CME TO OPEN ACCOUNT AT FED…
Now, this unusual story was shared by Mr. T.S., who sent it along with an email posing the question: "is this new account going to be used to bolster Commercial Banks with Funds from the FED in the Event of Margin Failures resulting from Extreme Gold demand forcing the shorting banks to liquidate their margin accounts?" Well, I'll let you read the short article, and "you can tell me":
CME Group says preparing to open account at the Fed
So what's going on here? Well, I suspect that for one thing, Mr. T.S. is right, or at least, close, in that something like what he has proposed may be going on. But there are other possible explanations as well, and one of them is that this, too, is a manifestation of what, in part, may have transpired at that secret meeting of Mr. Obama, Mr. Biden, and Ms. Yellen, at the Fed last week. You'll recall two days ago that I blogged about the fact that most derivatives trades are currently still "over-the-counter" and not subject to central clearing. You'll also recall that the initial Obama-Biden-Yellen meeting was due to the Fed invoking "expedited procedures", and that this meeting was followed up by meetings of major bankers in Washington, and a letter to JP Morgan Chase warning it that its "wind down" plan - sort of a last willl and testament for banks about to expire - was simply inadequate, since the bank was exposed to seizures of its liquidity from "foreign jurisdictions"(the Fed's phrase) and unspecified "third parties"(again, the Fed's phrase).
So what's going on here? I suspect in realty that behind the scenes these meetings were all about the derivatives crisis. Remember, it didn't go away in the bailouts of 2008. The can was simply kicked further down the road, and as I outlined two days ago, the majar western banks are all exposed to each other in their derivatives, not the least of which are (you guessed it) JP Morgan Chase and Deutsche Bank. What therefore might in part be going on is a quiet but deliberate move by the Fed to become the clearing house for derivatives trade, of which currently approximately 60% remains over-the-counter.
One might be tempted to argue this this is a good thing, given the fact that the derivatives trade - meaning run amok finance capital and big banks - was largely responsible for the bubble-bust mess in the first place. We know the story: mortgages were wrapped in these derivative bundles, and bundles of bundles, and these mortgages in turn were often fraudulent, robo-signed documents (and oh, by the way, the newest scam of the banksters is to claim "the documents are missing", yet another argument against electronic records and mortgages, but that's a whole other story), When the housing bubble burst, this began the unravelling of the derivatives, which, as we also know, run into quadrillions of dollars, an order of magntude more "money on paper" than the entire annual GDP of the entire planet Earth.
But, of course, this really may not be such a good thing, for if the trend continues, and if Mr. T.S.'s insight is valid, and if the derivatives traders and Fed itself are trying to position that notoriously corrupt institution as the central clearing house for most derivatives trades and backer for margin failures, then another layer of secrecy and non-transparency, and non-accountability, has just been added to the mix. In short, it's more of the same from these people.
And you thought the Bank of Crooks and Criminals International (BCCI) was bad...
See you on the flip side...
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This is a great discussion on these financial issues.
In watching a video by Mark Hunter where he interviews John Williams: Williams stated that china is exporting 43% less than it was last year and additionally container ships are being routed back due to lack of payment. ( not entering the docks because the shipments couldn’t be paid for ) He said that means: People are not making their bond payments.
I think we would need Catherine to figure out what all of this means on a global scale, it’s certainly above my paygrade, other than knowing these are not good signs.
Your comment is awaiting moderation.” Two for three, so far. goshawks – April 28, 2016 at 12:27 am.
My two Comments are now out of moderation, just below this. Enjoy!
It does appear by the frantic scurrying-around that things are coming to a head, somehow. One thing that was mentioned in the news at the time – and disappeared from the owned-news, since then – concerned fracking:
Harken back to high oil price days. Fracking was rising exponentially, buoyed by OPEC (House of Saud) greed. Various newsletters promoted buying ‘futures’ of fracking companies, based on long-term projections of ‘favorable’ oil pricing. Other financial instruments rode on these ‘futures’. A huge amount of capital was tied-up in this no-brainer ‘betting’…
Nowadays, fracking companies are getting set to ‘tank’ (pun) en-masse, due to Saudi-dominated* oil pricing. They just can’t produce at a profit at current prices. (These prices are good for the man on the street, though. Yay!) So, all the ‘futures’ and other leveraging-instrument losses are going to take a big bite out of available capital. Not to mention the original loans taken-out to establish the fracking business, which will zero-value when said companies formally go bankrupt.
Analysts connected-the-dots early in the oil-price plunge. The overall opinion was that this fracking-centered financial debacle would be huge, possibly even provoking another 2008 situation. One run would trigger another run, and so on.
Then, the owned-news went silent on this subject.
I wonder if the cows are finally coming home on this issue. This would tie-in with Obama’s recent visits to the House of Saud…
*Personally, I think that this dramatic oil-price reduction was (ironically) imposed on the House of Saud by the neocons to punish Russia and promote ‘regime change’ of Putin. I wonder if the fracking industry even came up in neocon minds…
Neocons (and the House of Saud) may have thought that they were totally in control of the on/off switch for oil prices. They may have even planned to make a few dollars by buying-up failing fracking companies just before hitting the ‘on’ switch.
