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As A Shocking $100 Billion In Glencore Debt Emerges, The Next Lehman Has Arrived

Tyler Durden's picture




 

One week ago, in a valiant attempt to defend the stock price of struggling commodity trading titan Glencore, one of the company's biggest cheerleaders, Sanford Bernstein's analyst Paul Gait (who has a GLEN price target of 450p) appeared on CNBC in what promptly devolved into a great example of just how confused equity analysts are when it comes to analyzing highly complex debt-laden balance sheets.

In the clip below, starting about 2:30 in, CNBC's Brian Sullivan gets into a heated spat with Gait over precisely how much debt Glencore really has, with one saying $45 billion the other claiming it is a whopping $100 billion.

The reason for Gait's confusion is that he simplistically looked at the net debt reported on Glencore's books... just as Ivan Glasenberg intended.

However, since Glencore - like Lehman - is first and foremost a trading operation, one also has to add in all the stated derivative exposure (something we did ten days ago), in addition to all the unfunded liabilities, off balance sheet debt, bank commitments and so forth, to get a true representation of just how big, or rather massive, Glencore's true risk is to its countless counterparties.

Conveniently for the likes of equity analysts such as Gait and countless others who still have GLEN stock at a "buy" rating, Bank of America has done an extensive analysis breaking down Glencore's true gross exposure. Here is the punchline:

We consider different approaches to Glencore’s debt. Credit agencies, such as S&P, start with “normal” net debt, i.e. gross debt less cash and then deduct some share (80% in the case of S&P of “RMIs” – Readily Marketable Inventories. These are considered to be “cash like” inventories (working capital) in the marketing business. At the last results, RMIs were about US$17.7 bn. Giving full credit for RMIs plus a pro-forma for the equity raise and interim dividend we derive a “Glencore Adjusted Net Debt” of c. US$28 bn.

 

On the other hand, from discussions with our banks team, we believe the banks industry (and ultimately regulators) may look at the number i.e. gross lines available (even if undrawn) + letters of credit with no credit for inventories held. On this basis, we estimate gross exposure (bonds, revolver, secured lending, letters of credit) at c. $100 bn. With bonds at around $36 bn, this would still leave $64 bn to the banks’ account (assuming they don’t own bonds).

Charted, here is why Sullivan and his $100 billion number was spot on, and why Glencore's banks suddenly realize the company has more gross exposure than its has total assets!

BofA lays out the stunning, if only for equity analysts, details:

Over US$100bn in estimated gross exposures to Glencore

 

We estimate the financial system's exposure to Glencore at over US$100bn, and believe a significant majority is unsecured. The group's strong reputation meant that the buildup of these exposures went largely without comment. However, the recent widening in GLEN debt spreads indicates the exposure is now coming into investor focus.

 

Debt broadly spread

 

GLEN debt breaks down as US$35bn in bonds, US$9bn in bank borrowings, US$8bn in available drawings and US$1bn in  secured borrowing. We then estimate that the group has US$50bn in committed lines against which it can draw letters of credit with which to finance its trading inventories. Based on public filings, we believe that the banks may have limited capacity to reduce even the undrawn portion of these lines until 2017. GLEN have publicly stated its financing is largely locked in - but we believe that this may not provide comfort to risk-averse bank shareholders and supervisors.

 

Concentration and convexity: potential stress testing ahead

 

GLEN had an unencumbered asset base of over US$90bn in property, plant, equipment and inventories at the half year. However, for bank investors and regulators, after the crisis, gross nominal exposure is a key metric – including committed facilities. We believe many banks may now be more carefully reviewing their exposure to the commodities complex. Glencore’s banks span the globe, with 60 in a recent financing. Glencore has stated it has locked its financing in for an extended period, but a desire to hedge would be powerful at the banks, as likely that regulators will include commodity and energy exposures in the next stress tests as it is a stated area of focus. These stress tests typically take gross exposures and assume elevated loss-given-default - a potential 5x capital uplift. A system positioned one-way on a credit has historically tended to keep spreads high; implying rising debt costs which are likely to put pressure on credit quality: convexity is alive and well.

Furthermore, as we reported last night, while banks have so far been willing to throw good money after bad, this is about to change:

Bond market spreads imply a non-investment grade rating

The group's bond spreads imply a rating in the single-B range and a rollover cost of funding >200bp above the cost of debt outstanding. We believe banks’ gross margins on their exposures are below the Glencore group’s average funding cost, with drawn financing at spreads around 50bps and undrawn lines materially below this. The cost of hedging exposure is currently over 600bps. Thus, the P&L dynamics for banks are difficult; this implies to us that banks may increase challenge the business model of commodity traders; this implies to us that banks may increase the cost of and reduce the availability of credit to commodity traders, thus challenging their business model.

 

Bank shareholder pressure on disclosure and exposure

 

We believe bank shareholders may pressure managements to reduce exposures, if not because of potential loss then at least because of likely capital consumption under stress. In our view, current disclosures by the banks are inadequate to provide clarity. It is not possible to estimate unsecured exposures, nor to understand if individual short term loans may be a part of a long-term irrevocable commitment as in the case of Glencore, based on publicly available disclosure..

Worse, since it is not just Glencore that the banks are exposed to but very likely the rest of the commodity trading space, their gross exposure blows up to a simply stunning number:

For the banks, of course, Glencore may not be their only exposure in the commodity trading space. We consider that other vehicles such as Trafigura, Vitol and Gunvor may feature on bank balance sheets as well ($100 bn x 4?)

Call it half a trillion dollars in very highly levered exposure to commodities: an asset class that has been crushed in the past year. Which explains BofA's next point:

According to our Credit analyst, Navann Ty, GLEN’s 5y CDS tightened by 85bp yesterday to c. 640 bps. GLENLN CDS is 70bp wider to MTNA (ArcelorMittal), which is rated Ba1/BB. Trying to extrapolate to an implied credit rating is difficult as we don’t think that there are many IG-rated credits trading at the same level. Bottom line - there appears to be a lot of demand for default protection.

 

All of the above should be well-known to our readers. However, the below exchange between the BofA equity analyst and the company's bank analyst is a must read to gain some further insight on Glencore which is increasingly - and belatedly - seen as the fulcrum entity in what may be the watershed event for any wholesale commodity-trading indudstry collapse, and why the company is, as we first called it, in danger of becoming the commodity sector' "Lehman", a name we first gave Glencore two weeks ago and which appears to have stuck.

