result is a doctrine of financial war not
only against labor but also against industry
and government. Gaining the financial power
to indebt economies at increasing speed,
the banking and financial sector is siphoning
resources away from the real economy. Its
business plan is not based on employing
labor to expand output, but simply to transfer
as much of the existing flow of revenue
as possible into its own hands, by capitalizing
all such revenue into interest payments,
on loans collateralized and pledged to creditors." ~ Michael Hudson (who compares the state of the
"When a restaurant has been used to launder money by the mafia and has been running for a few years, it must be burnt down to hide the fact there are no clients from the IRS. When Enron (the OTC derivative restaurant) went broke, the accountants burned it down by shredding the transactions made with thousands of straw partnerships. Now it is time to burn down the mega banks, too big for jail, in order to hide the facts from the eyes of newly inspired police of all kinds." ~ Jim Sinclair
has been growing exponentially everywhere.
Debt is backed with debt, based on debt,
dependent on debt, and leveraged with yet
more debt. For example, today it is possible
to buy a bond (i.e. lend money) on margin
(i.e. with borrowed money). The time is
now fast approaching when all debt will
be defaulted on. In our perverse monetary
system, one party's debt is another's money.
A debtor's default will impact the creditor,
who is usually also a debtor to yet other
creditors, causing him to default, and so
on. When this begins in earnest, it will
wipe out the banking system and thus everyone's
money. The paper currencies will not survive
this." ~ Keith Weiner (New
"And as policymaking turns increasingly desperate, it is almost guaranteed that Risk-on Risk off turns only more unwieldy. Indeed, it is clear at this point that the more global policymakers turn to monetary inflation to thwart the downside of the credit cycle, the greater the amount of fuel injected into a dangerous global speculative bubble. In anticipation of next week's scheduled Federal Reserve and EuroCB meetings, Steve Liesman (CNBC) today referred to Monetary Madness. I will use the term to describe the past couple decades." ~ Doug Noland (Prudent Bear)
"After twenty years of service, I am ashamed to have had any association with the Fund at all." ~ Peter Doyle (departing IMF economist, angry over favor given to Europeans, and over repeated suppression of reporting on extreme warning signals)
Editor Note: The implosion of Morgan Stanley is near. A Hat Trick Letter subscriber
has a friend whose father is a fund manager
inside Morgan Stanley. They are all talking
about implosion internally at the MS firm.
It is to happen soon. The father, along
with many colleagues, sold his personal
legacy MS stock holdings. They are abandoning
ship. Something big is brewing. An internal
disaster has also occurred, as the firm
made a transition from state of the art
technology with their software back to trading
software that takes five times longer and
is at least 10 years outdated. The move
has caused chaos at the trading desks. The
Facebook IPO was another disaster. My concern
is whether the massive Interest Rate Swap
application by Morgan Stanley in early 2011
has had repercussions, like the lead Wall
Street giant banks trying to kill off Morgan
Stanley, in order to bury the evidence of
criminal derivative trading. Recall that
a few months ago, Jim Sinclair shared information
that over 600 accounting experts and financial
analysts were poring over the the books
of a major Wall Street firm, trying to determine
if they were indeed dead meat. Many surmised
it was Morgan Stanley. Perhaps the internal
chaos is related. When the Jackass checked
with a Central European banker who has shed
light in the past, he wrote back, "Morgan
Stanley is a small casualty in the coming
chain reaction of things to unfold. We shall
see Deutsche Bank and Credit Agricole in
See the Special Report entitled "Personal Account of National Crisis"
as part of the August package. It includes
various perceptions of the US Presidency
in recent years, as the narco barons dominate
in the lineage. Political parties are a
mere distraction. The up-to-date revelant
fact is that Romney has gathered almost
five times as much Wall Street banker campaign
contributions than the incumbent president
occupying the White House. The report includes
various perceptions of the Treasury Secretary
within the Administrations, loyal since
1994 to Goldman Sachs. A theory is offered
to explain the oddball John Snow of the
lot in the Treasury post. The report includes
numerous interactions with Jackass college
friends, one in particular, the smartest
of the bunch. He is a law school graduate
and scholar. The conflicts and agreements
are described with friends, which typify
the American public, at least among the
educated and semi-intelligent. Lastly, the
report includes various perceptions regarding
the most significant event in decades for
the nation, the
## MONETARY FRAGMENTS
◄$$$ BARNHARDT QUOTES PROVIDE A LATE STAGE WARNING. THE SENTINEL CASE HAS GIVEN PRECEDENT TO ELIMINATING ALL LIABILITY FROM FINANCIAL FIRMS WHEN LOSING CLIENT FUNDS (OR STEALING THEM). IT IS OPEN SEASON TO STEAL CLIENT FUNDS WITH IMPUNITY. THE BIG BANKS ARE BEING PLACED IN FIRST POSITION ILLEGALLY, AHEAD OF CLIENT SEGREGATED ACCOUNTS. THE COURTS ARE BLESSING THE ILLEGAL ACTIONS. THE PATTERN IS SET, AND THE DIE CAST. THE PUBLIC HEEDS LITTLE THE WARNING FOR STOLEN PRIVATE ACCOUNTS, DONE WITH COURT PROTECTION. AS THE CLIENT ACCOUNT SEIZURES AND THEFTS CONTINUE, LOOK FOR CONSOLIDATION AMONG THE GIANT BANKS. THEY WANT CONTROL FOR FORTRESS DEFENSE AND FOR FUTILE IMPLOSION PREVENTION. $$$
Anne Barnhardt has become a vigilante warning like Paul Revere. She believes the entire financial market paradigm is being guillotined, and client accounts are being harvested like crops. The Sentinel case from 2007 has finally received a court ruling. It is a shocker, giving license to snatch client accounts even if segregated. "That Sentinel failed to keep client funds properly segregated is not, on its own, sufficient to rule as a matter of law that Sentinel acted with actual intent to hinder, delay, or defraud its customers," wrote US Circuit Judge John Tinder. See the full story from the 2007 case and recent ruling (CLICK HERE). The ruling goes counter to many legal statutes and bankruptcy procedures. No matter, since the ruling protects the big banks and financial firms.
Barnhardt has made several past warnings, writing in detail, with specifics on the breakdown of the financial brokerage practices. What follows are her points, assembled in cohesive fashion without quotations. The National Futures Assn (NFA) collusion with the banksters, government, and judiciary has achieved their goal. The entire concept of customer segregated funds is officially, completely, legally dead. Strong words. The public is still to some degree cowering in normalcy bias, unable to deal with reality. The marketplace is destroyed. The private investors must exit these markets, since all legal protections are officially gone. Harken back to the Ponzi scheme called the Sentinel Management Group that imploded in 2007. They stole over $500 million in customer funds. The NFA was the auditing regulator of Sentinel. The perverse part is that the NFA admitted after the Sentinel Ponzi meltdown that they signed off on their audits even though the NFA claimed not fully understanding Sentinel's books or accounting methods. Hence the NFA did not audit Sentinel at all. It was a blatant example of auditor accounting fraud. They have been forgiven of all liability, given a grand pass in violation of the law. The Fascist Business Model prevails.
