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Fed Orders Banks To Create 'Super Secret, Entirely Useless' Plan To Avoid Blowing Each Other Up
Just when you had got over the entirely inane creation of a living-will that purports to solve the taxpayer's dilemma should a large SIFI hit an iceberg; Reuters reports - this time super secret - the Fed, in 2010, asked for a plan from the US' Big 5 Banks for staving off collapse if they faced serious problems - critically emphasizing that the banks can't rely on government help. Read that again and we dare you not to laugh. It seems regulators are trying hard to ensure banks have plans for worst-case scenarios - in order to act rationally in times of distress.
Recovery plans differ from living wills, also known as 'resolution plans'; "Recovery plans are about protecting the crown jewels," said Paul Cantwell, a managing director at consulting firm Alvarez & Marsal. "It's about, 'How do I sell off non-core assets?' The priority is to the shareholders. A resolution plan is about protecting the system, taxpayers and creditors."
The deputy comptroller reassures that:
"Recovery plans required of the largest banks are helpful in ensuring banks and regulators are prepared to manage periods of severe financial distress or instability affecting the banking sector."
Each plan was to address severe financial stress at the firm, as well as "general financial instability." The plans should be capable of being executed ideally within three months, but no longer than six months, the documents said.
The plans should "make appropriate assumptions as to the valuations of assets and off-balance sheet positions," the documents said.
Recovery plans have been mentioned in public before, but only in passing.
Interestingly, Reuters has uncovered an 'Orderly Liquidation of a Failed SIFI' presentation - embedded below - sponsored by JPMorgan which is reassuringly positive of this end of the world contagion scenario.
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I don't think they'll blow each other up. They'll cover up. War is the ultimate cover-up.
i thought that is what they were doing with LIeBOR
no, that's their super-duper double top secret plan
So before the ship sinks how do you plan to steal as much money as possible!
Gauss: Stuxnet-Linked Cyber Weapon Hits Lebanon ABC NewsBy Lee Ferran | ABC News – 20 hrs ago
A new cyber weapon believed to be linked by code to the infamous Stuxnet worm has been discovered stealing banking information in Lebanon, according to Moscow-based cyber security firm Kaspersky Labs. The new malware, dubbed Gauss for an in-code reference to a German mathematician, is designed to "steal and monitor data from clients of several Lebanese banks," among other nefarious abilities. The code also includes some kind of "special warhead" that is so well encrypted that Kaspersky has been unable to identify it.
http://news.yahoo.com/gauss-stuxnet-linked-cyber-weapon-hits-lebanon-181...
So what's the big deal?
No different than the City of London within the Empire, remaining central locus of the Anglo-American Banling Cartel.
No surprise.
The money must flow to the law givers.
The cartel has exposed itself. Time to clap Big Ben and company in irons. And never let go!
Just wait until the world figures out that they really, truly just make it all up.
What a complete waste of time. They just proved they can pretend it never happened and print money and stuff it in the bank vaults. Digitally of course.
No matter what mess the bankers create, we now have a solution. The Bernanke flyby.
"That's great, it starts with an earthquake, birds and snakes...."
It's what I did when that preacherguy said the end of the world was coming. Everyone I was with was just completely floored by my level of sarcasm and the gallows humor. I told them they need to read more ZeroHedge.
So we can officially add another nation that we are actively at war with!
Amerika, Fuck Yeah!
They're on the list:
http://www.salon.com/2011/11/26/wes_clark_and_the_neocon_dream/
Using Gauss' name for a shitty worm? FUCKING DISHONOR is what this is.
Boating accident?
No need asking...You'll never know it in time.
And, after you've stolen all you can, how do you convert it to gold, guns, etc. without raising suspicion?
I, Lord Blankfein, do hereby agree to never sell JPM stock.
I, Jamie Dimon, do hereby agree to never sell BAC stock.
I, Brian Moynihan, do hereby agree to never sell C stock.
...et cetera and so forth...
We, The Financiers of the State, do solemly pledge..
