Pam Martens with Wall Street On Parade has written a few very interesting articles. And groovygirl is still looking at those recent deaths of bankers and traders.
Click here for an article about the government’s investigation of the oil and gas industry and possible price rigging and control. Explains how banks rig commodity prices. Also explains where all that taxpayer bailout money went. They bought assets! Hint: you should be doing the same.
Click here for Pam Martens article on the recent deaths in the banking and related industries. And that reporter is still missing. Also explains possible bad long play in life insurance industry. Pandemic would probably help the position.
Here is another very interesting article on the mysterious deaths. (Read the whole thing, very good, especially that part about V.)
In groovygirl’s humble opinion: although, these are just a few articles, it is clear just from the revolving doors between public and private industry (clear for anyone to see on the linked-in profile of an executive) that there is a silent contract between public government and private companies deemed too big to fail. groovygirl does have one question. Assuming that government is “investigating” these shenanigans and are getting close enough to have certain people bumped off. Would not that cause the manipulating to stop, slow down, or transfer to another company/office/country? Why then have we not seen a drastic change in markets, since no one or fewer people are “manipulating” them. Such as LIBOR, currency swaps, etc.? Groovygirl would suggest there are some possible reasons for this: there is no manipulation at all, we are seeing the result, the government (or certain parts of government) is much more involved than previously thought and is now controlling that manipulation directly, or the same banks are doing the same thing and they are counting on government to look the other way while they “slim” their staff. Lots of questions, few answers.
Click here for a post from Jesse on Bear Sterns. The Bear Sterns and MF Global were triggered by margin calls.
Click here for Martin Armstrong’s latest blog post entitled Is It Your Money? Are You Sure? dated January 27, 2014.
This post is not about cash bank runs, but just moving your money to another bank(s). Groovygirl has talked about this before. Another bank crisis will happen. Martin suggests after 2015. And you may lose our money or not have access to it for a period of time (which is the same thing). Money you can not get when you want it is not yours.
The next global banking crisis will be a bail-in. And it will not be announced ahead of time.
Groovygirl has always shared what she had done to help with buffer yourself in this situation. Spread your money over 3 or so banks. If you need an international bank for trading or business, fine, but don’t put everything in one place in one country. Maybe one local bank, one regional, and one national/international, depending on the amount of savings you have.
As a result of MF Global, she also suggests dividing your trading money between 1-2 brokerage houses (ones that don’t clear at the same place) and do not leave money you are not using for trading in those accounts! Trading accounts are for trading money. gg knows this is a pain, but do you want to help protect your money or not? This doesn’t eliminate loses, but it helps protect you, since you must use the banking/brokerage system for business and investing. Some MF Global clients lost access to their money for 3 months to one year. And had to spend money on lawyers to get it all back.
Click here for an article about HSBC dumping small account customer. We saw this is 2008-2010. Banks also called in loans and credit lines. This seems to just be smaller bank accounts.
The SEC is issuing warnings about the money market fund industry.
There are a few conclusions to draw here.
- This was a very quiet warning on July 17th. Quiet means we want to have the record we warned you, but we don’t want to start a panic.
- Too late, gg suspects we start to see the “quiet panic” around August 7th? Just a guess :)
- Money Market Funds collapse because investors need liquidity to cover another collapsed market that is underwater in debt. (i.e. they do not have the capital, assets, or even cash flow, to cover the debt needed to continue business or sustain the market.) This is the way the mortgage crisis moved to completely freeze credit in the US market in 2008-2009 and thus effected every business and market in the US and around the globe.
- Money market funds are used by all business like a revolving credit card. If it drys up, business and banks must be bailed out to keep normal daily business going, for things such as payroll.
- If those businesses do not have enough cash to hold them for six months to a year without adequate cash/credit, they go bankrupt, and lay off employees. We saw this in 2008-2010.
- There will be no bail-out this time around. Your funds will disappear, it will be a bail-in. If you remember, money market funds delayed cash withdrawal requests for up to 6 months the last time around. The only reason it was only 6 months….bail outs, free loans from the government to keep the game going and the sheeple asleep.
