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Deutsche Bank: "We've Created A Global Debt Monster"

Tyler Durden's picture


Two observations on the latest thoughts by Jim Reid (DB's best strategist by orders of magnitude):

  1. He is far more concerned by what is going on in China than any of the other noise around the world. And rightfully so. As we first showed a few months ago, the money creation in China puts what all the other global central banks do to shame. Any slowdown in this credit creation and the wheels have no choice but to fall off, which also explains why even the tiniest default in this $9 trillion economy will be bailed out as it would risk an outright "flow" collapse.

  2. The Fed came, saw, and after realizing the mess it created with tapering - which can never be priced in now that the market is terminally addicted to the Fed's liquidity injections - will soon do what we have said since the May 2013 "taper tantrum" would happen - untaper, and resume bailing out everyone.

Full note from Reid:

From all the stories that broke while I was away the most fascinating surely revolves around the Chinese Trust product that in the end wasn't allowed to be at the mercy of market forces. For me it’s a microcosm of the fragility still present in global financial markets that a $9.0 trillion dollar economy - that will be the biggest in the world within the time frame of most of our careers - struggles to allow a $500 million investment product to default without there being market fears of it igniting panic in financial markets. This has now been a theme for the best part of 10-15 years in global financial markets particularly in the developed world but more recently the EM world since the GFC. We've created a global debt monster that's now so big and so crucial to the workings of the financial system and economy that defaults have been increasingly minimised by uber aggressive policy responses. It’s arguably too late to change course now without huge consequences. This cycle perhaps started with very easy policy after the 97/98 EM crises thus kick starting the exponential rise in leverage across the globe. Since then we saw big corporates saved in the early 00s, financials towards the end of the decade and most recently Sovereigns bailed out. It’s been many, many years since free markets decided the fate of debt markets and bail-outs have generally had to get bigger and bigger.


This sounds negative but the reality is that for us it means that central banks have little option but to keep high levels of support for markets for as far as the eye can see and defaults will stay artificially low. As such we remain bullish for 2014. However it’s largely because we think the authorities are trapped for now rather than because the global financial system is healing rapidly. So as well as EM being very important for 2014, we continue to think the Fed taper pace is also very important. If the US economy was the only one in the world then maybe they could slowly taper without major consequences. However the world is fixated with US monetary policy and huge flows have traded off the back of QE and ZIRP so it does matter. We have suspicions that the Fed may have to be appreciative of the global beast they've helped create as the year progresses.

In other words: bullish... because the system will continue to collapse and need more bailouts. The Bizarro world Bernanke created truly is an exciting place.


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Mon, 02/03/2014 - 10:11 | 4395447 Dr. Engali
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We've created a Created a global debt monster"


No freaking shit captain obvious. This coming from one of the worst offenders.

Mon, 02/03/2014 - 10:12 | 4395454 ArkansasAngie
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Hold on.  WE?  I did not such thing.  I believe it be you.  And on YOUR head be it.

Mon, 02/03/2014 - 10:14 | 4395463 TeamDepends
TeamDepends's picture

We're on an express elevator to Hell, goin' down!

Mon, 02/03/2014 - 10:47 | 4395565 Oracle of Kypseli
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The subliminal message is buy stocks and stay with stocks. Sorry, I need insurance. Preserving what you have is better than trying to time the market. 

Mon, 02/03/2014 - 10:52 | 4395576 Stackers
Stackers's picture

The system was designed from the start with this ending being known. Keynes famous quote of "we all die someday" was his retort to this paradox of a debt-money system that charges interest on money created out of thin air.

Mon, 02/03/2014 - 11:02 | 4395609 Landotfree
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Stackers, 100% correct, the outcome has always been known.   However, all credit is created out of thin air, if not where is it stored?   The medium of exchange does not lead to the eventually collapse but attaching interest to it gives it a normal shelf life of 60-80 years or so.

Attaching interest to your medium of exchange, in this case on "credit", eventually the system is unable to supply or demand the exponential growth which leads to collapse and liquidation of the walking unfunded liabilities.


Mon, 02/03/2014 - 11:23 | 4395699 kridkrid
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I forget your previous handle, but your "unfunded liabilities" is a dead giveaway. Thanks.

Mon, 02/03/2014 - 11:53 | 4395808 HoofHearted
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This is the deflationary pulse. This is your chance. Buy anything that isn't nailed down that will be useful on the other side. For me it is my farmland, a tractor, animals first. I've also bought firearms for absolutely nothing, and I've been slurping up gold and silver as I can find any at a reasonable premium to spot. This is your chance to make generational wealth. For those of you who really have a stack of cash, buy a useful business or some income-producing properties. Because once the untaper and all the inflation starts, Katie bar the door. Those fiatskis I'd been saving in the pages of those old books will no longer be worth the amount they are now. 

For ZHers it is obvious. Buy buy buy things of tangible value. 

Mon, 02/03/2014 - 12:16 | 4395884 Landotfree
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The helicopters are coming crowd is going to be surprised when the tanks start rolling.   There are no helicopter... there is only Death when the equation reaches it's final conclusion.

Mon, 02/03/2014 - 12:34 | 4395946 cognus
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Except....  buy later.  Postpone, as real assets will only get cheaper.  Cheaper tomorrow versus today.... until the process stops and reverses.  So, procrastinate, procrastinate, procrastinate.


the "stock" market [that is the market for algo digits] has about had enough of all this selling, so if you have cash, buy this dip!

SPY may have a little more downroom - to about 172, then every large FED bank will be buy, buy, buy with both fists

Mon, 02/03/2014 - 12:03 | 4395833 linniepar
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<----- Crunch all you want, we'll make more. Leno

<----- Deficit spend all you want,we'll print more. Fedheadl

Mon, 02/03/2014 - 12:49 | 4395997 G.O.O.D
G.O.O.D's picture

Timing the market? There is no timing the market, or fundamentals or anything other than trying to guess what the controllers are going to do next. The market is a total crap shoot controlled by the ppt and hft machines. If you play in this game you might as well put it all on red or black in Vegas as your chances there are a hellova lot better.

Mon, 02/03/2014 - 10:51 | 4395566 NoDebt
NoDebt's picture

Back when I was a mere pup, I was perplexed at corporate M&A.  Put 'em together, break them apart- it all seemed so random, and rarely were the promises of "increasing shareholder value" met.

So I asked my father: why?  His answer was simple:  NoDebt, how are they going to make money breaking those companies up if they don't put them together in the first place?

Listening to Jim or anyone, really, from the banking world talk about this "new problem" that just popped up and needs to be addressed makes my blood boil.  It's an an entire self-contained ecosystem that exists to make money by creating problems so that they can make more money fixing them again.  

