Many investors think that we could never have a crash like the melt-down in 2008 but they are wrong. The 2008 Crisis was a stock and investment bank crisis – but it was not THE Crisis. That will happen when the biggest bubble in financial history – the epic Bond bubble – bursts. Let me explain.
Imagine what will happen to the markets when the Western welfare states finally go broke? It will make 2008 look like a picnic. Here are more insights into the situation.
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We are heading for a derivatives crisis unlike anything that we have ever seen. It is going to make the financial meltdown of 2008 look like a walk in the park. Read More »
Russian Roulette: Put one bullet in the cylinder of a revolver, spin the cylinder, point the gun at YOUR head, and pull the trigger. Most revolvers have 6 chambers, so your odds of surviving are 5 in 6, IF you quit after pulling the trigger once. Press your luck, spin the cylinder, point the gun, and pull the trigger again. It might be okay. Try for a third time? Now let’s play Russian roulette – derivatives style. Read More »
Never before in the history of the United States have we been faced with the threat of such a great financial catastrophe but, sadly, most Americans are totally oblivious to all of this. They continue to have faith that their leaders know what they are doing, and they have been lulled into complacency by the bubble of false stability that we have been enjoying for the last couple of years. Unfortunately for them, however, this bubble of false stability is not going to last much longer and when the financial crisis comes it is going to make 2008 look like a Sunday picnic. Let me explain why I believe the aforementioned to be the case. Read More »
Wall Street has been transformed into a gigantic casino where people are betting on just about anything that you can imagine. This works fine as long as there are not any wild swings in the economy and risk is managed with strict discipline but, as we have seen, there have been times when derivatives have caused massive problems in recent years – the government bailout because of derivatives at AIG; the failure of MF Global because of bad derivatives trades; and the 6 billion dollar loss that JPMorgan Chase recently suffered because of derivatives – [but the next] derivatives panic that comes will destroy global financial markets, and the economic fallout from the financial crash that will happen as a result will be absolutely horrific. [Let me explain my contention.] Words: 1485 Read More »
The term “derivative” has become a dirty, if not evil word. So much of what ails our global financial system has been laid-at-the-feet of this misunderstood, mischaracterized term – derivatives. The purpose of this paper is to outline the origin, growth and ultimately the corruption of the derivatives market – and explain how something originally designed to provide economic utility has morphed into a tool of abusive, manipulative economic tyranny. Words: 3355 Read More »
Of the $200+ trillion in derivatives on US banks’ balance sheets, 85% are based on interest rates and for that reason I cannot take any of the Fed’s mumblings about raising interest rates seriously at all. Remember, most if not all, of the bailout money has gone to US banks in order to help them raise capital. So why would the Fed make a move that could potentially destroy these firms’ equity and essentially undoing all of its previous efforts? That being said I still see derivatives as a trillion dollar ticking time bomb with a short fuse. Words: 506 Read More »