LOL
http://en.wikipedia.org/wiki/Racket_(crime)
Tyler
You missed the BEST part of the JPM document.
JPM's $150 Billion FDIC Reality Adjustment
It's easier to see on the PDF:
http://www.law.harvard.edu/programs/about/pifs/symposia/europe/baer.pdf
Go to page 9. Under the wipeout scenario JPM describes a $50 billion trading loss turning into a $200 billion loss as soon as the fdic takes over. Why... ? Because JPM says they would expect the FDIC to immediately writedown JPM's assets by an additional $150 billion.
Jamie Dimon just admitted to the world that their assets are overvalued on the books by $150 billion.
It gets better. Go to page 10. The chart shows that they only have $184 billion in equity, minus the $50 billion loss, minus 'the $150 billion fdic reality adjustment', which leaves them in a negative equity position of (-$16 billion).
So, we can extrapolate that without this phantom loss of $50 billion, JPM's real equity position is just $34 billion currently, not the $184 billion on their books.
BOOM...headshot
I did a quick story on it.
I included photo-grabs from pages 9 and 10 showing the $150 Billion FDIC Reality Adjustment:
Jamie Dimon Just Admitted To The World That JPM Assets Are Overvalued By $150 BillionAlso, if the FDIC is not repaid it will assess the industry to cover any losses.
Might need a derivative to cover this assessment.
SPY trading range for August: 140-141. A market designed only for "rigged skimming" algos.
Abraxas
cover up?
But we have been assured there is nothing to cover up.
Fed investigation finds Goldman Sachs innocent of any wrongdoing:
http://www.commondreams.org/headline/2012/08/10-1
Even if bank don't make plan government will still bail them out.
http://www.freefdawatchlist.com/2012/08/directionless-stock-market-now-ready.html
Vinu the government wont be able to bail them out because the government will be broke as well.
Our whole economy is on the brink of destruction. I think we will come through, but everything will change, mostly for the better, but after several years of chaos and violence of varying degrees, methinks
http://moneymorning.com/ob/economist-richard-duncan-civilization-may-not-survive-death-spiral/
One member of this team, Chris Martenson, a pathologist and former VP of a Fortune 300 company, explains their findings:
"We found an identical pattern in our debt, total credit market, and money supply that guarantees they're going to fail. This pattern is nearly the same as in any pyramid scheme, one that escalates exponentially fast before it collapses. Governments around the globe are chiefly responsible.
"And what's really disturbing about these findings is that the pattern isn't limited to our economy. We found the same catastrophic pattern in our energy, food, and water systems as well."
According to Martenson: "These systems could all implode at the same time. Food, water, energy, money. Everything."
Another member of this team, Keith Fitz-Gerald, the president of The Fitz-Gerald Group, went on to explain their discoveries.
"What this pattern represents is a dangerous countdown clock that's quickly approaching zero. And when it does, the resulting chaos is going to crush Americans," Fitz-Gerald says.
Dr. Kent Moors, an adviser to 16 world governments on energy issues as well as a member of two U.S. State Department task forces on energy also voiced concerns over what he and his colleagues uncovered.
"Most frightening of all is how this exact same pattern keeps appearing in virtually every system critical to our society and way of life," Dr. Moors stated.
"It's a pattern that's hard to see unless you understand the way a catastrophe like this gains traction," Dr. Moors says. "At first, it's almost impossible to perceive. Everything looks fine, just like in every pyramid scheme. Yet the insidious growth of the virus keeps doubling in size, over and over again - in shorter and shorter periods of time - until it hits unsustainable levels. And it collapses the system."
is this why the Mayans were so fond of "pyramids" knowing that they would last for centuries? it seems that pyramid schemes don't last nearly that long.
The pyramids that last for centuries are built with wide foundations on the bottom. The bottom holds the most material. The pyramids of economic schemes are built upside down. The top holds all the material and overwhelms the support underneath, collapsing all of it into ruin.
If the top falls off a pyramid, it doesn't take much to replace it. If the foundation crumbles the entire thing is destroyed.
