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Europe Opens $80 Trillion Shadow Banking Pandora's Box: Will Seek To Collapse Repo "Collateral Chains"

Tyler Durden's picture


In what may be the most important story of the day, or maybe year, for a world in which there already is an $11 trillion shortfall in high-quality collateral (and declining every day courtesy of Ben's monetization of Treasury paper) so needed to support the deposit-free liability structures of the shadow banking system (as most recently explained here), Bloomberg has just reported that Europe may begin a crackdown on that most important credit money conduit: the $80 trillion+ global shadow banking system, by effectively collapsing collateral chains, and by making wanton asset rehypothecation a thing of the past, permitted only with express prior permission, which obviously will never come: who in their right mind would allow a bank to repledge an asset which may be lost as part of the counterparty carnage should said bank pull a Lehman. The result of this, should it be taken to completion, would be pervasive liquidations as countless collateral chain margin calls spread, counterparty risk soars all over again, and as the scramble to obtain the true underlying assets finally begins.

From Bloomberg:

Banks and brokers face a clampdown on using assets they hold for clients as collateral for their own trades as part of European Union moves to bolster market stability and rein in shadow banking.


The European Commission is weighing whether firms should have to obtain formal consent from their clients before being allowed to reuse assets to back other trades, according to a document obtained by Bloomberg News. The consent would be enshrined in a “contractual agreement” between the parties.


The handing over of collateral is an integral part of repurchase agreements, or repos -- one of the activities under review by global regulators as part of their efforts to regulate shadow banking. The reuse of clients’ assets poses a potential threat to financial stability should one of a chain of firms that handled the securities go bankrupt, according to the document prepared by commission officials and dated May 15. Uncertainty about who holds an asset can fuel panic in times of market stress, according to the paper.


“Complex” chains of collateral can make it difficult for investors to “identify who owns what, where risk is concentrated and who is exposed to whom,” according to the document. “This has consequences for transparency and financial stability.”


Under the plans being weighed by the commission, banks and brokers holding securities for clients wouldn’t be allowed to reuse the assets for trading on their own account -- speculation on the markets aimed solely at boosting their own revenues, according to the document.




The Financial Stability Board has estimated that the global shadow-banking system was worth $67 trillion in 2011, with EU-based activities accounting for about $31 trillion.

Here's the kicker: collateral chains collapse on their own when confidence and faith in the financial system is evapoarting. This is usually manifested in soaring variation margin, and demand for delivery of collateral (which having been pledged at 10 or more different places just doesn't actually exist).

In other words, the last thing Europe needs is to force the aftereffect of a plunge in systemic confidence to be imposed upon the market participants! And yet, it is doing just that.

And for a comparable virtualization of repo pathways in the US, here is a chart showing the key relationships as of 2009. For the modern iteration, just update $30 trillion with $80 trillion (including custodial "assets" State Street, BoNY and JPM). This is $80 trillion in custodial credit money created via repo. Just in the US.

In other words, just as we have been warning for the past four years, Europe may pull the switch on its own electric chair. Among others, read:

Finally, read Kyle Bass' own thoughts on the matter: Presenting Kyle Bass' Analysis On Shortening Collateral Chains; Or The Gradual Evisceration Of Shadow Banking

Hayman Capital Letter Dec 14



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Fri, 05/24/2013 - 10:54 | 3595858 q99x2
q99x2's picture

The disruption comes at the start of one of the year's busiest travel periods as people head abroad for the Bank Holiday weekend.

Fri, 05/24/2013 - 11:03 | 3595874 Precious
Precious's picture

Shadow politicians take down shadow bankers.  That plot's enough to make Dan Brown weep.

Fri, 05/24/2013 - 11:03 | 3595890 Jayda1850
Jayda1850's picture

titled: "The inverted pyramid"

Fri, 05/24/2013 - 11:13 | 3595929 Fukushima Sam
Fukushima Sam's picture

I'm sure everything's just fine over in the global shadow banking economy.

Fri, 05/24/2013 - 11:20 | 3595948 NotApplicable
NotApplicable's picture

I take it that "collapsing collateral chains" are the new "cascading cross defaults?"

This should end well.

Fri, 05/24/2013 - 11:25 | 3595970 BigJim
BigJim's picture

 The result of this, should it be taken to completion, would be pervasive liquidations as countless collateral chain margin calls spread, counterparty risk soars all over again, and as the scramble to obtain the true underlying assets finally begins.

ie, it won't happen. But the threat of it will unleash another round of banker backhanders to politicians. 

Fri, 05/24/2013 - 11:28 | 3595987 Precious
Precious's picture

It would be happening faster but the shadow politicians aren't finished moving their own money to off-shore tax havens yet.

Fri, 05/24/2013 - 11:37 | 3596011 Manthong
Manthong's picture

80 trillion here, 80 trillion there..

Pretty soon you are talking about real hypothecations of promises of incumbrances of pledges of credit that can never be called to default..

Fri, 05/24/2013 - 11:41 | 3596027 BLOTTO
BLOTTO's picture

80 Trillion...$?

We are now starting to talk in large numbers used to measure distances between planets, stars, nebula's and shit...


Might as well use Au - Astronomical Units.

Fri, 05/24/2013 - 11:47 | 3596037 Manthong
Manthong's picture

Au= AU.. it will come to pass.


oh.. but quads in yen

Fri, 05/24/2013 - 11:53 | 3596069 BLOTTO
BLOTTO's picture

There i go thinking about Gold again i

Thanx Mant

Fri, 05/24/2013 - 12:08 | 3596102 SafelyGraze
SafelyGraze's picture


Fri, 05/24/2013 - 12:22 | 3596130 Element
Element's picture

At least it's not serious, I was getting a bit worried 'til I realized none of the numbers were real, come to think of it nor are they even possible ... whew! ... all better I suppose.

Fri, 05/24/2013 - 12:51 | 3596205 Joe Sixpack
Joe Sixpack's picture

The final stage of the Derivatives Collapse?

