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The Ghost of Failed Banks Returns

The Ghost of Failed Banks Returns 

Last week’s failure in the US repo market might have had something to do with Deutsche Bank’s disposal of its prime brokerage to BNP, bringing an unwelcome spotlight to the troubled bank and other foreign banks with prime brokerages in America. There are also worrying similarities between Germany’s Deutsche Bank today and Austria’s Credit-Anstalt in 1931, only the scale is far larger and additionally includes derivatives with a gross value of $50 trillion. 

If the repo problem spreads, it could also raise questions over the synthetic ETF industry, whose cash and deposits may face escalating counterparty risks in some of the large banks and their prime brokerages. Managers of synthetic ETFs should be urgently re-evaluating their contractual relationships.

Whoever the repo failure involved, it is likely to prove a watershed moment, causing US bankers to more widely consider their exposure to counterparty risk and risky loans, particularly leveraged loans and their collateralised form in CLOs. The deterioration in global trade prospects, as well as the US economic outlook and the likelihood that reducing dollar interest rates to the zero bound will prove insufficient to reverse a decline, will take on a new relevance to their decisions.

Problems under the surface

Last week, something unusual happened: instead of the more normal reverse repurchase agreements, the Fed escalated its repurchase agreements (repos). For the avoidance of doubt, a reverse repo by the Fed involves the Fed borrowing money from commercial banks, secured by collateral held on its balance sheet, typically US Treasury bills. Reverse repos withdraw liquidity from the banking system. With a repo, the opposite happens: the Fed takes in collateral from the banking system and lends money against the collateral, injecting liquidity into the system. The use of reverse repos can be regarded as the Fed’s principal liquidity management tool when the banks have substantial reserves parked with the Fed, which is the case today.

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The Fantasy of Central Bank “Growth” Is Finally Imploding

The Fantasy of Central Bank “Growth” Is Finally Imploding

Having destroyed discipline, central banks have no way out of the corner they’ve painted us into.

It was such a wonderful fantasy: just give a handful of bankers, financiers and corporations trillions of dollars at near-zero rates of interest, and this flood of credit and cash into the apex of the wealth-power pyramid would magically generate a new round of investments in productivity-improving infrastructure and equipment, which would trickle down to the masses in the form of higher wages, enabling the masses to borrow and spend more on consumption, powering the Nirvana of modern economics: a self-sustaining, self-reinforcing expansion of growth.

But alas, there is no self-sustaining, self-reinforcing expansion of growth; there are only massive, increasingly fragile asset bubbles, stagnant wages and a New Gilded Age as the handful of bankers, financiers and corporations that were handed unlimited nearly free money enriched themselves at the expense of everyone else.

Central banks’ near-zero interest rates and trillions in new credit destroyed discipline and price discovery, the bedrock of any economy, capitalist or socialist.

When credit is nearly free to borrow in unlimited quantities, there’s no need for discipline, and so a year of university costs $50,000 instead of $10,000, houses that should cost $200,000 now cost $1 million and a bridge that should have cost $100 million costs $500 million. Nobody can afford anything any more because the answer in the era of central bank “growth” is: just borrow more, it won’t cost you much because interest rates are so low.

And with capital (i.e. saved earnings) getting essentially zero yield thanks to central bank ZIRP and NIRP (zero or negative interest rate policies), then all the credit has poured into speculative assets, inflating unprecedented asset bubbles that will destroy much of the financial system when they finally pop, as all asset bubbles eventually do.

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Was 9/11 A Plot to Seize Power?

Was 9/11 A Plot to Seize Power? 

QUESTION: What is your view on the new demands for an investigation that there is “overwhelming evidence” that the buildings were brought down by explosives?

KD

ANSWER: I do not know about the Twin Towers, but I can say that the first World Trade Center bombers drew the World Trade Center on the wall of their cell in MCC with planes flying into it. There is no question that there was a terrorist attack. HOWEVER !!!!!!!! There is evidence, I know PERSONALLY, that the government knew what they were going to do. Do not confuse the fact that there were planted explosives to try to pretend there was not a terrorist attack. They just used the attack as cover.

I focus on building 7, which was never hit by any plane, yet it fell like a pancake and that was indicative of explosives. Curiously, the SEC was there and this is where they kept the evidence for court cases. Gun possession cases should have been dismissed but the prosecutors then showed photos of guns. The joke was that they used the same photo for everyone. Judges just accepted it and pronounced, “Take him away.” That is not the way the law is supposed to work.

