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Guest Post: The Fed’s European “Rescue”: Another Back-Door US Bank / Goldman bailout?
Submitted by Nomi Prins, former Goldman Sachs Managing Director
Guest Post: The Fed’s European “Rescue”: Another Back-Door US Bank / Goldman bailout?
In the wake of chopping its Central Bank swap rates, the Fed has been called a bunch of names: a hero for slugging the big bailout bat in the ninth inning, and a villain for printing money to help Europe at the expense of the US. Neither depiction is right.
The Fed is merely continuing its unfettered brand of bailout-economics, promoted with heightened intensity recently by President Obama and Treasury Secretary, Tim Geithner in the wake of Germany not playing bailout-ball. Recall, a couple years ago, it was a uniquely American brand of BIG bailouts that the Fed adopted in creating $7.7 trillion of bank subsidies that ran the gamut from back-door AIG bailouts (some of which went to US / some to European banks that deal with those same US banks), to the purchasing of mortgage-backed–securities, to near zero-rate loans (for banks).
Similarly, today’s move was also about protecting US banks from losses – self inflicted by dangerous derivatives-chain trades, again with each other, and with European banks.
Before getting into the timing of the Fed’s god-father actions, let’s discuss its two kinds of swaps (jargon alert - a swap is a trade between two parties for some time period – you swap me a sweater for a hat because I’m cold, when I’m warmer, we’ll swap back). The Fed had both of these kinds of swaps set up and ready-to-go in the form of : dollar liquidity swap lines and foreign currency liquidity swap lines. Both are administered through Wall Street's staunchest ally, and Tim Geithner's old stomping ground, the New York Fed.
The dollar swap lines give foreign central banks the ability to borrow dollars against their currency, use them for whatever they want - like to shore up bets made by European banks that went wrong, and at a later date, return them. A ‘temporary dollar liquidity swap arrangement” with 14 foreign central banks was available between December 12, 2007 (several months before Bear Stearn’s collapse and 9 months before the Lehman Brothers’ bankruptcy that scared Goldman Sachs and Morgan Stanley into getting the Fed’s instant permission to become bank holding companies, and thus gain access to any Feds subsidies.)
Those dollar-swap lines ended on February 1, 2010. BUT – three months later, they were back on, but this time the FOMC re-authorized dollar liquidity swap lines with only 5 central banks through January 2011. BUT – on December 21, 2010 – the FOMC extended the lines through August 1, 2011. THEN– on June 29th, 2011, these lines were extended through August 1, 2012. AND NOW – though already available, they were announced with save-the-day fanfare as if they were just considered.
Then, there are the sneakily-dubbed “foreign currency liquidity swap” lines, which, as per the Fed's own words, provide "foreign currency-denominated liquidity to US banks.” (Italics mine.) In other words, let US banks play with foreign bonds.
These were originally used with 4 foreign banks on April, 2009 and expired on February 1, 2010. Until they were resurrected today, November 30, 2011, with foreign currency swap arrangements between the Fed, Bank of Canada, Bank of England, Bank of Japan. Swiss National Bank and the European Central Bank.
They are to remain in place until February 1, 2013, longer than the original time period for which they were available during phase one of the global bank-led meltdown, the US phase. (For those following my work, we are in phase two of four, the European phase.)
That’s a lot of jargon, but keep these two things in mind: 1) these lines, by the Fed’s own words, are to provide help to US banks. and 2) they are open ended.
There are other reasons that have been thrown up as to why the Fed acted now – like, a European bank was about to fail. But, that rumor was around in the summer and nothing happened. Also, dozens of European banks have been downgraded, and several failed stress tests. Nothing. The Fed didn’t step in when it was just Greece –or Ireland - or when there were rampant ‘contagion’ fears, and Italian bonds started trading above 7%, rising unabated despite the trick of former Goldman Sachs International advisor Mario Monti replacing former Prime Minister, Silvio Berlusconi’s with his promises of fiscally conservative actions (read: austerity measures) to come.
Perhaps at that point, Goldman thought they had it all under control, but Germany's bailout-resistence was still a thorn, which is why its bonds got hammered in the last auction, proving that big Finance will get what it wants, no matter how dirty it needs to play. Nothing from the Fed, except a small increase in funding to the IMF.
Rating agency, Moody’s announced it was looking at possibly downgrading 87 European banks. Still the Fed waited with open lines. And then, S&P downgraded the US banks again, including Goldman ,making their own financing costs more expensive and the funding of their seismic derivatives positions more tenuous. The Fed found the right moment. Bingo.
Now, consider this: the top four US banks (JPM Chase, Citibank, Bank of America and Goldman Sachs) control nearly 95% of the US derivatives market, which has grown by 20% since last year to $235 trillion. That figure is a third of all global derivatives of $707 trillion (up from $601 trillion in December, 2010 and $583 trillion mid-year 2010. )
Breaking that down: JPM Chase holds 11% of the world’s derivative exposure, Citibank, Bank of America, and Goldman comprise about 7% each. But, Goldman has something the others don’t – a lot fewer assets beneath its derivatives stockpile. It has 537 times as many (from 440 times last year) derivatives as assets. Think of a 537 story skyscraper on a one story see-saw. Goldman has $88 billon in assets, and $48 trillion in notional derivatives exposure. This is by FAR the highest ratio of derivatives to assets of any so-called bank backed by a government. The next highest ratio belongs to Citibank with $1.2 trillion in assets and $56 trillion in derivative exposure, or 46 to 1. JPM Chase's ratio is 44 to 1. Bank of America’s ratio is 36 to 1.
