Reverse Repos Go Parabolic: ‘Liquidity Shock’ Derivatives Melt-Down Has Begun!

Posted on April 17, 2015 by The Doc
The strange volatility we’ve been experiencing in the markets is occurring because there’s is a massive derivatives melt-down going on behind the scenes. 
The Fed is engaging in an enormous reverse repo operation in order to prevent the global financial system from collapsing.
The ONLY REASON the Fed would need to inject massive amounts of Treasuries into the global banking system is because there’s an extreme shortage.
A massive derivatives accident requiring MASSIVE amounts of collateral to be posted has developed:
Submitted by PM Fund Manager Dave Kranzler, Investment Research Dynamics:
A reverse repurchase agreement, also called a “reverse repo” or “RRP,” is an open market operation in which the Desk sells a security to an eligible RRP counterparty with an agreement to repurchase that same security at a specified price at a specific time in the future. LINK…IMF tells regulators to brace for global ‘liquidity shock’ -LINK.
The financial news spin-doctors are attributing today’s abrupt sell-off to a report of a Bloomberg terminal outage and to a report that China has expanded its list of stocks available for shorting.   This explanation for the plunge in stocks globally is so absurd it almost leaves me speechless.

More…

The Global Liquidity Squeeze Has Begun

Submitted by Tyler Durden on 04/18/2015 - 18:50 The entire global financial system resembles a colossal spiral of debt. Just about all economic activity involves the flow of credit in some way, and so the only way to have “economic growth” is to introduce even more debt into the system. Unfortunately, any system based on debt is going to break down eventually, and there are signs that it is starting to happen once again.
 

This Technical Signaled The Last Two Market Crashes And It Just Happened

Submitted by Tyler Durden on 04/18/2015 - 10:55 So the fundamental case for a 20-year bull run as BMO is calling for and certainly many other banks seem to be onboard with that is not looking great YTD.  In fact, most perma bulls have shy’d away from even mentioning fundamentals other than to say that generally they aren’t looking great but don’t worry the Fed is still engaged.   And so we feel its a worthwhile exercise to have a look at the technicals.

This Global Crisis Will Be Catastrophic

from KingWorldNews:
So the situation is now much worse than it was in 2008. Debt is higher but not only that, massive amounts of money have been printed and interest rates have been lowered to zero and it has had no effect. So when the next crisis starts, the governments will have no tools but they will still print money and it will lead to hyperinflation and it will be reflected in the gold price, which is going to go to levels that are unthinkable today.”
Egon von Greyerz Audio Interview @ KingWorldNews.com

The Federal Reserve: Part II

from Armstrong Economics:

The amount of propaganda against the Federal Reserve is incredible. What we must keep in mind is that its original design, which lasted for about one year, was brilliant. The classic banking model, borrowing from depositors on a demand basis and lending long-term making a profit on the spread in interest rates, such as business loans and mortgages. This was Relationship Banking not today’s Transactional Banking model.
Yes, this was fractional banking insofar as about 8% of the money needed to remain free to service demand requirements. The crisis comes during an economic contraction when people run to the bank for a loss of confidence and demand to withdraw their funds. This results in the value of cash rising in purchasing power, compared to assets, so asset values collapse.
Read More @ ArmstrongEconomics.org
PART I

One Last Look At The Real Economy Before It Implodes - Part 5

Submitted by Tyler Durden on 04/17/2015 - 22:25 The endgame has indeed arrived. At the very least, the international elites seem to think success is within their grasp, for they now openly expose their own criminality. But they do so in a way that attempts to divert blame or to rationalize their actions as being for the "greater good." All signs and evidence point to what the IMF calls the "great global economic reset.”" The plans for this reset do not include U.S. prosperity or a thriving dollar.

Caught On Tape: National Guard Troops Patrol California City, Conduct New Jersey "Homeland Response Drill"

Submitted by Tyler Durden on 04/18/2015 - 17:38 While there are still three months until Operation Jade Helm officially opens, various documented reports of substantial national guard drills and troop exercises are starting to trickle in early. As Paul Joseph Watson notes, the first documented proof of National Guard drills comes from Ontario, California where National Guard troops can be seen patrolling residential streets and practicing traffic control. In the video troops, followed by a humvee, are seen marching close to an elementary school and single family homes.



Jim Sinclair’s Commentary

John Williams shares the following with us.

