triple hammerSubmitted by Morris Hubbartt:

If the implosion of Lehman could only get the dollar to 89.11, is there really any hope for the bulls now?  I don’t think there is.  I’ve labeled the dollar chart the “Triple Hammer Chart”, because I see 3 powerful chart patterns, and all of them are very bearish for the dollar.

Silver is setting itself up for a nice rally.  The set-up is very similar to last fall. At the bottom of the chart, note the bullish breakout of the Aroon indicator.    Silver is my favorite asset in the precious metals group, for adding fresh risk capital.  The Bollinger bands are tightening, and that is usually followed by an explosive move.

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US Dollar Triple Hammer Chart




  •  Other than during times of panic, the dollar can’t seem to trade above 80.50.  That’s a key level to study, on this monthly chart.


  •  The price action over the past several years indicates that the bulls are failing more often, in their effort to move the dollar above this resistance level.   This 80.50 resistance zone was created by the dollar’s monthly chart lows of 1995 and 2005.  Even the 2008 crisis failed to rally the dollar very far into the 80.50 “wall of stone”.


  •  If the implosion of Lehman could only get the dollar to 89.11, is there really any hope for the bulls now?  I don’t think there is.  I’ve labeled this chart the “Triple Hammer Chart”, because I see 3 powerful chart patterns, and all of them are very bearish for the dollar.  As big as it is, the 3rd hammer looks tiny, compared to even the 2nd one, let alone compared to hammer #1.


  •  Hammer #3 is the head & shoulders top pattern that many chartists are following on their daily charts.  The target is the 72 area.


  •  Hammer #2 is the trading range between 71.33 and 89.11, and the target is the 53 area.


  •  Hammer #1 is the largest hammer of all.  It’s defined by the price range of 80.43-121.21, and the target is about 40 for the dollar.

Dow Lightning Bolt Chart



  • Over the past week, I have done some in-depth video analysis of the US stock market for my subscribers.  My 14,000 target has been acquired. A key Fibonacci arc pattern is in play now.  Whether the Dow sells off from here, or displays a “blow-off top” in the 14,500 area, the trend is changing, from up to down.


  • Before this year ends, the Dow may trade down to 11,200.  My suggestion is to begin buying in the 12,200 area, but save your biggest buys for the 11,200 zone.


  • On Thursday, gold traded in the opposite direction that the Dow did, and that’s good news. I expect gold to rally strongly, as the Dow careens down to 13,400, like it was hit by a bolt of lightning.


Gold Two Roads To $1750 Chart




  • Since the fall of 2011, gold has been locked in a stubborn trading range. As frustrating as this is, an enormous base is required to facilitate the kind of bullish action we all want to see.  If gold just rises up quickly like a 1970s flagpole, it will crash and burn.


  • Some analysts might be able to get you out at the top of such a flagpole, but that’s a pretty risky way to handle your family’s money.  A permanently higher gold price is what all gold stock investors need, rather than a “one trick pony ride”.


  • Strong hands and central banks are buyers of gold in this price range.  Note where I got my latest buy signal, on Dec 20th.  The entry was in the $1640 area.


  • From here, I have two short term scenarios.  The first involves a quick pullback to $1648, and then a price surge to $1750.  The 2nd scenario sees gold just charge right to $1750.  The action of the Dow is going to be a key factor in determining how gold gets to $1750.


Gold Megaphone Count Chart




  • This bull market in gold has caught analysts & investors off guard, many times.  I think it will continue to do so.  For example, most investors believe that once gold goes above $1800, the wind will be at our backs, and gold investors will live “happily ever after”.


  • Instead, my charts show gold rising to $2300, but getting there could be a very bumpy road.  Gold could rally to $1850 now, but from there I see a very painful correction taking place.  It could drive gold back down to $1725.


  • Investors should definitely consider selling some positions in gold, in the $1850 area.


GDX Aroon Intensification Chart




  • The Aroon indicator, which means “early dawn” in Sanskrit, jumped significantly this week. It has been trending higher since early September, but as on Monday, it moved aggressively.