Fri, 05/24/2013 - 13:11 | 3596265 eatthebanksters
eatthebanksters's picture

This means the TBTF banks can no longer profit off of casino bets, right?  This means they have no more high margin business right? This means that they can't operate as huge, fat, bloated bureaucracies for the benefit of a few fat cats at th top right?  It basciallymeans TBTF is no longer corect...they will fail.  I'm down!

Fri, 05/24/2013 - 13:35 | 3596344 Spirit Of Truth
Fri, 05/24/2013 - 13:53 | 3596394 Doña K
Doña K's picture

first one out wins.

Fri, 05/24/2013 - 14:30 | 3596527 kaiserhoff
kaiserhoff's picture

Hell's the problem?  I'm sure they can pull 80 trillion in good collateral out of some goat's ass in Iberia.  Go for it, suckers.  Let's drop the big one and see what happens.

Mon, 05/27/2013 - 02:17 | 3600626 Dead Canary
Dead Canary's picture

Just when I got used to the fact that we live in a house of cards, I find out it's built in a swamp, over a fault line.
And the swamp is full of werewolves and cyber-gators.

If our financial system is stuffed with re-hypothecated, multi-pledged collateral, (Think MF Global) a few rules now attempting to bring order to this mess is a case of way to little, waaay  to late.
Katy, bar the door.

Sat, 05/25/2013 - 08:16 | 3598133 Urban Redneck
Urban Redneck's picture

It would be one of the early stages, unless the radiation from Tokyo can't be contained

Fri, 05/24/2013 - 13:32 | 3596333 Swarmee
Swarmee's picture

Clever double meaning, I like it. Of course as you likely know one AU is "only" approx 93 million miles, so even $80 trillion represented in AU (where $1 = 1 mile) would be 860,215 AU! Holy hell the distance from here to the nearst star, Proxima Centauri is just 271,000 AU!

The mind boggles. How did we ever let these people create so much debt?

Fri, 05/24/2013 - 14:33 | 3596546 MisterMousePotato
MisterMousePotato's picture

"We," Kemosabe?

Fri, 05/24/2013 - 14:58 | 3596633 resurger
resurger's picture

you are damn fucking right BLOTTO!

Sometimes i feel 80 Trillion is not a big number ....

Fri, 05/24/2013 - 15:14 | 3596676 MonsterBox
MonsterBox's picture

a stack of one million dollar bills = 333 feet tall

a stack of one billion dollar bills = 63 miles tall

same stack of a trillion dollar bills = 8.5 planet diameters

Can any one really get their head around the size of a TRILLION?!?

Fri, 05/24/2013 - 15:32 | 3596733 James_Cole
James_Cole's picture

$8 x 10^13, totally manageable lol

Total outstanding according ot zh, $3 x10^14

9.4 x10^15 - lightyear. Soon we'll be able to compare derivatives relative to light years. 

Big numbers, Bernanke is gonna need a spaceship instead of a helicopter. 

Fri, 05/24/2013 - 17:20 | 3597048 Manthong
Manthong's picture

trillions?? that is so.. double ought thinking..

quads is the new trillions in the teens.

Fri, 05/24/2013 - 11:51 | 3596063 Panafrican Funk...
Panafrican Funktron Robot's picture

There must be some reason for these intentional crash mechanisms coming into view (this, one day after the China copper article is posted).  I was initially thinking the banksters would be pissed about this, but intentional crashes often serve very useful purposes.

Fri, 05/24/2013 - 11:56 | 3596071 BigJim
BigJim's picture


Fri, 05/24/2013 - 17:48 | 3597123 mkkby
mkkby's picture

WTF is wrong with you people.  The article says europe "MAY CONSIDER".  It will... NEVER HAPPEN.  Just like honest mark to market accounting will never happen.

Hit the snooze button sheeple.  This is nothing.

Fri, 05/24/2013 - 12:04 | 3596093 tugtrash
tugtrash's picture

Off Planet Tax Havens

Fri, 05/24/2013 - 11:57 | 3596072 BigJim
BigJim's picture

 Ms Lagarde’s lawyer, Yves Repiquet, said the inquiry was ‘in no way incompatible’ with her new job...

Haha, understatement of the year! 

Fri, 05/24/2013 - 11:59 | 3596080 Manthong
Manthong's picture

Um .. maybe she has spent a little too much time on the tanning bed or getting injections at Wolf Richter’s place.
but we do know that she has a little bag..  so WTF?

Fri, 05/24/2013 - 13:12 | 3596270 new game
new game's picture

yup, the sly silver fox.  those pelts bring a premium, don't cha know.

Fri, 05/24/2013 - 13:36 | 3596347 Doña K
Doña K's picture

She learnt her tricks during her early days in Chicago.

Fri, 05/24/2013 - 16:53 | 3596995 Manthong
Manthong's picture

ah yes.. Chicago..

Where the popularized concept of "never let a serious crisis go to waste" emanates from nowadays.

Thank God the murder capitol home of gun control is run by such enlightened persons.

Fri, 05/24/2013 - 13:24 | 3596322 shovelhead
shovelhead's picture

That gal is gonna be swimming to Cambodia soon.

Fri, 05/24/2013 - 13:53 | 3596396 worldtraveler
worldtraveler's picture

Is it not just similar as when the Dem's blame Bush for all the mess that Obama has perpetuated and also newly created? Hollande's totally inept government tries to drag their predecessor and his team into the dirt - it's typical french bullshit. Same as starting a war with a foreign country to herd and distract the sheeple.

Fri, 05/24/2013 - 12:47 | 3596186 Spigot
Spigot's picture

Problem is that simply the discussion of "collapsing the chain" of re-hypothication by those who just keel hauled Cyprus and Irish depositors ... by itself will cause a stampede. Only the first oines to collapse their own chain and draw back the collateral will be able to do so, all the remaining bag holders will only have air to grasp at as their fall down the slope.

This is fucking hugh. Good Gawd!

Fri, 05/24/2013 - 13:59 | 3596409 kaiserhoff
kaiserhoff's picture

Haven't heard "keel hauled" in a while.

Would be a great way to encourage confessions from the bankster set.

