Financial markets are gripped by the role derivatives have played in Greece's debt crisis, but Italy also has a derivatives time bomb, and hundreds of cities are in the €24-billion blast zone.

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Christmas Eve 2009 was a time to wrap gifts for loved-ones. That's how the Obama Administration felt about the financial industry when it lifted all caps in emergency bailout money to Fannie Mae and Freddie Mac. That means the taxpayer was on the hook for all losses at these two mortgage giants no matter how large the losses.

The move caused a slight stir, but never got the attention of the American public because the announcement was timed to coincide with the peak season of distraction. And so it was forgotten, but not by Fannie and Freddie.

U.S. Taxpayers on Hook for $5 Trillion of Fannie, Freddie Debt ... No Matter What Barney Frank Says

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The Treasury Department is vigorously opposed to a House-passed measure that would open the Federal Reserve to an audit by the Government Accountability Office (GAO), a senior Treasury official said Monday.

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The banks that control the world’s supply of money are no better than counterfeiters – and their system of juggling debt has left the global economy teetering on the brink of ruin.

Daily Telegraph, 20 Feb 2010 By Darius Guppy

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And with that Japan joins the competitive devaluation currency race, in which both the SNB and Federal Reserve have a substantial head start (the euro and the fat Brussels bureaucrats are in a ouzo daze, with no clue what the hell is going on). Speaking before lawmakers BOJ governor Masaaki Shirakawa, who recently said Japan was powerless to fight deflation on its own, has changed his tune, and today said that Japan will print the kitchen sink if it has to to beat "stubborn deflation."

In a speech before the Lower House Budget Committee Shirakawa said that not only will Japan continue monetizing its debt (at least unlike Bernanke, he admits it), but that they will happily accelerate this action if it means killing the Yen and creating a glimmer of hope for inflation. Carry traders everywhere rejoice.

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In a speech before the UK Treasury Select Committee the Chairman of Goldman Sachs Bank, Gerald Corrigan, who also happens to be a former New York Fed President noted that it is not Goldman who is at fault in the whole Greek swap fiasco but Eurostat, "which was consulted on the transaction at the time it was entered into and which offered no objection." What is troubling is Corrigan's revelation that "Goldman Sachs was by no means the only bank involved with countries in these types of transactions... These transactions were not limited to Goldman Sachs and Greece." Just whose debt numbers will be put under the microscope next?

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Charlie Munger, Warren Buffett’s longtime business partner in Berkshire Hathaway, warns in a new column that the U.S. economic empire is crumbling before our eyes, thanks to federal debt and poor planning.

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"Znate šta? Sve to uopće nije bitno. Ništa od ovog takozvanog novca zaista uopće nije od nikakvog značaja.

Sve je to samo iluzija", dodao je Guverner Federalnih Rezervi Ben Bernanke vadeći novčanice iz svog novčanika i mašući njima ispred očiju svih onih koji su se nalazili blizu njega. "Samo ih pogledajte, besmisleni papirići s odštampanim brojevima po sebi. Bezvrijedni".

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"You know what? It doesn't matter. None of this—this so-called 'money'—really matters at all. It's just an illusion," a wide-eyed Federal Reserve chairman Ben Bernanke added as he removed bills from his wallet and slowly spread them out before him. "Just look at it: Meaningless pieces of paper with numbers printed on them. Worthless." According to witnesses, Finance Committee members sat in thunderstruck silence for several moments until Sen. Orrin Hatch finally shouted out, "Oh my God, he's right. It's all a mirage. All of it—the money, our whole economy—it's all a lie!"


For decades municipal bonds have been considered one of the safest income plays on the planet. These bonds are not backed by the Federal government (with its printing presses). We all know about California's problems. California represents 13% of total U.S. GDP, is the seventh largest economy in the world and has well over $500 billion in total debt outstanding (largely muni paper). The fact of the matter is that we are on the verge of a muni bond crisis.


In order to stay afloat the US Government has been refinancing debt that comes due, simply stated, it issues new debt for debt that matures. A record drop in  foreign holdings of U.S. Treasury bills in December sent a reminder that the government might have to pay higher interest rates on its debt to continue to attract investors. The Treasury Department said foreign holdings of U.S. Treasury bills fell by a record $53 billion in December. That topped the previous record drop of $44.5 billion in April 2009. Now you can see the problem.


The estimated liability in the global derivatives market is 1000 trillion dollars.

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Svijet naravno oficijalno izlazi iz krize, ali što nam je bolje, to nas više ostaje bez posla, a nakon bankrota kompanija, evo stižu bankroti gradova, regija  i država. Vjerovatno ste čuli za ono što se desilo u Grčkoj, vjerovatno i budno pratite razvoj događaja. Izranjanjem malverzacija kojima je Grčka uz pomoć velikih banaka poput Goldman Sachs kroz financijske instrumente derivate malo postponirala oficijalno proglašenje bankrota; na površinu, posvuda su se počele pojavljivati prognoze kako je ovo početak kraja tek rođene zajedničke valute euro.

 
Neke su zemlje poput Njemačke objavile i rezultate anketa koji pokazuju da je stanovništvo za povratak starih nacionalnih valuta, najvjerovatnije zbog toga što je u medijima izašlo da i se i druge zemlje ne nalaze u ništa boljoj poziciji od Grčke, koja je tako sada samo prva na listi.

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Dollar-denominated risk assets, including asset-backed securities and corporates, are no longer wanted at the State Administration of Foreign Exchange (SAFE), nor at China’s large commercial banks. The Chinese government has ordered its reserve managers to divest itself of riskier securities and hold only Treasuries and US agency debt with an implicit or explicit government guarantee. This already has been communicated to American securities dealers, according to market participants with direct knowledge of the events.

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