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The Derivatives Tornado.

Watch out below..Click for detail.



Yep, you saw it right.

Assets = 9.93 Trillion Dollars

Derivatives =
182.13 Trillion Dollars

This was at 30 June 2008 for the top 25 commmercial banks and trust companies.
Current exposure is currently a black hole.It has been revealed as each Bank has failed and it was time to pony up the cash. The thing to remember is that the 25 Banks are just one side of the Derivative equation. Like Lehman's , as one falls it takes another dozen with it. Counterparty Risk is a Bitch too.

Pop Quiz: how many of the banks above have gone Pop ? Who's next ?

Current TheStreet.Com Bank ratings..remember, anything under B-..be afraid.

http://www.thestreet.com/screener/index.html?src=ratingsindex&tab=3

JPMORGAN CHASE BANK NA              C+
CITIBANK NATIONAL ASSN                   D+
BANK OF AMERICA NA                           B-
WACHOVIA BANK NATIONAL ASSN    C- (Being absorebed by Wells Fargo)
HSBC BANK USA NATIONAL ASSN     D+
WELLS FARGO BANK NA                       C
BANK OF NEW YORK                              B-
STATE STREET BANK&TRUST CO      B-
SUNTRUST BANK                                    C-
PNC BANK NATIONAL ASSN                 B-
MELLON BANK NATIONAL ASSN          B
NORTHERN TRUST CO                          B-
KEYBANK NATIONAL ASSN                    C-
NATIONAL CITY BANK                              D
LASALLE BANK NATIONAL ASSN          C-
MERRILL LYNCH BANK USA                  B-
REGIONS BANK                                         C
RBS CITIZENS NATIONAL ASSN            C
FIFTH THIRD BANK                                   C
BRANCH BANKING&TRUST CO             B-
FIRST TENNESSEE BANK NA                 D+
LEHMAN BROTHERS COML BK             Adios
UNION BANK OF CALIFORNIA NA          B-
DEUTSCHE BANK TR CO AMERICAS   Unknown
    
That's a lot of Banks to be scared of. Valuation and ratings are based on real assets and possible exposure to worthless CDO's and Derivatives. Mortgage backed securities are obviously headed for the can. As more companies and Banks fail, the ratings of several of these banks will fall as they take the heat from their crushed companions. When General Motors fails it will take most of these with it because General Motors was one of the top derivative contracts in the market and just how many counterparties that will go to the wall is not exactly known but enough to have everybody scrambling around to save this obviously moribund creature from extinction to literally avoid their own.




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