Thursday, November 17, 2011

The Next Financial Crisis Will Be Hellish, And It’s On Its Way Fast....

The Next Financial Crisis Will Be Hellish, And It’s On Its Way Fast....

Warning to Occupy Wall Street! OTPOR (CIA) is Infiltrating Your Ranks

Full article by Nebojsa Malic inside - Malic is a DC-based Serbian journalist describing the CIA roots of Otpor which was born in Serbia and has been helping organize protests on behalf of CIA. Trust a journalist who is a native Serb to know who Otpor really is because this Soros/CIA group was created in Serbia in the 90s and deployed all over the world where governments needed to be destabilized for the elites.

Otpor is currently hired and active as a major organizer of OWS also - beware of CIA organizing our protests and be aware of the Otpor fist logo within OWS. Otpor is currently also again in the thick of stirring trouble in Egypt:
Egypt as crucible of Middle East tensions.

Here goes the EU guardian-angel-in-chief of the NWO gospel choir...all according to plan.....

Angela Merkel said she would "give up a piece of national sovereignty" to save the euro

"There is definitely going to be another financial crisis around the corner," says hedge fund legend Mark Mobius, "because we haven't solved any of the things that caused the previous crisis."

We're raising our alert status for the next financial crisis. We already raised it last week after spreads on U.S. credit default swaps started blowing out. We raised it again after seeing the remarks of Mr. Mobius, chief of the $50 billion emerging markets desk at Templeton Asset Management....

Speaking in Tokyo, he pointed to derivatives, the financial hairball of futures, options, and swaps in which nearly all the world's major banks are tangled up.

Estimates on the amount of derivatives out there worldwide vary. An oft-heard estimate is $600 trillion. That squares with Mobius' guess of 10 times the world's annual GDP. "Are the derivatives regulated?" asks Mobius. "No. Are you still getting growth in derivatives? Yes."

In other words, something along the lines of securitized mortgages is lurking out there, ready to trigger another crisis as in 2007-08.

What could it be? We'll offer up a good guess, one the market is discounting....

Seldom does a stock index rise so much, for so little reason, as the Dow did on the open Tuesday morning: 115 Dow points on a rumor that Greece is going to get a second bailout.

Let's step back for a moment: The Greek crisis is first and foremost about the German and French banks that were foolish enough to lend money to Greece in the first place. What sort of derivative contracts tied to Greek debt are they sitting on? What worldwide mayhem would ensue if Greece didn't pay back 100 centimes on the euro?

That's a rhetorical question, since the balance sheets of European banks are even more opaque than American ones. Whatever the actual answer, it's scary enough that the European Central Bank has refused to entertain any talk about the holders of Greek sovereign debt taking a haircut, even in the form of Greece stretching out its payments.

That was the preferred solution among German leaders. But it seems the ECB is about to get its way. Greece will likely get another bailout — 30 billion euros on top of the 110 billion euro bailout it got a year ago.

It will accomplish nothing. Going deeper into hock is never a good way to get out of debt. And at some point, this exercise in kicking the can has to stop. When it does, you get your next financial crisis.

And what of the derivatives sitting on the balance sheet of the Federal Reserve? Here's another factor behind our heightened state of alert.

"Through quantitative easing efforts alone," says Euro Pacific Capital's Michael Pento, "Ben Bernanke has added $1.8 trillion of longer-term GSE debt and mortgage-backed securities (MBS)."

Think about that for a moment. The Fed's entire balance sheet totaled around $800 billion before the 2008 crash, nearly all of it Treasuries. Now the Fed holds more than double that amount in mortgage derivatives alone, junk that the banks needed to clear off their own balance sheets.

"As the size of the Fed's balance sheet ballooned," continues Mr. Pento, "the dollar amount of capital held at the Fed has remained fairly constant. Today, the Fed has $52.5 billion of capital backing a $2.7 trillion balance sheet...., but the Zioconned US ZOG has over 200 Billion $ of unfunded Obligations....

"Prior to the bursting of the credit bubble, the public was shocked to learn that our biggest investment banks were levered 30-to-1. When asset values fell, those banks were quickly wiped out. But now the Fed is holding many of the same types of assets and is levered 51-to-1! If the value of their portfolio were to fall by just 2%, the Fed itself would be wiped out."

Mr. Pento's and Mr. Mobius' views line up with our own, which we laid out during interviews on our trip to China this month....

Keynesian policies are both immoral and impractical in the long run. When asked about what happens in the long run, Lord Keynes responded with: "In the long run we are all dead!" Well people, welcome to the long run....

