Central Banks Upside Down


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    Unknown Gurley-Lord service station, San Francisco 1929 The Swiss have unleashed a pretty wild storm in financial markets. All sorts of companies and
    [See the full post at: Central Banks Upside Down]


    Europe Stocks Rise to Highest Since 2008 as Energy Shares Climb



    That is obvious and at the same time puts all Yellen’s blather about ending the Greenspan put to lie. Given a plus 10% stock correction I’m betting Yellen et. al. will be ready willing and able to first talk more QE and then if needs be do it.


    These recent one way trades, short yen, long dollar, short oil, etc. are due for counter trend rallies and it’s worth considering that those with unlimited funds can carry them a long way.

    On today’s Debt Rattle’s, Poroshenko call up of 100K, remember in the spring there will be war or rumors of war. Not a good time for the ECB/EU or the Fed to go wobbly on staying the course.

    eclectic sceptic

    Am I missing something? Where is the talk on how much the other side of these trades made?


    eclectic sceptic – I wonder how much the other side of the trade was leveraged.


    with highly leveraged individuals and companies being wiped out en masse, the other side made a lot less than was lost. no zero sum here.


    Reading elsewhere, if the leveraged losers can’t pay their margin call AND the broker goes belly up, then the people on the right side of the trade (the winners) can’t collect. That would be a lot of money that just went up in smoke.

    As Karl Denninger points out, “It was not THAT long ago that depository banks could not play in the markets (at all) and non-depository banks were PARTNERSHIPS, which meant their owners had UNLIMITED liability for **** like this. That resulted in a (shocking) amount of sanity being present… gee, I wonder why?”

    He goes on to say:

    “But the real problem is that now FXCM is $225 million in the hole on client accounts — all at once.

    This is not over folks. In fact, you’re not even seeing the beginning of it yet.

    Most institutions impacted by this will try to hide it just as they did in 2008, whether they’re big companies with FX exposure who just got nailed or firms with “raw” exposure (like FX brokers and banks) that are levered up to the nuts. It won’t work because cash is cash and when the margin clerk is calling you can’t evade the fact that the guy on the other end of the phone wants his money — now.

    I give this action a one chance in five risk of destabilizing something important — perhaps a big bank in Europe — and setting off a cascade reaction.

    But whether it does or doesn’t this much is certain: Anyone betting on Central Banks giving “fair warning” just got an object lesson in why you never take such as truth, and anyone who thinks they can play at 20, 50 or 100:1 leverage and not eventually get blown up is an abject fool.”


    Here is a speculative explanation for all global banking problems, methinks, heh.

    Just based on rapid population growth, by 1999 the population was 6 Bn, so by Wiki and other sources, 1716 super intelligent or ‘gifted’ humans with iQ 175+ would have been born worldwide. Due to different birth environments, 50% might not survive because of war, poverty, disease, etc. Then another 25% would not adapt socially or learn to hide their gift. That would still leave 429 skilled survivors over the last 100 years to prevent boredom by making mischief for the rest of the world.

    I would posit many of the predatory capitalist robber-barons from 1850 to 1900 were such gifted humans. Furthermore 1 or 2 probably started the Federal Reserve idea at the Nov 1910 Jekyl Island meeting which culminated in the Federal Reserve Act of Dec 1913. They or their puppets have been in control or guiding the Fed, IMF, World Bank, BIS, large public and private banks too big to fail or jail, ever since.

    Because of communication difficulties these gifted humans (iQ > 175) probably have staff or paid ‘front persons’ with iQ 130-140, to explain things to us mortals. For example, a 180 iQ could explain a concept to a 140 iQ, who would not have thought of the idea, but can readily grasp it when hearing from the 180. Likewise, a corporate 140 lobbyist can explain a problem to a congressman who then can act in our best interests. There would have been born about 15,000 with iQ 160, with 3750 survivors; so a gifted human could have 3-5 minions to carry out orders.

    Super intelligent Ai while held up as scary stalking horses, would not be allowed by the gifted humans. They might provide too much competition; why share the spoils from shadow control of the world economy.

    These gifted humans would probably seek each other out socially to help avoid boredom and to some limited extent cooperate in their long-term goals. From the bumpy road the world has travelled the last 110 years, one can surmise there are 3-5 factions among the gifted, and getting consensus on a project would be 10x times more difficult than herding cats. When a global project has been agreed upon, the implementation would be a lesser hurdle, but significant.
    Regards, rabblebabble666


    In New Zealand, Global Brokers NZ, a currency trading firm, was forced to close its doors due to losses sustained after the Swiss Franc moves.

    “We are currently experiencing hundreds of withdrawal requests.”
    However, he said losses incurred on trades that could not be exited as a result of illiquidity – the inability to quickly sell an asset – would not be reimbursed.
    “Please note that the inter-bank market for francs was illiquid for hours after the event and no traders with an open franc position were able to close it for a significant period of time,” Johnson said.


    The casino that the world financial markets have become, is starting to show its true colours, as a huge gambling house where some patrons are more equal than others, and risk is totally mis-priced.

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