Separately Goldman happened to have lost a lot of money in Foreign Exchange derivative positions last quarter. (See Table 7.) Goldman’s loss was about equal to the total gains of the other banks, indicative of some very contrarian trade going on. In addition, Goldman has the most credit risk with respect to the capital it holds, by a factor of 3 or 4 to 1 relative to the other big banks. So did the Fed's timing have something to do with its star bank? We don't really know for sure.
Sadly, until there’s another FED audit, or FOIA request, we’re not going to know which banks are the beneficiaries of the Fed’s most recent international largesse either, nor will we know what their specific exposures are to each other, or to various European banks, or which trades are going super-badly.
But we do know from the US bailouts in phase one of the global meltdown, that providing ‘liquidity' or ‘greasing the wheels of ‘ banks in times of ‘emergency’ does absolute nothing for the Main Street Economy. Not in the US. And not in Europe. It also doesn’t fix anything, it just funds bad trades with impunity.
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Actually no, you're wrong. It is one hundred percent right to critisize the fed as "a villain for printing money to help Europe at the expense of the US." One simply needs to make a minor clarification:
"a villain for printing money to help Europe at the expense of the US. taxpayer."
And btw, Goldie, go f yourself.
so when "greece" was bailed out, who got the money, greece?
or the banks?
lol!!!!
so the point of the article was to make that distinction.
now that the nationalist trigger is closer to home some seem to miss the similarity in Modus Operandi.
Tyler - there seems to be a recurrent theme over the long perod of time here.
The Fed aka Bernanke is a nefarious machine that is devoted to syphoning off tax payer dollars to prop up criminal bankers and their proxies. Have I got it right?
I don't think so. There is true liquidity problem in the EU which has siginifcant impact on our financial system. Adding liquidity to the system is an necessity right now.
Just like an alcoholic has a true liquidity problem when his glass is empty.
Your simplistic answer to a complicated problem may by satisfying but not helpful - much like your alcoholic methaphor.
Denial is a symptom of alcoholism as well.
Often times people attempt to make things complicated when they don't like the simple answer.
I suspect that you may not a lot more about the usefulness of denial then I do - I applaud you for at least having that.
I read that several times and it still makes absolutely no sense at all.
My rectum hurts from all these "backdoor bailouts".
He left out the work "know".
It should have read - I suspect that you may know a lot more about denial than I do - I applaud you for at least having that.
It wouldn't have taken much to infer that content.
A bunch of folks are hitting red pill's up counter that they did not understand it either. Instead of admitting you are wrong, or apologizing, you decide to criticize them for their inability to cipher your post.
You look like the one in denial.
I do apologize for my assumption. Thanks for bringing it to my attention
However, I don't think that they are hitting red pill for my bad typing. They probably just agree with his position. And, that's fine too.
More specifically I think they disagree with yours, and I happen to be the one arguing with you.
A more apt person (pseudonym wise) to forward the position is yet to be found. Keep at it, redpill. Remember, Ratso's position is the same one we were all hoodwinked into thinking was fair to all players, the "normal" or "sane" path. Ratso, open your eyes. That maze you are following may lead you to to a food reward, but that chunk of cheese that they used to attract you ........ is not resting on a dinner plate.
and also remember, unlike ratso's claim, it isn't a matter of lack of liquidity, it is a lack of solvency. like japan for decades. for more detail, please see http://www.hussmanfunds.com/wmc/wmc110912.htm and associated articles.
You happen to be both correct in fact. On one hand we can not afford to have the checks stop clearing or the whole economy suffers immediately (ratso point), while on the other hand printing money and/or providing liquidity endlessly ensures of a catastrophe later. So that is a classical short-termist versus long-termism dilemma. Well shall not have a catastrophe now (ratso is right), but on the other we we are sure to have a catastrophe later (redpill is right). What do we do? Fuck it let´s spend, drink and smoke like there is no tomorrow (the consumers´s spending binge on Thanksgiving is a lot wiser than it seems...)
@ Ratso.
RP calls you out as being in denial and you counter that he is in greater denial. Scintillating.
No prizes for coming second in a two horse race, ratso.
I think the liquidity problem is that the banks have drained the well of the Globe's savings/pensions/investments/homes/wages. Well is dry bitchez......
C'mon, just ONE more glass and then I'll quite. I SWEAR!
Ratso it's very simple. The banks have a liquidity problem because they have been plowing trillions of dollars into the world markets expecting to unload the stocks to the citizen patsy who will be left holding the bag. Citizen patsy holds a worthless stock certificate, bank gets citizen's money which goes into the bank coffer, voila profit.
The banks don't realize that citizen patsy can't buy stocks this time around because they are all broke and those who aren't just ain't falling for it this time.