What are the similarities that you observe between GLEN and your experience/analysis of other financial companies during the 2008 Global Financial Crisis (GFC)? What is the roadmap for a situation like this to unwind?

 

Alistair Ryan (AR): One key similarity I see is the financial structure of the company in time and space. Glencore’s highly leveraged financial structure has not been stress tested in its current form through a full cycle. Ultimately it appears that there is a time mismatch between the duration of its funding (short) and the time to realize the value of (some) of its assets (e.g. the industrial assets). The large notional size of its outstanding debts (US$50 bn+) is also unusual. We observed similarly mismatched capital structures during the GFC in consumer finance companies (e.g. Countrywide, Household) & public broker dealers (e.g. LEH).

 

Can you give some examples of situations that ended well/less badly? What were the actions taken by company managements?

 

If we look at Banks as a counterpoint through the GFC, they were, in general much more financially resilient. The institutions which came under pressure and/or failed during the GFC had large nominal amounts of short term debt. Take HSBC. HSBC bought “Household”, the largest consumer finance company. We believe because of HSBC’s relatively low leverage, and the fact that they undertook a $17 bn rights issue, they were able to absorb the losses resulting from their ownership of Household.

 

As an interesting aside, and again speaking to the financing duration mismatch issue, while HSBC took US$22 bn in write-downs related to mark to market losses onstructured credit (sub-prime), in subsequent years, the company has written back around $21 bn of these losses. We might think about a parallel here with the duration mismatch of short term debt funding and some of GLEN’s more marginal industrial/mining assets which might be “out of the money” today but where value could be realized if the assets are held for the longer term.

 

Can you give some examples of situations that ended badly? What were the pitfalls?

 

If we consider the example of UBS, during the GFC found itself in the unfortunate situation of needing to do 4 share issuances support its balance sheet and ultimately sold down the assets that were causing the problems. While this combination did fix the problem at that time, it meant that the company didn’t benefit when the value of the distressed assets recovered. (As an aside, we note GLEN’s 9.99% issue may be of concern due to the fact this is the maximum permissible size that can be undertaken without shareholder approval or a prospectus). During the GFC we came to see similarly sized issues as not always adequate.

 

A key problem then is the combination of short term funding and market moves in the price of assets which could impact the ability to raise funds either through equity raises and / or asset sales.

 

Speaking in general terms, we think that some management teams may have been overly confident in terms of their ongoing access to funding. They may also have underestimated the severity of market moves and the extent to which these market moves might make their funding structures unsustainable in less liquid environments. Financial companies tended to have few covenants meaning there wasn’t an actionable indication of a problem under the debt terms until it was time to refinance. At Enron, by contrast, the company used funding structures which were dependent on its investment grade rating so that, effectively, 2 days after the company was downgraded to junk, it was “done”.

 

We do note the dependence of some business models on the feedback loop of market confidence into the cost of debt which can then ultimately impact the viability of the business. For example, if the cost of debt doubled at a commodity trading company, to what extent is the business model impacted?

 

We also find it interesting that other commodity trading houses such as ADM & Bunge use relatively lower levels of financial leverage.

 

What are the problems for GLEN with a potential downgrade to ratings 1 notch (BBB-). What about a two notch downgrade to Junk?

 

As a rough rule of thumb, we’d think about a 1 notch change in rating being equivalent to a 50% change in a bank’s appetite for exposure to a company. With the pressure we’ve seen on Glencore’s yields & CDS we’d expect that some banks could be looking to reduce their exposure to Glencore and would be looking to hedge existing exposures (for example through the CDS market). This would include undrawn lines. With Glencore presently financing at about Libor + 40 bps but the CDS at 800 bps, having a line out to Glencore has significant “negative carry” implications.

 

Size matters when it comes to the size of debt issuance. Glencore is a large absolute issuer with >$50 bn in outstanding debt in various forms. What this means, in our view, is that the credit may be quite large in many banks’ portfolios already. As such, the ability of some banks/investors to take additional exposure to Glencore may be limited. We consider the example of RBS vs. HSBC. RBS “maxed out” many credit counterparties including in the short-term wholesale market during the GFC.

We also consider the relative size of the markets for investment grade and high yield debt in Europe. Investment grade is about $1.6 trillion. High yield is about US$330 bn. These markets are anticipatory, of course, but to the extent that a large issuer were to be downgraded from IG to junk, we’d expect to see some indigestion as markets adjust to new balances.

 

What is the feedback loop into the banking system from financial stress at Glencore? What does our experiences of 2008 tell us?

 

The key feature of financial markets in early 2008 was that it had been a long time since something bad had happened. As such “tail risks” were underpriced and we saw an extended period of “easy money”. More and more leverage came into the financial system at different levels. The layers of leverage meant that once the market turned (and the key one here was the US housing market), and recovery proved difficult.

 

We also note that, as financial institutions came under pressure in 2008, 2009, several companies released quite general statements reaffirming the strong state of affairs in the business. While these statements may have been true in terms of operations, they didn’t reflect the sea-change in the financing environment and the potential negative marks to which the companies were exposed. As such, we read Glencore’s statement of 29th September 2015 with interest and caution: “Glencore has taken proactive steps to position our company to withstand current commodity market conditions. Our business remains operationally and financially robust – we have positive cash flow, good liquidity and absolutely no solvency issues. …”

 

How might stress tests evolve to include exposure to commodity traders? What is the likely outcome of this?

 

Bank stress tests are inevitably “topical” i.e. focused on the issues of the day. Take the concept of RMI (“readily marketable inventories”). It hasn’t been tested through an economic cycle. To the extent that we saw a dislocation in commodity markets (say caused by falling commodity prices), this might cause several financial institutions to reexamine commodities / contracts that initially appeared to be cash-like. Then, recovery assumptions might be called into question with the realization value for those commodities as key. To the extent that we saw systemic distress in the GFC with several financial institutions as forced liquidators in a distressed market, liquidity became a real issue and losses were greater than financial models might have suggested. As such, based on our experience, we could hypothesize that a stress test might require an approximate 30/40% haircut on assumed commodity prices.

 

UK, US & Swiss bank regulators are likely to be focused on this issue in the next round of stress tests (starting in January). In the US we are starting to see the fall-out from the US energy junk-bond situation. In the UK, HSBC and Standard Chartered have big exposures to emerging markets, particularly China. In Switzerland, we believe that both UBS & CS would have exposures to most of the commodity trading houses so Glencore, but also the privately held commodity trading companies such as Trafigura & Gunvor.