I had tapes that would have put the whole New York banker crew in prison if we had a real government. There were tapes covering every manipulation they pulled off from rhodium to platinum and silver. It was the platinum manipulation that I had a tape of where they admitted to bribing to a Russian minister to “recall” their platinum to take an inventory. They forced platinum to rally, then the Russian minister announced they found “more” platinum to ensure the price would crash after they flipped their positions. Even Ford Motor Company was looking into suing over that manipulation.

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Negative Interest Rates Spread To Mortgage Bonds

Negative Interest Rates Spread To Mortgage Bonds

There are trillions of dollars of bonds in the world with negative yields – a fact with which future historians will find baffling.

Until now those negative yields have been limited to the safest types of bonds issued by governments and major corporations. But this week a new category of negative-yielding paper joined the party: mortgage-backed bonds. 

Bankers Stunned as Negative Rates Sweep Across Danish Mortgages

(Investing.com) – At the biggest mortgage bank in the world’s largest covered-bond market, a banker took a few steps away from his desk this week to make sure his eyes weren’t deceiving him.

As mortgage-bond refinancing auctions came to a close in Denmark, it was clear that homeowners in the country were about to get negative interest rates on their loans for all maturities through to five years, representing multiple all-time lows for borrowing costs.

“During this week’s auctions, there were three times when I had to stand back a little from the screen and raise my eyebrows somewhat,” said Jeppe Borre, who analyzes the mortgage-bond market from a unit of the Nykredit group that dominates Denmark’s $450 billion home-loan industry.

For one-year adjustable-rate mortgage bonds, Nykredit’s refinancing auctions resulted in a negative rate of 0.23%. The three-year rate was minus 0.28%, while the five-year rate was minus 0.04%.

The record-low mortgage rates, which don’t take into account the fees that homeowners pay their banks, are the latest reflection of the global shift in the monetary environment as central banks delay plans to remove stimulus amid concerns about economic growth.

Denmark has had negative rates longer than any other country. The central bank in Copenhagen first pushed its main rate below zero in the middle of 2012, in an effort to defend the krone’s peg to the euro. The ultra-low rate environment has dragged down the entire Danish yield curve, with households in the country paying as little as 1% to borrow for 30 years. That’s considerably less than the U.S. government.

 …click on the above link to read the rest of the article…

How Do You Beat The Bankers At Their Own Game?

How Do You Beat The Bankers At Their Own Game?

Those that have been following events for several years know they are under attack by an enemy that has no face and means to do them great harm. Nothing less than their sovereignty and freedom is at stake. Absolute control over people and resources is the ultimate goal.

People need to understand that the bankers need to collapse everything and leave the population in want of resources and supplies. Just like after a natural disaster when the government shows up to provide help to those that have lost everything, the bankers want to show up after the population has lost everything in a collapse, to be their savior and gain control of everyone by offering resources in exchange for compliance.

There are several actions you can take to prevent these people from gaining control over your life. 

You must be able to feed yourself-

You must have a home to live in that you own free and clear-

You need to be your own energy company-

You need to be your own bank-

You need to be able to defend what you have-

You need to have skills to operate your own business-

You need to promote a community based economy-

To put it simply, you need to get out of their game and start your own. Remember, the house always wins.

The bankers can only win the game if people are dependent on the elite for everyday necessities. The bankers have created a society of dependent people that they can exploit. They can only continue to exploit people as long as they are dependent on the bankers for the things they need. Once this dependence is broken the bankers lose much of their control on society. This dependence is broken by people who can provide their own necessities. 

 …click on the above link to read the rest of the article…

Empty Words Are Failing. A Timeline For What Comes Next

Empty Words Are Failing. A Timeline For What Comes Next

A quick recap of the past couple of months: 

Stocks plunge.

The politicians, bureaucrats and bankers who depend on artificially-elevated financial asset prices start to panic.

The Fed announces that maybe it won’t have to raise interest rates any more, and the president announces a temporary cease-fire in the trade war with China.

The markets bounce, leading some to conclude that the worst is over and it’s time to go back to buying the dip.

A larger number of people conclude that the changes in policy were really just empty words. No actual actions had taken place.

Stocks start falling again. You are here — as this is written on Tuesday Dec 4, the Dow is down about 300 points.

What happens next?
Think of the past few months as the first act in a play that is performed in virtually every business cycle, with later acts following a predictable script. Here’s how it’s likely to go this time:

Words give way to modest action (early 2019). When the markets figure out that empty promises don’t change the underlying reality of slowing growth, falling corporate profits and rising loan defaults, they return to panic mode. Governments are then forced to actually do things to try to stop the bleeding. In the current US case, that means the Fed will announce that it’s done raising rates and will soon start cutting. Trump, meanwhile, will cut a trade deal with China that accomplishes little but removes the future uncertainty.