Because the banksters only know the ponzi game they think the more they pump up stocks the more the citizen pansy will want to join the game allowing them their exit point. Because the money given to the banks is all tied up in securities, stocks, commodity contracts, derivative swaps, etc that they can't unload there is a liquidity problem even though unprecedented amounts of liquidity have been pumped into the system.
Again its not a liquidity problem its a solvency problem. There is nowhere to unload the garbage on the balance sheet because nobody can actually afford to buy it. Get it now?
Why do you guys respond to idiot? He's fake.
Send them your money if you are concerned with their liquidity.
Oh, I agree that the EU has a "liquidity problem". But I think you and I would disagree as to the definition of "liquidity problem".
Somebody has a "liquidity problem" when they are hopelessly in debt and cannot find anybody so fucking, hopelessly, stupidly retarded enough to loan them more money.
Of course, nowadays, TBTF banks and sovereigns with liquidity problems just go and get some freshly printed dollars from the Bernank.
You want to know what is really required right now, and is, in fact, about 3 years past due? Nationalizing these too big to fail monsters and breaking them up into little pieces, that's what. Let's see just how those new Dodd-Frank rules work.
And at the same time, dig the fangs of these vampires out of the neck of the US Treasury by bringing back a stricter version of Glass-Stegall and repealing Gramm Leech Bliley - "Financial Services Modernization Act" my ass.
The fear is that the Euro falls against the USD and the finality that will render US Equity Indexes back to the reality of absolute worthlessness.
The FED is engaged in market manipulation - wanna call it "back dooring" - go ahead - but it nothing more than market manipulation - pure and simple. The more the USD print, the higher the US equity print. And less the likelihood a big fat righteous collateral call will force the Gypsies running the 3 card monte kiosks to take the "last flight" from the roofs of them overly compensatory tinsel power towers (hate mushy meat - prefer it firm on the spit with bones intact).
It's a backdoor bailout - for sure - but it's purpose is to inflate US equity indexes - and datz all it intended to do.
Is there [like?] some little magical Arc these neutered queens believe will deliver them to an imagined "Never Never Land" promised by indoctrinated dominion heresies momma used to whisper in their ears at night so they wouldn't wet the bed (again)?
Better to jump and accept being memorialized as a pilgrimage urinal, Avoids a whole bunch of other really nassity metaphors fate has historically dealt victims of acute gangster genetic syndrome (aka: the old "i am divinely ordained" sickness).
The liqudity problem is from bad bets made by greedy fascist banksters . Bens solution is to transfer the loss onto backs of the American people and pretend they did something brilliant . Bonuses for banksters bribes for fascist politicians and the bill to the proles .
Europe / US.
Them / US
Divide and Conquer.
old game.
Nice stuff by Nomi.
Outstanding, Nomi. Nice to read something that makes sense. Thank you.
'But we do know from the US bailouts in phase one of the global meltdown, that providing ‘liquidity' or ‘greasing the wheels of ‘ banks in times of ‘emergency’ does absolute nothing for the Main Street Economy. Not in the US. And not in Europe. It also doesn’t fix anything, it just funds bad trades with impunity.'
Great closing paragraph. This is all about 'psychology'. The half-life of these actions is debatable but I see no reason why this should change anything in Europe at least.
All of their actions are to stall while they ready the lifeboats (gold)
"does noting for Main Street Economy."
This is problem with Fed, it rewards bad behavior and then it hurts public. It does do something to Main Street, it makes them out to thinking everything okay. Does it reward prudent savers who avoid bubbles? No, these fuckers need to go to jail.
this is all about forensic psychology.
It doesn't fix main street because it doesn't serve main street.
We should get on the FOIA
What the point of bailing out the Banksters when all they do are to raise there stakes at the gambling table! No way you can help solve the problem of a compulsive gambler who do not admit that has a gambling problem.
"[F]und[ing] bad trades with impunity."
...Yet another mandate which ought be incorporated into the Fed's charter, "By Act of Congress."
A thoughtful piece, Nomi.
http://g-ecx.images-amazon.com/images/G/01/ciu/0b/0a/f9d80cb2fef50ad8956...
Nomi Prins rocks. ZH would be fortunate to have her as a regular post if that's what she wants. Very few females have a mind that sharp on financial matters. Plus she has a rockin' body.
Indeed, Nomi just made the A list.
Doubly so because of the picture. :-)
I have such a crush on Nomi. Intelligence, beautiful, and using her knowledge from the inside to help break us all out of this debt peonage, fiat enslavement circle jerk.
I'd give up a good pile of my gold and silver to spend a night with her....talking of course.
You must be a young bull.
this is just an update and recap of what Reggie has been saying for years. Goldman over leveraged and gonna die taking us (system) with it.
And she's quite hot as well as brilliant.
The only reason "Europe matters" is because of US bank exposure to European debt.
The big question is why do they keep increasing the exposure to European debt? We're missing something here.