- Housing Starts Plunged at Annualized Pace of 31.0% (-31.0%) in First-Quarter 2015
- Real Retail Sales Contracted at 2.0% (-2.0%) Annualized Pace in First-Quarter, Worst Showing Since Depths of Economic Collapse
- Annual Real Sales Growth at Recession Level
- Real Earnings Fell by 0.4% (-0.4%) in March
- March Year-to-Year Inflation: -0.1% (CPI-U), -0.6% (CPI-W), 7.5% (ShadowStats)
- First-Quarter 2015 Real GDP Headed for a Contraction
"No. 713: March CPI, Real Retail Sales and Earnings, Housing Starts, GDP Prospects "
Web-page: http://www.shadowstats.com?p=1043
PDF: http://www.shadowstats.com?p=1043&display=pdf

The Greek "White Knight" Emerges: Putin To Give Athens €5 Billion For Advance Gas Pipeline Fees

Submitted by Tyler Durden on 04/18/2015 - 09:54
With Greece teetering on the edge of insolvency and forced to raid pension and most other public funds, ahead of another month of heavy IMF repayments which has prompted even the ECB to speculate Greece should introduce a parallel "IOU" currency, a white knight has appeared out of nowhere for Greece, one who may offer $5 billion in urgently needed cash. The white knight is none other than Vladimir Putin.

Modern-Day Monetary Cranks and the Fed's "Inflation" Target

Submitted by Tyler Durden on 04/18/2015 - 17:05 The science of economics has taken a decidedly wrong turn sometime in the 1930s. In the field of monetary science specifically, sober analysis has given way to broad-based support of central economic planning, with both policy makers and their advisors seemingly trying to trump each other with ever more lunatic proposals.

These "Everyday Americans" Endorse Hillary

Submitted by Tyler Durden on 04/18/2015 - 16:30

 

World Ponders Life After US Hegemony

Submitted by Tyler Durden on 04/18/2015 - 16:00 We've long argued that the implications of the shift away from a global economic order that has prevailed since the end of WWII are far reaching and may include the demise of what has largely been a unilateral political and economic system characterized by the dominance of US foreign policy and Western notions of politics and capitalism. Now, it appears as though de-dollarization and the end of US hegemony may have gone viral because, as The NY Times reports, a US “retreat” from the world order it has largely shaped was the unspoken topic de jour at this year’s spring meeting of the IMF and World Bank in Washington.
 

2007 All Over Again? Let Us Count The Ways (And Remember What Happened Then)

Submitted by Tyler Durden on 04/18/2015 - 15:30 Extreme optimism - whether in the form of stock valuations, consumer spending, or happiness surveys like the one mentioned below - tends to be followed by corrections; because to get to an extreme point in a data series, extreme behavior is usually required. That is, a lot of really optimistic investment decisions have to be made to push financial markets to cyclical highs, and these kinds of moves tend to exhaust themselves and produce big moves in the other direction. Hence the 2008 low following the 2007 high.
 
 
 

Well That Hasn't Happened Before - Exhibit 2

Submitted by Tyler Durden on 04/18/2015 - 14:45 We have never, ever, seen the long- and short-end of the Treasury yield curve so anti-correlated.
 
 

Did Germany Secretly Fund Israel's Nuclear Weapons?

Submitted by Tyler Durden on 04/18/2015 - 14:00 The conservative German daily Die Welt, well-known for its unflinching support for Israel, recently published an article stating “with near certainty” that the Federal Republic of Germany, or West Germany, helped finance Israel’s nuclear program in the 1960s. The Welt report comes after former Israeli President Shimon Peres (who was the head of Israel’s nuclear-weapons program at the time of its inception in the 1950s) denied that funding for Israel’s nukes came from Germany earlier this month.
 

Chicago Credit Risk Soars On Rahm Emanuel's Re-Election

Submitted by Tyler Durden on 04/18/2015 - 13:15 It appears the re-election of Rahm Emanuel as Chicago Mayor has done nothing to assuage concerns about the city's insolvency. As Emanuel's victory became more assured, credit risk (measured by the spread between Chicago Muni yields and Treasury yields) has soared from 180bps to over 240bps. Furthermore, it has accelerated even more since the April 7th election. Recent statements by S&P that if the city fails to articulate & implement a plan by the end of 2015 to sustainably fund pension contributions, or if it substantially draws down reserves to fund contributions, they will likely lower the rating; has not helped (given that Moody's already have Chicago at Baa2 - just 2 notches above junk).
 

Has The Fed Already Lost?

Submitted by Tyler Durden on 04/18/2015 - 12:31 At some point, maybe sooner than later, the US economy will re-enter recession. Historically, that's the time when the Fed would lower interest rates in attempt to spur economic growth. But today, interest rates are already at 0%. That's what's so dangerous for the Fed about its current ZIRP policy -- it leaves no gunpowder left in the low-interest-rate bazooka. The Fed will enter its next battle defenseless. This is clearly a situation the Fed wants to avoid, so raising rates - soon - is an urgent priority. But... practically, can the Fed (and other central banks) really raise rates now without killing the already-moribund global economy?
 
 

China Sees Largest Capital Outflow In Three Years Amid Currency Conundrum

Submitted by Tyler Durden on 04/18/2015 - 11:45 "The last time China suffered such pace of capital outflows was during 2012 when $165bn of capital left during the last three quarters of that year. And before then it was during the Lehman crisis," JPM notes, in yet another sign that Beijing is stuck between a rock and a hard place as it battles to maintain the dollar peg in the face of slumping economic growth.

