The Death Throes of Capitalism

Right now in the streets of America cops are dying over a false narrative of racial inequality, while theirs and every Americans future has been pledged by the congress and the senate to insure through the FDIC the protection of banks playing the derivatives market again.

A derivative can be best explained as a contract whose value is derived from the performance of anything from a futures contract, to a mortgage backed security to an asset such as real estate or the inclusion of all of them. So basically what we are saying here is you go to Vegas and you make one bet and that bet includes for example the crap table, the slot machine, and the roulette wheel. That one bet is your derivative. The funny thing is that derivative bet value is determined by you, not some outside neutral source that has no money in the gamble.

Here is where the best part comes in. You have decided what the value of the bet is, what the value of the crap table, slot machine, and roulette wheel is so you decide on how much you win. Now is where the insanity begins.

Citi Group, JP Morgan and the rest, with the backing of the Fed, have lobbied congress to write into law that loses on these derivatives would be backed by the FDIC. That's right good citizens of America that is you. If 2008 is any indication we are in serious trouble.

The insanity of this bet (derivative) is best described as the bank losing their bet, and the taxpayers pay you back, and if the bank wins the bet they walk away with hundreds of millions. That my friends is a win win for the banks while we as citizens of the United States lose as our elected officials are there to protect us and not pledge our money for the banks mistakes.

Of course all this throws out an important section of Dodd-Frank legislation called the push-out provision but what does that matter.

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Anyone care to estimate what the citizens are on the hook for? Here is a hint it's more than the world GDP combined.