Hat Trick Letter – duben 2010

Chystá se nová měna? Will Be New Currency Introduced?

THE MUNICIPAL BOND MARKET IS THE LIKELY SITE OF THE NEXT US-BASED CREDIT CRISIS, DUE TO EXTREME INSOLVENCY AND LACK OF ATTENTION FROM THE SYNDICATE PRINTING PRESS OPERATORS LOYAL TO WALL STREET. THE DISTRESS IS ACUTE HERE & NOW. THE SOLUTIONS ARE NOWHERE IN EVIDENCE. A BUST IS ASSURED.

A senior SEC employee warns of a potential municipal bond market collapse. Rick Bookstaber is a a senior policy advisor to Mary Schapiro, the SEC director. He maintains his own private non-SEC affiliated weblog. He has past experience in risk management at Salomon Brothers, Moore Capital Mgmt, and Morgan Stanley. He is the author of three books and a number of articles on finance topics ranging from option theory to risk management, and has received various awards for his research. He holds a PhD in Economics from the Massachusetts Institute of Technology (MIT). So his credentials are solid. He wrote, „We will NOT see a big crisis emerging for some time in banks, hedge funds, or derivatives, mostly because, like with a knockout punch, the risks that matter do not come from where you are looking.“ He implies the USDept Treasury and USFed are fast at work in maintenance functions. He is not so sanguine about the municipal bond market. He continues with a risk summary.

„So, where to look next. To see other potential sources of crisis, let’s first recount the lessons learned from this crisis:

1) Problems occur when things get leveraged and complex, and thus opaque.

2) If the problems occur in a very big market, especially in a very big market like housing that is tied to the credit markets, things can go systemic.

3) The notion that you can diversify by holding a geographically broad-based portfolio works fine, until it does not.

4) A portfolio that is apparently hedged can blow apart. So we have to look at the gross value of positions, even if they are thought to be hedged.

5) Do not bet on ratings, because rating agencies are conflicted and might not be all too dependable at their job.

6) Defaults are never easy to manage, but it gets worse when there are a lot of them happening at the same time. It is harder to manage the mess, and there is less of a stigma in defaulting. And it is all the worse when, as is the case in the housing markets, those defaulting are not businessmen. As an added complication, with housing the revenue that we thought was there really was not. Income that was supposed to be there to finance the mortgages, even when that income was fairly stated, became committed to other areas like second mortgages.

Well, guess where we have a market that is (1) leveraged and opaque, that is (2) very big and tied to the credit markets, and is (3) viewed by investors as being diversifiable by holding a geographically broad-based portfolio, with (4) huge portfolios where assets and liabilities are apparently matched, and with (5) questionable analysis by rating agencies, and where (6) there are many entities, entities that may not approach default with business-like dispatch, and that have already mortgaged sources of revenue that are thought to support their liabilities?

Answer: THE MUNICIPAL MARKET.„

THE D.T.C.C. CLEARING HOUSE IS THE OBJECT OF NEW FOCUS, THE POSSIBLE SITE OF GLOBAL BANK SKIMMING OR A GRAND HEIST. THE SECRETIVE CLEARING HOUSE OPERATES AS AN ALL INCLUSIVE BLANKET WITH GRANDIOSE POTENTIAL FOR ABUSE. ALMOST THE ENTIRE U.S. FINANCIAL SYSTEM OF STOCKS AND BONDS IS VULNERABLE TO SEIZURE BY THE BANKING ELITE. THEY HAVE SHOWN THEIR COLORS WITH THE WALL STREET BUST, THE T.A.R.P. FUND CONFISCATION, THE FAILURE OF DISCLOSURE, THE EXECUTIVE BONUSES, RAIDS AGAINST RIVAL HEDGE FUNDS, AND VAST INSIDER TRADING.

