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Evolution Securities Warns Of "Total Carnage And Meltdown" As European Bank Sales Of CDS On European Sovereign Debt Soar
As much as we hate to say it, Europe is now without a shadow of a doubt the new AIG, only this time such heretofore considered insane (in retrospect) activities as doubling down to infinity on ones TBTF status are out in the public record for all to see. At least AIG conducted Joe Cassano's "made in London" $2.7 trillion bet on home prices never dropping in the shadows of Curzon 1. Whereas two days ago we made it clear how the unwind of trillions in rehypothecated securities could be the avalanche that buries first Europe and then the world, we explicitly excluded the impact of synthetic products such as CDS. Now it is time to bring the picture full circle, and put CDS front and center. As Bloomberg reports, "BNP Paribas SA, France’s biggest bank, sold a net 1.5 billion euros ($2 billion) of credit- default swaps on the nation’s sovereign debt, according to data compiled by the European Banking Authority. UniCredit SpA, Italy’s biggest lender, and Banca Monte dei Paschi SpA are net insurers of more than 500 million euros each of their government’s bonds, and Oesterreichische Volksbanken AG, the Austrian lender which has yet to pay interest on 1 billion euros of state aid received in 2009, has guaranteed a net 839 million euros of its national debt, EBA data show." (EBA source - link). For those confused by the above, here is the explanation: European banks, in order to generate modest cash flow from collecting on the pariodic interest premiums owed to them in order to plug increasingly large capital shortfall holes that otherwise would simply keep growing ever larger, have sold and continue to sell massive amounts of default protection on their very own host countries! As a reminder, it was precisely this that destroyed AIG when the illusion of the credit bubble burst.
Furthermore, our speculation of what caused the mindboggling surge of over $100 trillion in derivatives in the first half of the year to a record $707 trillion, has been confirmed. It was nothing short of every single European (and likely US) institution dodecatupling down on wrong way bets. Nothing more. As a reminder we said:
in order to satisfy what likely threatened to become a self-feeding margin call as the (previously) $600 trillion derivatives market collapsed on itself, banks had to sell more, more, more derivatives in order to collect recurring and/or upfront premia and to pad their books with GAAP-endorsed delusions of future derivative based cash flows. Because derivatives in addition to a core source of trading desk P&L courtesy of wide bid/ask spreads (there is a reason banks want to keep them OTC and thus off standardization and margin-destroying exchanges) are also terrific annuities for the status quo. Just ask Buffett why he sold a multi-billion index put on the US stock market. The answer is simple - if he ever has to make good on it, it is too late.
Today's EBA data confirms this.
Most importantly, this means that now US bonds are now completely irrelevant and don't need to blow out for the final unwind to occur: all that needs to happen is for European bonds to continue collapsing, which will in turn put the banks who have sold CDS on said countries into bankruptcy, as what selling CDS effectively is is a marginless way of going long the underlying security, i.e. naked longs. And no, ISDA's attempt to destroy the sovereign CDS market will have no impact as an event of default does not need to occur: banks will simply bleed to death due to daily variation margins demanding more and more and more cash each and every day as spreads blow out wider. Recall that in CDS trading, variation margins has to be posted and positions netted at the end of the trading day with virtually no exceptions. Which means that a CDS trading at infinity (or the underlying bond trading at zero which is equivalent) will put the seller of such product into insolvency, whether or not an actual event of default has been declared, thus making ISDA involvement irrelevant.
At this point we would like to request a moment of silence for Europe (and thus America, which will promptly implode without its transatlantic counterpart) because it is now inevitable that AIG's fate will be shared by Europe when (not if) global central banks finally lose control of European rates, which in turn will collapse.
And once again, lest we be accused of hyperbole, here is Bloomberg, citing the head of fixed income at Evolution Securities
“Some of this is trading rather than pure hedging,” said Gary Jenkins, head of fixed income at Evolution Securities Ltd. in London. “If European counties the size of France or Italy actually defaulted and triggered CDS, there would be total carnage and meltdown. It would be the end of the world, and at that stage it’s likely your counterparty would be the least of your worries.”
Alas, since nothing will ever change until the final blow up destroys everything, the time to start quoting T.S. Eliot has arrived.
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If you adjust for inflation you will find that stocks have dropped considerably in value for well over a decade. Worse when you compare them with gold.
'I heard that Zimbabwe had a rockin' stock market.'
+1. I'd love to see CNBS usher in the new year with new highs and then... just keep going until the numbers no longer matter.
