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Tag Archives: Derivatives

No Need For A Safe Haven? That’s Hogwash!

A Pfennig For Your Thoughts November 26, 2019 * Currencies go back to drifting on Monday… * You really need to read the FWIW article today! Good Day… And a Tom Terrific Tuesday to you! Since this is the last Pfennig before the Thanksgiving holiday, I have a special treat for you… Well, the same treat as I have every year! And we’ll start the letter off with it to put everyone in a good mood! (I’m sure to change that later! HA!) Our Blues were on the ice last night, and my Missouri Tigers...

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Arnold Kling on the Financial Crisis

In hindsight, within each sector affected by the crisis, we can find moral hazard, cognitive failures, and policy failures. Moral hazard (in insurance company terminology) arises when individuals and firms face incentives to profit from taking risks without having to bear responsibility in the event of losses. Cognitive failures arise when individuals and firms base decisions on faulty assumptions about potential scenarios. Policy failures arise when regulators...

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The Curious Tale of Liverpool Council, LOBO Loans and Schrödinger’s Cat

In Austrian physicist Erwin Schrödinger’s famous 1935 thought experiment – a cat is placed within a box, containing toxic radioactive atomic particles, and is said to be simultaneously both dead and alive, depending on a series of random events, which may or may not occur. So what do Schrödinger and his famous hypothetical cat have to do with Liverpool City Council and LOBO...

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Brexit and the Derivatives Time Bomb

Brexit could trigger a $500 trillion derivatives meltdown, by forcing the EU to allow insolvent member governments and banks to write down debt. Italy is in financial crisis and is already petitioning for that concession. How to avoid collapse of the massive derivatives house of cards? Alternatives are considered. Sovereign debt – the debt of national governments – has...

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The IMF Discovers The Ticking Clock——-China Massive Forward Dollar Short

By April last year, it had become clear that conditions in China were heading into dangerous territory. Even though most mainstream attention was fixed on the then-still growing stock bubble, there was so much that was wrong almost everywhere else. The economy would not stop slowing, and indeed still has not. The financial system was worse, so much so that in the middle of last March the PBOC decided to just end CNY currency volatility. Trading sideways for five months is about the most...

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Fund Manager Warns: Something Just Blow A Hole In The Fed’s Balance Sheet!

While all eyes seem to be fixated on Deutsche Bank’s stock, it would seem to me that we should be focused on the financial meltdown occurring behind the Fed’s “curtain” that is clearly going on in the U.S. banking system based on the sudden plunge both in the credit quality of the Fed’s balance sheet and the recent cliff-dive in bank stocks.  I would suggest the possibility that the fraudulent silver price fix on the LBMA last week was a last gasp attempt by the big bullion banks to grab...

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Washington Fiscal Accounting–The Most Devious Liars In The Room

By The Burning Platform There were a few different stories coming out over the last few days that reveal the true nature of government and the apparatchiks who use disinformation, devious machinations, fraudulent accounting, and taxpayer money to cover up their criminality, lies, and the true state of the American economy. The use of government accounting tricks to obscure the truth about our dire financial straits is designed to keep the masses sedated and confused. A few weeks ago, to...

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Osborne’s ‘Right to Buy’ just added £135bn to the UK debt. Coz banks and derivatives.

Just before the 2015 General Election, the Tories came up with a throw away Right to Buy policy for housing associations, labelled “back of a fag packet” thinking by HM Treasury staff. Osborne’s ‘solution’ to a housing crisis triggered by the lack of affordable housing, was to force housing associations, private bodies outside the public sector, to sell off social housing at a 20% discount to existing tenants. Many commentators noted, both in the media and in submissions to the DCLG...

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The Preposterous Conceit Of Central Bankers

There is always some chicken and egg to any financial irregularity; as in does a crisis cause a panic or is it the panic that causes the crisis? Though the evidence of the past eight years is decidedly on the side of the irregularity, central banks continue to press as if that were not so. In no uncertain terms, central bankers persist in expressing their own confidence and, if you read or listen closely enough, great disdain for free markets they deem unworthy as if nothing more than...

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The Problem Revealed—–Wholesale Banking Keeps Shrinking

JP Morgan announced back in February that the firm would be scaling back, particularly in “non-operational” deposits. These were not retail deposits in the traditional sense from regular folks doing actual banking, but rather institutional “deposits” linked to shadow conduits and wholesale functions. The idea, along with some other restructuring measures, was to cut about...

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