Credit problems in China are NEWS to anyone in the financial world?  That's been on the radar for YEARS.  It wasn't a problem for all those years, it was a "good thing" for a "rapidly growing economy."  Now all of a sudden it's an existential threat, according to those who allowed (made) it happen? 

Something about rolling the fucking guillotines becomes more attractive every day.

Mon, 02/03/2014 - 11:23 | 4395696 WillyGroper
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@LOP got me hooked on RTFG too.

Must be the cadence. 

Mon, 02/03/2014 - 15:03 | 4396552 janus
janus's picture


outstanding work on those sites...i just bookmarked a couple of them, and will be visiting them regularly.  seems to me you're one of the few taking this shit seriously; and serious shit it most certainly is.  people will not accept the fact that we've been hijacked by godless nihilists, perverts, sadists...the vilest and most evil swill imaginable has effectively seized the functions of state.  the republican/democrat -- conservative/liberal bullshit is not part of the ruse; it is the God damned ruse.

i hope that the better part of the patriot community begins to realize how important a component is propaganda.  sure, you'll attract the sympathies of a substantial portion with Truth (about 10%); but the remaining 90% or so of any given population will be swayed by cues they respond to for reasons that have little to do with honor, liberty, justice, etc...they instead want to associate with something they can identify with; or should i say, something they 'want' to identify with.  a cliched way of saying it is: cool kids rule the school.

and we have before us the choicest of opportunities.  the message shapers, working on behalf of the nihilists, perverts, sadists, etc. are so out of tune, so rigidly transfixed with messianic zeal, so tightly orchestrated that they've lost touch with the cool factor, sacrificing it on the alter of their new religion.  all of everything they offer is pathetic -- i am, right now, far more entertained watching the snow fall than by anything i could imagine searching out on netflix or anywhere else.  all entertainment is now moralizing drivel.

which leads me to the most important point.  within the human animal there are a host of competing tensions; one of said dynamics is the pressure to conform pitted against its complementary pressure, rebellion.  once these pressures find themselves at peak disequilibrium, a reversal ensues such that stasis is sought and then pushed past until another point of opposing disequilibrium is found -- and the whole process begins again.  we are nearing a major reversal in the collective psyche, insofar as the pressure to conform is so very pronounced and pervasive as to be ubiquitous.  and what makes power's position so very tenuous is that they've predicated their every authority on the notion of popularity -- and they ain't cool anymore.  

these communists spawn of eastern european ghettos are anathema...nobody likes them, no one has ever liked them and no one will ever like them; again, they ain't cool.  but they so badly want to be liked, and they toil ceaselsessly for a world where they'll majically be the hip and desirable thing (ain't gonna happen).  and even in a society where the people are given no choice, the people choose nothing instead.

there is a deep and abiding crave to both rebel from the constraints of this soft-slavery-society gone absolutely mad coupled with a longing for a more meaningful attachment to something firmly and deeply rooted (the vapidity of the new religion will prove to be its very undoing).  we have before us the unique opportunity to present honor, decency, dignity, virtue and tradition as the viable and cool mode of rebellion.  i think TPTB are aware of this; and i suspect they're shitting their drawers over it.    

their authority is arbitrary.  their power is tinsel.  their ethos is meaninglessness.  their time is at an end.  God damn them to hell.

and, patriot community, what's the best way to be 'cool'?  is it to manufacture, market, promote and contrive 'coolness'? heavens no!  that's the enemy's methods, and they're about to crash in flames according to them.  cool is simply searching out that thing what finds favor with the people, and then associating one's message and very self to it.  'it' being a difficult thing to define; but 'it' always and inevitably asserts itself.  cool is made by God, and is never contrived of man.

if chris christie thought those boos were something...just wait till all of em start gettin rotten eggs in their faces...then run outta town on the rails...then, well, Heaven only knows (mmmmwaaahahahahahah!)

i'll meet you on God's Golden Shore,


Mon, 02/03/2014 - 10:16 | 4395470 Winston Churchill
Winston Churchill's picture

"We are all in this together". When they fuck up.

"You are on your own". When you fuck up.

Mon, 02/03/2014 - 10:32 | 4395511 yogibear
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"We are all in this together".

The west funded China's growth and lost production and jobs to China.

Mon, 02/03/2014 - 10:47 | 4395568 Fogey
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Mon, 02/03/2014 - 11:47 | 4395733 Ghordius
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yes, but who are "they"? Tyler has some praise for some, like "Jim Reid (DB's best strategist by orders of magnitude)"

now I don't know personally Jim Reid, and he might be a gentlemen and a good citizen and all that. but I am pissed off at the group he represents

then he is an American banker working at the City of London HQ of that monster that is DB, a megabank that is theoretically a continental european one, yet it needs two CEOs, one German and one Indian (who is of course Jim Reid's boss)

and then I get reminded how Tatcher's "Big Bang" transformed the City banks from a Cavalier bunch of skin-in-the-game Merchant Bankers cove to a Full-Pirate setup

and then I get reminded how British HR companies had to find lots of "talent", and they found out that they have to make tests for attitude, and took in psychopaths as the "best suited to the business of banking" (sadly true, check yourself)

and then I get reminded that of course British Universities were producing too little "talent", and then started to shop at American Universities for that

and then I get reminded that American Ivy League Universities stopped catering for the rich and powerful only and opened their gates to the Super-IQs like Loyd Blankfein. (Yes, a Jew. Lots of Jewish families have a generation-long tradition of marrying IQ instead of beauty, and the guy is a good example for that)

and then I get reminded that the Super-IQ are often psychopaths. nothing wrong with that, the poor fellows are born this way. they just need a sound environment to adapt and monitor. though put too many in a bunch and they reach critical mass - when the moral compass is not just lost, it's thrown overboard

and then I get reminded that of course Uncle Sam had to take off all brakes and barriers from banking, and deregulate all sensible things we painfully added over the years of experience, starting with the abolition of Glass-Steagall

and so many out of Jim Reid's bunch have those characteristics:

American, Ivy League, Super-IQ, possibly borderline to full psychopath because recruited this way, outside of their ancestral environments which could give them a handy moral compass, working for a megabank in London full of similar profiles

we have not created monsters, we have carefully constructed (and recruited) monster outfits. new-age pirates

just think about that when you hear of some of them suiciding. Banking should be boring. Stodgy. Careful. Not the environment for a critical mass of Super-IQs, and not the environment for the deadly mix between American business attitudes, Psychopathy, British tolerance for certain behaviours, and lots of hyperleveraged credit lines


P.S. if any of the usual bunch of antisemites and psychopath-bashers think this is an encouragement to continue with inane rants... go blow off your heads

Mon, 02/03/2014 - 12:43 | 4395972 john39
john39's picture

empathy for the psychopaths?  no thanks.  better put them where they belong.  a prison cell.  that is the only way, short of a bullet to the head, to stop them from harming the rest of us.