The international banking interests/globalists/madmen would love nothing more than to further combine and intermingle the debt liabilities of all countries. This ensures the debt service continues indefinitely for all areas as it becomes an all-or-nothing proposition and they figure the majority of the sheeple will elect to continue the status quo (which they will). If exposure remained compartmentalized, then there is the temptation to think that default of some compartments is an answer (which it is) because its impacts would be limited, unpayable debt could be discharged, and a new beginning would be possible. But that's the last thing they want. Iceland is the nightmare situation for them and they don't want to see it again. They want to ensure the entire western world is successfully transformed into a tightly fenced milking cow that does nothing but eat, shit, and pay interest. Complete control.
Iceland is giving them nightmares because the people aren't asleep. We must wake up and realize that we can't remove the bankers without removing their elected servants. Both parties must be destoyed.
Police state(s) coming up:
http://www.singledudetravel.com/2011/10/welcome-to-the-new-america/
outstanding summary
Empires usually collapse first at the periphery. What else are they going to do? Invest in Brazil? This is a confidence game. Double down to keep the dream alive. Only now we've got a nightmare.
Because they are TBTF.
Different logic applies when you are TBTF. Any high reward investment where the risk is that from a global catastrophe is a good one: The Fed will always take care of that downside risk for you, and you become even more TBTF in the process.
Max Keiser explains why with a slinky - http://maxkeiser.com/2011/11/30/max-keiser-explains-the-slinky-school-of-economics/
Central banking is central banking. You are thinking like a nationalist. These people have no nationality. There is very little difference between the Fed and the ECB. Think of them like the collective pieces of a jellyfish.
With that established, all of their actions make sense. They will spend any amount of dollars or Euros, anywhere in the world, to keep this train wreck on the rails while they buy enough gold to make a new system with them safely ensconced on the top. Yes, Germany is a thorn, but in general, the collective jellyfish will spend USD to bail out Mars and Euros to bail out Venus if it just gives them enough time to survive this ordeal.
The consequences to the civilians is collateral damage, unless you believe like I do that they actively want a lower standard of living in the west and a higher standard in the East so trade flows more easily.
And to your point, they don't even think about it as Dollars/Euros/Swiss Francs. It's not even money to them. It's just a variable in their financial Matrix that in their nausea-inducing level of arrorgance think is actually sustainable.
their first passports may be different, but 90% of them have the same 2nd one
The greasing of the rails to hell continues..........
537:1
OT : http://www.infowars.com/chinese-government-official-us-threat-to-pakista...
Chinese Government Official: ‘US Threat To Pakistan Is Threat To China’SPOT ON ZERO HEDGE - THIS IS ABOUT BAILING OUT THE US FINANCIAL SYSTEM AND SQUIDS LIKE GOLDMAN AND JP MORGAN AND NOT ABOUT BAILING OUT EUROPE BECAUSE AS YOU CORRECTLY POINTED OUT GERMANY DOES NOT WANT TO GIVE UP THEIR POWERS..AND THEIR RELATION WITH CHINA IS GROWING FASTER THAN ANYONE EVER IMAGINED...WELL DONE ZER HEDGE
My point on Fox was that this ISN'T a simple low interest rate loan to Europe. Its a BAILOUT! So, Soros, PIMCO and Blackrock talk the Fed into bailing them out by bailing out Europe?
I estimate that the bailout of Europe will be $4 trillion.
The Morning After The Global Central Banks Ride To The Rescue! But The Eurozone’s Leg Is Broken and Central Banks Are Applying Gallons of Bengay As Treatmenthttp://confoundedinterest.wordpress.com
Dude- I'm sick of you trying to pimp your blog on every story on ZH...........
Dude, there are ZH Guest Contributors that are little better than cut and paste regurgitators and psudo-psycho-babbling idiots. ZHers fawn all over them.
At least this guy does a little work.
All he does is provide a link. So, don't click it
At least he's not taking up white space like some.
Granted, he's no Reggie, but then who is?
Note to Tylers, dshort.com and marketoracle.co.uk ,among others, have REAL content. Get some.
LOL- makes more sense why GS made themselves a "bank"- easier to attract a bailout.....
This woman rocks!
We should mate her with Reggie and make a supertrader, only Mrs. Reggie might not appreciate the endeavor.
that is fuckin disgusting
So this person is ex-Goldman? Same Goldman company?
I just heard Roger Altman, of something and something capital on bloomberg surveillance I believe, being interviewed by Kathleen Hays. When asked "does wallstreet wield too much influence on the US Government?" his response reminded me of Jerry Sandusky's response to Bob Costas's question "Are you attracted little boys?".
Yes, I'm implying that the wallstreet fraudsters in conjunction with their sycophant enabling congressmen are serial money molesters that violate every aspect of federal, state, and local law in order to fulfill their sexual desire for money, akin to pedophiles.
In other words, let US banks play with foreign bonds...
Well yeah, you could tell from yesterday's squid ooze they were pissed because they couldn't prop trade us equities volatility yesterday. Squids just wanna have fun.
Interesting. In yesterday's Japan 10-year auction, the biggest buyers were:
JPMorgan Securities was the largest buyer at Thursday's auction, taking Y289.7 billion of the bonds, followed by Credit Suisse with Y188.9 billion and Citigroup with Y183.1 billion - Nikkei
I'd rather those three did that than dabble in euro-trash.
