Mark Mobius Echoes Carl Icahn: "There Is Definitely Going To Be Another Financial Crisis"

Tyler Durden's picture

In an almost verbatim repeat of Carl Icahn's words of caution which we noted yesterday, Templeton's legendary chairman Mark Mobius said that "another financial crisis is inevitable because the causes of the
previous one haven’t been resolved" during a luncheon (menu included herb crusted chicken breast with cheese and tomato sauce, mashed potato and green vegetables, seasonal salad) at the Foreign Correspondents’ Club of Japan in Tokyo. Bloomberg reports: "There is definitely going to be another financial crisis around the corner because we haven’t solved any of the things that caused the previous crisis,” Mobius said at the Foreign Correspondents’ Club of Japan in Tokyo today in response to a question about price swings. “Are the derivatives regulated? No. Are you still getting growth in derivatives? Yes." Unlike Icahn, Mobius stopped short of calling for a return to Glass-Stegall and a repeal of the abominable Gramm-Leach-Bliley which unleashed the era of zero margin derivatives and financial system neutron bombs. On the other hand, it is nice of Messrs Icahn and Mobius to speak up now, two years after the ongoing systemic instability transferred $3.5 trillion in capital from current and future taxpayer generations to the present financial elite. We do, however, forgive them because in their better late than never contrition, they join the likes of Zero Hedge who since January of 2009 have warned, over and over, that nothing in the structure of capital markets has changed, and that the market could any day open not only bidless, but broken beyond even Brian Sack-ian band aid repair.

Mobius, as seems to be the conventional wisdom these days, focuses on the $600 trillion or so in OTC derivatives as the next source of systemic jeopardy:

The total value of derivatives in the world exceeds total global gross domestic product by a factor of 10, said Mobius, who oversees more than $50 billion. With that volume of bets in different directions, volatility and equity market crises will occur, he said.

The global financial crisis three years ago was caused in part by the proliferation of derivative products tied to U.S. home loans that ceased performing, triggering hundreds of billions of dollars in writedowns and leading to the collapse of Lehman Brothers Holdings Inc. in September 2008. The MSCI AC World Index of developed and emerging market stocks tumbled 46 percent between Lehman’s downfall and the market bottom on March 9, 2009.

He also blasted the lunacy of Too Big To Fail, where the Fed and the FDIC took an already unstable system, and made it even more brittle, by concentrating more deposits and more assets with a record low number of banks:

The largest U.S. banks have grown larger since the financial crisis, and the number of “too-big-to-fail” banks will increase by 40 percent over the next 15 years, according to data compiled by Bloomberg.

Separately, higher capital requirements and greater supervision should be imposed on institutions deemed “too important to fail” to reduce the chances of large-scale failures, staff at the International Monetary Fund warned in a report on May 27.

“Are the banks bigger than they were before? They’re bigger,” Mobius said. “Too big to fail.”

However, as long as Wall Street muppet Tim Geithner is in charge of the Treasury nothing will change.

Lastly, Mobius had some origianal words of investment advice, something that one could previously find at the Ira Sohn conference, before it became a media-fest free-for-all, book talking exercise in upcoming asset manager obscurity.

The money manager had earlier said at the same event that Africa has an “incredible” investment potential and that he has stakes in Nigerian banks.

“These banks are doing very well and are much better regulated than they were in the past,” Mobius said, without disclosing which lenders he holds.

Banks account for five of the eight stocks in the MSCI Nigeria (MXNI) Index. Guaranty Trust Bank Plc, the country’s No. 2 lender by market value, surged 31 percent in the six months through May 27, according to data compiled by Bloomberg. Shares of Access Bank Nigeria Plc recorded the second-biggest decline on the gauge in the period, the data show.

Is Africa the next bubble? And is it Africa's banks or their gold and other precious metals? Either way, how long before the IMF decides to offer openly dictatorial regimes in Central and Western Africa, only for NATO to decide one day 2-3 years from now that the time for humanitarian intervention has come, and it is the sanctified duty of the enlightened west to rid said countries of their gold, er oil, er diamons, sorry, evil dictators who will have been for many years the happy recipients of World Bank and IMF "infrastructure" capital...