 

How should we think about bank exposure to Glencore and commodity traders in general? Overall, what do you think about this situation?

 

I’m concerned. The company has cash on hand of around $3 bn at its last results. Yes liquidity is $10 bn including credit lines [JF: latest from company is c. $13 bn post the rights issue]. However, to the extent the company chooses to fully draw those credit lines, a scenario that could emerge is that of this being a stepping stone to lines potentially not being renewed.

 

If we look at the risks on counterparties, we think that UBS might not be in a position to “take” a $1 bn loss on funds outstanding to Glencore, if such losses were required. CS might not be in a position to “take” a $1 bn loss on funds outstanding to Glencore, if such losses were required. If we think about it from a game theory point of view, there is the danger of a “rush for the exit” in terms of bank exposure to GLEN. As such, credit departments must, we believe, be thinking about how others in the market will consider the risk.

 

Bottom line, given that CDS in the range of 600-800 and yields on some bonds are now 7% plus, we believe it seems unlikely that a financial institution would look to actively increase its exposure to Glencore, and potentially, to the wider commodity trading space. This scenario would suggest that, while a liquidity squeeze for the wider space may not be imminent, it cannot be ruled out over the next 12-18 months. Again, we are thinking about how risk officers will be planning for the next round of stress tests. To us, part of the latter may mean reducing exposure to commodity traders. We acknowledge that some relationship banks would likely continue to “back” the relationship but whether this will be the norm for the c. 70 banks with whom Glencore has a relationship is uncertain.

Finally, here is BofA's punchline:

  1. Comparisons are being made with some financially leveraged companies during the 2008 Global Financial Crisis (GFC).
  2. If credit is downgraded, banks could lower their exposure to Glencore both in terms of RCFs & LCs.
  3. The high yield market is small and, our credit strategist thinks we might initially see temporary dislocations in a scenario in which GLEN were downgraded to junk.
  4. Bank stress tests could start to include commodity trader distress. This could lead to less availability and more expensive bank funding of traders.

And just like that not only is Glencore confirmed to be systemically important (something we knew when we exposed an "academic" hack's paid report to guarantee that commodity traders were not a systemic risk, confirming they are preicsely that) but suddenly - now that this warning is "out there" and even the most clueless credit, and equity, analyst who is stuck holding billions in losses to GLEN will have no excuse to say they "had no idea" - the negative convexity of bank exposure means that all those very banks which have $100 billion in exposure to the giant commodity trading company will quietly do their best to hedge their exposure, ostensbilty by buying default protection adding even more stress to Glencore's "shadow" funding channels, in the process unleashing the very same chain of events that ultimately led to Lehman's downfall.

*  *  *

It appears the credit markets are well aware of the systemic risks that Glencore poses...

 

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Wed, 10/07/2015 - 11:29 | 6639841 Tonald J Drump
Tonald J Drump's picture

that's a yuge amount of debt !

Fri, 11/06/2015 - 00:22 | 6756636 smartmil
smartmil's picture

As for me when it finally becomes apparent that we have indeed lost our way, that mark to infinity, non-gaap numbers being included in any report to the SEC wasn’t such a good idea, and all the financial “innovations” are nothing but tricks to stretch a gnat’s ass of collateral over a rain-barrel, I predict a mad crash to real “price discovery” with Gold and Silver coming out the winner in a bull market unlike anything that has occurred before in financial history.

Wed, 10/07/2015 - 11:34 | 6639864 Oh regional Indian
Oh regional Indian's picture

Great handle and picture Tonald! Thanks for the laugh.

Banks can save anyone, well proven.

Glencore will be an issue if it is MEANT to be the issue...

Other wise, it'll be printabillion again...

Wed, 10/07/2015 - 11:41 | 6639895 Captain Debtcrash
Captain Debtcrash's picture

Smells like a critical mass default to me.

Wed, 10/07/2015 - 11:46 | 6639917 38BWD22
38BWD22's picture

 

 

Why own a turkey like Glencore?  Or any other miner (at least now).

Gold.  Just the shiny yellow physical stuff.  No counterparty risk.

Platinum is OK too if you are an optimist.

Wed, 10/07/2015 - 11:48 | 6639939 NoDebt
NoDebt's picture

They're a lot more "trading house" than "miner".

AIG was a nice, safe, conservatively run insurance company making good money until one tiny division of about 15 people selling CDSs sank the whole company.

Wed, 10/07/2015 - 11:53 | 6639961 38BWD22
38BWD22's picture

 

 

10-4, thanks for clarifying.  Trading houses blowup more spectacularly.

Still, miners are riskier than their products now.

Wed, 10/07/2015 - 12:15 | 6640067 The_Virginian
The_Virginian's picture

Does this mean we'll be hearing "Worst since Glencore" every day in 2021? 

Wed, 10/07/2015 - 12:31 | 6640120 J Jason Djfmam
J Jason Djfmam's picture

"Clearly, nobody could have seen this coming."

Wed, 10/07/2015 - 13:57 | 6640550 OrangeJews
OrangeJews's picture

So is Cramer telling us to buy Glencore?

Wed, 10/07/2015 - 15:17 | 6640991 Slarti Bartfast
Slarti Bartfast's picture

Is Gartner telling us to buy Glencore? 

Wed, 10/07/2015 - 15:19 | 6641008 Nenad
Nenad's picture

Obama will not finish his second term! Banned independent documentary reveals the truth. This will scare millions! Current Events Linked to Ancient Biblical Prophecy!

http://motivationdose.com/is-america-babylon/

Wed, 10/07/2015 - 15:26 | 6641062 Manthong
Manthong's picture

..a couple hundred billion?

..gimme’ a break..  it’s not like it is anything more than Monopoly money

If you don’t do trillions or quadrillions (I have a yen for big numbers) ,,, go home.

Electrons..  1’s and 0’s…..   let the fools eat it.

Wed, 10/07/2015 - 15:30 | 6641091 Slarti Bartfast
Slarti Bartfast's picture

I meant Gartman.

Wed, 10/07/2015 - 14:04 | 6640555 ZerOhead
ZerOhead's picture

$100B was only a month or so of QE back in the day so this will only bring the House of Cards down if they want it to bring the House of Cards down...

Wed, 10/07/2015 - 14:00 | 6640566 nevadan
nevadan's picture

Over US$100bn in estimated gross exposures to Glencore

 

We estimate the financial system's exposure to Glencore at over US$100bn, and believe a significant majority is unsecured. The group's strong reputation meant that the buildup of these exposures went largely without comment. However, the recent widening in GLEN debt spreads indicates the exposure is now coming into investor focus.