  • What is encouraging is that the last time this indicator came out of the hole in 2009, GDX nearly doubled over the next couple of years.   Note the comparison to 2009 on this chart.


Gold Miners Bullish Percent Index Chart




  • The BPGDM chart can be used to pinpoint not just a blip, but a real trend change. I want to see the index cross over the 10 day moving average.  Also, note the blue support line.


  • Another key sign of a bullish turn is positive divergences seen on this chart. The green circles on the MACD Indicator point to other times when the same phenomenon occurred.


  • The action of the Coppock momentum indicator is also interesting.  A move above the zero line should provide confirmation that gold stocks are beginning a sustained rise higher.


GDXJ Green Light Chart




  •  A week ago, I stated that a buy signal for GDXJ was “near, but note quite here”, due to volume concerns. It’s here now.  This week, GDXJ dipped lower.  Volume dropped, which is a bullish signpost for junior gold stock investors.


  • There was no violation of the Bollinger band, so I issued the buy signal, at $18.58.


  • The immediate target zone is the dotted Bollinger band.


  • Remember that this buy signal is not an attempt to call the exact price of the GDXJ low, but a place to enter the market on the long side, with professional money management tools in place.


  • The market should rally from these levels, but that’s not a guarantee.  Use a 10% stoploss on all my signals, or invest very small amounts of money each time, as I do.  If you do that, I think you’ll find the GDXJ traffic light just turned green!


Silver Rally Prep Chart



  • Silver is setting itself up for a nice rally.  The set-up is very similar to last fall. At the bottom of the chart, note the bullish breakout of the Aroon indicator.
  • Silver is my favorite asset in the precious metals group, for adding fresh risk capital.  The Bollinger bands are tightening, and that is usually followed by an explosive move.


  • Note the trading position sell signal on the chart.  Even though silver looks fantastic here, partial profits need to be taken regularly, like pruning a stately garden tree!


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    • Agree, Charlie.  Stackers are not traders, although, I suppose that one could trade part of one’s wealth and stack a separate part.  Most of the time, though, people are attracted to one of the other of those activities.  For my silver stacking, this is not about trading.  If I owned an insurance policy, I would not be looking to buy and sell it all the time.  I would be holding it for an “AW, CRAP!” situation where it would come in handy.  It is insurance, not a trading vehicle.  I see silver in the same way.  Yes, money can be made in PMs by trading them and I do some of that via the best ETFs (not GLD or SLV!) I can find but they are not my financial insurance: the stack IS!

  1. It’s just so hard to predict manipulation.  Everyone reads these reports and then the commercials pile on another 20,000,000 oz in paper / derivative shorts.
    However, one thing we probably all agree is sometime in the next 24 months the long standing fire sale on silver will end.  These ongoing currency devaluations will propel silver much higher.

    • “These ongoing currency devaluations will propel silver much higher.”
      Agreed.  Gold too.  The supply / labor problems affecting Pt and Pd will likely combine with the currency problems and push those metals much higher as well.

    • This is from Harvey Organ today.  Kinda paints the picture that many of us see.
      Both gold and silver are manipulated constantly by our bankers as the supply/demand relationship of these two precious metals are thrown out  the window. Thus technical analysis on the trading patterns of gold and silver are really worthless.

    • This is really what people need to focus on about the markets.  IMO, Rob Kirby needs to receive more credit because he truly understands how the markets really work.  This is just one part of a interview done by Rob Kirby.  It only has around 1,600 views.  People keep talking about the Fed but never the ESF.  If you don’t have time, just listen at the 3:25 mark of the video.  In a nutshell, Kirby explains exactly how the system works behind the scenes.


    • Holy cow, Charlie!  That is some seriously crummy weather!  Best stay indoors and sip a hot toddy now and then.  😀
      I tell my relatives in North Dakota that I am part of the family tree that escaped blizzard country because it hadn’t yet had time to freeze my brain into thinking it a good place to live!  lol
      Not to predict any worse problems, but… I sure hope that when that snow melts, it does so over several days and not all at once!
      Good video from the bad weather front lines!