This will be greeted with another few days of market euphoria, followed by the realization that, again, nothing substantive has changed. Stocks will resume their decline. Let’s call this “2008 revisited.”

DJIA 2008 empty words fail

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Bankers And Tech Executives Know The Collapse Of Society Is Coming And Are Feverishly Prepping For It

Bankers And Tech Executives Know The Collapse Of Society Is Coming And Are Feverishly Prepping For It

While most of the general population has been lulled into a false sense of security, bankers and tech executives are spending millions upon millions of dollars to prepare for the collapse of society.  Do they know something that the rest of us do not?  Apparently talk of doomsday scenarios has become very popular at Silicon Valley dinner parties, and as you will see below, having a plan to escape to New Zealand appears to be a very popular “Plan B” among the tech elite.  Of course this is not just a west coast phenomenon.  Many bankers on the east coast have similar concerns and have also been developing contingency plans.  Ladies and gentlemen, they know what is coming and they are feverishly getting prepared for it.  In fact, J.P. Morgan Chase’s head quant just publicly declared that the next financial crisis is going to result in “social unrest not seen in the U.S. in half a century”.  The following comes from CNBC

Sudden, severe stock sell-offs sparked by lightning-fast machines. Unprecedented actions by central banks to shore up asset prices. Social unrest not seen in the U.S. in half a century.

That’s how J.P. Morgan Chase‘s head quant, Marko Kolanovic, envisions the next financial crisis. The forces that have transformed markets in the last decade, namely the rise of computerized trading and passive investing, are setting up conditions for potentially violent moves once the current bull market ends, according to a report from Kolanovic sent to the bank’s clients on Tuesday. His note is part of a 168-page mega-report, written for the 10th anniversary of the 2008 financial crisis, with perspectives from 48 of the bank’s analysts and economists.

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Confronting the money-power elite

Confronting the money-power elite

Those who control the creation and allocation of money are able to control every other aspect of society. Shouldn’t that be us?

Credit: Flickr/Liz West. CC BY 2.0.

The world today is controlled by a small elite group that has been increasingly concentrating power and wealth in their own hands. There are many observable facets to this power structure, including the military security complex that President Eisenhower warned against, the fossil fuel interests, and the neoconservatives and others that are promoting US  hegemony around the world, but the most powerful and overarching force is the ‘money power’ that controls money, banking, and finance worldwide. It is clear that those who control the creation and allocation of money through the banking system are able to control virtually every other aspect of society.

What can be done to turn the tide? How can we empower ourselves to assert our desires for a more fair, humane and peaceful world order? I believe that the greatest possibility of bringing about the desired changes lies in economic and political innovation and restructuring.

The monopolization of credit.

I came to realize many years ago that the primary mechanism by which people are controlled is the system of money, banking, and finance. The power elite have long known this and have used it to enrich themselves and consolidate their grip. Though we take it for granted, money has become an utter necessity for surviving in the modern world. But unlike water, air, food, and energy, money is not a natural substance—it is a human contrivance, and it has been contrived in such a way as to centralize power and concentrate wealth.

Money today is essentially credit, and the control of our collective credit has been monopolized in the hands of a cartel comprised of huge private banks with the complicity of politicians who control central governments.

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Never Trust A Banker About Oil Prices

Never Trust A Banker About Oil Prices

Shale

In recent weeks I’ve commented on the powerful bullish forces that have combined in oil and oil stocks and your need to increase your exposure to them. So, before going on to other topics, this has to be the start of any column until further notice, despite the weakness in stock indexes overall.

OPEC and particularly Saudi Arabia continue to drop not so quiet hints about the importance of higher oil prices – for the cartel and the upcoming IPO of Saudi Aramco. In case anyone might have forgotten about their one-shot chance to remake their entire economy and culture, another ‘leak’ of Saudi oil reserve numbers was served up in the past week – a positive one, of course.

Many of the analysts who previously were pessimistic about the rise in oil prices have been slowly and steadily raising their projections. That should neither encourage us or bother us, as bank analysts have a dismal record of correctly projecting prices much into the future. One should always trust a trader first; whose obligation is to his own investments and money and not to retaining the respect of the community or keeping the job. Always remember: An analyst’s first priority is not to be wrong, while a trader doesn’t care if he’s wrong or right, only if he’s got the right side of the trade and making money.

Similarly, the speculative trade from hedge funds continues to be almost uniformly long – a fact that used to bother me much more in the days when bank proprietary trade desks dominated the speculators. In those days, their own positions would often be in conflict with sales, and, Chinese wall or not – could make for some very sticky and fast reversals of positioning inside the banks.

