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The Unspoken, Festering Secret At The Heart Of Shadow Banking: "Self-Securitization" ... With Central Banks
By now everyone has heard of securitization: the process whereby banks take risky assets on their books, package, tranche them, and then re-sell them to yield chasing fiduciaries of widows and orphans. The conversion process can be nebulous, usually involving a 20 year-old evil French mastermind working for Goldman, and a billionaire hedge fund manager, who select the worthless securities put into the weakest tranche, just so the abovementioned two parties can short it while misrepresenting their conflicts of interest, and make a boatload of money when the whole securitized structure implodes. The process usually takes place "off balance sheet" via Special Purpose Vehicles so it is completely unregulated, and as such allows massive leverage.
According to many, the hidden leverage embedded in the securitization pipeline is what catalyzed the 2008 near-death experience of the financial markets.
All of this is well-known to most.
What however is certainly not known, because until a few days ago the concept did not technicall exist, is what emerged deep from the bowels of the FSB's 2013 "Global Shadow Banking report", and what is barely even defined anywhere in popular literature, which thus we have defined as the "unspoken, festering secret at the heart of shadow banking."
Presenting self-securitization.
What is "self-securitization"? Go ahead and Google it: there doesn't exist any technical definition of this heretofore unheard of phrase.
Rather the term, conceived by the FSB as a means of making the total size of the $71 trillion shadow banking sector somewhat more palatable, is defined as follows:
Self-securitisation (retained securitisation) is defined as those securitisation transactions done solely for the purpose of using the securities created as collateral with the central bank in order to obtain funding, with no intent to sell them to third-party investors. All of the securities issued by the Structured Finance Vehicle (SFV) for all tranches are owned by the originating bank and remain on its balance sheet.
At this point alarm bells should be going off. And if they aren't, here is some more color.
The numbers for OFIs presented in sections 2 to 4 of this report include all financial assets of Structured Finance Vehicles (SFVs), regardless of who holds the securitised products. However, in a number of jurisdictions, some of these products are returned back onto the balance sheet of the bank that originally provided the asset to be securitised. This so called self-securitisation, or retained securitisation, is defined as those securitisation transactions done solely for the purpose of using the securities created as collateral with the central bank in order to obtain funding, with no intent to sell them to third-party investors. All of the securities issued by the SFV for all tranches are owned by the originating bank and remain on the bank’s balance sheet, so that third-party investors do not own any of the securities issued by the SFV. These assets should not be included in the shadow banking figure, as prudential consolidation rules consider them as banks’ own assets and as such subject to consolidated supervision and capital requirements.
... some of the assets that are currently ‘self-securitised’ by banks may at some point be sold to third parties when financial conditions improve.
Wait a minute: a company is "securitizing" assets.... which it then keeps, but only after it has "obtained funding with a central bank"? What?
Judging by the countries whose shadow bank institutions are the most aggressive participants in "self-securitization", it gets clearer just what is going on here:
While Italy and Spain are clear, why is Australia on this list?
While the large increase in Australian banks’ self-securitisation of residential mortgage-backed securities (RMBS) started in 2008 (i.e. before Basel III was developed), the amount of self-securitisation is expected to stay high going forward as these securities are eligible as collateral for the Reserve Bank of Australia’s Committed Liquidity Facility (CLF). Indeed some banks are gearing up already for the CLF. Given the low level of government debt in Australia, the Australian prudential regulator has adopted elements of the Basel rules that allow banks to count a committed liquidity facility provided by the central banks as part of their Basel III liquidity requirements.
So that very strict Basel III requirements are permissive enough to allow... shadow "banks" to engage in self-securitization with their central bank? Just brilliant.
Finally, what amount of circularly (non) securitized, central-bank backstopped securities are we talking here?
Answer: $1,200,000,000,000.
That is the amount of unlevered notional that shadow (and regular) banks engage in circular check-kiting games with central banks for, and in the process obtaing "funding." As one trading desk explained it:
you take yr worst assets... package up in an spv (which removes em from yr gaap balance sheet) then flip to central bank for cash at modest haircut and boom revenues...
And presto: magic balance sheet clean up and even more magical "revenues."
But wait, there's more (spoiler preview: take the above quote and put in on constant rewind)
Where this mindblowing, circular scheme in which riskless central banks serve as secret sources of incremental bank funding, i.e., free money, gets completely insane, is the realization that these self-securitized assets can also participate in rehypothecation chains. Recall from our exposition yesterday on the permitted leverage resulting from collateral reuse in a repo chain which is fundamentally what shadow banking is all about: unregulated, stratospheric leverage.
