A Nomura Document May Shed Light on the Repo Blowup and Fed Bailout of the Gang of Six in 2019
By Pam Martens and Russ Martens: January 19, 2022 ~
There are numerous reasons that members of Congress, bank regulators, and mainstream media don’t want to talk about the repo blowup in 2019 and the massive Fed bailout that followed. Economist Michael Hudson previously explained how the Fed lacked authority to bail out a handful of trading houses on Wall Street under the dictates of the Dodd-Frank financial reform legislation. Dodd-Frank restricted the Fed to using its emergency lending powers to rescue a “broad base” of the U.S. financial system.
As we detailed on Monday, there was no “broad base” of the U.S. financial system being bailed out by the Fed in the last quarter of 2019: 62 percent of a cumulative $19.87 trillion in rolled-over repo loans went to just six trading houses: Nomura Securities International ($3.7 trillion); J.P. Morgan Securities ($2.59 trillion); Goldman Sachs ($1.67 trillion); Barclays Capital ($1.48 trillion); Citigroup Global Markets ($1.43 trillion); and Deutsche Bank Securities ($1.39 trillion).
Notice that three of the firms listed above are affiliates of foreign banks (Nomura, Japan; Barclays, UK; Deutsche Bank, Germany.) Now imagine the embarrassment to the Fed if it was forced to admit that it had to secretly bail out the affiliates of foreign banks for the second time in 11 years because the derivatives of U.S. banks were still not adequately regulated, after derivatives had played a central role in the worst financial crash in 2008 since the Great Depression.
All six of the Wall Street trading houses listed above have one thing in common: large derivative exposure. Consider the revelations in the Consolidated Statement of Financial Condition for Nomura Securities International for the period ending March 31, 2019. (As indicated above, Nomura Securities International received the largest cumulative total of repo loans from the Fed in the fourth quarter of 2019.)
The financial statement shows that Nomura Securities International had total assets of $127.5 billion but potential derivative exposure as follows: (See pages 30 and 41.) A “Maximum Payout” on protection sold on credit derivatives of $14 billion; and a “Maximum Payout” on “derivative contracts that could meet the definition of a guarantee” of $97.7 billion.
**But here’s the really scary part of Nomura’s pile of derivative
... keep reading on reddit ➡I often read posts / comments from people who talk about the stock market as if it were an isolated entity. "It has some good years, it has some bad years, lately we've had good years, there will be bad years, too, but it always goes up over time." All of this is true. But I don't think you can look at the last 13 years or so and say that what we've seen is just business as usual. It's not. What we've seen the last 13 years has been entirely unprecedented and has basically been an experiment in monetary policy.
I could make this a long post, but I'll try to make it as simple as possible. Take a look at the M1 money stock, which over the last 13 years, since the Global Financial Crisis, has increased significantly, and radically so since the Covid-19 pandemic. (Note that M1 money means "the most liquid portions of the money supply, containing currency and assets that either are or can be quickly converted to cash)
https://fred.stlouisfed.org/series/M1SL
Also interesting to compare the S+P 500 to the M1 money supply: 1. post-2008,
Finally, someone linked an article a few weeks back from an analyst who said we shouldn't be afraid of high rates, but rather low rates, because markets have always been at their worst when rates were low. This is obviously ridiculous, because that's like saying that we shouldn't be afraid of smoking, but rather chemotherapy, because incidences of cancer are always higher when people are on chemotherapy rather than when they are smoking. Well of course! Chemotherapy is the remedy to cancer. Just as low rates are the remedy to a market downturn. We would expect that low rates would correlate to market downturns, given that they are the tool we use to stimulate the economy when things aren't going well.
Even so, the author of that article was using the period of 2009 to make his case (worst bear market in history also corresponded to the lowest rates). But you don't have to be a genius to see the correlation between low rates and stock prices, especially in the last decade:
[https://d1-invdn-com.akamaized.net/content/pice484f31450a7fa148b4f1e431e64e1aa.png](https://d1-invdn-com.akamaized.net/content/p
... keep reading on reddit ➡Russia is a new China?