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Tomgram: Nomi Prins, How to Set the Economy on Fire

Tomgram: Nomi Prins, How to Set the Economy on Fire

There’s no way to measure just how cheery this period really is — not if you’re the CEO of a major company. Just as the World Economic Summit was opening in Davos, Switzerland, and President Donald Trump was flying in to put his mark on the moment, PwS, a global consulting firm, released its annual survey of 1,300 CEOs. “The report,” wrote the Washington Post‘s Tory Newmyer, “found CEO optimism at a record high — with 57% predicting growth would accelerate worldwide this year — after lodging its biggest single-year leap, up from just 29% who predicted as much last year.” In the wake of the passage of staggering tax cuts for corporations and the truly wealthy, the most ebullient among them were, of course, North American CEOs!

And that wasn’t even the best news, not if you lived in a penthouse somewhere on this planet anyway.  As Davos began, Oxfam issued “Reward Work, Not Wealth,” its new report indicating that “82% of the wealth generated last year went to the richest one percent of the global population, while the 3.7 billion people who make up the poorest half of the world saw no increase in their wealth.”  Oh, and here’s a footnote of further cheer from Oxfam: “It takes just four days for a CEO from one of the top five global fashion brands to earn what a Bangladeshi garment worker will earn in her lifetime. In the U.S., it takes slightly over one working day for a CEO to earn what an ordinary worker makes in a year.”

In that context, Donald Trump gave an America First, exceptionalist pep talk at Davos filled with expectable falsehoods, lies, and exaggerations to a crowd — “some of the remarkable citizens from all over the world,” as he put it — primed to applaud (though there were a few hisses and boos and the rare protest, too).

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How The Elite Dominate The World – Part 2: 99.9% Of The Global Population Lives In A Country With A Central Bank

How The Elite Dominate The World – Part 2: 99.9% Of The Global Population Lives In A Country With A Central Bank

Even though the nations of the world are very deeply divided on almost everything else, somehow virtually all of them have been convinced that central banking is the way to go.  Today, less than 0.1% of the population of the world lives in a country that does not have a central bank.  Do you think that there is any possible way that this is a coincidence?  And it is also not a coincidence that we are now facing the greatest debt bubble in the history of the world.  In Part I of this series, I discussed the fact that total global debt has reached 217 trillion dollars.  Once you understand that central banks are designed to create endless debt, and once you understand that 99.9% of the global population lives in a country that has a central bank, then it finally makes sense why we have accumulated so much debt.  The elite of the world use debt as a tool of enslavement, and central banking has allowed them to literally enslave the entire planet.

Some of you may not be familiar with how a “central bank” differs from a normal bank.  The following definition of a “central bank” comes from Wikipedia

A central bank, reserve bank, or monetary authority is an institution that manages a state’s currency, money supply, and interest rates. Central banks also usually oversee the commercial banking system of their respective countries. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the monetary base in the state, and usually also prints the national currency,[1] which usually serves as the state’s legal tender.

 

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The Horror! The Horror! (Part Two)

THE HORROR! THE HORROR! (PART TWO)

In Part One of this article I detailed how propaganda has been utilized by the Deep State for decades to control the minds of the masses and allow those in control to reap the benefits of never ending war. In Part Two I will discuss recent events, false flags, and propaganda campaigns utilized by the Deep State to push the world to the brink of war.

“We penetrated deeper and deeper into the heart of darkness”Joseph Conrad, Heart of Darkness

The use of graphic images, electronically transmitted across the world in an instant, along with a consistent false narrative promoted by the captured corporate media, is the preferred means of appealing to the emotions of those who want to believe atrocity propaganda. Instigating a march to war through the use of unfounded fear, misinformation, staged photo ops, and appealing to passions and prejudices was as revolting to Albert Einstein  in the 1930s as it is today to normal thinking individuals.

“He who joyfully marches to music in rank and file has already earned my contempt. He has been given a large brain by mistake, since for him the spinal cord would fully suffice. This disgrace to civilization should be done away with at once. Heroism at command, senseless brutality, deplorable love-of-country stance, how violently I hate all this, how despicable and ignoble war is; I would rather be torn to shreds than be a part of so base an action! It is my conviction that killing under the cloak of war is nothing but an act of murder.” – Albert Einstein

It seems the level and intensity of the propaganda campaigns has ratcheted up dramatically in the last half dozen years and appears to be reaching a crescendo as we speak.

