The Doc spoke with financial/metals analyst Harvey Organ this weekend to discuss the escalation of the European debt crisis, JP Morgan’s derivatives crisis, and the gold and silver markets.
Harvey believes that the panicked reactions of multiple federal regulatory agencies indicates that JP Morgan’s losses are likely much more critical and severe than the mere $8 billion lost in the IG9 tranche, and states the data indicates JP Morgan is unwinding a portion of its $50 Trillion in interest rate swaps.
Harvey fears that the losses on JP Morgan’s interest rate swaps could already be $100 billion, and ‘COULD BRING DOWN THE WHOLE FINANCIAL SYSTEM OF THE WORLD!‘
Harvey states ‘If JP Morgan’s involved it really is The Fed itself, and if The Fed’s blowing up that will just about be THE explosion heard throughout the world.‘
When asked what type of risk JP Morgan’s derivatives crisis currently poses to the financial system Harvey responded:
We’ve been following this (JP Morgan’s derivatives) for quite awhile. Rob Kirby in 2009 wrote a great paper The Elephant in the Room, where he describes the huge amount of interest rate swaps that JP Morgan has underwritten, and it’s probably in excess of $50 trillion- of the $70 trillion in derivatives that they hold.
These interest rate swaps are really a bet where they go long on long term rates (T-bonds), and short the short term treasury bills. That forces the purchase of bonds, which in turn causes long term rates to fall. That’s basically why long term rates are low for the United States, but Europe’s rates are higher: it’s because of the manipulation by JP Morgan.
What Jim Willie has shown is that JP Morgan right now is unwinding some of these interest rate swaps. If they’re unwinding these things, together with the huge losses from the IG9 (which were losses from the underwriting of the European credit default swaps), THIS COULD BRING DOWN THE WHOLE FINANCIAL SYSTEM OF THE WORLD!
If it’s $100 billion, then that blows up everybody. This is scary- and it probably will explain why JP Morgan was forced to come out on a Thursday night rather than let the world know on a Friday evening- the regulators certainly forced them to make their statement on Thursday. It probably will explain why the FBI are involved. JP Morgan probably told them what is coming, so the FBI is now doing a criminal probe. It will also explain why the CFTC has their enforcement arm coming in on the derivatives side. And the SEC also began a probe on these trades the moment it was announced.
So if you look at these trades and realize JP Morgan earned $20 billion, and all of a sudden announce a loss of $2 billion- that shouldn’t cause this much of a scare. But probably these regulators know the truth, JP Morgan probably told them ‘we have a major problem here’ , and that’s why all these other regulatory bodies have started coming in.
If JP Morgan’s involved it really is The Fed itself, and if The Fed’s blowing up that will just about be THE explosion heard throughout the world.
This is huge, and it will probably really explain why these three regulatory bodies all of a sudden came in all at once. JP Morgan’s been fooling around in all these derivatives for years and now they’re suddenly worried about the customers? The probe didn’t start with MF Global, I didn’t see the FBI coming in when JP Morgan stole customer money there! But they came in now, and it’s immediate!
There’s some strong merit here that JP Morgan’s losses are huge – NOT from the losses they had in Europe with the IG9 tranche, and $8 billion is so huge! But I think that the scare is the huge losses that are unwinding on their interest rate swaps.
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Aw crap if it’s not one thing it’s another. Radioactive tuna, exploding derivatives, imploding Euro. I think I’ll just put on my hoodie, stick my gold in my crack, dig a hole in the ground and cover myself up. Call me the Unabummer. In all seriousness, Harvey is one of my favorite reads, publishing his blog about 7 PM PST. He wraps up the world events in a way that even I can understand. He rarely provides and inverview. This one will be an important event.
The Spanish Gov. has just nacionalized spanish 4th bank (Bankia) and has given them 23 billion Euros of taxpayer money, Doc. That’s around 28 billion USD.
Got popcorn?
It really makes one question why Glass-Steagall was removed back in 1999. In less than 10 years speculators managed to create another 1929 Wall Street Crash resulting in massive bailouts and a slow moving financial train wreck.
Pass the popcorn please!
I wonder if the western banking is upset of the new clearing house banking system of the BRIC’s? Could this be a financial false flag to make sweeping changes to give more “secure” controls to the IMF or BIS in order to regain controls of the world monies? Sacrifice your own son, JPM, to the god of mammon.