We added:
So... three participants result in 4x leverage; four: in roughly 6x, and so on. Of course, these are conservative estimates: in the real, collateral-strapped world, the amount of collateral reuse, and thus the number of participants is orders of magnitude higher. Which means that after just a few turns of rehypothecation, leverage approaches infinity.
Which means that should these same banks that self-securitize with Central Bank X, then proceed to re-use the same security with the same counterparty - i.e., their host central bank, or the Fed of course - then this $1.2 trillion in assets, already carried off-balance sheet with Basel III's blessings, can get 2x, 3x, 5x, 8x, 13x or more turns of leverage on them, as for the shadow bank it is the central bank that is the (up to infinity) levered counterparty. And the central bank, as everyone knows, can always just print money if and when the worthless collateral backing the bank's self securitization ends up worthless.
The implication of this unprecedented shadow banking circle jerk, which could very easily make even the direct wealth transfer resulting from trillions in QE pale by comparison, is so stunning that we leave it up to the reader to come to their own conclusion.
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I've been thinking about who owns US T debt - but I guess another way to think about it is who doesn't own it...
'00 there was about $2.4 T (out of $3.3 T total public Notes/ Bond) domestically owned Treasury debt ( x-Fed) and, '08 there were $2.9 T (of $5.1 T) and now in '13 there is about $2.7 T (of $12.2 T).
Pretty sure this means pensions, insurers, institutional, etc. are sitting on mighty risky stuff with a much smaller % of "AAA" US Treasury debt...wonder if that will have any impact on Fed's future actions in an equity selloff??? Interesting that since '00 the domestic buyers could really soak up no more Treasury debt...and all the action shifted to foreign buyers and the Fed...hmmmm.
Friday Homor
Q: What is brown and rhymes with Snoop Dogg
A: Dr Dre
have a great weekend ZH
Q: What is brown and lined with wokked dogs?
A: The roadsides of the People's Republic of Chinese Citizenism, alas, alas, #2 plus #1 times alas.
That first paragraph should be the textbook description of securitization as taught to first year business majors.
the finance community has disengaged from the real world
on the down side and has laid claim to all physical assets,
commodities, products and labor on the up side. as you
say, brilliant. now, can they get away with it? can there even
be a navigable get away plan from such a hall of mirrors?
.
we need more insane asylums.
More concisely:
Self securitization, sometimes also referred to as 'fraud' or 'lying' is a process whereby financial institutions cook their books to make themselves appear solvent, thereby enabling them to continue fleecing the public and paying themselves outrageous salaries and bonuses for a longer period of time than would normally be possible.
also known as sovereignty, etc ..
Lol. This is covert monetization. The central banks are monetizing the bezzle component of the financial instrument.
Look up definition of bezzle.
i call it stealing by other ordained and
legally sanctified means or debtification
of money; the inversion of work or transference
of power and control by means of superior organ-
i- (aye) -zation nation building toward the
sky in complete and infinite illusion and ignorance.
.
@".bezzle component of the financial instrument."..
that is a riot!
Given the low level of public debt in Australia, the global financial elite see this as a prime target for rape and pillage of the general public to enrich themselves with relatively low risk of dropping the proverbial 'straw that broke the camel's back' and bringing the entire ponzi scheme crashing down, effectively killing the goose that lays the golden egg.
Aussiland has negated its commitment to fight global warming and has said "I'm all in" to support self-securitisation and NSA shit.
At least they are coherent.
Yeah, seems they saw the writing on the wall early, as you said, picked a winner, and the strategy, and went all-in. Over here the debt limit's ~$400 billion AUD (about to be blown through) and the new govt was last week pleading for it to be expanded to $500 billion - ASAP. So we've gone from gov-debt free and ~25 billion in surplus, just before the GFC, to about 30% debt to GDP in the very near future, and we have a massive deficit, with a weak economy and rising unemployment, fuel cost through the roof, export and domestic manufacturing closing everywhere, while the AUD is still wanting to rise, and that will do even more damage, due to all this expanding printing as the dollar dies. I really don't think this mix is going to work.
Central Planners Troll Song
Self-Securitization = Self Monetizing by a few Cartel members. Just look at Mexico for a business model example. The Mexican Cartel is waiting for the release of new taxpayer monies to use for the new shell game in [winking] at creating new infrastructure.
Regretfully, it all boils down to this..
Les Visible's: You May Not Feel it, but Your Children Will.
there is only one rule and it is there are no rules.
