Financial Turmoil Abound

[bolus]

I want you to know, I really value the input you offer here.

Part of the reason I'm always angry these days is because of the loss we suffered in our stock portfolio. This account had been very well managed at Morgan Stanly for my parents since sometime in the '80s. I considered it a very good sum of money, overall. It grew substantially during Mr. Trumps presidency. I blame democrats. I figure if Trump, even though I think he's a dick, but I don't NEED to live with, or like him, had been in office things would not be this way.

Anyway. Thanks for popping in here.

I would not blame the politicians. they are part of the problem but they are simply bought out by the rich just making it sure that they can get richer. 2008 never stopped. All the crime and risky actions by the financial institutions in 2008 never stopped and have grown an order of magnitude greater. There are estimated to be over $1 quadrillion in derivatives now (global GDP is $96 trillion) so that means banks are leveraged to the equivalent of 15 years of global production.

Just like the subprime morgage crisis in 2008, people were making money hand over fist for years before the crash because no one seemed to understand they were all garbage while being rated highly by the rating agencies.

Since 2008 there has been an exansion of every possible financial crime. Banks over leveraging, massive counterfieting of stocks through naked shorts, ETF's, market makers and their legal "infinite liquidity," among many other methods. Financial institutions are stealing from everyone in the market (retirements, pensions, trading accounts, etc) with payment for order flow, internalizing orders, 97% of retail trades never seeing a lit market, darkpools, OTC pools and then a whole list of different methods they use to gain advantage. They have killed so many companies through naked shorting and cellar boxing strategies we've lost count.

No just look at the effect of one stock. Back in 2021 gamestop squeezed. Some numbers put the short interest over 300% before the squeeze. Those numbers are self reported so the amount of naked shorts (counterfeit shares sold) might be in the 1000% or more. They paid all the media to say they covered but they didnt and the SEC stated so in their gamestop report. So millions or billions of counterfeit shares are still out there. A bunch of retail investors said "screw them, we are not selling" and now 60%+ of the float is direct registered in their names and not available to the brokers to manipualte them.

So what has happened in 2 years in this standoff? Melvin Capital died. They were short and though they said they closed their position they obviously didnt because they are dead. Archegos did the same thing, Except instead of closing they hid their shorts in a swap (good for 2 years) but then they still died. Who financed that swap? Credit Suisse. Credit Suisse couldnt close and despite billions and billions of influx from the fed and other banks, they just died. UBS is now holding their bag. The only way UBS agreed to buy them if the central bank put up a 100 billion loan. If they could have closed they would have. now 10 central banks are printing liquidity into the system because of this. This is an exact definition of a contagion in the financial markets.

Now this is just one tiny thread with one stock of the big issue. This is one bag killing one financial institution after another and now central banks are bailing it all out. There are thousands of financial crime bags just like this one. All over leverged with naked shorts in a global conspiracy.

We are watching a firecracker go off with this line of banks now just killing credit suisse but in reality we are sitting on a nuclear bomb with the exact same problem. 200+ other banks are currently worse off than credit suisse. Can we bail them all out.

I honestly hope it does not go off but if you read the signs it looks scary as hell right now out there. One more little spark and it all goes off.

Sorry for the lack of sunshine.....

YOU MANIACS! YOU BLEW IT UP! AH, DAMN YOU! GOD! DAMN YOU ALL TO HELL!

 

[Mikej]

I would not blame the politicians. they are part of the problem but they are simply bought out by the rich just making it sure that they can get richer. 2008 never stopped. All the crime and risky actions by the financial institutions in 2008 never stopped and have grown an order of magnitude greater. There are estimated to be over $1 quadrillion in derivatives now (global GDP is $96 trillion) so that means banks are leveraged to the equivalent of 15 years of global production.

Just like the subprime morgage crisis in 2008, people were making money hand over fist for years before the crash because no one seemed to understand they were all garbage while being rated highly by the rating agencies.

Since 2008 there has been an exansion of every possible financial crime. Banks over leveraging, massive counterfieting of stocks through naked shorts, ETF's, market makers and their legal "infinite liquidity," among many other methods. Financial institutions are stealing from everyone in the market (retirements, pensions, trading accounts, etc) with payment for order flow, internalizing orders, 97% of retail trades never seeing a lit market, darkpools, OTC pools and then a whole list of different methods they use to gain advantage. They have killed so many companies through naked shorting and cellar boxing strategies we've lost count.