You may want to reconsider that rather. Our Treasury/Federal Reserve exports inflation through dabbling in bonds elsewhere.
Sure, it's a currency play for a stronger yen, but still, if they lose dollars on eurosov bets the fed will just buy the losers anyway thus creating even more inflation. I consider the default/haircut risk to be less in Japan because the BOJ is not subject to the same constraints the eurotards have.
Two words - outrage fatigue.
This is four words.
I can count to Five.
The Fed IS a villain and GS is a usual suspect when it comes to anything cryptic and having the inside edge. This week was undoubtedly a big payday for them. A GS bailout is the same as a US bailout, they are intertwined.
i am an old floor guy who traded options and etf's wheres my bailout on my bad bets....oh thats right i get an FU bailout while goldman gets and eu bailout --- whats one letter
Now, I get it, Bernanke was an american hero who once saved millions of jobs in the american banking industry. RIP.
And Timmy got to play Robin.
Or was it Robbin'?
and there's the british hood. maybe if you pushed robin hood through a black hole, you'd get timmy
For those familiar with her writing.... what are phases 3 and 4?
Phase 3 - Bend Over
Phase 4 - Take it.
Nomi, ole girl. Get a life.
Great rebuttle cock gobbler. Jesus....
you mean ruin one
It is all political.
This is being done as a last ditch effort by Bernanke to preserve the Federal Reserve system and the voodoo which is Keynesianism. Bernanke knows that after unlimited QE and ZIRP the economy is still unable to recreate a new bubble even after 3 years of accomodative monetary stimulus. He needs Pres. O to win in 2012 and he is under the impression that if he can goose the markets to 15k on the Dow the people may actually believe this is a substitute for growth.
Pres. O needs all the help he can get and he is dillusioned in the thinknig a rising stock market will help his re-election campaign. Ask yourself why Corzine is not being questioned or doing a perp walk while MF clients are still without their funds? The answer is Corzine and MF being splashed in the MSM is detrimental to Pres. O and the cohorts along with Bernanke because Corzine is a connected Goldman White Shoe Boy. Sprinkle in the revelation that Paulson tipped off the cool kids to the Fannie and Freddie Collapse along with the 300 ramp up Monday due entirely to the leaks from the Fed that they were gonna fire a Bazooka and the criminals have only one option at this point. There is no out there is only further in.
When you consider Ron Paul rising in polls and likely to win Iowa Ben Bernanke has no option left but to launch QE3 in early 2012. We have all speculated that with gold, silver, food and oil as high as we are that Ben cannot perform a QE but we now know politically the impossible must be done. Bernanke is going to launch a QE in the first meeting of 2012...pray the markets take off to new heights and hope the inflation that is inevitable is slow to trickle into the system and time it so that Pres. O can tout the "rising markets".
Does anyone else here question also why Chris Christie who was not going to run in 2012 is being splashed on the MSM this morning criticizing Pres. O?? It is because they need a new message to dilute Ron Paul and once Cain drops out they need all tools available.
If Christie fails..all hands on deck for Trump to run a 3rd party. Now they realize if Ron Paul is not the nominee that the GOP will lost because Paul will run 3rd party which is why EVERY SINGLE interview on the MSM is cornering him into answering wether or not he will run 3rd party.
+1 - astute as always John Boy.
MSM & Goldman - two tentacles of the Fed Leviathon
Is that so about Ron Paul considering a 3rd party? Has he said anything to that effect himself?
Ron Paul said yesterday he was not considering running as a 3rd party candidate, did not rule it out but said, and I quote, "if you consider 1 in 20,000,000 a possibility"
Thanks
He will run if he must. If the GOP continues to pretend he is invisible and tout their chosen puppets he will run. That is why in the past week he is being given better coverage. They are afraid and know full will that if he runs he takes 20% (AT WORST) into his pocket and Pres. O wins. Best case for the GOP is that he pulls a Perot did and the GOP loses but Paul is not Perot. If he is on stage with the other 2 he may very well win.
That is why 8 out of the last 10 interviews are trying to get him to commit to not running. He is going to if need be and why should he not? He already said he is not running for Congress so this is his last hurrah..his last stand as the last statesman so that if he does not win the history books will remember one man and his followers stood alone to try to save our nation from the coming tyranny and dissolving of what made us exceptional.
He has left himself open to run a 3rd party and now they cannot say YOU PROMISED NOT TO. That is why they are petrified. If they marginalize him he will run 3rd party and Pres. O will win. Even though the left and the right are nearly the same party many are banking on a GOP slam dunk and their jobs in the media rely upon this. Now they have to give him a fair shake.
Ben doesn't care which party wins, as long as it's one of the two he owns. If Ron Paul continues to make headway, we are sure to see some very nasty tricks, because that would threaten a very powerful class of people.
This tidbit from Yahoo!'s (often hilarious) market comments: "The dollar's effort to advance has been helped by news that the Swiss government might consider negative interest rates."
So, on the back of MFGlobal "misplacing" billions in customers' "segregated" accounts, now the notion that banks will actually charge you to hold your money is being floated in the meme-o-sphere. All in aid of stimulating the Propensity to Spend/Splurge, I suppose, but then how many will begin to wonder: So I should keep my money in a bank ... why?