Shades of LTCM.

Wed, 10/07/2015 - 14:24 | 6640712 Victorio
Victorio's picture

$100bn, is that a lot of money?

Wed, 10/07/2015 - 15:05 | 6640930 nevadan
nevadan's picture

It is if the market goes no bid and you have to sell.

 

Wed, 10/07/2015 - 16:32 | 6641506 gammab0y
gammab0y's picture

I disagree with this whole analysis, at least at it applies to Glencore's health.  

They are conflating existing debt with untapped credit lines.  Typically, you give a bit of a kudos to a company that has locked in a huge reservoir of cheap, available credit ,but in this article by adding everything together, they are punishing Glencore for just that.   If memory serves me right, Glencore doesn't need to refinance anything until 2017, so with their reservoir of available and locked bank lines, what's the short-term crisis?

I sort of understand adding the numbers together, but only from the perspective of a bank.   But the focus of the story then should be about the banks and not this frankly ridiculous Lehman=Glencore meme.   Glencore and the rest of the commodity traders do not have nearly the funding fragility that Lehman had.

As for the banks, yes, the banks are upside down and come 2017, I'm sure they will be far less generous in any refinancing.  But if we get to 2017 and the economy is stil in the doldrums, the banks are going to be upside down on a lot of credits besides just commodity traders.  There is a lot of "high yield" that has been written at anything but high yields over the last couple of years, and in any kind of recession, they will all become problematic together.

Finally, this whole sudden awareness that commodity traders are risky is a bit silly.  The Trafis, Vitols, and Glencores of the world have made a fortune arbing the world's commodities.  They are good at it, and even with the occasional blow-up, very profitable.  Commodity trading is not the problem for Glencore.  It is the transition from commodity trader to asset owner, mostly mines, and mostly through the XStrata merger.  If you want to look at it that way, then by all means, call Glencore that next ANR or Patriot, where a long, slow painful death is a possibility, but the comparison to Lehman is daft.

Wed, 10/07/2015 - 18:57 | 6642171 ZerOhead
ZerOhead's picture

Very interesting observations.

If Glencore is politically well connected then the 2017 timeline may give some indication as to when they expect the ongoing commodity collapse to be reversed by a hyperinflationary global monetary collapse.

Always tough to figure out who the players in the know wearing swim suits are until after the tsunami goes out...

Wed, 10/07/2015 - 19:17 | 6642230 Mentaliusanything
Mentaliusanything's picture

That's not the way it works. All it takes is a bank who has some security over Glencore to ask for immeadiate repayment and the show is over. Every loan in the fine print say so. That is why you go broke slowly then all of a sudden.

Your last sentence is correct but really  "Inter alia"

Wed, 10/07/2015 - 12:10 | 6640050 KnuckleDragger-X
KnuckleDragger-X's picture

They decided that their shit was odor free and they were the 'smart' people. they are finding out just how fucked up the system really is, but I just wonder how many more Glencores are out there that we don't know about...yet.....

Wed, 10/07/2015 - 13:56 | 6640527 fockewulf190
fockewulf190's picture

Yet another Black Swan enters the flock.  It´s going to be a common sight seeing bricks in toilets in the near future.

Wed, 10/07/2015 - 12:17 | 6640077 marathonman
marathonman's picture

Glenron.

Wed, 10/07/2015 - 14:00 | 6640570 ZerOhead
ZerOhead's picture

Glencorpse.

Wed, 10/07/2015 - 12:59 | 6640259 RaceToTheBottom
RaceToTheBottom's picture

The most important thing to know is who are the smartest guys in the room?.

Then you are safe.....

/s

Wed, 10/07/2015 - 22:13 | 6642696 August
August's picture

...about 15 people selling CDSs sank the whole company.

And those 15 guys never even told AIG's Board of Directors what they were doing!

(if the spokesman for Richard Goldbrajch... er, "Holbrooke", is to be believed.

Wed, 10/07/2015 - 11:49 | 6639946 Deathrips
Deathrips's picture

WTI going to 20s. Washout.

 

RIPS

Wed, 10/07/2015 - 11:57 | 6639978 sam i am
Wed, 10/07/2015 - 12:11 | 6640053 Deathrips
Deathrips's picture

If theres WW3 im not worried about my options.

Most probable that iraq and iran and syria come on strong production as soon as russia wipes the mossad off the chessboard.

 

RIPS

Wed, 10/07/2015 - 12:03 | 6640017 KJWqonfo7
KJWqonfo7's picture

It will go to 120 before it goes to 20.

Doesn't matter how many people have to die to make it happen.

 

 

Wed, 10/07/2015 - 11:46 | 6639922 NoDebt
NoDebt's picture

I always thought Brian Sullivan was kind of a bag of hammers.  I might have to reevaluate.  Then again, all he really had to do was add a column of numbers and stick to his guns after that, which, admittedly, he did.

Wed, 10/07/2015 - 13:54 | 6640530 prefan4200
prefan4200's picture

Your first thought is the right one, he IS a bag of hammers.  Someone else (smarter) gave him that info and prepped him and he just stuck by it.  He's just not that bright.

Wed, 10/07/2015 - 11:56 | 6639943 Bokkenrijder
Bokkenrijder's picture

Does the Jap chick give blowjobs to Ivan Glasenberg? Amazing how aggressively she cut off her co-host in order to prevent any 'uncomfortable' news. What a media propaganda whore!

Wed, 10/07/2015 - 19:47 | 6642325 Blankenstein
Blankenstein's picture

Can't let any negative news come out when a Rothchild is involved.

 

"A close friend is banking heir Nat Rothschild, who invested millions in Glencore when it was floated. Other friends include the ubiquitous Russian oligarch Oleg Deripaska"

Read more: http://www.dailymail.co.uk/news/article-2098036/Glencore-Xstrata-Ivan-Glasenberg-Mick-Davis-56bn-mining-mega-merger-came-being.html#ixzz3nvdAlbZA 
Follow us: @MailOnline on Twitter | DailyMail on Facebook

Wed, 10/07/2015 - 19:56 | 6642347 NoPension
NoPension's picture

$$$Billions$$$$ are thrown around now like $20's.

It was not long ago those types of numbers were used to describe soveirgn debt. Now, if your company in not reporting or rates in the 10's of billions, you're not worth a look. Wow!