Fri, 05/24/2013 - 15:01 | 3596641 bonin006
bonin006's picture

Probably because water boarding is more controllable, and easier to hide.

Fri, 05/24/2013 - 15:34 | 3596754 robertocarlos
robertocarlos's picture

Keel hauled is just going from one side of the boat to the other side of the boat. No big deal. Maybe they are serving coffee on the other side.

Fri, 05/24/2013 - 15:47 | 3596792 Spigot
Spigot's picture

Indeed, the former "depositors" were bound, gagged, and dragged over to the "share holder" side of the boat...

Fri, 05/24/2013 - 15:52 | 3596805 Spigot
Fri, 05/24/2013 - 14:56 | 3596627 Mesquite
Mesquite's picture

And about time..........

Fri, 05/24/2013 - 11:39 | 3596022 astoriajoe
astoriajoe's picture

OT: Does anyone have a photo of some guy smoking at an oil refinery?

Or perhaps a long-tailed cat at a mousetrap factory?


Fri, 05/24/2013 - 12:13 | 3596113 Handful of Dust
Handful of Dust's picture

Does this mean they cannot 'repledge' their house to five different banks for  5 separate $400k loans?



Fri, 05/24/2013 - 11:23 | 3595963 max2205
max2205's picture

Watch those yankee bonds blow up. Ben wilk have to cover that too

Fri, 05/24/2013 - 11:04 | 3595896 _ConanTheLibert...
_ConanTheLibertarian_'s picture

That was kind of my first thought. This sounds like cannibalism.

Fri, 05/24/2013 - 11:05 | 3595899 insanelysane
insanelysane's picture

People are starting to ask questions.

Fri, 05/24/2013 - 11:13 | 3595917 TheFourthStooge-ing
TheFourthStooge-ing's picture


In other words, just as we have been warning for the past four years, Europe may pull the switch on its own electric chair.

Hmmmmm, I wonder what happens if I push this big red button...

Fri, 05/24/2013 - 11:24 | 3595964 Jumbotron
Jumbotron's picture

Start an RSS feed with the keywords....asassination....unexplained murder...and/or death....suicide....mysterious death....high ranking officials...bankers....dictators....middle east....central banks......

just some suggestions to start off with.....

And just wait and see.....


Oh.....and rent the movie...."The International".....The real value of a conflict is in the debt that it creates.

here's a clip......

and one of the all time best.....from "Network".....The World is a Business


Fri, 05/24/2013 - 12:19 | 3596128 Jumbotron
Jumbotron's picture

People will die if they go through with this.....because.....

....."The Spice Must Flow" !!

Fri, 05/24/2013 - 13:34 | 3596343 TNTARG
TNTARG's picture

Old same shit about World domination.

They won't succeed.

I'm convinced. My father knew little about it. My mother, almost nothing. But he managed to pass on the right questions to us. We make huge progress in knowledge. My kids, even my 16 yrs old kid, know much more. We're just common people, as many, many are.

They won't succeed.


Fri, 05/24/2013 - 14:10 | 3596445 walküre
walküre's picture

I'm educating my Dad who is very thankful and of course I'm telling my kids all about the scam that is fractional reserve lending and how some at the top live parasitic life styles that they can continue indefinetely it seems at the mere push of a button. They are young but they know about the French Revolution, about the exessive life styles of Versailles and why the people were so angry at the time that they chopped off the heads one parasite at a time.

Fri, 05/24/2013 - 16:07 | 3596859 Jumbotron
Jumbotron's picture

"They are young but they know about the French Revolution, about the exessive life styles of Versailles and why the people were so angry at the time that they chopped off the heads one parasite at a time."

Uh Huh......

...Tell that to Robespierre......

"His goal in the Terror was to use the guillotine to create what he called a 'republic of virtue', wherein terror and virtue, his principles, would be imposed. He argued, "Terror is nothing more than speedy, severe and inflexible justice; it is thus an emanation of virtue; it is less a principle in itself, than a consequence of the general principle of democracy, applied to the most pressing needs of the patrie."[61]

Terror was thus a tool to accomplish his overarching goals for democracy."


And in the end, he met the same fate as the parasites. 

Hhmm...come to think of it...."Terror was thus a tool to accomplish his overarching goals for democracy"......Bush and Obama sound a lot like Robespierre.  They certainly have been taking the Consitution to the guillotine lately.

Fri, 05/24/2013 - 18:47 | 3597236 MeelionDollerBogus
MeelionDollerBogus's picture

"The International" was an amazingly prescient movie re: HSBC.

Sat, 05/25/2013 - 02:49 | 3597999 joe90
joe90's picture

Yep trollbot

Sun, 05/26/2013 - 01:38 | 3599298 MeelionDollerBogus
MeelionDollerBogus's picture

That's top-calling chart-troll :D

Fri, 05/24/2013 - 11:17 | 3595937 holdbuysell
holdbuysell's picture

And starting to act accordingly by pulling their real assets out of the banking system.

Fri, 05/24/2013 - 14:17 | 3596478 Go Tribe
Go Tribe's picture

Precious metals are yawning at this "news".

Fri, 05/24/2013 - 11:59 | 3596079 Panafrican Funk...
Panafrican Funktron Robot's picture

Trying to think through what would be real collateral.  Something nation-independent.  Perhaps something of stable value over a period stretching back to very near the beginning of recorded history.  I'm thinking this should also be tangible; really, I'd rather be able to hold it in my hand than trust a bank counterparty. 

Fri, 05/24/2013 - 14:10 | 3596448 JohnnyBriefcase
JohnnyBriefcase's picture


Fri, 05/24/2013 - 13:08 | 3596103 spine001
spine001's picture

When the ship starts sinking the rats are the ones that abandon it first. The top .1% which includes politicians also have their ill gotten assets bein rehypothecated without their consent. Before they let the system crash and while they are still in power they want to make sure that ownership is clear in their minds...

Until next time,


Fri, 05/24/2013 - 12:09 | 3596104 RafterManFMJ
RafterManFMJ's picture

People are starting to ask questions.