Barnhardt was clear, calling the NFA a criminal mafia, in cahoots with the auditors. She said, "There is no real regulatory oversight of the financial industry in this country!! The NFA is not auditing anybody in any realistic sense. If you are in the NFA mafia, they will coast you right through. If you are not in the NFA mafia, they will tear you apart and destroy you with malicious auditing and malicious litigation. The coup de grace is that the courts are now completely complicit in all of this!! The courts facilitated the fraudulent bankruptcy filing of MFGlobal, and now the 7th Circuit Court of Appeals upholding a decision from the District Court has now made this absolutely mind blowing decision, setting precedents that say customers have absolutely no right to their segregated funds held in any depository or financial institution!" This is outrageous.
Sentinel illegally seized customer segregated money and
fraudulently used it as the collateral on
a loan from Bank of
The Federal Appeals Court has explicitly stated that a Futures Commission Merchant (FCM) can use customer deposits to pay its debts, and that the customers themselves are subjugated and have basically no legal right to funds in their own accounts. The rules goes in direct violation of what standing legal statutes and regulations state. No longer are legal assurances, claims, or guarantees valid for client segregated funds held with an FCM or any other brokerage or depository institution. Whichever big bank is involved in the illicit mix can move to the front of the line in the final disposition of funds, after the financial brokerage firm is dead. The big bank is free to make fraudulent loans using the stolen customer funds as collateral. The firm will be treated like an ordinary financial firm, and not a brokerage firm. The die is case for precedent. Extend the implications in a basic logic step.
Conclude that all client funds in the
Barnhardt sees the entire high level bank processes completely revolving around
JPMorgan and Goldman Sachs. She expects
the Wall Street power center to try to consolidate
these mega banks even more. Look for
JPMorgan to make a play for Citigroup at
some point. Their merger grab for control
might include a play for Bank of
◄$$$ A TOTAL SNAFU OCCURRED WHEN KNIGHT ATTEMPTED TO LAUNCH ITS NEW TRADING SYSTEM. SOMEWHERE ALONG THE LINE, A MAJOR ACCIDENT OCCURRED THAT ESSENTIALLY KILLED THE FIRM. THE RESCUE INVOLVED HEAVY DILUTION AND NEAR WIPEOUT OF INVESTORS. $$$
Knight Capital Group was brought to its knees by a software glitch that caused errant trading in dozens of stocks. The company tried to do damage control, claiming the loss would be in the $150 to $250 million range, but it turned out to be more like $440 million. The Securities & Exchange Commission is mum on the story, from ignorance, not malice. The deal might be at risk if Knight's bold action is insufficient to restore confidence in the firm from its counter-parties. Worse, since the convertible bond is unsecured, investors are subject to full writedown on their investment quickly. The only perceived benefit is to 1400 Knight employees, who will will have a job until the true fallout of the mega trade blunder is understood. No indication of dastardly deeds like sabotage or flash trading gone awry here.
A group of investors will rescue embattled market maker Knight Capital Group
in a $400 million deal that keeps the company
in business, but the deal comes at a huge
cost to eradicated investors who will be
diluted badly. The bond will be convertible
at a $1.50 conversion price, greater than
a 60% dilution. Hence the pro forma share
count will soar from 90 million to 350 million
upon conversion. Bankruptcy is hardly
worse. The rescuing companies will buy convertible
preferred stock with a 2% dividend to save
Knight. The preferred shares are convertible
into about 267 million shares of common
stock. Knight will ensure the investors
would receive a stake of a little more than
70% in the company. The New York Stock Exchange
will temporarily transfer Knight's market
making responsibilities to Getco in
The Knightmare occurred upon the release of their new market maker software to work in real time with the NYSE stock market as a Retail Liquidity Provider. The post mortem indicates that Knight accidentally released the test software they used to verify that their market making software functioned properly, into NYSE live system. The software handles buy & sell orders, but might have been tripped up when hitting the bid & sell prices for stocks that Knight did not make a market in. It was a disaster that went out of control, without providing value on losses to the Knight managers in prompt time frames. See the Zero Hedge article (CLICK HERE) for details on the launch of the trading system.
◄$$$ THE UKGOVT DEFICIT DEATH SPIRAL FEEDS UPON ITSELF. THE PENSION UNDER-FUNDING
The insolvent banking system has a way of spreading the rot and capital decay, done by the ultra-low interest rates. The UKGovt (like the USGovt and EU govts) are stuck with the artificially low rates since they cannot properly fund their official debts. The insolvent housing market remains comatose. The pensions go worse in under-funding with each passing month, since their bonds under management earn next to nothing. The rot spreads like a cancer across capital bodies. The many pensions face a death spiral. The same force that ruins capital from a chronic 0% official rate, due to rising costs and shrinking profit margins, also attacks income by providing next to nothing as a return on savings in a grand spin cycle. The entire pension system requires income from the stored capital, but it is not provided.
Ros Altmann is a leading respected economist in
Altmann said, "This is turning into a Death Spiral. The lower UKGilt
yields fall, the worse pension deficits
become. The worse pension deficits become,
the more trustees will feel they need to
de-risk. This often means buying more Gilts,
which itself means worse deficits because
trustees are competing with the Bank of
◄$$$ THE UNITED STATES HAS LOWERED THE $10,000 REPORTING ON THE MOVEMENT OF CASH TO $3000. CAPITAL CONTROLS ARE NOT COMING. THEY ARE ALREADY HERE AS THE VISE IS TIGHTENING. $$$
Martin Armstrong has been compromised in my opinion. He has softened his message,
even altered certain themes, as a concession
in order to exit prison, marked by regular
beatings. But he has a message worth noting
that pertains to legal reporting requirements.
The vise is tightening on cash movements.
◄$$$ THE ITALIAN BORDER HAS SEEN A HUGE RISE IN CASH SEIZURES. MONEY IS
ATTEMPTING TO ESCAPE, FOR WHATEVER REASON.
MOTIVES INCLUDE PRESERVATION OF SAVINGS,
AVOIDANCE OF EURO CURRENCY DECLINE, PROTECTION
FROM BANK COLLAPSE, AS WELL AS TAX EVASION.