Wed, 10/07/2015 - 11:42 | 6639902 El Oregonian
El Oregonian's picture

"HollowCore"

Wed, 10/07/2015 - 12:36 | 6640145 Never One Roach
Never One Roach's picture

GlencoreGate.

Wed, 10/07/2015 - 11:43 | 6639903 VinceFostersGhost
VinceFostersGhost's picture

 

 

 

When do the Ebay auctions start?

 

Came that close to getting a Lehman hockey puck.

Wed, 10/07/2015 - 11:48 | 6639935 Bangin7GramRocks
Bangin7GramRocks's picture

100 B ain't no thing but a chicken wing now! Grandma can conjure that up in between her stories and before Jeopardy. She will even have time to do some gardening. Frankie Says Relax.

Wed, 10/07/2015 - 13:23 | 6640354 Tinky
Tinky's picture

If you were to audition for a bit part in the next Tarantino flick, I'm starting to think that you might actually have a shot.

Wed, 10/07/2015 - 11:51 | 6639957 Argenta
Argenta's picture

I snagged two Lehman orange pens off eBay back in the day.  A constant reminder of "too big to fail"...

-Argenta

Wed, 10/07/2015 - 12:39 | 6640156 Never One Roach
Never One Roach's picture

I sold my Countrywide pen that was actually used by Mozillo thru Ebay. There's a buyer and collector [and seller] for everything these days. Even Kardashian's pre-owned, month-old G-string can go for big dollas.

Wed, 10/07/2015 - 12:43 | 6640174 oddjob
oddjob's picture

Seems more like a BioHazzard than a collectible.

Wed, 10/07/2015 - 15:35 | 6641133 novelator
novelator's picture

That's why it ships in a Sharp's container.

Wed, 10/07/2015 - 22:22 | 6642732 August
August's picture

Bought one of Madonna's old Pap smears on Ebay for $500. It's yours for only $2,500... if you buy by midnight tonight.

Once she dies, the sky's the limit!  They won't be makin' any more!

Wed, 10/07/2015 - 14:24 | 6640708 MaxMax
MaxMax's picture

Have you noticed that pretty much all the financial institutions eventually fail?  And the ones that haven't failed have been bailed out or acquired by another when they got too weak. 

Wed, 10/07/2015 - 11:35 | 6639868 Hippocratic Oaf
Hippocratic Oaf's picture

Mark to market you cockksuckers.

Start the fire, lets get this show on the road!

Wed, 10/07/2015 - 11:38 | 6639883 44MagnumPrepper
44MagnumPrepper's picture

nopat works for Glencore and has assured me everything is okay.

Wed, 10/07/2015 - 11:41 | 6639898 abyssinian
abyssinian's picture

crack head Melissa Lee sure knows how to kill TV ratings and focus on cheerleading.  "hey hey, let's not get tot he bottom of his lies Michael, let's like tell people the truth and just go with this scams lies, let's just say they have a surplus and stop debating" 

Wed, 10/07/2015 - 11:53 | 6639963 BandGap
BandGap's picture

Not just that, they ain't gettin' any new loans!

Wed, 10/07/2015 - 12:08 | 6640042 Bloppy
Bloppy's picture

The retail investor hears nothing about this from CNBC or WSJ, so it's buy buy buy buy.

 

 

 

 

In Jamaica, Danny Glover demands Britain pay reparations for slavery

 

http://tinyurl.com/p4nl54n

Wed, 10/07/2015 - 12:41 | 6640157 ersatz007
ersatz007's picture

my favorite quote from this video "i strongly suggest you don't have a look at that..." regarding Capital IQ's indication of $100Bn in debt.  

Wed, 10/07/2015 - 13:49 | 6640504 Fukushima Fricassee
Fukushima Fricassee's picture

The US government produces nothing and has at least 200 thousand times that when unfunded liabilities are included

Wed, 10/07/2015 - 11:31 | 6639850 abyssinian
abyssinian's picture

But all the CNBC scams said it's over blown, everything is fine! Nothing 2 hours of yellen 's printer can't fix. 

Wed, 10/07/2015 - 11:54 | 6639965 BandGap
BandGap's picture

Buy Bear Stearns

Wed, 10/07/2015 - 11:56 | 6639972 two hoots
two hoots's picture

Let the Swiss take the printing hit, it's their stepchild.

Wed, 10/07/2015 - 11:34 | 6639856 Latitude25
Latitude25's picture

$100B is chump change to the FED.  

Wed, 10/07/2015 - 11:33 | 6639859 williambanzai7
williambanzai7's picture

TRADING PANIC 2

Wed, 10/07/2015 - 11:41 | 6639896 franzpick
franzpick's picture

If you can keep your wits about you, when everyone else is losing theirs, maybe you haven't heard the news.

Wed, 10/07/2015 - 11:44 | 6639908 Not if_ But When
Not if_ But When's picture

William - I miss pics of Obama and his hilarious golf clubs.  Please try to squeeze them back in somehow.  Thanks.

Wed, 10/07/2015 - 11:55 | 6639969 The Black Bishop
The Black Bishop's picture

Epic as usual William!

Wed, 10/07/2015 - 12:06 | 6640030 williambanzai7
williambanzai7's picture

THE 44TH HOLE

Wed, 10/07/2015 - 13:45 | 6640479 cro_maat
cro_maat's picture

William - Why is the cat panicking?

Is he listed in someone's trust which is overallocated to GLEN?

Or maybe he gets his catfood from GLEN. Yellen's new mantra will be "Save Glencore... for the kitties"

Wed, 10/07/2015 - 14:01 | 6640584 Arthur Schopenhauer
Arthur Schopenhauer's picture

 

 

On the good ship

Lollipop

Its a sweet trip

To the candy shop

Where bon-bon's play

On the sunny beach...Of peppermint bay

Lemonade stands...Everywhere

Crackerjack bands...Fill the air

And there you are...,

Happy landings on a chocolate bar.

See the sugar bowl, Do a tootsie roll

With a big bad devils food cake,

If you eat too much...

Oh, oh,...

You'll awake with a tummy ache.

On the good ship

Lollipop

Its a nice trip

In to bed you hop

And dream away...

On the good ship Lollipop

https://www.youtube.com/watch?v=jU3SDuWNTnU

Wed, 10/07/2015 - 22:37 | 6642779 August
August's picture

Definitely your best work since Die Welt als Wille und Vorstellung.

