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The "Real Pain" Is About To Begin As Chinese Currency Slumps To 19-Month Lows

Tyler Durden's picture




 

The PBOC's willingness to a) enter the global currency war (beggar thy neighbor), and b) 'allow' the Yuan to weaken and thus crush carry traders and leveraged 'hedgers' is about to get serious. The total size of the carry trades and hedges is hard to estimate but Deutsche believes it is around $500bn and as Morgan Stanley notes the ongoing weakness means things can get ugly fast as USDCNY crosses the crucial 6.25 level where losses from hedge products begin to surge. This is a critical level as it pre-dates Fed QE3 and BoJ QQE levels and these are pure levered derivative MtM losses - not a "well they will just rotate to US equities" loss - which means major tightening on credit conditions...

 

CNY hits a critical level at 6.25...

This is a major problem because...

The seemingly incessant strengthening trend of the Chinese Yuan (much as with the seemingly inexorable rise of US equities or home prices) has encouraged huge amounts of structured products to be created over the past few years enabling traders to position for more of the same in increasingly levered ways. That was all going great until the last few weeks which has seen China enter the currency wars (as we explained here). The problem, among many facing China, is that these structured products will face major losses and as Morgan Stanley warns "real pain will come if CNY stays above these levels," leading to further capital withdrawal, illiquidity, and a potential vicious circle as it appears the PBOC is trying to break the virtuous carry trade that has fueled so much of its bubble economy.

As we noted previously... The total size of the carry trade is hard to estimate although even just looking at some of the onshore CNY positions accumulated, DB Asia FX strategist Perry Kojodjojo estimates that corporate USD/CNY short positions are around $500bn. The size of the carry trade and the fact that China saw significant capital outflows during the last period of substantial Renminbi depreciation in the summer of 2012 has led to concerns over what this might mean for both the Chinese economy and financial markets as well as broader global financial implications.

Morgan Stanley believes that one such carry-trade structured product that will be the "pressure point" for this - should the Yuan continue to depreciate - is the Target Redemption Forward (TRF) which has a payoff that looks as follows...

While this is just an example of a product payoff matrix to the holder, the broader point is that the USD/CNH market has a particular level (or range of potential levels) at which three factors can create non-linear price action. These are:

 

1. Losses on TRF products will (on average) crystallize if USD/CNH goes above a certain level. This has implications for holders of TRF products, who are mostly corporates;

 

2. The hedging needs of writers of TRF products (banks) mean that there is a point of maximum vega for banks in USD/CNH. Below this level banks need to sell USD/CNH vol; above this level banks need to buy USD/CNH vol;

 

3. The delta-hedging needs of banks are complex. As we approach the average strike (the 6.15 in the theoretical point of Exhibit 1), banks need to buy spot USD/CNH. Above this point but below the European Knock-in (EKI) (i.e., between 6.15 and 6.20 in Exhibit 1), banks need to sell spot. Then above the EKI, banks don’t need to do anything in spot.

From internal Morgan Stanley data, we estimate that the point of maximum vega is somewhere in the range of 6.15-6.20, and that the 6.15-6.20 in Exhibit 1 is reasonably indicative of the average strikes and EKIs in the market.

 

In other words, so long as the TRF products remain in place (i.e., are not closed out) and we remain below the maximum vega point (somewhere between 6.15 and 6.20), there is natural selling pressure by banks in USD/CNH vol. When we get above that level, there is natural vol buying pressure.

 

Of course, in the scenario that USD/CNH keeps trading higher and goes above the average EKI level, the removal of spot selling flow by banks and the need to buy vol means the topside move may accelerate.

Simply put, if the CNY keeps going (whether by PBOC hand or a break of the virtuous cycle above), then things get ugly fast...

How Much Is at Stake?
In their previous note, MS estimated that US$350 billion of TRF have been sold since the beginning of 2013. When we dig deeper, we think it is reasonable to assume that most of what was sold in 2013 has been knocked out (at the lower knock-outs), given the price action seen in 2013.

Given that, and given what business we’ve done in 2014 calendar year to date, we think a reasonable estimate is that US$150 billion of product remains.

Taking that as a base case, we can then estimate the size of potential losses to holders of these products if USD/CNH keeps trading higher.

 

In round numbers, we estimate that for every 0.1 move in USD/CNH above the average EKI (which we have assumed here is 6.20), corporates will lose US$200 million a month. The real pain comes if USD/CNH stays above this level, as these losses will accrue every month until the contract expires. Given contracts are 24 months in tenor, this implies around US$4.8 billion in total losses for every 0.1 above the average EKI.