THE CAPITAL CONTROLS ARE TIGHTENING IN
Cash seizures from smuggling are soaring at
◄$$$ AN INTRIGUING SANTELLI RANT VERSUS LIESMAN AND KASHKARI TOOK PLACE, EXPLAINING THAT BANDAIDS AND PATCHES SOLVE NOTHING. THE PROBLEM IS INSOLVENCY. IT IS THE NATIONAL PROBLEM, NOT LACK OF LIQUIDITY. THE SOLUTIONS BY THE CENTRAL BANKS ARE STEEPED IN FUTILITY. $$$
Rick Santelli from the
◄$$$ THE USGOVT DEBT BOMB IS PRESENTED IN A PARODY, OF A POLITICAL STATE OF THE UNION MESSAGE. AN EXTREME FISCAL MESS HAS EMBROILED THE AMERICAN NATION. $$$
Almost no major group is spared. In a funny but biting video clip of a short song, check out the professional burlesque from the Daily Bail (CLICK HERE). It is well done and tasteful. We all require some levity and laughter.
To be honest as preface, the Jackass has minimized the Chinese bust. It is worse
than imagined. Since late in the 1990 decade,
The bumpy (possibly hard) landing for
The Chinese Politburo has thrown all engines into reverse throttle. The reserve asset requirement for banks has been cut several times. Regions have been given the green light signal for another blitz of stimulus financed by credit from state banks. Wei Yao from Societe Generale said, "The bottoming-out process is taking even longer than we anticipated. The easing policies announced so far have not fully passed through to the real economy. Expert opinion is split on the severity of the threat. Nomura said the latest spending drive will filter through just in time for the Communist Party hand-over later this year, carrying the economy into mid-2013."
However, other corners view the current measures as inadequate and ineffective.
Global Insight wrote, "The government
might not want to pile on debt and revert
to grand state-led stimulus, but it increasingly
appears that there are few other choices."
The concern is shared by Premier Wen
Jiabao, who is openly reluctant to turn
the credit spigot on again. He was warned
repeatedly that the Chinese Economy is badly
out of balance, and must find less dependence
upon exports and direct investment. Business
investment generally is at a world record
49% of GDP. If
China Securities Journal confirmed in early August that
Colonization to exploit natural resources in
A map assembled by Stratfor shows that since 2010, the continent has become
defacto Chinese territory. For the last
two years, the Chinese pledges of over $100
billion to develop commercial projects in
Stratfor wrote, "In late July, Beijing hosted the 5th Forum on China-Africa
Cooperation, during which China pledged
up to $20 billion to African countries
over the next three years.
The key factor not cited in the Stratfor report is the hot battles with soldier
deaths and casualties in SouthEast Africa,
◄$$$ AFRICAN NATIONS ARE SHUNNING THE USDOLLAR. TIGHTER RULE CHANGES ARE
MET WITH RESISTANCE.
The Zambian Kwacha currency has risen handsomely this year. Hard asset linkage
does that, as the USDollar moves in the
other direction, down from paperweights.
It is backed by debt, arrogance, and fraud.
The Ghanan Cedi currency should rise also,
due to new rules to keep all reserves at
their central bank in domestic currency.
Bear in mind that
The leaders in WashingtonDC should take a closer look in the mirror. History will not treat them well for hegemony in markets, and dastardly political deeds, all part of a strategy to maintain power. They should instead attempt to renew the American roots of industry, trade, cooperation, and mutual advancement. But that is NOT the way promoted by the banker-controlled USGovt leaders, who put into practice the highly destructive Fascist Business Model. The very dirty secret is that the hands controlling the USGovt leaders behind the curtains belong to Nazis. The sealed their power after 911, their blitzkrieg, which will someday in the near future be exposed.
## BANKER SCANDALS ERUPT
◄$$$ CONNECTION BETWEEN THE USFED AND THE
The complete loop is realized for the JPMorgan for its primary hub role in financial
criminal activity related to several key
arenas. Consider that JPMorgan runs the
Iraqi Export Bank in
JPMorgan is a principal operator of the Interest Rate Swap contracts in their
Chief Investment Office, which control the
USTreasury Bond yields. They fabricate the
false flight to safety in USTBonds, at a
time when foreign creditors are long gone,
domestic savings has vanished, and chronic
USGovt deficits are outsized. The connections
for criminality all run through JPMorgan,
thus the required protection by the
The expected revelations by JPMorgan whistle blowers was halted. The men in
black probably threatened death to any JPMorgan
employee acting to publicize criminal activity.
They act to serve the Syndicate, to make
What comes in the following weeks is likely a grand metal shortage within the
COMEX, which has gradually been abandoned
by legitimate players. Raising hope, then
dashing it, and doing so repeatedly has
a very detrimental effect on the metals
market. The players will simply go away,
steeped in distrust, seeking other honest
venues. Members will remove their inventory
and cause great pressures toward a default,
all in time. What comes is likely a
massive assault on other JPMorgan desks,
as their vulnerability is enormous. Look
for the internal works for Interest Rate
Swap reckless management, or Credit Default
Swap mutual vulnerability, or money laundering
routes, or mortgage bond lawsuit rulings,
or SLV silver inventory raids, to be exposed
at the most awkward inconvenient moments.
The wild card is exposure of USTBond counterfeit,
the data records for which were in the infamous
Building #7 of the
◄$$$ NUMEROUS SUBPOENAS DIRECTED AGAINST JPMORGAN CHASE OVER L.I.B.O.R.
ARE COMING FROM AGGRIEVED PARTIES ACROSS
THE WORLD. THE JPMORGAN FORTRESS IS UNDER
SIEGE. POWERFUL BANKS ARE SEEKING REDRESS
OF SERIOUS LOSSES. THE LAWSUITS WILL MOUNT,
BUT THE BIGGEST TARGET IS THE BIGGEST BANK,
JPMORGAN CHASE, THE
Since a publicly owned firm, JPMorgan must supply information on court actions.
In early August, the giant criminal syndicate
bank revealed actions taken against it to
the SEC. The bank made a similar disclosure
in its previous quarterly filing in May.
Regulators from the
The scandal is being called the grandest financial sector criminal event in
history. Not really true though. The
LIBOR case merely has raised awareness with
ugly revelations of what have been going
on for a half century. Stealing
JPMorgan is cooperating with the investigations. They do not wish to add obstruction
of justice to the laundry list of violations.
The bank must respond to numerous requests
for information about its involvement in
setting EURIBOR and TIBOR, the European
and Japanese versions of LIBOR, respectively.
JPMorgan has been identified as one of 16
banks in the
Previously, Bank of America and Citigroup have said that they have been served with subpoenas in the LIBOR case. These two banks have mentioned fewer regulatory agencies have knocked on their office doors than JPMorgan did. JPMorgan has disclosed being the subject of a large and growing number of lawsuits emerging from the LIBOR scandal. State and local governments, along with numerous official agencies, are suing banks for keeping LIBOR artificially low, rendering harm to the value of various swaps they purchased as protection against rising rates. See the Huffington Post article (CLICK HERE).
