DTCC Settles Record $1.8 Quadrillion in 2007

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...$1.86 Quadrillion ....

.. from the Millionaire Board......
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DTCC...$1.8 Quadrillion
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DTCC Settles Record $1.8 Quadrillion in 2007; $984 Million in Rebates Returned to Customers

New York, March 25, 2008
NEW YORK--(BUSINESS WIRE)--The Depository Trust & Clearing Corporation (DTCC) announced today it cleared and settled more than $1.86 quadrillion in securities transactions in 2007. DTCC also reported record revenue of $1.69 billion and returned $984 million to its customers in the form of discounts and rebates.

Through its subsidiaries, DTCC provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over the counter derivatives, and is a leading processor of mutual funds and insurance transactions. DTCC’s depository provides custody and asset services for about 3.5 million securities issues from the U.S. and 110 other countries and territories worth more than $40 trillion.

DTCC’s $1.69 billion in revenues last year was up 24% from the $1.36 billion in 2006. Record high volumes and DTCC’s tight fiscal management helped reduce costs in some of DTCC’s traditional market segments and resulted in record rebates and discounts of $984 million. Because DTCC operates on an “at-cost” basis, excess revenue beyond that required to fund the business is returned to customer firms on a pro-rata basis.

In addition to the rebates, the company announced the largest fee cuts in its history for 2008, driven by the economies of scale and frugal cost management provided by DTCC’s operations. These changes are expected to result in a combined total of $198 million in fee reductions to customers for the coming year. That followed fee revisions resulting in almost $90 million in reductions for 2007.

DTCC made significant progress in expanding its services globally in 2007 when its EuroCCP subsidiary was selected to clear and settle trades for Turquoise, a new pan-European multilateral trading facility developed by nine global investment banks. EuroCCP expects to provide the lowest costs for clearing and settlement of trades in Europe and is expected to support other European trading platforms, once it begins operation in 2008.

In support of OTC derivatives trading, DTCC launched its Trade Information Warehouse, the first global, automated repository for OTC derivatives, where contracts can be tracked and serviced in an automated environment over their lifecycle. During 2007, about 3 million contracts were recorded into the Warehouse, with an average of an additional 10,000 new contracts now being added daily. Deriv/SERV’s matching and confirmation platform has improved the automated confirmation rate for credit default swaps to more than 95% from 15% in 2003. DTCC also launched automated payment and centralized settlement for Warehouse contracts through a partnership with CLS Bank International. Almost 1,100 global dealers, asset managers, global banks and hedge funds were using DTCC’s Deriv/SERV services at the end of 2007, with more being added each week.

Customer satisfaction scores for DTCC across its diverse customer base reached record levels. DTCC scored 91% in overall satisfaction on an annual customer survey conducted by an independent polling company.

“All in all, we had a very successful year at DTCC in handling high transaction volumes, helping to reduce risk and lowering costs for customers across asset classes we support – and we continued to expand our services globally. DTCC recognizes that we are facing a new trading environment where customers require ever-greater levels of efficiency and stronger risk management,” said Donald F. Donahue, DTCC chairman and chief executive officer. “We are facing new venues for trading, new and complex instruments and risk transfer vehicles that demand new solutions to reducing risk and implementing technology to reduce costs, and we are responding to that challenge.”

Volume Growth

DTCC’s National Securities Clearing Corporation (NSCC) subsidiary, which clears virtually all trades done on the NYSE, the NASDAQ Stock market and other exchanges, electronic communications networks and alternative trading systems in the U.S., processed 13.5 billion transactions versus 8.5 billion in 2006, up 59%. On an average daily basis, transaction volume jumped to 53.9 million in 2007 from 34 million transactions daily in 2006, an increase of almost 20 million transactions a day. The average cost for clearing of one side of an equity trade through NSCC dropped to $.006 (six-tenths of a cent), down 45% from the $.011 cost in 2006 and a fourth of the cost four years ago. Overall, NSCC netted down (or reduced) transaction value from $283.2 trillion to only $5.2 trillion that actually had to be settled in 2007, a 98% reduction.

The Government Securities Division (GSD) of Fixed Income Clearing Corporation (FICC) also saw significant volume growth. Transactions processed increased to 30.4 million in 2007 from 24.9 million in 2006, a 22% increase. GSD netted down the value of its U.S. government securities transactions from $4 trillion in average daily transaction value to just under $1 trillion, a 75% netting factor. The Mortgage-Backed Securities Division saw volume increase to 2.1 million transactions from 1.7 million a 22% increase. The MBS division handles only agency-backed mortgages that are issued by Ginnie Mae, Freddie Mac and Fannie Mae. The MBS division reduced the total $61.9 trillion in par value to $3.3 trillion requiring bilateral settlement, a 94.5% netting factor.

