Monday, March 30, 2009

Drunk Investment Banks Soil Commercial Banks with Switch

Wall Street fled to safe harbors of commercial banking status. They brought their junk products with them. Structured Credit reported:

The notational amount of derivatives held by insured U.S. commercial banks increased by $25 trillion in the fourth quarter to $200 trillion. The increase resulted from the migration of investment bank derivatives activity into the commercial banking system. Credit derivatives fell 2% to $16 trillion.

Taxpayers now backstop credit bets for the drunk pirates of the investment world. Meanwhile, Treasury's Geithner previewed a public-private partnership treasure chest. "Any of you boys want a 25% rate of return? Arghh!"