Mon, 02/03/2014 - 12:50 | 4395999 Ghordius
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john39, if you don't feel empathy... then you are yourself a psychopath. and so I can only urge you to be careful and search for company with a moral compass. then stupid or lost psychopaths end up in prison or dead

you know what happens if you take one of those fishes who form big shoals and zap a certain part of their brain? they become instant leaders. 'cause they don't feel the urge to conform anymore. they swim, the others follow them. for a while, that is

if you are religious in any way, I urge you to feel empathy for those who have to learn it the hard way, i.e. thinking about. keeping psychopaths inside the boundaries of the community is one of the things religions are best at, btw. you could even think it's one of their USPs

Mon, 02/03/2014 - 13:05 | 4396068 john39
john39's picture

putting a psychopath in prison is empathy.  shooting them, not so much.

Mon, 02/03/2014 - 13:55 | 4396243 Ghordius
Ghordius's picture

yet psychopathy is not a crime, and most crimes are done by non-psychopaths. in a sane environment, psychopaths see the logic in following the rules, even if they don't naturally feel it. if they are smart enough, they can calculate the consequences. most people have empathy, and it's a powerful navigational tool in social matters, which often leads them to neglect the consequences of their actions

a lot of social behaviour has situational ethics. shoot the allied soldier, get shot. shoot the enemy soldier, get a medal. psychopaths just need peers with empathy. that's why recruiting and bunching them together is a bad idea

Mon, 02/03/2014 - 13:29 | 4396147 Toxicosis
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You do NOT need to be religious to feel or to develop the emotive skill of empathy.  And feeling empathy for abusers makes you an enabler.  These people and anyone else who manipulates, abuses, and morally or ethically destroys another human being for the sake of selfish NOT self-preservatory motives has earned no such empathy nor respect.  Narcissistic, sociopathic and psychopathic behaviours are character traits in the vast majority of the population, not some genetic or bred aspect of the human being.  If we are talking fetal alcohol than you have a point.  We make choices and we either care about how we affect and treat other people or we do not.  Please stop making excuses for selfish, greedy pricks, who love to get to drunk on money and the perceived power it brings them.

Mon, 02/03/2014 - 14:04 | 4396265 Ghordius
Ghordius's picture

strike the religious part, then. yet there are people who simply can't feel empathy. nada, nothing. you can't develop on nothing. this is different from slightly narcisisstic, sociopathic or psychopathic character traits in the vast majority of the population

Mon, 02/03/2014 - 10:18 | 4395472 Smegley Wanxalot
Smegley Wanxalot's picture

Correct.  WE didn't do shit.  They did.


And on top of a Debt monster, they've created a Doubt monster, in that the uncertainty generated by their incessant bullshit is generally causing the consumer they tried to dupe to do the exact opposite of what they expected.

It's fucking beautiful, man.

Mon, 02/03/2014 - 12:01 | 4395829 HoofHearted
HoofHearted's picture

And all the sheeple are right now trying to save up so that they can pay off all the Christmas bills. What they need to understand is that now is the time to buy anything not nailed down. Hell, take as much credit card debt as you can. Mortgage the wife and kids. And buy all kinds of tangible stuff during this deflationary pulse. For when the likes of Ol' Yellen see the specter of deflation, the Ghost of Bernanke past will come through to tell her to stimulate. And that will bring even yet more QE4eva. And my Zimbabwe 10trils and 50trils that I hand out to people won't make them chuckle so much.

Why am I reminded of the Chris Rock bit:

Neighbor: "I heard you got robbed."

Rock: "You didn't hear shit because you was doing shit."

Mon, 02/03/2014 - 10:18 | 4395474 XAU XAG
XAU XAG's picture

The Debt will take years before it gets to "Escape Velocity" if ever!

Mon, 02/03/2014 - 10:38 | 4395529 Jannn
Jannn's picture

The Chinese Government's Gold Policy, From The Horse's Mouth

Mon, 02/03/2014 - 10:56 | 4395591 RaceToTheBottom
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"In order to help guide commercial banks to develop RMB-quoted gold derivatives trading, working with SGE’s price quoting system infrastructure, work to allow commercial banks that are developing RMB-denominated gold derivatives to be able to hedge on-shore gold trading margin with off-shore position without actual gold import-export business operations. "

I know some derivatives might be necisary but waging the tail .....

Mon, 02/03/2014 - 11:23 | 4395700 National Blessing
National Blessing's picture

Those Nazis won't be happy until they've enslaved all of Europe.  Then they'll try to convince the rest of us that the peons got what they deserved.  Bastards.

Mon, 02/03/2014 - 11:39 | 4395754 HungryPorkChop
HungryPorkChop's picture

Release The Kraken..  It's time for the mortals to pay!

Mon, 02/03/2014 - 10:10 | 4395450 madbraz
madbraz's picture

For one Deutsche Bank is dead on water should things get out of control.  They better pray central bankers can continue the juggling game when everyday there is another ball being added (leverage).

Mon, 02/03/2014 - 10:11 | 4395451 Bearwagon
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In shadow banking, no one can hear you scream.

Mon, 02/03/2014 - 11:00 | 4395606 Colonel Klink
Colonel Klink's picture

Except these aliens are legal and hold dual alliances.

Mon, 02/03/2014 - 10:12 | 4395455 Sudden Debt
Sudden Debt's picture

I'm pretty sure the Chinese are masters in rigging their market enough to prevent a meltdown

Mon, 02/03/2014 - 10:34 | 4395502 paint it red ca...
paint it red call it hell's picture

The only thing I am sure of is that the public will take it anyway 'They' want to give it since the bailout bend over.

Mon, 02/03/2014 - 10:32 | 4395514 BandGap
BandGap's picture

But they need others to play along with the game.

This is the 3rd or 4th switch-a-roo between the US and China in regards to who has who by the balls. I suspect both countries have one hand on the other's throat and the other hand with a firm hold on the other's testicles. Who blinks first?

Mon, 02/03/2014 - 12:03 | 4395845 The Merovingian
The Merovingian's picture

I just assumed they killed anyone who has a meltdown (i.e. awakening) ... kind of like North Korea ..

Mon, 02/03/2014 - 10:14 | 4395458 Juvenal laughs
Juvenal laughs's picture

My oh my. While we'll speed up - eventually unavoidable - more and more obstacles will fall into place that all have to be circumvented to prevent a complete crash.

Mon, 02/03/2014 - 10:15 | 4395462 Seasmoke
Seasmoke's picture

Savers of the World, unite and takeover.....

Mon, 02/03/2014 - 10:32 | 4395515 kridkrid
kridkrid's picture

But last night the plans for a future war
was all I saw on channel four.