Deutsche Bank concludes...

Looking forward it’s possible that the PBOC is not attempting to actively engineer a sustained depreciation of the Renminbi but rather is attempting to increase the level of two-way volatility in the market to discourage the carry trade and also excessive capital inflows. In terms of the broad risk going forward the sheer scale of the challenge the PBOC has set out to tackle likely means they will have to move with restraint. This is certainly a story to watch...

As Morgan Stanley warns however, this has much broader implications for China...

The potential for US$4.8 billion in losses for every 0.1 above the average EKI could have significant implications for corporate China in its own right, as could the need to post collateral on positions even if the EKI level is not breached.

 

However, the real concern for corporate China is linked to broader credit issues. On that, it’s worth reiterating that the corporate sector in China is the most leveraged in the world. Further loss due to structured products would add further stress to corporates and potentially some of those might get funding from the shadow banking sector. Investment loss would weaken their balance sheets further and increase repayment risk of their debt.

 

In this regard, it would potentially cause investors to become more concerned about trust products if any of these corporates get involved in borrowing through trust products. In this regard, this would raise concerns among investors, given that there is already significant risk of credit defaults to happen in 2014.

Remember, as we noted previously, these potential losses are pure levered derivative losses... not some "well we are losing so let's greatly rotate this bet to US equities" which means it has a real tightening impact on both collateral and liquidity around the world... yet again, as we noted previously, it appears the PBOC is trying to break the world's most profitable and easy carry trade - which has created a massive real estate bubble in their nation (and that will have consequences).

+++++++++++++

The bottom line is the question of whether the PBOC's engineering this CNY weakness is merely a strategy to increase volatility and thus deter carry-trade malevolence (in line with reform policies to tamp down bubbles) OR is it a more aggressive entry into the currency wars as China focuses on its trade (exports) and keeping the dream alive? (Or, one more thing, the former morphs into the latter as a vicious unwind ensues OR the market tests the PBOC's willingness to break their momentum spirit).

The escalation of the unwind in recent days suggests the vicious circle is beginning.

Finally, putting aside speculative trader P&L losses, many of which are said to be of Japanese origin and thus will hardly enjoy much or any PBOC sympathies, here is CLSA's Russel Napier on what the long-tern fate of the Renminbi will be:

“Mercantilist alchemy transmutes China’s external surpluses into foreign exchange reserves and renminbi. But with capital outflows from China at record highs, those surpluses are only maintained due to its citizens’ foreign-currency borrowing. Bank-reserve and M2 growth are already near historical lows and are driving tighter monetary policy. This will lead to severe credit-quality issues and force the authorities to accept a credit crunch or opt for a major devaluation of the renminbi. They will do the latter; and despite five years of QE, the world will get deflation anyway.”

 

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Thu, 04/24/2014 - 12:03 | 4690922 Kreditanstalt
Kreditanstalt's picture

PRINTFASTER, Janet...

Thu, 04/24/2014 - 12:05 | 4690929 Buckaroo Banzai
Buckaroo Banzai's picture

When everything you are printing is getting sucked into the black hole of Treasuries monetization, it's awfully hard to keep the value of your currency from rising.

Thu, 04/24/2014 - 12:08 | 4690941 NotApplicable
NotApplicable's picture

Real pain for who exactly?

Thu, 04/24/2014 - 12:19 | 4690995 TruthInSunshine
TruthInSunshine's picture

The trade of this decade will be to short China & the rest of the BRIC wall.

As bad as things are in the developed world in real, economic terms (and they ARE bad, despite the financial tape painting/lipstick-on-pig sessions) - or more precisely, BECAUSE things are as bad as they are in the developed world - the max pain, wind driven rain will fall squarely against the BRIC plane (not plain).

Thu, 04/24/2014 - 12:39 | 4691072 Seer
Seer's picture

BRICS w/o energy.  Exporting nations that don't have natural resources to export are going to really feel the pain as world-wide contraction continues.

Thu, 04/24/2014 - 12:23 | 4691013 Stoploss
Stoploss's picture

7 Billion people.

Thu, 04/24/2014 - 12:37 | 4691065 NotApplicable
NotApplicable's picture

So... you're saying that we should be thankful for socialism spreading the losses amongst us all?

Thu, 04/24/2014 - 12:35 | 4691055 Ying-Yang
Ying-Yang's picture

"potential losses are pure levered derivative losses..."

Anyone know what the average leverage this carry trade represents? 10:1 or higher?