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ISEEIT's picture

Glad you guys are active today. I appreciate it.

Spirit Of Truth's picture

Might be prescient as there's reason to believe we are on the edge of a cliff:

DaveyJones's picture

nothing like a holiday to lift your spirits. Now where is my spirits?

ToNYC's picture


The movie is in production. The Financial system became dependent and floated on the shadow banking system. The toxic waste is being traded to the entitled ones's future cash-flows. It is as if the Titanic imploded in the black hole of credit contraction and the Atlantic Ocean went dry. Hint: it's a Pacific Rim story.

IdioTsincracY's picture

Big fucking surprise here!!!

Black hole of credit contraction?!?!?  .....

I'd say that it's more of "The collapse of the Pyramids" .....

The Pyramid scheme of casino-style markets

The Pyramid scheme of investment with no ties to the real economy

The Pyramid scheme of 'free' market economics .... where free stands for "let the Oligarchs do whatever the hell they want"

The Pyramid scheme of 'wait for that trickle down, as we pump it up to the top"

The Pyramid scheme of 'we are the few, the proud, the fucking elite and we deserve all of of it, so kiss our asses'

The Pyramid scheme of 'suck the middle class dry, outsource what you can, cheat on you taxes, offshore your wealth, and flip your middle finger'


As we celebrate memorial day and pay our respect to the people who sacrificed for our Country ... let's all shout a big "FUCK YOU!!" to the people who sacrificed our Country (sic!)

Fuck the bankers, the corrupt politicians, and the fucking speculators!

ToNYC's picture


I'd say after you f**k everyone you feel the need to....then maybe you can get busy.

bogey4's picture

A crisis will never happen when this many guys call for one.  Where were their calls for crisis in mid-08?  Nowhere to be found.

Crises come out of the blue - not when everyone predicts one.

Michael's picture

We bloggers called the dot-com bubble to bust and that busted.

We called the housing bubble to be a bigger bust and that busted.

Two out of three so far.

What do you want to bet our call for a complete and total economic collapse will also be an accurate call? 

Anonymouse's picture

So you're saying we can stop crises by having lots of people predict them.  That's great news! Let's get on it guys!


- Residential housing is going to crash!

- Commercial real estate is going to crash!

- Banks are going to fail!

- Municipal bonds will plummet in value!

- Corporate defaults will be rampant!

- Inflation is going through the roof!

- Gold, Silver, and Oil will reach unheard-of values!

  -- And just to make it interesting (in a Star Trek computer sort-of-way)

     --- Gold, Silver, and Oil will become virtually worthless!

     --- Gold, Silver, and Oil will trade in an extremely tight range at current levels!

- Obama will be re-elected in a landslide!

- Romney will be elected in a land-slide!

- Charlotte Rea (Mrs. Garrett from "The Facts of Life") will join the cast of "The Office" as the new regional manager of the Scranton branch!

- I'm going to gain 50 pounds any day now!

Come on join with me.  Together we can change the world.  Yes we can!

terryfuckwit's picture

me certainly no hot shot investor but you guys definitely deserve a contribution. the articles are amazing .. at first you think oh that's a bit over conspiratorial and then a week late MSM or other events confirms what is written on these pages ... well impressed i am


Michael's picture

Of course. We've been honing our skills at this for over a decade now. We've gotten pretty good at it. Coming up with the final outcome with pretty good timing in a New York minute, and getting the call right 100% of the time and knowing it. 

We are actually pretty proud of ourselves.

hugovanderbubble's picture


Just 200? 2000¿=?


Belgian central bank faces loss of about EUR 200mln on sovereign bonds according to Belgian central bank director


"the ECB needs a massive recap scheme" (Hugo Peterssen) one trust in Public Accounting...(Mafia Tricky Accounting Mode On:)

National Public Accounts 101% corrupted (world-wide)

trav7777's picture

you mean capitalizing with debt spun out of thin air isn't a good idea?

