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Gary Edwards

Global Financial Meltdown Coming? Clear Signs That The Great Derivatives Crisis Has Now... - 0 views

  • No one “understands” derivatives. How many times have readers heard that thought expressed (please round-off to the nearest thousand)? Why does no one understand derivatives? For many; the answer to that question is that they have simply been thinking too hard. For others; the answer is that they don’t “think” at all. Derivatives are bets. This is not a metaphor, or analogy, or generalization. Derivatives are bets. Period. That’s all they ever were. That’s all they ever can be.
  • One very large financial institution that appears to be in serious trouble with these financial weapons of mass destruction is Glencore.  At one time Glencore was considered to be the 10th largest company on the entire planet, but now it appears to be coming apart at the seams, and a great deal of their trouble seems to be tied to derivatives.  The following comes from Zero Hedge… Of particular concern, they said, was Glencore’s use of financial instruments such as derivatives to hedge its trading of physical goods against price swings. The company had $9.8 billion in gross derivatives in June 2015, down from $19 billion in such positions at the end of 2014, causing investors to query the company about the swing. Glencore told investors the number went down so drastically because of changes in market volatility this year, according to people briefed by Glencore. When prices vary significantly, it can increase the value of hedging positions. Last year, there were extreme price moves, particularly in the crude-oil market, which slid from about $114 a barrel in June to less than $60 a barrel by the end of December.
  • That response wasn’t satisfying, said Michael Leithead, a bond fund portfolio manager at EFG Asset Management, which managed $12 billion as of the end of March and has invested in Glencore’s debt.
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  • According to Bank of America, the global financial system has about 100 billion dollars of exposure overall to Glencore.  So if Glencore goes bankrupt that is going to be a major event.  At this point, Glencore is probably the most likely candidate to be “the next Lehman Brothers”. And it isn’t just Glencore that is in trouble.  Other financial giants such as Trafigura are in deep distress as well.  Collectively, the global financial system has approximately half a trillion dollars of exposure to these firms… Worse, since it is not just Glencore that the banks are exposed to but very likely the rest of the commodity trading space, their gross exposure blows up to a simply stunning number:
  • For the banks, of course, Glencore may not be their only exposure in the commodity trading space. We consider that other vehicles such as Trafigura, Vitol and Gunvor may feature on bank balance sheets as well ($100 bn x 4?)
  • Call it half a trillion dollars in very highly levered exposure to commodities: an asset class that has been crushed in the past year. The mainstream media is not talking much about any of this yet, and that is probably a good thing.  But behind the scenes, unprecedented moves are already taking place. When I came across the information that I am about to share with you, I was absolutely stunned.  It comes from Investment Research Dynamics, and it shows very clearly that everything is not “okay” in the financial world… Something occurred in the banking system in September that required a massive reverse repo operation in order to force the largest ever Treasury collateral injection into the repo market.   Ordinarily the Fed might engage in routine reverse repos as a means of managing the Fed funds rate.   However, as you can see from the graph below, there have been sudden spikes up in the amount of reverse repos that tend to correspond the some kind of crisis – the obvious one being the de facto collapse of the financial system in 2008:
  • What in the world could possibly cause a spike of that magnitude? Well, that same article that I just quoted links the troubles at Glencore with this unprecedented intervention… What’s even more interesting is that the spike-up in reverse repos occurred at the same time – September 16 – that the stock market embarked on an 8-day cliff dive, with the S&P 500 falling 6% in that time period.  You’ll note that this is around the same time that a crash in Glencore stock and bonds began.   It has been suggested by analysts that a default on Glencore credit derivatives either by Glencore or by financial entities using derivatives to bet against that event would be analogous to the “Lehman moment” that triggered the 2008 collapse. The blame on the general stock market plunge was cast on the Fed’s inability to raise interest rates.  However that seems to be nothing more than a clever cover story for something much more catastrophic which began to develop out sight in the general liquidity functions of the global banking system. Back in 2008, Lehman Brothers was not “perfectly fine” one day and then suddenly collapsed the next.  There were problems brewing under the surface well in advance. Well, the same thing is happening now at banking giants such as Deutsche Bank, and at commodity trading firms such as Glencore, Trafigura and The Noble Group. And of course a lot of smaller fish are starting to implode as well.  I found this example posted on Business Insider earlier today…
  • On September 11, Spruce Alpha, a small hedge fund which is part of a bigger investment group, sent a short report to investors. The letter said that the $80 million fund had lost 48% in a month, according the performance report seen by Business Insider. There was no commentary included in the note. No explanation. Just cold hard numbers.
  • Wow – how do you possibly lose 48 percent in a single month? It would be hard to do that even if you were actually trying to lose money on purpose. Sadly, this kind of scenario is going to be repeated over and over as we get even deeper into this crisis. Meanwhile, our “leaders” continue to tell us that there is nothing to worry about.  For example, just consider what former Fed Chairman Ben Bernanke is saying…
  • Former Federal Reserve chairman Ben Bernanke doesn’t see any bubbles forming in global markets right right now. But he doesn’t think you should take his word for it. And even if you did, that isn’t the right question to ask anyway. Speaking at a Wall Street Journal event on Wednesday morning, Bernanke said, “I don’t see any obvious major mispricings. Nothing that looks like the housing bubble before the crisis, for example. But you shouldn’t trust me.”
  • I certainly agree with that last sentence.  Bernanke was the one telling us that there was not going to be a recession back in 2008 even after one had already started.  He was clueless back then and he is clueless today. Most of our “leaders” either don’t understand what is happening or they are not willing to tell us. So that means that we have to try to figure things out for ourselves the best that we can.  And right now there are signs all around us that another 2008-style crisis has begun. Personally, I am hoping that there will be a lot more days like today when the markets were relatively quiet and not much major news happened around the world. Unfortunately for all of us, these days of relative peace and tranquility are about to come to a very abrupt end.
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    "Warren Buffett once referred to derivatives as "financial weapons of mass destruction", and it was inevitable that they would begin to wreak havoc on our financial system at some point.  While things may seem somewhat calm on Wall Street at the moment, the truth is that a great deal of trouble is bubbling just under the surface.  As you will see below, something happened in mid-September that required an unprecedented 405 billion dollar surge of Treasury collateral into the repo market.  I know - that sounds very complicated, so I will try to break it down more simply for you.  It appears that some very large institutions have started to get into a significant amount of trouble because of all the reckless betting that they have been doing.  This is something that I have warned would happen over and over again.  In fact, I have written about it so much that my regular readers are probably sick of hearing about it.  But this is what is going to cause the meltdown of our financial system. Many out there get upset when I compare derivatives trading to gambling, and perhaps it would be more accurate to describe most derivatives as a form of insurance.  The big financial institutions assure us that they have passed off most of the risk on these contracts to others and so there is no reason to worry according to them. Well, personally I don't buy their explanations, and a lot of others don't either.  On a very basic, primitive level, derivatives trading is gambling.  This is a point that Jeff Nielson made very eloquently in a piece that he recently published…"
Paul Merrell

