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Keyword: derivatives

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  • It's The Final Meltdown...(economic collapse)

    08/26/2015 12:33:19 PM PDT · by SatinDoll · 20 replies
    The Market-Ticker ^ | August 28, 2015 | Karl Denninger
    Oh yes, remember the banks cleaned up their balance sheets and closed all those pesky derivative trades.... Right? "NEW YORK – This spring, traders and analysts working deep in the global swaps markets began picking up peculiar readings: Hundreds of billions of dollars of trades by U.S. banks had seemingly vanished." “We saw strange things in the data,” said Chris Barnes, a former swaps trader now with ClarusFT, a London-based data firm." Except.... they didn't vanish. They went overseas, but are still there. Just remember, it was CDS and IR products that blew up the world last time, and you...
  • Greek banks 'to stay shut on Monday'

    06/28/2015 10:10:25 AM PDT · by tcrlaf · 144 replies
    BBC News ^ | 6-28-2015 | BBC News
    Greece banks to stay closed on Monday, Piraeus Bank chief says, after emergency meeting in Athens This breaking news story is being updated and more details will be published shortly
  • Deutsche Bank Exodus Continues As Real Estate Chief Leaves For Blackstone

    06/15/2015 7:29:04 PM PDT · by george76
    Zero Hedge ^ | 06/15/2015 | Tyler Durden
    Earlier this month, Deutsche Bank’s co-CEOs Anshu Jain and Jürgen Fitschen were shown the door ... Jonathan Pollack, the bank’s global head commercial real estate, is leaving after 16 years. ... Pollack's departure comes just one month after the bank's head of structured finance Elad Shraga left to start his own fund. Shraga was instrumental in helping Deutsche become "an award-winning arranger of asset- and mortgage-backed debt." Shraga had been with Deutsche Bank for 15 years. All of this seems to lend credence to the idea that Deutsche Bank may be in trouble. The employee exodus appears to be gathering...
  • Is Deutsche Bank The Next Lehman?

    06/12/2015 12:29:07 PM PDT · by SeekAndFind · 10 replies
    Zero Hedge ^ | 06/12/2015 | NotQuant
    Submitted by NotQuant.comLooking back at the Lehman Brothers collapse of 2008, it’s amazing how quickly it all happened.  In hindsight there were a few early-warning signs,  but the true scale of the disaster publicly unfolded only in the final moments before it became apparent that Lehman was doomed.First, for purposes of drawing a parallel, let’s re-cap the events of 2007-2008:There were few early indicators of Lehman’s plight.   Insiders however, were well aware:   In late 2007, Goldman Sachs placed a massive proprietary bet against Lehman which would be known internally as the “Big Short”.  (It’s a bet that would later profit from during...
  • MUST READ:Global Bail-In Plan Could Still Leave Taxpayers Holding the Bag

    03/10/2015 6:03:55 PM PDT · by RaceBannon · 12 replies
    American Banker ^ | MAR 4, 2015 10:00am ET | CHRISTOPHER WHALEN
    BEWARE OF THE BAIL_IN The Government tells the banks to grab your assets to fill their coffers when they are insolvent, the way they took GREECE money The Banks are going to call YOUR money UNSECURED DEBT Now, Look at the first paragraph:
  • Cramer: The gigantic oil crash that hasn't occurred

    03/13/2015 6:43:03 AM PDT · by thackney · 11 replies
    msn ^ | Jim Cramer
    We keep waiting for the bust, the gigantic rollover of oil companies that just plain collapse under their own weight and the $50 price that you get for West Texas Intermediate. It hasn't happened. We keep waiting for the junk bond market that is riddled with $200 billion in oil and gas paper to be crushed by defaults and restructurings. It hasn't been. In fact, the iShares iBoxx $ High Yield Corporate Bd, the high-yield exchange-traded fund that includes a lot of this suspect paper, is pretty much unchanged for the last three years and has enjoyed a sustained rally...
  • Austrian Bank On The Edge! Derivatives Is 10 Times The Size Of The Global Economy