Thu, 04/24/2014 - 12:08 | 4690936 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

China is imploding quickly. There is nothing the US or EU can do to contain the damage since we are joined at the hip. Our production capabilities sit in China as factories. Many of the multi-nationals are going to get vaporized when their factories are abandoned.

Thu, 04/24/2014 - 12:26 | 4691024 GernB
GernB's picture

You mean nohing other than corrctly assessing risk in investing in those areas during a currency war.

Thu, 04/24/2014 - 12:47 | 4691096 TruthInSunshine
TruthInSunshine's picture

Australia is up a creek w/out a paddle, mate.

Australia is massively dependent on China to suck up increasingly larger batches of its resources in the form of raw materials, to be processed into finished goods in China (mainly discretionary goods), to be exported to the developed world.

Thu, 04/24/2014 - 17:29 | 4692606 GernB
GernB's picture

Yea, I know. I was being a bit sarcastic. We get in these situations because corporations, governments, and rating agencies underestimate or minimize the risk in dependence on or investment in China or any other company printing money like there's no tomorrow. It is a crisis of our ability to come to grips with the fact we are operating on economic theories that don't appear to predict reality, yet we invest, expand and predicate future economic well-being on them. Australia seems like they have a reasonably good economy, maybe organizations will appear in Australia to take the place of those Chinese ones currently processing those raw materials into finished goods.

Thu, 04/24/2014 - 13:44 | 4691438 Seer
Seer's picture

"Our production capabilities sit in China as factories. Many of the multi-nationals are going to get vaporized when their factories are abandoned."

I'm still forecasting the big propaganda campaign of "Bring back our jobs!" in which US taxpayers will foot the bills for bringing back US factories from China as things deteriorate.  Of course, as I've said repeatedly, through the years, companies will only further automate manufacturing processes (always smart to look to do so when you're making a big production shift), resulting in less jobs than originally advertised.  Big win for corporate America (again)!

Thu, 04/24/2014 - 12:07 | 4690935 Cognitive Dissonance
Cognitive Dissonance's picture

OK! So which is the next 'donor' currency that will be carried?

Thu, 04/24/2014 - 12:19 | 4690990 Fuh Querada
Fuh Querada's picture

the SDR.

Thu, 04/24/2014 - 12:38 | 4691037 Grande Tetons
Grande Tetons's picture

I will bite. Care to elaborate? 

Fwiw..I can see sovereign debt yields all slowly approaching an equivalent yield...a very low yieild...much lower than today. 

Thu, 04/24/2014 - 13:24 | 4691282 Fuh Querada
Fuh Querada's picture

it was a joke in fact... will there be any other currencies left...

Thu, 04/24/2014 - 13:54 | 4691511 shitco.in
shitco.in's picture

bitcoin

Thu, 04/24/2014 - 12:08 | 4690940 Rising Sun
Rising Sun's picture

now we can import more fucking plastic trinkets

 

now I can buy my 50th golf shirt of the season that was on sale for $20, down from $150

Thu, 04/24/2014 - 12:12 | 4690955 SheepDog-One
SheepDog-One's picture

Not only that, but your large size Polo golf shirt will be a small and fall completely apart on its first washing, like mine did.

Thu, 04/24/2014 - 12:50 | 4691109 Proofreder
Proofreder's picture

Thanks, SD-1; suddenly a light went on ...

You see, for years and years I have never had a shirt fall apart, and my shirts are cheap - 'cause mrs Proof gets all of my clothes at the thrift shop in the better part of town as part of her garage expeditions on saturday.  Slightly worn Pendleton wool shirts for a couple of frn's.

So I realize that the fall-apart stuff never makes it to the yard sales and the donate-after-death places; another reason never to enter Allmart and Tar-J.  

Only the good stuff lasts and lasts.

Thu, 04/24/2014 - 13:21 | 4691253 Big Brother
Big Brother's picture

I would like throw in from my experience, H&M.  I think they spent all their money on David Beckham rather than purchasing somewhat decent raw material.

Thu, 04/24/2014 - 13:56 | 4691524 Seer
Seer's picture

Ha!  Smart retirement planning!  More and more people will retire and head to the golf courses, where you will be able to make a killing selling shirts! </sarc>

I have a relative who "retired" to the golf scene in a sunny/arid location (despite my warnings about water scarcity there- using precious water to turn deserts into golf courses- WTF?).  And I opt to never retire, to toil on my land until I drop dead...  sometimes I wish I hadn't taken the Red Pill.

Thu, 04/24/2014 - 14:24 | 4691729 greatbeard
greatbeard's picture

>> to toil on my land until I drop dead..

