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The Best Picture of How Large the Derivative Market Is!

Posted on April 20, 2012 by jerry

This article is a repost from http://demonocracy.info. I felt it was extremely helpful for us to understand just how large the derivative market is.

1 Trillion Dollars

$1,000,000,000,000 – When they throw around the word “Trillion” like it is nothing, this is the reality of $1 trillion dollars. The square of pallets to the right is $10 billion dollars. 100x that and you have the tower of $1 trillion that is 465 feet tall (142 meters).

1 Million, 100 Million, 1 Billion, 1 Trillion

Bank of New York Mellon

BNY has a derivative exposure of $1.375 Trillion dollars.
Considered a too big to fail (TBTF) bank. It is currently facing (among others) lawsuits fraud and contract breach suits by a Los Angeles pension fund and New York pension funds, where BNY Mellon allegedly overcharged the funds on many millions of dollars and concealed it.

Bank of New York Mellon - Derivative Exposure

State Street Financial

State Street has a derivative exposure of $1.390 Trillion dollars.
Too big to fail (TBTF) bank. It has been charged by California Attorney General (among other) lawsuits for massive fraud on California’s CalPERS and CalSTRS pension funds – similar to BNY (above).

Bank of New York Mellon - Derivative Exposure

Morgan Stanley

Morgan Stanley has a derivative exposure of $1.722 Trilion dollars.
Its a too big to fail (TBTF) bank. It recently settled a lawsuit for over-paying its employees while accepting the
tax payer funded bailout. Vice Chairman of Morgan Stanley had a license plate that said “2BG2FAIL” on his Porsche Cayenne Turbo. All this while $250 million of bailout money ended up in the hands of Waterfall TALF Opportunity, run by the Morgan Stanley’s owners’ wives– Marry a banker for a $250M tax-payer cash injection.
The bank also got a SECRET $2.041 Trillion bailout from the Federal Reserve during the crisis, beyond the tax payer bailout.

Bank of New York Mellon - Derivative Exposure

Wells Fargo

Wells Fargo has a derivative exposure of $3.332 Trillion dollars.
Its a too big to fail (TBTF) bank. WF has been charged for its role in allegedly pursuing illegal foreclosures and deceptive loan servicing. Wells Fargo was just slapped with a $85 million fine by Federal Reserve for putting good credit borrowers into bad-credit rating (high rate) loans.
In March 2019, Wachovia (owned by Wells Fargo) paid $110 million fine for allowing transactions connected to drug smuggling and a $50 million fine for failing to monitor cash used to ship 22 tons of cocaine. It also failed to monitor $378.4 billion (that’s $378400 millions dollars) worth of transactions to Mexican “casas de cambio” (think WesternUnion, anonymous cash transfer) usually linked to drug cartels. Beyond that, WF lets its’ VIP employees live in foreclosed mansions. WF knows how to cash your legit check, then claim “fraud” and close your account. WF also re-orders your transactions to create more overdraft fees. Wells Fargo’s Wachovia also got a SECRET $159 billion bailoutfrom the Federal Reserve.Wells Fargo paid NO taxes in 2008-2010 and had a tax rate of NEGATIVE 1.4% while making
$49 billion in profit during the same time.

Bank of New York Mellon - Derivative Exposure

HSBC

HSBC has a derivative exposure of $4.321 Trilion dollars.
HSBC is a Hong Kong based bank and its original name is
The Hongkong and Shanghai Banking Corporation Limited.You will find HSBC working a lot with JP Morgan Chase.
Both HSBC and JP Morgan Chase have strong interest in gold & precious metals. HSBC and JP Morgan Chase are often involved together in financial scandals.
Lately HSBC has been sued for allegedly funneling more than $8.9 billion to the largest ponzi-scheme in history – Bernie Maddof’s investment business.
HSBC (along w/ JP Morgan Chase) has been sued for alleged conspiracy suppressing the price of silver and gold, partially through precious metal DERIVATIVES and making billions of dollars on it. State of Hawaii is suing HSBC (and other banks) for deceptive credit card lending practices.
DZ Bank in Germany is suing HSBC (and JP Morgan) for deceptive (lying) practices when selling home-loan-backed securities.
HSBC is also under investigation for laundering billions of dollars.