Well they have to find some place to park about $30 trillion in newly printed up fake currency....hasnt anyone been paying attention? World afloat on a sea of imaginary fiat currency.
Seems to me that if through normal channels, the FED data would appear so parabolic it would be dizzying. Likewise, it would have already created hyperinflation. So, the same cash was created in the shadows. But, it seems that one can run but not hide from the inevitable math. Also supports the notion that fiat today is nothing is more dead money walking. Zombie cash that will be turned into dust the moment the shadow banking system sees the light of day... which occurs the moment that cash flow runs out.
Then again, the FED can say whatever it wants, and who's to stop them?
True. But laws of dimishing returns are bound to assert themselves at some point. The lies can only be hidden so long before they manifest themselves in actual commodity pricing. Kind of like a rubber band being stretched and stretched. When this puppy cannot be stretched any further, it is going to snap back something fierce. If credit money where akin to explosives, we are sitting on a super-nuke right now.
Credit Default Swaps are like Prophylactics. You don't put one on unless you plan to fuck someone. Simple really.
Yes, and they all have holes.
"Whether he knew of this deficiency himself I can't say. I think the knowledge came to him at last--only at the very last. But the wilderness found him out early, and had taken vengeance for the fantastic invasion. I think it had whispered to him things about himself which he did not know, things of which he had no conception till he took counsel with this great solitude--and the whisper had proved irresistibly fascinating. It echoed loudly within him because he was hollow at the core."
- Joseph Conrad, Heart of Darkness
Let's be blunt about it and stop beating around the bush. These Bankers and their financial engineers are fiscal terrorists. They are a clear and present threat to our economy and way of life. Terminate the bastards with extreme malice! Really now, give me a reason NOT to take these ass clowns out like the terrorists they are. CDS being sold to pad the banks income and thus the pay packages and bonus pools. These wankers profit from dubious financial instruments and dump their losses as TBTF entities onto the public. Take them out, and I mean with armed force if necessary.
Is there a reason they still are allowed to carry on doing what they do, other than their ownership via bribes of every western government??
I like beating around the bush!
You know the saying...
There's a wood shed for every banker
Their game has corrupted the world and turned free men into slaves. The deposits of free men got loaned out multiple times which created inflation so that the free men had to take out loans in order to buy what they no longer could afford on their income.
You mean your debt based economy that has allowed you a way of life beyond your means?
Please, you are also part of the problem. Without sheeple so willing to be part of that way of life, a lot of this crap would not exist.
Yes, let them face the lynch mob.
And what about you? Your "way of life" has meant death and misery to millions the world over. Will you face the lynchmob in Somalia?
How can a decent man grow up and understand what exactly it is these vermin are doing?
They own the politics, they own the propaganda and they own the system. Alternatives are being ridiculed at every turn.
Freedom from these vermin can only be achieved by violent means. The people or "sheeple" you are referring to have no clue and would rather live coddled in comfortable ignorance and signing all their freedoms and talents over to the vermin than trying the alternative.
Until the "sheeple" get raped as happened in 2008. But soon enough that's forgotten under the guise of a black President who was suppsed to give "hope and change" .. yadda yadda yadda
I for one am sick and tired of the vermin and their games.
>Without sheeple so willing to be part of that way of life, a lot of this crap would not exist.
Actually, in a free market - i.e. one based on voluntary exchange and not hampered by acts of aggression such as fraud - there would undoubtedly be more "consumerism". We'd be zooming around in The Jetson's cars by now.
Sounds a lot like Worldcom selling bandwidth to another ISP who then sells it back to Worldcom.
You don't think Merkel and Kozy are, you know, OOOOooooooo, My eye's, OOOOOooooooo
That's disgusting....
Don't you listen to CNBC, after Lehman the world learned never to allow a TBTF to ever go down. Move on nothing to see.
Everything works out fine so long as the bankers' friends in the government never allow anything to default
But again, thats not the point. None os this was a mistake, it was all planned destruction...no one could ever tell me everything was going great but suddenly and by total surprise all the banks were bankrupt. Fact is, the FED charter of 100 years is up, as well as Bretton Woods, so what we're seeing is the world move into a 1 world banking system and currency. Theyre just doing final positioning right now thats all.
Gotta agree. Could all of the developed countries gone into ubber debt at the same time, coincidentally? Not one large nation stands out which took fiscally prudent actions?
Yup. When this system crashes, the sheeple will be BEGGING for a single currency to solve their woes. No need to force it on them when you can be a savior by giving them what they cry for.
