Bill Buckler Puts Things Back Into Perspective: "Of The Total US $15 Trillion Market Capitalization, The Fed Provided About Half Of That"

Tyler Durden's picture

On a surprisingly quiet night, during which many, chief among them the President of the US, were expecting some fireworks, it is easy to get lost in all in your face political farce, while ignoring, and even blissfully forgetting, the real financial details behind the scenes. Luckily we have Bill Buckler, whose latest edition of "The Privateer" puts everything right back in perspective, and reminds us that "in the period between December 2007 and July 2010, the Fed parcelled out $US 16.1 TRILLION in emergency loans to financial entities all over the world. Almost half of this - a total of $US 7.75 TRILLION - was loaned to four US banks. They were Citigroup, Morgan Stanley, Merrill Lynch and the Bank of America. In July 2010 (the cut off date for this “audit”), total US stock market capitalisation was $US 15 TRILLION. The Fed provided about half of that." And here we are, haggling over $30 billion here, and $50 billion there...

The Last Remission

 

According to the official figures put out by the US government, the economic “recovery” in the US celebrated its second anniversary on June 30, 2011. The “fuel” burned in this “recovery” is immense. Mr Obama’s presidency has ushered in the era of $US 1 TRILLION plus annual deficits riding on top of 0.00 percent controlling interest rates from the Fed. It has also ushered in the era in which almost nothing istraded on the paper markets which is not - explicitly or implicitly - guaranteed by the government.

 

The fuel to keep the global financial system functioning does not stop at the borders of the US. The “Dodd-Frank Wall Street Reform and Consumer Protection Act” has just produced the first ever “audit” of the US central bank. It reveals that in the period between December 2007 and July 2010, the Fed parcelled out $US 16.1 TRILLION in emergency loans to financial entities all over the world. Almost half of this - a total of $US 7.75 TRILLION - was loaned to four US banks. They were Citigroup, Morgan Stanley, Merrill Lynch and the Bank of America. In July 2010 (the cut off date for this “audit”), total US stock market capitalisation was $US 15 TRILLION. The Fed provided about half of that.

 

This inflationary explosion is unprecedented in any era. It represents the biggest ever effort to rescue a debt-based system from the ravages caused by its own debt issuing excesses. It has, at best, provided a “remission” for global paper markets. The cost has been devastating for REAL economies everywhere.

 

A cancer patient who goes under the knife gets the malignant disease physically removed. If all traces of the malignancy are removed, the patient will recover. If all goes well, the recovery will be permanent with no “remissions”. A life-threatening malignancy is NOT fought or cured by doing everything possible to increase its power and potency. Yet that is what financial authorities in the US and everywhere else have been doing in regard to the life blood of their economies. As this stark fact becomes ever clearer, Washington DC and Wall Street stand helpless before the fact that they can only cure the economy at the cost of killing the financial system which is feeding on it. It’s that simple.

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kito's picture

as they sing it to the fed:

 

The hot summer night fell like a net
I've got to find my baby yet
I need you to soothe my head
Turn my blue heart to red

Doctor, doctor, give me the news
I've got a bad case of lovin' you
No pill's gonna cure my ill
I've got a bad case of lovin' you

A pretty face don't make no pretty heart
I learned that, buddy, from the start
You think I'm cute, a little bit shy
Momma, I ain't that kind of guy

Doctor, doctor, give me the news
I got a bad case of lovin' you
No pill's gonna cure my ill
I got a bad case of lovin' you
Whooaaa

I know you like it, you like it on top
Tell me, momma, are you gonna stop?

You had me down, 21 to zip
Smile of Judas on your lip
Shake my fist, knock on wood
I've got it bad, and I've got it good

Doctor, doctor, gimme the news
I got a bad case of lovin' you
No pill's gonna cure my ill
I got a bad case of lovin' you 

redpill's picture

I think Danzig is a bit more appropriate...