Mon, 02/03/2014 - 10:16 | 4395468 Element
Element's picture

yeah, debt face-suckers are cool but I preferred the bit where it punches out of the central bankster's narrow sunken chest, and all the noodles and cigarettes went flying ... Winston should have got a major award for that scene alone.

Mon, 02/03/2014 - 10:20 | 4395476 Cursive
Cursive's picture

Jim Reid diagnoses the problem and then asserts that we should continue to believe that the pseudo-cure will work for yet another year, although 1.3M people were just expunged from the EUB rolls and we are seeing retail carnage?  Forget taking a bearish stance, am I alone in wondering what it would take for "analysts" like Jim Reid to switch to neutral?

Mon, 02/03/2014 - 10:23 | 4395489 ArkansasAngie
ArkansasAngie's picture

That's part of the trouble.  There is no neutral.  It's all or nothing.  Either the 1%'ers get to keep playing like their insolvency is a liquidity problem or they are bankrupt.

You want income redistribution?  Let's go with liquidating their assets to pay their debts

Mon, 02/03/2014 - 12:26 | 4395921 Mudduckk
Mudduckk's picture

Fastest way to liquidate them is for a united debt serf move into phys gold with the proceeds they should be paying on their notes. All750+FICO'S go Long gold short the mortgage payment. 


That would fix it. And the FICO's can cure their mortgage short once gold hits a reasonable value in USD terms.


Alas the pleebs are still too scared and too compliant.

Mon, 02/03/2014 - 14:24 | 4396342 Spanky
Spanky's picture

And this is really interesting...

Mon, 02/03/2014 - 14:25 | 4396338 Spanky
Spanky's picture

I agree with this...

Mon, 02/03/2014 - 10:19 | 4395478 CaptainSpaulding
CaptainSpaulding's picture

" You have created a monster and it will destroy you"

      - Dr Waldman- Frankenstein, 1931

Mon, 02/03/2014 - 10:22 | 4395481 paint it red ca...
paint it red call it hell's picture

"Deutsche Bank", playing the GOOD TBTF.

Warning us about the BAD TBTF's..

Now what is the signal being transmitted here???

Maybe, 'Oh, its just us. We want you to know it is time to execute the next stage of the planned systemic collapse. It's just us, don't ever say we didn't warn you.'

Mon, 02/03/2014 - 10:38 | 4395537 kridkrid
kridkrid's picture

That's right. Some posts in this thread are of the "glad you're finally realizing" variety. Don't fool yourself. They are and have always been fully aware of what's happening. It's not even terribly complicated. I can explain it in 2 sentences to a high school kid with an elementary understanding of the exponential function.

People should not read their words at face value... try to understand why they are being written now.

Mon, 02/03/2014 - 11:47 | 4395790 hot sauce technician
hot sauce technician's picture

This is the "self-reckoning" of the sociopath right before he becomes truly reckless and destructive.

Mon, 02/03/2014 - 11:48 | 4395793 hot sauce technician
hot sauce technician's picture

This is the "self-reckoning" of the sociopath right before he becomes truly reckless and destructive.

Mon, 02/03/2014 - 10:21 | 4395483 orangedrinkandchips
orangedrinkandchips's picture

1.) debt monster...NO SHIT SHERLOCK. (but glad someone introduced the pink elephant in the room).

2.) Clearly when "companies" constantly push MOHR DEBT in the market ONLY TO BUY STOCK? we have a big fucking's called Short term vs. Long term.


More debt to buy equity? WHY NOT!

Cap Ex and organic growth is on the list with santa claus, easter bunny and the tooth fairy!


Mon, 02/03/2014 - 10:22 | 4395484 SheepDog-One
SheepDog-One's picture

The monsters are now complaining that there be monsters? Oh well.

Mon, 02/03/2014 - 10:21 | 4395485 Sufiy
Sufiy's picture

"Who's Got The Money?" - Bernanke's True Legacy "Helicopter Ben" - Elaine Diane Taylor

  Brilliant video and song - share it with your friends. You can guess: "Who's Got The Money".

Mon, 02/03/2014 - 10:38 | 4395507 Tall Tom
Tall Tom's picture

Coins and Crowns -- Elaine Diane Taylor.


Thank you Mike Maloney.

Mon, 02/03/2014 - 10:24 | 4395490 krispkritter
krispkritter's picture

Why isn't the China line in Red? Just sayin...

Mon, 02/03/2014 - 10:27 | 4395500 Quinvarius
Quinvarius's picture

Paper debt is solvable with printing.  It is the gold debt that is the problem.  In particular, some large amounts of gold that were borrowed and sold over the course of 30 years, and are owed back to people with guns who make laws. 

Mon, 02/03/2014 - 10:28 | 4395503 youngman
youngman's picture

Just look at Greece.....what is going to save them...

Mon, 02/03/2014 - 10:29 | 4395509 Dr. Engali
Dr. Engali's picture

Moar debt of course. Debt fixes everything. At least that's what the Krugmeister told me.

Mon, 02/03/2014 - 10:35 | 4395521 yogibear
yogibear's picture

Just pulls more demand from the future, unless you forgive the debt. And someone has to take the hit (bondholders).

Eventually all that debt leads leads to negative growth some time in the future.

Mon, 02/03/2014 - 11:02 | 4395614 Dr. Engali
Dr. Engali's picture


Mon, 02/03/2014 - 11:05 | 4395621 MsCreant
MsCreant's picture

If you pull enough debt from the future, it turns time inside out, like a sock. The future disappears and the present becomes a black hole financial event horizon if you pull from the future long enough. 

Then everything sucks and no one escapes. 

Mon, 02/03/2014 - 11:50 | 4395801 hot sauce technician
hot sauce technician's picture

Making due with the minimum. Time to tighten those belts because there ain't gonna be too much bread to eat.

Mon, 02/03/2014 - 11:51 | 4395804 hot sauce technician
hot sauce technician's picture

Making due with the minimum. Time to tighten those belts because there ain't gonna be too much bread to eat.

Mon, 02/03/2014 - 10:30 | 4395504 ZeroPoint
ZeroPoint's picture

I cannot lie to you about your chances, but - you have my sympathies.....


They are publicly admitting this now because they are priming the public for the great reset. Got gold, food, and ammo?


Mon, 02/03/2014 - 10:32 | 4395512 Deer Hunter
Deer Hunter's picture

WAR! We just need a bigger adversary than Afgan or Iraq. Washington?

Mon, 02/03/2014 - 10:39 | 4395538 Tall Tom
Tall Tom's picture



I am not fighting.

Mon, 02/03/2014 - 10:31 | 4395513 Calculus99
Calculus99's picture

Kudos to whoever mentioned it first on ZH -

"Never forget that central planners are masters at painting themselves into a corner'.

So so true. But the tough part is of course the timing, but painting themselves into a corner is what they're doing right now...

