Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Will You Make Money in the New Silver Bull Market ? - 13th Aug 20
Hyper-Deflation Capital Destruction And Gold & Silver - 13th Aug 20
Stock Market Correction Approaching - 13th Aug 20
Silver Took the Stairs to $21 in 2008, Took Escalator to $29 2010. Is Silver on Elevator to 120th floor today? - 13th Aug 20
President Trump Signs Additional COVID Relief – What To Expect from the Markets - 13th Aug 20
Has Gold's Upward Drive Come to an End? - 13th Aug 20
YouTuber Ads Revenue & How to Start a Career on YouTube - 13th Aug 20
Silver Notches Best Month Since 1979 - 12th Aug 20
Silver Shorts Get Squeezed Hard… What’s Next? - 12th Aug 20
A Tale of Two Precious Metal Bulls - 12th Aug 20
Stock Market Melt-Up Continues While Precious Metals Warn of Risks - 12th Aug 20
How Does the Gold Fit the Corona World? - 12th Aug 20
3 (free) ways to ride next big wave in EURUSD, USDJPY, gold, silver and more - 12th Aug 20
A Simple Way to Preserve Your Wealth Amid Uncertainty - 11th Aug 20
Precious Metals Complex Impulse Move : Where Is next Resistance? - 11th Aug 20
Gold Miners Junior Stcks Buying Spree - 11th Aug 20
Has the Fed Let the Inflation Genie Out of the Bottle? - 10th Aug 20
The Strange Food Trend That’s Making Investors Rich - 10th Aug 20
Supply & Demand For Money – The End of Inflation? - 10th Aug 20
Revisiting Our Silver and Gold Predictions – Get Ready For Higher Prices - 10th Aug 20
Storm Clouds Are Gathering for a Major Stock and Commodity Markets Downturn - 10th Aug 20
A 90-Year-Old Stock Market Investment Insight That's Relevant in 2020 - 10th Aug 20
Debt and Dollar Collapse Leading to Potential Stock Market Melt-Up, - 10th Aug 20
Coronavirus: UK Parents Demand ALL Schools OPEN September, 7 Million Children Abandoned by Teachers - 9th Aug 20
Computer GPU Fans Not Spinning Quick FIX - Sticky Fans Solution - 9th Aug 20
Find the Best Speech Converter for You - 9th Aug 20
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
NATURAL GAS BEGINS UPSIDE BREAKOUT MOVE - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Investment Banks CDS Derivatives Positions Deceptions, Deceit and Distrust

Stock-Markets / Credit Crisis 2009 Jul 17, 2009 - 08:07 AM GMT

By: Rob_Kirby

Stock-Markets

Diamond Rated - Best Financial Markets Analysis ArticleWith the former Investment Banks being granted Commercial Banking status due to the unfolding financial crisis in late 2008 – it was widely reported in the mainstream financial press that this “change” would mean that these banks would be subject to more oversight and hence, more transparency would result regarding their derivatives activities.


Ladies and gentlemen, nothing could be further from the truth.  View the Q1 / 09 Quarterly derivatives report here.

If we take a look at the latest Quarterly Derivatives Report published by the U.S. Office of the Comptroller of the Currency, in table 1, we see a detailed breakdown of the derivatives activity of the 25 largest Commercial Banks in the U.S.  Take special note of the aggregate total derivatives being reported by the top 4 names on the list:

Now let’s contrast table 1 with table 2, which shows the outstanding derivatives notionals held by the top 25 Bank Holding Companies, a completely different picture [or lack of, perhaps?] emerges.  The total amounts of derivatives held by the same names are, for the most part, MUCH LARGER:

The OCC Quarterly Derivatives Report provides a great deal of analysis and charts examining further breakdown of total derivatives reported by Commercial Banks; by product [precious metal, foreign exchange, interest rate], by contract type, by concentration, by credit exposure, by profitability, by revenue and by product type and maturity.

For derivatives held by many of these same U.S. institutions at the Bank Holding Company level, the OCC gets summary data only.  The detailed data under the purview of the Federal Reserve and no detailed analysis is made public through the OCC or any other regulator.