    • @Duckvision good video one of the better one. Looks like the rats are ready to start jumping the ship by blaming others a sign of defeat long may it continue. We have the ropes waiting to hang from the trees. Hope we have enough trees.

    • Now that’s what we are trying to defend. Get it back into the schools and teach our kids what it’s all about. Sent chills down my back. God Bless America

  2. JPM financial data 2012.    Total assets $2.359 Trillion in assets.  Total net worth $200 billion approx.  Gross revenues $99.89 billion.  Net income $21.284 billion prior to adjustments. 
    $79 trillion in derivative exposure.  If the rates go up to 3% from the present 2% 10 yr treasury rates.  Can anyone guess the derivative losses and the hit to net worth and equity.  I think it’d be a complete collapse of this company.  Derivative to total assets ratio is 33 to 1.  Derivatives to gross revenues 790 to 1.   And these people think they are the kings of the world.

    • I have a question, AG.  If the net worth of JPM is about $200B, then why is it that more than $200B in losses is needed to wipe them out?  That $2.36T in assets belong to them or to their customers for them to manage?  If the latter, then it cannot be counted as a JPM asset, IMHO.  If I am missing something, please enlighten me.  🙂
      Ann has a serious rant going here but I can find no fault with her logic in any of this.  She is also right that she will not be getting any SS or Medicare, because she is likely to have a fatal stroke LONG before she is eligible for those programs.  
      Tame the beast within, Ann.  Yes, the financial system is seriously flawed and MANY of those flaws were built into it intentionally in the name of greed and corruption.  It is unlikely that any of us can slow or divert the trains before they collide, but if we are on them, look for the softest place we can and… JUMP!  while we still can. Hmmm… that golden pond looks good to me, as does that silvery river.

    • Reflecting on Ann’s video …
      “Although historians do not advertise the fact, a lot of pension funds went bankrupt in the 1930’s, and the remaining ones had to scale back the amounts they had contracted to pay to their pensioners. Economists failed to offer an explanation for this universal phenomenon. Yet the explanation is clear: the accumulated capital of the pension funds was badly impaired, and in some cases completely wiped out, by the falling interest rate structure. Exactly the same causes are operating right now, (2010) and exactly the same effects will follow. The only difference is the larger scale of capital destruction in the present episode.” –Antal Fekete

  3. Ed B
    I’ll see what I can do to answer your question from a couple of angles.
    In the financial review of a typical business, say a manufacturer, losses are absorbed as best they can be against retained earnings and business capital. A firm can build after tax earnings for years and with one really bad year, the company net worth can be hammered by losses. The retained capital is a buffer against losses. If losses continue, the firm’s capital base is destroyed and it will fail due to insolvency or illiquidity, unless measures are taken to stem the losses or restore the capital base. Private firms are on their own in these events since they operate without public financing safety nets found in the openly traded equity markets and the world of banks.
    My answers are those of a layman, not a regulator or CPA, so they’ll flow differently than either of those people.
    If the firm suffering losses is publically traded, the board can contribute their own cash or go to the public market to request recapitalization. Sometimes the capital market funds are coupled with bank loans. Those can both be used to rebuild working capital. As often as not the losses can be stemmed by changes in business marketing, products or cost factors if the board and officers are on their toes. Sometimes these actions fail and the company dies. The entrepreneurial graveyard is full of the bones of failed enterprises.
    These same things can happen to banks. First and foremost they are businesses. They can’t escape the forces that mold these models. If there are enough losses, the bank can fail in a single quarter, as we’ve seen in the news when a bank and regulators tout the safety of the bank in one quarter and the next quarter sees the announcement of the bank take over.
    Dexia Bank in Belgium failed in about 60 days. One month everything was rosy. The next month the bank failed. Its asset base was 1.5 times the size of the Belgium GDP. It was taken over and as a consequence of its bad loan portfolio, some of the banks who took Dexia over also failed after numerous bailouts. As is clear from Dexia and its disproportionately large asset base to it’s home country’s GDP, this was a serious matter.
    The entire collective asset base of our largest domestic banks, 70% of all US bank assets at roughly $8 trillion, is about one thirteenth of the liabilities that weight against these assets. That is large leverage but the Euro banks leverage is about 35 to 1. They are way worse off than us and more likely to suffer catastrophic losses and failures in 2013. All the money in the world won’t save them. But the Fed is trying. Bernanke shipped $237 billion to Euro banks in January 2013 alone. Adios dinero, my tax paying friends.

