Archive for the ‘Have the courage to live your own life. Don’t be trapped by dogma, which is living the result of other people’s thinking’ Category

The Top 25 U.S. Banks Have 222 Trillion Dollars Of Exposure To Derivatives

Sunday, May 28th, 2017

by Michael Snyder, May 15th, 2017

The recklessness of the “too big to fail” banks almost doomed them the last time around, but apparently they still haven’t learned from their past mistakes.  Today, the top 25 U.S. banks have 222 trillion dollars of exposure to derivatives.  In other words, the exposure that these banks have to derivatives contracts is approximately equivalent to the gross domestic product of the United States times twelve.  As long as stock prices continue to rise and the U.S. economy stays fairly stable, these extremely risky weapons of mass destruction will probably not take down our entire financial system.  But someday another major crisis will inevitably happen, and when that day arrives the devastation that these financial instruments will cause will be absolutely unprecedented.

During the great financial crisis of 2008, derivatives played a starring role, and U.S. taxpayers were forced to step in and bail out companies such as AIG that were on the verge of collapse because the risks that they took were just too great.
But now it is happening again, and nobody is really talking very much about it.  In a desperate for higher profits, all of the “too big to fail” banks are gambling like crazy, and at some point a lot of these bets are going to go really bad.  The following numbers regarding exposure to derivatives contracts come directly from the OCC’s most recent quarterly report (see Table 2), and as you can see the level of recklessness that we are currently witnessing is more than just a little bit alarming…
Citigroup
Total Assets: $1,792,077,000,000 (slightly less than 1.8 trillion dollars)
Total Exposure To Derivatives: $47,092,584,000,000 (more than 47 trillion dollars)
JPMorgan Chase
Total Assets: $2,490,972,000,000 (just under 2.5 trillion dollars)
Total Exposure To Derivatives: $46,992,293,000,000 (nearly 47 trillion dollars)
Goldman Sachs
Total Assets: $860,185,000,000 (less than a trillion dollars)
Total Exposure To Derivatives: $41,227,878,000,000 (more than 41 trillion dollars)
Bank Of America
Total Assets: $2,189,266,000,000 (a little bit more than 2.1 trillion dollars)
Total Exposure To Derivatives: $33,132,582,000,000 (more than 33 trillion dollars)
Morgan Stanley
Total Assets: $814,949,000,000 (less than a trillion dollars)
Total Exposure To Derivatives: $28,569,553,000,000 (more than 28 trillion dollars)
Wells Fargo
Total Assets: $1,930,115,000,000 (more than 1.9 trillion dollars)
Total Exposure To Derivatives: $7,098,952,000,000 (more than 7 trillion dollars)
Collectively, the top 25 banks have a total of 222 trillion dollars of exposure to derivatives.
If you are new to all of this, you might be wondering what a “derivative” actually is.
When you buy a stock you are purchasing an ownership interest in a company, and when you buy a bond you are purchasing the debt of a company.  But when you buy a derivative, you are not actually getting anything tangible.  Instead, you are simply making a side bet about whether something will or will not happen in the future.  These side bets can be extraordinarily complex, but at their core they are basically just wagers.  The following is a pretty good definition of derivatives that comes from Investopedia
A derivative is a security with a price that is dependent upon or derived from one or more underlying assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.
Those that trade derivatives are essentially engaged in a form of legalized gambling, and some of the brightest names in the financial world have been warning about the potentially destructive nature of these financial instruments for a very long time.
In a letter that he wrote to shareholders of Berkshire Hathaway in 2003, Warren Buffett actually referred to derivatives as “financial weapons of mass destruction”…
The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.
Warren Buffett was right on the money when he made that statement, and of course the derivatives bubble is far larger today than it was back then.
In fact, the total notional value of derivatives contracts globally is in excess of 500 trillion dollars.
This is a disaster that is just waiting to happen, and investors such as Buffett are quietly positioning themselves to take advantage of the giant crash that is inevitably coming.
According to financial expert Jim Rickards, Buffett’s Berkshire Hathaway Inc. is hoarding 86 billion dollars in cash because he is likely anticipating a major stock market downturn…
Far from a bullish sign, Buffett’s cash hoard could mean he’s preparing for a market crash. When the crash comes, Buffett can walk through the wreckage with his checkbook open and buy great companies for a fraction of their current value.
That’s the real Buffett style, but you won’t hear that from your broker or wealth manager. If Buffett has a huge cash allocation, shouldn’t you?
He knows what’s coming. Now you do too.
Warren Buffett didn’t become one of the wealthiest men in the entire world by being stupid.  He knows that stocks are ridiculously overvalued at this point, and he is poised to make his move after the pendulum swings in the other direction.
And he might not have too long to wait.  In recent weeks I have been writing about many of the signs that the U.S. economy is slowing down substantially, and today we received even more bad news
Despite high levels of economic confidence expressed by business owners and consumers, one key indicator shows that it has not translated into much action yet.
Loan issuance declined in the first quarter from the previous three-month period, the first time that has happened in four years, according to an SNL Financial analysis of bank earnings reports filed for the period. The total of recorded loans and leases fell to $9.297 trillion from $9.305 trillion in the fourth quarter of 2016.
This is precisely what we would expect to see if a new economic downturn was beginning.  Our economy is very highly dependent on the flow of credit, and when that flow begins to diminish that is a very bad sign.
For the moment, financial markets continue to remain completely disconnected from the hard economic data, but as we saw in 2008 the markets can plunge very rapidly once they start catching up with the real economy.
Warren Buffett is clearly getting prepared for the crisis that is ahead.
Are you?

