By Stephen Lendman<\/p>\n
When investing becomes gambling, bad endings follow. The next credit crunch could make 2008-09 look mild by comparison. Bank of International Settlements(BIS) data show around $700 trillion in global derivatives.<\/p>\n
Along with credit default swaps and other exotic instruments, the total notional derivatives value is about $1.5 quadrillion \u2013 about 20% more than in 2008, beyond what anyone can conceive, let alone control if unexpected turmoil strikes.<\/p>\n
The late Bob Chapman predicted it. So does Paul Craig Roberts. It could \u201cdestroy Western civilization,\u201d he believes. Financial deregulation turned Wall Street into a casino with no rules except unrestrained making money. Catastrophic failure awaits. It\u2019s just a matter of time.<\/p>\n
Ellen Brown calls the \u201cderivatives casino\u2026a last-ditch attempt to prop up a private pyramid scheme\u201d \u2013 slowly crumbling under its own weight.<\/p>\n
For years, Warren Buffett called derivatives \u201cfinancial time bombs\u201d \u2013 for economies and ordinary people.<\/p>\n
Unless collateralized or guaranteed, their worth depends on the creditworthiness of counter-parties. Earnings on derivatives are \u201cwildly overstated,\u201d Buffett explains \u2013 because they\u2019re \u201cbased on estimates whose inaccuracy may not be exposed for many years.\u201d<\/p>\n
When corporate bosses ask financial executives how profits look in any quarter, they, in turn, ask how much do you want, then manipulate things to oblige when told.<\/p>\n
Since 2008, too-big-to-fail banks consolidated to much greater size than ever. They\u2019re financial and political powerhouses controlling world economies to their own advantage.<\/p>\n
Civilization\u2019s only hope is smashing them \u2013 dismantling them into small, impotent pieces, or ideally putting money back in public hands where it belongs.<\/p>\n
It\u2019s too important to be privately controlled. Financial predators entrap small\/weak nations into unrepayable debt peonage like Greece, bleed them dry, and thirdworldize developed ones into dystopian backwaters \u2013 while they grow richer and more powerful than ever ahead of the whole corrupt system going bust, decimating billions worldwide in greater human misery than already.<\/p>\n
Washington Post editors support what demands condemnation. Don\u2019t worry, be happy, they say. On July 23, they headlined \u201cThe Fed\u2019s stance on banks and capital makes good sense.\u201d<\/p>\n
Half-intelligent economics students know better. The Wall Street owned, controlled and operated Fed is the problem, not the solution. Monied interests buy politicians like toothpaste. They write business friendly legislation, getting Congress to pass it in return for generous campaign contributions and other special favors.<\/p>\n
America\u2019s economy and financial system are house-of-cards disasters waiting to happen. Not according to WaPo editors.<\/p>\n
\u201c(T)he US financial system has made significant progress toward being less bailout-prone since\u201d the dust settled on the 2008-09 crisis, they said.<\/p>\n
\u201c(B)ig banks are considerably better capitalized than\u201d half a decade earlier \u2013 enough to \u201cwithstand (another) \u2018Great Recession.\u201d<\/p>\n
The source: The Wall Street controlled Fed\u2019s last \u2018stress test\u2019 assessment made public in March \u2013 ignoring the monstrous derivatives ticking time bomb weighing them all down along with the entire financial system.<\/p>\n
WaPo editors endorse too-big-to-fail banks. They tout so-called \u201ceconomies of scale and greater \u2018soft power\u2019 for US foreign policy.<\/p>\n
Near the end of his tenure, Bill Clinton signed legislation repealing Glass-Steagall (the 1999 Gramm-Leach-Bliley Act \u2013 letting insurance, investment and commercial banking merge) and the Commodity Futures Modernization Act (permitting unregulated commodity and derivatives trading).<\/p>\n
A casino culture of anything goes persists. When counter-parties don\u2019t have funds to pay on demand, bubbles begin deflating. It\u2019s just a matter of time before current market mania ends.<\/p>\n","protected":false},"excerpt":{"rendered":"
Global Derivatives: $1.5 Quadrillion Time Bomb By Stephen Lendman When investing becomes gambling, bad endings follow. The next credit crunch could make 2008-09 look mild by comparison. Bank of International Settlements(BIS) data show around $700 trillion in global derivatives. Along … Continue reading