Mon, 02/03/2014 - 10:36 | 4395524 eddiebe
eddiebe's picture

Who will win the race to the bottom?

Mon, 02/03/2014 - 10:43 | 4395554 Bearwagon
Bearwagon's picture

I think of it more like a rat-race. Because the problem with that is more similar: Even if you win the race - you are still a rat!  ;-)

Mon, 02/03/2014 - 10:50 | 4395573 Fogey
Fogey's picture

Da Drones!

Mon, 02/03/2014 - 10:36 | 4395526 GCT
GCT's picture

The goal is to disarm the USA or develop a weapon to control the masses keeping our masters out of harms ways, and then all the stops will be off.  The ultimate goal is to digitize all money so every transaction can be tracked.  those with pyhsical assets will do well.  Those that can use their hands will do well.  Bartering will be outlawed along with the use of PM's.  Alot simpler then trying to confiscate it.  Everyone in the world will be sucking on the government teat as another measure of control.

The Deutsche bank would implode if any of the EMU member told them to take a hick.  The Dictatorship of Europe will be complete once the banking union happens.  Afterall the officials heading the union will have immunity from all legal prosecutions.  Well they mostly have it now if your a TBTF banker or politician. 

Mon, 02/03/2014 - 10:56 | 4395597 cherokeepilot
cherokeepilot's picture

Question:  "Everyone in the world will be sucking on the government teat as another measure of control."  If this would be true, from where the hell is the "govenment" going to gets it's money?  More likely that the "goverment" will have to keep some people working so that they (government) can collect taxes to pass on to the FSA.

Mon, 02/03/2014 - 16:06 | 4396894 SDShack
SDShack's picture

They are called "serfs". What is being designed is a New Feudal World Order. Kings/Queens are TPTB, and the Lords are the politicians and security to administer the new order. The middle class will disappear under increasing and eventually crushing debt that will lead to all private assets being eventually stripped from the masses as payment to the Kings/Queens, and doled out as tribute to the Lords for their allegiance. The Free Shit Army will be split into 2 groups - Debt Slaves who owe their vary existence to TPTB and Chaff that will be confined to Fema camps, or de-militarized inner cities to fend for themselves. 

Mon, 02/03/2014 - 12:39 | 4395956 nightshiftsucks
nightshiftsucks's picture

Bartering illegal ? I doubt it.They would have to declare martial law GCT to do any of the things you mention.What would happen is on the next election cycle every politician who voted for that bull shit would be voted out and the laws repealed.

Tue, 02/04/2014 - 07:40 | 4399506 GCT
GCT's picture

Nightshift Let me put on my tin foil hat and continue.  Once the cycles are complete there will no be anymore election cycles.  All the government has to do is decalse marshal law.  Problem solved.  Do you actually think our politicians give a shit about us small people? 

Outlawing bartering just like FDR confiscated gold only garnered 20% of the actual gold in private citizens hands will not work and I agree but there is nothing stopping them from outlawing it as TPTB will stop at nothing to steal your production. 


Mon, 02/03/2014 - 10:39 | 4395540 HRamos_3
HRamos_3's picture


Mon, 02/03/2014 - 10:41 | 4395547 falak pema
falak pema's picture

and who (which bank)  has the biggest stack of toxic derivatives in Euro zone?

Mon, 02/03/2014 - 10:43 | 4395548 Athenian
Athenian's picture

Whose "we" sucker?

Smith, Wesson...

Mon, 02/03/2014 - 10:46 | 4395560 RaceToTheBottom
RaceToTheBottom's picture

The Euro burped and the US FED backstoped them

The Chinese burp and the US FED will try to backstop them.

Only the Chinese problem is multiples of the US and EURO

Bummer, dude.

Mon, 02/03/2014 - 10:49 | 4395570 Bill of Rights
Bill of Rights's picture

" Thud "

Another Banker bites the dust.

Mon, 02/03/2014 - 10:57 | 4395593 Bearwagon
Bearwagon's picture

Jump you fuckers!

Mon, 02/03/2014 - 10:51 | 4395579 kurt
kurt's picture

Duh, I guess I'll go buy some Walmart stock, right? There was no Great White Shark, no sir, none at all... 

Go ahead go swimmin'! Take your whole family! Yea! 

Happy Days are Here Again

Gosh, Thanks.

Mon, 02/03/2014 - 10:52 | 4395580 fijisailor
fijisailor's picture

Greece is a good example that the monster will starve you to death even if you say yes unlike Argentina that said no.  Equal opportunity starvation.

Mon, 02/03/2014 - 11:04 | 4395581 moneybots
moneybots's picture

"We've created a global debt monster that's now so big and so crucial to the workings of the financial system and economy that defaults have been increasingly minimised by uber aggressive policy responses. It’s arguably too late to change course now without huge consequences"


Wrong answer.  The correct answer is that it is too late.  Huge consequences are coming.

Uber aggressive policy responses have uber aggressive consequences.  The consequences are already built into the equation.  The laws of math are not subject to financial engineering.

Change course or not, huge consequences are coming.  Math ALWAYS wins.

Mon, 02/03/2014 - 10:56 | 4395598 lunaticfringe
lunaticfringe's picture

Wow. DB finally states what every ZH reader has known for at leastthe last 6 years if not longer.

I think what amazes most of us is how long you banker cocksuckers have managed to avoid complete disaster.


Mon, 02/03/2014 - 11:01 | 4395604 Rising Sun
Rising Sun's picture

So where's the opportunity?  The central banksters are going to try to unwind this - big market drops - and then prop things up - corrective moves up.


This market will be a trader's wet dream - lots of volatility.

Mon, 02/03/2014 - 11:03 | 4395616 moneybots
moneybots's picture

"It’s been many, many years since free markets decided the fate of debt markets and bail-outs have generally had to get bigger and bigger."


Yet bigger and bigger bail-outs haven't fixed the problem, have they?  Now there is all this talk of bail-ins.  How much biggger and bigger will those become?

Mon, 02/03/2014 - 11:39 | 4395766 nostinknbadges
nostinknbadges's picture

How can you have a free market when the money is a creation of at best market socialism, or of crony capitalism or fascism? Just as the deproductive undermobs sell votes for EBT tokens, the elite harvest the weatlh of the vast middelish class and cut in the politicas via taxes which are a cost of the political for manipulating, lying, handholding, dividing or even holding out a jr. partnership in stealing their own wealth.


Mon, 02/03/2014 - 11:06 | 4395622 Debugas
Debugas's picture

it had started with Reaganomics in the seventies when consumer credit was invented to prop-up payable demand

Mon, 02/03/2014 - 16:06 | 4396911 SDShack
SDShack's picture

Try 1913.