Will the US Dollar collapse become the catalyst for a Global Financial Disaster?

Sunday, February 23rd, 2014

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"We are at the crossroads of the most serious economic crisis in world history. The economic crisis has by no means reached its climax, as some economists have predicted. The crisis is deepening, with the risk of seriously disrupting the structures of international trade and investment."   —-  Prof. Michel Chossudovsky, Global Research October 31, 2013 —

It seems that western world leaders practicise a head-in-the-sand (ostrich) policy But this behaviour is extremely dangerous. It will drive the majority of world population in dependency of a very few big banks and their owners or shareholders.

World’s Dominant Currency – the US Dollar

Will it’s collapse become the catalyst for a Global Financial Disaster?

China Starts To Make A Power Move Against The U.S. Dollar

By Michael Snyder and his personal permission to publish his article on my site, on February 20th, 2014

In order for our current level of debt-fueled prosperity to continue, the rest of the world must continue to use our dollars to trade with one another and must continue to buy our debt at ridiculously low interest rates.  Of course the number one foreign nation that we depend on to participate in our system is China.  China accounts for more global trade than anyone else on the planet (including the United States), and most of that trade is conducted in U.S. dollars.  This keeps demand for our dollars very high, and it ensures that we can import massive quantities of goods from overseas at very low cost.  As a major exporting nation, China ends up with gigantic piles of our dollars.  They lend many of those dollars back to us at ridiculously low interest rates.  At this point, China owns more of our national debt than any other country does.  But if China was to decide to quit playing our game and started moving away from U.S. dollars and U.S. debt, our economic prosperity could disappear very rapidly.  Demand for the U.S. dollar would fall and prices would go up.  And interest rates on our debt and everything else in our financial system would go up to crippling levels.  So it is absolutely critical to our financial future that China continues to play our game.

Unfortunately, there are signs that China has now decided to start looking for a smooth exit from the game.  In November, I wrote about how the central bank of China has announced that it is "no longer in China’s favor to accumulate foreign-exchange reserves".  That means that the pile of U.S. dollars that China is sitting on is not going to get any higher.

In addition, China has signed a whole host of international currency agreements with other nations during the past couple of years which are going to result in less U.S. dollars being used in international trade.  You can read about many of these agreements in this article.

This week, we learned that China started to dump U.S. debt during the month of December.  Many have imagined that China would try to dump a flood of our debt on to the market all of a sudden once they decided to exit, but that simply does not make sense.  Instead, it makes sense for China to dump a bit of debt at a time so that the market will not panic and so that they can get close to full value for the paper that they are holding.

As Bloomberg reported the other day, China dumped nearly 50 billion dollars of U.S. debt during the month of December…

China, the largest foreign U.S. creditor, reduced holdings of U.S. Treasury debt in December by the most in two years as the Federal Reserve announced plans to slow asset purchases.

The nation pared its position in U.S. government bonds by $47.8 billion, or 3.6 percent, to $1.27 trillion, the largest decline since December 2011, according to U.S. Treasury Department data released yesterday.

This is how I would do it if I was China.  I would try to dump 30, 40 or 50 billion dollars a month.  I would try to make a smooth exit and try to get as much for my U.S. debt paper as I could.

So if China is not going to stockpile U.S. dollars or U.S. debt any longer, what is it going to stockpile?

It is going to stockpile gold of course.  In fact, China has been voraciously stockpiling gold for quite some time, and their hunger for gold appears to be growing.

According to Bloomberg, more than 80 percent of the gold that was exported from Switzerland last month went to Asia…

Switzerland sent more than 80 percent of its gold and silver bullion and coin exports to Asia last month, the Swiss Federal Customs Administration said today in an e-mailed report. It imported most from the U.K.