 

Sold into slavery down in New Orleans
Goddess
Of the bayou light
Black dog's head on the killing bed
Severed
And left to bleed
There on fire
In the corner of the world
There in misery
There on fire
In the corner of the world
Left for God to see

Do you want to take a life
Do you want to cross that line
Cause it's a long way back from hell
And you don't want to go with me

Poison father of the human race
God
Of the tainted blood
Malevolence
Sneaking up the spine of the world
Ready for the bastard son
There on fire
In the veins of man
There in misery
There on fire
In the veins of man
Left for to see

Do you want to take a life
Do you want to cross that line
Cause it's a long way back from hell
And you don't want to go with me

Do you want to take a life
Do you want to cross that line
Cause it's a long way back from hell
And you don't want to go with me

And it's a long way back from Hell
And you don't want to go

Instant Karma's picture

Tyler I forwarded you a tweet that was released by Senator Jim DeMint on Friday with this information. It was based on an audit of the FED that had just been released. Friday. Senator Demint. Fed Audit. Twitter.

Guess you missed it. 

I try.

Here's the tweet from @jimdemint : Audit: Fed gave $16 Trillion in emergency loans, $3 Trillion to foreign financial institutions

 

Larry Darrell's picture

What I would like to know is where is the rest of the actual 7.75 trillion floating around??

After all, if the market is a measly 15 trillion face value, the real dollars underlying it are only 1 trillion at a 15:1 leverage ratio, which would not be absurd to these fucktards by any stretch.

So, what happened to the others 6.75 trillion dollars?

Samual Adams's picture

high class hookers, gambling, bribe money, hush money, monopoly money

or  ;)

The moon is hollow as I'm sure you're well aware of,  but there is an ongoing concerted effort to fill it up with FRNs!

Larry Darrell's picture

After re-reading the post, I see that it does say there is 15 trillion in capitalisation.  Sorry for the earlier post

 

markmotive's picture
  • Reserves held on deposit with the Federal Reserve.
  • US Treasury and agency debt.
  • Paychecks and bonuses.

How's that for a start?

 

@planbeconomics

Fed Supporter's picture

Off setting debt destruction.  Look at the reduction in the size of the Shadow Banking.  Look at the write offs at the Banks.

 

Widowmaker's picture

Easy, record bonuses in off balance sheet accounting fraud, stashed for a rainy day called deferred income.

Juice Box's picture

We must be brave little communists now.  Lets just buy everything with TARP II, III, and IV.  Remember our leaders say that if we do not continue this madness the bottom will fall out.

Meanwhile Iceland is enjoying growth without debt.  They let it default and returned to living within their means.

sun tzu's picture

They don't have a monstrous welfare state and a gigantic military waging three wars at once. They also don't dish out tens of billions in foreign aid each year.

Fed Supporter's picture

I might read your posts if you get rid of the dude in the thong.

Buckaroo Banzai's picture

Oofa. No kidding.

We need a double-dose of Pladizow to compensate.

Dr. Engali's picture

I find myself torn between; hurry up and burn so we can rebuild a better system , and we need to keep the system alive. I fear that same people who ravaged this country will probably have there hand in rebuilding a more diabolical system.

Samual Adams's picture

I fear that same people who ravaged this country will probably have there hand in rebuilding a more diabolical system.

 

The trick is, as I have read and researched over history is, and get this....Make sure that the 'same people' don't make it past the Burn phase and into the Rebuild phase.    

Take your pick,   Guillotine,  Rope, Big Bangs and smoke, Lead....

Stockholm Syndrome is a bitch though....for the plebs and proles and slaves

Liberty or Death!

Everyman's picture

NO, I go with a public PIKING of these criminals for the damage they have done and to deter others from even considering this again.  Shove a 4 inch somewhat sharpened wood log from taint to throat and let then slid down it.  That goes double for lying congresscritters.  I am so done with this ilk that is in charge of the country and the finances.

I fear a real revolt is not far away.

Samual Adams's picture

Ah, courtesy of Vlad the Impaler.   I like your style.   Very classy.  

Vlad did it right.  aka, Dracula.  OG.     

http://www.youtube.com/watch?v=LHQ7J4IbW8I

 

+1776

nodhannum's picture

Everyman, tell me how you really feel.