As much as I like the theory of forced monetary descrution, I haven't found any evidence of a 100 yr charter on the FED anywhere. The fact that all large nations went into unsustainable debt around the same time could be attributed rational irrationality.
How we got here is not my main focus anymore. How to survive the impending crash is. Avoiding a forced world currency is on my list too, but other than letting people know that is the route we are being led down, I don't know how to affect it.
Refuse the Deutsche Mark of the Beast.
Here's the alternative theory - it's not planned, rather it's the outcome of the system due to human nature. Now the world's major economies are mainly democracies right? Read the following article:
http://www.newworldparty.org/2011/08/democracy-cause-of-debt-problems.html
Fiscal prudence is painful and therefore it tends to interfere with a politician's reelection prospects.
well we all know the central banks of the world arent going to let it happen so how do we profit???? the only thing they can do is print thats it....the euro bond doesnt fix the problem so in short SHORT EURO AND OR LONG GOLD...the EUR wont disolve but like the us dollar it should get crushed
Don't forget, Corzine, Biden and Obama like to sleep together!
Okay. What I don't understand is the fact that th ECB knows it has to print or die. I'm sure they all do. So are they gonna wait for the wheels to come off completely before they print, or are they going to let it just fall in on itself so they can try and roll out a new system to "save us'? Which one is more devastating to the powers that be? Hyperinflation or economic collapse?
The plan all along was to die, and resurrection from the ashes into 1 world bank. No one here is trying to 'save' anything, except for the outside possibility that this grand plan looked great on paper, but like what happens to all James Bond villains best laid plans, some minor overlooked detail screwed it all up.
Oh I know the plan is to have a world bank. And I don't think for a minute anybody is trying to save the current system. I am just curious which path they take. If they print and hyperinflate they can pin it all on one man. If they let the system collapse they can blame it on wallstreet. Which one is more beneficial and the least disruptive for the powers that be?
Maybe something went wrong in their plans and its not working, maybe some of those 'in the club' now see that theyve been stabbed in the back? To me, it looks like their plans are meeting resistance from somewhere.
Germany has to start feeling pain for ptrinting to commence
As much as we hate to say it, Europe is now without a shadow of a doubt the new AIG,
As much as I hate to say it, no one gives a shit as long as the markets melt up.
sunny
Well, fools only care if 'markets melt up', totaly unable to see the far larger real picture that stocks are at 1990's levels. But thats their plan, the sheeple are conditioned to believe if the DOW was up, then the economy is fine. Nevermind nothing could be further from reality.
Moody's downgraded three French banks and their stock went up 5%.
What is wrong with this picture?
+1 for the avatar. A very under-rated Bond villain.
Thank you.
If you think about his modus operandi in 'Live And Let Die', Dr. Kananga would today likely be in charge of the Fed:
--Dump massive amounts of hopium on the market, destroying your competitors and expanding the client base, then when everyone's hooked and no competitors remain, raise the price and watch gov'ts around the globe do your bidding in exchange for an everlasting supply to keep the population under control.
Excellent.
For me, the two most important Bond villains are Goldfinger and Kananga. Both were commodities investors with a megalomaniac desire to master the world.
the only answer is that the very visible fist of the state extended its protection and shored up those stocks.
in the world of broken confidence, the ratings alone don't confer real signals since everything else is mispriced.
rather the signal is in how you fare despite the downgrade. in this case, a managed downgrade, actually is
meant to show a triumph of robustness and security. you know, a french victory. like labelling a retreat from
moscow an advance on paris.
The Hollow Men are the tools who continue to think there is a trade here with EU sovereign debt via CDS. Every salesman on wall street has a real agenda and this type of "analysis" only makes me wonder if the overall trade isn't just a straight up shorting of EU banks. Plain vanilla, boring, reliable, Klarmen-wannabes.
Otherwise, great link to a timeless poem! Hey, maybe i'll name my first analog album after that....maybe i already did.
Whole World is moving to interest only finance a-la U.S. Soon the interest will be so big, they will need interest on interest only finance.
Great. And both US Treasurie and German Bund yields RISE today while Italy and France see yields declining. WEALTH TRANSFER!!!!!!!!!!!!!!!!!!
http://confoundedinterest.wordpress.com
Got VWAP?
Europe will burn in nothing short of a debt holocaust!