Harvey states ‘If JP Morgan’s involved it really is The Fed itself, and if The Fed’s blowing up that will just about be THE explosion heard throughout the world.‘
The beat of the war drums is getting louder again with Iran and Iran has set up its own SWIFT.
The powers that be had to be able to predict the end of the US dollar as the world (petro) trading currency when strangling sanctions were placed on Iran and any who would trade with Iran. Who knows maybe Iran is a player, gold is transferring there in lieu of American dollars. The 0% and swaps had to come to this end game conclusion – so again, things seem very planned.
Gold and Silver are manipulated down and Central (private) banks buy at the low prices.
Governments take over the failing private banks – Central banks don’t nationalize the failing banks.Central banks don’t lose anything, they just print and lend phony money to the government, they don’t borrow.
Somehow I think the 1% power elite will end up with the majority of the gold and silver and everyone else loses everything that they have saved in paper and digits. If that happens there will be blood in the streets.
Maybe the entire financial collapse is the false flag. (for a New World Government)?
And recently, to protect the elite, the US either passed or introduced a bill to legalize propoganda on Americans, add this to recent laws that the US can legally jail or kill almost anybody on any soil now.
Im going to say this one more time:
GIVE PEOPLE A GOOD DEAL, AND SOME TIME, THEY WILL FUCK IT UP.
There is no way in Hades they can unwind that much. If they are trying, look for the next few days to a week (maybe two) for the STHTF in a way that will send the Eurozone reeling. Not long after that, the dollar will accelerate its spiral. No way in hell. Hope it’s not true yet gotta a little more stacking to do. Picked up 4 Eagles and 4 half 90% today.
It just continues to boggle my mind the AMOUNTS involved here. It’s ludicrous.
And it makes me wonder… for all that the “conspiracy theories” say this is pat of the big, bad NWO cabal and all of that, the people involved here — and more importantly the results they seem to continue to get — make me think that really, they’re NOT “that smart” and they’ve gone and backed themselves into a corner where they’re now good and fucked. In fact, they seem downright stupid to keep playing out the same failed game plan. It’s not just Ron Paul who predicted bubbles and crashes years before they happened (and as the Bernake and Krugman clones claimed all was right in the world just months before it all went belly up), there are a lot of folks who see the train comin’. The tighter these idiots are clinging to thier failed models and plans, the worse this is winding up to be for EVERYONE, but especially gonna be bad for them.
Truly.
If they WERE “that smart”… you’d think SOMEONE would have seen the potential result here. To me, this looks a whole lot more like a group of folks who maybe all bought into a similar philosophy… a FAILED philosophy… and are just trying to hold it together long enough to get the hell outta Dodge. The massive numbers of banksters resigning and moving on early (another one in Spain just announced after Bankia’s chief was let go / left with his golden parachute intact) to me definitely smacks of rats fleeing the ship. If they were “that smart” and the overarching plan was truly “that good”, well… they’d not be so worried, they’d not be fighing so hard against the “Liberty movement” in the US and other things of the sort. IF they truly had a grand plan, they’d have accounted for this. The fact that they’re all running like blazes for the exits and disappearing to Paraguay or Uruguay or whatnot… smacks of desperation as they realize the WHOLE thing is about to come down.
Sure, there are some sacrificial lambs that are going to try and ride it out, and they’ll ultimately go down HARD when SHTF for real. At some point “the people” are gonna rise up, at some point there IS going to be a reckoning when enough people wake up. That’s going to be messy to say the least, and I have to wonder what these banksters are thinking as they run off now. Didn’t Judas too throw back his 30 pieces of silver to those who paid him, when the disgust of what he’d done finally hit him? Eventually the Truth will come out, and man on man, these guys are SO in for it. Just hope it’s in my lifetime at this point, so I can see my kids benefit from getting a world worth inheriting.
Meh, enough ranting. This just pisses me off when I consider the magnitude of the gross injustices being played out against all of humanity for the benefit of such a small few. This is NOT going to end well.
OK GENTS..
Many of you are brilliant. I would like to think and consider myself an expert when it come to silver and the manipulation. WHY IN THE HELL IS SILVER NOT ROCKETING PAST 100.00 an ounce? It just does not make sense. Don’t give me any of that Prechter bullshit on deflation.. At some point this thing has to ballistic.