I'm retired, but I'll be GDed if I can stop working.  My hobby farm thing fills in the time well, but unless I've got a full blown rehab going on I'm bored shitless. 

Thu, 04/24/2014 - 12:16 | 4690945 SheepDog-One
SheepDog-One's picture

'Real pain on the way'.... so DOW 25,000 yer saying? That's the real pain from my perspective, the criminal bankster overlords never have to feel any pain ever apparently.

Thu, 04/24/2014 - 12:10 | 4690949 Jack Sheet
Jack Sheet's picture

Shit, this is taking paper- and digit-pushing jargon to new levels. What is a "European Knock In"?   A fucking bawdy-house in down town Lyon?

The guy in my town in a 100 sq foot shopfront repairing shoes contributes more to society than these c***s.

Thu, 04/24/2014 - 13:00 | 4691162 Proofreder
Proofreder's picture

This is the most absurd, obtuse, and complicated financial bullshit I have ever thought possible ...

A primer, if you can understand this ...


Conditions are defined in terms of one or two barriers that may be touched:

  • If they are European, only on the expiry date of the option.
  • If they are American, at any time during the lifetime of the option.
  • If there is a payout, it is that of the underlying vanilla option.

Why use barrier options?
You would use a barrier because of both the following reasons combined:

  • It is inevitable cheaper than its equivalent vanilla counterparty.
    Why? This is because it has a risk of being knocked out, or of not being knocked in. By a similar logic, a double knockout option is cheaper than a single knockout option because it has two two knockout barriers and thus double the risk of being knocked out.
  • You have a particular take on the movement of the underlying (that is, the spot in the FX market, the nearest future in the CM market for metals, etc.) that makes the risk of the added barriers worthwhile.

Example of a barrier option
You need to hedge a short USD/CHF exposure, and the spot is currently 1.4500 and the forward rate is 1.3900.

You can achieve this buying a regular vanilla USD call option. However, a more effective way to hedge this exposure could be using a knock out barrier option—a USD call with a knockout strike of 1.4000 and a knock out barrier of 1.3700.

Why is this more effective than the vanilla alternative?

The knock out option gives you the right but not the obligation to buy USD against CHF at 1.4000, as long as the spot never hit 1.3700 during the life of the option. However, should the spot reach 1.3700 before the expiry date then the option is automatically terminated.

Firstly, because of this risk, that the option may be terminated before the expiry date, the knock out barrier option is cheaper than the vanilla option (420 CHF pips as opposed to 590 CHF pips). That is, if the option finishes in-the-money without having reached the outstrike, your underlying exposure was always protected from an unfavourable spot movement but for a cheaper premium than if you had purchased the vanilla option.

Secondly, the Knock Out option only exists when you need it (if the spot moves in an unfavorable direction) and only ceases to exist when the spot market has moved in favour of the underlying exposure, giving you the opportunity to close your underlying position at a favourable rate or to reassess market conditions.

If however, the spot should hit the barrier before the expiry date, it is advisable to take action in the form of a spot, forward or option to avoid being unhedged for the remainder of the hedge period. This is because after hitting the barrier (and knocking out the hedge protection) the spot may retrace itself and finish in-the-money.

Types of barrier options
You can create the following barrier options:

 

The above gives a whole new meaning to the term Buyer Beware

Derivetives gonna be the death of the world financial system - default, anyone ?

Thu, 04/24/2014 - 13:22 | 4691267 Fuh Querada
Fuh Querada's picture

...Thx, appreciate your time and work...
....that puts a completely different complexion on the whole matter! So that is how they are having my pension fund managed.....

Thu, 04/24/2014 - 12:11 | 4690951 maskone909
maskone909's picture

whats worse, the chinese as an intenational gold backed reserve currency, or the good ol USA?  time has shown us that every nation in this position has managed to screw itself over. they never have any transparency.  its bananas.

Thu, 04/24/2014 - 12:15 | 4690968 Obama_4_Dictator
Obama_4_Dictator's picture

as in Banana Republic......

Thu, 04/24/2014 - 12:13 | 4690959 youngman
youngman's picture

Why is there FX trading anyway???  It used to be a slow controlled market...now its a daily quick moving casino...again the clan has destroyed a market

Thu, 04/24/2014 - 12:20 | 4690996 maskone909
maskone909's picture

Tribe.

Thu, 04/24/2014 - 12:19 | 4690998 hungarianboy
hungarianboy's picture

Arn't all FX companies in the hands of Israel?

Like FXCM, Forexpro, Alpari etc?

I think they are.