    01/28/2015 1:49:24 PM PST · by alexmark1917 · 18 replies
    Last year Austria's largest bank, Erste Bank, sent shudders of Credit Anstalt through the European Banking System. This year it is Austria's 3rd largest bank that is scaring investors senseless. On the heels of the Swiss National Bank's decision to un-peg from the Euro, Raiffeisen Bank's Swiss-Franc-Denominated mortgage worries have resurfaced (along with Russian/Ukraine writedowns) and nowhere is that more evident than the total collapse of the bank's bonds (from over 95c to 65c today). Even after the ECB Q€ (and some apparent intervention to weaken the Swissy) bonds kept free-falling. Perhaps, The Freedom Party's demands for a bailout will...
  • Rickards: Brace For Financial Storm 6x Larger Than 2008

    01/21/2015 12:09:48 PM PST · by alexmark1917 · 38 replies
    Over the coming months, I believe we could see an economic meltdown at least six times the size of the 2007 subprime mortgage meltdown... The next financial collapse, already on our radar screen, will not come from hedge funds or home mortgages. It will come from junk bonds, especially energy-related and emerging-market corporate debt. The Financial Times recently estimated that the total amount of energy-related corporate debt issued from 2009-2014 for exploration and development is over $5 trillion. Meanwhile, the Bank for International Settlements recently estimated that the total amount of emerging-market dollar-denominated corporate debt is over $9 trillion. Energy-sector...
  • France Terror Heading to US, Oil Crash Equals Market Crash, Obama’s Phony Recovery

    01/11/2015 6:50:55 PM PST · by Lorianne · 12 replies
    You Tube/ USA Watchdog ^ | 08 January 2015 | Greg Hunter
    video 15:10
  • Fed and Congress Signal Trouble, Putin Defends Russia, ISIS War

    12/19/2014 12:38:05 PM PST · by GilGil · 10 replies
    USAWatchdog ^ | 12/19/2014 | Greg Hunter
    My top story is the economy, and I think the Fed and Congress just signaled that something is seriously wrong, and it’s going to get worse. First off, the Federal Reserve just came out and said that it was going to be “patient” when normalizing the monetary policy. I know Wall Street is jubilant and the stock market spiked on the news, but I think this is really ominous, and it is nothing to be celebrated. To me, that means don’t expect the Fed to raise interest rates anytime soon because the economy is much worse than what they are...
  • Presenting The $303 Trillion In Derivatives That US Taxpayers Are Now On The Hook For

    12/12/2014 6:25:55 AM PST · by coloradan · 57 replies
    Zerohedge ^ | 12/12/2014 | Zerohedge
    Courtesy of the Cronybus(sic) last minute passage, government was provided a quid-pro-quo $1.1 trillion spending allowance with Wall Street's blessing in exchange for assuring banks that taxpayers would be on the hook for yet another bailout, as a result of the swaps push-out provision, after incorporating explicit Citigroup language that allows financial institutions to trade certain financial derivatives from subsidiaries that are insured by the Federal Deposit Insurance Corp, explicitly putting taxpayers on the hook for losses caused by these contracts. Recall: (more at link)
  • Plummeting Oil Prices Could Destroy The Banks That Are Holding Trillions In Commodity Derivatives

    12/08/2014 10:10:30 AM PST · by SeekAndFind · 43 replies
    The Economic Collapse Blog ^ | 12/08/2014 | Michael Snyder
    Could rapidly falling oil prices trigger a nightmare scenario for the commodity derivatives market? The big Wall Street banks did not expect plunging home prices to cause a mortgage-backed securities implosion back in 2008, and their models did not anticipate a decline in the price of oil by more than 40 dollars in less than six months this time either. If the price of oil stays at this level or goes down even more, someone out there is going to have to absorb some absolutely massive losses. In some cases, the losses will be absorbed by oil producers, but many...
  • New Law Would Make Taxpayers Potentially Liable For TRILLIONS In Derivatives Losses

    12/07/2014 4:30:18 PM PST · by dontreadthis · 28 replies
    The Economic Collapse ^ | December 7th, 2014 | Michael Snyder
    If the quadrillion dollar derivatives bubble implodes, who should be stuck with the bill? Well, if the “too big to fail” banks have their way it will be you and I. Right now, lobbyists for the big Wall Street banks are pushing really hard to include an extremely insidious provision in a bill that would keep the federal government funded past the upcoming December 11th deadline. This provision would allow these big banks to trade derivatives through subsidiaries that are federally insured by the FDIC. What this would mean is that the big banks would be able to continue their...
  • CCP “contagion” fears spark derivatives debate