    I’ve watched several hundred banks fail in the last 30 years. The three main causes are loan losses, income losses and embezzlement. Most banks can retain some modest profits simply by having a good client base with quality management of costs, loan performance and profit centers

    Some fail due to a market erosion or incompetence. They are in a bad place at a bad time. The owners might not that good at what they do. Those banks are usually sold to a better, more competently managed bank.
    Most banks that fail calamitously do so by losses to their capital base, and that’s true for the mega banks too, even though their bases are measured in the hundreds of billions of dollars. When they sustain massive losses against their loan portfolio or investments, the bank is gutted and falls like a rotten tree.
    In the bank crash of 2007 to 2010, the banks that failed or were taken over saw the sub prime residential loans, loans devoted to failed real estate development projects, business loan losses, internal investments and other loans that ‘went bad’ hollow out their capital base. In some cases, the bank suffered from several forms of losses. If enough of these loans go bad and there’s no effective remedies like timely foreclosures and repossessions, the recoveries are insufficient to restore the the bank’s capital.
    Banks can call good loans and bring capital back into the bank to build up the capital base. They can recapitalize with stock sales. They can create new loan products and client services. But if loan losses continue without enough new profit centers to bolster the capital losses, the banks start showing a lot of red ink. Their key business ratios start fallling. Funds for new loans dry up. Their capital asset mix can change quickly as depositors flee the bank, leaving the lender without capital to loan out.
    This gets the attention of the regulators. They usually start sniffing around after one quarter of published poor performance. The regulators have to protect the assets of the bank as the banks are more of a public trust than many forms of business. Real losses in a bank hurt a lot of people. Large depositors have insufficient FDIC coverage. The government stands to take the biggest losses so they focus their attention on these problems pretty quickly. The tax payers are on the line too.

    And then there’s the Too Big to Fail, Jail and Bail Banks. With these, the regulators start acting like the inspector in Casablanca. “I’m shocked, shocked that there is gambling going on in these premises. Round up the usual suspects”
    Croupier–‘here are your roulette winnings, Inspector Messr. Chiltonne
    The FDIC needs to make up losses to depositors. When the bank is taken over, they assist another bank in taking over and assuming most, if not all, of the loan portfolio. The FDIC or another agency may end up taking over the worst assets, disposing of them in the marketplace for bad loans and assets at 10% of face value. In turning over a failed bank to another bank, there are assets that are just too smelly. The Government eats those.
    Ann Barnhardt opined on the worthlessness of the FDIC in protecting any depositors since this agency has about $15 billion or so to cover several trillion in deposits. That leverage is worse than many banks. You can read about that on her site.