Yes, it's called a pyramid scheme and everyone should be aware of what the entire system is by now. You work to give money to those who wish not to work.
King's and Queens and the rest of the royal set, got to the point that they thought riding a horse around and lifting a fork to eat was actual work. Just like the wealthy class today that thinks talking on the phone to a stockbroker or spouting endless bullshit at a conference is actual work.
The insanity will end when those who wish to be wealthy without having to work, are killed by those who work but are forced to be poor.
What surprized me about the article is that this is not confined to the financial markets, or even the genral economy.
This pattern of front loading all gain and back loading all costs is found everywhere in every industry.
Its almost comically stupid, but the impact will be so severe and so many will suffer and be lost it is truly tragic.
And I am afraid it will be mostly the poor who bear the brunt, once again, and the rich will buy their way through the crisis which will largely be the creation of their own lack of foresight and incompetence.
I tried not to laugh but this is really fucking stupid.
This bit brought an extra long chuckle from the London Whale:
I know this is off topic but will someone please explain this fucking alternate universe, real life event now happening?
http://finance.yahoo.com/blogs/breakout/j-c-penney-shares-soar-despite-huge-earnings-134919367.html
Bailout ?
It is purely shorts taking profits on the news. It is an oversold position and a crowded trade. The down trend will continue shortly.
Why is this being reported now. Why?
In adherence with the pledge of openness and transparency of the...
Ohneverthefuckmind
"Why is this being reported now. Why?"
Election is my guess. I'm not a Gold Bug but I do find this interesting
A Gold Bug as Secretary of State in a Romney Administration?Game Changer for Gold
if either candidate advocated slewnomics' position that US Mint-produced PM coinage is required by theConstitution to be legal tender" and not be "taxed by fiat" i would lead the parade; even for mittens
the first candidate/party who adopts the slewiePlankTM will win the election
a politician does not want to be "second" of this one, BiCheZ!
imagine! theUS goobermint in 2012, giving thePeople their REAL money back, an an equal basis with fiatscoes, tax&reporting-wize; kinda like utah, as i've said these dozen times, now
candidates fighting to implement what theConstitution palinly sez, not what some banksters WISH it said!
I nominate Slewie for President of the United States of America.
fair question: who knows why rilly?
my guess is that with the big upcoming FED annuual jacksonHole bankster rodeo and BBQ, the FED is doing some "education of its clientele" regarding some of the applied "stablity plans and procedures" they have generated under their new job-controlling legislation: the dodd/frank bankster legislation of 2010
"the banks can't rely on goobermint help" under dodd/frank, at least theoretically
the FED haa a "new job description" and since almost no one understands dodd/frank, almost no one understands wtf the FED is actually up to w/ QEZIRP
slewinomics has postulated for months now that they are up to : keeping the checks in the mail + stability; and i may actually be correct, too! which is why the "hypno-doomers" here no longer appear quite so reasonable to me as "economic forecasters"; they just don't seem to think stability is possible?
however the markets are showing us stability and fungibility under increased centralBankster cabal co-operation and co-ordination
i have tried to lay out my views here and i thank tyler for listening and starting to follow the crumbs as they become visible
this is part of the FED's educational program about itself as a centralBank imo and this is about the FED's new job under dodd/frank~~not "growth', not "jobs" but "stability"; the purpose for those who may be brain-dead being: to avoid another 2008 "collapse" incident which resulted in the neoCons and the banksters looting the USTreasury for themselves and their corpo-fascist cronies
the actual present job description of the FED has kept coming up on-line recently~~here on zH, b/c of moi
this at least is not disinformation
if the 2012 elections are gonna be about the "bigBadDodd/frankBanksteringLaw" and why we need to elect mittens to "fix it" then an informed voter should probably understand a bit more about this law, why it was passed, and what it means for "stable regulation the financial syatem by the FED" as a primary goal of the centralBank
in case of severe financial distress, theCongress is apparently unwilling to EmptyTheVaultForThePerpsII, which is why they wrote the law, at least ostensibly
so thx again, tyler!
