...Do you now understand, banks have not put those derivatives on their books - but come Sept. 30th 2009 - due to new banking standards - derivatives need to be put on the books and when that happens - the banking industry will most likely come crashing down.
Watch out for 9/31/09
when the worthless derivative market equities
are declared by banks,
the Sh.t likely will really hit the fan
“Watch out for 9/31/09”
I’m predicting that that day won’t show up. ;-)
There are only 30 days in September!
There are only 30 days in September!
Sep 13, 2009 - 04:48 PM
By: Graham_Summers
In case you have not heard the news, China has announced that it will be instructing its state-owned enterprises to potentially default on their derivatives contracts. As I have written extensively in the past, the derivatives market is a massive time bomb just waiting to go off. China’s latest move may be the match that lights the fuse.
[snip]
I am not saying any of this to be “scary” or “doom and gloom.” But things are coming to a head in a very REAL way on the global stage. And it is not looking good at all. This financial crisis is nowhere near over. If anything we’re at the end of the beginning.
Many, many more banks will go under. We can and will see a lot more volatility in the bond and currency markets (a bear market in bonds would be a nightmare we haven’t seen in 30 odd years). And stocks (already overbought and propped up via manipulation and accounting gimmicks) are primed to take a full-scale nosedive (more on this in a minute).
My Personal Message: BE PREPARED
In light of this, and on a more personal note, I am suggesting you prepare for the WORST if you are in the US. This means stockpiling food, and having enough cash on hand to survive an economic shutdown if it happens. We came close to such an event last fall (the story was not widely spread but banks in US and UK considered shutting down ATMs and having a holiday).
I can tell you that I personally have stockpiled food (3 months’ worth) and am telling my family and friends to do the same. After all, what’s the worst that could come from doing this? If I’m totally wrong and everything gets better, you simply eat the food just like you would anyway.
But if I am right, and things do get MESSY, then stockpiling now means you’ve got food on the table later. Again, we have the making of several black swan events that could push an already weak economy into SERIOUS trouble.
[snip]
(The Black Swan Theory (in Nassim Nicholas Taleb's version) concerns high-impact, hard-to-predict, and rare events beyond the realm of normal expectations. Unlike the philosophical "black swan problem", the "Black Swan Theory" (capitalized) refers only to events of large magnitude and consequence and their dominant role in history. "Black Swan" events are considered extreme outliers. Note that in his writings Taleb never uses the phrase "Black Swan Theory"; instead, he refers to "Black Swan Events" (capitalized).
Last week JP Morgan, Goldman and 13 other derivitive dealers petitioned the New York Federal Reserve Bank that they will submit 95% of new creditu-default swap trades to clearinghouses. Global Markets for DERIVITIVES rebounded to $426 trillion in the second quarter as risk appetite returned, but the system remained unstable and prone to crisis, according to BIS.
Washington/Wall Street is now nothing more than a Crime Syndicate and they are about to burn the country to the ground. The Grandest of Larceny.
Who says the derivatives in fact will be valued? If the banks “say” they have done it and a complicit regulatory agency signs off on it (wink, wink) who is to know? Does anyone really trust anything coming out of the beltway today?
And the music plays on.
It’s coming. I don’t know when (months or years). But we’re headed for economic catastrophe.