Don't they realize the various govts will destroy the buyers of CDSs by declaring the write downs 'voluntary' and all will be screwed
EBA didn't mention anything abt this yesterday when they released their latest list of lies. /sarc off
i don't see any problem
as long as:
what could possibly go wrong?
(signed) sarcastic slewie
Wait... we're not allowed to own cruise missles? I got this one on sale in Mogadishu a few years back.
Remember to SELL into strength. Book profits (if you're lucky enough).
1.Issue and purchase a vertible spiderweb of interconnected CDS contracts on said sovereign debt.
2. Warn of mutually assured destruction due to counter-party risk coming or going.
3. ???
4. PROFIT!
Step 3- Print more money
new AIG , does that mean billions backdoor to Goldman Sachs ?
Lets see if we can get this mkt red by the close. To the battle stations!
Which bond would be the best to watch for the coming implosion, the French 10 year?
I imagine Italy and Spain bear watching, but the real SHTF would probably be the French bonds (?).
The risk you run with shorting France is that the Germans will bail them out like they did when the ERM blew up. But the Germans did not bail Italy :) And that is why it is called Merkozy and not Sarkmermonti:)
When there is insurance on a house and the owner is in financial trouble, there is a slight chance the house will burn, but not accidentially.
If neighbors were allowed to take out insurance on their neighbor's house, the risk of total loss would go up.
So it is with the unregulated dirivatives market. When the same insurance is sold multiple times, and the insured will only get paid upon the unlikely event of disaster, the event is no longer random. It is all but ensured.
No wonder Kyle Bass demanded collateralized backing for his bet against Japan's debt. That same bet is now being bid up and sold to multiple other betters. In an unregulated, leveraged market with no required capitalization ratio or public trading forum, that is a prudent move.
But, it is different this time. Riigght!
And what makes people think that we short this market. Broken markets are dangerous to go long and go short. Most of us know that here.
So while we prepare for what we know is going to transpire, we stay as safe as we can, and that also means, going short makes 0 sense most of the time.
These insane CDS and other OTC derivative positions are simply a way for the psychopath bankers to force the central banks' hand. They're making sure that, when everything starts unravelling, the only choices the central banks will have will be 1) cause the end of the world or 2) print
yet the market moves higher, higher, higher
Meltdown bitchez!
libertarian86.blogspot.com
As a sign of my great personal integrety I would have it noted that I was the only ZH reader that did not junk TOOBEARISH ( I hope I win a prize)
"If European counties the size of France or Italy actually defaulted and triggered CDS, there would be total carnage and meltdown. It would be the end of the world,"
Cramer is going to call this a buying opportunity.
I think Cramer's head would be on a pike outside the NYSE at that point. Of course, not even that would shut him up...
They will never allow a default. Those CDS will never be triggered, not when it is so much easier to print.
I agree. Call it what you want but it looks to me like it's blackmail ...
OH kummerspeck !
What drooling morons are buying this CDS? It's like guaranteeing you'll be a pallbearer at your own funeral.
http://www.youtube.com/watch?v=RnA0_C6jLPY
internment resettlement specialist.............hmmmm, nice job title , for the gulag, hmmm?
the trick is ladies and gentlemen, never, ever allow them to get you in this position, no matter what happens....
This does not sound right !!!! who would buy protection on italy from unicredit....when it is time to collect unicredit wont be able to pay....... if I were unicredit if there is a buyer dumb enough to pay me and I would sell it like crazy because if italy defaults then so would unicredit.....
So, CDS is like vigorish on sammy the Shark's loans
Here comes another bold prediction.
I wish I had a counter for all the "horrific" predictions proffered up the last 6 months from all these "experts"
None of them have come true.
Never before have so many been so wrong for so long.
Life goes on for most Europeans, nothing has changed in their daily routine.
And this based on your extended observations out of the Redondo surf? Go to Greece and tell the people who lost their pensions and retirement their lives are the same. Or Ireland or Portugal. Or Spain and Italy in one year. Or France, Belgium and Germany in two.
I usually wince when people feed the Robotroll by reponding to him , since he thrives on it, but I'm glad to see you give him the smackdown on occasion.
you know things are bad when even TD doesn't have the patience for robo's humor anymore.
Ah, so Roboidiot is living in California on the beach. That explains almost everything. He's been outed. Nuff said.
Yeah the Europeans are screwed but at least life is still good for those in Libya, Egypt, and Iranians are about to get a boost to their standard of living.
Add Iraq, Afghanistan, Yemen & Syria to the civil war tinderbox.
Robo's mom is going to Greece. Or going Greek.