In blockbuster poll, Sanders destroys Trump by 13 points | TheHill - 0 views

  • Stop the presses! According to a new poll by Quinnipiac University on Tuesday, Sen. Bernie Sanders (I-Vt.) destroys Republican candidate Donald Trump in a general election by 13 percentage points. In this new poll, Sanders has 51 percent to Trump's 38 percent. If this margin held in a general election, Democrats would almost certainly regain control of the United States Senate and very possibly the House of Representatives.ADVERTISEMENTIt is high time and long overdue for television networks such as CNN to end their obsession with Trump and report the all-important fact that in most polls, both Hillary Clinton and Sanders would defeat Trump by landslide margins. In the new Quinnipiac poll, Clinton would defeat Trump by 7 percentage points, which is itself impressive and would qualify as a landslide, while the Sanders lead of 13 points would bring a landslide of epic proportions.It is noteworthy that in this Quinnipiac poll, Sanders runs so much stronger than Clinton against Trump. It is also noteworthy and important that both Sanders and Clinton run so far ahead of Trump in general election match-up polling. And it is profoundly important and revealing that Sanders would defeat Trump by such a huge margin — 13 points in this poll — that analysts would be talking about a national political realignment and new progressive era in American history if an enlightened candidate such as Sanders would defeat a retrograde race-baiting candidate such as Trump by a potentially epic and historic margin.
  • It is time for the mainstream media to end their obsession with Trump and their virtual news blackout of the Sanders campaign when discussing presidential campaign polling.
Paul Merrell

Trump Invades Syria | Global Research - Centre for Research on Globalization - 0 views