    To answer your question more fully, JPM could fail if they suffered significant losses. Their assets consist of loans, securities and other investments that could sour quickly. Depositors and investment clients could flee. The most dangerous of these losses are the pools of derivatives. Since JPM has a derivatives to equity ratio that is beyond belief, even a tiny loss in the derivatives could collapse the bank. The derivatives to total asset ratio is a terrible 33 to 1. A 3% loss in derivatives, something that might happen if a large set of loans in Europe goes bad, would wipe out the entire asset base of JPM. Their IR swap losses could have totaled $50-100 billion if allowed to go unchecked. I suspect the PPT came in to save the day. Thus the reason Bernanke and Dimon do not sleep well at night.
    The IR swap losses committed by the London Whale could have proven fatal to JPM if they were not staunched. The court jester CIO lost her head and is suing for her termination. Good grief! The next time they might not be so lucky. That IR swap loss was $8-10 billion, taken against investment loss reserves, a cost factor any bank has in its income statement.
    A modest loan loss reserve is contained in all bank P&Ls but $8 billion is serious money and required a serious amount of bafflegab and BS. As a result Dimon suffered a near 50% cut in pay. He only made about $14 million or so. Blankfein was the big winner with something on the order of $28 million. The muppets were pleased, or so he says.
    Losses happen; its just a fact of life in a bank. The heads of the TBTF banks usually suffer little more than a paycheck haircut. Most banks get the guillotine, along with the owners. But I digress. The thought of Jamie’s head rolling along the cobblestones is just too sweet.

    If an uncontained chain of events such as huge losses on bad residential loans in 2008 that destroyed WAMU and Wachovia ( failed banks wrapped into B of A and WFB, who still have these ticking loan loss time bombs in their bowels) or the derivative failures that killed off Lehman and nearly exterminated AIG, this proves even the largest banks can be taken down by losses.
    Banco Monti Paschi, the 3rd largest Italian bank and one of the oldest in Italy, is on its fourth bailout due to derivative losses. Draghi and Monti, the two most powerful bankster/political leaders in the Eurozone have their fingerprints all over this rolling fiasco. Both are Goldman Sachs alumni so failures like this just burnish their resumes. I wonder what their next jobs might be. Spittoon polishers in Hades?
    This multi year problem may both change the political landscape and allow Berlusconi to be reelected to the presidency of Italy while starting a domino effect that will rotate into the eurozone as it’s issues are fully disclosed and more damage ensues. The losses were attributed to derivative problems that hit the bank 4 times in about 7 years. In the first 3 failures, bailouts of this bank were quick and quiet, papering over systemic problems. It seems derivatives have many lives. BMP is evidence of this.
    Or maybe banks will start suffering due to the Venezuelan currency devaluation. It seems that almost anything can start a collapse.
    The policy of saving this zombie Italian bank by throwing bailout capital and other assets at it to keep it alive may be the final part of the puzzle to answer your question.
    JPM is the Fed: The Fed is JPM. Or so it’s thought.
    The entire government ponzi pump and dump printing edifice is invested in the continuing operations of JPM. They will probably spend as much capital as needed to keep this TBTF bank alive. The same can be said for GS, the bank reportedly handling the Exchange Stabilization Fund, a $110 billion pool of market rigging and control funds used to suppress the prices of gold and silver while managing ad supporting the other casino, our equity markets. But again, I digress.
    The one way these TBTF banks could fail is if the derivatives house of cards comes crashing down. Now we’re talking about $600 trillion in losses. There’s not enough money on the planet to staunch this blood flow–not the Bernanke would not try. Geithner quit at the right time. Ben will be blamed. His name will live in infamy.