I can't remember exactly what she said.
Greece, Ireland, Portugal and Spain; people there really feel the pain, terrible pain (check the suicide rate in Greece, it's horrific.)
France, Belgium and Italy: they don't feel it that bad -yet- it won't be long though. Most people are in denial as of why they're not making ends meet or they lost their job. Life as usual for the great majority. MSM is powerfull there too and alternative media in local languages is just not as prolific as in the U.S.
As for a discussion in page 1 of the comments about Wall Street bringing over their banking style and wrecking an otherwise old fashioned banking system, yes, that's true and williambanzai7 is right imho. It came about the same time U.S. corp. successfully exported fast-food (and obesity), Halloween, commercial Christmas, Monsanto, Disney-Land and reality shows. Each time I go there, I'm amazed how american corporate culture permeates and sometimes obliterates (through heavy advertizing almost brainwashing) european culture. At first it was interesting to observe, then it was a bit uncomfortable and now it's just totally wrong, to say the least.
I must say it takes 2 to tango though.
nah. this was seeded a long time ago at the post-war period: it only bloomed in the last decades.
the americans followed in step to the british, who serviced the wishes and whimsies of old money.
how many to contango?
In case you didn't notice there is a financial war against the euro led by Wall Street and by the infamous City of London. USD-Pound war machine is loosing it against all odds. David Cameron is only following BoE and the pirate queen's orders, against the british people. The same is happening to USA and the american people. Economy is not a Ponzi game, and a Ponzi game is not economy, but pure lunacy and robbery!
I noticed, and I agree with you.
Corp. America and financial "lunacy and robbery" began at the same time some years ago. Actually, I believe it was right around the time the Euro was born, maybe a couple of years before it went in circulation. Most people in France, Belgium... don't realise how deep in it they are, yet.
@ RobotTrader
I have to ask - do you believe the things you post here or just poking the bear(s)?
Poke a bear too often, and get your face ripped off and you get eaten. Just say'en.
So sad...
Robot, you truly are a confused sack of shit...
Print or die. The banks are betting on it hard. It's amazing that there are those in high places and editorial positions at the NYT that simply refuse to ackowledgr the role moral hazard plays in all this.
European banks just bet everything on hard 8s and 6s.
"Bernanke: Clearinghouses Pose Risks,Too"____ {[4/5/11][no mention of shadow banking?]}
http://www.complinet.com/dodd-frank/news/articles/article/feds-bernanke-...
I'll see your derivative of a derivative and raise you a double-secret derivative.
I've read it 3 times but want to make sure I have this straight. If the interest rate on the bond shoots up (to 8% for example), the value of the bond drops and the price of any CDS on that bond goes up. If this happens, the holder of the CDS must pay cash to ISDA? If the price of the CDS goes back down, does the holder get cash back? Sorry, this is too confusing and I can't believe banks are allowed to do this!
Yes. As the CDS goes up in price and the likelihood of the CDS being triggered grows, the CDS underwriter in theory would have to post additional collateral. Not necessarily true in all cases.
In a world where banks actually mark their books to market, they'd be eating it pretty hard in those scenarios.
This is, in theory, why I posted the BoA $53 trillion derivatives figures.
They moved them, as I understand it, to avoid the increased counter-party / insurance fees on the amount that a ratings downgrade would cost (something to the tune of $3-5 billion on $75 trillion which shows you how fucking broken everything is). i.e. The very amount to keep the derivatives "insured" would end up bankrupting the bank ~ moving that to a place where client's money ($1 trillion) could cover it "reduced the risk" and thus saved them a few billion.
If I've misunderstood this, then I apologise, however it looked pretty clear cut to me.
Oh, apart from the bit where having $75,000,000,000,000 derivatives makes any kind of sense at all. (And yes, I'm using the American trillion there ~ 12 zeroes). They used to say that making a million would require you getting paid $10 / day since the birth of Christ. With a trillion, you officially just jumped the shark and required counting from the universe before the universe before the universe that spawned our universe, assuming that the big bang / crunch model is correct. Actually, that's not true: since this universe is only 13 billion years old, you'd require 75x0(12) / 13x0(9) universes.
And, being honest, FUCK THAT SHIT BOYS.
[edit: was being dumb: removed 6 zeroes for a "real" American trillion. Phew, market looks much more healthy now]
It only gets bitter from here.
The buyers and sellers of this crap truly deserve each other.
X
Apparently they've fixed it. Europe that is.
So the printing can now go ahead apace!