  • Although the Syrian army, with its ally Russia, has made significant gains against ISIS over the past week or so, the Washington Post is reporting tonight that President Trump has for the first time sent regular US military personnel into that country in combat positions. This is an unprecedented escalation of US involvement in the Syrian war and it comes without Congressional authorization, without UN authorization, and without the authorization of the government of Syria. In short it is three ways illegal. According to the Post, US Marines have departed their ships in the Mediterranean and have established an outpost on Syrian soil from where they will fire artillery toward the ISIS “headquarters” of Raqqa. The Post continues:  The Marines on the ground include part of an artillery battery that can fire powerful 155-millimeter shells from M777 Howitzers, two officials said, speaking on the condition of anonymity because of the sensitivity of the deployment. The expeditionary unit’s ground force, Battalion Landing Team 1st Battalion, 4th Marines, will man the guns and deliver fire support for U.S.-backed local forces who are preparing an assault on the city. Additional infantrymen from the unit are likely to provide security. On March 5th, RT ran footage of a US military convoy entering Syria near Manbij. The US mainstream media initially blacked out the story, but the Post today confirmed that the troops were from the Army’s 75th Ranger Regiment in Stryker vehicles. What is important to understand about this sudden escalation of US involvement is that if this “race to Raqqa” is won by the US military rather than by Syrian government forces, the chance that the US will hand the territory back to the Assad government is virtually nil. In other words, this is an operation far less about wiping ISIS out from eastern Syria and much more about the United States carving out eastern Syria as a permanent outpost from where it can, for example, continue the original neocon/Israeli/Saudi plan for “regime change” in Syria. The United States is making a military bid for a very large chunk of sovereign Syrian territory. Something even Obama with his extraordinarily reckless Middle East policy would not dare to do.
  • How will the Russians react to this development? How will the Russians react if increased US military activity on the ground in Syria begins to threaten Russian military forces operating in Syria (with the consent of that country’s legal government)?  With President Trump’s “get along with Russia” policy lying in the tatters of a Nikki Haley at the UN and a Fiona Hill at NSC Staff, how differently might the Russians see US actions in Syria than they might have only a month or so ago? Make no mistake: this is big news. And very bad news.
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    The WaPo article is at https://www.washingtonpost.com/news/checkpoint/wp/2017/03/08/marines-have-arrived-in-syria-to-fire-artillery-in-the-fight-for-raqqa/ The M777 howitzer has a range of up to 25 miles. It is an artillery weapons specially developed for light-weight.Two M777s can be transported in a Marine Osprey VTOL aircraft, compared with only 1 of the older M198s.
Paul Merrell

Kim Dotcom: I Knew Seth Rich, He Was The Wikileaks Source - 0 views

  • Last week, Fox News dropped a bombshell report officially confirming, via anonymous FBI sources, what many had suspected for quite some time, that murdered DNC staffer Seth Rich was the WikiLeaks source for leaks which proved that the DNC was intentionally undermining the campaign of Bernie Sanders. In addition to exposing the corruption of the DNC, the leaks cost Debbie Wasserman In addition to exposing the corruption of the DNC, the leaks cost Debbie Wasserman Schultz her job as Chairwoman. Of course, if it’s true that WikiLeaks’ emails came from a DNC insider it would end the “Russian hacking” narrative that has been perpetrated by Democrats and the mainstream media for the past several months.
  • Moreover, it would corroborate the one confirmation that Julian Assange has offered regarding his source, namely that it was “not a state actor.” Meanwhile, the plot thickened a little more over the weekend when Kim Dotcom confirmed via Twitter that he was working with Seth Rich to get leaked emails to WikiLeaks.
  • Meanwhile, Kim Dotcom has promised more information will be released on his interaction with Seth Rich by tomorrow.
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  • why is he just now coming forward with such information? Second, while Seth Rich may explain the DNC leaks we still don’t know who is responsible for the “Podesta Files” which we’re certain will continue to be attributed to “Russian hackers.” Which leads to the most important question of all: is this all just another fake news diversion, or is there more to the Seth Rich murder?
Paul Merrell

FBI Informant "Threatened" After Offering Details Linking Clinton Foundation To Russian... - 0 views