    11/13/2014 9:41:06 PM PST · by TigerLikesRooster · 13 replies
    banking technology ^ | 13 November, 2014 | Elliott Holley
    CCP “contagion” fears spark derivatives debate 13 November, 2014 Written by Elliott Holley Controversy over the handling of derivatives dominated talk at the Mondo Visione Exchange Forum this week, where panellists contested the value of interoperability and whether CCP contagion might bring down the financial system. “Regulators should absolutely not allow interoperability for derivatives,” said Philip Simons, head of OTC derivatives business at Eurex Clearing. “It creates systemic risk. If one clearing house goes down, it would result in contagion as it would bring down all the others. CCPs are phenomenally under-capitalised. They could easily fall over.” Simons added that...
  • How Goldman's Libya case could disrupt derivatives

    10/21/2014 7:47:02 AM PDT · by Lorianne · 3 replies
    CNBC ^ | 21 October 2014 | Matt Clinch
    A costly legal battle between Goldman Sachs and the Libyan sovereign wealth fund could have more permanent repercussions for the global banking industry, experts have told CNBC. The Libyan Investment Authority has accused Goldman of misleading it and taking advantage of its lack of financial knowledge to make "substantial" profits on a series of derivative trades back in 2008. The bank denies the allegations and a full hearing has been touted to begin in early 2016 after a preliminary hearing was completed earlier in the month. The LIA claims the disputed derivative trades in early 2008 cost $1 billion, and...
  • Five U.S. Banks Each Have More Than 40 Trillion Dollars In Exposure To Derivatives

    09/28/2014 7:00:07 PM PDT · by SeekAndFind · 101 replies
    TEC ^ | 09/27/2014 | Michael Snyder
    When is the U.S. banking system going to crash? I can sum it up in three words. Watch the derivatives. It used to be only four, but now there are five "too big to fail" banks in the United States that each have more than 40 trillion dollars in exposure to derivatives. Today, the U.S. national debt is sitting at a grand total of about 17.7 trillion dollars, so when we are talking about 40 trillion dollars we are talking about an amount of money that is almost unimaginable. And unlike stocks and bonds, these derivatives do not represent "investments"...
  • China Scrambling After "Discovering" Thousands Of Tons Of Rehypothecated Copper, Aluminum Missing

    06/24/2014 8:22:06 AM PDT · by Renfield · 19 replies
    Zero Hedge ^ | 6-4-2014 | Tyler Durden
    "Banks are worried about their exposure," warns one warehousing source, "there is a scramble for people to head down there at the minute and make sure that their metal that they think is covered by a warehouse receipt actually exists." The rehypothecated catastrophe that we discussed in great detail here (copper financing), here (all commodities), and here (global contagion) appears to be gathering speed as the China's northeastern port of Qingdao has halted shipments of aluminum and copper due to an investigation by authorities after they found "there is a discrepancy in metal that should be there and metal that...
  • Bitcoin swap agreement could lead to regulated derivatives

    03/24/2014 1:02:40 PM PDT · by Errant · 16 replies
    Market Watch [WSJ] ^ | 24 March 2014
    The Tera Group Inc. said Monday it had finalized the terms for a multi-million dollar bitcoin swap agreement between two U.S. institutions, but declined to name the parties involved. Such transactions are currently unregulated, Tera said. The company said it has reached out to the U.S. Commodities Futures Trading Commission in order to work on a regulated bitcoin swap. The CFTC hadn’t responded to a request for comment as of writing this post. “The goal is for us to bring this to the bitcoin community because there are many commercial entities that want to take bitcoin in but have concerns...
  • Did Derivatives Cause Bond Fund Giant, PIMCO's $2 Trillion Divorce?

    02/28/2014 8:11:51 AM PST · by SeekAndFind
    American Thinker ^ | 02/28/2014 | Chriss Street
    The Wall Street Journal on February 25th published a story about December’s messy corporate divorce between Bill Gross and Mohamed El-Erianas, co-Chief Investment Officers at Pacific Investment Management Company (PIMCO), the world’s largest bond fund with almost $2 trillion in assets.  The article focused on the prickly personality of Gross and foul language complaints by El-Erian during a period of stress last summer when the firm was suffering market losses and clients were withdrawing billions.  But despite a carefully crafted image of a traditional conservative bond manager for “serious” money, PIMCO has magnified returns by making trillions of dollars in high-risk...
  • Washington & Wall Street: Too Big to Fail and the Detroit Bankruptcy