These legal/financial restructurings may continue until someone in a position of relative power makes a demand consistent with their geopolitical power that puts a relatively subordinate power in a popularly unmanageable position. Then the dominant will insist, and the inferior blinks, causing unrest and revolt; or, they do not blink, causing increasing hostilities carried out through any means of power available. You can't stick-save an avalanche.
The "treaty" between Euro nations was necessary to rape Germany. The debts of Greece et al to the US can now be collected upon from Germany.
Does Germany realize it is footing the bill and signing itself over as collateral to the debt held by other nations? If people truly understood what just happened or what it is these politicians are trying to achieve, they would be marching towards Berlin and Paris and boot out the entire crop of representatives!
Merkel announced yesterday that there wouldn't be any debt cuts. That was one of her alleged milestone achievements but since Geithner paid her the visit, she had to reneg on that!
Much of the debt in the bankrupt countries is debt held by the global banking elite. They are not taking hair cuts! They forced Germany into making this treaty with the bankrupt nations in order to carry their debt load!
Again, Germany is being sucked into the sick banker's game. 3 times the charme or what?
This will come back to haunt Germans - AGAIN! Versailles was Kinderkacke compared to the chokehold the bankers are having over Germany with this treaty!
For Fuck's Sake isn't there anyone left in Germany with more than shyte for brains?
The bankers are bleeding Germany dry - AGAIN!
NO WONDER THE BRITS SAID NO TO THIS !!! THEY ARE ON THE RECEIVING END! THE WINDSORS ARE GETTING TO RAPE GERMANY.
Fuck if I only I had a time machine.
Merkel has an opt out. Don't despair. She can walk away if Italy and Spain collapse. That's the deal.
No debt cuts is called "bluffing" in poker, to keep market guessing. But if the banks bleed its over for Italy/Spain and Merkel says "ciao" to Eurozone.
I'm truly hoping that you're correct. We still have Nowotny and Ackermann on our side.
Scoreboard! (Dow up 200)
OK...off topic...but going into the last hour....we've completely taken back the 198 pt loss in the Dow from yesterday, currently UP 198pts. What happens in the last hour? The usual 50-75% give-back, or will the market freak out to the upside? Will the last 10 minutes be the usual puke-a-thon? Or will we go into the weekend on a completely delusional sugar high? Ooooooh it's all soooo exciting!
The rumor mill has a break this afternoon. Besides, mission has been accomplished. Today was programmed to rally - NO MATTER WHAT.
Tyler -
I'm way too late to this post so you probably won't even see this, but please clear something up for me:
In some of your previous posts I've gotten the impression that you mock those that imply that the world will "end" if the banks/sovereigns aren't bailed out (thereby justifying ever more and greater bailouts)...but this post implies that you seem to agree with Evolution's conclusions. Maybe I misunderstood before - which is it?
Me thinks this calls more for Yeats and not Eliot:
The last stanza of The Second Coming
The darkness drops again but now I know
That twenty centuries of stony sleep
Were vexed to nightmare by a rocking cradle,
And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born?
http://www.potw.org/archive/potw351.html
I suck at poetry-what's that mean?
it means go back to sleep rip van winkle.
Banks will fail, Gov't will nationalize, and give the finger to everyone not in an insured account. Massive Deleveraging all at once. The losses wont be hidden, this is how Gov'ts take back control from the banks.
The banks that fail are mere empty shells. The bank's owners have long taken their assets and operating elsewhere. Do you seriously think that Rothschild's and Rockefeller's et al would let their powers dwindle?
You seem to forget that banks are not just a corporation. They have owners, major shareholders and major depositors which historically have never ever taken a haircut or lost any of their wealth.
This time is not different.
At least there was a woman supplying me with -I'd go as far as to say- unlimited amount of alcohol whenever I was gambling. What's their explanation?
Are they using the Lehmanesque manual of strategic selling - Thinking that if they sell as much of the worthless shit they are left with, they 'll hopefully get rid an adequate amount, in order to make their already crashed ship light enough to levitate above their self-created shit-avalanche?
Because I think that I've watched this episode before.
They must have stuck their heads in the commode, thinking it was a sandbox. The fabrications and plausible deniability are like kicking over a kerosene lantern, and saying the cow did it. In the process, the Golden Goose gets cooked.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
And AIG was the old Europe.
Yup. So Europe gets destroyed twice. Brilliant!
Germany gets blamed 3rd time when Germany as the alleged creator of this treaty cannot afford to pay other nation's debts.