However, the relaxation of Iran sanctions made their oil available to the West. Naturally, Iran began pumping like mad. Ironically, this effectively put the on/off switch in Iranian hands…
I could see this going in one of two directions: Either a ‘tanking’ of the financial industry due to the fracking industry going under, or some manner of turning the Iranian spigots down/off (new sanctions due to some manufactured incident, or even strikes by a certain rogue Middle East country against Iran). One would love to be a spider on the wall, these days…
your two scenarios do not mutually exclude. almost for sure the ziocons used sa to drive down oil prices, drive down the ruble, drive small fracking businesses to chapter 7. it splains rockefellers selling exxon and sa selling aramco. it’ll drive their share prices down too. when they do hit the on switch, they will have already bought back in on their own shares and all the fracking operations.
it’s a shake out – consolidation of power. relatively speaking their losses are miniscule. at the same time relatively speaking all these smaller operators on fracking rigs in ussa are suffering massive catastrophic losses that insurance and bankruptcy will not relieve. hence chapter 7 and not chapter 11 or 13.
isn’t there a rothschild famous for doing the same over waterloo? crassus in rome? one irony is that while the ruble fell by 50% twice in one or two quarters, putin kept buying gold. not easy and long term genius. kind tough on russia’s 99% too.
tanking the fracking/oil industry further is not a problem for those with infinite digital dollars in their accounts. shutting off iranian oil is not a problem either. if anything, it’s another tool. who ever knows of the attack the day before said rogue me country attacks and shuts down iranian oil can profit more off that knowledge before and after the attacks.
kinda like 911
ZDB, you reminded me of a 911 ‘tactic’ which could be used in OUR favor, in the case of the shutting down of Iranian oil. Various insiders will probably ‘short’ products and services which would be effected by the shutoff, a day or two before. Simply trawl-through the data for ‘statistically-improbable’ trades, and you have a list of the traitors of humanity. Then…
anyone think china buying chx pertains to these plans?
Since I really don’t know much about CME, I clicked on that little hyperlink in that little article and then read “about CME” paragraph which I pasted below. Besides these mind numbingly huge derivatives, CME also trades in “energy products” such as crude oil, natural gas, and refined products. Recall also a series of stories from Zero Hedge in which the Dallas fed was advising banks (although they claim they didn’t) not to push the U.S. Oil companies on their bad loans and work with them.
Perhaps its a double whammy.
The Company offers its customers the opportunity to trade futures contracts and options on futures contracts on a range of products, including those -based on interest rates, equities, foreign exchange, agricultural commodities, energy and metals. It also clear swaps contracts on a range of products, including those -based on interest rates, credit default, foreign exchange, agricultural commodities, energy and metals. The Company’s customers includes professional traders, financial institutions, institutional and individual investors, corporations, manufacturers, producers, governments and central banks. Its exchange consists of designated contract markets for the trading of futures and options on futures contracts.
Agricultural Commodity Products include Corn, Soybean, Wheat and Soybean Oil. Energy products include crude oil, natural gas and refined products. Metal Products include gold, silver and copper.
Does anybody find it passing strange that none of the Presidential candidates are talking about the 19 trillion dollars it owes the Fed !!
Obama has the only “unlimited” credit card on the planet, and the Fed thinks that’s just great.
Those politicians couldn’t run a meat raffle in a butcher shop.
they know how to run a butcher shop out the back door though.
Keeping it all in the family to further integrate and strengthen Wall Street’s Universal Matrix of Fraud ™.
This allows the Plunge Protection Team/Masters of the Universe to apply massive, precisely targeted FRN units, as needed, at any sign of weakening in the Oligarchs’ Safe Space — itself a shield against market losses far more important to the health of the planet than even the ozone layer — thus ensuring that Amerika’s capital markets and gambling casinos thrive and remain glorious examples of unfettered free enterprise.
Think “la cosa nostra” and you’ve pretty much got 95% of the picture.
The digital is not a realm without boundaries: capital sets the limits for immaterial production characteristic of digital capitalism, a point of extension beyond which the political economy must inevitably collapse.
The denial of the physicality that is specific the aura of the digital, and the apparent evolution from hand-labor to the automation characteristic of digital capitalism is inherent in how this technology has been deployed.
One that incorporates the living into the non living.
The economic collapses of the dot com bubble and the housing bubble, et. al., were not only inevitable, but are a structural effect of the transition to immaterial production, and the human collateral damage a sign of its productive action.
The economic upheavals are direct evidence for the impact of immaterial production through the digital manipulation of finance as a semiotic system .
not sure i got all that robert.
what i thought of the whole experience was that it was all designed to fail and gut main street through wall street while pretending it was all a mistake.
so the human damage was not collateral damage.
and these were not side effects but goals.
ZDB, well said!
Derivatives a polite word for reckless gambling on a nation-planetary scale. When will these mindless idiots be brought to heel for gambling with the World economic-political-biological infrastructure. Their fantasies house of cards is coming down so fast they wont know what hits them when it happens.
Derivatives are more than reckless gambling… it is using an asset to gamble: put up a bank loan against it, then sell options against it, then promise it someone as if it was for sale so they will put up the down payment…. every form of selling it without actually actually owning it in the first place!
it’s only gambling when there’s a chance of winning. this is intentional failure that brings down joe sixpack harder and more universally.
This appears to be an attempt to head off a catostrophic event. There are Astrologers who have stated Bad Magambo is going to land on the US later this year. And you know how slavishly obidient the PTB are to Astro/Numerological forecasts. I do believe they will do everything in their power to mitigate this. “What” will be the thing to watch.. Interesting times are indeed upon us..