Update: they suck with btc at 39.8k
Tldr: The Russia Federation is not proposing to ban Russian citizens from buying, selling, trading, transferring or hodling crypto (on exchanges outside the Russian Federation).
Disclaimer: Ya ne Russki, nu ya mogu govorite i chitat Russki yazik (I'm not Russian, but I can speak and read the Russian language).
As usual the mass media have painted a dystopian picture of how the authoritarian Russian Federation have decided to ban crypto currencies full stop. Blah, blah.... it's China all over again, blah, blah.
Except that isn't what the report is proposing - and yes, it's only a proposal at this stage - an awfully long way from ever becoming law for multiple reasons. In Russia, government is not actually dictated by the Kremlin, contrary to popular Western perception. Here is what is actually being proposed:
- A ban on the mining of cryptocurrencies on the territory of the Russian Federation.
- A ban on Russian banks permitting their customers to buy, sell or trade cryptocurrencies.
- A ban on crypto currency exchanges operating on the territory of the Russian Federation.
Most interestingly of all, the new proposals did not come from the Russian Central Bank (which did ban the use of cryptocurrency as a means of payment in 2020). These new proposals actually came from the FSB (The Federal Security Service), which has proposed:
'A complete ban of all cryptocurrency transactions in Russia, in order to undermine the financing of “foreign agent” media outlets, “undesirable” organizations, and the opposition.'
Given the security situation in Western Russia (border with Ukraine), it's no great surprise that the FSB are currently influencing Russian government policy more so than typically. Yet it remains HIGHLY unlikely that these proposals will ever pass into law. Moreover we've been here before:
https://www.reuters.com/article/us-russia-cenbank-bitcoin/russia-turns-cold-on-crypto-currencies-idUSKBN1CF0RF
Many commentators agree:
John Wu, president of Ava Labs:
“Once again we’re seeing the crypto markets’ resilience to this kind of posturing. This is just the latest installment in a pattern of monetary authorities calling for a ban of crypto, and either seeing no further action or reversing their stance in the near future.”
Indeed, the Russian Finance Minister Anton Siluanov recently stated that: “There is no sense in banning them, there is a need to regulate them".
Then just yesterday, Elizaveta Danilova, the head of the Russian Central
... keep reading on reddit ➡According to cache:https://www.gazeta.ru/business/news/2022/01/20/17170255.shtml (already deleted, but internet and cache remember everything) no one in Russia is going to ban crypto. The news said that the size of the annual bonus of the financial department of the Central Bank directly depends on the citation index in the media. It is for this reason that today they threw in the information about the ban on cryptocurrencies.
How it's easy to manipulate, especially if you are central bank
IMO
See the news link from SS: https://www.reddit.com/r/Superstonk/comments/reixa6/chinas_central_bank_declares_evergrande_officialy/?utm_source=share&utm_medium=web2x&context=3
It says that Evergrande officialy enters the bankruptcy liquidation process. So we come closer and closer to a D rating of Evergrande!
At the moment their rating is RD (Restricted Default), so D is only one step away.
So remember what Dr Metzler said. It was as soon as Evergrande ´s rating is D, commercial papers cant be used as collateral anymore!
And then you guess what, marge is calling and liquidation of short positions will be forced.
Also now as the DOJ is looking not only closely, like GG did, but really go for it. The noose around the neck is getting tighter for Mayo Boy, and he is ready to fall.
They are fucked, apes win. BUY HODL, drs if you like.
THIS IS THE WAY, no fInAnciaL AdVice
🦍TOO THE MOON BBY 🚀🚀🚀🌙
Federal Reserve Chair Jerome Powell said the central bank will prevent higher inflation from becoming entrenched while cautioning that the post-pandemic economy might look different than the previous expansion.
