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The article of
July 22nd on "Smoking Guns of USTreasury
Monetization" hit more desks, raised more dust,
and brought more attention than expected to the grand fraud in progress using
USGovt debt securities. The glaring actions continue without any hint of
legal prosecution but deep foreign resentment among creditors as publicity
mounts. Nobody appreciates counterfeit of the instruments held in great
volume as supposed savings. The only counterfeit of honorable origin is of
Microsoft products, since mostly stolen and surely not the output of in-house
innovation. The problem is more diverse than just a JPMorgan bond fraud
issue. Sure, the venerable colossus and syndicate titan sold more than $2
trillion in USTreasurys than were issued in the 1990 decade. Records used to
be found in the penthouse business offices at Cantor Fitzgerald in South
Manhattan. A database migration to New
Jersey surely involves a great deal of deletions. The
problem goes far beyond the giant bank, which gobbled numerous other banks in
the course of its cancerous reign, to become an appendage of the USGovt
today. See Chase Manhattan, Chemical Bank, Manufacturers Hanover, and Bank
One. Any competent student of financial economics can see that such merger is
part & parcel of the Fascist Business Model, with climax merged union with
the state, and side effect of criminal impunity that permits deep fraud in
numerous markets like silver. JPMorgan cannot be fixed by the process any
more realistically than an angry man with a vengeful heart can carve out his
own cardiac pump in order to enjoy a better day. Thus no solution exists.
The problem in
very recent history traces back to the September and October months of
2008, when Wall Street investment banks and the US
banking system died. These banks have not and will not recover, since
they died. Some deaths were obvious, but others remain well hidden. The big
banks do not lend money since they are dead, the dirty little secret. Their
insolvency is easy to prove, but obscured by altered accounting rules put in
place on April 1st 2009. They include generous rules that permit a dead
entity to declare itself alive by filing a false accounting report, valuing
their own assets at whatever suits their needs. Generally, insolvency plus
illiquidity will force bankruptcy. But Wall Street and the Big US
Banks use naked shorting of USGovt-backed bonds to produce urgently needed
liquidity. All the extreme efforts to revive the US
banks are futile. Imagine numerous transfusions of a dead man in the
Emergency Room of a hospital, as more blood does not guarantee a
resuscitation. More wires and tubes don't mean squat, since the guy has
croaked and his corpse is rotting with a stench spreading into the corridors.
The dirty secret, protected from the US
public, is that the man died. So Wall Street and the Big US Banks are dead.
By withholding the reality, a storm of funding programs has been approved by
the USGovt, mostly directed at Wall Street and the Big US Banks. They
urgently need liquidity, and are creative how they obtain it.
A near total shun
of the crooked investment banks Main
Street and the states has taken place. The
private sector investment community does not float new bonds when lawsuits
cases are in progress! Sure, the last Stimulus Plan sent many billion$ to
the states to plug budget shortfalls. And sure, another $26 billion pittance
was approved today for states in a second plug. Somehow the thought of
tossing a $1 bill into a tin cup for a street beggar comes to mind, except
the beggar is a former well-placed skilled industry employee, now painfully
displaced. The states need several hundred billion$, or better yet, they need
to redirect the vast funds sent to WashingtonDC and keep them at home, where
they would not be wasted or pilfered or sent to battle overseas.
So Wall Street
and the Big US Banks are dead. No amount of Financial Accounting Standards
Board rule changes can overrule the fact that they are grossly insolvent, and
worsening by the month. The housing bust and mortgage debacle killed them. Many
new profit or basic elite welfare programs are channeled into executive
bonuses and excess cash reserves held at the US
Federal Reserve, which is also insolvent, yet another major iconic zombie.
Check their balance sheet for mortgage bonds worth half their value listed on
the books. The lead dogs in the financial sector cannot have access to their
cash, desperately needed and absconded by the USFed. They must lean heavily
on devices that provide cash. Their bond issuance business has dried up,
amidst deep fraud allegations. Their stock initial public offering business
has dried up, in collateral damage to integrity. Their credit derivative
business is thriving, not coincidentally since it is unregulated. Even their
hedge fund business is shriveling up, a strange byproduct of Wall Street
targeting and leverage backlash. Their flash trading business is intriguing,
hardly a sign of free market efficiency, with bizarre outcome of a grand
incestuous poker game limited to those holding Wall Street business cards. So
Wall Street and the Big US Banks are dead. Do not count them out just yet!