Some believe the DTCC is the US Federal Reserve’s next big money grab, following a pattern of hidden authority and position placed by it. The existence of the Depository Trust & Clearing Corporation is probably the best guarded secret in United States, easily surpassing the real truth about the Fort Knox. No gold exists in Fort Knox, the ugly secret. The DTCC and its six subsidiaries were established in 1973 as a clearing house for every financial transaction is the US, Euroland, and over 100 foreign countries. The EURO CCP, one of the six DTCC subsidiaries, did not exist at the time of inception. To obtain a proper perspective on the magnitude of its scope and potential, in the year 2009 the DTCC managed over $2 quadrillion USDollars of transactions. That is a billion billion dollars, a mindboggling sum. A grandiose setup has taken place for future abuse. Until January 2009, a person could hold a physical paper stock certificate or bond in possession as proof of ownership within the financial realm. After the 1st of January in 2009, only electronic transactions and entries were permitted, investors thrust into cyberspace. Worse, without permission the entry was switched from the investor name to the broker name from the firm involved. The names of investors have been once removed. Then without permission it was switched to a company called Cede & Co, which happens to be a subsidiary of the DTCC. Investor funds are parked in the DTCC money pool. Now the name of investors have been twice removed. The DTCC and its six subsidiaries are wholly owned by the US Federal Reserve System, a private group of bankers, brokers, insiders, and global elite. They are the subject of frequent challenges for disclosure of balance sheets and for illegal activity such as TARP Fund confiscation. The people must realize that at any time the elite choose to engineer the ultimate money grab in the name of national security or war or any other phony excuse, they can seize your money or freeze it indefinitely, with no power lying in the hands of investors. The USFed officially and legally has access to all contents in the DTCC money pool.

In other words, the USFed through its DTCC Warehouse has become the guarantor for all the CDS transactions that clear via the DTCC, a gigantic hairball of $25.5 trillion size. If and when the next meltdown occurs, like with AIG or Lehman Brothers or Bear Stearns or Fannie Mae, these criminal bankers in total control of the USGovt finance ministry and US banking system are prepared. They are in a position to offset that staggering Credit Default Swap contract losses by pilfering money residing in the DTCC money pool. Whether they do so remains to be seen. The grand bank holiday event, in my opinion set to enable the grand financial system heist of private investor funds, has been prepared under full system construction. The people are totally unaware, only suspicious and angry. The banker elite have at their disposal the full $25 trillion. If and when they confiscate the funds, they will surely call it a failure of the system, which should be interpreted as the climax of slavery.

Čína – China

BIG FINGERS ARE POINTING AT SCOTIABANK. THE RIGGED GOLD MARKET CONTROVERSY HAS TURNED TO A CANADIAN FIRESTORM. ACCUSATIONS HAVE BEEN MADE THAT SCOTIA MACOTTA, THE BULLION BANK SUBSIDIARY OF SCOTIABANK, HAS ONLY PALTRY AMOUNTS OF GOLD, 10 TIMES LESS THAN THEY SHOULD IN INVENTORY TO MATCH ITS INVESTOR ACCOUNTS. A BROADER ACCUSATION INVOLVES THE BIG PICTURE OF EXCHANGE TRADED FUNDS FOR GOLD, WHICH INCREASINGLY ARE BEING SHOWN TO BE VAST CHANNELS FOR WALL STREET FIRMS TO CONFISCATE GOLD BULLION. E.T.FUNDS ARE NOTHING BUT PAPER SHELLS AND SCAMS. THEIR INVESTORS WILL NOT ENJOY THE GOLD RUN.

Reaction has come with serious doubt on the legitimacy of any Exchange Traded Fund for gold. The target is the iShares Gold ETF (IAU) whose vaulted gold bullion is supposedly in ScotiaBank. Claims by informed persons have been made that 90% of its inventory has been covertly depleted. Accusations are lodged that JPMorgan and Goldman Sachs have taken the gold illegally.

Extreme forces are at work, from European sovereign debt risk, to London shortage of gold, to appearances of tungsten lacked gold bars, to admission of gold swaps by Greenspan, to outsized naked shorts under scrutiny, to skyrocketing USGovt deficits, to heavy hidden USTreasury monetization, to ongoing sacred wars, and finally to the CFTC hearings on gold & silver, combined with fraud charges against Goldman Sachs. The winds have changed in the last few months in a significant historically unprecedented and highly dangerous manner. Charts will be provided for the major assets and instruments, as usual, but be sure to know that on a given week in the future, a quantum change might come to any one of them, with a huge price shock. The decline shock in gold & silver, along with upward shock in USDollar was seen in the autumn months of 2008. My suspicion is the reverse is about to occur, and very soon. The following charts attempt to address qualitative factors with more emphasis. More conceptual items, less numerical items.

The following main points were made at the hearing by a stream witnesses led by Maguire, but also Gene Arensberg, Jeffrey Christian, Harvey Organ, and Bill Murphy:

Ø JPMorgan routinely floods the gold & silver markets with naked short futures contracts, without benefit of metal collateral. JPM and the Big Four banks appear totally exempt from collateral rule enforcement.

Ø JPM and the Big Four banks hold huge concentrated positions that never seem to diminish, but rather grow each and every year. The size of their position is usually greatly in excess of annual global production and has no possible economic bearing on mining operations.

Ø JPMorgan routinely sells gold & silver futures contracts during thin market times like early in Asia, and even enlists small platoons of metals traders to join them with subtle hints and messages. They show no appearance of seeking the highest optimal sale prices.