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Bankers, Always the Last to Know

Bankers, Always the Last to Know

Commercial real estate is starting to cool, with deal volume last year dropping 10% from 2015 to $493.7 billion, while, as Peter Grant reports for the Wall Street Journal and Grant’s Interest Rate Observer, “the early stages of 2017 have delivered even weaker results: $50.3 billion in transaction value through March 1 compared to $80.1 billion in the like period in 2015 (a 37.2% yearly drop).”

One would guess bankers would take notice and turn shy. However, Craig Bender of ING real estate, tells  the Wall Street Journal:  “The banks are hungry.  The life insurance groups are hungry”.

It seems Lord Keynes had one thing right when he wrote, “Banks and bankers are by nature blind. They have not seen what was coming…. A ‘sound banker,’ alas! is not one who foresees danger and avoids it, but one who, when he is ruined, is ruined in a conventional and orthodox way along with his fellows, so that no one can really blame him.”

In America’s hottest commercial market, New York, a veritable magnet for hot, cheap, and foreign funds, the first quarter of 2017 was a bust. Large office property sales (those with over 50,000 square feet) that closed in Q1 2017 plunged 63% year-over-year, from $5.54 billion in Q1 2016 to $2.1 billion. It was the lowest transaction amount in any quarter since Q1 2013, writes Wolf Richter.

Not only did the amount of square footage sold nosedive, but the price per square foot fell as well. Richter points out the commercial property bubble has been inflating unabated since 2009. “The big freeze in New York City may be another sign that this bubble too can only go so far, and that peak craziness has been reached,” he writes. “The Fed is now specifically fretting about this commercial real estate bubble, and how to contain it before it takes down the financial system.”

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Hayes: “A Lot Of What I Know Even The DOJ Is In The Dark”

Hayes: “A Lot Of What I Know Even The DOJ Is In The Dark”

An exclusive excerpt from the hot new financial and legal thriller “The Spider Network” by David Enrich

The small ski resort town, nestled in the mountains outside the city of Karuizawa, was a popular destination for day trips for Japanese families. Bustling during the day, it was mostly quiet this Saturday night. Clouds cloaked the moon.

A chartered bus pulled up outside a bar, its windows aglow. A light snow was falling. Out into the peaceful evening stumbled dozens of rowdy bankers, some toting tall cans of Asahi and Kirin. Most of them were drunk. They quickly took over the small bar.

The drinkers were employees of the American bank Citigroup, one of the world’s largest and most troubled financial institutions. A year earlier, at the beginning of 2009, American taxpayers had finished pumping a staggering $45 billion into Citigroup to bail out the collapsing behemoth. Now the transfused recipient was treating dozens of its investment banking employees to a weekend getaway. The bankers were housed nearby in a sprawling luxury hotel, each employee’s room designed in Japan’s typical spare style.

These festivities weren’t so spartan. The point was to foster camaraderie, and that was happening in spades. The party had begun on the hundred-mile ride on the bullet train out from Tokyo. After a day of hitting the slopes, Citigroup ferried the bankers to a bowling alley, where they drank and bowled and drank some more. Their bus had then deposited the intoxicated crew at this bar, before leaving the partiers behind to fend for themselves.

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Sometimes You Just Have to Go With the Flow When Nothing Flows

Todd River Regatta
Australia-OutbackThe central banks are clueless and have no control over the economy. This whole thing reminds me of Australia. I loved going into the Outback, driving through rivers, and seeing ant hills that were taller than the Jeep. I was invited to go to the Todd River Regatta in the middle of the desert. I thought it was a joke. They said, “No mate! Come on!”

Armstrong Palm Valley Australia

 

I was perplexed at first. How can you have a regatta in the middle of a desert? Well, only Australia could figure that one out. They raced in pretend boats down an ancient river bed where no white man has ever seen water flow. They held the pretend boats up around their waist and raced down the riverbed. It was good fun. I actually joined in on the camel races.

We have the same thing going on now in politics and finance — just living the dream. Negative interest rates punish savers, and bankrupt pensions are creating a collapse in socialism that threatens civil unrest on a grand scale beginning next year (2017). Then we have politicians raising taxes and creating mountains of regulations that nobody can figure out without a lawyer and an accountant preventing small businesses from forming. Those who want to always rule the world  are brain-dead and it is impossible for them to figure out why small businesses are not expanding to create jobs. Duh! They craft pretend theories and run down dried-up riverbeds where there is no water and proclaim to the world they are “stimulating” the economy when they encourage bankers not to lend paying them for excess reserves and then raise taxes because they want to be “fiscally responsible” to the bond holders. You really cannot reconcile these actions and theories. It is just the Todd River Regatta on a grand scale.

Olduvai IV: Courage
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Olduvai II: Exodus
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