vampire squid goldmanFixed Income Global Structured Covered Obligation. Say that three times fast.
According to yesterday’s Wall Street Journal, the bailed out financial criminals at Goldman Sachs are set to launch the latest and greatest toxic derivative product directly into the portfolios of willing muppets the world over.
It all starts this September, so public pension funds may as well just start taking out stacks of hundreds and torching them at Burning Man while they still have a chance.
Yes, it’s called the “Fixed Income Global Structured Covered Obligation,” and no, you will not have a clue what’s in it.
No seriously, you won’t have a clue.

bombshell willieIf Banco Espirito goes under, the default could trigger $29 billion in bondholder claims, and $120 billion in credit default claims. 
However, it’s not the $120 billion in CDS claims that are visible.  The real danger lurks in the “daisy-chain” of hidden counterparty default that could trigger a big meltdown.    Remember AIG/Goldman?   That melt-down – which triggered the big bailout banks – was likely triggered either by the Bear Stearns or Lehman collapse.
The former happened several months before AIG and Goldman.  When Bear collapsed, Bernanke assured us it was isolated and contained.  “Shalom Ben!” – how did the statement work out for you?

Will the Argentina default and the coming one of Banco Espirito trigger a credit default swaps meltdown?

SLIDE_GOLD_DEFAULTHint: Because it’s the Credit Default Swap of the Next Financial Crisis

Submitted by Gonzalo Lira

Credit default swaps were the insurance—the hedge—against exactly what happened in 2008: Bonds threatened to default, during the Global Financial Crisis. So the CDS’s insuring those bonds rose in valueuntil suddenly, they didn’t: CDS’s stopped rising in value just when the markets collectively realized that the counter-parties to those CDS contracts might not be able to pay up.

What if the price of gold is drifting not because the markets don’t trust the world’s reserve currencies to continue to devalue, but because the market doesn’t trust gold?

Since everyone with any sense realizes that this is the endgame of the current race to the bottom, gold ought to be rising dramatically, but that is not happening. Gold rose steady and strong from 2000 through September 2011—but since then it’s been drifting jaggedly.
So why would gold—which is an actual, physical commodity—be acting like credit default swaps did right before the 2008 crisis?
For the same reason: Gold buyers don’t trust the counter-parties selling gold.

imagesIn the latest Keiser Report, Max & Stacy discuss the butch welfare Queens in Virginia, Maryland and DC who rely on the ‘untouchable’ Pentagon budget. They also discuss the US deploying both its FMDs — “financial extortion”, “monetisation” and “devaluation” — to finance its debt and deficit requirements and its troops to 35 African nations. In the second half of the show, Max Keiser talks to Dan Collins of TheChinaMoneyReport.com about the petro-yuan, China’s gold and the problem with the fact that nobody in Africa wants to buy America’s opium – credit default swaps.

CelenteGold and derivatives expert Jim Sinclair has sent subscribers an alert this morning warning on the severity of the global derivatives market, which Sinclair has dubbed the Global Derivative Graveyard Problem.
The IMF, which currently estimates the global derivatives market to be approximately $600 trillion (rather than the true $1.26 QUADRILLION notional), has come out and stated that the entire derivatives market is a WMD time bomb

Got Phyzz?