No just look at the effect of one stock. Back in 2021 gamestop squeezed. Some numbers put the short interest over 300% before the squeeze. Those numbers are self reported so the amount of naked shorts (counterfeit shares sold) might be in the 1000% or more. They paid all the media to say they covered but they didnt and the SEC stated so in their gamestop report. So millions or billions of counterfeit shares are still out there. A bunch of retail investors said "screw them, we are not selling" and now 60%+ of the float is direct registered in their names and not available to the brokers to manipualte them.

So what has happened in 2 years in this standoff? Melvin Capital died. They were short and though they said they closed their position they obviously didnt because they are dead. Archegos did the same thing, Except instead of closing they hid their shorts in a swap (good for 2 years) but then they still died. Who financed that swap? Credit Suisse. Credit Suisse couldnt close and despite billions and billions of influx from the fed and other banks, they just died. UBS is now holding their bag. The only way UBS agreed to buy them if the central bank put up a 100 billion loan. If they could have closed they would have. now 10 central banks are printing liquidity into the system because of this. This is an exact definition of a contagion in the financial markets.

Now this is just one tiny thread with one stock of the big issue. This is one bag killing one financial institution after another and now central banks are bailing it all out. There are thousands of financial crime bags just like this one. All over leverged with naked shorts in a global conspiracy.

We are watching a firecracker go off with this line of banks now just killing credit suisse but in reality we are sitting on a nuclear bomb with the exact same problem. 200+ other banks are currently worse off than credit suisse. Can we bail them all out.

I honestly hope it does not go off but if you read the signs it looks scary as hell right now out there. One more little spark and it all goes off.

Sorry for the lack of sunshine.....

I had the thought before all this money was just gone, when the stock market started going, that I should call my guy and say, I want everything in cash, in a large bag to put in my safe.

 

[Hop Sing]

I had the thought before all this money was just gone, when the stock market started going, that I should call my guy and say, I want everything in cash, in a large bag to put in my safe.

That's what I did the day I retired. Could I have made money after that? Sure, the market still ws strong then. But I sleep mighty fine nowadays, not having to worry about losses.

 

[arakboss]

I keep track of which companies and industries are laying people off.

Amazon isn't just a tech company, they own whole foods... I didn't check yet but they announced an additional 9,000 will be layed off.

Krispy Kreme and Tyson Foods have announced lay offs.

I'm starting to get worried.

I think we are just getting started.

 

[Cavedweller]

 

[bolus]

Yellen makes millions a year in speaking fees from the banks and hedge funds. Its basically her pay to save them at any cost. The plan is still Dollar>banks>people

 

[bolus]

holy cow!

So if you are following credit suisse collapse you see the media mentioning AT1 bonds are worthless now.

https://www.cnn.com/2023/03/20/investing/credit-suisse-at1-bond-write-down-explainer/index.html

Someone dug into a bloomberg terminal and found the list of bag holders:



If Im reading that correctly, (M) means millions so the top holder just had $806 billion in bonds declared worthless. The total on this list seems to be $3.4 trillion.

The article above says $17 billion is worthless, but it may actually be 1000 times worse than that?

EDIT: a very helpful person pointed out that M = Thousand which of course makes absolutely perfect sense since numbers are so hard to standardize so only $3.4 Billion in this list, not a trillion.

 

[Provincial]

Looking at the names on the list, I'll bet that most of the losses were offset by Credit Default Swaps. The convoluted connections of the derivative markets are hard to follow. Intentionally.

Knowingly invest in a failing company. Take out multiple default derivatives to cover potential losses, and when it fails, make multiple times the booked losses. Take out others to cover in case the company doesn't fail. And on, and on.......

 

[bolus]

Looking at the names on the list, I'll bet that most of the losses were offset by Credit Default Swaps. The convoluted connections of the derivative markets are hard to follow. Intentionally.

Knowingly invest in a failing company. Take out multiple default derivatives to cover potential losses, and when it fails, make multiple times the booked losses. Take out others to cover in case the company doesn't fail. And on, and on.......

Swaps are a huge part of the problem. If you look at most of the bank credit default swaps they are going up right now.

Someone today found out how a lot of the players are hiding their counterfiet shares using swaps overseas. The summary from reddit:

In summary, the author has discovered a complex financial mechanism involving equity swaps, total return swaps, and credit default swaps. These mechanisms have allowed for the exploitation of U.S. securities in foreign exchanges, where fails-to-deliver (FTDs) and shorts are not tracked. The author believes that mutual funds have been using these mechanisms to short stocks like GameStop (GME) in foreign exchanges, such as the Vienna Multilateral Trading System (MTF).

The author provides examples of how financial institutions like UBS and Goldman Sachs have participated in these swap arrangements, with mutual funds playing options on the swaps. In these arrangements, synthetic ownership is transferred to foreign affiliates, allowing for infinite shorting and rehypothecation. This strategy, according to the author, is evident in the N-CSR filing for Guidestone.