The People: "Will Honey BooBoo be back next season? Who's in goal tonight? Where's the fuckin' remote control!?"

Fri, 05/24/2013 - 12:16 | 3596119 Handful of Dust
Handful of Dust's picture

If Kim Kardashian has pledged her [pre-owned] panties to 81 different men....


This is going to get ugly.

Fri, 05/24/2013 - 12:28 | 3596147 Jumbotron
Jumbotron's picture

"This is going to get ugly."

What?  The 80+ trillion dollar Shadow Banking System.....or Kim Kardashian's panties ?

....Oh...RIGHTTTtttt....<slaps forehead>......BOTH !!!!   Gotcha !!!!

Fri, 05/24/2013 - 14:17 | 3596480 ebear
ebear's picture

Not really.  That's only 81 days to cover.  Commercial law gives you 90.

Fri, 05/24/2013 - 12:40 | 3596171 Cacete de Ouro
Cacete de Ouro's picture

And what happens to "Gold as Collateral" in a land of liens, claims and encumbrances..

LCH.Clearnet and CME Clearing Europe accept unallocated gold as collateral....

Fri, 05/24/2013 - 11:12 | 3595920 bank guy in Brussels
bank guy in Brussels's picture

This talk about the EU firing a torpedo to blow up the shadow banking system, is another public relations ploy, a 'run the idea out in the media and see what happens' sort of thing

Like the Wall Street Journal piece by Hilsenrath saying Bernanke might end QE ... ha !

Given how the EU actually works ... If Deutsche Bank with their 75+ trillion in derivatives (as documented on ZeroHedge), doesn't want this to happen, it won't

Before the European Commission implements significant new regulations like this, there is a process with time and room for significant input and influence from, for example, lobbyists for the banking industry

If it is really important, the lobbyists start pulling major strings via allies in EU Member State governments, to kill the idea

And that is assuming the Commission already has been given the powers by the Member States and EU Parliament to implement new regulations

If it is new laws or a new regulatory framework, then there is an even more complex process involving 'trilogues' among the EU Commission, EU Parliament, and EU Council of all Member State governments ... with plenty of time for the banking industry to make clear their position and marshal their supporters in bank-heavy EU nations like Germany

Fri, 05/24/2013 - 11:13 | 3595927 LawsofPhysics
LawsofPhysics's picture

Exactly.  More "circuses", which is fine, so long as the bread can be delivered.  Still waiting for the "let them eat cake" moment.

Fri, 05/24/2013 - 11:52 | 3596066 Skateboarder
Skateboarder's picture

One big fuck up in the derivatives market stops the bread dead in its tracks.

Fri, 05/24/2013 - 12:36 | 3596162 yogibear
yogibear's picture

Someone profiting on the derivative market blowup wouldn't have a hard time triggering a collapse with enough money.

Fri, 05/24/2013 - 11:21 | 3595952 London Banker
London Banker's picture

Lobbying and influence didn't kill the Financial Transaction Tax.  It's not clear to me it is going to kill re-use/rehypothecation either. 

Lehman International was looted by proprietary use of customer assets for Lehman financing, causing tens of billions in losses to EU investors.  Same with MF Global.  The EU hasn't forgotten this, and is concerned that once was misfortune, twice was coincidence, but three times might signal a new business model for the TBTF Wall Street banks that took those billions in margin calls in advance of the Lehman/MFG filings and then reported record profits.  They want to make sure customer assets stay under customer control, and one way or another, they are likely to do this.

I agree with the massive impact for existing liquidity and business models, but I'm not sure this is a good reason not to implement a sound policy.  Besides all the prime brokers and custodians will just put proprietary re-use into standard agreements . . . .

Fri, 05/24/2013 - 11:52 | 3596065 Seer
Seer's picture

LB, I think that you're correct on this call.

Everyone knows that doing the right thing will eventually win out.  They all know they were playing with matches at an oil refinery.

It's been a long and slow change of arc.  Most don't see what is going on with the currents underneath because we're just riding along on top.

The link to the Kyle Bass article is from 2011.  All the Big Boys have known for some time that light would be shed on all this at some point.

Articles/info like this are part of the conditioning to eliminate this practice.  I suspect that the Big Boys are working to wind down.

We have to get to "the other side," we have to go through the mine field.  Our only options are:

A) Run like hell and hope we don't hit one (QE).

B) Go slowly and diffuse each mine in our projected path.

Oh!  And we don't even know what mines are really there; we've never done this before.

"We stand today at a crossroads:
One path leads to despair and utter hopelessness.
The other leads to total extinction.
Let us hope we have the wisdom to make the right choice."

- Woody Allen

Fri, 05/24/2013 - 13:17 | 3596297 ekm
ekm's picture

Extremely well formulated

Fri, 05/24/2013 - 13:45 | 3596370 shovelhead
shovelhead's picture

Then again, there may be an issue about naughty photos taken with a long range camera lenses that may negate this process.

Worse case scenario is that ricin tipped umbrellas become very fashionable.

Fri, 05/24/2013 - 14:01 | 3596417 Telemakhos
Telemakhos's picture

This is about what's going to happen: "Besides all the prime brokers and custodians will just put proprietary re-use into standard agreements."  I'd be a bit surprised if it weren't already in the fine print, though.

Fri, 05/24/2013 - 11:32 | 3596000 No Euros please...
No Euros please we&#039;re British's picture

No, I think they're really getting tough on the banks now. Look at Basel 3, who would have thought the banks would let them implement that from January 2013.




Fri, 05/24/2013 - 11:37 | 3596015 ekm
ekm's picture


Europe is experiencing ENERGY STARVATION. Derivatives to be blamed partically for it.

Nobody is caring about derivatives any longer.


They're day to day's coming

Fri, 05/24/2013 - 12:02 | 3596087 Seer
Seer's picture

Check Mate.

Pretty much as I'd been calling it.

Technology WON'T save the day.

The premise of perpetual growth on a finite planet is FLAWED.

Switching back to fossil fuels ain't going to do it, as that makes them more dependent upon imports.  Ultimately conservation will be the adjustment; however, as more and more "adjust" this will result in margin issues for energy producers, quite possibly demanding/forcing price increases.