    12/30/2013 2:49:03 PM PST · by george76 · 9 replies
    Breitbart ^ | 27 Dec 2013 | Christopher Whalen
    the bogey man known as “systemic risk” to gain advantage over the other creditors . ... In order for the OTC casino to work, the derivatives contracts had to be given special priority in bankruptcy. Speculative derivative instruments such as credit default swaps (CDS), which caused the failure and government bailout of American International Group, could never exist in significant size were in not for the safe harbor from bankruptcy for derivatives created by Congress in the 1980s and 1990s. Members of Congress from both parties were paid very well for their treachery. ... The intellectual author of the “systemic...
  • What Do They Say Is Coming In 2014? Top Financial Prognosticators Speak Out

    12/13/2013 7:19:47 PM PST · by Tolerance Sucks Rocks · 21 replies
    Freedom Outpost ^ | December 13, 2013 | Michael Snyder
    Some of the most respected prognosticators in the financial world are warning that what is coming in 2014 and beyond is going to shake America to the core. Many of the quotes that you are about to read are from individuals that actually predicted the subprime mortgage meltdown and the financial crisis of 2008 ahead of time. So they have a track record of being right. Does that guarantee that they will be right about what is coming in 2014? Of course not. In fact, as you will see below, not all of them agree about exactly what is coming...
  • Derivatives dispute harming EU-US free trade talks

    10/30/2013 7:48:37 PM PDT · by Olog-hai · 1 replies
    Reuters ^ | Tue Oct 29, 2013 4:10pm IST | Luke Baker and Stephen Adler
    Ambitious plans for an EU-U.S. free-trade agreement may be put in jeopardy by Washington’s failure to finalize a deal coordinating rules in the $630 trillion derivatives market, the EU’s financial markets chief has warned. The U.S. Commodity Futures Trading Commission agreed in July this year on a common position with the European Commission and other global regulators that aimed to iron out differences in how they police derivatives trading worldwide. But in the months since that agreement was struck in principle, the parties have failed to sign off on the details of the arrangement. The CFTC, under pressure to adhere...
  • Banks rigged €10 trillion derivatives market, Brussels says ($13 trillion)

    07/02/2013 8:55:25 PM PDT · by Olog-hai · 3 replies
    EU Observer ^ | 02.07.13 @ 09:30 (July 2) | Benjamin Fox
    Thirteen big banks colluded to shut out competition from the multi-trillion euro derivatives market, according to an investigation by the European Commission. The EU’s executive arm said that its investigation, which began in 2011, had uncovered anti-competitive practices during the 2008-9 financial crisis. The commission investigation focuses on the credit default swap (CDS) market which allows banks and businesses to hedge against possible losses. However, more controversially, they were used by Goldman Sachs and others to speculate on the probability of a Greek debt crisis in 2010. There are almost 2 million active CDS contracts with a joint notional amount...
  • The 441 TRILLION Dollar Interest Rate Derivatives Time Bomb

    06/24/2013 8:09:18 PM PDT · by blam · 33 replies
    TEC ^ | 6-24-2013 | Michael Snyder
    The 441 TRILLION Dollar Interest Rate Derivatives Time Bomb By Michael Snyder June 24th, 2013The Derivatives Time BombDo you want to know the primary reason why rapidly rising interest rates could take down the entire global financial system? Most people might think that it would be because the U.S. government would have to pay much more interest on the national debt. And yes, if the average rate of interest on U.S. government debt rose to just 6 percent (and it has actually been much higher in the past), the federal government would be paying out about a trillion dollars a...
  • Worldwide derivatives market could be over $1.2 quadrillion in notional value

    03/26/2013 9:50:57 PM PDT · by Lorianne · 28 replies
    25 March 2013 | Gaius Publius
    We wrote earlier about the recent move by bankers — and the politicians who serve them — to unreform the derivatives market, to return it to its pre–Dodd-Frank, pre–Crash-of-2007 state. This is a serious move by banks and bank lobbyists, and it could well happen soon. The seven bills in the House package of “tweaks” — as the House Agriculture website dishonestly puts it — have cleared the committee with Democratic support and are headed to the House floor. In the meantime, there are companion bills in the Senate. What will happen in the Senate? Well, Dick Durbin (always an...
  • Nigel Farage: My God, The TRUTH!