For instance, while the chart appended below DOES include / measure precious metals futures holdings of Goldman Sachs at the Commercial Bank Level, as goose-eggs across the board – it says nothing about Goldman’s holding of precious metals futures at the Holding Co. level.  The same can be said for Morgan Stanley, who do not even appear on list appended below:

The above chart published by the Office of the Comptroller of the Currency would mistakenly lead us to believe that Goldman Sachs does not participate in the gold market, ditto with Morgan Stanley. 

I suggest this is done intentionally to misdirect in much the same way that a group of conspirators assembled at Jekyll Island, Georgia almost 100 years ago today to frame up plans for a Private Central Bank.  Knowing there was no appetite in the U.S. for a Private Central Bank, the proposed legislation was dubbed the Federal Reserve Act to give the intended Private Central Bank an air of being ‘Federal’, or, ‘of the people’ and being in possession of reserves - when in fact it was neither FEDERAL nor did not posses ANY reserves.

Deceptions like this have more recently come to be known as the HALLMARKS of American banking and finance.  Why is anyone surprised?  American corporations did learn from the deceptive best, didn’t they?  This is a significant contributing factor as to why the international financial community has grown so displeased and distrustful of American finance.

You see folks, the truth about Goldman Sachs and Morgan Stanley is that BOTH of these institutions are MAJOR players in the precious metals futures markets – but apparently only at the Holding Company Level where we are not permitted to see the size of their holdings and the influence they exert on the market.  That information remains another one of the Federal Reserve’s dirty little secrets.

This is why the New York Commodities Exchange [COMEX] has already taken provisions – CHANGING THE RULES - to allow for the delivery of ‘paper’ exchange-traded-funds in lieu of delivering physical bullion.  The commodities exchanges are “supposed to be” mechanisms engaged in the price discovery of physical bullion – not paper alternatives.

The Federal Reserve has ALWAYS known the true state of the unfolding derivatives debacle.  They fostered and protected its growth; Alan Greenspan used to claim that derivatives innovations gave the U.S. financial system “flexibility”.

When the false economies brought on by artificial derivatives pricing finally sunk the American financial house, an accounting change was mandated to make insolvent banks appear, for accounting purposes - they are rolling in dough.  Rest assured, American banks are rolling in something – but it’s not dough.

More disingenuous clap trap – get the picture?

The Bank for International Settlements [BIS] informed me the Federal Reserve has been gathering data on the derivatives market for years:

1) OTC derivatives: The data is collected by the FED-NY from a population of more than 3,000 reporting dealers located worldwide and whose head office in the US. Reporting dealers are mainly commercial and investment banks and securities houses, including their branches and subsidiaries and other entities which are active dealers.  Please be informed that due to the confidentiality policy agreed with the reporting central banks we are not allowed to disclose the list of dealers participating in the survey. Having said this, please be also informed that the FED-NY publishes in their website the documentation related to this survey, i.e. reporting forms and methodology; I believe that this documentation includes the list of reporting institutions (only head offices): http://www.newyorkfed.org/banking/reportingforms/FR_2436.html

Now, only with the former investment banks now reporting a mere “glimpse” of their interest rate swap derivatives positions [listed under “OTC Swaps” in table 2] it reinforces and validates earlier work reported in The Elephant In the Room – chronicling how the Fed has taken complete control of the entire interest rate curve [bond market] utilizing interest rate swaps books of their proxy institutions.

With new legislation currently being tabled to grant the Federal Reserve an expanded mandate and even more POWER, it is essential that the Obama Administration – that campaigned on transparency and change – DEMAND this illegitimate institution first be FULLY audited by an independent third party.

By Rob Kirby
http://www.kirbyanalytics.com/

Rob Kirby is proprietor of Kirbyanalytics.com and sales agent for Bullion Custodial Services.  Subscribers to the Kirbyanalytics newsletter can look forward to a weekend publication analyzing many recent global geo-political events and more.  Subscribe to Kirbyanalytics news letter here.  Buy physical gold, silver or platinum bullion here.

Copyright © 2009 Rob Kirby - All rights reserved.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Rob Kirby Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules