Friday, September 30, 2016

"The Good Ship 'World Economy' Meets The Giant Derivatives Wave, At Last"

"The Good Ship 'World Economy' Meets The Giant Derivatives Wave, At Last"
Any questions?

Again, this is no surprise, it was never a matter of "what", only "when." You were warned countless times... I hope for your sake you've withdrawn all you can from your bank account. Get up, right now, and go to the ATM and take what you can. 
- CP

"Deutsche Bank may well be the scapegoat this time around just like Lehman was the scapegoat in 2008. Central Banks in collusion can prevent just one bank from collapsing. It was the co-collapsing of AIG and Goldman Sachs that prompted then-Secretary of Treasury, ex-Goldman CEO Henry Paulson, to put in motion the bailout of the U.S. and European banking system.

Yesterday it was reported that the rate the Fed charges the banks to borrow collateral surged to its highest rate in 7 years– LINK. The rush to borrow collateral was no doubt prompted by OTC derivatives-related counter-party collateral calls. A collateral call is like a margin call in a stock account. This occurs when a derivatives trade goes south for an entity that is on the long side of the derivatives bet– a bet that Deutsche Bank won’t default, for instance– and the counterparty to that trade demands more collateral to be posted in order to insure that the bet can be paid off if the “long side” loses.

Now multiply that concept across thousands of derivatives trades involving hundreds of hedge fund and bank counterparties totalling $100’s of trillions. (Total world-wide derivatives estimated at $1.5 QUADRILLION- CP) It does not take too many collateral calls before counterparties and Central Banks run out of collateral that can posted against these OTC derivatives margin calls. That’s happening now."


“Credit Default Swaps Explained in 5 Minutes”
Remembering why these lunatics have now created $1.5 QUADRILLION of these "derivatives" is very simple: every policy written, a bet, really, paid a commission to the originator! And you're talking policy amounts of hundreds of millions of dollars. Bets. That's why you hear it derisively called a casino...
“This Is How Much Liquidity Deutsche Bank Has At This Moment, And What Happens Next”

Here is the IMF's chart showing the key linkages of the world's riskiest bank:
Click image for larger size.

Risk exposure...
You'd be well advised to read this article:
"Derivatives - The Economy's Achille's Heel?"

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