They have found a clever way to provide vast sums of liquidity, aided by the
blind eye of USFed Chairman Bernanke. They sell that which they do not own,
relying upon collusion at the top.
NAKED SHORTING
WITH FAILURE TO DELIVER
In the Smoking
Gun article, the main accusation was cited as widespread counterfeit and
hiding vast funds. The sale of USTreasury Bonds in the last two years has
exceeded the USGovt debt issuance by $1.5 trillion. It was asked "Where
did the money go?" But the more important questions are:
Ø
What
telltale evidence exists to shed light on the counterfeit? (Failures to
Deliver)
Ø
Where
else is excessive sale of USGovt sponsored securities? (USAgency Bonds)
The answers are
easy. The implications are great. The impunity is disturbing. The signs of
systemic breakdown are diverse. The road to perdition is clear. The path to a
USTreasury default is far more obvious with each passing month. The denial is
thick. The mortgage bond fraud, whose climax failure in 2008 was quite
visible, went unprosecuted. So Wall Street and the Big US Banks are dead. The
kings are dead, but the theft has not ended. A new blatant form of fraud has
entered the room. Silence is deafening from the entire cast of enforcers, who
have one element in common, a Goldman Sachs pedigree. The impish clowns
sitting on the helm at the USFed oversee the fraud. They have often stated
their primary objective to aid in the promotion of liquidity to the big
banks. Naked short sales of USTreasurys and USAgency Mortgage Bonds
accomplishes the mission. Yet another Mission Accomplished on a sordid trail
in recent US financial snakepit and cesspool run by a den of thieves.
Failures to
Deliver on both types of USGovt-backed bonds are staggering. When
a trade takes place, usually two to three days are permitted before the stock
or bond must be delivered, so as to complete the trade, and to settle the
funds transfer among parties. A year ago, vast sums of USTreasury Bonds were
the subject of debate and dispute as the volume of Failures to Deliver was
staggering in the months following the autumn 2008. Blame was given to the
disorder that ensued from the Lehman Brothers failure, the AIG breakdown, and
the Fannie Mae nationalization. No such convenient event can be blamed on the
present-day Failures to Deliver. They continue for USTreasurys, and explain
well the superfluous $1.5 trillion. They precede the return launch of the
QE2, the Quantitative Easing. Suddenly, delivery of bonds might be made
easier as the USGovt floods the bond market with new issuance covered in cost
by the Printing Pre$$, which USFed Chairman Bernanke claims can be
operated at zero cost. The actual cost is the ruin of the USDollar image and
the ruin of the USTreasury prestige.
What would be the
motive for naked short selling of USTreasurys in such volume? Sure, simple
greed is always in the mix. Worse, Wall Street lacks legitimate business
volume from which to earn profits. So Wall Street and the Big US Banks are
dead. Imagine a dark storefront that used to have a bustle of business and
constant flow of customers. Not Wall Street, no more. The dark storefront
conceals a vast counterfeit operation inside. They sell debt securities under
the cover of darkness, out the back door, and rake in great sums of money.
When demanded to produce the USTreasurys, they refuse, they delay, or they
defy, since they cannot deliver. Thus, the Failures to Deliver. This explains
the ready cash flow of liquidity to the Wall Street banks without much
investment banking business. This explains the 90 consecutive days without
trading loss for the lead dogs in the corrupt sled. This explains how dead
zombie banks continue to operate. So Wall Street and the Big US Banks are
dead.
DEBT MATURITY
& RESALE, NOT THE EXPLANATION
Word is getting
out. The excess is NOT explained by USTreasury maturity, expiration, and
re-sale, as some analysts claim without doing proper research. Many people
offer this simplistic explanation, but it is not correct. Mature rollover of
debt is clearly labeled as such, not to be confused with utter counterfeit
from naked short sales. The excess USTreasury sale (over and above USGovt
deficits) is largely from naked shorting, marked by known Failure to Deliver.