And here is the GS plan summary:
"Hello Ben? Got us a little problem here we need some help with..."
Ben: That's why the exchange stabilization fund was made. How much do you need?
Ben: I'll help you out if you want but, why don't you just use segregated funds it's much easier for both of us.
GS: But using customer funds is illegal! Just look what happened to Corzine! He, he...oh, NOW I get it....
1.6 Trillion in excess reserves is a good START.
Mr. Bernank...I'm TBTF..may i have 2bln please...thanks
http://govttrader.blogspot.com/
"make appropriate assumptions as to the valuations of assets and off-balance sheet positions,"
WTF? LOL...sorry, but it's funny.
Secret plans to prevent catastrophic failure..... 1)Crash the market 2) warn of the apocalypse 3) collect check.
Nice plan.
Can't happen,because the TBTF banks in their infinite greed, have
vastly increased any bailout ammount way too far beyond whats payable.
They are now; Too Big Too Save.
They are never too big to save when uncle ben can print them as many benny bucks as he likes.
Gold bitchez.
I dispute that the bailouts can occur in perpetuity, but I think there are many, many ways to funnel money up the ladder so to speak. One way is to force local and regional banks into failure... this can be done in any number of ways, but even allowing the general banking system to approach the cliff would probably suffice for bank runs. In 2008, all of the money went to TBTF under the assumption that the government would backstop them before the local and regionals... I think, in large part, the plan is to put the TBTF at the forefront of the freshly printed money (credit created) as well as to beam performing assets up to the mothership. You've got consolidation happening in the financial world... the big issue is whether the sacrificial lambs actually have enough meat on their bones to appease the gods.
No... Ben didn't invent a perpetual motion machine... but it can last a lot longer than most believe.
http://research.stlouisfed.org/fred2/series/FREQ
Number o' banks, going down steadily.
I thought SOX was going to save us?
No way.
The Yankees will beat the crap out of the Sox.
As is the will of God.
Mr. / Ms.Durden(s):
Please move this to the Friday Humor thread. Thx
their plan is to make sure they buy enough congression members to make sure a taxpayer bailout is approved.
and here I always thought that trying not to blow up and go out of business was one of the implicit goals of being in a profitable business. Silly me.
Ok, we can sell assets. But only the ones we don't think are that important. At the same time that everyone else is trying to sell their not too important assets. Because other players in the market are not as dumb as us and will be in fine shape when we come crashing down and drag everyone else with us?
Yeah, that's what we'll do, sell assets into an illiquid and panicked market, that will work ...
Can anyone say, counter cyclical ?
He who defaults first defaults best.
Lol...like these guys wouldn't stab each other in the back faster than you could say " free lunc..."
This is not a "plan"...it's an Abbot and Costello routine.
i am sure Jamie Dimon was totally honest when he filled out this document.
One thing I feel good about is that the only way he can retire is to die cause the day he tries to, the market will read it as the end is coming and then POOF goes JPM.
Put Neidermeyer on it... He's a sneaky little shit...
They have a plan already...their jets are always full of jetfuel and the pilot is on a 1 hour call.....range 5,000 NM..and the gold is in the shipping crate ready to go at anytime..
i have the same plan but with much meager means. i can bug in or bug out if needed.
I love the line in the HAHVARD closed to the public presentation...
in effect
If JPMC does not pay back the FDIC bridge loans, the FDIC will collect it from "the industry".
Oh yeah, the Industry??
There is more than smoke and mirrors flying. I call Fecal Matter. Romper Room Propoganda.
"...Blowing Each Other Up" ... Well, that certainly triggered the cornputers at DHS, FBI, TSA, CIA, and all the rest of the idiotic alphabet soups.
"Entirely Useless' Plan"See that's why I read Zero Hedge unlike the propaganda spewed by the MSM news the Tyler's make it easy for people to understand.
This plan is just wash, repeat the only valuable insight I took away from the reports was how bad off 5 of the banks still are.
Did it just cost the PPT $15 dollar move in gold to push the /ES up 3 points ?