    Ann Barnhardt is a very smart woman who saw the near certainty that her brokerage clients could lose everything if she continued her business. Once MG Global’s embezzlement ran its course, showing the third way a bankster fails, she closed her brokerage. That took a lot of guts and removed much of her income. She is making DVDs designed to educate the public about the dangers of keeping any money in the banking and brokerage systems. On her recommendations I fired Fidelity as my IRA and fund fiduciary shortly after she announced that the criminals were running loose in the streets. Her fierce sternness was just what I needed to convince me of my course of action. In my opinion, Fidelity is just a larger version of the corrupt enterprise; MF Global.
    Her friend, Warren Pollock, drilled down into the investor statements of Fidelity. In late 2011 Warren found clear evidence that this brokerage hypothecated and rehypopthecated the stocks and other investments of their clients. Like MFG, they could just as easily fail even though their asset base is in the trillions. Subsequent analysis of laws and regulations signed in 2012 made it clear that these assets could be taken by the government in times of crisis. Think NDAA and NDRP. Think DHS and the asset seizure mentality evident in their own admission of same. Legislative moves are being made to allow MMAs to ‘break the buck’ if losses come to pass in these formerly safe monetary parking lots. Read the annual reviews and see what represents safe investments today
    Bernanke made it clear that he considers the lowly MMAs as the first line of liquidity and a means to defend the monetary system. I prefer to protect my financial system without the help of the Fed; thank you very much.
    That simple analysis forced me rethink my position in Fidelity. Once I analyzed the income statement of the Cash Account MMA and found that Fidelity paid themselves about 98% of the income generated through this MMA parking lot, I exited this pack of cheap-assed rat bastards about a year ago and went ‘all in’ into silver and gold.
    Ann’s words, along with Doc’s, presented an first rate option to secure my assets. Along with Pollock, these 3 people represented a tipping point for me
    . Doc says “If you don’t hold it, you don’t own it”
    Ann says ‘ If your assets can’t be stacking into a solid metallic bunker formation and defended by an AR 15, they are not safe.’
    Warren made clear reference to Fidelity as a scam looking to find a home.
    The AGXIIK avatar is my way of clearly demonstrating my commitment to those philosophies.

    • So if I understand ALL of that, you are saying that JPM can fail from suffering losses to its managed asset base and not just to its own net worth?
      Otherwise, I already knew a good share of what you said but it was good to see it ALL laid out like that.  I was just not clear about exactly what was being lost when a bank incurs “losses”.

      “Doc says “If you don’t hold it, you don’t own it””
      My version of this is, “If it can be taxed, you don’t own it!”.
      “Ann says ‘ If your assets can’t be stacking into a solid metallic bunker formation and defended by an AR 15, they are not safe.’”
      OK, how about stacked in a safe and defended by an AK + a Mossberg 590 + a .45 Colt w/ 500 rounds of ammo… and various other weapons as well?  😀

  4. Pat  your quote from Fekete is perfect.
      In  January 2013,  Ford, Boeing and Dow had to collectively put another $10 billion into their pension funds.  $10 billion over and above their normal contributions. This was forced by the public pension regulations.  Since the  fund balances fell below a specific level,, thus damaging the actuarial calculations for payouts, those pesky regulators stepped back in with a requirement that these firms bump their pension balances.  The PBGC is another failed government program, even worse than the FDIC. For all intents and purposes it’s broke.
      Why did this happen?  The pension plans are operating in the world of ZIRP, the biggest WMD ever created by the Fed—or at least running a close second to derivatives.  Zero income can’t be papered over in the private sector.  The Feds created this bulls***  of  ZIRP and then expect us to pay for it. 

    • @AGXIIK … “The Feds created this bulls*** of ZIRP and then expect us to pay for it.”
      You know from my posts that I have a different view, based on the banknote scheme’s co-generation of currency-by-debt-by-currency … ad infinitum. I surmise the bankers can’t believe that the point of debt-saturation has truly arrived and so they’re ‘buying time’ in the hope that people’s resolve will break and they’ll resume borrowing the interest into existence again. And, why not? … so far that has been the pattern that had played out. Nevertheless, this time I’m pretty certain that folks are too intransigent and that their abandonment of indebtedness is NOT going to subside, but rather intensify. The propensity is a global trend.
      Governments can ‘pony up’ bridge capitalization ‘in their Peoples’ names’, but that presumes they’ll be able to collect the taxes to erase the ‘damage’. There too, it appears they’re in for a rude awakening because folks are ever-more recalcitrant against any further plunder.

      As unnerving as this continues to get, I still feel weirdly ‘fortunate’ to be witness to it all. This is a period of truly momentous historical import. It’s as though I can intimately ‘bond’ with the people who lived through America’s birthing … TIMES TEN!

