Sunday, May 27, 2012

Financial Armageddon Cometh

A couple of weeks ago, JPMorgan Chase CEO Jamie Dimon warned investors specifically, and the public generally, that the bank was suffering some rather acute losses in its CIO – Chief Investment Office – which might adversely affect earnings for the next several quarters. Was this announcement pre-emptive candor or a sleight of hand hiding more ominous news? We vote for the latter.

The American financial and political worlds are rife with criminal behavior emanating from the most august board rooms and pedigreed persons on Wall Street. While Dimon is no exception, his perch at the largest bank in America gives his crooked deeds added weight. Why did the CEO announce unrealized losses of around 2 billion USD for an institution with a market capitalization of 150 billion USD? Although the amount was substantial, even in times when bandying about trillion dollar amounts is par for the course, most other banks would have swept it under the rug through creative accounting.
The press conference was a mixture of confession and legerdemain. Dimon was signaling that he and his irresponsible management had lost control of certain markets, and that he would probably need more bailouts before the dust settled. The problem is that we are not dealing with private investments or even hedges, but with US debt and finances for which JPM is syndicate lead.
Dimon thought that by coming forward with the bad news while it was small, he could show statesmanship and earn PR brownie points ahead of the down curve by letting out some bad news early on the notion that it would become ho-hum when feces flew from the proverbial fan blades. That strategy may be the case given that so many crises are swirling around the US, Europe, and China to give cover for JPM's troubles.
The point of Dimon’s confession was that some trades involving European debt had turned bad due to the slump in European bond prices. How the trades soured when European debt markets were buoyant relative to their recent instability was never explained.
Some analysts pointed out that JPM was hedging its hedges which would be a rather illogical thing to do but even more so when it held many naked short positions. The trades involved some rather arcane derivatives in Investment Grade 9 and 18 CDSs.
Many thoughtful commentators pointed out that the losses would be much larger than the 2 – 2.5 billion USD reported by the JPM CEO. Zero Hedge already calculated at least 5 billion USD in losses while more aggressive analysts show 18 – 33 billion USD in capital destruction. The 33 billion dollar figure stems from Fed chairman Ben Bernanke telling Dimon during stress tests earlier in the year that he could not proceed with share buy backs and dividends if losses at the bank reached 33 billion. The CEO announced last week the suspension of his 2 month old plan to buy back shares and increase dividends.
But does European bond trouble explain the problem at JPM? Not by a long shot. The bank is at best a gambling casino and at worst a criminal enterprise. Forensic financial analyst Rob Kirby reported that the real derivative which is at the root of the problem is Interest Rate Swaps (IRS), a derivative requiring the purchase of bonds. JPM has over 80 trillion USD in notional exposure to IRS.
As the leading government functionary for government finances, JPM has a massive book of these swaps in order to manipulate the prices of bonds upwards which of course keep interest rates low. Indeed, Bernanke instituted the capital destructive ZIRP program in the wake of the 2008 financial crisis in order to finance the multi-trillion dollar deficits which Obama instituted when he was installed as president.
The size of the IRS pool is ginormous, requiring death defying feats of dare to manage in the face of perpetual trillion dollar deficits. The upward pressure on interest rates is enormous – a fact which makes the low interest rate regime remarkable. However, repudiating gravity is not a wise or long term strategy promising much success.
As the IRS and their accompanying CDS grow, the instability of that complex trebles. The fallout of the triggering of IRS at even small levels would be of Biblical proportions, making Lehman Brothers’ collapse sound like a gnat’s fart in comparison. One analyst sees up to 500 billion USD in losses at JPM.
Two other observations emerge from the desperation at JPM. We now have probable cause to accuse JPM of stealing MF Global segregated account money to prop up its bad trades.
We also understand why the government has been issuing more debt than it needs. It wants to bailout its chief banking partner from its casino trades, which company has a voracious appetite for IRS which in turn has a huge craving for bonds.
The criminal and corrupt Wall Street and Washington alliance has heard the Fat Lady clear her throat. The troubles in Europe are real and larger than reported but they are dwarfed by the troubles stirring in the United States’ debt markets. We are witnessing the onset of nuclear winter. JPM will make tsunami waves in the future. Keep your eyes on its caldron of radioactive proprietary trading which reflects the complete meltdown in US government finances.

USTBond Tower of Babel Teeters, Jim Willie, May 23, 2012
JPMorgan’s Senior Officers’ Addiction to Gambling on Derivatives, William Black, May 23, 2012

Copyright 2010-12 Tony Bonn. All rights reserved.

Tuesday, May 1, 2012

On the Anniversary of Osama bin Laden's Murder

The United States president of Indonesian citizenship, Barry Soetoro, has made much of his murder of Osama Bin Laden. Unfortunately, the mythology around bin Laden is a pack of lies to fool the American people and anyone else interested in imbibing his deceptions.
Osama Bin Laden is alleged to have destroyed the World Trade Centers and attacked the Pentagon on September 11, 2001, using a loose confederation of terror cells situated around the world, including the United States. Unfortunately this story is complete bunk.
Bin Laden, also known as Tim Osman, was a business partner of George Bush, Jr. who was intertwined with the former president in various oil enterprises in the Middle East, including a pipeline project passing through Afghanistan to India from the Mediterranean. Bush and bin Laden were also involved in Enron, a financial fiasco of Biblical proportions, to raise money for the Bush Crime Syndicate and its many subterfuge and terrorist operations.
Part of the motivation for the attacks of 9/11 was to eliminate George Bush, Sr.’s business partner Saddam Hussein, but also to bury the Enron evidence which former FBI executive John O’Neil had uncovered linking the Bushes to Enron and bin Laden.
The Bushes had extensive ties with Saudi Arabian royalty, with the Saudi construction magnate being one of the most colorful. Bin Laden was set up as the lightening rod to take attention away from the real masterminds of the BCS’s terror attacks.
Bin Laden was tied to al Qaeda by American propaganda leaders through their proxies in the establishment news media. The CIA created al Qaeda during the 1980s as it developed a portfolio of mercenaries throughout the world to undertake their black operations, particularly against the USSR in Afghanistan.
The Bush Crime Syndicate used this Rolodex of mayhem to orchestrate a series of contributing and diversionary activities leading up to 9/11. After the attacks, the BCS created its famous 9/11 Most Wanted list published on playing cards to add extra drama and entertainment to the clean-up operation. Indeed, the men targeted for destruction included al Qaeda members, political threats, and innocent people  who knew too much.
The opportunities to capture bin Laden before 9/11 were numerous yet no one in official capacity sought to apprehend him until after the BCS had destroyed the Enron evidence in WTC 7. Prior to 9/11 bin Laden was being sheep dipped like Lee Oswald was in the months leading up the murder of President John Kennedy by the Bush Crime Syndicate.
Soetoro gave orders to kill bin Laden rather than take him alive. If bin Laden were truly the leader of this alleged worldwide conspiracy of al Qaeda cells, he would have been far more valuable alive than dead, and America forces could have easily taken him alive before he died.
It is highly doubtful that the man murdered by American SEALs in 2011 was actually the Osama bin Laden of 9/11 fame. Numerous credible intelligence reports indicate that he died quite some time ago.
Please disregard all of the entertainment lavished on bin Laden. He is not the real criminal. That sobriquet belongs to the elite Citizens of the World who fill the ranks of the Bush Crime Syndicate.

Writings of Sherman Skolnick, Sherman Skolnick
The Terrorist Conspiracy Revisited, Jim Marrs
Family of Secrets, Russ Baker

Copyright 2010-12 Tony Bonn. All rights reserved.