I quit Wall Street and decided that it was time to talk more about what was going on inside it, as it had changed. It had become far more sinister and far more dangerous.~ Nomi Prins
For years, many people have suspected that the New York Fed is more or less controlled by the “too big to fail” banks. Well, we now have smoking gun evidence that this is indeed the case…
Alibaba is now the poster child example of how corrupt and controlled by the bankers our entire system is.
Any professional money managers/fund managers who bought this stock for anything more than a quick flip should be strung up from an oak tree by the neck for breach of fiduciary duty.
It is completely inconceivable that the SEC would have approved this stock for issue in the U.S. market 20 years ago.
That the SEC put it’s meaningless “It’s okay to sell this stock to retarded U.S. investors” stamp tells us the degree to which our financial and legal system has become engulfed by the corruption and criminality of Wall Street banks.
BABA is the kind stock market nuclear waste that boiler room penny stock operators like Stratton Oakmont would stuff down the throats of helpless senior citizens and greed-crazed morons. It’s not the kind of garbage that, historically, any large Wall Street investment bank would have touched with a ten-foot pole. Although I can understand JP Morgan and Citi having no qualms about to selling BABA to anyone who picks up the phone call from their broker at those two firms, the fact that Goldman Sachs, Morgan Stanley and Credit Suisse were willing to sell this sewage to the public (historically these 3 firms left the boiler room rot to the sleazy penny stock firms in Long Island, South Florida, Denver and Salt Lake City and focused on real crime) tells us just how unethical and corrupted Wall Street has become.
Fixed 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.
If 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?
- The Squeeze is On! Gold & Silver spike through $1300 & $20- is the next major bull move underway?
- Will the end of the Silver Fix kill the gold fix as well? Alasdair explains why THE FIX IS DEAD!!
- We discuss physical demand in US & Europe, & Alasdair breaks down how 3/4 of all above ground gold is now in Asia!
- Bloomberg admits paper derivatives in silver is a $5 trillion annual market, with gold an $18 trillion annual market- 20 x as much paper silver as gold capping prices?
- With gold & silver bursting out of consolidation patterns this week (& silver breaking out of a 3+ year downtrend) Alasdair informs SD readers that once an uptrend is established (perhaps within a matter of a few weeks): “The prices of gold and silver are going to run very, very quickly“, and that “If we look back on 2014 and saw that was the year gold & silver broke into new high ground, it wouldn’t surprise me-I’m not predicting it, but I would not be terribly surprised because the underlying dynamics are there!“
The SD Weekly Metals & Markets with Guest Host Alasdair Macleod is below:
In an interview with CNBC, Goldman Sachs CEO Lloyd Blankfein advises the CNBC host that at some point, some event will happen that will reset portfolios.
Blankfein states that interest rates will rise, which will be a shock to the market, and states that I have a lot of bad dreams at night, liquidity is one of them.
Lloyd Blankfein’s full interview with CNBC is below:
The recently announced swaps deal between Goldman Sachs and Ecuador involving the exchange of 13 physical tonnes of gold for $585 million in “highly liquid” paper raises the question of why the parties simply didn’t enter into a gold leasing arrangement.
Precious Metals Fund Manager Dave Kranzler cuts through the aromatic cloud hanging over the deal to address this and other key issues affecting the PM markets in the video below.
Ecuador: The Gold, the Bad & the Goldman
Regarding Goldman Sachs’ hypothecation of Ecuador’s 13 tonnes of gold: Ecuador has 26 tonnes in total.
You don’t manipulate the market with 26 tonnes. China withdraws over 30 tonnes per week from the Shanghai Gold Exchange. Then there’s India. Then there’s Russia. Then there’s Viet Nam (Viet Nam is the 5th largest gold importer in the world – that’s a fact). Then there’s all the other gold-buying countries. At least 50 tonnes of gold gets bought every week. This is gold that has to be delivered.
Coincidentally, or not coincidentally, Russia bought 25.5 tonnes in April.
My bet is that Goldman may have needed that gold from Ecuador to deliver to Russia.
This is a great example of how the game works. In a world in which every government on earth needs “liquidity” to survive, and the primary goal of every government is and always has been survival (the retention of arbitrary power at all costs), the provider of liquidity is king. So what is liquidity and who provides it?
…Ecuador agreed to transfer more than half its gold reserves to Goldman Sachs for three years as the government seeks to bolster liquidity. The central bank said it will send 466,000 ounces of gold to Goldman Sachs, worth about $580 million at current prices, and get the same amount back three years from now…“Gold that was not generating any returns in vaults, causing storage costs, now becomes a productive asset that will generate profits,” the central bank said in the statement.
If you want to understand the relationships between the American banking industry and Washington, D.C., look no further than the new book by Nomi Prins: All the Presidents’ Bankers: The Hidden Alliances that Drive American Power.
Prins joined Eric Dubin on Liberty Rising Radio for a lively discussion about the rise of American banking power. Bankers and presidents have traditionally worked together, as allies. Enormous concentration of financial wealth has always assured bankers a seat at the table. At the turn of the last century, the J.P. Morgan empire included control over 70% of the steel industry and over half of the publicly listed companies on the New York Stock Exchange.
Following the 2008 crash, the “too big to fail” banks have only grown larger.
Prins believes another crash is likely the only catalyst that can force change.
Ladies and gentlemen, it is perfectly clear that gold prices are headed south – and in a big way.
For those of you who trust pictures, I have included a graph of gold prices since 1975.
As you can see – it is perfectly clear – repeat – PERFECTLY CLEAR – gold prices have NOWHERE to go but down, down, down.
The distinguished analysts from Goldman Sachs have reiterated their 2014 forecast for gold to hit $1,050 by the end of the year.
Goldman has a serious motivation for throwing the paper price of gold under the bus. You see… Goldman is by far the weakest and most vulnerable bank when it comes to its Assets to Derivatives ratio. Not only does Goldman rank DEAD LAST compared to the other banks in this ratio, it does so with flying colors.
The five biggest banks in the United States in 2008, today those banks are bigger. They have a larger percentage of the assets of the banking system. They have much larger derivatives books and if you apply what I use which is complexity theory, to understand the risk in capital markets, you know that when you increase something in scale, the risk does not go up in a linear fashion. It goes up in an exponential fashion so the risk is – the size of the system is greater than ever before and the risk gets exponentially greater than ever before.
So we have a lousy economy. We have massive risk. We have the whole thing getting propped up like money printing by the Fed. This is naturally going to happen except this time, the next time, it will be worse than 2008 because it will be bigger than the Fed.