Thu, 04/24/2014 - 12:40 | 4691075 NotApplicable
NotApplicable's picture

"Well, it's all just a little bit of history repeating."

Thu, 04/24/2014 - 12:42 | 4691081 THX 1178
THX 1178's picture

Naturally, the money changers have millennia of experience.

Thu, 04/24/2014 - 12:35 | 4691058 Seer
Seer's picture

It's a carcass that's being picked apart by vultures. All is heading toward an entirely different way of life, one that not even the "clan" can control (though that never would stop them from trying).  Think of it like the Easter Islanders' last days, fighting for supremacy measure in statue prowes, probably were trying to hoard statues right up to the end; and after it all collapsed I doubt that folks had any desire to continue statue building.  The "clan" knows the game of marbles.  In the future the game of marbles won't be played...

Thu, 04/24/2014 - 12:16 | 4690976 HaroldWang
HaroldWang's picture

Market sure is worried as SPX is inching closer to 1900.

Thu, 04/24/2014 - 12:20 | 4690999 lesterbegood
lesterbegood's picture

PUBLIC NOTICE
“To Whom It May Concern”
Worldwide Banks & “Governments” Foreclosed

BACKGROUND TO GLOBAL FORECLOSURES
A two-year investigation by The One People’s Public Trust (OPPT) discovered the massive fraud that
‘banks’ and ‘corporate government’ have systemically perpetuated against the people of the entire world over many decades.

OPPT’s final report concluded that a debt slavery system had been deliberately set up by the heads of the banks and corporate governments, and whether we realized it before or not, this system gradually entrapped almost every human being on earth for the duration of their life.  The report also concluded that the existing system could not be fixed and that a new legal landscape had to be created to free the people of the earth from debt slavery. (Report http://i-uv.com/oppt-absolute/oppt-initial-investigation/)

So, using the same legal process that the banks, corporations and corporate governments have always
used to ‘foreclose’ on unsuspecting individuals, OPPT lodged various commercial filings during 2011,
2012 and 2013, using what is called the Uniform Commercial Code (UCC).  The banks and corporate government entities were given plenty of time and opportunity to ‘rebut’ the filings, but to date no rebuttals have ever been registered and so the UCC filings were accepted as Rulings and therefore, came into existence as global law.

UNIFORM COMMERCIAL CODE – WHAT IS IT? WHERE AND TO WHOM DOES IT APPLY?
The Uniform Commercial Code (UCC) is the ‘bible’ of ALL commerce and is used worldwide by high-level banking and government corporations to manage and govern their transactions and commercial behavior at an international level. Sadly, ‘UCC’ is not taught in law schools so most lawyers, attorneys and magistrates know nothing about UCC and will argue it has no application.  However, given the usage of UCC filings in the upper levels of “government” and banks worldwide, due diligence and working knowledge of the UCC is a necessity.   UCC Resources:
1)  http://www.law.cornell.edu/ucc/ucc.table.html
2)  http://en.wikipedia.org/wiki/Uniform_Commercial_Code
3)  http://australian-commonwealth.com/ucc.html

HOW DID THE FILINGS COME TO BE GLOBAL LEGAL RULINGS?
After the investigation was completed, the OPPT made two very important conclusions that were set out in the original UCC filings:? 1. that they (the banks and corporate governments) had by deceptive acts and practices been stealing from the people for hundreds of years, and; 2. nothing stood between
the Creator and each of the Creator’s creations.

The banks and governments were given due opportunity to rebut both statements, which they could not and therefore did not:  (See Declarations of facts and allegations of wrong-doing by banks and corporate governments: http://i-uv.com/oppt-absolute/oppt-declaration-orders/ ) As a result, on December 25,
2012, OPPT announced the foreclosure of the world’s banks and corporate governments with their first
Public Announcement  http://i-uv.com/oppt-absolute/oppt-press-releases/  and first Press Release (Feb
4, 2013): http://www.scribd.com/doc/140666918/Press-Release-One-People-s-Public-Tr... Foreclosure-on-Major-Corporations in accordance with global commercial law established through the UCC filings registered by OPPT.
TWO EXCERPTS FROM THE ORIGINAL FILINGS:
You can find the documents listed here at the Washington DC UCC Registry:
https://gov.propertyinfo.com/DC-Washington/  (Free Login UN: OPPT PW: opptiuv )

Refer: TRUE BILL: WA DC UCC Doc# 2012114776 - Oct 24 2012
Bank Charters Cancelled:?
“Declared and ordered irrevocably cancelled; any and all charters for Bank of International Settlements (BIS) members thereto and thereof including all beneficiaries, including all certain states of body owning, operating, aiding and abetting private money systems, issuing, collection, legal enforcement systems, operating SLAVERY SYSTEMS ...commandeering lawful value by unlawful representation...”