All our money is based on debt and those debts are BAD.  People think that defaults lead to  The money got spent; it stays out there.  Then the debts default and the money no longer has any backing

philgramm's picture

Hey Trav,

Question. I dont understand fractional reserve banking all that well. I understand that a home mortgage loan creates money via fractional reserve system. My question is what happens when that debt is fully repaid? Does the money leave the system?

Printfaster's picture

Trav, you just pushed a knife through Denninger's eyball, and Shedlock's mouth.

Print on.

shortus cynicus's picture

O, thank you the Lord!

Nice to see at least one ZH junkie supporting the theory i also believe.

I wrote practically the same just few minutes ago:

Muir's picture

from your post:

"But Chinese know, that those houses are worthless anyway, so they must panic and spend it for anything else. Marginal Utility Theory clearly explains that there is no sense to Chinese to own all US houses. They must flee to commodities, causing price increases."


And after the Chinese have bought all these commodities who is going to buy said commodities after a crash?

cosmictrainwreck's picture

touche!, Muir.... speculating here: we know they're stock-piling everythng, check. and they're buying up resource-producing capacity (directly or by delivery contract) check. but that's all just to keep the furnaces belching & peasants at bay. hmmm....what is it they're gonna do with the rest of the pile of cash? buy Chicago, maybe? nah, I think they'd prefer Minneapolis.... 

Muir's picture


"you mean capitalizing with debt spun out of thin air isn't a good idea?

All our money is based on debt and those debts are BAD.  People think that defaults lead to  The money got spent; it stays out there.  Then the debts default and the money no longer has any backing"


It's a 2 way street.

As more crap can not be collateralized, (because it is recognized for what it is: crap) then you cannot create further "money" out of thin air.

Problem Is's picture

Some Serb anarchist might cap your ass for such comments...

Caviar Emptor's picture

Echo-bust, bitchez!

disabledvet's picture

never underestimate a new twist on an old theme.  "monetize everything but the debt" please.

alangreedspank's picture


Then again, it's not so much that they deregulated derivatives, it's that they are backstopping the kids messing up things using them. That in itself, it hyper-regulation.


A_MacLaren's picture

Derivatives are still the elephant in the room, as Eric Sprott pointed to back in April 2009.


blindfaith's picture

How gracious of them to spew forth with great wisdom.  Never would have guessed this without their help.

Gee...wonder what trades they have in place to profit from their 'observations' and a gentle shove off the cliff for everyone else.

Dear Carl, we in Florida have not forgotten what you did to us.  Have YOU?

cosmictrainwreck's picture

can you elucidate? inquiring minds want to know.......

cowdiddly's picture

Never eat the seasonal salad at a luncheon in Tokyo. As the picture confirms, your hair will fall out and it makes you so mentally slow to the point where your predictions are so late they are already reality.

f16hoser's picture

So DONK didn't fix shit! Our politicians are so predictable it's not even funny anymore. Even Dodd knew better than to run again. I wonder how his new job on Wall Street is working out for 'em? Ron Paul better have his name on the next ballot or my "write In" candidate will be Mickey Mouse! At this point, even our idiotic politicians know the debt can't be repaid. All that's left is retirement pensions and 401K's. I can't wait for the super rich to start fucking each other over. And they will once they're done with us.......! Average Americans are to illiterate to understand what's happening to them. Divide and conquer! Americans are divided between the two party system. Dems/Repub will fuck-up the free lunch line too. Just wait and see!

Other than that "God Bless America!"