An update. JPMorgan Chase, Barclays, and UBS are among seven banks subpoenaed
conducted by investigators in
◄$$$ LIBOR SCANDAL COULD COST BIG BANKS $BILLIONS IN LAWSUITS. WHEN FIGURING IN THE GIGANTIC UNREGULATED DERIVATIVE INDUSTRY, THE LAWSUIT LOSSES COULD BE AN ORDER OF MAGNITUDE HIGHER. $$$
Already 20 lawsuits are lined up in the
The table displays the potential civil lawsuit losses. The biggest liability
stands with two
Application of LIBOR rates extends into every conceivable nook and cranny. The FOREX trade is over $500 trillion per year. The LIBOR priced derivatives are integrated. To call the damages minor since fractions of a percent, mere basis points, is naive and ignorant. A one basis point shave on $500 trillion translates into $50 billion, shared across numerous banks in collusion. This is not small money.
◄$$$ EXPECT A SLEW OF SMALL US-BANKS TO SUE THEIR GIANT CRIMINAL COMPETITORS IN A FASCIST BUSINESS MODEL BACKFIRE. FURTHERMORE, LOOK FOR SOME FIREWORKS AS R.I.C.O. LAWS AGAINST RACKETEERING WILL BE INVOKED. ECONOMIC CHARLATAN SHAMANS LIKE LARRY KUDLOW MIGHT BELIEVE NOBODY WAS HURT BY ARTIFICIALLY LOW L.I.B.O.R. RATES, BUT REALITY TELLS A DIFFERENT STORY. DEFENSE OF THE CRIMINAL FINANCIAL SYNDICATE WILL TURN STRANGE. $$$
Incredibly, foppish economist Larry Kudlow has stooped to an embarrassing low point. In sevice to his CNBC sponsors and banker masters, the boot licker expressed the opinion that nobody was hurt by the LIBOR price rigging. He even went to say that the entire system benefited from the lower costs. The reality is a different story. Mortgage underwriters are the main site of aggrieved LIBOR parties. Countless others will appear in lawsuits, but focus on the mortgage arena since so simple. The mortgage underwriters are paid less from home loans in interest paid, but carry huge risk of default still. The underwriters will provide gory detail for their losses from the price rigging. On any transaction, there are two sides. The underwriters made cheap mortgages, too cheap, as they suffered major losses with artificially low monthly payments. Worse, they offered undue stimulus to attract mortgages at such low rates, bringing in the worst possible clients with the lowest FICA scores. The losses from mortgage defaults will not be an easy bridge to cross in proving damage from LIBOR price rigging.
Thousands of small
The scandal is reverberating far beyond the boundaries of Wall Street and the
◄$$$ THE PATH OF INTERNAL EMAILS REVEALS $100 BILLION IN AID TO A.I.G. FOR HELPING BUDDIES. TREASURY SECY GEITHNER MIGHT BE THE INITIAL TARGET FOR BANK SCANDALS WITHIN THE UNITED STATES. HE WAS SELECTED TO BE THE MINOR PLAYER AND BAGMAN. $$$
USTreasury Secy Tim Geithner might be the weakest link in the sprawling Syndicate team that extends into several financial chambers. His original work with the New York Fed is highly vulnerable. He was critical in the last Bush Admin in fulfilling the lusty TARP Fund distributions and assuring that his old firm Goldman Sachs was paid 100 cents on the dollar for its crippled Credit Default Swaps when no other firm benefited from such largesse. The action was patently illegal, but permitted within the Fascist Business Model of deep banker corruption. If and when the players within the USGovt are pursued via prosecution, Geithner might be the first to go down. He always was a weak low ranking lieutenant with no great accomplishments, and more importantly no strong friends. If he attempts to turn against his masters and to provide evidence to avoid jail time, he might suddenly begin flying exercises from a high rise building without wings. The evidence is slowly coming to light. Whether it will be acted upon depends on the tide of power shift. Watch for some surprising legal events extending from the damage done by the LIBOR scandal. The bankers are losing their power base. See the Daily Bail article (CLICK HERE).
◄$$$ LIBOR DETAILS ARE GIVEN ON PARTICIPANTS AND DEVICES. THE LEAD SLED
DOG BARCLAYS IS SPECIAL AMONG THE BANKS.
IT HAS OWNERSHIP STAKES IN A GAGGLE OF GLOBAL
BANKS. BARCLAYS IS LIKE A BANKER MUTUAL
FUND. THUS THE IMPORTANCE OF HITTING BARCLAYS
FIRST IN AN ORGANIZED ASSAULT FROM THE NEW
It is extremely important to realize that the LIBOR scandal breaks the banker power structure at the heart and core. It shatters the collusion links while prosecutions proceed. The list of LIBOR banks is impressive, all subject to legal assault in the next round. Here are the 17 banks that form the committee to set LIBOR: Bank of America, Bank of Tokyo-Mitsubishi UFJ Ltd, Barclays Bank, BNP Paribas, Citibank, Credit Agricole CIB, Credit Suisse, Deutsche Bank, HSBC, JPMorgan Chase, Lloyds Banking Group, Rabobank, Royal Bank of Canada, Societe Generale, Sumitomo Mitsui, Europe Ltd (SMBCE), The Norinchukin Bank, Royal Bank of Scotland Group, and Union Bank of Switzerland. That is an impressive comprehensive list that touches many nations, mostly in the West.
Among the banks on the list of LIBOR participants, none is more important than Barclays. It is a part owner of dozens of global banks. It is called the banker's bank. Thus when the LIBOR scandal broke out, and Barclays quickly admitted guilt and agreed to pay a whopping fine, the billboard was painted. The marquee message is that the big banks are under attack, and the integrity of the lead bank was the first smashed. The new sheriff in town from the East knew exactly where to hit first, in order to cause the most damage and to force silence among partners that might quickly convert into attacks of self-preservation.
Rob Kirby explained in rough terms some of the LIBOR dynamics. The big
◄$$$ FINALLY JPMORGAN WILL FACE A SUBPOENA OVER THE PFG-BEST PILFERED ACCOUNTS. THE MFGLOBAL REPEAT IS IN PROGRESS. HOWEVER, THE CASE MIGHT BE MOOT AFTER THE SENTINEL THEFT RULING. $$$
The trauma from MFGlobal client segregated account theft perpetrated by JPMorgan is still relatively fresh in memories. The recent bankruptcy of Peregrine Financial Group, aka PFG Best, appears to serve as chapter two in an MFGlobal redux. At least $200 million in PFG client account funds has evaporated. The first party of interest is none other than JPMorgan, which together with various other banks, will be the target of a subpoena by the PFG trustee. Once again, the monster criminal bank JPMorgan is implicated in this particular episode of client account vaporization, also known as plain sight theft. See the Zero Hedge article (CLICK HERE). The ruling by the courts over the Sentinel Mgmt Group case might offer usable precedent called upon hastily in order to throw the entire PFG Best case out. It will be interesting to observe the bold whitewash on a public stage.