Mon, 02/03/2014 - 11:07 | 4395625 blindman
blindman's picture

"a thin mint" Monty Python
Death By Em-bank-ment
Posted on February 3, 2014 by Dave Harrison
"...Mike Dueker - Former Federal Reserve employee ranks among the top 5 percent of economists by number of works published. It may not be a good idea to call out the Fed as being “on a slippery slope” for its price stability mandate (read dual mandate… turned triple mandate) if you’re planning to jump down an “embankment” to your death." dave

Mon, 02/03/2014 - 11:08 | 4395629 ghostzapper
ghostzapper's picture

Now it's getting pretty interesting.  Fourth test here right now of 1772-1773 key level.  Probably smoke coming out of the keyboards at the PPT offices right now.

Mon, 02/03/2014 - 11:21 | 4395695 ghostzapper
ghostzapper's picture

Gonna take some heavy lifting to try and close it above 1772-1773 now boys.  Maybe they "allow it" to go to my 1646ish zone to get the untaper jawbone.  Yikes not much between right here and 1646ish.  Hell without the Fed it could do it in a couple minutes.  

Mon, 02/03/2014 - 11:15 | 4395658 moneybots
moneybots's picture

"the market is terminally addicted to the Fed's liquidity injections - will soon do what we have said since the May 2013 "taper tantrum" would happen - untaper, and resume bailing out everyone."


Who is going to bail out the FED?


TERMINALLY.  The end.  Thus the FED cannot bail out everyone, as the FED will destroy everyone, doing so.

How much was the market gain in Venezuela last year?  What does the Venezuelan economy look like?

Mon, 02/03/2014 - 11:17 | 4395672 Randoom Thought
Randoom Thought's picture

Based on what I am seeing, Douche Bank is describing how it has been planned. Those running this portion of the game understand that nothing lasts forever and all they can hope to do is achieve their short-term goals. Individual human beings do not live long enough in the body to appreciate the very long-term goals. So, those controlling the systems have several choices: 1. keep it going, die and leave it to someone else. 2. Bring it down on their terms (the expected approach) 3. Just let go of control and give power back to the people. 4. Make people fight for it ... to bring meaning to their life. Nothing happens by accident.

Who is actually in control (God through "the adversary"? Or a computre program that gives us the gift of life?) is an interesting question because there are many apparent plots and subplots (levels) and figuring out who knows and who is just a mindless slave is hard to determine, as of yet. One might as well ask, what is the meaning of life and does life have meaning without creating it artificially through the dialectic.... so who controls the dialectic (one has to look back through history to find the answer to this question... to a time before it was forgotten or hidden).

Order - Chaos, Good - Evil ... all just part of the dialectics that gives purpose and meaning to people's lives ... at least to those who are entwined within the deception. Maybe life feels more worthwhile if one immerses oneself in a side for good, evil, order or chaos, fighting for a cause ... using those dialectics that feed each as vehicles.

However, if one is intent on playing on one side or the other, one can benefit through those who control things currently or one can fight them by pulling away their support network. Name and Shame is the Game. Those who are basically good people with a conscience who are acting against their better judgment and supporting the efforts of the "Evil Cabal" side of the dialectic need to be named, shamed and shunned so that they have an opportunit to change their ways. As long as public opinion is shaped through media controlled by the Evil Cabal (television, internet, newspapers) then they will be able to control the people through "fear" (or hope if they were so inclined). However, once people are Named, Shamed and Shunned for being slaves to the evil cabal, it is the community that controls the future.

Leaders are not leaders if they have no one to lead.

Mon, 02/03/2014 - 12:05 | 4395852 blindman
blindman's picture
Glenn Beck's Fake Crying Photoshoot
apparently, this is all in a days work
in the contemporary world of madness and
terrorism for the people, aka american political
commentary and communication. circuses being
manufactured before your eyes for gmo laced bread.
but , the show must go on. or
these are the crafts of the media to lobotomise
a frustrated and insecure populace. they show
us just how inane and pointless it is to be human,
if you buy what it is they are selling or follow
to where they lead.
there the trap and message of zombification or the
end of the intellect in g.b.'s crying eyes.
comedian, actor, entertainer, political savant
and media attraction. bizzaro

Mon, 02/03/2014 - 11:17 | 4395675 viator
viator's picture

“The problem with socialism is that you eventually run out of other people's money.”
Margaret Thatcher

Mon, 02/03/2014 - 11:18 | 4395688 Michigander
Michigander's picture

Tyler, you are the Matt Drudge of the Financial World!!!

Mon, 02/03/2014 - 11:21 | 4395691 cheetahbaby
cheetahbaby's picture

Apes on a treadmill.....

Mon, 02/03/2014 - 11:22 | 4395693 no more banksters
no more banksters's picture

"Another two banks, Merrill Lynch and Citigroup, are included in the Primary Dealers list, despite that according to the US Financial Crisis Inquiry Commission (FCIC) report, together with Goldman Sachs, are those responsible for the "creation" of 30% of the destructive financial "tools" known as CDOs during 2004-2007, which contributed significantly to the creation of the housing bubble in US. Two more banks which had significant presence in CDOs that time are Deutsche Bank and UBS, which also continue to be two of the twenty two Primary Dealers."

Mon, 02/03/2014 - 11:21 | 4395697 Xandrino
Xandrino's picture

The whole system is debt based. The problem with China is the pace of the debt increase. That causes problems for the bank honcho's.

Mon, 02/03/2014 - 11:37 | 4395744 Rockatanski
Rockatanski's picture

in my financially uneducated mind, the FED will NOT un-taper.

this is the end of the line and the world banks have created this situation to herd us into the slaughter house. war, famine and worldwide civil unrest will be the QE of the future, for awhile.

remember the georgia guide stones tells us our future.

Mon, 02/03/2014 - 11:46 | 4395784 shovelhead
shovelhead's picture


I just got a picture of a drunk in a rowboat that dropped the anchor through the hull and lost an oar.

Rowing with one oar in circles while trying to bail out the boat with a Dixie cup as the shore fades into the foggy mist.

Funny, yet grim.

Because I'm a passenger.

Mon, 02/03/2014 - 11:54 | 4395799 caShOnlY
caShOnlY's picture

Debt is all we have keeping us alive now.  We must make more new debt to insure that we can make payments on the old debt.  The longer it goes on the larger and faster the debt grows.   Just like the proverbial "snowball".

The FED's "balance" sheet expansion is the giveway.   As things grow worse economically more bullshit credit (i.e. car loans, home equity, credit cards, etc.) will be given to keep the "ball rollng".   The credit that goes bad will be swept off banks books and onto the FED balance sheet were it will eventually die along with the currency that backed it.

How long can this game be played is anyone's guess.  Anyone believing the US is will go along with any change to the global currency structure in place right now is insane.  Change will come but only after the collapse.