" The implication of this unprecedented shadow banking circle jerk, which could very easily make even the direct wealth transfer resulting from trillions in QE pale by comparison, is so stunning that we leave it up to the reader to come to their own conclusion. "
Is there someone here who believes the FED, or any other central bank taking part in such scheme, is still really preoccupied by the notion of economic recovery ?
I think these municipal bond "swap fees" that pop up everytime a city goes bust are in fact circular insurance policies, where the city is charged an "insurance fee" for insuring their bond debt........with their own assets.
So why did they pay all the fees if they pleged to cover their own insurance coverage losses with their own assets?
They paid the "fees" because the fees paid "commissions".
It's a bitter- sweet sym-phon(e)y, that's life ! ! !
Self-dealing, self-regulation, self-securitazion, self-anything and everything. It's the heart of the financial sytem corruption and we're all self-screwed.
Bankers are soo arrogant, that that they have to put themselves on their books as an asset to make themselves feel better haha
The Constitution says no paper money.
So...how is it that we have paper money? It's illegal in this country (USA).
So, where are the judges and lawyers to contest it in court? Where are the "Brave Men and Women in Uniform (TM)" to charge in and save us?
IT's ILLEGAL. So where are the law enforcers?
They must be at least 6 feet under, and therefore can no longer perform their just duty. When the cats's away, the mice will play.
I always wondered why they didn't just print money for themselves. I feel much better knowing that the FBS is watching over this.
Instead of creating money from thin air, "collateral" is created from thin air and used to secure a loan from a central bank (of money created from thin air).
I have heard of central banks monetizing government bonds. That funding circle jerk is well known.
This is impressive.
Self-securitize aka 2-card monty
When you are above the law, the creative juices flow unfettered.....I really do like the way the Chinese treat fraudulent bankers!
Invent a better circle jerk, and the world will beat its meat to it.... Bitchez, its just that simple.
Ok i was mistaken. This is classic "bezzle" when a financial instrument trades for more than it is worth.
Look up the definition of bezzle.
When the central bank loans out more money than the financial instrument is worth as collateral, then the dollars in excess of the financial instrument's value is a bezzle.
It is a covert form of monetization, well hidden from the unsophisticated
Financial engineering has advanced by leaps and bounds. If there is a way to produce profit, then the engineering will be done. Law and regulations hardly exist in the newer fields of this process. Clinton worked with Wall-Street and Banks to engineer a near total deregulation of banks and trading houses. The results are plain for all to see, if you discount Main Stream Media, who can't see jack shit, or willingly turn the blind eye to it.
Look, this sort of engineering of financial instuments is not something I know much about, but the basic criminality is so transparent that even a layman can see it, sense it and know it is criminal. Governments are now funded and controlled by the world of finance capital. The actions of the US Congress are proof of this, the slime ball Clinton making bank dregulation the center piece of a democratic administration tells you how deep the lobby power goes. Obama is worse than Clinton, and both Ape the actions of the Bush family presidencies.
Will anything change? No. Infact, the run away financial sector is deeper in now than in 2008. The next blow up will put the death blow to mainstreet economic life. I feel certain of this. And to me, this explains why government is building militaristic police forces, putting Army troops into domestic units and using the patriot act to spy on every man,, woman, child, car and dog in America. They will impose a total lockdown on average Americans when next the financial system blows up. Republican and Democrat parties both work together to provide political cover for banking and finance. The Federal Reserve is an instrument to provide unlimited ZIRP cash to be engineered.
The suckers who by financial investment grade instruments from the trading houses must be fucking mad! To buy the shit being sold them. That is where I lose ability to understand why the end sucker keeps buying into this system of fraud.
Central banks are monetizing the "bezzle" by giving out more in loan money than the collateral is worth.
Look up the definition of bezzle.
Tyler,
your fucking article is not clear, Sorry! Are you saying that Janet Yellen and Ben Shalom now Repo, Double Repo, Reverse Double Repo back to back and front to back with Wallstreet G's?
When things get out of hand like this it makes people angry because it doesn't pass the smell test - but maybe it does pass that test because it smells like s#&t. I know this crap makes me angry - anybody else ?
Cheeses Rice!
Fucking Welfare State at its Elite Finest.
these self securitizers get free phone in this deal?
So, let's see if I understand this. I write an IOU to myself for $1 million. I bring it to my local bank and borrow $1 million while keeping my IOU on my books as an asset? Tomorrow, I do the same thing.... What could go wrong?