Bank of New York Mellon - Derivative Exposure

Goldman Sachs

Goldman Sachs has a derivative exposure of $44.192 Trillion dollars.
The $1 Trillion pillars towers are double-stacked @ 930 feet (248 m).
The White House is standing next to the Statue of Liberty.Goldman Sachs has advantage over other banks because it has awesome
connections in US Government. A lot of former Goldman employees hold high-level
US Government positions (chart).Mitt Romney’s top donor is Goldman Sachs, and one of Obama’s best donors.
Ex-CEO of Goldman Sachs, Hank Paulson became the Secretary of Treasury under Bush and
during the 2008 financial crisis authored the TARP bill demanding $700 billion bail-out.
In UK, Goldman Sachs escaped £10 million bill on a failed tax avoidance scheme with help of good connections.
The bank is the largest player in the food commodities market, earned $955m from food speculation in 2009” – That’s your $$$.
Goldman Sachs employees are arming themselves with guns in case there is a populist uprising against the bank.
Goldman Sachs calls their investors “muppets“. and use clients to make money for themselves, disregarding the clients.
The bank was fined $22 million for sharing valuable nonpublic information with top clients (Think insider trading with best clients).
Goldman Sachs was part-owner America’s leading website for prostitution ads until the ownership stake was exposed.
Goldman Sachs helped Greece conceal its debt with secret loans, while simultaneously taking advantage of Greece.
Goldman Sachs got a $814 billion SECRET bailout from the Federal Reserve during the 2008 crisis.
Goldman Sachs got $10 billion of the 2008 TARP bailout, and in the same year paid $10.9 billion in employee compensation and “benefits”, while paying a tax rate of 1%. That means an average of $327,000 to each Goldman Sach’s employee.

Bank of New York Mellon - Derivative Exposure

Bank of America

Bank of America has a derivative exposure of $50.135 Trillion dollars.BofA is sticking the tax-payers with a MASSIVE bill, by moving derivatives to
accounts insured by the federal government @ total of $53.7 trillion as of 06/2011.
During 2011-12 BofA has been in need of cash, so Warren Buffett gave BofA $5 billion.
Same year BofA sold its stake in China Construction Bank to raise $1.8 billion in cash.Bank of America paid $22 million to settle charges of improperly foreclosing on active-duty troops
BofA recruited 3 cyber attack firms to attack WikiLeaks. but the Anonymous hacker group hacked the security firms first.
BofA was sued for $31 billion in home-loan losses in 2011, the bank is involved in many lawsuits, too many to document.
BofA also received a SECRET $1.344 trillion dollar bailout from the Federal Reserve.

Bank of New York Mellon - Derivative Exposure

Citibank

Citibank has a derivative exposure of $52.102 Trillion dollars.
The $1 Trillion dollar towers are double-stacked @ 930 feet (248 m).Citibank customers have been arrested for trying to close their accounts, while in in Indonesia a man was interrogated to death in Citibank’s special “questioning room”. In 2011 Citibank paid a fine of $285 million for selling home-loan backed bonds to investors, while betting they would lose value (think derivatives/insurance). The man in charge of the unit at Citibank became Obama’s Chief of Staff. 2 weeks before getting hired by Obama he got $900,000 from Citibank for great performance. This was after Citigroup took out $45 billion in bailout money.
Citibank knowingly passed over bad loansto the Federal Housing Administration to insure.Citigroup also received a SECRET $2.513 trillion dollar bailout from the Federal Reserve.