Pretty clear why all the US actions in the ME: yup, it WAS/IS about oil; fucking DUH!

Japan is in a worse position.

Fri, 05/24/2013 - 11:49 | 3596058 silverserfer
silverserfer's picture

kind of like a banker holdding a gun to his head threatening to shoot. People are like ok. banker repeates I'll do it! Ok... nothing happens 

Fri, 05/24/2013 - 12:05 | 3596094 Panafrican Funk...
Panafrican Funktron Robot's picture

"If Deutsche Bank with their 75+ trillion in derivatives (as documented on ZeroHedge), doesn't want this to happen, it won't"

There may be some use served by pulling a Lehman on DB.  I know, they're part of "the inner circle" (along with JPM, Lloyds, Barclays, HSBC), but they're also kind of the "odd man out".  Calling the gold stores into question, and roadblocking ECB printing, can have consequences.  

Fri, 05/24/2013 - 12:16 | 3596122 Seer
Seer's picture

Doesn't matter if DB is a big fish, if there are bigger fish in the pond...  Contractionary forces can't be rebuked by DB or anyone else; and contractionary forces WILL draw blood: either DB cooperates and stays in the pond as a smaller fish or it comes to an end.

Fri, 05/24/2013 - 12:50 | 3596201 Cacete de Ouro
Cacete de Ouro's picture

None of those banks are in the inner circle, innit!

ps: Deutsche Bank did not call gold stores into question. Deutsche Bundesbank did. But...the Bundesbank would not make such a move without consulting Jain and Fitschen. So if this what you mean in a round-about way?

Fri, 05/24/2013 - 14:20 | 3596491 walküre
walküre's picture

What's the status on their push to reform HFT? They pretty much banned short sales over and over again.

Where there's talk, there is thought. Where there's smoke there is fire.

The experiment commonly referred to as EU and EMU will be nothing but a footnote in future history books. What's 30 or 50 years in the context of millenia?

I would even dare to go further and say that with the end of the EU, comes the end of the American Empire and will mark the beginning of the end of judeo-christian hegemony. Hundred years from now, people won't waste time disecting fairy tales and fables collected as "bible". What's the point when they realize that all this indoctrination and propaganda did, was allow a few members of an elite clan to oppress the rest of the people financially and spiritually.

When that is allowed to happen, then we can finally continue a path of truth, enlightenment and progression as human beings. But we have to strip it all away first and expose the naked emperors.

Fri, 05/24/2013 - 11:51 | 3596054 GVB
GVB's picture

They will probably just back off the plan to address shadow banking, just as they did with the olive oil. But taking all options into consideration, thus considering they don't => Then either these politicians don't have a clue what they've just asked for, or they're looking for a global collapse of the Western financial system. This scam doesn't confine itself to Europe.

Fri, 05/24/2013 - 12:23 | 3596137 Seer
Seer's picture

"Then either these politicians don't have a clue what they've just asked for, or they're looking for a global collapse of the Western financial system."

In the first case, REVOLVING DOOR- politicians and the bankers are one and the same.  They absolutely DO know/have a clue.  It's not like they can ram through a law that would immediately result in a massive unwind/panic.  This is all about trying to diffuse the bomb.

The Western financial system WILL collapse if something isn't done.

Anyone thinking that all these folks WANT to bring on disaster have to ask themselves why these folks would do it given that the way things have worked have enabled them to be at the helm- when you're on top you DON'T change things!  THEY don't know how this is going to be diffused, nor does anyone else, because it really IS the end of the Western financial system (those with physical are no longer willing to trade that precious physical for paper and promises).



Fri, 05/24/2013 - 11:07 | 3595909 zorba THE GREEK
zorba THE GREEK's picture

This is most likely a ploy by the EU to get banks to unwind much of

these derivitives themselves, but a move like this could cause a dash

for real assets and set fire to the massive paper market. 

Fri, 05/24/2013 - 12:05 | 3596095 Seer
Seer's picture

Yeah, it's an "encouragement" that sooner or later the parents will walk into the room so it's best to start looking to put away all the shit...

I think they're still unsure how to have a controlled demolition without ending up looking like it's not controlled (massive damage, perhaps lethal).

Fri, 05/24/2013 - 11:19 | 3595942 slaughterer
slaughterer's picture

Seriously, get out of PM paper long positions before the weekend: you will be destroyed by Tuesday as the Japanese scramble to meet margin calls.   If you are a stacker, just BTFD next week.

Fri, 05/24/2013 - 11:28 | 3595985 Dr. Engali
Dr. Engali's picture

When precious metals get hit they  won't be available at the paper prices. The stackers will all be trying to buy and the demand will drive the premiums well above what the paper price suggests.

Fri, 05/24/2013 - 11:45 | 3596034 gmrpeabody
gmrpeabody's picture

And the better miners will follow the phys....

Fri, 05/24/2013 - 12:20 | 3596131 Frank N. Beans
Frank N. Beans's picture

One can only hope

Fri, 05/24/2013 - 12:45 | 3596181 moonstears
moonstears's picture

Been asleep the last 8 weeks, Doc? That one's moving forward, as I type.

Fri, 05/24/2013 - 12:07 | 3596099 Panafrican Funk...
Panafrican Funktron Robot's picture

Yeah, because the Japanese have a shitload of gold.  Oh, wait.

That said, there are any number of manufactured reasons one could go with for tanking the paper price of gold.  I'm hoping for sub $1k personally, along with at least one idiot willing to sell phys to me at or anywhere near that price.

Fri, 05/24/2013 - 15:14 | 3596699 Herd Redirectio...
Herd Redirection Committee's picture

Japan and Argentina, the slow learners among the crowd, I guess.

What surprising is Argentina with its history of currency debasemenet still has no love for precious metals!  What kind of edumacation do they got down there?

Fri, 05/24/2013 - 11:25 | 3595968 Translational Lift
Translational Lift's picture

And another chair is removed from the musical chairs............

