Remember this post from groovygirl? Click here.
Point 1: Mortgage securities are still a problem….not solved, not fixed, not settled, and getting bigger.
Point 2: The entities (notice the non-bank banks on the link) that are still standing and have still have off the book exposure to these unsettled securities met with Obama on Thursday. Click here.
Point 3: Martin Armstrong has had several blog posts this week about pension funds, IRAs, and 401ks confiscation and/or forced loans. Click here for one of them. In another post, he suggested a possible date for these forced loans to begin as 2016. A result of the unsettling economic turn in October 2015?
When point one crashes and triggers a collapse and credit freeze again, point two’s TBTF will get a “bail-in” from your money in point three. That bail-in will go thru the forced buy of government bonds.
George Washington via zerohedge.com wrote a great piece on MERS and how it contributed to the Mortgage Crisis and the following global credit freeze. It is an excellent description of mortgage securities and the magic of AAA rating.
I bring this up because the mortgage crisis is not behind us. These securities have not been unwound yet, no losses really booked yet AND new ones are still being created and sold. This crisis, or actually the second half of the original mortgage security/derivative crisis, should hit around October 2015 (Martin’s date for his Economic Model Cycle).
You can almost hear the cash being sucked out of European banks and being placed anywhere else. Click here.
Click here for the latest blog post from Martin Armstrong dated April 3, 2013 entitled All Government Acknowledge the Cyprus Model for Bank Bailouts Is It.
Groovygirl is posting this one, but there are other good posts at Martin’s website, because this is her focus for the next few months, and possibility beyond.
gg says: It is very clear now what will happen and a time frame. The next global debt collapse and banking system crisis will either happen or impact main street in 2015 (Martin’s date is October 1, 2015). It is coming. It will like 2008, but much worse. They will take your savings this time to try and save the system. And judging from the reaction in Cyprus, they will not announce it beforehand. You must prepare now, if you have not already, and have your financial plan in place before 2015. That is just about 18 months from now.
Update: and the phrase of the day is: Cyprus is a template. Jesse agrees. Click here.
We all know that the TBTF banks have used legal (and, in gg’s humble opinion, illegal) creative accounting methods to hide their exposure to the toxic mortgage securities going back to the 2007 implosion which required massive over-the-counter and under-the-counter taxpayer bail outs.
Nothing has been fixed. In fact, banks have been using the system to put off legal responsibilities.
Groovygirl got an email from a friend, and it looks like this systemic exposure is heating up again.
There are some clues out there if you are looking: click here for Goldman loss in the courts and click here for Freddie’s “miraculous” gain in 2012 (perhaps, not too consequently, they “lost” the same amount in 2011).
Again, gg would like to remind her readers that securities on the balance sheets of banks are just the trigger. It is the billions, perhaps trillions, in derivatives that are connected to the mortgage securities that bring down the system and stop credit markets dead, as they did in 2007-2009.
No one knows when this next crisis will hit, but the banks’ balance sheets are NOT fixed.
And with Cyprus, will the depositors “bail in” the TBTF banks next time?
Update: some preliminary online research on this issue has brought this to gg’s attention. Click here.
Side musing: pay attention to this issue! Research your own banks and brokerages and investments. You will have to look at the foot notes of the prospectus of the last 5 years to even get a hint of what is really on the balance sheet.
Well, that went well….
Nigel Farage gives some not-so-subtle advice….get your money out of Europe!
Now, I am sure British banks are more than willing to take frightened European depositors’ money for safe keeping, but the Cyprus main attraction this week shows us two things: a small country can do major damage to the global banking system and nothing is off the table to preserve the failing banking and debt system. That means any country, any bank, anywhere….
Now that apparently the IMF has back-tracked from the “one-time-tax-on” deposits. Look for a reprieve before they try something else the next crisis. Such as, they will not announce it beforehand?
Can’t wait for the 2014 German election!
You will have to take steps to preserve the purchasing power of your own savings.
Next bank run. New Zealand. Click here. Question: why would any politician look at the global political reaction to Cyprus this week and say, “hey, let’s do something like that”?
In other news, gold looks good.
Well, this is certainly an interesting Monday morning. If they were looking to stabilize and create confidence in the European and global banking systems, gg thinks they missed.
This is just one more lesson in the past 5 years. Banks are not a safe place to keep money, you will be penalized for saving money, and saving the current collapsing system is the prime directive.
side musing: it also confirms what Martin says, there can be no conspiracy because they have no idea what they are doing five minutes before they do it. A well-thought-out plan would not piss off the Russian government. The powers-that-be are only reactionary and use every new crisis (whether they indirectly created it or not) as much as possible to retain power, influence, and wealth until it doesn’t work anymore. Then they move to the private sector and use their reactionary-crisis skills to destroy investor funds.
Click here for zero hedge comments. And here.
Update: seems to be going well…yeah right! They just extended the “bank holiday” to Wednesday/Thursday. Click here.
Another update: it just keeps getting more interesting. Problem is that Europe/IMF doesn’t have time for another option to bail out Cyprus, this was it (or Germany front the money…..) Click here. So more interesting than the Russian mob money, the citizen riots, and what this will mean for future “bailouts” of southern European countries is: what will they do in Cyprus, if they don’t do this?
The title of this post is a quote from a zero hedge post. Click here.
Since banks are officially, via Eric Holder, to big to prosecute and they can borrow money at zero interest from the Fed, guess what: they will continue to do what they have been doing and we will face the same thing as 2008 again. As Jim Sinclair says, QE will never end.
If we let the banks fail one time, they won’t be too big to fail or jail for a long while. Just a thought…..
This should end well.
The message to the Fed, after their “leaked” notes on the possibility that they were maybe thinking about stopping the massive buying of anything that might implode without hitting their 6% unemployment goal, is crystal clear: investors will sell everything in a split second and crash the economy (via the invisible derivative market).
We now know exactly what will happen in the future: either the Fed will never stop buying vulnerable assets or if they do (or are forced to), they will not announce it. Be prepared.