Hong Kong was the top destination at 44 percent on a value basis, with India at 14 percent, the Bern-based customs agency said in its first breakdown of the gold trade data since 1980. Singapore accounted for 8.6 percent of exports, the United Arab Emirates 7.9 percent and China 6.3 percent.

When China imports gold, most of it goes through Hong Kong.  We know that imports of gold from Hong Kong into China are at an all-time record high, but we don't know exactly how much gold China has accumulated at this point because they quit reporting that to the rest of the world a number of years ago.

When it comes to global finance, China is playing chess and the United States is playing checkers.  China knows that gold is a universal currency that will hold value over the long-term.  As the paper currencies of the world race toward collapse, China could end up holding most of the real money and that would be a huge game changer when they finally reveal that fact…

The announcement of China's new gold hoard will send shockwaves through the financial markets, and make China and the Chinese yuan (their national currency) even bigger players at the international table.

International banking expert James Rickards compared it to a game of Texas Hold 'Em poker:

"You want a big pile of chips. The U.S. has a big pile of chips, Europe has a big pile of chips. The U.S. has 8,000 tonnes [metric tons] of gold, 17 members of the euro system have 10,000 tonnes. China at 1,000 tonnes is not a player, but at 5,000 tonnes, they are a player."

There are some really good points made in the quote above, but I do take exception with a couple of things.  First of all, I believe that China now has far more than 5,000 tons of gold.  Secondly, I seriously doubt that the U.S. still actually has 8,000 tons of gold or that Europe still actually has 10,000 tons of gold.

As China (and eventually the rest of the world) moves away from a U.S.-based financial system, the consequences are going to be dramatic.

For instance, right now the average rate of interest that the U.S. government pays on debt is just 2.477 percent.  That is ridiculously low and it is way below the real rate of inflation.  It is simply not rational for anyone to lend the U.S. government money so cheaply, and at some point we are going to see a dramatic shift.

When that day arrives, interest rates are going to rise dramatically.  And if the average rate of interest on U.S. government debt rises to just 6 percent (and it has been much higher than that in the past), we will be paying out more than a trillion dollars a year just in interest on the national debt.

Even more frightening is what a rapidly changing interest rate environment would mean for our banking system.  There are four large U.S. banks that each have exposure to derivatives in excess of 40 trillion dollars.  You can find the identity of those banks right here.  Interest rate derivatives make up the biggest chunk of those derivatives contracts.  As John Embry told King World News just the other day, when that bubble bursts the carnage is going to be unprecedented…

"Stockman brought up a brilliant point, the fact that we have hundreds of trillions of dollars of interest rate swaps, which are polluting the world’s banking system. If we see growing volatility in interest rates, and I think that’s inevitable with what’s going on, that would cause spasms in the financial system. And if something goes wrong in the derivatives market, Heaven help us because the leverage that is imparted to the banking system through these derivatives is unholy."

Unfortunately, very few of the "experts" will ever see this crash coming.

Very few of them saw it coming in 2000.

Very few of them saw it coming in 2008.

And very few of them will see it coming this time.

I really like what Paul B. Farrell had to say about this…

Early warnings of a crash are dismissed over and over (“just a temporary correction”). They gradually numb us about the inevitable. Time after time we forget history’s lessons. Until finally a big surprise catches us totally off-guard. Financial historian Niall Ferguson put it this way: Before the crash, our world seems almost stationary, deceptively so, balanced, at a set point. So that when the crash finally hits — as inevitably it will — everyone seems surprised. And our brains keep telling us it’s not time for a crash.

Till then, life just goes along quietly, hypnotizing us, making us vulnerable, till a shocker like Lehman Brothers upsets the balance. Then, says Ferguson, the crash is “accelerating suddenly, like a sports car … like a thief in the night.” It hits. Shocks us wide awake.

Don't let the upcoming crash take you by surprise.

The warning signs are very clear.

Get ready while you still can.

 

 

 

 

Startupers Headache Pills

Saturday, February 22nd, 2014

getting_started

Hello sailor —

most probably you got here whilst you're trying to find solutions for a problem that cause you headaches. That's why I decided to make a special site for Startupers.

As you might have seen on my profile, I am a management and marketing pro, multiple-awarded by multinational companies, banks or international management consultant groups for my achievements. One of these awards was given for a startup that I had formed and whereby I had learned what problems a new entrepreneur might or will face, and how to clear the barriers. That is the reason why I decided to make this site. It shall help young entrepreneurs or newbies to achieve their goal: to set up an own enterprise.