## BRUSH FIRES SPREAD
◄$$$ THE LIKELY MURDER OF AN H.S.B.C. EXECUTIVE WILL WORK EFFECTIVELY
TO COVER UP A NEST OF MONEY LAUNDERING VIOLATIONS.
HOWEVER, THE GLOBAL BANK WITH
No sooner had the HSBC been fingered in narco money laundering with Mexican
banks, but my
The HSBC executive, Michael Foreman, aged 48 years, was reported missing the day before his death. That alone arouses suspicion. Then he dived from the fifth floor balcony to his death, to announce he was no longer missing. The body parts were then collected, which closed the missing person case. The show horrified attendees at a gallery on the South Bank. Obviously, police are not treating the incident as suspicious, under orders from the masters. The abnormality of a missing person, followed by a jump suicide, goes far beyond suspicion, more like indicative of plain sight murder. A the coroner's inquest, the senior bank manager was declared to have died of multiple traumatic injuries. Being thrown off a high balcony for wanting to come forward with criminal evidence often results in head injuries. Foreman knew too much, and probably was about to offer critical evidence and testimony. Or else the Boyz wanted to win HSBC attention with a knock. Recall back in April 2009, the chief financial officer of Freddy Mac supposed committed suicide. CFO David Kellermann was about to produce a mass of evidence also. A closer look would find both men happily married with families and a strong hopeful view of their futures, not men dragged by depression. But police have their orders. Justice is always compromised when bank criminality is at issue and in need of protection.
Another victim appears more like an apparent murder suicide. Deloitte partner
Daniel Pirron was shot in the head, maybe
by his own hand. He was linked to the
◄$$$ THE MONEY LAUNDERING THEME AMONG BANKERS TOOK AN UNUSUAL TURN WHEN STANDARD CHARTERED WAS ACCUSED OF DIRECT BANKING FUNCTIONS WITH IRAN. THE USGOVT HAS UPPED THE ANTE IN THE BANKER WARS, THREATENING A HEAVY FINE. AFTER NEGOTIATION, THE FINE WAS TINY AT 0.14% OF VOLUME. THE RETALIATION IS NEXT. THE USGOVT HAS A TENDENCY TO PAINT WITH A BROAD BRUSH, MIXING MONEY LAUNDERING AND COMMERCE WITH DESIGNATED TERRORIST NATIONS. THE BANKS ATTACK EACH OTHER AS CLEAR LINES ARE DRAWN AND DISTRUST GROWS. THE LIBOR SCANDAL AND INVESTIGATIONS HAS TURNED THE COLLUSION INTO A DEFENSIVE DISTRUST. $$$
The primary violation by
Standard Chartered Bank, with
The bank's operations inside the
Quick update. Prince Geithner and King Bernanke closed down the probe, and in
my opinion backed off with better judgment
in a massive bluff. They agreed to a wrist
slap to Standard Charter. In dispute was
the total amount of money involved in Iranian
transactions. Regardless, the
◄$$$ NEXT BANKER SCANDALS WILL FOCUS ON GOLD, THE PROCESS ALREADY BEGUN. THE COMPETENT ALTERNATIVE PRESS IS MOVING FOCUS TO THE NEXT SCANDAL ARENA. LIKE A BOIL WITH PUS, THE GOLD MARKET RISES TO THE SURFACE. BUT IT WILL TAKE MORE FESTERING TO BE SEEN. LOOK FOR SOME INTRIGUE IN THE CURRENCY MARKET FOR CORRUPT PRACTICES, PERHAPS WITH HEDGE FUND COLLUSION AND FLASH TRADING DEVICES. THE BROKEN DERIVATIVE MARKET IS RIPE FOR SCRUTINY. THE RUPTURES ARE COVERED BY PAPER MACHE IN VAST FLORAL ARRANGEMENTS THAT WOULD BEST BE SET FOR FUNERALS. THE INTEREST RATE SWAP CORRUPTION AND FALSE CREATION OF A FLIGHT TO SAFETY IN USTREASURY BONDS WILL BE UNMASKED AS JPMORGAN IS STRIPPED, LAYER BY LAYER. $$$
The Gold price fix process is a likely candidate for
a serious scrutiny in a corrupt process. Twice per day the price of the precious
metal is set, formally called 'FIXED' by
five banks: Bank of Nova Scotia, Deutsche
Bank, HSBC, Societe Generale, and Barclays.
The leader of the fix begins by proposing
a price. What follows is a simulation whereby
the five banks go through exercise that
attempt to balance the buy and sell orders
on their client books. When a stable price
converges, the Gold price is set and announced.
All transactions in gold in
The foreign exchange (FOREX) market is hardly a dark corner. It is the biggest
The role of High Frequency (Flash) Trading will be given more scrutiny over time also. It is a well known and publicized factor within the stock market, given blame for some mini crashes. It is laced throughout the FOREX and commodity markets as well. Many influential people question the flash activities and want the hammer brought down. What began as legitimate hedging, like of soybean crop prices later at harvest, or natural gas prices later when a project under contract kicks in, has turned into a gigantic fiasco of casino proportions. The derivative industry has put the entire global financial system not only at risk, but on a certain unavoidable path of destruction. As it breaks further, the criminal aspect will be revealed since the losses will be staggering. The banks have been placed in the middle of hedge practices. Over the years, they realized they could build a profit center, control the game, and buy another decade after the system actually fell into semi-ruin in the 1990 decade. What remains is a massive Interest Rate Swap contraption that keeps the official rates near zero percent even though the new debt security in supply is outsized, even though the willing creditor buyers in demand are nearly vanished. The spreading effective deep scrutiny for illegal practices within the derivative market has begun. It will extend to the other side, to Credit Default Swaps. These bond insurance contracts are laced with hoodlums, deceptions, and propaganda in the press also. The netting concept is a grand lie, as counter-parties tend to be dead on both sides, instead of mutually strong in corresponding support. The scandals most assuredly will reach the corrupted derivative arena traded over the counter, in a completely unregulated setting. See the UK Independent article (CLICK HERE).
