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Federal regulators are relying on Goldman Sachs Bank USA to have hedged $42.2 trillion in derivatives

Posted by Richard640 @ 13:05 on April 4, 2020  

Wall Street Had Cut 68,000 Jobs and Received Trillions in Emergency Loans Prior to COVID-19 Anywhere in the World

By Pam Martens and Russ Martens: April 1, 2020 ~

Goldman Sachs Bank USA is the poster child for the insanity inherent in the U.S. banking system (with JPMorgan Chase and Citigroup’s Citibank not far behind). It has $228.8 billion in assets, $34.5 billion in risk-based capital, and $42.2 trillion in notional derivatives (face amount). Federal regulators are relying on Goldman Sachs Bank USA to have hedged $42.2 trillion in derivatives so that its netted out total credit exposure from all of its derivative contracts is just $118.4 billion rather than $42.2 trillion — which is still 344 percent of its risk-based capital.

That’s a big leap of faith given that JPMorgan Chase in 2012 had no idea its derivative traders in London were hiding massive losses on their derivative trades until a media leak brought on an investigation. JPMorgan CEO Jamie Dimon told the media at the time that it was all just “a tempest in a teapot.” But once the Senate’s Permanent Subcommittee on Investigations looked into the matter, it turned out to be a $6.2 billion loss on derivatives. The London traders had used the insured deposits of the bank as if they were chips in a gambling casino.

Even a calamity like that, which launched an FBI probe, did not move the Federal Reserve to tame these banking behemoths on Wall Street.

https://wallstreetonparade.com/2020/04/wall-street-had-cut-68000-jobs-and-received-trillions-in-emergency-loans-prior-to-covid-19-anywhere-in-the-world/
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Post by the Golden Rule. Oasis not responsible for content/accuracy of posts. DYODD.