Fri, 05/24/2013 - 11:28 | 3595979 ebworthen
ebworthen's picture

And likely related to Bankia's 50% plunge yesterday (?).

(link opens in new window/tab)

Fri, 05/24/2013 - 12:07 | 3596101 Seer
Seer's picture

Swimming naked on the shoreline (and not at a nude beach) is problematic when the tide goes out.  Likely lots of folks out there holding Bankia's shorts? (pun intended)

Fri, 05/24/2013 - 11:34 | 3596002 RafterManFMJ
RafterManFMJ's picture

I'm going to need more Jiffy-Pop.

Fri, 05/24/2013 - 12:12 | 3596111 Seer
Seer's picture

Just note that when buying that that you're handing over $$s to ConAgra...

Oh, fuck!  Orville Redenbacher popcorn (that I get) is also owned by ConAgra!

Fri, 05/24/2013 - 13:39 | 3596357 Skateboarder
Skateboarder's picture

I bought some organic Newman's Own microwave popcorn from Prole Foods the other day. Have given up gmo microwave popcorn for a long time now.

Sat, 05/25/2013 - 07:41 | 3598105 drdolittle
drdolittle's picture

Gotta look up the new definition of organic. You're right GMO can't be organic but..

You can still fertilize the corn with the same fertilizer it just has to be sprayed on the leaves (foliar feeding) rather than on the roots. A rich "farmer" (landowner who has serfs working the land for him) told me that. You should have seen the evil glint in his eye when he did. He knew he was fooling people to make extra money and ws thrilled about it.

Sorry, big ag changed the definitions. Only way around it is beyond organic. Know your local producer. For those in the Huntington, wv tri state area I recommend 'the wild ramp'. They source local only and the owner has been to almost all the farms, knows what's coming out of there.

Cage free for chickens means there's a door at the end of the building and ten feet of dirt the width of the building. For broilers (harvested at 7 weeks) they don't even have to open the door until 5 weeks (birds really susceptible to disease, almost as if they're not designed to live 10k to a building or something). Cage free is bs. Gotta find local and try pastured eggs. You'll be able to see the difference in the yolk.

Fri, 05/24/2013 - 14:02 | 3596420 freedogger
freedogger's picture

Friday allways has the best feel good news stories.

Fri, 05/24/2013 - 10:57 | 3595860 The Thunder Child
The Thunder Child's picture


World Wide March Against Monsanto

TOMORROW 2pm Everywhere

Get out and let your voices be heard, help to stop GMO and the takeover of our food supply!

Fri, 05/24/2013 - 11:07 | 3595908 Bangin7GramRocks
Bangin7GramRocks's picture

Thanks for posting. People don't realize what that GMO poison will do. It will separate the classes even more. The 1% will buy all organic and avoid the poison and most of the 99% will rot from the inside and endure horrifying allergies.

Fri, 05/24/2013 - 11:09 | 3595915 The Thunder Child
The Thunder Child's picture

This is one of many battles we must fight to win the war, the time to stand up and say NO is NOW!

Fri, 05/24/2013 - 11:16 | 3595935 LawsofPhysics
LawsofPhysics's picture

Nature has a funny way of settling such scores.  For example, systems under stress undergo rapid mutations that result in a more evolved species.  So, what you are saying is that the 1% stop evolving, while 99% go into hyper-evolution mode.  All fine and good if one truly belives that 1% can control whatever comes out the other end of that process.  History shows otherwise...

Fri, 05/24/2013 - 11:22 | 3595951 The Thunder Child
The Thunder Child's picture

The entire worlds food supply is in jeopardy, time to rally up and put a stop to this!

Fri, 05/24/2013 - 11:24 | 3595965 NotApplicable
NotApplicable's picture

Aren't you aware yet that the world is run by a criminal cartel? You demand they stop something, and they'll stop it in a way that only makes it worse.

You should stop empowering the beast over you.

Fri, 05/24/2013 - 11:30 | 3595975 The Thunder Child
The Thunder Child's picture

Stop being cynical, if you lay down the cartel will walk all over you. The time for unification and civil disobedience is now. Network, make alliances the battle against the banks is coming soon and we are going to need as many people on board as possible.

Fri, 05/24/2013 - 12:08 | 3596100 oddjob
oddjob's picture

A simple act like refusing to buy any type of insurance en masse would suffice.

Fri, 05/24/2013 - 12:57 | 3596217 NotApplicable
NotApplicable's picture

I'm not laying down at all. Unlike you, I work in a positive fashion in order to create the world around me that I wish to live in.

You, OTOH, are empowering the cartel via your ignorance of how the system actually functions.

Simply put, begging governments for ANYTHING is only to create the next disaster you need to beg them to solve as well.

In other words:  IT'S A TRAP!!!!

The First Rule of Holes is extremely applicable here.

Fri, 05/24/2013 - 13:15 | 3596252 The Thunder Child
The Thunder Child's picture

I have never seen you say anything positive against my posts, all your comments and threads with me have been extremely negative. You are a cynic and have put my message down on numerous occasions, if you think that saying nothing and not standing up for yourself and your common man is going to get you somewhere then you are sorely mistaken. Apathy is what got us here in the first place and I refuse to continue that path ESPECIALLY since I know exactly how the system functions, it doesn't it is corrupt to the core. Grass roots activism, civil disobedience, protest and alternative media are the weapons we currently have and you can be damn sure that I will use them as well as disconnecting from the system (no bank savings, no credit card, no stocks, no paper assets, shop local stores). I will not pick up arms or use violence unless we are forced to, have the moral high ground and that is stll a ways off.

Personally I am very much looking forward to joining a march that is on a global scale, something that is larger then myself and I am also looking forward to meeting like minded people that are ready to act to prevent further decay of humanity. People like you can remain hidden in their basements fearing the cabals tenticales for all I care, while real people with guts go out and try to stop this.

Fri, 05/24/2013 - 13:34 | 3596341 WillyGroper
WillyGroper's picture

What is it about awareness that you're against so that more people are informed & can make an educated vote with their money?

Would you prefer the flow of information stop, beginning with writers like Michael Pollan?