Refer: DECLARATION OF FACTS: UCC Doc # 2012127914 - Nov 28 2012
Government Charters Cancelled:
“...That any and all CHARTERS, inclusive of The United States Federal Government, UNITED STATES, “STATE of ...", Inclusive of any and all abbreviations, idem sonans, or other legal, financial or managerial forms, any and all international equivalents, inclusive of any and all OFFICES, inclusive of any and all OFFICERS, PUBLIC SERVANTS, EXECUTIVE ORDERS, TREATIES, CONSTITUTIONS, MEMBERSHIP, ACTS, and any and all other contracts and agreements made thereunder and thereby, are now, void, worthless, or otherwise cancelled, unrebutted; ...”

WHAT DO THE UCC RULINGS MEAN FOR BANKS & CORPORATE GOVERNMENTS?
All beings now act in the capacity of individual entities without a corporate safety net and with full personal liability for each and EVERY ACTION THEY TAKE under common law, protected and preserved by public policy UCC 1-103, and Universal law, the governing law laid out in the OPPT UCC filings. (Refer: WA DC UCC Ref Doc # 2012113593). Should any individual pursue any actions on behalf of a foreclosed Bank or “Government”, causing another individual any damage as herein described, they in their individual and unlimited capacity are absolutely liable. Such actions may result in the receipt of a Courtesy Notice.

WHAT IS A COURTESY NOTICE?
The Courtesy Notice contains the information of this flyer and offers terms and conditions for any future dealings an agent of a foreclosed entity may wish to have with you.   Individuals are now downloading and sending Courtesy Notices worldwide; 64,000 were downloaded in the first two days following release in early Feb 2013. (See  http://i-uv.com/oppt-absolute/oppt-tools/which-courtesy-notice/)
Share your Public Notices here:  www.pn.i-uv.com

WHAT DOES THIS MEAN TO YOU? All People Declared Free of Debt
Refer: NOTICE OF DECLARATION OF ABSOLUTE TRUTH UCC# 2013032035)
The final filing of the OPPT occurred on March 18, 2013. This document terminated all remaining man- made entities and returned all people of this planet to absolute freedom. In this document the creator is referred to as "absolute essence" and all creation’s people are referred to as "absolute essence embodied".  Article VI states..."I duly verify, with full responsibility and liability, by DECLARATION OF ORDER, that eternal essence IS made transparent and known by the DO'ing of any and all embodiment
of eternal essence in eternal essence's universe, IS free and free of debt, unrebutted."

This means THERE IS NO DEBT.? You have no debt... No one has debt... it is done.  This includes your mortgage, credit card and car or student loan. There is simply NO MORE DEBT.
FURTHER RESEARCH

Radio shows:
http://i-uv.com/media/radio-shows/

Debt Slavery Rulings
You probably did not know that the following have been filed by banks and corporate governments to
give them ‘ownership’ of your body and labor.

1. Executive Order 13037 dated 04 Mar 1997 defined humans as capital. See:
http://americankabuki.blogspot.com.au/2013/03/us-citizens-defined-as-pro...

2. UCC Doc # 0000000181425776 filed 12 Aug 2011 evidences sale of US citizens in transaction between The Federal Reserve System and The United States Department of the Treasury 1789 for $14.3 trillion. (Linked above)

3. UCC Doc #2001059388 evidences the template the Federal Reserve Bank of New York uses to secure the collateral in major banks around the world... including chattel paper, goods and the unborn young of animals. (See http://www.mediafire.com/view/?3yh79cjnzcwzu0s )

Countries and ‘Governments’ Are Just Corporations, on the USA Stock Exchange and Dun & Bradstreet Go to http://www.sec.gov/edgar/searchedgar/companysearch.html and search for your country under “More Options” using either 8888 (Foreign Government ) or 8880 (American Depositary Receipts) as the SIC code.  There you can research your country as a registered company on the USA Stock Exchange.
You can even review your country’s Annual Report. Go to this List of Duns Numbers for US Corporate Governments and you can see many US federal, state and local governments listed with their business Dun and Bradstreet identification number.