By understanding these mechanisms, the author aims to raise awareness of the scheme, demand accountability, and ultimately change the game.

Archegos had a lot of crime hidden in a swap when it died. We only see their crime come out when they are gutted open. UBS is part of this mess so they know what they are getting into with buying credit suisse. I think they will be doomed as well but its either doom themselves now or buy them and hope they can put of the doom for another day.

 

[arakboss]

The plus side to this action is that grocery stores may be less crowded and shelves fuller.

Shrinking food stamp benefits for families mean yet another challenge for retailers

For retailers like Kroger, Walmart and Dollar General, the decline in SNAP dollars will put pressure on discretionary sales.

www.cnbc.com

 

[frank linkh]

I think that you should relax and have a snickers. Try not to get your panties in a bunch. Most of us don't give two shiffs one way or another. Just like Walter Cronkite said. Dilligaf?

 

[trunner]

The plus side to this action is that grocery stores may be less crowded and shelves fuller.

Really? Seems to me people have to eat, and will do what's required to stay fed, including pilfering foodstuffs (also, alcohol, medicines, etc.).

Retailers should be concerned: potentially fewer paying customers.

Just one man's opinion. I'm happy to be wrong about this.

 

[arakboss]

Really? Seems to me people have to eat, and will do what's required to stay fed, including pilfering foodstuffs (also, alcohol, medicines, etc.).

Retailers should be concerned: potentially fewer paying customers.

Just one man's opinion. I'm happy to be wrong about this.

That's possible but if they are pilfering instead of paying maybe the checkout lines will be shorter.

 

[trunner]

That's possible but if they are pilfering instead of paying maybe the checkout lines will be shorter.

Haha! True.

 

[arakboss]

Disney layoffs will begin this week, CEO Bob Iger says in memo

Disney CEO Bob Iger notified employees in a memo that job losses will begin this week.

www.cnbc.com

 

[Mikej]

Disney layoffs will begin this week, CEO Bob Iger says in memo

Disney CEO Bob Iger notified employees in a memo that job losses will begin this week.

www.cnbc.com

So what's the happiest place on earth NOW then?

 

[arakboss]

Lucid to cut 1,300 workers amid signs of flagging demand for its EVs

Lucid CEO Peter Rawlinson said the job cuts will hit "nearly every organization and level, including executives."

www.cnbc.com

 

[arakboss]

They aren't playing games when it comes to layoffs.

Electronic Arts is cutting about 800 jobs, or 6% of workforce, and reducing office space

Video game company Electronic Arts will lay off 6% of its workforce and reduce office space, costing the company around $200 million.

www.cnbc.com

 

[Provincial]

Lucid to cut 1,300 workers amid signs of flagging demand for its EVs

Lucid CEO Peter Rawlinson said the job cuts will hit "nearly every organization and level, including executives."

www.cnbc.com

I'm coming to realize that we are likely entering a type of recession like a previous one. I'm starting to refer to this one as "Dot Com 2.0" because things are lining up in a similar way.

In the first Dot Com recession, things were set up by low interest rates making bank deposits and Bonds underperform This lead to shifting investment to the stock market, because that is the only place that returns would exceed inflation. The less risky stocks seemed to have low returns, so investors chased "growth" stocks, and the most active area in "growth" was the Internet. The "new kid on the block" that promised great returns, because it was a new type of investment that looked like it would change the world, and make huge amounts of money doing it.

Then reality hit, interest rates went up, and the lure of the Dot Coms faded when they didn't make the promised returns. Investors dumped the stocks and returned to more stable investments.

Now, with rapidly rising interest rates, savings and freshly issued short term bonds are giving decent return with more stability. The stock market is stagnant. A recession is looming, and the Tech sector is starting to slip, with many layoffs. A sell-off of Tech is likely, so, Dot Com 2.0.

The rapidly rising interest rates and stagnant stock market are much like the 1975-1985 era. Stagflation, or stagnant investment options and high inflation is a bad combination. Having lived through it, I know that lots of jobs will dry up, and the poor and middle class will suffer. The one change is the growth of Government, which stifles innovation, and currently is at war with cheap energy. Cheap energy was critical in beating Stagflation the last time, and also 2016-2020.

Hang on tight, clear out any debt, look for a stable job, get your personal expenses reduced, and expect hard times.

 

[bolus]

Remember if your CDS (credit default swap) rate takes a jump then that means someone is charging more because they think their swap might default. Like the CDS of Lehman brothers in 2008, and the recent CDS wtih credit suisse.

So if you see a CDS jump up on a 1 year US government bond what would be the concern?