Wed, 10/07/2015 - 11:43 | 6639907 two hoots
two hoots's picture

Apropos!  

 

And

 

Was thinking of one done with a picture of Hillary Clinton and a cardboard cut out of the same (exact dress/hair/all) with the picture pointing to cutout saying:  “That’s not me, I’ve changed”.

  

Wed, 10/07/2015 - 11:53 | 6639955 SWRichmond
SWRichmond's picture

the D-52 debt bomber is still my favorite one.

But, someone help me out here: is Glencore "systemically important"?  Do they own something valuable which the big banks need right now, and soon will be able to take possession of for pennies on the dollar?

And finally, where is ACA Capital when we need it?

Wed, 10/07/2015 - 11:58 | 6639986 The central planners
The central planners's picture

What is suppose to be this? One of those the economist cover magazine with a secret message?

Wed, 10/07/2015 - 12:00 | 6640000 The central planners
The central planners's picture

The gold coin seems to enjoy this.

Wed, 10/07/2015 - 11:34 | 6639862 BeaverCream
BeaverCream's picture

It's okay, whoever gets in trouble for this one has been saving to pay off their fines. No jail time of course, retirement should be a breeze.

Wed, 10/07/2015 - 12:13 | 6640058 negative rates
negative rates's picture

Trouble + retirement = six feet under in case you are not familiar, and their aint no breeze down there.

Wed, 10/07/2015 - 12:43 | 6640169 Never One Roach
Never One Roach's picture

Top execs will settle for a huge fine and walk away with $$$$ Golden Parachutes.

 

The AGs look the other way. They're too busy chasing FIFA officials, Subway pedophiles and invesitgating police departments [that's when they're not furiously shipping guns to drug lords].

Wed, 10/07/2015 - 11:35 | 6639866 max2205
max2205's picture

call me when it's a trillion dollar problem

Wed, 10/07/2015 - 11:40 | 6639890 Dr. Richard Head
Dr. Richard Head's picture

Ring, ring...Hello Student Debt calling.

Wed, 10/07/2015 - 12:01 | 6640001 Kaervek
Kaervek's picture

A new generation of waiters and bartenders in the making

Wed, 10/07/2015 - 12:16 | 6640068 negative rates
negative rates's picture

Nah, forgive it and then monetize it, just like a banker or lawmaker  would do.

Wed, 10/07/2015 - 14:49 | 6640841 Kaervek
Kaervek's picture

Raise rates right after this shitshow collapses and your newly acquired waiters will have to work forever to pay off their loans

Wed, 10/07/2015 - 13:03 | 6640281 Mr. Bones
Mr. Bones's picture

Just wait for the counterparty unwinds.  The fun begins when this snowballs.

Wed, 10/07/2015 - 14:50 | 6640849 Kaervek
Kaervek's picture

Waiting for months on end now, will keep waiting though

Wed, 10/07/2015 - 14:35 | 6640755 Exalt
Exalt's picture

Paging Dr. Bernanke... Bernanke needs a Doctor!

Wed, 10/07/2015 - 11:35 | 6639870 Bay of Pigs
Bay of Pigs's picture

It appears we have reached a fork in the road Kemosabe...

Wed, 10/07/2015 - 11:40 | 6639882 knukles
knukles's picture

Who's "we" white man?

 

                            Ah, it'll all "net out" in the end.
                                    maniacal laughter

Wed, 10/07/2015 - 11:55 | 6639968 SWRichmond
SWRichmond's picture

Yeah, no problem, ISDA now has first claim on the money in your "savings" account.

Wed, 10/07/2015 - 11:35 | 6639871 Pullmyfinger
Pullmyfinger's picture

Stay off the sidewalks; the penthouse pianos have started heading for the ground floor.

Wed, 10/07/2015 - 11:37 | 6639878 Mark Mywords
Mark Mywords's picture

Only $100 billion. That's chump change.

I agree with the person above who said to call them when it's a trillion dollar problem.

Wed, 10/07/2015 - 11:46 | 6639893 Dr. Engali
Dr. Engali's picture

In the grand scheme of things 100 biilion isn't much, but it's not the debt collapsing that is the problem. It's the counter party risk and the derivatives they are exposed to that can bring down the whole house of cards should Glencore fail. Don't forget these "assets" are levered up and rehypothecated several times over

Wed, 10/07/2015 - 11:48 | 6639936 Ataxic Press
Ataxic Press's picture

Yeah - couldn't Bill Gates and that Suckerberg kid just get together and write a check to cover it?

Wed, 10/07/2015 - 14:19 | 6640680 RockySpears
RockySpears's picture

Ataxic Press

They could, but the cash is tied up in ... mmmm .. Glencore

Wed, 10/07/2015 - 12:03 | 6640010 Kaervek
Kaervek's picture

Don't forget, as soon as a business would be able to bring down the whole system the taxpayer will HAVE to save it from collapsing. Nothing is ever going to fail in this de-risked world. It's a money grab and we are on the wrong side of it.

Wed, 10/07/2015 - 12:30 | 6640117 CarpetShag
CarpetShag's picture

Wonder what it feels like to be levvered up to the yingyang.

Wed, 10/07/2015 - 12:39 | 6640158 debtor of last ...
debtor of last resort's picture

Where's Glencores commodity storage, in some Chinese harbor?

Wed, 10/07/2015 - 11:43 | 6639905 GRDguy
GRDguy's picture

If the players who leveraged this debt ONLY ten times, it's already a trillion dollar problem.  Somebody ain't gonna get paid.

Wed, 10/07/2015 - 11:47 | 6639928 Tyler Durden
Tyler Durden's picture

"For the banks, of course, Glencore may not be their only exposure in the commodity trading space. We consider that other vehicles such as Trafigura, Vitol and Gunvor may feature on bank balance sheets as well ($100 bn x 4?)"

Half a trillion for an industry that is not too big to fail is actually a far greater systemic risk than trillions in exposure for a space that knows it will always get a taxpayer bailout.

Wed, 10/07/2015 - 11:49 | 6639947 Dr. Richard Head
Dr. Richard Head's picture

"Half a trillion for an industry that is not too big to fail is actually a far greater systemic risk than trillions in exposure for a space that knows it will always get a taxpayer bailout?"

Student Loans just hung up the phone. 

Wed, 10/07/2015 - 12:03 | 6640016 ReallySparky
ReallySparky's picture

Wanted to log in and offer up a round of applause for the excellent coverage of this!  Reminds of when you first starting reporting on the Lehman back in the blogspot days.  Thanks for showing up and doing this everyday.