And they actually signed on to this!
LOL naked longs
http://www.adweek.com/news/advertising-branding/steal-136712
stealing groceries in amerika's stores ............
if you can't afford steak, then slip it in your britches on the way out of the store .......
Of what may come hereafter For men that sow to reap: I am weary of days and hours, Blown buds of barren flowers, Desires and dreams and powers
And everything but sleep.
15:41 EST
Approaching market close and rating agency downgrade for European banks and everything else?
You forget one crucial FACT ..Mr Tyler : and that is .. european countries have borrowed too much money . YES ,, but we have mainly borrowed FROM OURSELVES ... and THERFORE .. we also can settle this issue ..in a mutually satisfactory way .. without having to ASK anybody else ... contrary to the ANGLOSAXONS who ,, only have the option.. to RUN AWAY from their DEBT .. as they have done previously ..
I've heard it said that patriotism is the last refuge of a scoundrel, but EUROPATRIOTISM? That's a new one on me:)
Follow the rabbit hole ALL THE WAY..
The debt is being held by European banks who are part of the GLOBAL banking cabal which is headquartered in the US.
There is a reason why the banks are holding this debt and why they are not taking any haircuts. There is a reason why Timothy Geithner comes to Europe to "assist" and "advise" at these meetings. There is a perfectly good reason why the UK (Windsors and Rothschilds) have vetoed the treaty.
The treaty will make the banking cabal whole at the expense of the fleißigen taxpayers mainly in Germany.
Explain to me how is this different from Versailles other than the fact that Germany supposedly WON THIS WAR but is still being FUCKED and ASKED TO PAY???
If you read this, the picture wll change dramatically against UK-USA. Debt is one ugly thing but hyper-hypothecation is alot worse :(
Engaging in hyper-hypothecation have been Goldman Sachs ($28.17 billion re-hypothecated in 2011), Canadian Imperial Bank of Commerce (re-pledged $72 billion in client assets), Royal Bank of Canada (re-pledged $53.8 billion of $126.7 billion available for re-pledging), Oppenheimer Holdings ($15.3 million), Credit Suisse (CHF 332 billion), Knight Capital Group ($1.17 billion),Interactive Brokers ($14.5 billion), Wells Fargo ($19.6 billion), JP Morgan($546.2 billion) and Morgan Stanley ($410 billion).
http://newsandinsight.thomsonreuters.com/Legal/Securities/Insight/ViewIn...
Doesn't matter market only goes up, smart money is losing, dumb money (aka Retail) is winning and not pushing pressure on politicians to get their shit together. Can you imagine if the Retail investors were losing money like they did in 08? They would be armed by now and heads would be flying off.
Dumb money is being hauled into the slaughterhouse. Smart money got smart for selling at a profit to dumb money.
The more things change, the more they are the same.
With so many warnings flying around everywhere, dumb money cannot complain to anyone but themselves just like in 1931.
I have previoulsy used the example of someone wanting to invest in the BOND market ..10 years ago
if a EUROPEAN had bought for 100.000 USD 10 Year Treasuries 10 Years ago .. he would have paid approx 112.000 EURO for that desire ( Exchange rate 0.8889 ).. ..10 years later he would have received approx 74.000 EURO back ( exchange rate 1.338 )..and in the interim 10 years enjoyed some of the lowest interst rates on earth may be combined 30 -35 % ... in all 35.000 USD diveded by exchange rate 1.338 = approx 26.000 EURO ..in all having recieved approx 100.000 EURO for an investment of 112.000 EURO ... for lending his savings to the US Gouvernemt for 10 Years
if an AMERICAn had invested for 100.000 USD worth in EUROPEAN Bonds he would have received European Bonds for 112000 EURO , would have enjoyed a couple of % more in interest than he would have gained in the US in all ending up with approx 150.000 EURO after 10 Years.. equal to 225.000 USD to day ..overall
Considering the continuing appetite for DEBT CREATION in the USA ..with NO END IN SIGHT ... contrary to the EFFORTS of Austerity in EUROPE ( meaning to live within ones means ) to me it looks like we will see a SIMILAR DEVELOPMENT for the next 10 Years.
Which Bonds would the intelligent investor prefer .. for the next 10 Years ?
Hmmmm... there You see !
Market is not breaking resistance levels at 1256.
Just another roundtrip and we're back where we started.
Cue Twilight Zone theme...
