serious risk,” Fitch said, without explaining what it meant by contagion.
The “exposures” of U.S. lenders to major European banks and the stressed nations of Greece, Ireland, Italy, Portugal and Spain, known as the GIIPS, are smaller than those to some of the continent’s larger countries, Fitch said.
The six biggest U.S. banks -- JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), Citigroup Inc. (C), Wells Fargo & Co. (WFC), Goldman Sachs Group Inc. and Morgan Stanley (MS) -- had $50 billion in risk tied to the GIIPS on Sept. 30, Fitch said.. . .
While U.S. banks have hedged some of their risk with credit-default swaps, those may not be effective if voluntary debt forgiveness becomes “more prevalent” and the insurance provisions of the instruments aren’t triggered, Fitch said in the report. The top five U.S. banks had $22 billion in hedges tied to stressed markets, according to Fitch. . . . ‘
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