This explains how Wall Street and Big US Banks keep their liquidity flowing.
These big banks are dead zombies bereft of income, so they counterfeit a
source of income. The big banks (including investment banks) have seen a huge
decline in IPOs, Bond issuance, and their lending business is way down also,
seen in the credit data. They have a big source of income in the USTreasury
Carry Trade, buying long, selling short. They have been parking those profits
in the USFed, earning interest as Excess Reserves. These points require
repeating so as to sink in. Legitimate income is not available.
A Failure to
Deliver occurs when the selling party cannot locate the bond, cannot find the
bond, or it does not exist. More USTreasurys have been sold than float in
existence. Worse, more USAgency Mortgage Bonds have been sold than float in
existence. The Wall Street and Big US Banks are engaged in basic counterfeit,
sale of that which they do not own, much like selling the Brooklyn Bridge.
Some prefer to think the best, that debt is maturing and re-sold. No so! That
is naive! The same goes on with the USAgency Mortgage Bonds.
New Issuance of
USTreasurys, as the label implies, is new and not old. Many people have some
confusion over what New means, which means fresh new securitizations.
Rollover of old expiring maturing debt is totally different. The USGovt
finance ministry calls it Rollover of Mature Debt Securities, or some such.
Anyone who follows the auctions can easily comprehend the names of auctioned
securities. In a typical auction, the USDept Treasury might say "$12
billion in New Issuance plus $4 billion in Rollover of Mature Debt
securities." There are dozens of examples to detect with a minimum
of research. These types of USTreasury products are utterly basic and the
names are plain so that common folk can comprehend.
My friend and
colleague, and partner in comic relief via telephone, is Rob Kirby. He is a
former professional bond broker and credit derivative trader in Toronto. He
knows that which he speaks. His opinion was sought, which appears liberally
on his website (www.KirbyAnalytics.com). His analysis is thorough and highly
reliable. Mr Kirby agreed with me and my claims of naked bond shorting, as he
provided a thorough response that should settle any dispute. He wrote:
"When bond
issues are announced they are all referred to as New Issuance in that they
immediately (before they are auctioned) begin trading on a WI (when issued
basis). But when the Government / Treasury states they issued $1.25 Trillion
in New Debt securities, they are talking about an increase to aggregate
outstanding, which would not include a boatload of expired debt that Rolled
or replaced newly issued bonds or T-Bills. To perhaps make that a bit
clearer. When the government announces they are going to issue $1.25 billion
in new 5-year bonds, even if they are reopening an existing 5-year issue with
a known coupon, they immediately begin trading on yield as opposed to
existing bonds which trade on PRICE, as in discount or premium to par. / Rob"
SECOND SMOKING
GUN WITH FANNIE MAE BONDS
They are known by
many names. They are called Govt Sponsored Enterprise Bonds (GSE Bonds), or Fannie
Mae Bonds, or Agency Bonds. My preference is to call them USAgency Mortgage
Bonds, since they are backed by the full deceit, dishonesty, corruption,
collusion, and cloud cover of the United States Government. My claim has been
consistent, that Fannie Mae is the crime scene for trillion$ in past theft,
with probable dirty hands on past presidents, and that Fannie Mae is the
principal clearinghouse for numerous fraud schemes in progress under the
USGovt roof. Naked shorting has gone out of control with Mortgage Bonds. A
fresh Bloomberg article has brought the counterfeit events to the fore, maybe
even painted on a billboard. But the billboard has few lights, and might have
been pushed onto a backstreet instead of a main avenue.