Fitch Ratings is warning that U.S. banks could be “greatly affected” if Europe’s sovereign debt woes continue to widen. The report caused US stocks to drop 200 points on the Dow Jones industrial average late Wednesday.

Stocks stabilized at the open this morning after the government reported new claims for unemployment benefits last week dropped to a seven-month low and another report showed that housing starts fell less than expected in October. But the Europe concerns weighed on the markets, with the Dow off 170 points or 1.5 percent by early afternoon in a sell-off that included gold, down $55 an ounce to $1,719, and crude oil, down $3.88 a barrel.

Fitch said that exposure by US banks to the stressed European markets of Greece, Ireland, Italy, Portugal, and Spain were manageable but there’s concern that the debt woes are spreading to the larger economies of the region.

The ratings agency said the six largest US banks hold about $50 billion in debt from the stressed nations. But exposure to the major economies of Europe is much larger. The top five US banks have $188 billion in exposure to French banks alone and $225 billion in exposure to the UK.

“Fitch believes that, unless the eurozone debt crisis is resolved in a timely and orderly manner, the broad outlook for U.S. banks will darken,” the agency said in its report. “Currently, Fitch’s rating outlook for the U.S. banking industry is stable, reflecting improved fundamentals at most banks, coupled with generally lower ratings versus pre-crisis levels.”

Another worry is exposure to possible sovereign debt losses by money market funds affiliated with major US banks. The 10 largest US prime money market funds, three are of which are affiliated with U.S. banks, have $89 billion in exposure to as of Sept. 30, 2011.

“Any prolonged turmoil could negatively affect capital market-related revenues well into the future, not to mention the possible effects on loan portfolios and other revenue opportunities,” Fitch said.

Fears of a further credit crunch intensified last night after a stark warning that British banks are struggling to raise money for loans to households and businesses.

The Bank of England said the crisis in the eurozone and slowdown in the global economy have deprived UK lenders of access to vital funds.

And the economic turmoil is so great that the Bank's governor has admitted he doesn't know 'what's going to happen tomorrow', let alone over the long term.

Britain has a one in three chance of tumbling back into recession but the squeeze on household finances is finally coming to an end, the Bank added yesterday.

Governor Sir Mervyn King said the UK economy ‘could be broadly flat until around the middle of next year’ as the Bank slashed its forecasts for growth and inflation.

Weaker growth threatens to blow a hole in the Chancellor’s plans to slash the record deficit racked up by years of borrowing and spending under Labour.

It piles pressure on George Osborne to produce a comprehensive plan to boost economic growth in the Autumn Statement at the end of this month.

In its latest inflation report yesterday, the Bank said British lenders have found it increasingly hard to raise funds since the eurozone debt crisis escalated over the summer.

One key funding measure – the cost of insuring UK banks against default – rose ‘significantly’ in August and September to above the level seen ahead of the collapse of U.S. investment bank Lehman Brothers.

The report warned that if the ‘strains’ on the UK banking system persist, it will hit households and businesses ‘as banks pass on higher funding costs to borrowers and scale back lending’.

That would wreak havoc in the housing market and leave millions of small businesses already starved of the loans they need to prosper facing collapse.

The Bank slashed its economic growth forecasts to around 1 per cent for both 2011 and 2012 from the 1.5 per cent and 2.2 per cent predicted in August. It pencilled in growth of around 2.5 per cent in 2013 but conceded that the ‘prospects for the UK economy have worsened’ over the summer.

Sir Mervyn said the crisis in the eurozone is the ‘single biggest risk’ to Britain and admitted the Bank has ‘no idea how this will be resolved’ in an attack on dithering politicians in the single currency bloc.

He added: 'In the last three years, we have seen extraordinary events. Who knows what's going to happen tomorrow, let alone next month?'

‘Official meetings come and go but the underlying global problems remain,’ said Sir Mervyn. ‘The journey to a more balanced world economy will be long and arduous.’

But he added that inflation will ‘fall back sharply next year’ towards the 2 per cent target from the current level of 5 per cent.

‘The extraordinary squeeze on real take-home pay that we have seen in the last three years should now begin to come to an end,’ he said.

It was the one silver lining in a bleak report.

Last night experts warned that the Bank’s report may be ‘optimistic’.

Vicky Redwood, chief UK economist at Capital Economics, said: ‘Even the Bank’s downgraded growth forecasts still look optimistic to us. We expect zero growth next year.’