Gerald Celente (who was stung, of course, by the MFers at MFG) is now predicting an "Economic 911 event" to be followed by Bank "Holidays" as soon as 12Q1. Mattress money, anyone?
"banks will actually charge you to hold your money"
From the time you set up a checking account including all fees, monthly fees, check card fees, check printing fees, paper fees, cashier check fees, online privilege fees, (standing in line costs).
Add it all up and I'll be damned, it's cheaper to stuff that jew confetti under my mattress.
"But I'm afraid someone might rob me...."
Someone is robbing you!
Get one of these and learn how to use it in an offensively aggressive manner.
http://www.cheaperthandirt.com/76579-1.html
only cheaper until the local gestapo bashes your door in, drops a joint on the floor, then seizes the cash as the obvious self-evident proceeds of terrorism/drugs/insurgency/organized crime. And then gives you a bill for the scratch on their battering ram and the rounds they expended shooting your dogs.
Nice try. In my neighborhood probable cause carries weight.
You thugs are going to pay for every last distressful act, punitively.
I just listened to the interview at King World News.
http://kingworldnews.com/kingworldnews/Broadcast/Entries/2011/12/1_Gerald_Celente.html
When I wrote this and ZH was kind enough to run it, folks got on my case for saying that he is going to be just one of many. I guess they felt I was insensitive.
http://www.zerohedge.com/news/guest-post-mf-global-fractal-frying-pan
Celente himself is saying he got "F"ed by MF global and that all of us are going to get "F"ed.
We all watched the micro version in 2007-2008 with all the TARP/bailout bullshit. We are all getting ready to get "MF"ed--Globally. More Ponzi to bail out the Ponzi. I think they hope if they can construct a story of bullshit so complicated that the general population cannot discern that it is just digital printing and air, that maybe they can not only preserve their power, but increase it.
If we see through it, the dollar crashes and they will cook up SDRs or something.
If we don't see through it, they will have tested their printer and know that they can print at any time and channel resources any way they want to. ABSOLUTE POWER BITCHEZ! Global fascism.
Hey, Simon Black, where you gonna run to now?
If we see through it...
If we don't see through it...
Stay tuned to The Hedge bitchez for your 20/20 vision plan.
TY Ms. Sorry I missed your article. More please.
Thanks for the link, I missed that on Sunday. Good post and lots of interesting comments. FWIW, I heard Celente on Rockwell's show on Tuesday, I think in was.
Justice = Just Us. We're at their mercy and clearly, they have none. Not good.
>>>I suppose, but then how many will begin to wonder: So I should keep my money in a bank ... why?<<<
First, do a little homework to understand what a negative interest rate really means, under what conditons it occurs and who the real targets of the rate are.
A negative interest is not targeted at likes of you/me/us...teeny, tiny inconsequential depositors by comparison.
And it often facilitates a carry trade. Hmmm....
Recent example--
http://www.moneyweek.com/investments/what-is-the-carry-trade
http://www.zerohedge.com/article/day-yen-carry-trade-died
Most people don't have any money in the bank, but there are no opportunity costs from taking it out, so I could also see a bank run. More importantly, people may take out their pension funds and pay the penalty. That would cause a panic.
So why does it seem like Goldman is biting the hand that feeds? Most of the commentary coming from their top analysts criticized the coordinated bailout.
Is this merely Goldman pretending that it wasn't the main beneficiary in order to avoid public outrage?
The GoldMan allways says the opposite of what they mean.
It is the GoldMan way.
it's almost as if, they're liars
bailout bingo:
you BiCheZ better button up the trap door on those long johns if youve got derriere derivative exposure, too!
She gives a pretty good definition of a "swap". Please forward it to the CFTC so that they can finally set position limits...about a year late.
Flywheel is starting to turn...
...more liquidity begets...
....more derivatives begets...
....more liquidity begets....
....more derivatives begets...
.....more liquidity (uh oh)...more liquidity...I SAID MORE LIQUIDITY!!!
F-A-I-L.
Stop navel gazing and see the big picture from the perspective of the Oligarchs of USA who built the NWO and the financial ponzi to surf off it, which has led us where we are :
Reposted on why the Fed did what it did :
QE 3 is panick stations to save the global banking cartel. And to keep the USD devaluation on track WITHOUT LOSING USD RESERVE CURRENCY STATUS.
As Merkel won't do it to fix banking collapse in EUroland, and inevitable meltdown of US finance, the FED has to.
Bottom line : The US financials have MUCH more to lose than the Germans; they could lose the WHOLE shooting match of PAX americana. And that means that they lose the control of Middle East oil and Far East Pacific rim to China/Russia and other new players. Now that...
These guys run the world, not the American people. So if the US politicians belong to the oligarchs why don't you take your rose tinted glasses off and see their vision of the world; OR, WREST POWER FROM THEIR GRASPS IN THE NAME OF THE PEOPLE.
Now that...
Jeebus Christo. I see it all so clearly now after reading this article.
The market really is not fixed and manipulated. The Squid is doing gods work.
The evil Vatican is fucking us all!