Caviar Emptor's picture

At least they had Betty Boop for President way back when. Now we can't come up with a decent update. Sadder yet: if a rapper, porn star, pimp or pedophile wanted to run for President many might take the candidacy seriously and they would have a serious shot. 

i-dog's picture

"if a rapper, porn star, pimp or pedophile wanted to run for President"

Only connected insiders get a final crack at the job, the others just "happen" to have a scandal or two pop up during the campaign (if they are getting too popular). That's why, next time, it will be Perry vs. Obomber (just in case Diebold fucks up the rigging). Last time, they were "covered" with either McCain or Obomber (and, funnily enough, neither was born in the country!).

boiltherich's picture

Porn star, let's talk!  I would rather have a guy who made an honest living off of having a huge dick than any of the current crop of crooks.  As long as he can prove he was born on US soil. 

i-dog's picture

"Ron Paul better have his name on the next ballot or my "write In" candidate will be Mickey Mouse"

Why the fcuk do you participate in that charade? Do you seriously think they even count the votes?

"God Bless America!"

How do you think that is working out, so far?

nodhannum's picture

Sadly, I have to agree. You can fool some of the people some of the time but you can't fool all of the people all the time...with one CAN fool enough of the people enough of the time.  We are fucked and they won't even kiss us!

rufusbird's picture

Comments here over the past week prompted me to try to articulate this thought. Please bear with me...

A New Division

     The nature of the events and follow up discussions has strengthened my growing belief that there is a developing new division in this country. On the one hand there is the combination of the current powers in control, on the other hand is a growing group of citizens who believe they no longer represent the interests of the public, and in the extreme, believe that are acting in concert to the disadvantage of the public. Now I realize that is a broad swath, but intentionally so, because the second group is becoming a larger and larger group.    

     The media and the news has historically presented a view of ourselves, as a nation, as a nation of Democrats and Republicans. This is something else. There has been something new growing. For lack of a better word at present, I will say it is like a political party, except that it is not organized. That is the ominous part. If it were organized, it could be watched, influenced, controlled, debated, invalidated or what ever. It is a like a live organism with a life of it's own, a mass of cells without a body, but with a consciousness in the Carl Young “collective conscious” sense. This growing population has a growing mass of literature and communication that is conducted primarily in/on the Internet. I have never yet heard of it referred to collectively with a name. If it had a name, an accurate name would be “The Patriot Party”.

     I think there is a growing division between the The Powers That Be. TPTB for short, and the Patriots. The powers that be include most of the current government administration, the money center banks and the Federal Reserve, heads of Wall Street firms, and major corporations, who collectively control most of the nations media. The other group, the Patriots, is a growing list of people who have become disenfranchised with the direction the nation, it's attitude toward individual freedom, the economy, and financial industry regulation, have taken. A growing number of spokesman has developed, who have a growing population of followers of their comments and videos, and interview clips, some of which are from the main stream media. The list of people is increasingly including journalists, political figures, ex political figures, and ex-military figures, all of whom are speaking out against current Federal Reserve Policy and Banking administration, or lack of, the failure of Regulator bodies to perform their jobs, such as the SEC and the CFTC. A portion of this group believe that a takeover of our government, by the industries that are suppose to be regulated, has already occurred. The reason this group of people and needs to described as new division is because, while they all share a strong conviction that something wrong has, and is happening in the nation, that laws reflect the interests of Major Corporations. Generally, these social critics do not stand out as, or refer to the issue as Democrat vs Republican issue.

     The Powers That Be group includes a large part of the population that is influenced by the media who would probably consider the Patriots to be un, or Anti-American. That is why I call this new development a division. I am speaking as a sociologist, not a politician. I am certain that the administration has social scientists who are aware of, and describe just what I am talking about. I think that there is some conscious effort taking place to keep the general population pacified, and to prevent them from becoming part of the Patriot population. Again, I don't call it a movement because it is not organized. I think there is some fear on the part of government, of what would happen if more of the population became Patriots. That is the motivation behind the growing invasion of privacy, recent extension of The Homeland Security Act, and the development of FEMA camps, and other precautionary measure.

     The weakness in my description above, is in failing to convey how big this new division is. I tend to talk to a select group of a few people who are like minded. Only recently have I had many discussions with other new people that I meet, and have discovered that many people have been going through a process of discovery and disenfranchisement. They express a genuine concern about who is in control of our government processes, and a fear of the future. Invariably, the issue of the power and influence big banks comes up. Rarely does the issue of Democrats, or Republicans come up. These people are all good citizens and concerned Americans and they don't know what to do, but they want to share their concerns. They have become part of the Patriots.