How can we weaponize this?
A Bridge Company to which the Old Holding Company assets will be transferred to AND be revalued?
Sounds like a straightforward win-win to me.
Also, the management responsible for the failure is replaced, per slide 4?
And I will be receiving 100% free lifetime supply of unicorn fart-candy on top you say?
'Cause you had me at "Firm-wide total credit reserves of $28B, loan loss coverage ratio of 3.35%"
Anyone have 3 pieces of paper? - Hank Paulson
I read it as the FED saying "Fellas, things ARE going to get ugly. We'll keep telling the public that it's all AOK, but you had better prepare for a Lehman-esque situation."
And they were saying this to the banks in 2010.
If the plan does not involve handcuffs and resignations of the big five bank heads then it is not credible. Can you imagine the meetings these bankers have over this subject? Everyone is just living in fantasy land.
Mom: "Now Johnny, I'm not going to give you $10,000 in cash and bail you out of jail next time you go on a bender to Vegas so you need to plan on what you will do the next time this happens to you."
Johnny: "Yes Mom".
Mom: "Now here's a fifth of Bacardi 151, the keys to my 750i, and $5,000 in cash. Run along now, and don't forget that plan."
Johnny: "Yes M'am!" (tires squeal as Johnny zips off to Vegas).
Mom: "That Boy! I'm sure he'll learn his lesson one of these days."
I've never seen a Tyler make a typo before. The last word in the Post title, "Up" should be removed for accuracy.
and was it 'protect the crown jewels' or 'protect the crowned jews' ?
With the text wrap I didn't even see the 'Up' until you mentioned it...I thought Tyler was finally losing composure with these clowns....
This kind of stuff doesnt sound familiar at ALL.
Groundhog day rolls on.
I don't think this plan will work. at all.
they need a new plan, something that involves running around in circles screaming whilst throwing your arms in the air. or maybe something old school cold war like duck and cover under the nearest available desk, you remember that right? in the event of a nuclear attack you were supposed to dive under something and cover your head as if that would fucking help...
I have a feeling the super secret plan as presented above would be about as effective.
In defense of duck and cover, it was created under the assumption that atom bombs would be dropped. The radiation and destructive power of those bombs was far less than the later hydrogen thermonuclear bombs. If you weren't killed by the blast and the building collapsed, hiding under a desk would give you a better chance of survival.
It was still mostly propaganda, but it had a little truth. The save Wall Street plan doesn't have any truth to hide under.
The SS TBTF is unsinkable bitchez! [/iceberg]
We are f-ing doomed
So... kicked in the balls and fucked in the ass we are. Imagine that. Anybody got the 800 number for the FEMA camps reservation desk? I am going to book early.
Double secret probation.
This is why I love ZeroHedge:
"Fed Orders Banks To Create 'Super Secret, Entirely Useless' Plan To Avoid Blowing Each Other Up "
.... getting the message out in 1 line !
The Fed read the reports from the banks and said, fuck. You can't avoid blowing us all up so we'll have to print to keep you solvent.
Jamie said to Ben, "That's the plan, man."
......................but being the psycopaths that they are they will anyway
survivingsurvivalism.com
By any measure of the common citizen TARP was a failure, because the average person is now worse off after it. Because of this another TARP like bailout would be political suicide and potentially even endanger the continuation of the Federal Reserve Act of 1913.
What the FedGov needs, at a minimum, assuming it is eager to step in with another big round of bailouts, is one or more stooge TBTF banks to at least appear to fail along with new and increasingly severe economic pain being experienced by a lot of citizens, so that the FedGov is on better political footing to print more for the banks bots to play with.
This should sound kind of crazy, because it is.
Faulty assumption: TARP was to improve the lot of the average citizen. Reality: TARP handed dollars to the banks.
Everything will be fine if millionaires just pay their fair share. The deficit will be reduced by $4 trillion and the economy will grow. We won;t need any more bailouts.
I just read that on Obama's banner ad.