So if I am understanding this correctly the FED is potentially self securitizing using some of those toxic MBS turds they are taking off the banks books to create credit through a check kiting type of scheme to purposely reflate housing bubble 2.0 through shadow banking entities like Blackstone hedge fund using that credit to buy properties which in turn is a stealth monetization in it's own right to remove even more toxic exposure off the same banks books?
The banks get to remove toxic turds off their books -> The FED self securitizes those turds -> Blackstone gets credit line off same turds -> Blackstone buys properties off the same bank that the original toxic turd originated from thus clear more toxic turds off their books -> Hedge fund helps recapitalize same bank with high quality collateral by renting the property while also making a profit (hopefully). Add in the their propaganda mouthpieces in the MSM yammering nonstop about the housing recovery while this going on. If I am also understanding the process the leverage on the self securitization gets paid back by the renter through the hedge fund who holds the mortgage on the property.
This reminds me of that infomercial turn your trash into cash and this is all the more reason to audit the FED just to see what type of bubbles they are blowing using garbage securities to self securitize funding in the first place.
VCR's into cash. I've made tons doing this. You can too! Here's how.
http://m.youtube.com/results?q=vcr%20into%20cash&sm=1
This nonsense is just a fancy way of justifying leverage to the moon, or in other words, financial Jenga on steroids being played with concrete slabs during an earthquake while the people mindlessly party within. When things start to unravel, this sort of leverage will come undone like a lubricated zipper on a an epileptic prostitute. The only way to salvage such a ridiculously fragile ponzi would be to pump incredible levels of newly minted currency into the breach with the hope of burying the whole thing in a sarcophagus of financial grout.
I noticed that the Canadian banks (I assume that means the Chartered banks) are hip deep in this ponzi - I guess we now know the dirty secret of the so called Canadian banking miracle - sell your Royal Bank shares (Canadian LIBOR bank) while they still have residual value......
I think the Canadian banks made it on here with CMHC. CMHC is in effect the mechanism by which canadian banks are self-securitizing their assets. Almost all of the mortgages at banks are "insured" at CMHC, even those with lower balances. For high ratio mortgages the borrower pays the insurance but in the case of low-ratio mortgages the banks are buying CMHC/Genworth insurance on their own behalf in droves.
In march of this year Flaherty and Harper started to limit the purchase of CMHC insurance on low-ratio mortgages for this very self-securitization reason. A quote from a FP article on March 21, 2013 is "Ottawa will prohibit the use of any taxpayer-backed insured mortgage, both high and low ratio, as collateral in securitization vehicles that are not sponsored by CMHC." I'm not sure I understand the "not sponsored by CMHC" part, if anyone knows what it means please let me know.
I did look up the assets of the banks vs. the amount of mortgages and it seems like about 10% which corresponds to the chart Tyler showed above. So indeed I think in Canada the CMHC/Genworth/AIG United Guaranty Mortgage Insurance Laundry Service is the whole of Canada's Self-Securitization scheme.
You know what, I hate banks. They will do anything they can to screw me you and grandpa out of their last farthing.
Central banks. The clue is in the name. Collectivism. Central control. Privatise profits and socialise losses.
SO this is how the Capitalist West defeated the Communist East?
I think this house of cards will be coming down on all our heads very soon...and Communism may ask for (and deserve!) a rematch.
Just watch as the shit hits the fan over the next year with Real Estate markets imploding and financial markets running for the high hills...
It's not capitalism or communism. It is corporate socialism, named fascism by Mussolini.
It is the biggest money power conniving with monarchy and appointed politicians to create Big Brother state, all for the inner party, with everyone else designated as a wage slave, debt slave, tax slave.
The new reality. Meet the new boss. Same as the old boss. Neo-feudalism. Defy them. Don't collaborate with them.
The problem with not collaborating is that you are collaborating just by being productive on any market they can tap into (farmer selling eggs for cash is outside of this, but any company, any legal job etc they're all in). Not voting, ignoring the political claptrap, being vocal about your morals and how they are incompatible to that government ... all well and good, but just being productive feeds the machine. 'Let them protest, as long as they pay taxes'.
Minimizing spending and enjoying the decline, or even better getting on the dole - is in fact most practical way of defying them. But the people most interested in downfall of this system, are least interested in being on welfare...
unfortunately, nothing really suprises me anymore.
if one can merely imagine the most heinous, fraudulent practices, it's probably happening.
Fear not. Cling to family and friends. All politics is local when the STHF. The robber barons have always existed in one form or other, and they have always ended at the guillotine or financial ruin when the majority turn against them. Bastids. No surrender.
What I'm afraid of is the majority never turning against them...