Mon, 02/03/2014 - 12:14 | 4395858 Randoom Thought
Randoom Thought's picture

While we idiots are concentrating on "money" as the issue, those who create and control the supply of fiat money are creating gobs of it and using what they have created out of thin air to purchase productive and valuable assets.

Tell me that there can ever be any kind of fairness or real order in the world if one group of people are able to create and distribute all of the money that they decide to create and the rest of the people are dependent on receiving some of that money for their food, shelter, clothing... and whatever. The hand that gives is above the hand that receives. It is slavery by another name.

By the way, the answer is NOT "workers of the world unite". That is a sham, a lie. The answer is "deny consent" and "name and shame those who are complicit". People will find an order. They do not need crony oligarchs who create money out of thin air and put the people to war against each other.

"Get out of our universe!" ... we no longer need you ... Babylon 5

Mon, 02/03/2014 - 11:55 | 4395813 AnAnonymous
AnAnonymous's picture

We=WeThePeople aka the "american' middle class, they are the ones who enabled all that stuff all the way down.

Mon, 02/03/2014 - 12:16 | 4395883 Randoom Thought
Randoom Thought's picture

Sure, we are complicit in our own destruction. We give power to those who would destroy us and let petty pride devour our soul.

Mon, 02/03/2014 - 12:02 | 4395837 resurger
resurger's picture

Whats the status on DB CAR?

Mon, 02/03/2014 - 12:04 | 4395843 JR
JR's picture

It’s arguably too late to change course now without huge consequences. – Jim Reid, DB’s “best strategist”

It’s never too late…to do the right thing. 

The United States of America lacked only one thing in the Bankers’ Depression of the 1930s: and that was an adequate supply of money to carry on trade and commerce. But the bankers – the only source of new money and credit – deliberately refused loans to industries, stores and farms.

The result: they subsequently “took possession of hundreds of thousands of farms, homes, and business properties.”

Sound familiar?

Yes, there is a solution other than Reid’s (aka Goldman Sachs Deutsch “best strategist”) to America’s – and the world’s -- current financial crisis.

Sheldon Emry, whom I paraphrased above, provides it in his paper: “Billions for the Bankers, Debts for the People.”

Emry explains that if Congress issued debt-free and interest-free money,  “money issued in such a way would derive its value in exchange from the fact that it had come from the highest legal source in the nation and would be declared legal to pay all public and private debts.”

His point: “Issued by a sovereign nation, not in danger of collapse, it would need no gold or silver or other so-called ‘precious’ metals to back it. As history shows, the stability and the responsibility of the government issuing it is the deciding factor in the acceptance of that government’s currency—gold, silver, or iron buried in some hold in the ground.

“Proof is America’s currency today. Our gold and silver are practically gone, but our currency is accepted. But if the government was about to collapse, our currency would be worthless.”

And, now, America’s financial system is on the verge of, yes…collapse.

America’s solution to her Banker Republic should be the same as Germany’s solution after the hyperinflation of the Weimar Republic.

Emry points out that Germany used debt-free and interest-free money “from 1935 and on, accounting for its startling rise from the depression to a world power in 5 years.

“Germany financed its entire government and war operation from 1935 to 1945 without gold and without debt, and it took the whole capitalist and communist world to destroy the German power over Europe and bring Europe back under the heel of the bankers.

Mon, 02/03/2014 - 12:09 | 4395864 resurger
resurger's picture

Merica has passed the "RUBICON", it cant be fixed JR.


Mon, 02/03/2014 - 12:24 | 4395908 Randoom Thought
Randoom Thought's picture

Sure it can. People, including those in charge, just have to do the right thing.

Granted it is apparently against their nature to do the right thing. They show all of the signs of self-absorbed psychopaths/sociopaths. But are they really?

Mon, 02/03/2014 - 12:39 | 4395959 JR
JR's picture

I agree that the International Bankers have treed America, resurger, and that they are getting ready to foreclose so they can own it all.

But “can’t be fixed” is the siren song of our enemies, resurger. Translation: We are going to continue with ou thievery and you’ll need to continue supporting us.

The answer is to stop The DEBT Wagon and begin the difficult road back to sound money. It's the wagon masters, the Deutsche bank guys who're saying we’ve got loads of debt and all we need to do is just add more debt but... we can’t get off the wagon!

These guys are just grabbing as long as they can grab; but they’re lying to us that we have to keep going along with them. IOW, The Debt Has to Be Stopped.

The president of the Bank of England in the 1920s and second richest man in Britain, Josiah Stamp, said: “The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again… If you wish to remain the slaves of the Bankers and pay the cost of your own slavery, let them continue to create deposits.”

Stamp gave the answer to the world’s dilemma: “However, take it away from them, and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a happier and better world to live in.”

We need to take Stamp’s advice, and dismantle the debt wagon. End the Fed.

Mon, 02/03/2014 - 14:43 | 4396425 resurger
resurger's picture

Yes i agree 100% JR, but lots of fortunes at stake here, the fucking elite wont allow this to happen and they will try to keep the sheeple busy.

Mon, 02/03/2014 - 12:04 | 4395848 TORNasunder
TORNasunder's picture

I still think the race is who's massive debt bubble blows first, then the others will blame the winner for the global meltdown. The contenders;


Fed is the elephant in the room, but it's also in control of the race. Of course gold running out in the West could blow this up, or any number of black swans.

It is interesting that again DB is the one calling shenanigans. Who is the majority owner of DB?

Mon, 02/03/2014 - 12:17 | 4395887 JR
JR's picture

Deutsche Bank is not Germany; it’s Wall Street.

Deutsche Bank, Germany's largest bank, is headed by Paul M. L. Achleitner who is a former Vice President of Mergers & Acquisitions of Goldman Sachs & Co., New York, and partner of Goldman Sachs Group.

Remember this from April of 2009?

“Without the government money, Goldman, Merrill Lynch & Co., Morgan Stanley, Deutsche Bank AG and other firms could have become some of the biggest creditors in a bankruptcy filing by AIG, the world’s largest insurer, because of the billions in losses on subprime bonds and corporate debt…” -- Bloomberg

And this from June 11, 2011, "Deutsche Bank’s Chief Casts Long Shadow in Europe" the NY Times:

[Joseph] Ackermann [long-term collaborator with Jean Claude Trichet, until recently head of the ECB – both Jewish], 63, emerged from the panic of 2008 as the most powerful banker in Europe and, depending on whom you ask, possibly the most dangerous one, too. As the chief executive of Europe’s largest bank [Deutsche Ban] and a symbol of German financial might, he is at the center of more concentric circles of power than any other banker on the Continent.  

From this seat at the nexus of money and politics, Mr. Ackermann, for better or worse, is helping to shape Europe’s economic and financial future. He regularly advises politicians and policy makers on the most pressing economic issues of the day: the smoldering debt crises in Greece; the widening gulf between the economically strong nations of Europe, like Germany, and weaker ones like Ireland and Portugal; and the future of Europe’s economic and monetary union and that grand venture’s most manifest expression, the euro.