Orders to Cease and Desist:
Attention is drawn to DECLARATION AND ORDER: UCC Doc # 2012096074, Sept. 09 2012, duly reconfirmed and ratified by COMMERCIAL BILL UCC Doc. No. 2012114586 and TRUE BILL UCC Doc. No.2012 114776 which states:

Volunteers within the military ... “to arrest and take into custody any and all certain states of body, their agents, officers, and other actors, regardless of domicil by choice, owning, operating, aiding and
abetting private money systems, issuing, collection, legal enforcement systems, operating SLAVERY SYSTEMS against the several states citizens, ...”, and “Repossess all private money systems, tracking, transferring, issuing, collection, legal enforcement systems operating SLAVERY SYSTEMS...”

“...all beings of the creator shall forthwith assist all Public Servants identified herein, to implement, protect, preserve and complete this ORDER by all means of the creator and created as stated herein, by, with, and under your full personal liability...”

Because a CEASE AND DESIST order exists, you are free to offer terms and conditions to individuals
acting on behalf of a foreclosed Bank or “Government”, by issuing a Courtesy Notice.

Websites:
www.i-uv.com                              ... http://americankabuki.blogspot.com.au/
http://opptcourtcases.forumotion.com                    http://i-uv.com/media/sister-sites/

Thu, 04/24/2014 - 12:26 | 4691026 Seer
Seer's picture

Who could have known that there was cheating going on within a system that's predicated on a false premise (perpetual growth on a finite planet)? </sarc>

Listen, we're all owners of the BIG LIE, the false premise.  Unless you start with a valid premise you can NOT have a REAL solution.

Thu, 04/24/2014 - 12:46 | 4691093 NotApplicable
NotApplicable's picture

Luckily ALL of this shit is merely "words on paper" and has absolutely no bearing other than what well-armed people claim it does while they point the gun at your head.

While this view won't prevent any pain, at least it allows one the opportunity to observe that all laws are nothing more than a hostage situation under the guise of "Do as I say and nobody gets hurt!"

As long as people believe in the legitimacy of violence as a social organizing strategy though, there will be no relief.

Thu, 04/24/2014 - 13:59 | 4691547 Seer
Seer's picture

There's reality!

Thu, 04/24/2014 - 12:47 | 4691097 Schmuck Raker
Schmuck Raker's picture

-1; " Executive Order 13037 dated 04 Mar 1997 defined humans as capital. See:..."

No, it doesn't. A reference to "Human Capital" is not the same as defining "Humans" as "Capital". Do your homework.(It only took me five minutes, and I'm a moron.)

Also, what is a "Creator"?

Thu, 04/24/2014 - 14:02 | 4691566 Seer
Seer's picture

Oh Regional(sp?) says that it's OK to be Mor-On, better than Mor-Off.  So, I too continue to feel pride in being moron!

Thu, 04/24/2014 - 13:05 | 4691183 Ban KKiller
Ban KKiller's picture

Only because I have fought the fight agains banks using "tinfoil hat" theories...and am winning so far, that I understand some of what is above. I do know I can become a secured party creditor as I have done that with UCC. So...will look at the rest after I burn a fatty. 

Stack the lead and fuck the FED. 

Thu, 04/24/2014 - 14:27 | 4691752 Chief Wonder Bread
Chief Wonder Bread's picture

-- "UNIFORM COMMERCIAL CODE – WHAT IS IT? WHERE AND TO WHOM DOES IT APPLY?
The Uniform Commercial Code (UCC) is the ‘bible’ of ALL commerce and is used worldwide by high-level banking and government corporations to manage and govern their transactions and commercial behavior at an international level. Sadly, ‘UCC’ is not taught in law schools so most lawyers, attorneys and magistrates know nothing about UCC and will argue it has no application."

That's odd. I had an entire course in UCC in undergraduate business school. You mean most lawyers, attorneys and magistrates don't know anything about something that I know something about (admittedly very little)?

Thu, 04/24/2014 - 16:49 | 4692447 Imminent Collapse
Imminent Collapse's picture

Believe me the UCC is well understood by the legal bar, not so sure about the poster here.  Sounds a bit like a guy who told me that he had declared his soverignty and was not longer responsible for federal income taxes.  That was right before all of his accounts were frozen. 

Fri, 04/25/2014 - 00:42 | 4693946 Chief Wonder Bread
Chief Wonder Bread's picture

I should have added a sarc tag.

Here's what you're dealing with here:

http://en.wikipedia.org/wiki/Freeman_on_the_land

Ultimate tin-foil hat army. You'll notice several post here regularly.

Thu, 04/24/2014 - 12:25 | 4691006 Yen Cross
Yen Cross's picture

    China has been doing REPOing of the yuan (draining) all week so this move is all the more troubling when that's taken into account.