Kindly go blow your sunshine up someone else's ass. TIA.
uuugh, the fuckery continues.... ill just keep stacking nice shiny bars, MRE's and ammo. this sucks. i take absolutley no joy in seeing this bullshit carry on unabated. I am forever grateful for this site. I prefer to be be awake and prepared, than blissfully ignorant, pepper spraying fat people at my local Wal-Mart in hopes of getting that Xbox 360 for 20 dollars off.... Kudos to Tyler(s) and all those who frequent this site dispensing healthy doses of humour and ass-kickery in an honest and open manner!
Both Aristotle and Freud noted that enlightenment as to how things really work, as oppossed to the facade we see daily, can lead to discomfort and pain at least temporarily.
I still hope it is not as bad as you see it. It is bad enough already.
ditto. here for the same reasons as well.
.
Yeah, we sure are getting back-doored alright!
heres a point jews and arabs hate each other correct....where is all Saudi money----bingo GS.....enough said
Tilt...
Segfault...
Prince Alwaleed bin Talal al-Saud of Saudi Arabia owns a large percentage of News Corp....
I think it is spelled "CORRUPTION", though some would say it is spelled "MALFEASANCE" or "SKULLDUGGERY" or simply "SIN".
Damn! I love this site!
I am ignorant as to the nuances on how dollar and foreign currency swaps work.
So the fed lends to a foreign bank on the brink of collapse. The fed lends dollars and they get debt dominated in that foreign currency ? I gather from "borrow dollars against their currency" they are not actually trading currency for currency but currency for debt denominated in another currency.
So in substance it is actually a near 0% interest loan?
So I take it the foreign bank than goes back and converts those $ to their currency? And then when the time comes to "swap back" (pay back the loan) the bank hopefully magically became profitable and has enough liquidity to convert their profits in their currency back into dollars and pay the fed.
And the way things seem to go the foreign bank, if they can't make the swap back instead of going bankrupt they just do another "swap" use those dollars to pay for the first swap?
Rinse and repeat. The cycle continues forever?
Very close, but it is even slightly crazier than that, because the dollars and euros for the swap are merely accounting entries on each central banks ledger. Poof! Ten billion dollars magically appears. Ten billion dollars of euros magically appears, and they swap these accounting entries.
Zero hedge has an excellent article on central banks currency swaps if someone could remember the link I would appreciate it.
Thank’s for the explanation.
I don't know why something about the international aspects of this transaction made me think the federal reserve was actually giving them real currency in exchange for binary digits/debts in accounting ledgers.
I guess all foreigners actually trust the federal reserve enough to do debt for debt. Accounting entries for accounting entries. It's mind boggling how made up and phony it seems. Since it all seems to be made up, what's to even stop a foreign bank from faking and forging a fed currency swap in their ledgers/ balance sheet?
The U.S. FED is doing both of these, I believe:
http://en.wikipedia.org/wiki/Currency_swap
http://en.wikipedia.org/wiki/Central_bank_liquidity_swap
In simple terms, an open line of credit to foreign banks backstopped by the U.S. taxpayer. Instantaneous binary data currency swaps favorable to the foreign banks that "need" them, so they can hide the facts of their insolvency.
Only individuals and families can be bankrupt; the kleptoligarchy of cronyism - the fascist hegemony of corporate governments owned by banks - are never accountable for their theivery and gambling and draw fat salaries, kickbacks, and bonuses to boot.
The Fed and Treasury will do everyrhing possible to goose the economy and bailout everyone these next 12 months.
The Fed does not want to be blamed for losing the election for Obama. If Obama loses they dont want anyone accussing the Fed of failing to do enough to "help the economy recover" since bad economies often cost incumbents the election.
I suppose this is how the fed maintains its "independence?"
If the fed is always trying to help the incumbent party with short term interventions (even if they are harmful long term) then they avoid scrutiny and maintain their " independence".
I think the fed would do this action anyway regardless of the puppet and the election cycle. This action may mean the fed is truly undisputedly the first global central bank. The "Fed still only serves U.S. banking interests" argument is weak.
It's arguable that U.S. banks have a lot of exposure to European banks and assets in the Euro-zone, so the fed back doored the bailout of the entire continent of europe so that the U.S. Banks wouldn't go bankrupt. (and everyone knows in reality that the Federal reserves' real mandate is to serve the banks not the U.S. itself and certainly not the United states people)
But through the latest actions has the federal reserve expanded their real mandate to global ? Because even if U.S. banks were gravely exposed to Europe, the federal reserve could have just bailed out the U.S. banks (they have shown no qualms about doing this before) after Europe collapsed and let the U.S. banks fill up the vacuum.
As far as Obama and the presidency he seems kind of irrelevant. Certainly Barry doesn't want the banking collapse to happen now, so he isn't complaining about the bailout. But the federal reserve doesn't want any banking collapse to happen ever, unless to get rid of Goldman Sach’s competitors. Maybe GS didn’t really want to take out competing foreign banks yet? Maybe they still need to replace more European country’s leaders with their Alumni first?
Or does GS no longer control the Fed allowing the fed to become it's own entity and go global?
a lawless bunch run the land and we...