Thus, from time to time I will release articles, ideas, tips, or notes that might give an inspiration or particular solution to make things easier.

Everybody is a genius. But if you judge a fish by its ability to climb a tree, it will live its whole life believing that it is stupid.” ― Albert Einstein

 

Start Up Funding

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Religion – men’s creation?

Saturday, January 18th, 2014

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"Scientists at the Institute of Historical Research have finally released their findings after five years of dedicated research". Result: All religions are man-made.

There are times in our lifes we may ask ourselves, if all the sententious words we have been taught by our family, teachers, and the many other sources of religious "wisdom" preachers that has got spread around our globe for hundreds or even thousands of centuries, are the "plain truth", as all major religions claim to possess. Indisputable.

About 4,000 years ago the ancestors of the Hebrews were wandering nomads. Biblical tradition says that Abraham, the founder of the line, came from Ur, but we cannot be sure that this was the Ur located in Mesopotamia. There are no records of these people except for the traditions laid down in the Bible many centuries later.

All major western religions, including Islam, justify their religious doctrine by this man and his life, Abraham (Hebrew:Avraham, Syriac: Oraham; Arabic: Ibrāhīm),

He is the key figure in the religious texts of Judaism, first patriarch of the Jews. Said to having lived around 2000 BCE. He is first mentioned in chapters 11:26-25:18 of the book of Genesis. His story is essentially the history of the establishment of the covenant between Abraham and God: God calls Abraham to leave his land, family and household in Mesopotamia in return for a new land, family and inheritance in Canaan, "the promised land".

Abraham and his story is the cornerstone for all later western religions, as an outgrowth of Abraham's life story.

“The Selfish Giant” – Will Our Western Politics Bring More Social Collapse

Wednesday, January 1st, 2014
theUS-eyesonyou
 
and with personal permission to publish this article
Global Research, December 30, 2013

 

For a person who graduated from Georgia Tech in 1961, a year in which the class ring showed the same date right side up or upside down, the 21st century was a science fiction concept associated with Stanley Kubrick’s 1968 film, “2001: A Space Odyssey.” To us George Orwell’s 1984 seemed so far in the future we would never get there. Now it is 30 years in the past.

Did we get there in Orwell’s sense? In terms of surveillance technology, we are far beyond Orwell’s imagination. In terms of the unaccountability of government, we exceptional and indispensable people now live a 1984 existence. In his alternative to the Queen’s Christmas speech, Edward Snowden made the point that a person born in the 21st century will never experience privacy. For new generations the word privacy will refer to something mythical, like a unicorn.

Many Americans might never notice or care. I remember when telephone calls were considered to be private. In the 1940s and 1950s the telephone company could not always provide private lines. There were “party lines” in which two or more customers shared the same telephone line. It was considered extremely rude and inappropriate to listen in on someone’s calls and to monopolize the line with long duration conversations.

The privacy of telephone conversations was also epitomized by telephone booths, which stood on street corners, in a variety of public places, and in “filling stations” where an attendant would pump gasoline into your car’s fuel tank, check the water in the radiator, the oil in the engine, the air in the tires, and clean the windshield. A dollar’s worth would purchase 3 gallons, and $5 would fill the tank.

Even in the 1980s and for part of the 1990s there were lines of telephones on airport waiting room walls, each separated from the other by sound absorbing panels. Whether the panels absorbed the sounds of the conversation or not, they conveyed the idea that calls were private.

The notion that telephone calls are private left Americans’ consciousness prior to the NSA listening in. If memory serves, it was sometime in the 1990s when I entered the men’s room of an airport and observed a row of men speaking on their cell phones in the midst of the tinkling sound of urine hitting water and noises of flushing toilets. The thought hit hard that privacy had lost its value.

I remember when I arrived at Merton College, Oxford, for the first term of 1964. I was advised never to telephone anyone whom I had not met, as it would be an affront to invade the privacy of a person to whom I was unknown. The telephone was reserved for friends and acquaintances, a civility that contrasts with American telemarketing.

The efficiency of the Royal Mail service protected the privacy of the telephone. What one did in those days in England was to write a letter requesting a meeting or an appointment. It was possible to send a letter via the Royal Mail to London in the morning and to receive a reply in the afternoon. Previously it had been possible to send a letter in the morning and to receive a morning reply, and to send another in the afternoon and receive an afternoon reply.

When one flies today, unless one stops up one’s ears with something, one hears one’s seat mate’s conversations prior to takeoff and immediately upon landing. Literally, everyone is talking nonstop. One wonders how the economy functioned at such a high level of incomes and success prior to cell phones. I can remember being able to travel both domestically and internationally on important business without having to telephone anyone. What has happened to America that no one can any longer go anywhere without constant talking?