 

Signs That 'The Elites' Are Feverishly Preparing For Something Big

Submitted by Tyler Durden on 04/17/2015 - 21:45 What in the world are the elites up to?
 

Italian Paper Breaks Silence Over Political Assassinations in Kiev: “Somebody is Killing those Opposed to the Ukrainian Government”

by Daniele Pozzati, Global Research:
Italy’s second largest newspaper La Repubblica has broken western media’s silence over the latest wave of political murders in Ukraine.
In an unusual for mainstream western media frank assessment of Kiev’s post-Maidan regime, La Repubblica has denounced “a ruthless sweeping away of every form of political opposition taking place in Kiev”. The paper was reacting to yet another assassination in Ukraine — this time of a popular journalist Oles Buzina.
Not shy of calling a spade a spade, the article leaves no doubts as to what has happened, and is happening in Ukraine, right from the headline: “Pro-Russian journalist murdered in Kiev. It is the third political homicide in 24 hours.”
Read More @ Globalresearch.com

Vicious attack on Dr. Oz actually waged by biotech mafia; plot to destroy Oz launched after episode on glyphosate toxicity went viral

by Mike Adams, Natural News:
Dr. Oz should be given a Congressional medal of some kind for his willingness to expose the truth about glyphosate on national television. In a recent episode that went viral, Dr. Oz discussed the toxicity of the biotech industry’s favorite pesticide “glyphosate” — a dangerous chemical that even the World Health Organization now admits likely causes cancer.
In response to this episode, the so-called “Monsanto Mafia” went berserk with all their usual character assassination tactics, and now they’ve come up with a contrived plot — a campaign of intimidation and character smearing — to try to silence Dr. Oz by destroying his credibility.
Read More @ NaturalNews.com

Going Rogue: 15 Ways to Detach From the System

from Ready Nutrition:
I am inspired by the very definition of self-reliance: to be reliant on one’s own capabilities, judgment, or resources. Ultimately, it is the epitome of independence and lays the groundwork of what we are all striving for – to live a life based on our personal principles and beliefs.
It is a concept rooted in the groundwork that made America great. Being dependent on our own capabilities and resources helped create a strong, plentiful country for so long. That said, the existing country as it is now is entirely different than when it began.
It is much too complicated to get into how the “system” was created. That said, the purpose is to enslave through debt and to create an interdependence that will force you and your family to never truly find the freedom you are seeking. to continue purchasing as a sort of status symbol to make you think you are living the good life. While all along, it has enslaved you further. Wonder why we have all of these holidays where you have to buy gifts? The system needs to be fed and forces you into further enslavement. If you don’t buy into this facilitated spending spree, you are socially shamed.
Read More @ ReadyNutrition.com

The “Khazarian Mafia” Plotting Another 9/11?

by Jonas E. Alexis, Veterans Today:
After the 9/11 attack, Benjamin Netanyahu was elated. Based on what he said publicly, he probably went to a party on the same day to celebrate the ideological paradigm shift which happened shortly after the buildings went down. He probably knew that the disastrous event was going to bring about some kind of tikkum olam. The mad man was so happy that he could not hide his feelings. During a conference at Bar-Ilan University, he said:
“We are benefiting from one thing, and that is the attack on the Twin Towers and Pentagon, and the American struggle in Iraq.”[1]
All of those diabolical events, Netanyahu continued to say, “swung American public opinion in our favor.”[2]
Phew! When your sons and daughters and loved ones died at the World Trade Center, it was a victory for Netanyahu. What he ended up saying was that no price is too high for the Israeli regime. He also ended up saying that because of the 9/11 attack, the Israeli regime could grab Washington and much of America by the balls and squeeze them.
Read More @ Veteranstoday.com

“We The People” Are Now Ready to Fight for JUSTICE:

SGT Note: Scream from the rooftops, “HELL NO” to California’s Orwellian and UNCONSTITUTIONAL SB77 “Mandatory Vaccines” Bill.
Bix Weir, Road To Roota:
My detractors think I am naive to believe that the Bad Guys can be taken out. They think there are not enough awake and aware people in the United States to force the change. They think that when faced with the difficult choice between Safety and Liberty that the “Sheeple” will simply stay on the couch and let the Bad Guys run the show.
My detractors are wrong.
This week at a California Senate Health Meeting to vote on a bill called SB277 which would REQUIRE all students in Public and Private Schools to be fully vaccinated with all the government mandated child vaccinations, THE PEOPLE SHOWED UP IN MASS TO VOICE THEIR OPPOSITION. (watch the whole 2:24 second video as the emotional impact kicks in around 1:00 when you realize this line does not end…and will not end until we are ALL standing in it!:)
Read More…

 
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