◄$$$ BRUSH FIRES ARE TURNING INTO
The narcotics money laundering is conducted by continental regions. HSBC is
My focus is on jumps in the big brush fire that escalate the financial criminal
exposures. It is has been focused on LIBOR.
Next will be a jump to INTEREST RATE SWAP
defense of the USTBond bubble. Another jump
in the brush fire later will be to the ALLOCATED
GOLD account that is marred by gold bullion
seizures via swaps to gold certificate shell
games. That process will be thorny, since
it will begin with the GOLD PRICE FIX and
extend to the offices where gold has been
illegally snatched in order to maintain
the gold price in vast intervention projects
that occur daily. As the source of gold
bars is uncovered to be a combination of
Allocated Gold accounts and the GLD exchange
traded fund inventory, the controversy will
erupt. My gold trader source assures
that the shortfall deficit from illegal
Allocated Gold account raids totals well
over 40 thousand metric tons globally. The
multi-$billion class action lawsuits in
Perhaps another forest patch for jumping brush fires will be a jump to INSOLVENT BIG BANK RECOGNITION. The big banks are all painfully insolvent, wretched hollow structures from the mortgage bond fiasco, kept afloat in appearance by the adopted phony Financial Acccounting Standards Board rules blessed by the USCongress in April 2010. The scandal in bank insolvency will implicate the phony FASB accounting pervasive in banking industry, and the absurd valuations given to hundreds of $billions in currently stated assets on their corrupted balance sheets. The violations of Sarbanes Oxley law could be the crowbar that forces the corrupt balance sheets into the legal spotlight. The stock investors are protected by this law, and the violations are countless and significant.
However, the game changer, the story that will alter the nation once again in
a counter measure event will be the Mother
of All Jumps in the brush fires. It is inevitable,
as forces are gathering and building in
a powerful manner. The big jump will be
the outing of the 911 INSIDE JOB and it
full exposure. The real story will be told
of how it was actually a bank heist. The
movement of stolen assets in gold bars,
bearer bonds, and diamonds will be revealed
since the volume of close to one third of
a $trillion in total assets is simply too
large to hide forever, especially when friends
of the Syndicate responsible are dwindling.
Those in power responsible are attempting
to create a new war in order to continue
the cover layers, which is opposed. Those
in opposition are under great pressure,
which should break down and result in exposure
of the USGovt officials complicit. The criminal
aspect is horrific, since almost 3000 people
perished in the
My crucial Central European banker source expects a few other jumping brush
fires in time, related to World War II,
which are not oriented toward bankers. The
fuller account of many details from WW2
could come to light, such as raids of central
banks in Eastern Europe, participation in
Nazi war machine financing by Wall Street
banks, death count revision at the gulags,
role of the
The same Central European banker actually has a deceased uncle who rotted for
two years in the Eisenhower Detention Centers
## MONEY MARKET VULNERABLE LINK
◄$$$ SYSTEMIC RISK IS POSED BY MONEY MARKET FUNDS. ODDLY, MONEY MARKET FUNDS ARE NO LONGER THE STAID BORING TYPE. THEY ARE NOT CASH, BY OFFICIAL DECLARATION. A PROGRESSION OF RISK HAS HIT MORTGAGE BONDS A FEW YEARS AGO, SOVEREIGN BONDS IN THE LAST YEAR, AND FINALLY MONEY MARKET ACCOUNTS, WHICH HOLD TOGETHER THE ENTIRE BANKING SYSTEM AS THE LAST ELEMENT OF LIQUIDITY. $$$
Given how money market funds are the last pool of liquidity
that holds together the entire Western banking
system, it is under attack. More like being corralled by the banking leaders, to make sure it does not
exit and roam the golden fields looking
for better pasture. The new rule concept
is called Minimum Balance at Risk (MBR)
and is direct capital control applied domestically
◄$$$ A STUNNING PROGRESSION IS UNDERWAY, THE EROSION IF NOT RUIN OF ASSETS IN A SEQUENCE. NOTICE THAT SUPPOSEDLY SAFE PAPER ASSETS ARE AT GREAT RISK. THE EXTER PYRAMID IS AT WORK. THE END GAME IS TO HOLD GOLD, THE LAST ASSET STANDING, THE ONLY SURVIVOR. $$$
In recent years like in 2006 through 2009, investment in mortgage bonds proved unsafe. They used to be the stable staple among paper merchants, located with their real estate brethren of assets in the red group (highest risk). More recently, sovereign bonds have been shown to be unsafe, the supposedly sacrosanct bonds backed by governments. Finally, cash set aside in money market accounts is not safe. The progression of risk is palpably clear in the systemic breakdown. The present focus of interest is the orange group that includes government bonds. Money market funds lie in the yellow group since the ultimate in short-term paper, in my opinion. Next will be attack focused upon the short-term government bills. The winner and final survivor will be gold, the last asset standing to look over the charred ruin landscape. It is inevitable. It is written by the annals of history.
◄$$$ AN ATTACK ON THE $2.7 TRILLION IN MONEY MARKET FUNDS HAS COME, THE TRADITIONAL STATIC STABLE SHELF. OBSERVE THE STEALTH ACTION TOWARD CAPITAL CONTROLS. NEW RULES COULD FORCE A MAINTENANCE OF A MINIMUM AMOUNT IN EACH ACCOUNT. THE MONEY MARKET FUNDS SERVE AS SCARCE CAPITAL, A LIQUIDITY SOURCE THAT HOLDS TOGETHER THE INSOLVENT BANKING SYSTEM. $$$
Back in January 2010, it became apparent that money market funds were in danger. They are typically very safe, the safest, like cash funds. No longer. They have been abused to sustain the corrupted system. Depositors (investors) gradually have been losing their right to redeem money market accounts, in fallout from the extreme distress extended from mortgage bond holes followed by sovereign bond growing holes followed by more hidden derivative gaping holes. The USGovt is implicitly placing capital controls on the primary forms of cash aggregation available, such as $2.7 trillion in US money market funds. The regulators are leaning on proposed Money Market Rule 2a-7, which grants money market fund managers the option to "suspend redemptions to allow for the orderly liquidation of fund assets." The rule is obviously designed to prevent money market runs, thus bank runs, in veiled domestic capital controls. The all important Group of 30 which is basically the shadow central planners of the world is about to be revived by the New York Fed. A publication reveals their plan to mitigate systemic risks posed by money market funds, since they serve as the primary liquidity source in a land of dry scorched earth. The de-leverage process is devastating to the banks. The USFed does not wish to publicize the dire market liquidity conditions that are sure to worsen in the future months.