“We will use our tools to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched,” Powell said in a brief opening statement prepared for delivery at his confirmation hearing before the Senate Banking Committee. “We can begin to see that the post-pandemic economy is likely to be different in some respects. The pursuit of our goals will need to take these differences into account,” he said in the remarks, released Monday ahead of Tuesday’s hearing.
https://www.bloomberg.com/news/articles/2022-01-10/powell-says-fed-to-ensure-inflation-doesn-t-take-root-in-economy
Andrew Bailey, governor of the bank of England was "concerned" about Bitcoin being used as legal tender in El Salvador.
>It concerns me that a country would choose it as its national currency … What would worry me most of all is, do the citizens of El Salvador understand the nature and volatility of the currency they have.
Thankfully Nayib Bukele is a chad and he responded by tweeting
>I’m really concerned about Bank of England printing money out of thin air. Bank of England is ‘worried’ about El Salvador’s adoption of bitcoin? Really? I guess Bank of England’s interest in the well-being of our people is genuine. Right? I mean, they have always cared about our people. Always. Gotta love Bank of England.
This man also bought the dip yesteday with 150 Bitcoin and and tweeted
>Missed the f***ing bottom by 7 minutes 📷
TLDR: Nayib Bukele is a chad and knows how to put greedy bankers back in their own place.
"As other countries, like China, develop CBDCs that fundamentally omit the benefits and protections of cash, it is more important than ever to ensure the United States’ digital currency policy protects financial privacy, maintains the dollar’s dominance, and cultivates innovation."
His main argument could be boiled down into 2 contentious issues that would arise if the Fed would spearhead the creation of a CBDC:
- Single point of failure and the cost of failure would be compromise of data of millions of users using the digital currency
- Authoritarianism that would ensue following the release of CBDC by making the audit trails of CBDC holders very apparent to the Fed
He concludes his view with-
"Simply put, we must prioritize blockchain technology with American characteristics, rather than mimic China’s digital authoritarianism out of fear. "
This is such a great news that a congressman (a representative) is actually speaking for the citizens that he's supposed to represent and not parroting the same old dialogues which the authorities in the central government are used to parroting.
Link- To the thread.
- Below is the White Paper from the Federal Reserve introducing the Central Bank Digital Currency
- Remember TheFed is a private bank that is NOT A BRANCH OF USA GOVERNMENT.
- Apes. I want to learn how to resist.
- I'm 58 and need help from young and old.
- Send me Creative and Clever ways to Fight the Centralized Bank Digital Currency.
Here is their so called "white paper"
https://www.federalreserve.gov/publications/files/money-and-payments-20220120.pdf
You are under watch. Today you may move only 3 miles from your home station.
An unknown crypto investor withdrew USDT stablecoins worth more than $83 million (approximately 6 billion rubles) from the largest cryptocurrency exchange Binance in terms of trading volumes. The transaction was discovered by the Whale Alert service, which tracks large movements of cryptocurrencies. The transfer took place after the Bank of Russia proposed to ban the mining, issuance, circulation and exchange of cryptocurrencies by any Russian players, crypto exchanges, crypto exchanges in the country. The Central Bank also proposed to introduce liability for Russian individuals and legal entities for using cryptocurrencies for payments and to develop a mechanism for blocking transactions with them. The regulator did not specify what the punishment might be.
Our debt to gdp is around 40 %…what can we expect in my country next?
Federal Reserve Chair Jerome Powell said the central bank will prevent higher inflation from becoming entrenched while cautioning that the post-pandemic economy might look different than the previous expansion.
“We will use our tools to support the economy and a strong labor market and to prevent higher inflation from becoming entrenched,” Powell said in a brief opening statement prepared for delivery at his confirmation hearing before the Senate Banking Committee. “We can begin to see that the post-pandemic economy is likely to be different in some respects. The pursuit of our goals will need to take these differences into account,” he said in the remarks, released Monday ahead of Tuesday’s hearing.
https://www.bloomberg.com/news/articles/2022-01-10/powell-says-fed-to-ensure-inflation-doesn-t-take-root-in-economy