DTCC Deriv/SERV LLC, which matches and confirms over-the-counter derivatives transactions, saw its transaction volume jump 123% to 5.9 million transactions from 2.6 million in 2006. The number of customers also increased dramatically, up 43% to 1,078 at the end of 2007 from 753 in 2006.

Among the key highlights of 2007 for DTCC were:

Increased NSCC’s processing capacity to 280 million transactions a day from 160 million, a 77% increase.
Completed the consolidation of FICC’s business applications into DTCC’s data replication and recovery technology, the last applications that needed to be brought into the business continuity framework.
Launched a new Managed Accounts Service with 15 investment managers and three broker/dealers.
Responded effectively to market turmoil in the second half of the year by handling several instances of defaults on asset-backed commercial paper issues without incurring any loss.
Implemented service to support matching and netting of U.S. Treasury prime broker transactions.
Other key statistical achievement milestones for 2007 included:

DTCC’s depository held in custody $7.6 trillion of non-U.S. issues of the total $40 trillion value of all securities held by the depository.
Mutual fund activity through Fund/SERV, NSCC’s main mutual fund service, jumped to an average of 676,000 transactions a day, up 19% from the prior year’s 569,000 daily volume. Total dollar value of the transactions rose to $2.5 trillion in 2007, up 19% from $2.1 trillion in 2006.
Insurance Services saw the volume of transactions settled jump to 63.1 million from 53.5 million, up 18%. Dollar value of transactions settled increased to $20.8 billion in 2007 from $16.3 billion settled in 2006, an increase of 28%.
The number of Underwritings handled by the depository increased 7% to 54,266 in 2007 from 50,867 in 2006, although the value declined 3% to $4.3 trillion from $4.4 trillion.
Cash dividend, interest, redemption and reorganization transactions processed by DTCC’s depository rose 17%, totaling $3.8 trillion compared to $3.3 trillion in 2006.
The Global Corporate Actions Validation Service provided more than 1 million validated corporate action announcements globally, up 17% compared to just under 900,000 in 2006, and provided 3 million announcements about scheduled payments for fixed income securities. GCA VS maintains service centers in New York, London and Shanghai to provide round-the-clock global coverage of corporate actions events.
About DTCC

The Depository Trust & Clearing Corporation (DTCC), through its subsidiaries, provides clearance, settlement and information services for equities, corporate and municipal bonds, government and mortgage-backed securities, money market instruments and over-the-counter derivatives.

In addition, DTCC is a leading processor of mutual funds and insurance transactions, linking funds and carriers with financial firms and third parties who market these products. DTCC’s depository provides custody and asset servicing for 3.5 million securities issues from the United States and 110 other countries and territories, valued at $40 trillion. Last year, DTCC settled more than $1.8 quadrillion in securities transactions. DTCC has operating facilities in multiple locations in the United States and overseas. For more information on DTCC, visit www.dtcc.com.


Contacts
DTCC
Stuart Z. Goldstein
212-855-5470 or 646-321-5573
[e-mail]
or
Citigate
Lucie Holloway, [phone]
[e-mail]

At A Glance
Depository Trust & Clearing Corp.
Headquarters: New York, New York
Website: www.dtcc.com
CEO: Donald F. Donahue
Employees: 2,500
Organization: Private
Source: via Business Wire
Updated 02/12/2008 by company

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[hundredtoone]

Bear Stearn's Collapse Is Tip of Iceberg
Jim Kirwan

Wall street is a giant casino and Bear Stearn's demise is just the tip of the iceberg of a potential complete financial meltdown led by the collapse of the greatest crap shoot of them all ~ Derivatives : Allen L Roland

As Andrew Leonard wrote yesterday in Salon ~ " A couple of things to bear in mind while we watch and see what transpires this week. First: Bear Stearns was the canary in the coal mine. That canary is now dead. "

Wall street can no longer hide the ugly excesses of the subprime mortgage markets or the present collapse of most major credit markets but the looming tsunami which could bring down the whole house of cards is the collapse of the $172 trillion dollar derivative market.

Martin Weiss, Money and Markets, explains the risk of Derivatives and names the principle players in the greatest Wall Street crap shoot of them all ~ and very possibly the core of the present crisis.

Allen L Roland blogs.salon.com/0002255/2008/03/18.html


Closer to a Financial Meltdown

by Martin D. Weiss, Ph.D.


No Lessons Learned

www.moneyandmarkets.com/issues.aspx?Closer-to-a-Financial-Meltdown-1558

Excerpt: " Now, at long last, looking back at the truths ~ and deceptions ~ revealed in recent months, you'd think someone might have learned a lesson from this experience.

