- This weekend's meeting of four heads of central banks
communicates the size of the OTC derivative disaster. It is a system that
is broken. A bailout will require the printing of trillions of dollars
worth of monetary stimulation making Bernanke's helicopter drop look like
chump change.
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- The dollar number of pending derivative bankruptcies
is the size of the mountain of garbage paper issued by just those who are
to be bailed out. That number is greater than the total world economies.
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- There simply isn't enough money in the world for central
banks to buy up the mountain of worthless paper sold by those who need
bailouts; all of which made fortunes for their directors, officers and
key people.
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- When an OTC derivative fails to perform, notional value
becomes real value.
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- The notional value of all OTC derivatives exceeds $500
trillion.
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- Credit default swaps (OTC derivatives) alone account
for over $20 trillion dollars of notional value and are failing. Major
dealers in these items, Lehman and JP Morgan, had their debt downgraded
last week.
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- Maintaining the AAA rating on debt of public companies
primarily issuing default swaps as credit guarantees is a sick JOKE of
fabrication. This is a JOKE that in all probability will lead to litigation
that destroys the rating companies.
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- You can be absolutely sure that all the biggies have
their money out.
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- No one mentions these firms being bailed out are the
ones who created this disaster, making billions for their economic sin.
You can be sure the big boys have their money out of the now on-the-rocks
international institutions.
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- No one mentions that bailing out the bankers will leave
the average man victimized and paying for the pleasure of the economic
rape.
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- Meanwhile Derivative Traders (salesmen of perdition,
not traders) and their hedge fund managers are all in Greenwich Connecticut
with their hundreds of millions and billions, now retired playing tennis
on their indoor courts at their waterfront mansions as the mess deepens.
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- Litigation against the officers and directors of these
international banking firms, both against the biggies personally as well
as the company, will make the biggies occupation one of defending against
litigation for the rest of their lives.
-
- For those biggies in these companies who trust no one
and therefore have wives with no money will lose everything. Some of them
I know. What goes around certainly comes around.
-
- Litigation against OTC derivatives are slam-dunk victories
for the injured plaintiffs. The biggies will pay.
-
- This is the greatest act in history of "Public Be
Damned" and "Let them Eat Cake." It will not come about
because in the USA it is already the hottest political potato.
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- The problem is that the plan of the US legislative is
down right STUPID. It is an embarrassment that legislators are so publicly
moronic when it comes to economics.
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- The problem that no one is focusing on right now is the
tracking of the mortgage itself to the structured product, which has broken
down. That means in these items many can't connect the underlying mortgage
to the structured investment product (derivative).
-
- So far courts have held that the only entity that can
foreclose is the entity that actually lent the money. The average guy
does not know that with an attorney to protect him he has a free house!
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- The entity that actually lent the money has sold the
mortgage and been paid. Therefore where is the incentive for original lender
to foreclose? The answer is there is none. Bankers do not help bankers
in the same way that sharks do not help sharks.
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- Conclusion
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- Because of the unthinkable size of the problem it is
impossible to construct a Resurrection Trust to buy all these worthless
and never to be anything but worthless items.
-
- Should any item surface to do this it will destroy all
the National currency of the central banks that participate.
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- If there were an attempt to construct such an entity
with the cooperation of the USA, the US dollar would go much lower than
.5200. Gold would go to many thousands of US dollars.
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- Anyone who last week assumed the problem was over and
we would be improving from there on out is simply nuts. ****
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- http://jsmineset.com/
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