Yes, the planet is run by a criminal cartel. I agree. The only thing they know is money. The first & best gut punch is the home vegetable garden.

Teach a man to fish.

"You should stop empowering the beast over you."

Fri, 05/24/2013 - 11:26 | 3595976 LawsofPhysics
LawsofPhysics's picture

My food supply (and that of my tribe) is just fine, but then I made different choices when chosing my career path.

Fri, 05/24/2013 - 11:28 | 3595986 The Thunder Child
The Thunder Child's picture

There's 6.9 billion other people on this planet outside your tribe that aren't so lucky...

Fri, 05/24/2013 - 11:35 | 3596007 Hi Ho Silver
Hi Ho Silver's picture

What does luck have to do with their bad choices?



Fri, 05/24/2013 - 11:38 | 3596021 The Thunder Child
The Thunder Child's picture

Yeah they chose to support Monsanto, terminator seeds, round up, GMO sterilization, monopoly on food and a thousand other nasty processes Monsanto is responsible for...

Fri, 05/24/2013 - 12:15 | 3596117 Bangin7GramRocks
Bangin7GramRocks's picture

Nut allergies were incredibly rare until GMO's entered the food supply. Now, peanut butter is practically forbidden in most American schools.

Sat, 05/25/2013 - 07:45 | 3598111 drdolittle
drdolittle's picture

gotta source that one for me. Peanut allergy is to a mold that grows ont the nuts. Tree nut allergies are different. Most processing plants handle all kinds of nuts and thus, you're exposed to all the allergens.

Fri, 05/24/2013 - 12:26 | 3596136 MrNude
MrNude's picture

The simple fact is you can't save everyone.

That is what evolution is there for in the first place.

If people don't want to hear it and educate themselves, then leave them to it. If they want to be blindly lead off the cliff that is there choice.

They made their choice and we made ours. 

There are no excuses in an era where everyone has access to most of the worlds information at the click of a finger for blind ignorance and people not educating themselves to what is going on.


Fri, 05/24/2013 - 12:28 | 3596151 The Thunder Child
The Thunder Child's picture

So $5 million a year in lobbying funds in the US alone has nothing to do with it?

Who is they?

Fri, 05/24/2013 - 12:46 | 3596185 MrNude
MrNude's picture

You are missing the big picture.

Most people here know about Monsanto and their dirty tricks, you know about Monsanto and their dirty tricks and yet we are seemingly arguing over semantics.

If we both went outside and with signs and leaflets about Monsanto i'm sure we'd get people listening and who would like to learn more but i'm also sure we'd get people walking on by shaking there heads and laughing thinking we are fruitcakes.

Why be concerned with them?

One person who wants to learn and educate and save themselves is far more important than 100 people walking off laughing and never learning until it's too late in my opinion.


Fri, 05/24/2013 - 12:59 | 3596226 The Thunder Child
The Thunder Child's picture

If most people are aware of Monsanto then why would people shake their heads and laugh thinking we are fruitcakes?

Most people are on board with stopping Monsanto it just takes a few positive people that are willing to stand up to get the ball rolling. Grass roots support for this is MASSIVE, everybody wants to put this company down.

Fri, 05/24/2013 - 13:35 | 3596339 MrNude
MrNude's picture

Look around you, do you see Greeks, Spanish, Japanese hanging the bankers and politicians that have bankrupted their countries. Even with the proof widely avaliable to them at the click of a finger on the internet.

Do you see Americans flipping out en masse that they are living on QE 4ever and can be droned on US soil now at any time even though the proof of this is widely avaliable at the click of a finger on the internet.

And yet you think the same people are going to suddenly rise up against Monsanto even though the evidence of Monsanto's crimes are freely and widely avaliable at the click of a finger on the internet.

I'm not trying to put you down, we are on the same team but what I am saying is the reality of the situation is most of these zombies are sleepwalking simply because they want to believe the lies. You'll learn one day that you or me can't change that and nature and the rules of the universe just have to play out there course on them. I'm sorry it is that way but it just is.

Fri, 05/24/2013 - 14:54 | 3596371 The Thunder Child
The Thunder Child's picture

You or me can't change the world alone but we can.

People want to be in with the herd, if the herd starts promoting action more will follow. Intellectual revolutions don't happen overnight it takes years to get the people properly motivated and informed.

Fri, 05/24/2013 - 13:11 | 3596271 TNTARG
TNTARG's picture

Do you actally believe you can save yourself? How naïf!

Fri, 05/24/2013 - 13:57 | 3596405 WillyGroper
WillyGroper's picture

>>>>>Why be concerned with them?


Why did the Tyler(s) create this site? 

Fri, 05/24/2013 - 16:02 | 3596841 MrNude
MrNude's picture

And that has never been the issue or point i've been making.

Even before Zerohedge the history of past crashes have been well documented in history and what REAL changes have we seen from then to now? Nothing except the rich getting richer and the poor getting poorer.

As i've been saying since my initial comment, you can lead a horse to water...but you can't make it drink.

The majority are content with living in the lie and staying in the matrix.

Am I pissed off about it like you all are, yes, that is why we are here but I still don't think we are going to singlehandely change the mass of human condition.

That is why I will always be more interested in fellow awakened and slowly awakening humans, as we have already made the leap and have a chance to sidestep the current human condition that others are choosing to sleepwalk along to.



Fri, 05/24/2013 - 19:21 | 3597317 Cobra
Cobra's picture

People have to discover things for themselves. I haven't been very successful in cleansing the wool from some of my friends' eyes. And a few of them now think I'm nuts so I had to scale back to save face. I almost had to turn in my 'cool card' and take a weirdo card. Fuck 'em... I hope they get here in time, but it's not looking good.

Fri, 05/24/2013 - 12:34 | 3596160 Seer
Seer's picture


Please don't project percentages based on what you see in the western societies.

Most people on the planet DO eat locally.  Most are subsistence farmers.

Food, Shelter and Water.  I quit railing against things and have moved my energies toward being FOR things, things that are based on the aforementioned fundamentals.