Instead, here we ago again in a typical 1-2-3 pattern ...

1. Like June of last year, Bear Stearns is the first to reveal a disaster.

2. Like last year, the authorities have been huddling through the weekend, poring over Bear Stearns' books. And ...

3. Like always, they are trying to come up with a story to spin the facts.

But this is not June of 2007, when it was still easy to fool most investors most of the time. Too much has changed too quickly, and the crisis has already progressed to a more advanced phase. Now ...

* Revelations of big losses are being replaced by fears of big bankruptcies.

* The collapse of subprime mortgages has been replaced by the collapse of nearly all major credit markets.

* And most worrisome of all, these fears and collapses are threatening to freeze up the greatest grand casino of all: Derivatives.

The Truth and Consequences
Of $172 Trillion in Derivatives


Derivatives are essentially bets ... and ... debts.

As an illustration, if you and I were players, I could bet you that a particular firm will go bankrupt between now and year-end ... and you could bet me that it won't.

Or I could bet you that interest rates on junk bonds will rise more than interest rates on Treasury bonds ... and you could bet they will rise less, or not rise at all.

We could bet on virtually any market that moves, or even bet that it won't move.

For each wager, we'd likely borrow huge amounts of other people's money. And in each case, we'd have a contractual obligation (or right) to consummate the deal: To pay up if we lose (or collect if we win).

That's the essence of each transaction in the frenzied, hectic world of derivatives.

But what was once a small sideshow in the traditional world of stocks, bonds and loans has become the towering center ring in the big-top: The derivatives market has now ballooned into a monster of unimaginable dimensions.

At U.S. commercial banks alone, the total national value of the derivatives is $172.2 trillion, according to the latest report by the U.S. Comptroller of the Currency (OCC). Plus, the OCC reports that:

* In over 90% of these derivatives, there is no established exchange that helps protect either party from default.

* Just FIVE major U.S. banks control 97% of all the bank-held derivatives in the United States, a concentration of power and risk unsurpassed in the history of finance.

* All five of these major players would likely be severely crippled, or even bankrupted, by the default of just a few major counterparties like Bear Stearns.

* Four have more credit exposure to counterparty defaults than they have capital.

* Two have over four times more credit exposure than capital. (More details in a moment.)

The Potential Damage of Bear Stearns' Demise
Today Is Far Bigger Than the Feared Impact of

Long Term Capital Management's Fall in 1998.


So in the days ahead, don't be surprised by new announcements of "big, bold steps" being taken by Washington and Wall Street. Also don't be surprised by a bigger-than-expected rate cut by the Fed today.

But throughout it all, don't let them fool you when they again put out the word that "Bear Stearns is alone" or that "the crisis is contained."

Not true.

Why JPMorgan Chase Is
Among the Most Vulnerable


Logic alone dictates that containing the crisis is highly unlikely. Let me walk you through the facts, and you'll see what I mean ...

* All major Wall Street firms engage in the same kind of trading strategies that entrapped Bear Stearns.

* All use the same kind of high-powered leverage that sunk Bear Stearns.

* And perhaps most important, all are joined at the hip to each other as counterparties (trading partners) in derivatives, including Bear Stearns.

Indeed, even as you read these words, derivatives are emerging as the new core of the crisis. And derivatives are definitely not limited to Bear Stearns.

Among investment banks that do not report to the Fed, the biggest players are Lehman Brothers, Goldman Sachs, Morgan Stanley and Merrill Lynch.

And among those who do report to the Fed, the five dominant players in derivatives that I mentioned a moment ago are Citibank, Bank of America, Wachovia, HSBC and the biggest of them all: JPMorgan Chase.

We believe all are vulnerable, in varying degrees, to the kind of crisis that struck Bear Stearns last week.

We believe JPMorgan Chase could ultimately be the most vulnerable.

And we believe this may help explain why JPMorgan Chase was the Wall Street firm that emerged as a participant in the Bear Stearns rescue on Friday. "

Allen L Roland blogs.salon.com/0002255/2008/03/18.html
Freelance Online columnist and recognized therapist Allen L Roland is available for comments, interviews, speaking engagements and private consultations ( [e-mail] )



Allen L Roland is a practicing psychotherapist, author and lecturer who also shares a daily political and social commentary on his weblog and website allenroland.com He also guest hosts a monthly national radio show TRUTHTALK on www.conscioustalk.net

blogs.salon.com/0002255/2008/03/18.html

www.fourwinds10.com/siterun_data/government/homeland_security_patriot_act_fema/news.php?q=1206491225

...Flying Moose(cmkxunofficial)

[soonerlew]

QUADtrillion?? WOW!!! I don't even want anywhere close to that.....LOL