    03/20/2013 9:47:09 AM PDT · by Kartographer · 8 replies
    Market-Ticker ^ | 3/20/13 | Karl Denninger
    We are to blame for this because we failed to demand and enforce a stop to this crap of un-margined derivative exposure that is "off book" and unsupervised on a daily basis, unlike positions in the futures and stock markets. I have been calling for "pulling the fuse" on this bomb since I started The Ticker for this very reason. The banks have hundreds of trillions of "gross" exposure in these instruments and while that grossly overstates the actual risk the fact of the matter is that these institutions have not and cannot post margin against these positions as they...
  • DoJ lawsuit against S&P even sillier than first thought (Banks got duped on their own offerings?)

    02/08/2013 7:56:06 AM PST · by SeekAndFind · 7 replies
    Hotair ^ | 02/08/2013 | Ed Morrissey
    I wrote Tuesday about the hypocrisy and perhaps vindictiveness of the Department of Justice’s lawsuit against ratings agency Standard & Poor’s for rating toxic mortgage-backed securities and their derivatives highly before the housing bubble popped. Apparently I wasn’t tough enough on … the DoJ. Bloomberg’s Jonathan Weil explains why the lawsuit isn’t just ill-considered, but downright silly: Oh, the poor suckers at Citigroup Inc. and Bank of America Corp., fooled about the stench of their own garbage by those sneaky credit raters at Standard & Poor’s.The U.S. Justice Department made some peculiar allegations in its lawsuit this week against S&P...
  • The Obama Hypocrisy: US sues S&P over pre-crisis mortgage ratings

    02/08/2013 6:33:10 AM PST · by Madhattan · 1 replies
    In charges filed late Monday in Los Angeles federal court, the Justice Department said S&P gave high marks to mortgage-backed securities that later went sour, even though it knew they were risky. The government said S&P misrepresented the risks because it wanted more business from the banks. The case is the government's first major action against one of the credit rating agencies that stamped their seals of approval on Wall Street's mortgage bundles. It marks a milestone for the Justice Department, which has been criticized for failing to make bigger cases against the companies involved in the crisis. "Put simply,...
  • No Big Deal: Italian Bank Hid Derivative Losses

    01/26/2013 8:54:11 AM PST · by Kaslin · 2 replies ^ | January 26, 2013 | Mike Shedlock
    When Mario Draghi (now ECB President), had oversight of the Italian bank system as Bank of Italy Governor, the Italian bank Monte dei Paschi di Siena (Italy's third largest bank) hid information on the derivatives transactions between 2006 and 2009. This information is just now out, and shares of the bank have plunged 22% in a few days. Mario Draghi ought to be under fire, but he says it's a "Matter for the Italian Authorities". The Mish translation is "It's a Matter for the Italian Authorities, to Sweep Under the Rug". With that backdrop, let's take a look at the...
  • Goldman Sachs And The Big Hedge Funds Are Pushing Leverage To Ridiculous Extremes

    01/20/2013 5:43:44 AM PST · by SeekAndFind · 15 replies
    TEC ^ | 01/14/2013 | Michael Snyder
    Goldman Sachs And The Big Hedge Funds Are Pushing Leverage To Ridiculous Extremes By Michael, on January 14th, 2013 As stocks have risen in recent years, the big hedge funds and the "too big to fail" banks have used borrowed money to make absolutely enormous profits. But when you use debt to potentially multiply your profits, you also create the possibility that your losses will be multiplied if the markets turn against you. When the next stock market crash happens, and the gigantic pyramid of risk, debt and leverage on Wall Street comes tumbling down, will highly leveraged banks...
  • 1000x Systemic Leverage: $600 Trillion In Gross Derivatives "Backed" By $600 Billion In Collateral

    12/25/2012 7:55:15 PM PST · by SeekAndFind · 26 replies
    Zero Hedge ^ | 12/24/2012 | Tyler Durden
    There is much debate whether when it comes to the total notional size of outstanding derivatives, it is the gross notional that matters (roughly $600 trillion), or the amount which takes out biletaral netting and other offsetting positions (much lower). We explained previously how gross is irrelevant... until it is, i.e. until there is a breach in the counterparty chain and suddenly all net becomes gross (as in the case of the Lehman bankruptcy), such as during a financial crisis, i.e., the only time when gross derivative exposure becomes material (er, by definition). But a bigger question is what...
  • Behind an Estimated $30 Trillion Drain on Banks, a Lot of Hypotheticals