There are advantages for both sides.
I'd say it's not going to be local if military stays stalwart on the side of tyrants. The entire population would have to understand how they got exploited and right now it's a small minority on the red pill. Plus a lot of confusion. Just look at OWS. Hundreds of wrong ideas and a lot of rage. This type of thing can easily be channeled by a skilled leader into some outside enemy. Or maybe they hang some bankers and proceed to rebuild their power.
1. Understanding of economy in general population (especially soldiers).
2. Local resilience (SHTF, all the starving people will easily bend over for food).
3. Secession (let's have a global Switzerland, not global CCCP).
Infinite currency available to control any of the 'markets' in any manner to suit the need.
Manipulation made easy.
Unbelievable.
One great achievement of the internet is the freer flow of information and ideas, so those with eyes to see, hearts to care and minds to discern can face their enemy with determination, and all important knowledge. In my opinion.
Tyler, any idea when this form of 'alchemy' arose? I wouldn't be surprised that it was developed in the past few years when the indexes (stocks for sure) started to take on a very mechanical/controlled look to them.
Edit: it also might help explain some of the incredible firepower seen to slam certain markets in the past few years as well.
There are some hints here by Guy Debelle (RBA - Reserve Bank Aust) The Present and Possible Future of Secured Issuance - Address to Australian Securitisation Forum Sydney - 21 November 2011.
Other interesting things from a five minute trawl of the RBA's web site
rba.gov.au
Committed Liquidity Facility (used for RMBS repo's),and a list of eligible securities on its HERE. Much more to look at...
Lesson number #1 in business? I took chemistry and statistics almost 100 eons ago.
Complicated belongs on "marketing material". I'm still trying to absorb those idiots that are self financing mortgages--startups--Basic V.C. shit.
Due Diligence BITCHEZ .
Predator rules: Get away with whatever we can.
Central bank rules: Get away with whatever we can.
Maybe I'm missing something here (feel free to explain) but I don't see how this is really any different to what we've been talking about for years regarding TARGET2 and the ECB.
Sovereigns issue and post their own bonds as collateral with the ECB to secure borrowing while retaining ownership ("self securitisation") and, most controversially (as first pointed out by Hans-Werner Sinn), they avoid the haircut that would normally apply when selling debt via public bond auctions due to the ECB turning a blind eye to reality and quietly treating all eurozone sovereign debt posted in TARGET2 as AAA.
Seems like pretty much the same thing to me, only it's the private sector rather than govts. Rehypothecation then amplifies the stupid. (Credit to ZH for shining the light on rehypothecation; this really made it clear how a "fractional reserve" shadow system operates and thus how limited the Fed's traditional tools really are).
Implications of all this are simple enough. Risk reduction processes are illusory. Collateral exists only so long as you don't attempt to draw on it when in lodging a claim you then discover, to your horror, that 30 other parties have a full claim on the same asset and the take is all or nothing (no 31 way dilution / split, you simply lose it all). (Credit to Nicole Foss and Raul Ilargi Meijer who were saying this even before ZH was a twinkle in Dan I's eye).
To cut a long story short, the entire system is nothing more than a standard street-urchin confidence game. A con. Don't play the game.
Sounds like a crowded theatre to me. What would be the easiest way to "yell fire"?
Even MSM are carefully talking about a possibility of a boubble. So there are people yelling already. Though I'd say when Japan gets it, that might trigger the collapse and 2nd depression. That's one large economy and serious industry. Paper will evaporate, while many suppliers of their corporations will be also hurting. This can spread like a wildfire (not a single fireball like Greece). Maybe, hopefully this time it's going to burn down to the ground?
Standards of living for a median person are worse than some decades ago. They are only propped up by extreme increases in IT and communications. Take away mobile phones, computers with entertaining games and general connectivity and it would be way worse. All of that, while technology made significant improvements (even frequently loughed at retarded cars got some serious increases in mileage, safety etc). Even 3 years of chaos and disruption would be offset in a single decade of post-national banks world (numbers obviously subjective).
Works fine while so long as the repo guy goes a knocking
Primary difference: all "off-balance sheet", all "netting out" and thus allowing unlimited, unregulated turns of leverage and since there is no counterparty risk to either party, this is a far more direct and undocumented liquidity injection than mere repoing of gov bonds to the ECB (or any other bank).
All was described best by Matt King over 5 years ago.
Cheers.
So, more than ever now, we have no way of predicting in advance how much "net" will suddenly transform into gross once there's a major default and a scramble for what little good collateral exists in the system. Great.
