When the $1 QUADRILLION plus derivatives market fails, the inventor of the financial weapon of mass destruction known as the derivatives market- Blythe Masters could quite literally surpass Lenin and Mao Tse-tung as the person responsible for the greatest loss of human life in history.
The Columbia Business School recently conducted an interactive debate entitled “Financial Innovation: A Risky Business?with the aforementioned Blythe Masters of JPMorgan, along with Barny Frank, Gary Gensler, and a panel of experts debating the merits of financial innovation.

The one thing we can say with certainty after watching the 65 minute discussion/debate: (other than that there is a reason that Joe-6 Pack has no comprehension of what is facing the derivatives and entire financial market when the first domino fails) is don’t expect the CFTC led by Goldman alum Gensler to take ANY action against Blythe’s commodities division at JPM over alleged silver manipulation.

Full nausea inducing discussion on the merits of financial innovation below:


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  1. Financial Innovation
    That’s a very respectable sounding phrase.  It translates to ‘creating new tentacles and siphons to drain the lifeblood from an economy’.
    The financial industry produces misery and poverty, unemployment and war.  Oh, and billions for its operators.
    An industry we were better off without. Too bad they didn’t ship these leeches to China in stead of our manufacturing base.

    • Their time is coming when they will be hunted to the far flung parts of the planet. When to many people take losses that basically leave them homeless they will rise up in protest and it will be violent.

    • Indeed it will, May, but anything they end up doing is likely to be justified.  Banksters will become the new Nazis and will be hunted to extinction across the globe.

  2. I just love these televised discussions about finance. Everyone is so level headed, righteous and virtuous for the cameras and the “simulated” environments they discuss but, just become a fly on the wall of the meetings behind closed doors………..I’m sure you will get a VERY different picture of their morality. I listened for 15 minutes and I couldn’t stomach anymore. These people are very good at presenting a ‘front’ but, in the end, they are blowing up the financial world that is “all in a day’s work”.

    To hell with all of them. There’s not an honest banker or hedge fund manager anywhere in this world.

  3. 1-13 on the panal  2-Eeverything is criminal and they both know it!  3-Wrong! the seller must assume that their client is unaware and that is why the client came to them admitting they don’t know! 4-I stop @ four because it makes me want to puke! Should we only be allowed to rob those that should understand that they are being robbed or should we stop after robbing everyone!

  4. Blythe; Your criminal honesty is brutal! Keep it up you evil witch. You never have and never intend to work in an industry! The person who doesn’t understand what he is selling shouldn’t be selling it! Thats why we don’t sell silver! Because we Don’t know what it is worth, we only know that it is worth much more than people like you would have us believe it is worth!

  5. When you don’t even have to own the underlying principle of a transaction and you are literally betting on the future movement, no wonder this has gotten into the quadrillions of dollars worth of exposure.  When you can buy insurance and don’t even have to own what you are buying insurance on, then this is a problem.  This is simply a circus.  Take put options on US treasuries for example.  Put options on the treasuries are a cheap form of insurance just in case the bonds go bust.  The Fed has made this market of put options a very cheap and easy way to drive the yields on the treasuries lower.  Since the Fed made put options so cheap, every hedge fund has bought these investments if they own US treasuries.  The hedge funds think they have hedged their positions.  The higher the yield curve on the bonds, the higher the premiums on the put options.  Since the yields on the bonds are at all time lows, the put options are very cheap to own.  CDS and put options distorts the markets because they lower the yield curve and it makes lending easier even to high risk individuals.  This created the housing boom in the US.  CDS and put options dropped interest rates and allowed anyone to qualify for a loan.  Also, they lowered the lending standards as well to blow up the housing bubble.  Cheap CDS and put options also distorts the safety of US treasuries.  The lower the yields creates a safe haven play.  The hedge funds and commercial banks have figured out how to play this game.  They buy treasuries and then buy put options to hedge against.  This strategy is offset by losses on the bonds with the gain of the put options value.  Just buying treasuries and sitting on them is death because the yields are lower then the rate of inflation.  You must buy put options to offset the loss of holding the bonds.  This market is based on fraud and Masters understands this because she is the mastermind of CDS.  She is basically saying you can buy put options on your own debt.  This is what the Fed is doing.  They are selling insurance on their own created debt which is US treasuries.  These CDS and put options will never be paid out.  The ISDA will never rule a official default on US paper.  The derivatives like put options and CDS would bankrupt the world if they had to be paid out. JP Morgan has 78 trillion in OTC derivative exposure.  That is 3 and half times bigger then the world’s GDP.  No way in hell the ISDA will rule a default on any major country.  One more very important video by Eric DeCarbonnel.  This video is amazing.  If you have time please watch it.  It will give anyone a better understanding of what the Fed is doing to the yield curve and the treasuries using these derivatives.  It’s fraud to the highest order.


  6. How long can the fed keep a handle on inflation? Prices on common items like food and clothing have gone up a lot the last year. Much higher and people who rely on the government for food stamps won’t be able to buy enough to last the month. Food shelves are being stripped bare already in some cities. Hungry people with kids get desperate enough and civil unrest will explode.
    Bankers are running on borrowed time, that meeting would have been a good chance to fix what is wrong in this world…

    • Who says that the Fed IS handling inflation?  Not me… and not John Williams of Shadow Government Statistics either.  In fact, he is calculating inflation in the exact same way that the Gov did prior to 1994 before they started playing games with the numbers to make the Gov and the Fed policies look better than they are.  John says inflation is in the 9.5-10% area now and he has no ax to grind so I tend to believe his comments.  Like lawyers , there are probably 4-5 economists in this world to whom it is worthwhile to spend some time listening and Williams is one of them.  John includes food and fuel, two things which we all MUST buy.  Eliminating them from the CPI is complete rubbish and Bernanke and the rest of the FOMC are well aware of it.  Even economists have to study basic math in college and even some basic science, so they know that arbitrarily omitting vital components from statistics is inherently wrong.  Merely because they do not like the effect that including them has is not sufficient reason for leaving them out.  If they don’t like the results, perhaps they should change their policies until the math works better for all of us?  Nah… can’t do that.  It’s more fun to fudge the numbers and pull the wool over the sheeples’ eyes while still retaining all that unworkable Keynesian BS they do so love.  It may very well work on paper but few of us actually LIVE on paper, so for us classic economics is far more useful.

  7. As to this wonderful conference, it surprises me that no one thought to ask, “What happens to the highly leveraged derivatives market when 0.5% of them fail and are not paid?  Answer:  Well, in that case every bank and brokerage that owns these will be immediately insolvent and we will just have to beg Bernanke to print us off a few hundred trillion worth of fresh money.  A train with 100 boxcars filled with baled $100 bills should do it.  If not, there’s PLENTY more where that came from! (ha ha… har har… giggle, tee hee, etc)

    I can just see a scenario with these monsters stripped and slowly roasted over small piles of burning fiat currency.  It won’t be THEM laughing then!

  8. A genetically engineered super tapeworm would squirm and blush with embarrassment to be in the company of these parasites.  They have created the financial equivalent of the Star Trek “Red Matter”
    I wonder if they truly understand what they are doing here.  
    Go Wiki “The Chernobyl Disaster” and click on the “Experiment and explosion” link in the index. Take a read.  I wonder when this panel of so-called experts and specialists will have their Chernobyl Moment…..that small fraction in time when the system goes parabolic and they finally realise they have lost all possible control…

  9. This is like buying life insurance and hoping you don’t have to die to collect.  And then buying insurance that pays if you don’t die as well.
    13 people.  Just the right number for a circular firing squad.

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