Had to wonder why a supposed $2B loss would prompt employees to immediately file suit against their employer for jeopardizing their retirement plans. Of course, a $2B net swing on a previously reported $20B profit is a $22B loss, not a $2B loss. But, even so, employees would normally expect some losses during the year. Why would they jump to the conclusion that this one loss will destroy their retirement plans. They know something we don’t. Yet.
PoppaT,
It’s kin of like Pumpkin’ Chunckin’. You can only depress a spring so far before it lets loose. Time is near as the FED and COMEX is straining to hold the kinetic energy back. When it does let loose it will be a pumpkin catapult form hell.
Bloomberg News
Credit Traders Drive Up Swaps Index Linked to JPMorgan’s Loss
By Mary Childs on May 11, 2012
Derivatives traders seeking to profit
on speculation JPMorgan Chase & Co. is unwinding positions tied
to its $2 billion trading loss are driving up a vintage credit-
default swaps index to the highest in more than three months.<—The Other Side Of The Trade Is Taking Advantage Of JPM’s Troubles. They Can’t Get Out Until They Take Maximum Losses IMO
The 10-year Markit CDX North America Investment Grade Index
Series 9, created in 2007, reached as high as 138.8 basis points
today before easing to 137.9 as of 3:17 p.m. in New York,
according to data provider CMA, which is owned by CME Group Inc.
and compiles prices quoted by dealers in the privately
negotiated market. The index ended yesterday at 126.7 and has
climbed from 111.7 on March 30.
JPM LOSSES AS THE SPREAD GETS WIDER <—The trade on the index probably wasn’t a one-way bet, the market
participants said. Iksil may have offset it by buying protection on the
same index with contracts that expire about seven months from now, the
people said. That strategy would pay JPMorgan the difference between the
long-dated contracts and the short-dated ones, and the trade would gain when the gap narrows.
The hedge would end in December unless another trade is made to replace it.
Iksil’s trades have been so large that
they’re widening gaps between the relative value of the indexes and the
average price of contracts tied to companies in those indexes, according to the market participants. That has frustrated some hedge funds that had bet the gaps would close, the people said. My comment on this My comment on this Silverdoctors Link
Traders are pushing the index wider as they wager it’s one
of the bank’s biggest positions contributing to the loss,
revealed late yesterday by Chief Executive Officer Jamie Dimon
on a conference call with analysts. Some trading firms seek to
profit from dislocations rather than bets on which way a market
is headed.
The $2 billion loss occurred in London under multiple
traders, according to an executive at the New York-based bank,
who spoke on the condition of anonymity. Bloomberg News first
reported April 5 that JPMorgan trader Bruno Iksil had amassed
positions linked to the financial health of corporations that
were so large he was driving price moves in the $10 trillion
market.
Dimon declined on the call to discuss the specific
transactions or people involved. Synthetic credit products are
derivatives that generate gains and losses tied to credit
performance without the owner buying or selling actual debt.
JPMorgan used the instruments to hedge exposure on loans and
other credit risks tied to corporations, banks and sovereign
governments. The losses emerged after the firm tried to reduce
that position and unwind the portfolio, Dimon said.
The Above Story Is Linked HERE: LINK
This Story Refers to The “10-year Markit CDX North America Investment Grade Index
Series 9″
This is Not This “Series 9 Index, But Is CDX.NA.HY.Series 15.
I’ve been trying to find any links that actually track this series 9 index. This Link Gives This Reference: Markit INDEX LINK But Since This Index is out-dated, I only Found This:
INDEX NAME SERIES VERSION New RED Codes
CDX.NA.HY 9 22 2I65BRJD3
I had to Find This March 2, 2011 Reference to illustrate what was happening one year ago when these spreads were widening.
Wednesday, March 2, 2011 LINK
High Yield CDX Spreads Widened (CDX.NA.HY.8, CDX.NA.HY.9)
High yield credit default swap spreads widened yesterday. CDX.NA.HY.Series 8 and Series 9 were
the most active on CMA’s website. I’m not a CDS trader, but the curve
is steep and could be flattening or default risk is being repriced on
high yield credits (more info from @credittrader 1, 2).
From CMA Datavision’s ”Largest Widening Spreads” list on 3/1/2011
5-Year Mid CDX.NA.HY.Series 8: 117.02 basis points, +21.24 bps, +22.17%
5-Year Mid CDX.NA.HY.Series 9: 147.22 basis points, +12.00bps, +8.88%
This is How You Lose When Spreads Go Against You. This is Also Why You Can Lose Even If You Think You’re Hedged.