I'll take
Suckle on the teat for $1000 Alex?
=Must watch TV for you Goldmanites!
http://www.youtube.com/watch?v=as--TpEylRk
Who owns the fed? Don't most of the major banks in the US have a stake? Therefore, isn't the fed in the business of bailing itself out?
Exactly.
Look at the national debt clock: http://www.usdebtclock.org/
The FED and Treasury simply create money in their database, no coin or paper bills (or heaven forbid, gold or silver) needed.
The "money" is handed out to banks, CONgress, foreign banks, IMF, etcetera, etcetera. The bill is put on the backs of the "little people" (national debt). Then, "austerity" will be demanded of everyone but the malfeasant.
Deep in the halls of academia this thievery is equivocated and rationalized away with euphemistic phrases and terminology, blended with obtuse formulae and theory, and layered upon nebulous concepts disconnected from reality and the rational mind.
This toxic conceptual beverage is drunk by the delusional believers in something from nothing, of conjured food, necromanced water, and free labor, who are generally termed "economists".
It's alleged that foreign banks have a stake in the Federal Reserve as well.
Specifically, the Federal Reserve Bank of New York. It's claimed that the banks within the region belonging to FRB of NY own shares in the Federal Reserve Bank of New York, and those banks are owned by foreigners from Europe and the city of London. It’s also claimed some individual foreigners directly own shares as well..
It's difficult to research because legally the 12 regional Federal Reserve banks are rare and perverse legal entities known as Private Federal Corporations (PFC), or also known as a Federal Government Corporations (FGC).
In substance they are private federal corporations. Both owned by private shareholders and run for the benefit of private shareholders. A minor the difference is how they are formed. The major and unjustifiable difference is the exemptions from the regulatory agencies that regular corporations are subject to.
The Federal Reserve Bank of New York does not have to file with the Securities and Exchange Commission to publish a list of its major shareholders.
Not alot to say,other than Fuck the Banksters.
And time to end corrupt to the fucking core ,Western Goverments
When I see NO MORE post on here from American Ctizens,because you's are ALL down at the Non Federal ,Federal Reserve building,tearing it down, than I will know you's are taking this personally.
Otherwise,buisness as usual,and the beat goes on.
Put up,or shut up.
That is the problem; tearing the building down would do nothing but get you shot.
The FED databases would still keep humming, sending taxpayer money to the banks here and abroad, at no charge.
The only solution is to collapse the entire system in the same way, by denying labor and participation in the database economy.
Unfortunately, a great many millions of sheeple distracted by propoganda and bread and circuses (NBA, NFL, CNBC, Dancing with the Stars, X-Factor, The View, etc.).
Thats the thing.
You have to get ALL the ants down to the enemys building.
Saftey in numbers.....
Looks like a "good day to die".
Some of the ants would have to say,but so be it......
Are we not all on our way..?
I hear ya', and it may happen and I will pop a bottle of champagne, but I still think the internal collapse due to external non-participation in the ponzi would be a sweeter revenge.
Just ten years ago today.
http://www.youtube.com/watch?v=6lSkrQBP4gg
Every day is a back door bailout for the FED and the banks.
Look at the kitco gold and silver charts,and you will see that this manipulation is done in plain sight every day.
Without stomping on gold and silver ,DAILY,these banks,USA and European ,would allready have collasped from lack of CONfidence in the USA dollar.
Fucking whole thing is a ponzi.
Do your friends and family know this...???
It is YOUR DUTY ,to make them aware of this .
The Banks are STEALING ,your parents,and your grand parents money,and they are going to STEAL your childrens money.
ENOUGH ALLREADY...!!!!!
Time to Dismantle the system...!!!!
Wanna know where all your buying power went? Wanna know why your life seems more unaffordable today than it did 4 years ago? And getting worse month after month?
Simple. It's all going to bail out the financial sector bandits and make their life easier while yours gets harder.
And it really is that simple: each time they print up trillions or move and flush them around the web of interconnected institutions that keep each other clad in Gucci, you lose because the dollar loses buying power. Monetary easing causes incipient inflation. Simple as that. And since global economies keep contracting since 08 in real terms, with a dramatic effect on median real incomes since 08, you lose you lose you lose!!!
Ok Zerohedge now your talking. This one had insight!
"There are other reasons that have been thrown up as to why the Fed acted now – like, a European bank was about to fail. But, that rumor was around in the summer and nothing happened."
Just over a week ago was an options expiration Friday when the Fed would typically gets its maximum effect from such actions, but it didn't do anything then. Why wait until now?
I think one or more EU banks were about to trigger the CDS dominoes. If so, they will be found out eventually and the market will force those dominoes to fall.
I asked for just one TBTF bankruptcy but Santa said they only come in big multipacks and might not be available for 12 months
So get the multipack already.
Naomi u rock.
When the swaps are arranged and the central banks divert currency to the banks, is it in the form of interest free loans, how does it work? When do the banks have to pay this money back? Nothing is very clear, I'm against the banks but how is this a bank bailout in the form of QE?
We are living in the times of the Financial Totalitarianism
http://thechinonomist.blogspot.com/2011/11/financial-totalitarianism.html