"L'Éloignement des pays répare en quelque sorte la trop grande proximité des temps."1
Sans Soleil
Our current crisis has nothing to do, really, with Capital or debt: it has everything to do with hope, trust and faith. With the breakdown of these three, you have no more system. Ironically, those best at the playing the game are precisely those least able to reinforce them in their fields at this current time: Government (hope for a progressive future), Capital (trust that ledgers will be settled honestly) and Religion (faith that there is something larger than the subject).
Hint: this isn't Monopoly, those wishing to go back to GO and collect $200 are playing the wrong type of game.
Evolution is indeed the solution, and Security (of the system, although this has different styles, the least sophisticated being 'power') is the playing field.
I find it doubtful that the future will resemble the 20th Century. The last months of watching the European leaders attempting to play has not been uplifting.
what we have here comrades is the highest blood-thirst game of the millennium, whereas the stakes have risen to the pinnacle of a thrill-kill?
the game is russian roulette, but with a macabre sadistical twist - the weapon of choice will have its cylinder fully loaded but for single caveat-emptor - minus one bullet.
when the party is rounded out,... but one will walk away - as will the sudden illusion of shadow banking "666's" come to a sudden death - for the survivor himself will bury the dead upon himself,...
jmo
in short : western civilization is commiting financial suicide. The Oligarchs never survive once they lose their base country. They think they are good anywhere. But in fact very few keep their life style. How many Roman patriarchs survived 476 AD, How many Greeks survived 1453?
How many rich Germans survived 1945?
Back to the bottom of heap.
Quite a few. Mainly industrialists and bankers that were switching sides quickly when the loss became apparent to them. The US knew that the German economy was too important to completely bomb back to the Stoneage. After the patent heist post 1945, it was clear to the US elite how innovative Germany had been and that retaining the loyalty of industrials and bankers was an asset going forward. Destroying the rich German elite would have left a power and brain vacuum which wouldn't be beneficial against the rise of communism from the East.
A lot. After all, everybody knows that Germany won World War II and a group of industrialists held a meeting...
Oh shit. ORI has brainwashed me.
without power,... wealth means nothing?
they got lucky, Uncle Sam was there to recover them, their money and their brains. True, US hegemony was magnanimous in those days. We had continuity in the WW2 context as the US had same values as pre third reich Germany and pre fascist Mussolini and Japan.
Its not the ones who survived abroad that allowed rebirth in post war Germany; it was Marshall Plan and free market resurgence of Europe and Japan. So the new civilization of PAx Americana then was virtuous with the victims.
Recipe for taking down the banking system:
Deregulate & Wait
Apparently it'll end kind of like David Carradine.
tick tock, tick tock
then time no more
silently all cries fade
into deepest darkness
Anyone else out there suffering from Meltdown Malaise, Hypothecation Hernia, Sovereign Default Syndrome.... ?
Game theory time.
The bank owns sovereign debt. It also sells CDSs on the same sovereign debt, effectively doubling down. Margin settlement occurs every day on the CDSs. A day comes when the combination of loss on the market value of the bond, plus the cash or collateral requirements as the CDSs are marked to market becomes painful.
Do a Greek Bond-style "voluntary" haircut. No default event. CDS resets. The pain is cut in half, as the loss is now simply the decline in the market value of the bond. And the CDS-writing bank gets to keep the premium.
Or perhaps the CDS writer is bust anyway, due to existing exposures to the sovereign. Or the CDS writer is TBTF, anticipates going bust & has nothing to lose from a larger bailout...
So perhaps - in a crazy way - it makes sense for the writer. What I don't get is how it makes sense for the CDS buyer, since the protection is clearly (economically) worthless. Unless buyers are getting away with netting the CDS with long sovereign bond positions?
& then there are likely forthcoming sovereign downgrades. Won't that bring down the CDS writing banks ratings, and trigger covenants in the CDS contracts. (Or less favourable regulatory treatment?)
:s
Of the increase in notional derivatives for 2011, almost all of it can be attributed to increases in interest rate swaps. What is confusing is trying to figure what this "swaps" category includes. According to BIS, "Forward-starting swap contracts are reported as swaps". This phrase is puzzling at best, and disconcerting at worst, as it implies somebody is taking on a lot of new interest rate risk well beyond what a typical interest rate swap usually signifies. Straight up vanilla interest rate swaps are amongst the more benign of derivatives, on a relative basis, but "forward-starting" is more insidious. Frankly, without further detail, I just don't know, though one would be wise to err on the side of caution, as these are banks and their record of probity and business wisdom are not especially comforting.