The Federal Deposit Insurance Corporation. FDIC—now that is a four letter word. They have been going around shutting down all these banks that were making everybody a lot of money. They said they were saving Americans their deposits from getting lost in these “creative financial products.”

Imagine if they had done that to wall Street? Nobody would be in business. So thank God we got the Fed. A 3 letter word that trumps that 4 letter word.

Case in point. Brilliant idea from the boys at Bank of America.

They shifted $55 Trillion in derivatives from their Merrill Lynch subsidiary to the retail bank which houses trillions in deposits from ordinary Americans– and is insured by the FDIC.

The ratings agencies had downgraded Merrill and by shifting the derivatives to the retail bank the Merrill Lynch section saved a ton because they won’t have to fork over more money as collateral for their exposure to the derivatives. And they can now go out and write even more derivatives—as well as collect BIGGER BONUSES!

Now the FDIC is squawking some bullshit about how this puts the taxpayers at risk rather than the “too big to fail”.

Well, not according to the Fed.

The Fed has no obligation to the taxpayers. Its only obligation is to Wall Street.

So they have the proper perspective to analyze this from a cost/benefit analysis, rather than the sky is falling sky is falling perspective of the FDIC.

The Fed understands how much money can be made here.

And even if those guys at the FDIC are right and the sky will fall, it isn’t going to fall on the boys at Merrill Lynch…