I question BofA's business practices and relationship with the government as much as the next guy, but this:
"a huge portfolio of dangerous bets into a side of the company that happens to be FDIC-insured, putting all of us on the hook for as much as $55 trillion in irresponsible gambles. "
Fairly certain that $55 trillion approaches the overall GDP of the global economy. Its super easy to make compelling arguments about BofA without resorting to such exaggerations.
That's possibly the notional value for all their derivative positions, but you're right in that BofA is unlikely to be in a position where they'd write a check for that amount. I think the author picked the biggest number he could find without understanding what it means.
addendum: The same mistake is repeated elsewhere: '"About $350 trillion worth of financial products globally reference LIBOR," says one antitrust lawyer familiar with the case.' Unless I'm mistaken, that too is notional value. A swap or whatever is usually worth a lot less than its notional value.
That the total liabilities referred to are $55T is a fact. That the FDIC would be capable of paying out even a small fraction of that is an exaggeration, though.
There's no reason the FDIC would need to pay out $55T. They only need to cover insured deposits. Moving bad bets onto the books makes the insured deposits riskier, but it doesn't insure the bad bet as well.
"a huge portfolio of dangerous bets into a side of the company that happens to be FDIC-insured, putting all of us on the hook for as much as $55 trillion in irresponsible gambles. "
Fairly certain that $55 trillion approaches the overall GDP of the global economy. Its super easy to make compelling arguments about BofA without resorting to such exaggerations.