-------------
I notice that I get Obama ads after I come from looking at stock quotes from any site. I'm off to look at some porn so I can get some SnorgT ads. The redhead is hot.
Ironically, the Fed’s left no elbow room for the real economy to ameliorate natural crisis such as the U.S. drought and oil refinery fires, etc, which the investment bankers will exacerbate, with the ensuing global increase in the price of food coming on top of the Fed’s orchestrated inflation-based increase in the price of food and fuel.
It’s interesting that in the first days of the drought that the media was pounding away that this will increase food prices. That shows the media’s connection with the banker economy.
You can push people if it’s 1930 and there’s nothing they can do or say and they can’t communicate with each other. And you can tell them what they can or must do. But it ain’t 1930 anymore. If you push them harder and harder, they’re going to push back.
Hunger is a strong motive for push-back.
AND THIS IS THE BUDDY WHO IS CRASHING FACEBOOK
“If you bought the $22 put when Facebook was trading at $38 then you will have earned a lot of money,” said Heiko Geiger, head of public distribution for Germany and Austria at Vontobel Holding AG in Frankfurt, which issued the $22 warrant.
Step 6: Paulson 3 page term sheet
Step 7: ...
Step 8: Profits
Wake me when we can have an honest and open discussion about why 7 of 12 Fed bank presidents, the Chair and most members of the Fed Reserve Board and FOMC, the chairs of the SEC, FDIC, and CFTC, and CBO ... as well as the heads of the Council of Economic Advisors and Office of Budget and Management and National Economic Council... essentially every position of economic responsibility/leadership in the Fed or Executive are Jewish - a group comprising 2.5% of the population.
Please, please...please spare me the "anti-semitic" nonsense - that's not going to fly on this one. The over-representation of Jews in these positions begins to look like a conscious and deliberate effort to comport with the very "conspiracies" we are all Pavlovian trained to immediately reject as absurd.
It's absurd to not acknowledge that Jews seem to be effectively running the Fed and economic regulation thereof.
I'm not even suggesting this is necessarily bad... I'm suggesting that the inability to discuss the plainly obvious is.
Speaking of connections, Denninger today cuts through the chaff to expose the broken justice in the Justice Dept’s clean bill of health given Goldman (a.k.a. the NY Fed), by referencing Goldman’s own emails calling the allegedly-valuable securities they're selling "crap" and a "flying pig" internally while selling them to their clients. Denninger asks (and I paraphrase): You think a jury would not be able to find evidence of fraud? In other words, the DOJ couldn’t but a jury could.
Concludes Denninger in Goldman Skates: It's good to be a bankster...., “You would have to be out of your mind to invest in a small business today, or to start one, as this is what you're competing against. Without putting an end of this crap economic recovery is impossible.”
http://market-ticker.org/
Makes you wonder how the big manufacturers, Germany, China, Japan, South Korea, manage to get along with their deficit of Jews.
Former heavyweight champion Mike Tyson once said, "Everyone has a plan. And then they get punched in the mouth."
Just imagine that you are a heavyweight boxer, and you are fighting Mike Tyson for the belt in 1989. You have prepared your body and mind for months. The bell rings. You approach your foe across the ring. Then you exchange blows taking a shot to the mouth. At that point you realize that despite all of your training and planning if he keeps hitting you like that you will not only lose the fight but your life. Then, you create plan B which is slumping to the canvas until the ref counts to 10, and you get to live another day and count your money.
The parable of Mike Tyson is meant to show that real conditions quickly get in the way of expected conditions. This is the problem with these bank resolution plans. The real conditions that the plan is to be executed in differ markedly what was accounted for in the plan.
When the bankers realize that they cannot save their institutions, they will crumple to the canvas and live to count the money they already made. The taxpayers will be left with the mess.
http://dareconomics.wordpress.com/
Only the little people's debt will be indexed; end game.
I figured they would just use the same plan they've used from 2007-2012.
Get on the horn to FED-RSRV and UStreasURY and request truckloads of US Taxpayer cash...or equivalent electrons.
But what do I know.