Oh regional Indian's picture

Nice Rufus, I was thinking about this last night and I call them (my-self included) mis-fits.

Plain and simple. In fact, that is the theme of the video (mine) below:


rufusbird's picture

Thank you for the link. I had trouble with the original site, and had to use the YouTube version...

I enjoyed it a lot. Is that you? For what it is worth my three grandchildren were encouraged to use a variety of handdrums around my house as they developed, and they all have a well developed sense of rhythm.

Oh regional Indian's picture

Thanks rufus. Yes, that is me. And that was my blessing too. Instruments around the house that I had free reign on! Good move by the parents.


disabledvet's picture

ever rage into a "death metal" sequence for fun?  "bite the head off a canary" and sheet?

Oh regional Indian's picture

Too funny. You'll have to give the whole DVD a listen then disabledvet, eh?

That was Oz E.

i'm V


Ag1761's picture

Hey ORI, how many Eagles you hiding in those bongo pots in the video?

Pegasus Muse's picture

A most enlightening documentary.  The Banksters have been perfecting their fraud/scam for hundreds of years.  The biggest challege today, in contrast to years past, is so few people understand what really is going on.  This documentary takes care of that problem. 


The Money Masters - How International Bankers Gained Control of America

 "The powers of financial capitalism had a far-reaching plan, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole...Their secret is that they have annexed from governments, monarchies, and republics the power to create the world's money..." THE MONEY MASTERS is a 3 1/2 hour non-fiction, historical documentary that traces the origins of the political power structure that rules our nation and the world today. .... "


sschu's picture

Yours is not a bad thesis, here is a book written by someone with similar perspective:

I have not read it, but listened to a couple interviews and understand the ideas.  They have some merit.

I am unsure how this all gets reconciled, but it seems some sort of social meltdown is likely.  

As the economy slowly (or rapidly) sinks into the debt induced coma, the only institution left standing and the one that will be portrayed as the savior will be the Federal Government. So we will have a Federal Government and Fed induced fiscal and monetary catastrophe that will be solved by more powerful, bigger and intrusive government.

Everyone will work for the government and ultimate power will be achieved by the progressives (TPTB), because if you want to eat, you will vote for the ones handing out the food.

The pain we need to endure to prevent this will not be borne by the American people it is sad to say. I hope I am wrong.



Imminent Collapse's picture

Nice post, dude.  I agree with the premise and salute ZH for leading the way.  Actually this group of people show common attribute:  discernment and independent thinking.  This is not a group of illiterate witch burners.  My experience is that these are people who have considered the facts and come to the very supportable conclusion that the patterns are dysfunctional.  The big issue now is what to do about it - and how to protect your family and friends from the coming cataclysm.  Hold high the mission!  

Something's happening here, what it is ain't exactly clear - Buffalo Springfield -

AgShaman's picture

"Battle lines being drawn...."

Nice thoughts Rufus.

The problem is with the disconnect fomented in the populace's historical background.

"A Republic, if you can keep it" -BF

It has been lost....and the states have been subjugated by a traitorous entity....empowered by a parasitical syndicate of private bankers.

The division you speak of needs to be encouraged.

States would do well to consider threatening the "federal beast" with secession....and snap more of the asleep, over-fluoridated, and over-medicated complicit zombies into being awake to the original designs of their country. They equate "patriotism" with going out and dropping a couple "C-notes" on a box full of fireworks once a year.

I for ashamed to be an American....henceforth, I will accuse military service members of treason....and for breaking the oaths they took upon entrance into their service.

(all enemies....foreign and domestic)

The American landscape is laden with "domestic enemies"....quite a few departments of the federal govt. have easily qualified to emulate that moniker.

cosmictrainwreck's picture

Understand your premise; I think if they kept the oath we'd have a damn coup. Unfortunately, the more probable outcome is fascism, since all the fat-ass generals & bureaucrats in the Pentagram are nothin' but pigs at the trough, too.