Everyman's picture

Can't do that nod, I would then be put on a "list".

AssFire's picture

So delicate and subtle a solution. I like your style..I'm gonna keep an eye on you.

NumNutt's picture

Only problem is Barney frank is into the Piking thing.......he would be yelling "YEAH MOTHER FUCKER..GIVE ME MORE!!!!!" damn fags..

 

ibjamming's picture

He wouldn't say it like that...  He'd be more gay...with a lisp...  Probably mostly just a soft moan...like he likes it.

AUD's picture

Killing the financial system will destroy the lives of millions because millions have all their 'money' in the bank. If bank credit deflates to its real value, which is a fraction of what it is currently marked to myth at, millions will lose everything but the shirt off their back.

It's not just the 'elite bankers' who will lose, though they might lose their lives first, at the hands of someone with only a shirt to his name.

RockyRacoon's picture

The consolation being that everybody will suffer in accordance with their life-style.

I can go with that.

The rich have fewer lattes and the guy living under the bridge has to move to a smaller refrigerator crate.

Sudden Debt's picture

The rich will find a way to profit even more from what's comming. It's the common working man that doesn't stand a chance.

 

NumNutt's picture

bullshit, people need to find out now where the big bank CEO's live, make note now. Spend as much time one day as you do playing WOWC to find out the names and addresses of bank Execs then post it on the web. Then when TSHTF you go right to their house and burn it down. Make these fuckers afraid of the future just like the rest of us.

Incubus's picture

Don't count on the cattle-masses to do what's required when the time comes.  TPTB will just toss a few bones to 'em and they'll influence who they need to when it comes the reconstruction phase.

 

THe masses are mindless because of an inherent reluctantness to face reality.  If you've got the right people buttering them up at the right time, you're just going to end up with the same old shit as what we just tried to get rid of,  only now, they'll be able to loot without so many people getting pissed off, because it'll take another handful of decades for the system to fall apart, again.  If you're amongst the first ones in the shiney new temple, then go for it, dude.  The commoners are so busy with the "new car" smell, they won't see you runnin' past em with armsful of loot.

 

whiskeyjim's picture

Mr. Durden,

It is this modeling that should form the central thesis of any modern economics in evaluating the economy.

Unfortunately, the analogy at the end of the post is slightly off center. The debt is the cancer to the economic patient. The interest rate is the heroin administered by the Fed in order to keep the patient alive while giving it a chance to recover. Either will eventually kill it.

Since significant reduction in debt has NOT occurred in pretty much any sector, including private, we suggest that the patient is only becoming addicted to heroin.

I refuse to apologize for sounding like a broken record. TARP was the worst legislation ever enacted. For only bankrutpcy had a chance to revalue debt and real estate which drives stagflation and hovers like a large cloud over the comatose patient. The system by now cannot survive without the structural transfers from the poor to the rich inherent in fractional reserve banking, evidenced by the outsized profits the financial community earns as a percentage of total economic output.

A free market system is self-correcting. We are now seeing the inevitable result of allowing banking institutions the ability to print money. For no out-of-control politicians could ever enter into so much debt without bank printing presses; much less painful self-correction would have occurred years ago if even a vestige of the market was still in operation.

 

 

 

wisefool's picture

<sarc 120% on> I thank you for the application of justice. You are right, in that you have correctly identified the evils in this world as the banking institutions. TARP has nothing to do with covering up a 3 way between Bill Clinton, Monica, Barney Frank and a stimulant called CRA. </sarc>

 

For the non sark stuff, Dont tell your babies to be goldsmiths. Tell them to be tax LLMs and such. Washington is not suffering any declines in housing. Timmay will (in fact) move his family there. Niether timmy or the bernake has an LLM tax. And that is why they fail..

Royal Fleming's picture

wow...thank god for cut and paste...lol

RobotTrader's picture

U.S. is on the brink of default and the 5-yr. yield is at 1.52% and the dollar is unchanged.

I'm flabbergasted.