    11/08/2012 11:32:14 AM PST · by ExxonPatrolUs · 8 replies
    NY Times ^ | 10-29-2012 | PETER EAVIS
    Imagine a situation in which the world’s banks have to find as much as $30 trillion to comply with just one new regulation. That might be something of a stretch, given that the gross domestic product of the United States is only $15.8 trillion, and the world’s 10 largest banks hold only $25 trillion of assets. Yet a banking industry group recently looked into a new rule and sketched out a possibility in which banks were forced to come up with as much as $30 trillion in cash. The potential cash call is outlined in a letter the International Swaps...
  • RED ALERT: It's Open Season on All Customer Funds

    08/10/2012 11:13:07 PM PDT · by STARWISE · 78 replies
    Barnhardt.bix ^ | 8-10-12 | Ann Barnhardt
    The NFA is collusion with the Banksters, government and judiciary have achieved their goal. The entire concept of "customer segregated funds" is officially, completely, legally dead. Guys, it is OVER. I know that many of you are still cowering in normalcy bias, unable to deal with reality, unable to face the world as it is, but you have GOT to snap out of it. The marketplace is DESTROYED. You CANNOT be in these markets. All legal protections are now officially gone. Do you remember how I told you about the Ponzi scheme that imploded in 2007 called "Sentinel Management Group"...
  • When The Derivatives Market Crashes (And It Will) U.S. Taxpayers Will Be On The Hook

    06/01/2012 9:28:47 AM PDT · by Lorianne · 7 replies
    Hawaii News Daily ^ | 29 May 2012 | Michael Snyder
    Recently, JP Morgan made national headlines when it announced that it was going to take a 2 billion dollar loss from derivatives trades gone bad. Well, it turns out that JP Morgan did not tell us the whole truth. As you will see later in this article, most analysts are estimating that the losses will eventually be far larger than 2 billion dollars. But no matter how bad things get for JP Morgan, it will not be allowed to fail. JP Morgan is the largest bank in the United States, so it is essentially the "granddaddy" of the too big...
  • US reportedly plans to arm Italy’s drones

    05/29/2012 9:54:24 AM PDT · by opentalk · 4 replies
    Wall Street Journal ^ | May 29, 2012 | WSJ
    The Obama administration plans to arm Italy’s fleet of Reaper drone aircraft, a move that could open the door for sales of advanced hunter-killer drone technology to other allies, according to lawmakers and others familiar with the matter. The sale would make Italy the first foreign country besides Britain to fly U.S. drones armed with missiles and laser-guided bombs. U.S. officials said Italy intends initially to deploy the armed drones in Afghanistan. Lawmakers who question the planned deal say the decision to “weaponize” Italy’s unarmed surveillance drones could make it harder for the U.S. to deny similar capabilities to other...
  • Killers of banks and jobs (JP Morgan is much ado about nothing. Look at public sector mismanagement)

    05/15/2012 6:16:59 AM PDT · by SeekAndFind · 4 replies
    Washington Times ^ | 05/15/2012 | Richard Rahn
    Last week, Jamie Dimon, CEO of the nation’s largest bank, JPMorgan Chase, revealed that the bank had made a $2 billion-plus trading mistake. The bank has more than $2 trillion in assets and made a profit of about $20 billion last year. So it lost one-tenth of 1 percent of its assets and an amount equal to about 10 percent of its income for last year. No big deal, despite all the hand-wringing of the political and media class. Predictably, Sen. Carl Levin, Michigan Democrat and arguably the most irresponsible member of Congress, immediately issued a press release calling for...
  • Massive derivatives loss at JPMorgan fuels calls to tighten Wall Street regulation

    05/12/2012 5:39:26 PM PDT · by Olog-hai · 23 replies
    Newark Star-Ledger ^ | Saturday, May 12, 2012, 8:05 PM | Ed Beeson
    The only Wall Street titan to emerge from the financial crisis without a black eye headed into the weekend with a concussion. JPMorgan Chase, fresh off the surprise news that it lost more than $2 billion in recent weeks to a complex trade in credit derivatives, saw its stock value plummet Friday more than 9 percent. The massive loss also reportedly led regulators to open up inquiries about the trading strategy and caused a downgrade of its credit by the rating agency Fitch, which in turn sent its stock lower in after-hours trading. To top it off, the reported loss...
  • The $2 Billion Loss By JP Morgan Is Just A Preview Of The Coming Collapse Of The Derivatives Market