 PBOC does 85 bln yuan repos, drains 2 bln yuan for week

Thu, 04/24/2014 - 12:22 | 4691011 Seer
Seer's picture

All this excessive yuaning is making me sleepy...

Thu, 04/24/2014 - 13:01 | 4691164 BandGap
BandGap's picture

Time out!

How the fuck do you pronounce Kojodjojo?

That is all.

Thu, 04/24/2014 - 14:12 | 4691644 Seer
Thu, 04/24/2014 - 12:26 | 4691025 riot-police
riot-police's picture

Hate to admit it but this is where comerce is going. Almost like their trying to give stuff away for free. Desperate for a dollar.

You can buy some crazy Junk on amazon from China with free shipping. Where if you were buying in N. America you would be paying 4X more.

I think it is the same items made in the same factory.

Thu, 04/24/2014 - 12:28 | 4691035 Seer
Seer's picture

Everything, except food and energy, is getting to be more and more worthless.  One day in the future most all you see around you will be meaningless: if you have to have an abondoned vehicle in your yard make it a truck, as at least it can make for a planter...

Thu, 04/24/2014 - 12:28 | 4691034 JailBank
JailBank's picture

What roll does weather play in this?

Thu, 04/24/2014 - 12:32 | 4691049 Proofreder
Proofreder's picture

Just roll with the weather, no matter what role you play in life ...

... currently that of an uneducated idiot fool.

Thu, 04/24/2014 - 12:30 | 4691040 Proofreder
Proofreder's picture

"devalue the renminbe"

We cannot allow that here, this is the War Room

We face a Devaluation Gap; we must have a devaluation of our own !

Will WWIII and World Currency War coincide ??  Inquiring minds want to know.

Thu, 04/24/2014 - 12:31 | 4691044 chinaboy
chinaboy's picture

I'm surprised that no one reports FX loss in the 1Q. Zero hedge please keep track of those 'victims'. Are those people all Chinese? or are they global? To what extent 'mark to market' rule is not applied to the FX 'assets'?

Thu, 04/24/2014 - 12:42 | 4691083 Winston Churchill
Winston Churchill's picture

Until they hit the stops on interest rate swaps, they are
un realized losses and can be hidden. eg JPM's whale losses are actually closer to 100 billion than the stated 5bn.

Thu, 04/24/2014 - 12:41 | 4691080 RagnarDanneskjold
RagnarDanneskjold's picture
Steel Trade Lawsuits Explode; Banks' Unceasing Nightmare; Defendants Flee

The situation with steel company debt continues to deteriorate. Last year there were a total of 2500 lawsuits at the relevant court in Pudong, Shanghai; in the first quarter of 2013 there were 1051 lawsuits. Last year the cases amounted to ?19 billion, this year they are already ?11.4 billion, in other words the average case in 2013 was about ?7.6 million, but this year it is up to ?10.8 million, an increase of 40%. The situation is expected to continue worsening into next year, with concern that this is still the tip of the iceberg.

Thu, 04/24/2014 - 12:50 | 4691108 Cthonic
Cthonic's picture

OT: $16 billion worth of AAPL changed hands so far today with a stupendous gap.  That's enough volume to cover the entire short interest and then some.  Which long/short hedgies got their ass splattered?

Thu, 04/24/2014 - 12:55 | 4691133 Yen Cross
Yen Cross's picture

    The Chinese Belgian = UST connection. What a circle jerk central banking has become.

   AEP: China hiding reserves in Belgium

 

Thu, 04/24/2014 - 13:11 | 4691206 elegance
elegance's picture

Putin will be mightily displeased when he realizes which way China troops are actually marching.

Thu, 04/24/2014 - 13:25 | 4691288 Cthonic
Cthonic's picture

Are you insinuating they'd want back outer manchuria?

Thu, 04/24/2014 - 19:31 | 4693075 AdvancingTime
AdvancingTime's picture

Yes China is on the edge. China has entered a great credit trap and is awash in overcapacity and debt. Much of the recent growth in China after 2008 came from a massive 6.6 trillion dollar stimulus program that expanded credit and poured massive amounts of money into the system. This money encouraged expansion and construction with little regard as to real demand or need. 

After several years of growing debt concern is rising the whole unstable pyramid is about to come crashing down bringing China and possibly the global economy with it. This is not just about writing off a few bad loans. The shadow banking sector is so large that concerns exist about contagion and a domino series of defaults that might rack the economy as savers lose money. More on this subject in the article below.

http://brucewilds.blogspot.com/2014/03/china-and-great-credit-trap.html

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