Ø JPMorgan and other Big Four banks routinely manage the exchange metals inventory with fractional techniques, whereby 100 times as much metal is sold than exists in hand. This is part of the Ponzi framework.

JPMorgan and the Big Four routinely win short-term profits from rigging these markets, but their gains are set up by ruinous long-term positions that never go away, and always grow larger. Their balance sheets are polluted with the long-term core positions, toxic and deeply under-water. Imagine all the short contracts in gold when it was under $500 a few years ago.

THE GOLD MARKET HAS UNDERGONE A PERCEPTUAL CHANGE. THE EXTREME SHORTAGE IS RECOGNIZED. THE RIGGED MARKET IS SLOWLY BEING UNDERSTOOD, ACCEPTED, AND REVEALED. THE UPTREND IS CLEAR, AND A CHALLENGE OF HIGHS IS IMMINENT. A $100 SINGLE WEEK MOVE IS POSSIBLE SOON.

THE SILVER MARKET HAS ALSO UNDERGONE A PERCEPTUAL CHANGE. AN EVEN GREATER EXTREME SHORTAGE IS RECOGNIZED. THE RIGGED MARKET IS SLOWLY BEING UNDERSTOOD, ACCEPTED, AND REVEALED. A STRONG REVERSAL IS EVIDENT, SOON TO SEE A CHALLENGE OF HIGHS. THIS IS A MUCH SMALLER AND MORE EXPLOSIVE MARKET, WITH AT LEAST DOUBLE THE POTENTIAL PRICE GAINS COMPARED TO GOLD. A $10 SINGLE WEEK MOVE IS POSSIBLE SOON.

PERMIT THE JACKASS TO DESCRIBE A POSSIBLE CLIMAX SCENARIO. MINE IS PURE SPECULATION, BASED UPON NUMEROUS CONVERSATIONS WITH INFORMED PEOPLE WHO HAVE BEEN RELIABLE AND ACCURATE IN THE PAST, MIXED WITH MY GUT FEELING AND EXPERIENCE WATCHING EVENTS. $$$

My imagination will be unrestrained. This is not a forecast, just a possible scenario. Citigroup fails suddenly, is liquidated, but the aftermath is called a restructure. Other Wall Street banks like Bank of America go bust. The JPMorgan credit derivatives blow up, with $15 to $20 trillion in rumored losses, but the firm continues to stand. Goldman Sachs succumbs to fifty lawsuits in twelve countries, and goes into receivership, but its assets were removed to a foreign location to join the Madoff funds. The USGovt leaders, together with USFed and USDept Treasury officials, will declare that all is clear after the climax, but they will lay blame elsewhere, not on their policies or the broken US$ framework. Next will come the widespread closure of US & UK banks and brokerage firms. Reports will spread like wildfire of $1 to $2 trillion in missing accounts, but the major networks will not cover it, only the internet which focuses attention on the DTCC as villain. A bank holiday will be announced for three days, but it will last thirty days. Entire supply chains will be disrupted, as supply lines for food, gasoline, ATM cash machines, and basic materials are interrupted. Pensions and civil workers nationwide will not be paid. The internet will not function properly, even cell phones will not operate properly. Some phony terrorist attack and infiltration will be announced, which will be blamed for many missing accounts.

A flash of events will occur. The gold exchanges will shut down altogether, as officials blame speculators and foreign account holders for removing the majority of gold & silver bullion. Numerous complaints of fraud and price fixing will arrive to flood the exchanges. Most gold claim funds like the GLD and SLV will be shut down, with these fraud-ridden Exchange Traded Fund officials announcing that account holders given cash redemptions at low prices. The USDollar will suddenly suffer a 25% devaluation, as the USTreasury yield will rise quickly from 4% to 6%, but come down and remain under 5% on the 10-year yield miraculously. Rumors of trillion$ monetization will come forth, to explain, as the news renders repeated rounds of damage to the USDollar. Foreign central banks assist in the USDollar stabilization initiative, as a global monetary crisis is the rage. The crude oil price zooms up to $150 per barrel and stays there, as some liquidations of tankers finally occurs, with extreme profits realized, sending the oil price down to $120. The gold price hits $1600 per ounce, and the silver price hits $35 per ounce, but only the major mining stocks benefit. No physical bullion will be available worldwide. Many mining firms will be acquired suddenly, again at low prices, in order to grab valuable property and staff. The people will remain dazed and confused. If they riot, then the swine flu will make a comeback. If disorder is widespread, then FEMA camps might begin to take in prisoners. Just speculating.