Naked shorting
explains well the extremely high volume of mortgage bonds, including the
Failures to Deliver. Wall Street and the Big US Banks are staying afloat from
naked shorting, a form of counterfeit, in order to survive. They lack
liquidity. The must sell something. Corporations, municipalities, and other
entities observe the Wall Street criminal behavior, their conflict of
interest, their trades positioned in opposition to clients, and have lost
trust. The Wall Street community activity centered upon naked short
sales of USAgency Mortgage Bonds complements their naked shorting of
USTreasurys. So Wall Street and the Big US Banks are
dead. The USTreasurys are the prima facie in the case to be brought for large
scale fraud, sufficient for indictment. The USAgency Mortgage Bonds are the
second part to the story, worthy of important support toward conviction. The
difficulty of executing transactions tarnishes, pollutes, and contaminates
the image of the $5.2 trillion mortgage bond securities market, which is the
most liquid behind USTreasurys. That is precisely why the Fannie Mae bonds
can be counterfeited so easily. With heavy volume comes heavy cover for
fraud. The same is true of $100 bills counterfeited by the Central
Intelligence Agency, to keep America strong.
In the aftermath
of the USFed's $1.25 trillion of mortgage bond purchases over the last 18
months, they have exposed the market as broken. After acquiring about one
quarter of home loan bonds with USGovt-backed guarantees to buttress the
housing prices against the threat of freefall, to save the mortgage bond
market from outright freefall, and to build a vast queer safety net for the
USEconomy, the USFed made some securities too hard to find. In essence, the
USFed exposed the vast fraud by Wall Street and the Big US Banks by scooping
up the objects of their counterfeit.
Caroline Salas
and Jody Shenn started off in their Bloomberg article with a powerful salvo.
They wrote, "For all the good the Federal Reserve's $1.25 trillion of
mortgage bond purchases have done, they have also left part of the market
broken. By acquiring about a quarter of home loan bonds with government
backed guarantees to bolster housing prices and the US economy, the Fed
helped make some securities so hard to find that Wall Street has been unable to
complete an unprecedented amount of trades. Failures to deliver or
receive mortgage debt totaled $1.34 trillion in the week ended July 21,
compared with a weekly average of $150 billion in the five years through
2009." The last sentence should be read two or three times.
It is a smoking gun of USAgency Mortgage Bond fraud, not so much of
monetization. In fact, the fraud is the obverse side of the coin whose face
features blatant bond monetization. The US financial coin has monetization on
its face and bond fraud on the obverse, the rotten output of a fiat currency
system in its final phase.
Thomas Wipf
chairs an industry group that is trying to address the problem, which is
hardly a secret. The fraud is in the open, but not discussed EVER in the
financial press or on the air of financial networks. Wipf is chairman of the
Treasury Market Practices Group and the head of a bond group at Morgan
Stanley. He is concerned about exacerbated damage caused by the collapse of a
bank or fund. Translate that concern, as Wipf is worried about exposure of
massive bond fraud by Wall Street and Big US Banks during a routine bank
failure. Wipf said, "You are adding systemic risk into the
market. Investors are taking on counter-party risk in trades they did not
intend to take on." In other words, investors are being defrauded
and could retaliate if powerful enough. Numerous other bank and bond analysts
are hot on this story, but they either refuse to state the obvious or they
are not permitted to state the obvious. Maybe after years of operating within
the snake pit, they cannot perceive the obvious. Wall Street and
the Big US Banks are dead, and are using magnificent naked shorting of
USGovt-backed bond securities to remain alive. They know well that the USDept
Treasury, the Securities & Exchange Commission, and the Office of the
Comptroller of Currency will do nothing. They are dominated and controlled by
Goldman Sachs, each head holding a GSax pedigree, and thus no prosecution for
grand bond fraud will ever happen. In fact, some research might expose that
Goldman Sachs could be the greatest offender of them all in this grotesque
naked shorting game. They were a primary player in the last bond fraud
scheme, the packaging and sale of mortgage backed securities. This is a natural
extension within their field of expertise, their realm of dominance.
