The five big banks own 96% of the total amount of derivatives issued in the U.S., or $221.76 trillion in derivatives. The Bank of International Settlements estimates that there is over $707 trillion in derivates in the entire world.
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New York, NY (PRWEB) May 01, 2012
According to Michael Lombardi, lead contributor to Profit Confidential, at the onset of the financial crisis in 2008, the five big banks represented 43% of the U.S. economy. Lombardi reports that the five big banks currently represent 56% of the U.S. economy.
“Not only have the big banks not been reduced in size, but they have also actually increased in size over the last five years,” says Lombardi.
In the article, Why We See Trouble Ahead for the Big Banks, Lombardi highlights the dangers still inherent in today’s banking system.
“The five big banks own 96% of the total amount of derivatives issued in the U.S., or $221.76 trillion in derivatives,” says Lombardi. “The Bank of International Settlements estimates that there is over $707 trillion in derivates in the entire world. The big five big banks in the U.S. hold 31% of all of the derivates in the world.”
Because the big banks own so many derivatives, Lombardi believes this means that they have big exposure to Europe, Asia, and all parts of the world. “The big banks here in the U.S. remain vulnerable,” says Lombardi.
According to Lombardi, the five big banks that received most of the bailout money were JPMorgan Chase & Co., Bank of America Corporation, Citigroup Inc., Wells Fargo & Company, and The Goldman Sachs Group, Inc.
Lombardi highlights that reduction in the number of banks leads to greater concentration. “In the 1980s, there were roughly 13,000 banks in this country,” says Lombardi, “In 2012, we are down to 6,291.”
“Where are the new limits on the big banks’ trading operations? Where is the call to prevent further consolidation of our financial system?” asks Lombardi.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market... before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.