- Notice the time line from the 2007 crash. Stocks/housing market start to decline in fall of 2007, fully clear to all in 2006 that it was coming/in process. Contagion starts to be felt by everyone and all markets by 2008-2009 as major companies/banks go under or require major bailouts. This doesn’t happen over night. It just seems to because the insiders’ panic is not announced or acknowledged or covered-up.
- We do not know what the catalyst will be this time, but we have several options: muni bond markets, continued European debt implosion, slowdown in China, derivatives from any one of these markets, war/terrorism/Arab Spring, change in law for one of these investment markets, old derivatives from 2008 mortgage crisis that have not been realized. Take your pick.
- All of the above-mentioned markets (actually all markets tied to debt/margin) are VERY FRAGILE. They will all be severely effected by whatever the catalyst is this time around. That will make this coming collapse in 2015, as suggested by Martin Armstrong, much worse than 2008.
Beware and be prepared. Groovygirl is not suggesting have absolutely no cash in money market funds, just don’t have it all in that type of investment. You are responsible for making the decisions for your own investments.
Side musing: regarding Martin Armstrong’s 2007 turning point. Groovygirl thought it very interesting that major national security websites and data systems were hacked in 2007. Just now being admitted. This could be point the history books point to as the fall of the American Empire (foreign hackers are the Barbarians at the Roman gate) and the official start of the new war: cyber warfare. very interesting. Although it was announced that the Pentagon was hacked. Apparently several other private and government infrastructure sites were hacked including electrical and water infrastructure and NASA, as well as national security sites. The hackers were downloading information and able to view current information for six months before discovery. And they aren’t even sure if it was all the Chinese. This is the new war.
Peak Prosperity interviews Bill Black. Good one from July 13, 2013. Click here.
From the transcript:
And we have not even discussed derivatives to this point. Which is the not-800-pound gorilla, but the $8-trillion-ton-gorilla that is out there. So we already have the insanity of derivative trades in which both of us book a gain because we have different evaluations for the asset. So we have phenomenal paper gains that cannot be true. When the markets no longer trust each other, then those kinds of transactions do not work anymore, and there is no liquidity, and you are in the equivalent of trying to sell minority shareholder interest in a privately held corporation. How is that going to work out for you? Ever tried to do that?
So all across the globe, all across history, minority shareholders get completely screwed in that circumstance, when liquidity dries up. Well, the same thing can happen to much broader markets, including in particular the derivatives markets.
And if it does, when trust is interrupted, much less eroded, in the ways I have talked about it in the derivatives market, liquidity completely dries up. Anything that functions like a market-maker collapses, and you get whole financial systems that grind to a halt. And they do not happen just a few times. It can happen in thousands of markets roughly simultaneously.
You asked me earlier about Dodd Frank, and I said it had no coherent strategic vision. And a couple of the areas in which it had no coherent strategic vision we have talked about. It did not deal with the international competition-in-laxity. It did not deal with “too big to fail.” And it did not deal with derivatives. So I would say that was strike one, strike two, strike three.
Click here from Martin Armstrong on the European timeline. From Martin: “Once the general understanding that the German banks are really in trouble hits home, there will be no place for capital to hide inside the Euro.”
Click here for a prelude to Martin’s upcoming Asset Allocation report (coming out in September?).
From the link above:
We have received numerous requests from old institutional clients that they need help on asset allocation. Even the famous All Weather Bridgewater Fund used by pension funds is under water. The asset allocation modeling that we have done for institutional clients over the years is adopting the most dramatic changes how portfolios should be restructured to survive the 2015-2020 period. We are going to see a lot of banks fall. This will include some of the most famous names that will shock confidence right down to its root core. The currencies will go wild and we are NOT going to even see the standard Flight to Quality rushing to government bonds that dominated the 2007-2011 downturn.
Click here for the ongoing story of how the Cyprus bailout is really going. Punch line: Cyprus is selling its natural resources, infrastructure, and any other asset not tied down. This article also describes what is happening to the depositors, creditors, etc. Or, gg should say, preferred creditors :)
New lists coming out of systemically important banks and non-banks. Your investor funds in “unsystemically important” entities will be “bailed in”. Click here. It’s all here, exactly what will happen in the next leg down of the global debt collapse.