    05/12/2012 10:44:24 AM PDT · by SeekAndFind · 41 replies
    The Economic Collapse Blog ^ | 05/12/2012 | Michael Snyder
    When news broke of a 2 billion dollar trading loss by JP Morgan, much of the financial world was absolutely stunned. But the truth is that this is just the beginning. This is just a very small preview of what is going to happen when we see the collapse of the worldwide derivatives market. When most Americans think of Wall Street, they think of a bunch of stuffy bankers trading stocks and bonds. But over the past couple of decades it has evolved into much more than that. Today, Wall Street is the biggest casino in the entire world....
  • Bank Downgrade Forward Calendar

    04/05/2012 12:46:15 PM PDT · by SatinDoll
    The Zero Hedge ^ | 04/05/2012 | Tyler Durdan
    A major potential negative catalyst for financials globally is rapidly approaching as 114 banks are on review-for-downgrade by Moody's across 16 countries. Why do we care so much about ratings given their historical credibility?...In Europe, the fun heats up in the next few weeks as first Italian banks (4/16), then Spanish banks (4/23) and then Austrian (4/30) face from 1 to 4 notch downgrades and the potential to lose their short-term (funding-/CP-related) Prime-1 top rating, implicitly raising funding costs (and liquidity concerns) even further.
  • TBTF Get TBTFer: Top 5 Banks Hold 95.7%, Or $221 Trillion, Of Outstanding Derivatives

    03/26/2012 1:22:10 PM PDT · by SatinDoll · 8 replies · 10+ views
    The Zero Hedge ^ | 03/26/2012 | Tyler Durden
    Every quarter the Office of the Currency Comptroller releases its report on Bank Derivative Activities, and every quarter we find that the Too Big To Fail get Too Bigger To Fail. To wit: in Q4 2011, of the total $230.8 trillion in US outstanding derivatives, the Top 5 banks (JPM, BofA, Morgan Stanley, Goldman and HSBC) accounted for 95.7% of all Derivatives. In some respects this is good news: in Q2, the Top 5 banks held 95.9% of the $250 trillion in derivatives. Unfortunately it is also bad news, because $220 trillion is more than enough for the world to...
  • How To Bring The Cancerous Derivatives Market Under Control

    01/25/2012 9:35:12 AM PST · by SpaceBar · 57 replies · 1+ views
    The American Almanac ^ | September 6, 1993 | by Christopher White
    On March 9, Lyndon LaRouche intervened in the economic crisis to propose a plan that is as simple and direct, as it is potentially effective in its execution: a sales or transaction tax on the turnover of ``financial derivative'' securities or financial instruments. Each time such a security or instrument is traded, he said, it should be taxed at 0.1 percent of its face value, or, as it is called in the derivatives trade, its notional principal amount. ... Talk to most people about ``derivatives'' and you pretty soon discover that they have no idea what they are. Still less...
  • Hendry's 'China Short' Fund Makes Big Returns

    12/12/2011 6:52:12 PM PST · by TigerLikesRooster · 6 replies
    CNBC ^ | 12/12/11 | Sam Jones
    Hendry's 'China Short' Fund Makes Big Returns Published: Monday, 12 Dec 2011 | 9:08 PM ET By: Sam Jones, Hedge Fund Correspondent Shorting the credit of companies positioned to do badly from a Chinese slowdown has proved to be one of the hedge fund industry’s most successful trades of 2011. Hugh Hendry, the outspoken U.K. hedge fund manager known for his bearish, often contrarian views on the global economy, has seen his ‘China short’ fund rack up gains of more than 52 percent so far this year, investors have told the Financial Times. The gains compare to a loss for...
  • Black Swan

    12/10/2011 2:43:44 PM PST · by nathanbedford · 34 replies · 1+ views
    Vanity (long) ^ | December 10, 2011 | Nathan Bedford
    Seven decades after Pearl Harbor and one decade after 9/11 we Americans dare not remain willfully oblivious to the threat of the Black Swan. Our grand American experiment is more vulnerable now that it was in 1941 and it is certainly more precariously balanced than it was in 2011. These conundrums are what Donald Rumsfeld might describe as the "known unknowns" but by definition a Black Swan event is as surprising as it is earth shattering. So all of these threats which beset us are by definition not Black Swan events. They are known risks. There are many more risks...
  • $707,568,901,000,000: How (And Why) Banks Increased Total Outstanding Derivatives