Samual Adams's picture

Wiley coyote also kept running, or trying to even though he already went past the cliffs edge.

btw.  where is "RobotTradersMom"

You can't eat Tbills/bonds.  U can wipe your ass with them, so there is some utilitarian use. 

Cheers!

Hulk's picture

Kinda of reminds one of Worldcom or Enron, doesn't it?!

Problem Is's picture

[X] Enron

Now in this fraud-hole... who's our Jeffrey Skilling and who's our "Kennie Boy" Lay?

Problem Is's picture

Double Post -- The "new" and "improved" system is full of annoying glitches...

Yen Cross's picture

That was "Earthworms & Grubs"   This is "GODZILLA vs GHIDRAH....

2discern's picture

ASTOUNDING INSANITY: the CONgress negotiates with an illegal impostor. http://www.thepostemail.com/2011/07/23/the-coup-detat-on-january-21-2009/

Why in the world would barry soetero even matter? The show goes on...can you spell puppet?

Samual Adams's picture

+ 1776  * Lead + Rope + Red Pill = Freedom/Liberty

Diogenes's picture

The fix is in and there is nothing you can do about it. They can even publish an obviously photoshopped birth certificate and laugh at all the birthers who go ballistic, thinking there is a law in America. There isnt. At least, no law the rich and powerful need to worry about.

cranky-old-geezer's picture

QE is TARP in disguise. 

Hank Paulson got the ball rolling with his 700 billion, then Benokio took over, buying up trillions in worthless trash paper, including wortless trash treasury debt (with a AAA rating), paying full mark-to-myth price for it.  

Wall Street takes the money from sale of their worthless trash paper and puts it in the stock market.

Treasury takes the money from sale of their worthless trash paper and spends it in the economy.

And it will go on and on. The debt ceiling will be raised, then raised again, then raised again, till it's 100 trillion ...and keep going.  Fed's balance sheet will grow and grow till it's 100 trillion ...and keep going.

But the US dollar will steadily lose value along the way as Bernokio keeps the presses running ...or its computer equivalent which is way easier.   

Bernokio is single-handedly stealing all the wealth from the American people, giving it to Washington and Wall Street.

That's what haapens when you let a central bank control the nation's currency ...as Mayer Amschel Rothschild said long ago.

Yen Cross's picture

 Throw a tarp over that Avatar... Thank you Ed; we are here to trade financial in- struments

dogismyth's picture

forget the system.  its their system, let them have it.  Why is everyone so reluctant to turn their backs on these idiots that claim to be leaders or governors of our society.

you guys worry to much about their system and you have hardly any facts, if any at all, and you have no idea what really is going on.  Why would you give one iota about trying to rediscover such a corrupt system, let alone trying to salvage it.

They are only in charge because you and I continue to play the game.  However, I have for the most part removed myself from the game.

You want to spend night after night trying to figure this shit out??  Haven't you had enough shit crammed down your throat in the past 2.5 years???

Ya really think that's gonna change from within the system?

Stop feeding the monster and ignore it like you would some imbecile.

Sometimes I think you guys are like little old ladies watching their daily soap operas on TV.  They live it and can't wait for it the next day.

Kali's picture

Yet here you are.  I believe this site serves many purposes.  One of the more important ones is to teach people who are just waking up.  Congratulations, if you have successfully repudiated the system, be grateful. 

Prometheus418's picture

There's some truth to that, but only some.

I never gave a crap about macro-economics until they intruded into my life, and the more I look, the less I like it.  I learn plenty of new things here, but mostly, it's a matter of knowing when the time comes to stay home from work and lock-and-load to protect my family.  This is the fastest, freshest news source availible to plebs like me.

Also, when you're an insominac who doesn't watch tv, you need to do something in the hours when everyone else is sleeping, and quiet falls over the house.

And I like to argue.

island's picture

"As this stark fact becomes ever clearer, Washington DC and Wall Street stand helpless before the fact that they can only cure the economy at the cost of killing the financial system which is feeding on it. It’s that simple."

Amen.  (And so it is.)