If you sit at an airport gate awaiting a flight, you might think you are listening to a porn film. The overhead visuals are usually Fox “News” going on about the need for a new war, but the cell phone audio might be young women describing their latest sexual affair.

Americans, or many of them, are such exhibitionists that they do not mind being spied upon or recorded. It gives them importance. According to Wikipedia, Paris Hilton, a multimillionaire heiress, posted her sexual escapades online, and Facebook had to block users from posting nude photos of themselves. Sometime between my time and now people ceased to read 1984. They have no conception that a loss of privacy is a loss of self. They don’t understand that a loss of privacy means that they can be intimidated, blackmailed, framed, and viewed in the buff. Little wonder they submitted to porno-scanners.

The loss of privacy is a serious matter. The privacy of the family used to be paramount. Today it is routinely invaded by neighbors, police, Child Protective Services (sic), school administrators, and just about anyone else.

Consider this: A mother of six and nine year old kids sat in a lawn chair next to her house watching her kids ride scooters in the driveway and cul-de-sac on which they live.

 

Normally, this would be an idyllic picture. But not in America. A neighbor, who apparently did not see the watching mother, called the police to report that two young children were outside playing without adult supervision. Note that the next door neighbor, a woman, did not bother to go next door to speak with the mother of the children and express her concern that they children were not being monitored while they played.

The neighbor called the police. http://news.yahoo.com/blogs/sideshow/mom-sues-polices-she-arrested-letting-her-kids-134628018.html

“We’re here for you,” the cops told the mother, who was carried off in handcuffs and spent the next 18 hours in a cell in prison clothes.

The news report doesn’t say what happened to the children, whether the father appeared and insisted on custody of his offspring or whether the cops turned the kids over to Child Protective Services.

This shows you what Americans are really like. Neither the neighbor nor the police had a lick of sense. The only idea that they had was to punish someone. This is why America has the highest incarceration rate and the highest total number of prison inmates in the entire world. Washington can go on and on about “authoritarian” regimes in Russia and China, but both countries have far lower prison populations than “freedom and democracy” America.

I was unaware that laws now exist requiring the supervision of children at play. Children vary in their need for supervision. In my day supervision was up to the mother’s judgment. Older children were often tasked with supervising the younger. It was one way that children were taught responsibility and developed their own judgment.

When I was five years old, I walked to the neighborhood school by myself. Today my mother would be arrested for child endangerment.

In America punishment falls more heavily on the innocent, the young, and the poor than it does on the banksters who are living on the Federal Reserve’s subsidy known as Quantitative Easing and who have escaped criminal liability for the fraudulent financial instruments that they sold to the world. Single mothers, depressed by the lack of commitment of the fathers of their children, are locked away for using drugs to block out their depression. Their children are seized by a Gestapo institution, Child Protective Services, and end up in foster care where many are abused.

According to numerous press reports, 6, 7, 8, 9, and 10 year-old children who play cowboys and indians or cops and robbers during recess and raise a pointed finger while saying “bang-bang” are arrested and carried off to jail in handcuffs as threats to their classmates. In my day every male child and the females who were “Tom boys” would have been taken to jail. Playground fights were normal, but no police were ever called. Handcuffing a child would not have been tolerated.

From the earliest age, boys were taught never to hit a girl. In those days there were no reports of police beating up teenage girls and women or body slamming the elderly. To comprehend the degeneration of the American police into psychopaths and sociopaths, go online and observe the video of Lee Oswald in police custody in 1963. http://www.youtube.com/watch?v=4FDDuRSgzFk

Oswald was believed to have assassinated President John F. Kennedy and murdered a Dallas police officer only a few hours previously to the film. Yet he had not been beaten, his nose wasn’t broken, and his lips were not a bloody mess. Now go online and pick from the vast number of police brutality videos from our present time and observe the swollen and bleeding faces of teenage girls accused of sassing overbearing police officers.

In America today people with power are no longer accountable. This means citizens have become subjects, an indication of social collapse.

 

 

 

 

 

 

 

 

 

 

 

 

 

How To Make Your Goals Become Reality

Monday, January 14th, 2013

Most people fail to achieve their goals and keep motivated due to a lack of stamina. Goals can boost performance but there is also a mental strenght that must be set free, s.a. to decide “how” you are going to accomplish your goals. Ask yourself: “How am I going to do it? What are the basic conditions that will help to achieve my goals? What strategies can I adopt that will help me to finish my goals successfully?”

This excellent video by John Assaraf from San Diego will help to achieve ANY Goal in Your Life:

Enjoy.