Just started another garden plot.  New batch of chicks arrived.  More to plant.  Coops to build...  Maybe I should join the protests, as that would be FAR easier?  But if everyone is out protesting who is producing their food?

Best solution, IMO, is to take back your energies and time and to create that which you want (rather than spending time and energy telling others what they should or shouldn't be doing).

“You never change things by fighting the existing reality.
To change something, build a new model that makes the existing model obsolete.”

- Buckminster Fuller

Fri, 05/24/2013 - 12:47 | 3596169 The Thunder Child
The Thunder Child's picture

Do both, we need to be responsible for our food supply as well as stop Monsanto from taking it with patents on living and geneticall altered organisms. It's 2 hours out of your afternoon and you are not telling other people what to do you are spreading awarness and protesting.

How would it feel if 10 years down the road and your organic garden is contaminated by Monsanto pollen and you are ordered to till it all in or face arrest? That is the direction we are heading in today, they want to own the entire food supply by patent and law.

Sat, 05/25/2013 - 07:49 | 3598113 drdolittle
drdolittle's picture

damn straight! If your crops are cross pollinated by gmo crops monsanto may take you to court over having "their" technology wihtout paying the royalties. And, if you save some seed to reuse and it has monsanto gm dna, it's assumed you're a thief.

Fri, 05/24/2013 - 14:29 | 3596522 walküre
walküre's picture

Really? That's all there is to it? Making different choices for your "tribe"?

Dude, the planet is being polluted with GMO seeds. Doesn't matter where you grow your tribe's crop. It will reach you before you even know it. I'm in the same boat and planting NON GMO and NON MONSANTO but I know these fuckers have their fingers in many pots and they will eventually starve my supplier out of business.


Fri, 05/24/2013 - 12:05 | 3596096 Things that go bump
Things that go bump's picture

Why do you think they built that seed vault up in Svalbard near the artic.

"On this God-forsaken island Bill Gates is investing tens of his millions along with the Rockefeller Foundation, Monsanto Corporation, Syngenta Foundation and the Government of Norway, among others, in what is called the ‘doomsday seed bank.’ Officially the project is named the Svalbard Global Seed Vault on the Norwegian island of Spitsbergen, part of the Svalbard island group."

Look at the names on that list. I'm sure there are more.

Fri, 05/24/2013 - 14:29 | 3596523 WillyGroper
WillyGroper's picture

Engdahl is awsome!

Fri, 05/24/2013 - 11:35 | 3596006 Bangin7GramRocks
Bangin7GramRocks's picture

If you are on the east coast, walk around a Wegman's and a Walmart and look at the people. Sadly, the evolution has begun and the poor are morphing into a new species. It will only get worse!

Fri, 05/24/2013 - 19:24 | 3597329 Cobra
Cobra's picture

+1. I've noticed that 2/3 of the EBT receiving population don't even bother to get dressed anymore to go shopping... What's that about?

Sat, 05/25/2013 - 07:50 | 3598115 drdolittle
drdolittle's picture

At least they have pajama pants covering their fat asses. Naked would be so much worse.

Fri, 05/24/2013 - 11:40 | 3596024 ThirdWorldDude
ThirdWorldDude's picture

It wouldn't be called Status Quo if the degenerate inbreds were still evolving.
Rising up against Monsanto goes way beyond GMO's - it's about their mindless arrogance expressed in patenting nature's own creations and even life itself.
They should patent the slogan "doing God's work" before The Squid does it...

Fri, 05/24/2013 - 11:57 | 3596073 The Thunder Child
The Thunder Child's picture

Couldn't have said it betteer, Thanks TWD

Fri, 05/24/2013 - 13:12 | 3596278 Seer
Seer's picture

I stay away from GMOs, but I know that not all are as bad as most think (yes, some ARE).  Humans have been mucking with genetics for a LONG time.  I think that the notion of terminator genes should be mandatory so that there's no way any of this can actually reproduce (or cross-pollinate).

The PROBLEM is in loss of diversity, a concentration of control of food sources.  Interesting that much is happening in this regard as a result of pressures to have better quality/security controls, when, in the long-run, it'll result in big failure points.

"it's about their mindless arrogance expressed in patenting nature's own creations and even life itself."

I tend to believe that it's hubris delivered via benevolence.  No matter, loss of diversity will end badly...

Never forget that Nature bats last.

Fri, 05/24/2013 - 15:29 | 3596740 ThirdWorldDude
ThirdWorldDude's picture

"Humans have been mucking with genetics for a LONG time."

And called it cross-breeding, which (unlike laboratory gene manipulation) is in great part a process of natural selection.


"I tend to believe that it's hubris delivered via benevolence."

No matter how you name them and their mental disorder, they're definitely not benevolent... Remember the recent GMO labeling campaign? Now why do you think they have a problem with letting you know what's in yout food?

Fri, 05/24/2013 - 18:42 | 3597229 MeelionDollerBogus
MeelionDollerBogus's picture

No, the problem is that the viral vector copied to install the genome splices is actually inhibiting the ability of plants and animals to reject infections. This endangers us all. Now some diseases will be able to jump between plants as never before and even from crops to animals - maybe to us.

Fri, 05/24/2013 - 11:51 | 3596062 thisandthat
thisandthat's picture

They wish... once gmo polen is airborne, it's everywhere, there will be no escaping.

Fri, 05/24/2013 - 16:54 | 3596997 DosZap
DosZap's picture

The 1% will buy all organic and avoid the poison and most of the 99% will rot from the inside and endure horrifying allergies.

Organic is not all it's cracked up to be, it leads the pack in salmonella outbreaks.(while I agree if YOU grow your own, way better off).

Fri, 05/24/2013 - 11:22 | 3595958 NotApplicable
NotApplicable's picture

In the US, it's way, way too late. GMO corn and soy are practically the entire market these days.

Good thing I don't eat them. I'd recommend the same to anyone.

Fri, 05/24/2013 - 11:29 | 3595989 The Thunder Child
The Thunder Child's picture

You might as well lay down and die with your attitude. Just look at what Hungary has done..

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