    While everyone was focused on the impending European collapse, the latest soon to be refuted rumors of a quick fix from the Welt am Sonntag notwithstanding, the Bank of International Settlements reported a number that quietly slipped through the cracks of the broader media. Which is paradoxical because it is the biggest ever reported in the financial world: the number in question is $707,568,901,000,000 and represents the latest total amount of all notional Over The Counter (read unregulated) outstanding derivatives reported by the world's financial institutions to the BIS for its semi-annual OTC derivatives report titled "OTC derivatives market activity...
  • eCat Has European Certification

    10/24/2011 7:35:54 PM PDT · by Kevmo · 27 replies
    ECat News ^ | October 24, 2011 | admin
    eCat Has European Certification October 24, 2011 | Author: admin Many of us have been wondering about Defkalion’s stated progress (or otherwise) regarding official certification of their eCat derivatives. Since their divorce, it is interesting to note that Andrea Rossi states that he has completed CE compliance: Andrea Rossi October 23rd, 2011 at 8:08 AM Dear Dario: The CE for the business to business has been done. For household applications not yet. Warm Regards, A.R . The following snips are from the wiki entry: CE marking (originally EC mark[1]) is a mandatory conformity mark for products placed on the...
  • Bank Of America Dumps $75 Trillion In Derivatives On U.S. Taxpayers With Federal Approval

    Bloomberg reports that Bank of America (BAC) has shifted about $22 trillion worth of derivative obligations from Merrill Lynch and the BAC holding company to the FDIC insured retail deposit division. Along with this information came the revelation that the FDIC insured unit was already stuffed with $53 trillion worth of these potentially toxic obligations, making a total of $75 trillion.
  • Coming Derivatives Crisis That Could Destroy The Entire Global Financial System (Bank of America)

    10/22/2011 4:55:46 PM PDT · by dennisw · 57 replies
    Most people have no idea that Wall Street has become a gigantic financial casino.  The big Wall Street banks are making tens of billions of dollars a year in the derivatives market, and nobody in the financial community wants the party to end.  The word "derivatives" sounds complicated and technical, but understanding them is really not that hard.  A derivative is essentially a fancy way of saying that a bet has been made.  Originally, these bets were designed to hedge risk, but today the derivatives market has mushroomed into a mountain of speculation unlike anything the world has ever...
  • Sleight of hand: BofA moves dodgy Merrill derivatives to bank (U.S. taxpayer on the hook for $55+T?)

    10/22/2011 9:43:11 AM PDT · by rabscuttle385 · 63 replies
    The New York Post ^ | 2011-10-21 | Mark Decambre
    A plan by beleaguered Bank of America to foist trillions of dollars of funky Merrill Lynch derivatives onto its depositors is raising eyebrows on Wall Street. The rarely used move will likely save the bank millions of dollars in collateral but could put depositors’ cash behind the eight ball. The move also brought to light fissures between the nation’s top banking regulators, the Federal Deposit Insurance Corp. and the Federal Reserve, in the wake of new regulations meant to curb the free-wheeling habits that fostered the worst crisis in a generation back in 2008. At issue is BofA’s decision to...
  • Federal Judge Grabs Bank Of America's $8.5 Billion Settlement

    10/21/2011 9:08:18 PM PDT · by Razzz42 · 9 replies
    Forbes ^ | 10/19/2011 @ 9:48PM | Nathan Vardi, Forbes Staff
    A federal judge ruled on Wednesday that the approval process for Bank of America’s $8.5 billion mortgage put-back settlement should be moved to federal court, making it more vulnerable to attack from investors and public officials. William Pauley, a federal judge in Manhattan, said the case must be heard in federal court because it “implicates core federal interests in the integrity of nationally chartered banks and the vitality of the national securities markets.” Bank of America in late June struck the $8.5 billion deal with 22 big institutions like BlackRock that had invested in Countrywide’s mortgage-backed securities and claimed that...
  • Derivatives The 600 Trillion Time Bomb That's Set To Explode

    10/12/2011 2:37:06 PM PDT · by Stayfree · 13 replies ^ | Oct. 12, 2011 | Keith Fitz-Gerald
    In 2009, five banks held 80% of derivatives in America. Now, just four banks hold a staggering 95.9% of U.S. derivatives, according to a recent report from the Office of the Currency Comptroller... The world's gross domestic product (GDP) is only about $65 trillion, or roughly 10.83% of the worldwide value of the global derivatives market, according to The Economist.