The Bloomberg
authors Salas and Shenn point out the ripple effect, the daisy chain of
unsettled trades that occurs when a broker dealer acting as a buyer in one
transaction fails to deliver those bonds as a seller in another. Even Moodys
Investors Service is on the crime scene, but not likely to speak truthfully,
accurately, or boldly. Senior analyst Alexander Yavorsky at Moodys is
concerned about the drag on the mortgage bond business, when he should be
more concerned about massive fraud within the business. Obviously, if
reduced liquidity in the mortgage bond market persists and causes investors
to seek other assets, the consequent effect would run counter to the USFed's
goal of buoying demand for the securities. The official program (dubbed QE1)
began in January 2009 and officially ended in March. Fraud usually
undermines, hinders, and ruins securities markets. But in the Untied States
of America, such bond fraud is sanctioned and protected by the regulators, by
the central bankers, and by the finance ministries. If truth be known, Wall
Street and the Big US Banks are dead. Authors Salas and Shenn had better be
careful, or they will lose their jobs for the horrible exposure. Their editorial
managers probably have told them to shut the hell up already, after receiving
a phone call from the Wall Street control tower. See the Bloomberg article
before it is pulled by order of the USGovt (CLICK HERE). It is entitled "Fed Finding No
Good Deed Goes Unpunished With Mortgage Bond Trades Failing" and is
an eye-popper.
Friend and colleague
Aaron Krowne is the owner and editor of the Mortgage Lender Implode website
(CLICK HERE). He
is an astute bank analyst with a keen alternative viewpoint. He wrote in an
email, "Looks like a side effect of the USFed's massive mortgage
buying is causing the 'tide to go out' on this market, revealing
massive manipulation, or at least, incredibly unsound synthetic derivatives
trading on these major fixed income bonds." Wall Street built
countless leveraged and artificial bonded securities, mostly atop shifting
sands. A great unraveling is in progress, and so is a great awakening in
progress.
EFFECT ON GOLD
The leverage and
the makeup of the structured finance schemes devised by Wall Street and the
Big US Banks is unraveling. As it does so, the deep fraud is exposed. As it
does so, the ruinous construction of finance engineers is exposed. As it
does, the vulnerable heart & soul of fiat currency systems is exposed. As
it does, the uncontrollable growth of debt originating from the Untied States
is exposed. As it does, the path to the USTreasury default is exposed. As it
does, the only legitimate financial asset in a paper-driven world is exposed,
GOLD. As the Wall Street and Big US Banks are recognized as dead defunct
charred ruins of financial firms, whose main source of liquidity funds is
naked shorting, the blatant unprosecuted counterfeit of both USTreasurys and
USAgency Mortgage Bonds, the ruined condition of bonds is exposed. They are
the primary instruments for the fiat currency system. As it does, the only
legitimate financial asset is exposed, GOLD. Money today is no different from
denominated debt coupons. GOLD IS MONEY AND ALWAYS HAS BEEN MONEY, AS JOHN
PIERPOINT MORGAN ONCE SAID.
The USGovt backs
with guarantees the USTreasurys. If such debt securities are the exposed
object of extreme multi-trillion$ naked shorting in order to avert a death
experience by Wall Street and the Big US Banks, then the faith, confidence,
and prestige of the USDollar will be harmed irreparably. The alternative
is clearly GOLD. The USGovt backs with guarantees the USAgency Mortgage
Bonds. If such debt securities are the exposed object of extreme
multi-trillion$ naked shorting in order to avert a death experience by Wall
Street and the Big US Banks, then the faith, confidence, and prestige of the
USDollar will be harmed irreparably. The alternative is clearly GOLD. Bear in
mind that the European and British government bond markets are suffering deep
damage. Confidence is fast disappearing. Weaker nations are seeing a
vanishing act from bidders and buyers of their bonds. Sovereign bond supply
is growing during the crisis without respite. Austerity measures imposed upon
government budgets is a ruse, a mirage, a smokescreen. Deficit reduction will
be minimal, if at all. If such debt securities are exposed object of
unfixable impairment, then the faith, confidence, and prestige of the all
major currencies will be harmed irreparably.
The alternative
to defrauded and counterfeited bonds is clearly GOLD. The badly deceived and
ill-informed US public will figure it out, only when the GOLD price
penetrates the $2000 level, or when the SILVER price penetrates the $50
level. Until then, GOLD shines with an insufficient crowd of advocates,
afficionados, and lovers. The next big upleg will occur when the number of
people on the GOLD/SILVER train is reduced to a minimum, using every crooked
game and every false information possible. That day might be in the coming
few weeks.
Jim Willie CB
Home
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Jackass website
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