Bombed by our own stupid complexity.
Well they need the money to . . . . . well, not to loan cause there isn't much business - so they need it to . . . embezzle, pay bonuses, steal, . . . well anyone??? Buehler??? Buehler?????
Dividing by Zero is Self-Securitization mathematically.
LOL, the Fed's economic model was so F'd up they had to abandon it.
All their mathematical models were tossed in the garbage. Speaking of garbage you don't hear Bernanke speaking about his PhD depression thesis anymore.
Bernanke and Yellen and the 12 heads without an economic model are like Obama without a teleprompter.
Yes but look what they are doing for BitCoin Last price:$455.00000
self-securitization? Did they mean autofellation?
"Near death experience"? Nothing "near" about it.
Zombie SIFI smell tells no lies, but the odor is worth a thousand words.
When you hear the word "macroprudentialism" remember this article. When you hear the word thermite remember the rubble pile left behind and the lack of evidence.
You could have made 50% in the past week with BTC...
How about in the next week? How about next month? Hindsight is the most magnificent of views, everyone is correct. Why not go "all-in" and report back over those timeframes?
With TOR infiltrated by the NSA , good luck with that.
They can close iBTC down anytime they want.
They already have your wallet code.
They want it all, everything , and they will get it too.
Illusions on illusions on illusions. No wonder they were so gung-ho for the rule of law during the last 10 years. And that law's one-eyed application is clearly bank-account-level based.
If the CBs can get away with inventing money for the super wealthy and privileged banking criminals, even when those same vermin have slashed the throat of the real economy and closed small businesses everywhere, the people that they have damaged, and stolen their houses and prospects, then the Govts that allowed all of that shit will not be getting one damn cent from me. I will do all I can to demolish this system, it's proven to be far more corrupt and vile than even I had ever dared to suspect. I knew they were complete crooks, and I knew the system was obviously deeply rotten, and built on accreted lies and millions of 'legal' acts of wicked people in tall office buildings, but this just shows us its full deviance, and depth of pathology.
T H E R E A R E N O R U L E S
Oh, there are real 'rules' in just the same way the US govt presents a real 'budget'. Its all a facade, a con, a ruse to dupe the masses. The Basal III rules and all that muck is irrelevant. It's just the ruse. It only 'matters' for the sucker, who still believes in and plays along with the ruse's hypnotic contrivances. But there are no real laws, there are only the 'laws' they selectively use on the masses of oblivious drones who can't or won't face that there's no actual law, the sham of 'due-process' is just a wicked ruse that gets the sheep to the abattoir in the most efficient way.
It would be heaping wickedness on wickedness to pay one cent of tribute to such a now internationalized system of predation and protracted attack, on the whole fabric of our civilization.
T H E R E A R E N O R U L E S
Sorry, got to call you on that, the rules DO apply, to you and me, not the criminal class wearing suits.
Which is what I said in the next paragraph.
the only chain u need to know. Frack baby frack. otherwise i'd guess the stadium is oh say 40 minutes. just a guess
http://burnanenergyjournal.com/wp-content/uploads/2013/04/hydrocarbon-chains.jpg
might help
How many times can these "assets" be sent in to the central banks for liquidity?
I've been posting here on ZH for nearly three years. Its time to take personal stock of what I have learned and what I have affirmed.
Lets put it this way : I start from a personal perception of what I believe Man's adventure in life is about. It can be summarised in one word, in one phrase, in one document that encapsulates it.
One word : Eudaimonia, etymologically meaning spiritual good. Aristotle said it was supreme virtue of Man. The stoics said it was love of virtue. Aristotle said it was also material pursuit of happiness. To exercise the pursuit of Eudaimonia man required FREE WILL. The western meme therefore based the whole concept of man's existence on his free choice that had to face the hard reality of rule of law and primacy of fact to test its consistency. Analytical logic was born in the west and had its first open system software. It was Aristotelian.
One phrase : Thomas Jefferson recognised this primal truth and proclaimed it : Life liberty and pursuit of happiness.
One document : The Universal rights of Man picked it up and as for TJ, said, personal freedom and liberty are prime concerns to the extent they respect those of others.
Now to see how this has played out in the hard, factually based dialectical thread addressing this historical dichotomy that has haunted Man since Prometheus discovered fire and gave it to mortal defying the Gods, who exemplified PERFECTION in those days; first act of Man's liberation from predestination.
The debate between personal freedom and collective cohesion, as factually demonstrated in the historical thread of the Capitalist Industrial age, now gone secular in Enlightenment meme, played out in the country that has iconised this evolution in the 20th century : The USA.