Wed, 10/07/2015 - 12:09 | 6640046 tarabel
tarabel's picture

 

 

But are we looking at a new group of pledges to the TBTF frat house?

They can't even be considered for admission unless they are failing. 

Wed, 10/07/2015 - 12:41 | 6640170 Atomizer
Atomizer's picture

Good job Tyler. Gnomes didn't pick on the SWF report. 

Wed, 10/07/2015 - 14:55 | 6640881 Kaervek
Kaervek's picture

Hey Tyler how many days before Lehman did you write a post like this one?

Just asking so I know about how much time I got left for a trip to the lake.

Wed, 10/07/2015 - 15:10 | 6640960 Bob
Bob's picture

ZH did not yet exist at that point, even at seekingalpha (where I first ran across Tyler), much less blogspot and zh.com proper. 

Wed, 10/07/2015 - 11:48 | 6639937 tarsubil
tarsubil's picture

There's hundreds of trillions of derivatives out there just looking for the first 100 billion to start the mother of all daisy chains.

Wed, 10/07/2015 - 12:21 | 6640084 Arnold
Arnold's picture

Quadrillion.

In our short lifetimes, millions, billions and trillions have become way too commonplace.

 

Only a machine can unwind this anymore.

http://www.auburn.edu/~vestmon/robotics.html

Wed, 10/07/2015 - 12:34 | 6640138 J Jason Djfmam
J Jason Djfmam's picture

How far to Gazillion?

Wed, 10/07/2015 - 11:37 | 6639879 ghostzapper
ghostzapper's picture

Manufacture another "rally" to get more short stawks and commods to hedge your exposure to "Glenplosion" . . . . . . . nah they would never do that.  

Wed, 10/07/2015 - 11:37 | 6639880 SillySalesmanQu...
SillySalesmanQuestion's picture

Ahem, not to be critical, but, isn't there a zero or two missing on that exposure figure...?

Wed, 10/07/2015 - 11:38 | 6639886 Colonel Klink
Colonel Klink's picture

Hahaha, it's all a sucker's game if you have your money in the rigged casino.

Wed, 10/07/2015 - 11:40 | 6639889 Gracy101
Gracy101's picture

100 bil? no prob. 

https://thatguybloke.wordpress.com

 

 

Wed, 10/07/2015 - 11:41 | 6639891 yogibear
yogibear's picture

Jack Jew uses Hank Paulson's Tanks in the street street again for a TARP #2.

Wed, 10/07/2015 - 11:42 | 6639900 Not if_ But When
Not if_ But When's picture

So who is behind the big upward move in Glencore's stock price of late and just how does this impact the points made in this article?

Wed, 10/07/2015 - 11:45 | 6639915 ghostzapper
ghostzapper's picture

Institutions scratching each other's back in a high stakes poker game creating the illusion it is "rebounding" and "the bottom is in".  Check weekly and monthly charts to see huge moves and distribution versus accumulation.  They are trying to lure in as many sheep as possible to unload that turd.  Institutions can't just unload 500K shares as easily as one might think they can as an example.

Wed, 10/07/2015 - 11:46 | 6639925 Argenta
Argenta's picture

There's likely many more of these Glencore-wannabes (or don't-wannabes) out there.  Derivative exposure is pretty rampant, and it dwarfs government debts in the grander scheme of things.  All joking aside this is really scary stuff.

-Argenta

Wed, 10/07/2015 - 11:48 | 6639933 Smuckers
Smuckers's picture

....Aaand it's Gonecore.

 

Wed, 10/07/2015 - 11:50 | 6639952 JPMorgan
JPMorgan's picture

Pocket change I tell you! 

Someone get me Yellen on the phone. 

Wed, 10/07/2015 - 11:52 | 6639960 Haole
Haole's picture

What's the big deal, the Fed prints that every few days?

Wed, 10/07/2015 - 11:57 | 6639981 venturen
venturen's picture

I guess they should have never forced the mega banks from perpetuating the commodities fraud.... A classic Warren Buffet moment when the tides goes out who doesn't have swim trunks. Going to cost Glencore CEO some pardon money for Obama...isn't that what Marc Rich did?

Wed, 10/07/2015 - 11:59 | 6639995 world_debt_slave
world_debt_slave's picture

another taxpayer raping

Wed, 10/07/2015 - 14:58 | 6640894 Kaervek
Kaervek's picture

Better lube up, you know what's coming now

Wed, 10/07/2015 - 12:02 | 6640003 yellowsub
yellowsub's picture

It's got to be bad when Cramer is worried about this company and not pumping it up.

Wed, 10/07/2015 - 12:01 | 6640004 buzzsaw99
buzzsaw99's picture

nice work zh

Wed, 10/07/2015 - 12:04 | 6640019 CarpetShag
CarpetShag's picture

I wish I could piss like that Gait guy yaks....

Wed, 10/07/2015 - 12:04 | 6640021 SillySalesmanQu...
SillySalesmanQuestion's picture

I forgot to ask, is this by GAAP accounting or "magic cookbook" accounting?

Wed, 10/07/2015 - 12:05 | 6640028 wcvarones
wcvarones's picture

To be fair, Brian Sullivan is a blithering idiot who just reads whatever somebody puts in front of him.

http://www.wcvarones.com/2013/02/cnbcs-brian-sullivan-is-blithering-idio...

Wed, 10/07/2015 - 12:07 | 6640038 bbq on whitehou...
bbq on whitehouse lawn's picture

Enron was and independant energy trader, Glencore is an independant commodity trader.
Price discovery can never allow people to realise just how much wealth was stolen. In less then 10 years 10 dollars will have the buying power of a 1960s penny. Thats the wealth that was stolen.

Wed, 10/07/2015 - 12:08 | 6640039 Catullus
Catullus's picture

What are the cross-default provisions on the LOCs? Though they are accessing the credit, they can still default on them and trigger a default throughout the rest.

Reliant did the same thing in 2008. Missed debt/ebitda provision in an LOC they hadn't accessed. Default. ML thought they owned them.

Wed, 10/07/2015 - 12:12 | 6640055 stant
stant's picture

Can't be glen core! just dosent sound cool like lee mon

Wed, 10/07/2015 - 12:18 | 6640079 Atomizer
Atomizer's picture

United States, City of London, and European Union was suppose to be merged to hide the sovereign debt default. The largest SWF is going to collapse. Derivatives will follow. 