Bank of New York Mellon - Derivative Exposure

JP Morgan Chase

JP Morgan Chase has a derivative exposure of $70.151 Trillion dollars.
$70 Trillion is roughly the size of the entire world’s economy.
The $1 Trillion dollar towers are double-stacked @ 930 feet (248 m).JP Morgan is rumored to hold 50->80% of the copper market, and manipulated the market by massive purchases. JP Morgan is also guilty of manipulating the silver market to make billions. In 2010 JP Morgan had 3 perfect trading quarters and only lost money on 8 days. Lawsuits on home foreclosures have been filed against JP Morgan. Aluminum price is manipulated by JP Morgan through large physical ownership of material and creating bottlenecks during transport. JP Morgan was among the banks involved in the seizure of $620 million in assets for alleged fraud linked to derivatives. JP Morgan got $25 billion taxpayer in bailout money. It has no intention of using the money to lend to customers, but instead will use it to drive out competition. The bank is also the largest owner of BP – the oil spill company. During the oil spill the bank said that the oil spill is good for the economy.
JP Morgan Chase also received a SECRET $391 billion dollar bailout from the Federal Reserve.

Bank of New York Mellon - Derivative Exposure

9 Biggest Banks’ Derivative Exposure – $228.72 Trillion

Note the little man standing in front of white house. The little worm next to lastfootball field is a truck with $2 billion dollars.
There is no government in the world that has this kind of money. This is roughly 3 times the entire world economy. The unregulated market presents a massive financial risk. The corruption and immorality of the banks makes the situation worse.If you don’t want to banks with these banks, but want to have access to free ATM’s anywhere– most Credit Unions in USA are in the CO-OP ATM network, where all ATM’s are free to any COOP CU member and most support depositing checks. The Credit Unions are like banks, but invest all their profits to give members lower rates and better service. They don’t have shareholders to worry about or have derivatives to purchase and sell.Keep an eye out in the news for “derivative crisis”, as the crisis is inevitable with current falling value of most real assets.
Derivative Data Source: ZeroHedge

Bank of New York Mellon - Derivative Exposure

Publius

This explains somewhat accurately how big the derivative market is but does not adequately relate what the “crisis” might be. There are some serious flaws in it, particularly that those who need diagrams to imagine relative sizes of numbers probably have a very unclear idea of what a derivative is at all and so can get little from the information beside a rather uninformed terror.

A few observations: Bernie Madoff’s scheme is not the largest ponzi scheme in history, that prize must go to the US Social Security Administration. I’m not sure what is objectionable about Wells Fargo allowing valued customers to live in houses Wells Fargo owns. While some of these lawsuits are serious, it must be noted that every business the size of these banks (and many smaller businesses) have a constant barrage of lawsuits against them.

There are some important concerns for any citizen regarding the power of large financial institutions, the fairness of their practices, the degree taxpayers are subsidizing risky investments and the overall honesty of their dealings, but mashing them all together doesn’t clarify any of those issues.
- Josh
  
  I am not sure what you are trying to suggest, but to act like the derivatives market is not a problem is simply unreasonable. Also, sometimes it is important for us to actually be able to tangibly see how large somethings is using real images. American politicians throw around a million, billion, and trillion like they are quarters on a gum ball machine. Therefore, it is sometimes important for Americans to see visual images to show how real the crisis is.
- Publius
  
  I’ve yet to see evidence that the derivatives market is “a problem”, inconclusive graphics above notwithstanding. JP Morgan Chase, whose derivatives exposure supposedly dwarfs the world’s entire economic activity, is trading at roughly nine times earnings, has a decent yield and has just over 1% of its shares shorted. Citi is about the same. By comparison, good old Walmart, who has little derivative exposure, is trading about the same as well, a slightly higher P/E. If it was unreasonable to think the derivatives market is not a problem, the many reasonable people who understand derivatives and actively trade securities would not put so much faith in these companies’ and their p/e or short/float ratios would show that.
  
  You repeatedly use the term “crisis” and fail to explain what this “crisis” entails. Showing stacks of one dollar bills towering over the white house does not show how real a derivatives crisis is any more than showing towering barrels of shampoo explains a hair-care crisis. What would be useful is an explanation of “derivatives exposure” and a set of scenarios that may trigger a crisis involving said outcomes.
  
  I do not mean to be cantankerous, but I believe that the metals market is being fueled by fears that are stoked by incomplete data and that worries me.

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