Was This Ever Posted In Silverdoctors? If Not Here it Is: It Shows The Series 9 Index Spreads:
Yep, that is why it’s called “The Morgue” and/or to be exact “JP Morgue”.
I don’t think a hundred billion will disrupt much of anything. These guys, be it the morgue, the fed or the government have huge band aids. Eventually the system will tilt and shit will happen but a hundred billion won’t do it. Just remember when tarp was passed and uncle sam let goldman sachs change it’s authority to a bank or something so they could get 12 billion bucks. No one in the system batted an eye at that, it’s what these crooks do and it’s how they survive reaping gigantic profits. All involved will bend over backwards to support jp morgan.
JAKE?………………………….. Yes, Jamie?…………….
I’ve Been Reading This Thread Can We Talk?
OKAY, JAMIE–What Would You Like To Say?
Well–I—I—Well, It’s Like This, Jake…Only Michelle Looks Good In An Orange Jumpsuit.
Maybe You Shoulda Thought Of That Before You Authorized The Whale Bets?
Maybe You Could Write A Book? Here’s A Hint On What You Could Call It——> In the Mean-time Check Out Your New Room!
Looks Like You’ll Have Company!–Get It?–Company?—HAHAHA—!
That Was A Ba-Da-Boom Joke!
VERY FUNNY JAKE–OKAY, WHAT DO MY LOSSES AMOUNT TO NOW? DO YOU HAVE THE NUMBERS HANDY? THEY’RE GETTING TO BE SO LARGE, I DON’T THINK I CAN REMEMBER HOW MANY ZEROS I NEED—CAN YOU TELL ME HOW MUCH I’M LOSING?
SURE, JAILBIRD –YOUR LOSSES WILL HAVE AS MANY DIGITS AS YOUR INMATE NUMBER: YOU’RE UP TO $10,922,658,345
INMATE # 10101101001
There is much more going on than just financial corruption and regulatory incompetence.
One theory is that it has gotten to this point – because the globalist Oligarchy knows it will soon not matter.
I apologize for Doc for being off-topic, but I think this is important info for everyone.
I noticed today this earthquake monitoring site, ANF, dropped a bunch of good size earthquakes, and it wasn’t the first time. If you know about seismographs, you know three stations must receive seismic waves in order to triangulate the epicenter, so there is much less room for error. None of these ever showed up on the USGS site either:
http://www.abovetopsecret.com/forum/thread845543/pg1#pid14219105
This site from NRC shows significant EQ’s from the last 400 years in Canada, there is almost nothing where these earthquakes were today:
http://www.earthquakescanada.nrcan.gc.ca/historic-historique/GSCOF5539/index-eng.php
Hi! Jake can’t get your video to work and I love your last post. LMAO
It’s happening folks the end of the line, when the Derivatives Collapse so go the PM’s To The Moon I just wish I had more Stacking time but it’s getting near the end of Buying.
Next thing to look for is the Interst Rates going up and The End
DOC…good job on the Harvey Organ interview article. I look forward to hearing it soon. Looks like more of those who are not members are voting how much they like the post by the FACEBOOK hits. I gather the SD members may forget their is a COIN BUTTON next to the post….LOL
SRSrocco;
methinks that before the IR swaps hit JPM reeeeaaaallllly hard, the Greek CDS will be the epic event that causes mid 11 figure losses to JPM, B of A, WFB, GS, HSBC and others, all of whom took multi billion dollar bets on Greek bonds. Now that Greece has some $1 trillion in debt its Debt to GDP is over 400%. Their tax revenues are collapsing at single digits per month, meaning that less and less are able or willing to pay ‘their fair share’ Thus the total collapse in very short order. If you have any assets at risk please remove from harm’s way at your earliest convenience. Being 1 month early beats 1 week late. IMO.