Basically, according to the USFed, the minimum balance rule would make the financial system more fair, would reduce systemic risk, and would protect smaller investors who can be left with losses if larger investors in their fund withdraw cash first. The proposal would require fraction of each fund investor's recent balances to be segregated into a sinking fund to absorb losses if the fund is liquidated. Later redemptions of these minimum balances at risk would be delayed for 30 days, thus creating a disincentive to suddenly redeem if the fund suddenly is at risk. The rule essentially socializes the losses and reduces the risk of panic. The actual motive for what the USFed is suggesting is open capital controls to avoid a banking system implosion. It is near; it is not avoidable. Once this proposal is implemented, the USFed or some other regulator will effectively have full control over how much money market cash can be withdrawn from the system at any given moment.
The pot contains $2.7 trillion in total, which if withdrawn in significant manner
could cause ruptures in the
◄$$$ RENEWED REPO ACTIVITY APPEARS TO BE A LAST DITCH INITIATIVE TO RESCUE THE MONEY MARKET FUNDS FROM SEVERE ILLIQUIDITY CONDITIONS. THE AMERICAN MASTER BANKERS CANNOT MAINTAIN CONTROL OF THE MONETARY SYSTEM, GIVEN THE ARTIFICIAL 0% RATE. IT IS ALL BREAKING DOWN. NEW GOVERNMENT RULES SHOW STARK DESPERATION. $$$
Counting the money markets, a ripe $3.5 trillion in idle cash sits on the sidelines. The central bankers, their lieutenants, and their henchmen at the big banks lust for it. They are frustrated by such idle funds. They have always been one of the most hated liquidity intermediaries by the central planners. They do not go into stocks. They do not go into bonds. They sit and collect miniscule interest. More importantly, they are inert, and cannot be incorporated into the re-hypothecation strategies of shadow banking. A repeat in conditions has developed, as money market funds (MMF) have once again begun to show signs of the climate before the Lehman Brothers implosion, better depicted as controlled demolition. In secretive maneuvers, the USFed Chairman Bernanke has eyes for at least $400 billion sitting in money market funds to shore up the banking system. If cable lines, tension rods, and containment chambers are installed, then future bank busts would force a vanishing act on the money market funds. This is the vile nature of re-hypothecation, soon to reach money market funds.
The gold community and hard asset money crowd have long argued that the core
reason for all developed world problems
is the gradual disappearance of good collateral
and viable money assets. Suppose the MMF
cash were to shift by force into bonds,
or any other traditionally (not anymore)
safe investments. The cash based assets
would enter the shadow liquidity system
and buy time. The implosion appears more
assured with each passing month, except
to those citizens with heads in the sand,
those unable to comprehend red light signal
semafores, those eternally optimistic in
the face of sequential storm centers, and
the plain dullard loyalists who believe
the system will prevail as always. The
goal of the central planners and fortress
defenders is to securitize the cash mountain
in order to provide at least a year or so
in additional breathing room for a system
that has essentially run out of good liquidity.
◄$$$ BIG BANK LIQUIDITY PROCESSES ARE BACK ON TAP. THE USFED HAS RESUMED THE REPO PROCESS AFTER A FOUR-YEAR HIATUS. THEY ADDED $600 MILLION ON A SINGLE DAY. THE BANK LIQUIDITY STRESS HAS BEEN CLEAR, BUT THE NEW PATH APPEARS TO SEEK REINFORCEMENT FOR THE Q.E. TO INFINITY THAT IS FAILING TO SHOW ONGOING BENEFITS. THE FRACTURE LIES IN THE MONEY MARKET FUNDS. $$$
The Reverse Repo Process is a liquidity drain event, when the USFed sells USTreasury instruments to the banks and dealers. The big bank excess reserves have typically been arranged as a zero cost base via TARP, TALF, or whatever liquidity device was used by the USFed, basically money giveaway schemes. Regular Repo Processes are liquidity adds, where the USFed purchases USTreasury instruments from the dealers, giving them cash with which they are free to speculate, buying anything from equities to commodities or possibly even making a loan. Here is the big change event. The last regular Repo Processes were done were in December 2008, all basically 1-month Repos. Put aside the point made by Rob Kirby that a 1-month duration does not make them regular at all, because 1-month repos are very rare. Kirby explained further. Most Repos are shorter, like 1-day or over-the-weekend.
The heavy Repo Process usage in the wake of the Lehman Brothers bust in autumn 2008 made intuitive sense since the USFed wanted extra liquidity gushing within the market during the crisis aftermath. The big banks needed to reach past the year end, a notoriously costly tight time for banks to obtain short-term funds in the inter-bank market. Exactly why on August 7th the USFed did the large $600 million over-the-weekend Repos and followed that up with another 3-day repo the next day, is not exactly clear. Four years have passed, and one can conclude a serious threat has arisen. Stress is building within the banking sector, likely arising in some monetary aggregate the USFed follows closely. Another possibility is the USFed sees something ugly, or has planned something drastic, or is anticipating something they do not want to share with us.
While the USFed assures these are merely test runs, adept bank analysts realize the central bank is issuing giant signals to the banks of what is in store. One day after the last Repo expired, a new 3-day Repo kicked in for a whopping $600 million, including not only USTreasurys, but also Agency Mortgage Bonds and standard Mortgage Bond securities. The event sticks out like a giant red flag. The highly dependent financial markets enjoy the liquidity infusion, celebrate the advantage, but ignore the red flag. Look further and conclude that the massive QE programs have lost their spark, no longer contain the magic. That is the nasty nature of Ponzi Schemes, currently run by the USFed in bond monetization. The appetite for liquidity becomes insatiable. The QE programs never ended, but their benefits have stopped. See the Zero Hedge article (CLICK HERE).
## CENTRAL BANKS SQUIRM
◄$$$ THE IDENTITY OF THE USTREASURY BOND CREDITORS IS MADE MURKY BY THE INTEREST RATE SWAP DEVICE. IT IS LEANED UPON TO EXTRAORDINARY DEGREE. IF FINAL DEMAND IS ARTIFICIAL, THEN THE PRIMARY CREDITOR FOR USGOVT DEBT IS A BYPRODUCT OF THE DERIVATIVE MACHINE AND OUTPUT FROM THE USDOLLAR EXPANSION BASE TOOL, THE PRINTING PRESS. THE BIG US-BANKS HOLD AN ORDER OF MAGNITUDE MORE USTBONDS THAN THEY ADMIT. THE SITUATION WILL MAKE THE DEBT DEFAULT EXTREMELY DIFFICULT TO RESOLVE, PERHAPS IMPOSSIBLE. CHAOS WILL REIGN. $$$
Great debate comes to describe what will happen to the USTBond complex as time
passes, since the situation is entirely
untenable. It cannot be sustained. The USGovt
debts are well over $1 trillion per year.
The creditors have largely left the process.
The Printing Pre$$ is used heavily. The
USFed lies about the extent of its usage.
