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lquadland10 (< 20)

Is the 360Trillion dollar derivatives starting to Implode?



January 24, 2013 – Comments (2) | RELATED TICKERS: GS , WF , JPM

Just reported that Ben at the FED lent out 14 to 16 Trillion Dollars. I can't remember how much. Then you had JPM. Now you have Last week, following documentation from Deutsche Bank (and Nomura), it became clear that Italy’s Monte Paschi (BMPS) bank (the oldest in the world) has engaged in derivatives with the German and Japanese banks in order to save itself during the financial crisis. The derivatives, according to Bloomberg, were done off-market and allowed the booking of large upfront gains which covered losses optically that the bank faced as European liquidity dried up completely – the offsetting ‘losses’ are now coming due. Today, amid growing outcry over the ‘deal’, the former head of BMPS has resigned. Bloomberg reports that Giuseppe Mussari, now Italy’s top banking lobbyist, was the Chairman of BMPS during the derivative deal period. BMPS shares were halted after plunging dramatically as investors are still unclear of the extent of losses it faces on derivatives. If that was not enough chicanery, there is a twist in that none other than Mario Draghi, as Director of the Bank of Italy, would have had to vet Mussari (and his banks’ regulated books) during this period – as BMPS accumulated what is obviously undocumented derivatives positions to intentionally obscure losses. Once again, years later, it seems the truth comes out – and of course we would expect no-one to go to jailand the lying in Europe (then and now) continues unabated – as the reality of financial system health remains hidden from view.


I don't think any bank can withstand what is going to happen next and then there are the Currency Wars that are starting. It going to be a wild year.


2 Comments – Post Your Own

#1) On January 24, 2013 at 10:31 AM, L0RDZ (91.88) wrote:

Naa... they'll  just  lose  the paper work  and  fudge  the number than  somehow   stick  the peasants with the check  in higher  prices  and  taxes...

Call me a  radical,  but maybe  they need to round up these people and give them choices  (unpleasant ones if anyone catches my drift).

If that doesn't work,  its amazing how  when the amounts loaned reach  unrepayable amounts  how  no one is willing to come clean that  they screwed up big time...

Its  the paradox  of  large numbers...


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#2) On January 24, 2013 at 5:01 PM, lquadland10 (< 20) wrote:

LoreZ. Correct as usual.


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