M45: Sorry–I didn’t Copy The URL Correctly: Here It Is:
Aragornos, I am thinking the same way. We have the so-called greatest risk managers on th planet from JP Morgan (Bruno Iskel, Ina Drew) and they blew up their books on the IG-9 trade. To me this is very scary. I see the financial world like quantum physics. The interconnectivity of the trades are so linked together that it’s impossible to see the impact. I believe the models that these idiots use are useless in the OTC derivative market. When people are trading in this reality it’s becomes mulidimensional just like quantum mechanics. Every single trade, small or large, will have a impact on the movement of your trade. Fundamentals and suppy and demand become worthless. Trades become more frequent in time, space, and volume. The world’s economy has never gone through this experiment before. Phrases like “the market has priced in a Greek default”drives me nuts. How in the hell do they know that? The world has never experienced a 1.4 quad-trillion dollar market before with unlimited leverage. Priced in my ass!! Derivatives are only as strong as it’s weakest link. You spark this bomb and who knows what can happen to the financial world. Jim Willie has been amazing at pinning the problem on interest rate swaps. This makes so much sense. 1.5% on the 10-year could mark the beginning of a major explosion in the markets. With a 16 trillion dollar deficit and adding by the day, there is no chance of rates going up. ZIRP will continue until the world markets blow sky high. IF the FED takes their foot off the pedal on interest rates, then rates will immediately go up. There is ZERO demand for US paper. It’s all of a illusion. The FED monetized 61% of the bonds in 2011 and probably 80% in 2012. No way the FED cannot continue with ZIRP and Operation Twist. Private sector involvement is little to none since Pimco left. China is slowing down rapidly and Japan just got downgraded last week. The FED is trapped with buying our debt. No way out and it’s checkmate. What does the FED do? With more QE, it raises commodities and stocks, but it drives up interest rates. Downgrades will soon follow because of more debt. If they don’t come in with more QE, the stock market crashes back down to 2008 levels and Obama re-election is done. I believe like Jim Willie, the FED needs Europe to take the heat. Europe needs to crash and the money will flow into US treasuries to keep rates down. The FED will go full on QE to save the US banks and the markets. This could work short-term just to get Obama re-elected. 2013 is really scary. I have no idea what will happen next year. I getting the feeling that the FED doesn’t either.
Fuck you Dimon you prick head you need to start talking now. He said in 6 weeks there was only 2B loss thats a lie! if in 2 1/2 weeks they just loss 8B right Jake. Arrogant MF sat there and blamed everybody but him self. I guess at JPM shit only rolls up hill until vice CEO.
Can’t wait for the interview post!!!
Glass-Steagall was removed by lobbying. Guess by whom, who later became a bank. They became a bnak in 08 so that they could also get the TBTF bailout. Indeed. The Kazahrians, AKA Goldman Sachs.
In many ways the current JPM zombification is the ever lasting stride between J Street and W street that is JPM/Rockefellers vs GS/Rothshield. Wanna bet who’ll win? The one that always did (with their ancient aristocracy glued to it) of course. The “systemic” bank (what? systemic? They became a bank in 08 to get the free gov lunch!!) of GS. JPM is toast. That’s great, but what then. How are you going to get rid of the visibly much smaller (but behind the curtain much bigger) Goldman………
Hope you liked my take on this, best regards,
R3K
PoppaT: short answer:
because they have literally trillions of fiat money to spend before giving up and showing the world the scrawny wizard of “Oz” working his useless machines and showing it’s all make believe.
That’s what it is, make believe. And one day it’s gonna just end before you can even poop.
Love ya’ll,
R3K
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MicrosoftInternetExplorer4
Hi PoppaT, excellent
question, I think (although im not an expert) that the silver price is tanking
because of the naked shorts perpetually dumped on the markets by JPM. It’s the only
explanation that I can think of… if you find out yourself please let me know as
I am scratching my head too.
Also you have to consider the Euro is crashing which is causing deflation in everything…
Remember five, six, seven years ago and further back how common (and
odd) it was to see such large purchases of US bonds coming out of
so-called hedge funds in the Cayman Islands? That still goes on. But
the ironic thing about the massive leap in deficit spending and bond
market manipulation we see today is that it wouldn’t be possible without
resorting to contortionist derivative market idiocy taking the market
rigging to a whole new level.
JPM pretty much is the Fed at this point, complete with a national security exemption enabling it to not report true financial statements.
Thanks Jake for the video, it’s all about stealing money and excuses and not a word of truth. Hang the Bastard.
Not Talking about Specific Risk Positions. Yea Right As*%*$# $2 Billion More Like $10 Billion + Even His Voice Makes Me Puke.
After Listening To Jamie