No go test , Modus Operandi corruption within the Obama administration. 

It will be the first nigger hanging in a century. 

Wed, 10/07/2015 - 12:19 | 6640089 scatterbrains
scatterbrains's picture

Let's hope they are massively short Silver when she blows.

Wed, 10/07/2015 - 12:20 | 6640090 I Write Code
I Write Code's picture

AIG rides again.

Wed, 10/07/2015 - 12:22 | 6640097 piceridu
piceridu's picture

So what is the impact to commodity prices that Glen holds? Do they move up or down if this thing goes the way of Lehman?

Wed, 10/07/2015 - 13:00 | 6640262 RadioactiveRant
RadioactiveRant's picture

Sticking my finger in the air, I'd guess PMs go up everything else, especially copper, goes down.

Wed, 10/07/2015 - 12:28 | 6640109 Atomizer
Atomizer's picture

Keep in mind how Washington DC play's into your fears on shutting down the Government and increasing debt ceiling. 

November 5, 2015 deadline. 

Wed, 10/07/2015 - 14:23 | 6640704 Crocodile
Crocodile's picture

Notice how the propaganda works well, for people still call "tiny closure" a "Shut-down"; the gov't never came close to a shut-down and it won't this time around. 

 

If we wee citizens who really gave a crap we would amass 10 million people who are willing to die and take DC down without violence except to catch the bad-guys, quick trial (like Manning's) and execute justice quickly and fairly.

 

If the military ever wanted to really shine; this is the time for them to do it.  They have the most favorable support among the people in comparison to politicians, but that will also fade over time.  Might be one reason they are spread out all over the world.  What parent would encourage their child to enter "these" armed forces?

Wed, 10/07/2015 - 12:34 | 6640136 Lost in translation
Lost in translation's picture

I wonder how Millenials will deal with the next Lehman-esque crisis, they can't remember the last. 

Wed, 10/07/2015 - 12:36 | 6640146 J Jason Djfmam
J Jason Djfmam's picture

Here's some advice: Just charge it to your grandchildren.

It's worked great so far.

Wed, 10/07/2015 - 14:16 | 6640661 Crocodile
Crocodile's picture

The Millennials will be least affected because they already have the last burden on them.  It is Gen "X" that is feeling the real pain, but those Baby Busters (that generation called the greatest that in fact is not) will get their share; except the ones that have and are retired now.

Wed, 10/07/2015 - 12:38 | 6640151 Atomizer
Atomizer's picture

Barry Diller is already on a plane to Tel Aviv. 

/sarc

Wed, 10/07/2015 - 12:40 | 6640164 GreatUncle
GreatUncle's picture

we think that some management teams may have been overly confident in terms of their ongoing access to funding.

Let me get this right, for 7 years we have above expectation optimistic economists, central bankers and governments so wouldn't you be "overly confident in ongoing access to funding". I mean what's the problem, economically everything is fine isn't it /SARC.

It ain't and they rope-a-dope carried on as normal when they needed to contract to minimize losses.

As for the 100 billion, who cares? FED can print that in a month and nobody blinks an eye and the BOE total print was 375 billion pounds QE so within most central banks reach to bail out. Even Greece we talk of 300 billion +euros in debt so it is only a TINY debt.

Won't go bust, TBTF so bailout is already on its way because the CD's if they get triggered cause a tsunami so bailout it is then.

Move along, nothing to see here.

Wed, 10/07/2015 - 12:45 | 6640192 22winmag
22winmag's picture

Next up... handing out speeding tickets at the Indy 500.

Wed, 10/07/2015 - 14:13 | 6640641 Crocodile
Crocodile's picture

LOL...I forgot all about that stupidity, but noticed all the soccer moms lined up for lessons on "How to use a tire gauge & inflate".

Wed, 10/07/2015 - 12:49 | 6640207 Atomizer
Atomizer's picture

Social European feudalism system doesn't work well in the United States of America. We have guns and a Constitutional law. 

 

Wed, 10/07/2015 - 14:11 | 6640635 Crocodile
Crocodile's picture

Good luck with that; I have Jesus and there is none that has ever overcome Him...I'm sticking with true and tested.

Wed, 10/07/2015 - 13:15 | 6640316 Sashko89
Sashko89's picture

So if i understand correctly, this is finally the real beginning of the crash of our current monetary system?

Wed, 10/07/2015 - 14:09 | 6640624 Crocodile
Crocodile's picture

No that started long before 9/11, but 9/11 was the moment when the financial coup took place.  2008 was the exposure moment and now we are in the hiding phase until "they" decide to pull the plug or can no longer successfully defend the USD by war.  So we have a ways to go before this ends badly and many are already dying and many more to come.

 

One question remains to be seen; can they or do they even desire to keep this going up and through the election.  I am 50/50 because Obama has done a masterful job at keeping the sheep asleep and enriching the globalist; he has caused much pain and division among the American people and the world.  Once they are done with him; who knows what will happen; he won't go back to to "Community Organizing"; whatever that actually is and he won't go back to Kenyan.

Wed, 10/07/2015 - 13:18 | 6640327 VWAndy
VWAndy's picture

 Faith based economics. Maybe the folks that believe in it should try flying on faith. Off a very tall building. We could call it a learning moment.

Wed, 10/07/2015 - 13:25 | 6640359 stocktivity
stocktivity's picture

...and just how do the bastards bail out Glencore?  Oh I know!  Now I see why they're ramping up commodities the past week.

Wed, 10/07/2015 - 13:28 | 6640369 Jack Burton
Jack Burton's picture

Let's be clear about this. In all economic and government circles, DEBT is out of control, and often hidden. When the water goes out the naked swimmers are everywhere. We piled on debt after 2008, a debt driven crisis! So just imagine the situation after all these years of added debts? Not the least of debtors are government.

Wed, 10/07/2015 - 13:45 | 6640476 VWAndy
VWAndy's picture

I suspect the gap betwenn the issue of debt and its assingment to a bagholder is both large and way off into the future.

 TPTB are looking for a bagholder that cannot exist. Its crackhead logic.

 Jump you fuckers!

Wed, 10/07/2015 - 14:03 | 6640592 Crocodile
Crocodile's picture

The problem is that before the water runs out; all the naked swimmers are comfortably swimming elsewhere.  The only naked swimmer left is the taxpayer.  And they are naked because they got raped and tossed into the water.

Wed, 10/07/2015 - 13:33 | 6640403 moneylover3
moneylover3's picture

Trump will FIX this 

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