If we consider that the Monetary thread is a very good yardstick for measuring it and for assessing if the pursuit of happiness (eudaimonia) has progressed or regressed over this century we can state, as the ZH university has taught us :
1° THe creation of the FED was the supreme act which proclaimed that pursuit of general economic good in industrial society was best achieved by privatising the monetary thread, by giving it to the scions of the PRIVATE SECTOR, not to government; making the best and brightest of our society (New financial Templars) the guardians of the monetary temple : the Rothschilds and the Morgans. State --Woodrow Wilson-- bowed to their acumen as leaders of US society, trailblazers defying the European dystopia of Marxist statist decadence. It gave the exuberant age of the "roaring twenties" after financing the great "herd thinning" in Europe --their own decadent colonial minded fault-- and ended in 1929 ramp up and fiery WS asset fiesta leading to depression. Was that "pursuit of happiness?"
2° Lets move on. Under FDR State came back with a vengeance with Keynesian fiat pumping under Glass Steagall. It spawned the deficit spending macro model to pursue "happiness" in a horizontal construct, (not Oilgarchy vertical of roaring 20s) which we called the Welfare State. But it did involve checks and balances. It was NOT open ended. The balance between individual enterprise and state redistribution of wealth moved in favour of "social programs", to get economic mobility to the "small man". It didn't KILL private enterprise. On the contrary; as we found out with the Oil conundrum, the only way you discover more oil is by having Oil priced high, not low. So...the only way to get entrepreneurs to innovate is by having a high taxation system. It incentivives innovation and NOT the contrary. Lets move on, having taken due measure of what ZIRP has done to prove that cheap money in unlimited amounts is the bane of civilization.
3° The Oligarchs of USA under LBJ-Nixon Pax Americana MIC morph decided they wanted both military and economic control of the world; It had a price, it would be BW revoke. Fiat empire was born. "Our money your problem" coupled with MIC stick and petrodollar hegemony seemed like an ideal solution. It led to hyperinflation.
4° This led to the Reaganomics construct and dismantlement of the welfare state bigtime, destroying in the process the Fordian mantra "I pay high wages to my workers so that they can buy my cars". We were moving back to economic verticality bigtime and the supply side mantra led to "cheap oil" -- pump baby pump Saud meme-- and asset ramp of WS concoction with the birth of SHADOW BANKING and resulting shenanigans. Then NWO and Chindia OUtsourcing and the destruction of industrial USA was complete; with consumers fed on cheap money, borrowed from others, based on "USD reserve forever" hopium and, MIC stick to ensure it in Saud oil patch hard collateral land.
MOAR DEBT baby! Never stop printing, never stop pumping fiat now that we have black gold under our gun!
Pursuit of happiness had one logic : whats good for WS assets is good for consumerist US sheeple. (It replaced the old adage of industrial USA : whats good for GM is good for USA).
5° Then came 2008 collapse and the reality from behind the tinsel curtain appeared like a nightmare wake up call. Its all smoke and mirrors and debt is NOT pursuit of Happiness as ZH has amply proven here.
6° Penultimate act in this relentless pursuit of Oligarchy concocted "happiness" visible to ALL is the NSA matrix that imposes on common man an Orwellian world in all its suffocating splendour. We are here now and it all began with the "privatisation" of monetary control in capitalist society initiated by FED construct, all part of a Jekyll Island conspiracy to make the rich masters of the world. They have achieved it and current Potus, unlike his predecessor, is not even a blue blooded Oligarch. He is just simply their puppet who does what he is told to do. Choosing an ethnic minority denier to caress ostensibly the "free society" meme is the most Machiavellian of tactics the Oligarchs could have concocted. "We are full steam behind rights of man and enlightenment". Wow, just Wow!
A system where 0.01 % control the wealth of the world who are not answerable to anybody 'cos the Reaganomics-NWO construct now openly affirms : there are no rules except the ones we make on adhoc basis, in the PURSUIT OF OUR OWN ELITIST happiness. ---Now I get it !
7° Final act of the Neo feudal Order now openly in full throttle hubristic arrogance : The officialisation of Oligarchy Corporate rule worldwide via TPP for Pacific and US-EU deal for Atlantic Corpocracies... YOur personal freedoms, sheeple, will no longer exist in the face of our transnational prerogatives. THIS will be cast in stone. The end of Internet peer to peer and all media under total regulatory capture. For the individual: the end of personal free will and total subservience to Oligarchy doing God's work on earth.