  5. You’re right Pat.
      I get so wrapped around the temporal aspect of our present situation I forget about the bank note  interest scheme that has been around much longer than ZIRP.  It like the old story about cleaning out the swamp and forgetting there are alligators to deal with.   If I’m basically on the same page, then ZIRP compounds the damage created by bank note scheme that’s been the fate of FIAT currencies, particularly ours,  since the US Dollar is so ever present throughout the world. The world is flooded with dollars.   Those holding them are fated to lose
    It’s pretty certain that bankers really don’t understand the bank note interest scheme.  If the imputed FIAT rate of interest is 10 yr T bonds or 2%, ZIRP yields are 0% and inflation is 8%, there’s an extremely large spread that no amount of taxes will ever fill or bridge.  This gap will continue in its destructiveness until the whole worldwide system implodes.
    Banks are very low profit businesses, squeezing maybe 1-1.5% net profit from their assets. If the imputed rate of FIAT is 2%, the bank’s fate is sealed.
    It’s the perpetual compounding of interest that will weigh down people, companies and even banks.  The bankers won’t, can’t or are unwilling to  understand that they are operating a fatally flawed business model.  Few banks survive more than 10-20 years.  They usually fall into the trap of thinking they can beat the odds.
    By being wrong just once or twice on their loan and investment bets, they lose their bets and are either taken over or sold off for pennies on the dollar. I can tell you many stories of bankers who ended up broke thinking they could beat the odds. The ones who survive usually do so through politically connected bailouts, Fed intervention or outright theft. We know who those ones are.
      Instead, most of them function  in  the conceit that somehow the interest they charge will keep them solvent, liquid or at least surviving long enough,  keeping their heads above water  until they retire or get bought out.  I have noticed that in the last 32 years of my lending experience, very few bankers retire rich.  Most work until they fall over or drop dead.  Many lose their pensions, bank stock investments and livilihoods long before they find that narrow exit channel that leaves them comfortably off.  It’s somewhat like taking your winnings off the gambling table while your winning streak is still running.Bankers are nothing if not inveterate gamblers and give a long enough time line they always end up losing.
     In a way it’s also like a pact with the devil.   If one signs the pact consciously, the banker who signs this agreement knows he better make the best of his time on this earth.  If the other group made their pact with the devil thinking the contract was voidable, they’ll be very surprised when their time comes. It reminds me of the funny story about a person at the pearly gate. He wanted to hedge his bets—-stay in heaven or hell. He asked to visit hell and saw hundreds of people standing in a huge pool of feces, drinking coffee. He’d seen Heaven, clouds, harps, kind of boring. He though that his vision of hell was more appealing and besides which he saw a whole bunch of his friends down there too.
    He told St Peter that he decided to go back to Hell. Once he arrived he jumped into the pool of poop, grabbed his cup of coffee and settled in. A moment later the devil came out and said “All right you sinners, coffee breaks over, back on your heads for the next million years.”
    All in all I think most of us understands either intellectually or in our gut that the math is unsupportable.  Hence we stack.

    • Which brings us rather neatly to the entire crux of our difficulties and that is the making of economic decisions for political purposes.  This is what will destroy the current financial / economic / political systems that have been created over the past 100 or so years.  That these have become so thoroughly corrupt as to totally deserve destruction has not escaped notice.  Unfortunately, there will be a vast amount of collateral damage that will make the situation MUCH worse before it gets better.  It will get better, though.  Old farts like me might not live to see the final results but we can peek in on the kids and grand kids from time to time to see how things are going.

  6. Ed B In rresponse to your question about what can destroy a bank, the S&L industry existed fat and happy for decades until 12% inflation shredded their nice comfy 6% home loans.  Forced to offer 10% on CDs, their interest expenses quickly outstripped  their interest income.  Called disintermediation, this gap of income vs outgo forced some S&Ls into extremely risky ventures where they ended up using dequestered funds, betting on piss poor projects.  Remember Lincoln Savings and Loan. It brought down Senators who were flying cover over these illegal activities.   The government ended up spending about $150 billion in bailouts.  Several hundred bankers went to jail. I knew a few.   That $150 billion would be worth $1 trillion today. 

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