Wednesday, September 25, 2019

It Has Begun

Between Tom Luongo and Pam and Russ Martins it's pretty obvious that the inevitable crisis of interbank confidence is well underway. As stated several times in this blog, the 29 Trillion in Fed dark money bailouts from the last such event barely kept the system hobbling along in maintenance mode for 11 years (although it cannot be said that the illusion of recovery wasn't artfully maintained).

Now with its daily repo on auto-pilot (publicly) the FED can only do what it's systematically programmed to do - keep bailing out defaulting derivative debt with more debt based derivative FIAT. As the weeks and months progress, you will be entertained with cries of "all is well" and "back to normal" but what is going on behind the curtain of happy smoke blowing up the skirts of the little people will be harder and harder to contain.

I suspect it's Deutsche Bank that can't cover its losses, and it's counterparties know it. It's Lehman / AIG in the form of Deutsche / Lincoln National for starters, but all the primary dealers are feeling their sphincters tighten as the great sucking sound coming from their assholes presages the collapsing super nova of liquidity anti-matter. In other words, multiple "dark holes" with "big JP" conspicuously involved, deep state cufflinks and all.

Maybe Mnuchin will go full Paulson on CNN. Williams as Geithner is unlikely, and Powell is no Bernanke. Somehow I can't see Trump in the role of Dubbya, looking like a deer in the headlights and talking about "Too Big To Fail". It's got to be spun another way. In the Luongo article above you are given a few clues.

We waded into uncharted waters in 2008 and we've been drifting further out without a life preserver ever since. Even the families are divided.

I know what I'd like to see, but no light is shed upon the flower of understanding. Only darkness. Someone will say "I told you so" but that won't matter. It will be interesting. Let the liquid invasion ensue.

17 comments:

  1. So please allow me to ask, what should one do in light of this situation? Thank you.

    ReplyDelete
    Replies
    1. Every situation is different. But let's see how it plays out.

      Delete
  2. Do not be fooled by recent "news" that "the repos are over, liquidity is fine, the banks got what they needed and don't need any more" (etc.) What real news did leak out sent the stocks of the bailout Queens down considerably and that real news had to be adjusted to restore CONfidence. October may have a few surprises in store.

    ReplyDelete
  3. To wit....
    https://wallstreetonparade.com/2019/09/the-fed-is-offering-100-billion-a-day-in-emergency-loans-to-unnamed-banks-and-congress-is-not-curious-enough-to-hold-a-hearing/

    ReplyDelete
  4. I wonder what would happen if the Fed got stuck with all the collateral when the banks cannot buy them buy.
    I assume all the money the Fed create out of thin air cannot evaporate back into thin air the next day when the banks either don't want them back or don't have to liquidity to buy them back.
    Would that be the beginning or it has begun?

    ReplyDelete
    Replies
    1. The Fed could have 25 trillion of dollar denominated assets on its balance sheet. The question is, does its dollar still function. Right now the dollar wants everyone to understand that while every other major currency has surpassed its highest price for physical gold the dollar has not. So all things are relative. But behind the curtain, systemic banks are preparing for a shock to the system based on the increasing move away from dollar settlement. If producer nation banks no longer need dollars for settlement, there's no liquidity problem, rather there's a derivatives problem. That problem, I believe, has begun.

      Delete
  5. Amazingly, Alasdair MacLeod echoes my very same thoughts two days after posting (though in his much more characteristically thorough fashion).

    https://www.zerohedge.com/political/us-repo-calypse-ghost-failed-banks-returns

    Friday was a wild day for me, it's no wonder I missed it. It was not brought to my attention until viewing the comments in Greg Hunter interview (today) with Rob Kirby, who points out another take on the "spectacular growth of America's money losing shale fracking debacle".
    https://usawatchdog.com/dollar-rejection-is-why-america-ramped-up-oil-and-gas-production-rob-kirby/

    We watch, as the rest of the story unfolds.

    ReplyDelete
    Replies
    1. Unless the strait of hormuz closes.... Oil price rises and bails out big oil and the banks that have loaned the dollars. Every time Trump has made progress on relationships in the middle East a terrorist attack sours relations again. War for profit. The USA bailout.

      Delete
  6. They seem to have fixed the plumbing problem with massive digital paper out of the thin air. Me think as long as the dollar is not rejected outright, they can do this again and again. Come to think of it, they have been doing this since !998.

    ReplyDelete
    Replies
    1. Indeed sir they have, maybe longer. But ask yourself ... has the mood changed lately? Or is it just me? And then think about the fragility of confidence. My friend, this system is held together by thoughts blowing in the wind. And my fellow man seems to see a storm rising. It's THAT fragile now.

      Delete
  7. https://www.zerohedge.com/markets/fed-injects-1042bn-overnight-term-repos-one-day-after-start-not-qe

    ReplyDelete
  8. So where is the best place within 401-K options to weather this coming storm to preserve capital? Guaranteed investments? Money Markets for liquidity?

    ReplyDelete
  9. Nothing will happen until "they" want "it" to happen and it will not be nice for the us in EU and US.
    The criminal banking cabal holds aaaall the cards while the crowd all over the world is too dumb to get.
    Only God could help us ...if we deserve it.
    Iquite of have too laugh when I read a VictortheCleaner and his apostels.
    Reapeating their mantra for over 10years and changinging the tune whole the noose gets tighter.Als, they don't even feel the heat.
    The choice between communist and "capitalist" globalists is not a choiche. It's hell, what we already have but much worse than WE had in our lifetime.
    Sad future for those who understand it.

    ReplyDelete
    Replies
    1. Your hypothesis rests upon the premise that "they" are of a single mind, working together in unison as a harmonious element. Perhaps you should consider that greed and sociopathic psychosis does not exactly "play well with others" and that there are divisions among these so called powers that be, as is evident in the struggles to retain power and wealth at opposite ends of the political and cultural spectrum.

      Aside from that ... yes, life for the little people mostly sucks, and then you die, leaving little more than "debt as wealth" behind.

      Delete
    2. There are indeed factions.
      I refer to the " strongest" faction. Which one?
      One which has for hundreds of years an ideology, except that re money.
      In my case I don 't leave any debt behind as I AM absolutely debtfree.
      Wealth, Yes, but that too is only hypothetical. Wealth is what you are allowed to use in a rational way. For as long as I am not allowed, I live within my means, which is still possible.When communism will swap completely all over Europe, then well, I don' t think I want to live any longer.And it's coming.Surreptiously but steady.
      So no blablas from Fofoa vor Victor help. They are ignorant only repeating their mantra.
      I remember their opponents at Fofoa: they were right.

      Delete
  10. It won't be long before we reach the first trillion in repo loans. Interest rate problems and derivative problems are intrinsically intertwined. It began on September 17th, and was evident by the 25th. Nearly a month later, we are numbed by the misdirection and have no idea how much off book paper is being issued to keep the system afloat.

    ReplyDelete
  11. As this original post contended ...

    "You can earmark September 17, 2019 as the actual date that this Financial Crisis II got underway."

    https://wallstreetonparade.com/2020/03/there-was-a-bloodbath-in-wall-street-banks-and-insurers-yesterday/

    ReplyDelete