Its not "God wills it" anymore (except in Iran Lalaland), its the "Oligarchy wills it" 'cos 'Yes we can!'
So much for those who say the State is our worst enemy. Nope it isn't, if it acts like a Republic and if WE be true citizens not just DUMB consumers divided and herd-penned.
Its the private hijacking of the State before our VERY eyes that has gotten us into the world destructive dynamics: all in the name of "pursuit of private happiness". What an incredible sleight of hand.
Eudaimonia anyone...? Who wants more Oligarchy Eudaimonia, coming FREE to your local theatre.
Hey you libertarians, how does it feel to be the laughing stock of the world?
You wanted freedom of individual in land of free, home of brave. You got it BIGTIME all wrapped up in Oligarchy razzmattaz.
Sometimes I feel, in ZH forum, we are discussing how many angels could sit on the head of a pin. Remember that incident?
I rest my case. I need a drink after that!
The laughing stock of the world consists of everyone who, in whatever way, supports government.
+1,
where is the post-modern, post-capitalist variant of william jennings bryan when you need him most?
Sanctioned money laundering at it's best!
An example of how the banking cartels control countries
http://failedevolution.blogspot.gr/2013/11/an-example-of-how-banking-car...
Central Bank 'A' buys the debt from Central Bank 'B' who has bought the debt from Central Bank 'C'. Now Central Bank 'A' issues new debt based on its balance sheet assets, which are bought by Central Bank 'D', who ... well this sure looks like a self-levitating perpetual motion machine to me!
The deeper problem is that the people who head up all these central banks went to the same graduate schools, they all passed through the London School of Economics, they all got their PH.D. from the same small clique of professors, they all go to Davos, they all pall around at the same conferences. But most important, they all are Keynesians and they do all they can to ensure that nobody but Keynesian Boosters get nominated to any position that could possibly lead to being on the Board of any central bank.
They all believe that government has the power and indeed the obligation to manipulate the value of money in order to manipulate the behavior of the individual participant in the economy. They are arms of government even when they claim to be independent. Since every government is addicted to spending more than they have in revenue, the central bank is the means by which this is made possible. Government needs central bankers and central bankers cannot operate without government. When coupled with taxes on the nominal value of assets in a tax regime that taxes incomes, it is the grandest scheme of theft of private wealth in all of human history. Central banks enable governments to turn citizens into economic serfs and the benefit accrues to the government class.
The only way out is to prohibit government from spending more than it takes in and to forbid government from having control of the currency. The government class would rather die than give up these two things.
Bitcoin:
Now 477 $ - New Record!
http://btcpost.net/
OT / good video on Petro-Dollar
http://www.youtube.com/watch?v=8T9ICWOYCNQ
Jesse: COMEX Claims Per Ounce Of Gold At 69 To 1
Jesse has updated the latest information from COMEX and it has even higher leverage now: Fractional Gold Reserved System is run at the all-time-high leverage with 69 Owners per 1 ounce of Gold.http://sufiy.blogspot.co.uk/2013/11/jesse-comex-claims-per-ounce-of-gold...
Why isn't the US in the chart of nations with banks with the most self-securitization? Are US banks just using a different method?
This seems like a way of pretending that bad debts are good assets, which should be inflationary.
The FedRes is monet1zing the dog shit directly thru' RMBS
purchases at par.
http://www.financialstabilityboard.org/about/overview.htm : "The FSB is chaired by Mark Carney, Governor of the Bank of England. Its Secretariat is located in Basel, Switzerland, and hosted by the Bank for International Settlements."
Yet this is the organization exposing this fraud in a report.
It's like we're being grabbed by the collar, thrown and pressed up against a wall, and now the spittle-spewing thug screams at us "We're going to take your money, your liberty, your national sovereignty, your cultural institutions, your family, and anything else that you ever thought was yours. And, you're going to love us for it."
So,if I understand this article correctly, Central Banks are taking on high risk, shitty collateral that has been rehypothicated multiple times. Diabolical but not totally unexpected.
If you keep posting articles like this you are going to have to charge tuition. People coming here are going to get more education in how finance really works than with a masters degree at any of the ivy league schools
1 Executive Order could ruin BTC's whole day in the sun.
It's out there.
http://www.investorvillage.com/mbthread.asp?mb=4245&nhValue=760216&nmValue=760256&dValue=1&tid=13300853&showall=1
http://www.investorvillage.com/smbd.asp?mb=4245&mn=760296&pt=msg&mid=13300853
Wasn't there a ZH article about why we shouldn't allow academics into economics and financials? Does this answer that question?