  • While the mainstream media has largely ignored it, the scandal surrounding Russian efforts to acquire 20% of America's uranium reserves, a deal which was ultimately approved by the Obama administration, and more specifically the Committee on Foreign Investment in the United States (CFIUS) which included Hillary Clinton and Eric Holder, is becoming more problematic for Democrats by the hour.  As The Hill pointed out earlier this morning, the latest development in this sordid tale revolves around a man that the FBI used as an informant back in 2009 and beyond to build a case against a Russian perpetrator who ultimately admitted to bribery, extortion and money laundering.  The informant, who is so far only known as "Confidential Source 1," says that when he attempted to come forward last year with information that linked the Clinton Foundation directly to the scandal he was promptly silenced by the FBI and the Obama administration.
  • Working as a confidential witness, the businessman made kickback payments to the Russians with the approval of his FBI handlers and gathered other evidence, the records show.   Sources told The Hill the informant's work was crucial to the government's ability to crack a multimillion dollar racketeering scheme by Russian nuclear officials on U.S. soil that involved bribery, kickbacks, money laundering and extortion. In the end, the main Russian executive sent to the U.S. to expand Russian President Vladimir Putin's nuclear business, an executive of an American trucking firm and a Russian financier from New Jersey pled guilty to various crimes in a case that started in 2009 and ended in late 2015.   Toensing added her client has had contact from multiple congressional committees seeking information about what he witnessed inside the Russian nuclear industry and has been unable to provide that information because of the NDA.   “He can’t disclose anything that he came upon in the course of his work,” she said.   The information the client possesses includes specific allegations that Russian executives made to him about how they facilitated the Obama administration's 2010 approval of the Uranium One deal and sent millions of dollars in Russian nuclear funds to the U.S. to an entity assisting Bill Clinton's foundation. At the time, Hillary Clinton was serving as secretary of State on the government panel that approved the deal, the lawyer said.
  • In the midst of the new discoveries revealed yesterday about the Uranium One case (see: FBI Uncovered Russian Bribery Plot Before Obama Approved Uranium One Deal, Netting Clintons Millions), "Confidential Source 1" has once again hired an attorney, Victoria Toensing, a former Reagan Justice Department official and former chief counsel of the Senate Intelligence Committee, to get his story out. Sitting down with The Hill earlier, Toensing said that the last time her client tried to speak out "both his reputation and liberty" were "threatened" by the Obama administration in a effort to force his silence.  “All of the information about this corruption has not come out,” she said in an interview Tuesday. “And so my client, the same part of my client that made him go into the FBI in the first place, says, 'This is wrong. What should I do about it?'”   Toensing said she also possesses memos that recount how the Justice Department last year threatened her client when he attempted to file a lawsuit that could have drawn attention to the Russian corruption during the 2016 presidential race as well as helped him recover some of the money Russians stole from him through kickbacks during the FBI probe.   The undercover client witnessed “a lot of bribery going on around the U.S.” but was asked by the FBI to sign a nondisclosure agreement (NDA) that prevents him from revealing what he knows to Congress, Toensing explained.   When he tried to bring some of the allegations to light in the lawsuit last year, “the Obama Justice Department threatened him with loss of freedom. They said they would bring a criminal case against him for violating an NDA,” she added.
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  • As we pointed out last summer when Peter Schweizer first released his feature documentary Clinton Cash, the Uranium One deal at the center of this scandal is believed to have netted the Clintons and their Clinton Foundation millions of dollars in donations and 'speaking fees' from Uranium One shareholders and other Russian entities. Russian Purchase of US Uranium Assets in Return for $145mm in Contributions to the Clinton Foundation - Bill and Hillary Clinton assisted a Canadian financier, Frank Giustra, and his company, Uranium One, in the acquisition of uranium mining concessions in Kazakhstan and the United States.  Subsequently, the Russian government sought to purchase Uranium One but required approval from the Obama administration given the strategic importance of the uranium assets.  In the run-up to the approval of the deal by the State Department, nine shareholders of Uranium One just happened to make $145mm in donations to the Clinton Foundation.  Moreover, the New Yorker confirmed that Bill Clinton received $500,000 in speaking fees from a Russian investment bank, with ties to the Kremlin, around the same time.  Needless to say, the State Department approved the deal giving Russia ownership of 20% of U.S. uranium assets 
Paul Merrell

Microsoft's ElectionGuard a Trojan Horse for a Military-Industrial Takeover of US Elect... - 1 views

  • arlier this month, tech giant Microsoft announced its solution to “protect” American elections from interference, which it has named “ElectionGuard.” The election technology is already set to be adopted by half of voting machine manufacturers and some state governments for the 2020 general election. Though it has been heavily promoted by the mainstream media in recent weeks, none of those reports have disclosed that ElectionGuard has several glaring conflicts of interest that greatly undermine its claim aimed at protecting U.S. democracy. In this investigation, MintPress will reveal how ElectionGuard was developed by companies with deep ties to the U.S. defense and intelligence communities and Israeli military intelligence, as well as the fact that it is far from clear that the technology would prevent foreign or domestic interference with, or the manipulation of, vote totals or other aspects of American election systems.
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