But it is no secret where Mr. Ackermann’s financial allegiances lie: with the banks. For instance, he has insisted that providing some sort of debt relief for Greece would be a huge mistake. Such a move — a restructuring, in banking parlance — would involve writing down Greece’s debt, which is now more than 140 percent of its gross domestic product, deferring payments and cutting interest rates.

... European banks, including German ones like Deutsche Bank, hold many billions of euros in Greek government bonds, and the banks would lose big if those debts were restructured.

And remember this from April 10, 2013, Europe’s Poorest? Look North: ECB Survey Puts Southerners on Top in Household Wealth, Germans Near Bottom :

FRANKFURT—German households are among the poorest…in the euro zone, according to a study by the European Central Bank that adds a new twist to the debate over how far taxpayers in Northern Europe should go to support weaker countries…

The median, or midpoint, of German households had just over €50,000 in wealth, the lowest in the euro zone. The median in Greece, was twice that, at €102,000, and five times as high as in Cyprus at nearly €270,000.

The German people, like American’s most productive, are suffering the rape of the industrious by bankers via demonization to fill the pockets of the billionaire collectivists

Mon, 02/03/2014 - 12:05 | 4395854 resurger
resurger's picture

How long is the tower between the bank assets gap?

Mon, 02/03/2014 - 12:11 | 4395867 MoneyWorshipper
MoneyWorshipper's picture

The real challenge is how to profit from this, hedge exoctic currencies? bitcoins? gold? a self sustained hut in a wood?

Mon, 02/03/2014 - 12:11 | 4395868 MoneyWorshipper
MoneyWorshipper's picture

The real challenge is how to profit from this, hedge exoctic currencies? bitcoins? gold? a self sustained hut in a wood?

Mon, 02/03/2014 - 12:17 | 4395897 theondoxazo
theondoxazo's picture

I appreciate the link to the small picture on the main page.  PLEASE provide such links for ALL the pictures you post there.  I've often been frustrated by trying to get a better look at those small pictures and been unable to access the original picture in anything like a full-sized image.

Mon, 02/03/2014 - 12:24 | 4395915 gwar5
gwar5's picture

These banker assholes are really pissing me off.


We told these fuckers 5 years ago this would happen. Only now do they agree. The little people are smarter than these greedy pricks so they all need to be disappeared in order for civilization to start moving again.


Mon, 02/03/2014 - 12:30 | 4395933 andrewp111
andrewp111's picture

It is like that movie Speed, where the bus blows up if it drops below a set speed. Only the buildup of debt forces that setpoint higher and higher and higher........

Mon, 02/03/2014 - 12:37 | 4395953 Bastiat
Bastiat's picture

Yes. The money-debt compounds beyond the pace of economic growth so additional wealth is not created to cover the interest; then more money is created to fill the gap.  Finally the economy collapses from underneath the rickety debt tower.

Mon, 02/03/2014 - 12:42 | 4395976 Keegan11
Keegan11's picture

Spot on. He's playing it as he sees it. Go along to get along bitchez -

Mon, 02/03/2014 - 12:53 | 4396005 Winston Smith 2009
Winston Smith 2009's picture

"The Fed came, saw, and after realizing the mess it created with tapering - which can never be priced in now that the market is terminally addicted to the Fed's liquidity injections - will soon do what we have said since the May 2013 "taper tantrum" would happen - untaper, and resume bailing out everyone."

Nope. Here's why:


The pension funds and insurance companies that are the backbone of this market are probably doing plenty of screaming, and with good cause. If this keeps up their cash flow will collapse; they can't absorb it. Further, Bernanke and the rest of the Fed know that factually the damage they took on by buying those instruments during QE cannot be gotten rid of either; it has to roll off, because if you sell that bond you're going to take a capital loss and crystallize the entire loss right now instead of spreading it out!

This is what is forcing the end of QE. It is also what is going to force The Fed to pull liquidity and let the short end come up.

They don't have a choice but they will never breathe a word of this, because to confirm it would be to give a clean opportunity to gang-bang all those bondholders by Hedge Funds and others who can play in the derivatives market, and that could (read: probably would) set off a crisis far worse than 2008.

Mon, 02/03/2014 - 12:57 | 4396027 thismarketisrigged
thismarketisrigged's picture

when r bankers going to start jumping?


i want to watch it happening live

Mon, 02/03/2014 - 13:03 | 4396054 The Abstraction...
The Abstraction of Justice's picture

Why the fuck is DB promoting Mexican immigration?

Mon, 02/03/2014 - 15:03 | 4396548 youngandhealthy
youngandhealthy's picture

It is absolutely true that the debt problem is created by BB....but its no the BB you think is Blockhead Bush

Mon, 02/03/2014 - 16:24 | 4396929 Raging Debate
Raging Debate's picture

This article/admission is vindication for a lot of people at ZH and elsewhere. So since many of you have the intelligence and temerity to be ahead of the curve, get out into the local community and lead with confidence. A situation/possibility:

Look at the Obamacare website debacle. Many cities lack good IT to announce job openings or local events that could bring the people together. Sometimes, all it takes is a phone call to the city mayor or manager. Many of you are prepped for the worst while most outside of this place are not. Therefore, we have time to now go out and demonstrate leadership. The general population does not.

I did this for a town I lived in Maine. I offered it on a volunteer basis but they insisted I get paid to maintain the service and give them a full license of the software. I also met new contacts that also paid me to build other tech for them.

I mention this example not out of vanity but out of opportunity (I may be the steward type but I have to eat too). But it does feel good to know actually giving a shit can pay dividends.

Rebuilding this economy will start at the local level. One of the primary reasons is the governments reliance on monetary authorities, the Federal Reserve. They do not have the experience or drive to reorganize labor and increase venture capatialism and as the article shows, the bankers are not offering this suggestion, only "give us more free money please because we're now worthless."

Ps: Investment disclosure - I'm invested in RE, database business and look to reinvest in equities in 2016, when I feel the dust has settled a bit. Geopolitics are the wild card.

Mon, 02/03/2014 - 16:39 | 4397073 bunnyswanson
bunnyswanson's picture
If the citizens do not, the United Nations will (step in and offer funding with a catch).  Taking inventory and rezoning as we speak. UNITED NATIONS AGENDA 21 The Local Agenda 21 Planning Guide CHAPTER 1 Sustainable Development: The Local Context 1.0 What is Sustainable Development?\

At the local level, sustainable development requires that local economic development supports community life and power, using the talents and resources of local residents. It further challenges us to distribute the benefits of development equitably, and to sustain these benefits for all social groups over the long term.

Do NOT follow this link or you will be banned from the site!