The Jackass has described it as a
The USGovt will eventually be isolated, be involved in grotesque self-dealing
of the bonds, be called out as a Banana
Republic, and make unilateral decisions
on its own bonds to the point that the world
will force the issue. At the inevitable
global conference for a massive writedown
and debt forgiveness, all hell will break
loose. The big
A footnote. No new anticipated QE3 will ever come, since the Quantitative Easing never stopped. If a new QE3 is supposedly ordered into effect, then no benefit would be realized. That is the major undermining motive. The camp of critics would gain insight that the QE parade never ended and grand lies have been told. The financial markets would feel betrayed and make their anger known in a loud manner. The benefit from recent bond monetization has lost almost all traction, precisely as Ponzi schemes play out. The USFed is using the public hopes of QE to levitate the financial markets, like waiting for Godot. The sham is slowly being understood. The USFed is not printing like crazy because creditors complained about damage done to reserves, and about rising costs like with food. Entire societies have been destabilized. See the Aziz Economic article (CLICK HERE).
◄$$$ USFED MIGHT BE INSTALLING INTEREST RATE SWAP AS POLICY WITHIN THE
USTREASURY BOND STRUCTURE. THE USTBOND RALLY
HAD BEEN FLASHING A DANGEROUS SIGNAL UNTIL
EARLY AUGUST WHEN IT BEGAN A MARCH TO 1.8%.
IT IS UNCLEAR WHO THE SELLERS ARE. WITH
THE PROSPECT OF NEGATIVE BOND YIELDS RISING,
THE PLAN FOR FLOATING RATE NOTES APPEARS
LIKE A PLOY BETTER LABELED
The USGovt debt limit is expected to be reached at the end of this year. By
that time, extraordinary measures will be
used to fund the federal operations into
early 2013. As if the Printing Press and
supporting derivative machinery was not
enough. The USDept Treasury announced it
is developing a Floating Rate Note program
that could be operational in a year or more,
in response to possible negative rate
bidding. An official auction where negative
yields dominate would erode all integrity
from the lead sovereign bond linked to the
USDollar global reserve currency. They
might as well call it the Weimar Note. The
sale of $72 billion in notes and bonds in
refunding processes over the first full
week of August had an impact, with a damaging
followup last week. The 10-year USTBond
yield was steady at 1.6% all of June. The
TNX touched a 1.4% low in late July. But
a momentum swing to 1.8% has occurred, sure
to place tremendous unwieldy pressure on
Interest Rate Swaps that manage as stabilizers
The Floating Rate (
◄$$$ A BILL FOR USFED AUDIT PROCEEDS SLOWLY BUT SURELY. THE BILL WAS APPROVED BY THE US-HOUSE. COMPROMISE LEADS TO EXPOSURE. THE CORRUPTION OF THE BANKING LEADERSHIP IS GRADUALLY GOING MAINSTREAM. $$$
The Dodd-Frank Financial Regulatory Bill contained some compromises by the banking industry to permit audits of the USFed. They seem to care little, since it is like an accounting of the barn after the horses left. The gigantic multi-$trillion loans continue unabated, unchecked. USFed Chairman Bernanke and USHouse Finance Committee leader Frank have openly expressed their discontent. But the USFed Audit Bill moves along in the approval process. A potentially stunning blow has come to the dark Syndicate forces by none other than Harry Reid, out of the Obama camp. No wonder the Wall Street donations pour in for Romney. See the Bloomberg article (CLICK HERE) and the Road To Roota article (CLICK HERE). The Jackass does not hold out much hope for the audit process. It is so incremental and toothless. So one more window into the dark castle is granted. No halt will come to their unbridled devotion with false money loans made to the cohort global banks, $23 trillion in two tranches. However, the bigger benefit is the gradual perception that the USFed and USDept Treasury are engaged in gross criminal activity. The perception is going mainstream, to my surprise.
◄$$$ EURO CENTRAL BANK HEAD DRAGHI IS CAUGHT IN AN INTRACTABLE BIND. HE
IS USING BRINKSMAN MOVES TO SECURE POWER.
ON ONE SIDE HE ATTEMPTS TO IMPOSE A QUARANTINE
High noon approaches. Great power struggles ensue. The actions taken by Mario
Draghi appear to be misdirected assaults,
like a feint in sword fighting. He raises
the market expectations for liquidity grants,
then falls short of delivering them, which
leaves the seniority bond issue in limbo.
The result is more added pressure to Spanish
and Italian Govt Bonds. He could be deliberately
forcing them down the bailout route, never
having wanted to support them from his first
month in office. Once they request bailouts,
In early August, Mario Draghi of the ECB announced possible rule changes on
bond collateral used for loans at its window.
Discussions would take place in September.
The central bank is leaning toward a repeat
of such measures as its wrecking ball of
cheap loans, known as Long-Term Refinance
Operations (LTRO). Clearly, if another
LTRO is launched with a big participation
by Spanish banks, where Spanish Govt Bonds
are used at the window, the Repo market
could grow much unmanageable. The fostered
reliance by peripheral banks on the central
bank is certain to remain high. The buzz
among analysts was that the LTRO extension
could contribute to the decline of the cash
market because the Repo is needed to grease
the cash market. The money market funds
will face tremendous pressures until they
break wide open in a grand controversy,
complete with bank runs. Unlike
A review of USTreasury Bond demand in the last year reveals a theme that reflects
on the next decade with a bright billboard.
It is difficult to change commitments after
two generations, even if the debt picture
is abysmal. Over the past three years, the
biggest institutional buyer of USTBonds
has been the USFed. No surprise there, except
to the lapdog US financial press, which
still dickers over QE when it never stopped.
To be sure,
The Chinese total USTBond holdings had fallen from over $1.3 trillion to $1.15
trillion in December, where it has stayed
without change in 2012.
No solutions ever came, only patches. The Greek Govt is out of money. The prospect
of debt default smacks in the face every
single day, not with cultured intervals
of two months when meetings are arranged.
As politicians bide time,
The farce of
◄$$$ A BIG BUYER OF FRENCH GOVT BONDS IS EVIDENT, BUT NOT PUBLICIZED.
MY GUESS IS
The following came from the LeMetropole Cafe run by Bill Murphy in early August. The French Govt Bond auctions are showing less stress, more demand, and ample liquidity in a surprising manner. Some party finds favor with French debt. The bond summary was as follows.
fall sharply at French auctions:
Neil Keenan is a noted Dragon Bond lawyer. He shared some interesting news from
an Asian backwater,
Thanks to the following for charts StockCharts, Financial Times, UK Independent, Wall Street Journal, Zero Hedge, Business Insider, Calculated Risk, Shadow Govt Statistics, Market Watch.