Ross Walker, chief UK economist at Royal Bank of Scotland, said: ‘The UK economy isn’t back in recession but it is on the edge. We are stalling.’

The Governor of the Bank of England has told Europe’s political elite to stop passing the buck and move swiftly to tame the storms ripping through the eurozone.

In his most dramatic intervention yet in the euro crisis, Sir Mervyn King said it was up to governments, not central banks, to rescue indebted countries from bankruptcy.

The European Central Bank is coming under intense pressure from France to shore up financially stricken single currency members, such as Italy and Greece.

But Sir Mervyn said it was ‘not the job of a central bank’ to fund budget deficits of governments shunned by investors.

The eurozone is rich enough to end the crisis immediately and it was only a lack of political will that was preventing rich nations from bailing out their insolvent partners, he suggested.

At yesterday’s inflation report launch, Sir Mervyn said: ‘The euro area does have the resources, if you were to regard it as a single country, to make appropriate transfers, within itself.

‘The European Central Bank feels, and with total justification, that it’s not the job of a central bank to do something which a government could do perfectly well itself, but doesn’t particularly want to admit to doing.’

He said the pressure being heaped on the ECB to lend directly to stricken nations stemmed from governments’ unwillingness to ‘own up’ to their responsibilities.

The Governor admitted that he had ‘no idea’ how the crisis would play out, but said that a ‘sticking plaster’ solution would be no ‘substitute for proper medical treatment’.

Breach: Angela Merkel said yesterday that any kind of rescue package led by the European Central Bank would break European Union regulations...

And as the crisis continues to deepen, Lord Lawson, Chancellor under Margaret Thatcher, today calls for Britain to withdraw from the European Union if Brussels fails to scrap the euro and implement other far-reaching reforms.

Writing in the Spectator, he calls for ‘an orderly dissolution of the eurozone’, adding: ‘The EU needs explicitly to abandon the failed notion of ever-closer union.’

The comments come as divisions between France and Germany deepen over how to resolve the escalating crisis.

Paris yesterday urged the ECB to do whatever is ‘necessary’ to prevent a disastrous dissolution of the single currency.

But German premier Angela Merkel said any sweeping rescue led by the ECB would breach EU rules.

The turmoil continues to spread from to the heart of the 17-nation eurozone.

Following another rout in the French bond market, Paris is now paying 2 percentage points more than Germany to raise a ten-year loan – a fresh euro-era high.

Fears are growing that the country could soon lose its triple-A credit rating.

And Italy’s borrowing costs rose again yesterday, with Rome now paying an interest rate of 7.17 per cent – a level considered too high to sustain its £1.6 trillion debt....

The Occupy movement, OWS is going Global...– And Original 2009 Tea Party – Movement Is Protesting the SAME THING that the Founding Fathers Protested at the Boston Tea Party in the USA...

The Founding Fathers hated big corporations. See this, this and this. They were as suspicious of big corporations as they were the monarchy. So they only allowed corporate charters for a very brief duration, in order to carry out a specific, time-limited project.

As James Madison noted:

There is an evil which ought to be guarded against in the indefinite accumulation of property from the capacity of holding it in perpetuity by…corporations. The power of all corporations ought to be limited in this respect. The growing wealth acquired by them never fails to be a source of abuses.

Indeed, while the Boston Tea Party was a revolt against taxation without representation, it largely centered on the British government’s crony capitalism – and disproportionate tax breaks – towards the East India Company, the giant company which dominated the tea market and hurt small American business.

Protesting against the government propping up today’s giant banks – who are ruining the chance for small businesses to have a fair chance at competing – is exactly the same idea.

As I’ve repeatedly noted, the “Tea Party” movement starting in 2009 was also originally centered on the protesting government bailouts of the giant banks. See this, this, this, this and this.

While it was quickly hijacked by the mainstream Republican party, Sarah Palin, criminal/assassins/Neocons and others, the Tea Party was originally an anti-crony capitalism, anti-corruption, anti-bank bailouts protest. As such, it really was originally modeled on the Boston Tea party.

No wonder – as last month:

The Oath Keepers and a founding member of the Tea Party announced that they are supporting the current protests on Wall Street and against the Federal Reserve.

Another key founder of the Tea Party – Karl Denninger – also supports the protests, and points out that the demands of the Tea Party protesters were originally very similar to those of the Occupy protesters (before the mainstream Republican party co-opted the Tea Party) .

Numerous local tea party leaders, such as the leader for the Trenton area, also support the Occupy protests....

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