The Derivatives Beast Prepares To Devour EU Banking Despite Bail Outs

The countries unable to collect taxes on the rich and unable to control spending in Europe have all joined forces to make the thrifty, tax paying states recapitalize their banking systems and to not move bank messes onto sovereign debt nor allow the countries that are solvent to dictate spending terms.  The German defeat will have repercussions in the future that are negative and the wild spending, easy credit nations will kill the Golden German Goose.


The Germans are angry:  Merkel Makes Concessions at EU Summit – SPIEGEL ONLINE


In 15 hours of negotiations in Brussels, Monti together with Spanish Prime Minister Mariano Rajoy secured easier access to the permanent euro-zone bailout fund, the European Stability Mechanism (ESM). Euro-zone member states which fulfil the budgetary rules laid down by the European Commission can now receive aid without agreeing to tough additional austerity measures. Strict oversight by the troika of the European Commission, European Central Bank (ECB) and International Monetary Fund (IMF) would no longer apply.

The ESM will also be allowed to provide direct aid to banks in the future, but only after a European banking supervision mechanism, under the auspices of the ECB, is established.


We lost control of our own national bank, the Federal Reserve, which cheerfully recapitalized the entire EU/US banking system back in 2008.  We then had a hyperinflation surge.  The bankers were bailed out and they rewarded themselves very richly and nothing was reformed or fixed so the problem has remained: the insane Derivatives Beast, a market created by the bankers to have fake capital fund loans.


This fake capital is the dark shadow that menaces the banking system as it tries to return to the profitable business of giving out loans while having no capital aside from government IOU paper.  Recapitalizing banking after banking was irresponsible is proving to be very dangerous.  The elimination of true capital holdings has harmed our banking system quite seriously because there is NO BRAKE on going to infinity so the only brake is to see the inevitable crash as natural forces prevent infinity.


The defeat of the thrifty Germans happened after midnight.  This is quite common: physically, humans who are defensive lose more and more if worn down by weariness whereas aggressors remain stronger.  Many, many historic bad deals have been hammered out after midnight.  Europeans Agree to Use Bailout Fund to Aid Banks


Working through the night in the face of pressure from the embattled euro zone countries Italy and Spain, European leaders agreed early Friday to use the Continent’s bailout funds to recapitalize struggling banks directly, according to the European Council president, Herman Van Rompuy…The decision, by leaders of the 17-nation euro zone, would allow help to banks without adding directly to the sovereign debt of countries, which has been a problem for Spain and potentially for Italy.


Of course, this doesn’t remove the problem of sovereign debt/wealth deals, it hides it from the citizens of countries that are now forced to bankroll losses of capital for bankers.  That is, Germany’s sovereign WEALTH will capitalize southern tier bank losses.  This is being hidden from view but hasn’t fooled the Germans or other sovereign wealth EU nations.


The English banking system was allowed to turn into a pirate operation thanks to offshore islands owned (yes, OWNED) by Queen Elizabeth.  The creation of the Derivatives Beast as a banking system which was modeled after the commodity market system for bankrolling future farm production was possible only because offshore banking isn’t supervised very much by hardly anyone.  Big Four banks admit to mis-selling interest rate swaps – Telegraph


Big Four banks admit to mis-selling interest rate swaps – Barclays, HSBC, Lloyds Banking Group and Royal Bank of Scotland have all agreed to immediately halt the sale of complex interest rate hedges to smaller businesses and have pledged to compensate potentially thousands of customers who have been hurt by the products that have left some firms with hundreds of thousands and even millions in costs they say they were never warned about.


Businesses trying to protect themselves against future possible inflation and currency value changes were tricked by the derivatives deals which are 99% the product of the world’s biggest dozen bankers.  Already, several major banks have collapsed thanks to the derivative interest rate swap scams and the only reason any of these banks still exist is thanks to being recapitalized and saved by the central banks in the EU and US.


Despite desperate bail outs, the crash continues and picks up steam as the Derivatives Beast, once it hit that invisible ceiling that prevents anything from going to infinity, continues to deflate in size and collapse towards zero:  Italy to put €2bn into world’s oldest bank Banca Monte dei Paschi di Siena – Telegraph


The financial lifeline will allow the Tuscan bank, founded in 1472, to bring its core tier one capital ratio to 9pc of total assets, thereby conforming to the rules of the European Banking Authority (EBA).  On top of the aid, Rome will substitute a loan it gave the bank in 2009 with a new loan, bringing the total amount of aid channelled into BMPS to a maximum of €3.9bn (£3.1bn).


This is why Italy has to raid Germany’s sovereign wealth to recapitalize their system.  The tax collection system in countries like Italy and Greece are very poor and are run in such a fashion that the rich can party while paying for nothing and pile on the debts onto the future as we see in the US where tax evasion has been legalized and thus, the rich become obscenely richer and debts pile up ominously.


More news from the bail out:  Europeans Agree to Use Bailout Fund to Aid Banks –


Countries that request bond support from the rescue fund will have to sign a memorandum of understanding setting out their existing policy commitments and agreeing to a timetable. But they will not face the intrusive oversight of a “troika” of international leaders to which Greece, Ireland and Portugal have been subjected, Mr. Monti said.


The euro zone “will be strengthened by this,” Mr. Monti said, calling it a step on the path to collective responsibility and mutualized debt. The decision also opened the way to agreement on the growth pact, and the euro rose on the news.


The euro shooting up in value is bad for exports and good for the Chinese.  The downward spiral will continue.  The odd position whereby a strong currency means a flood of imports has hammered the US for years and it seems the more debts piled on governments, the stronger the currency.


Why is this upside down situation happening???  Ah!  The distortions caused by the Derivatives Beast games and currency trade schemes is responsible.  Countries with lots of sovereign wealth can afford to buy and hold other currencies to make them artificially stronger.  So the richer a country, the more they can manipulate their currency to weaken it against trade rivals.


Another Derivatives Beast story:  Interest rate scandal: Will Barclays turn in other banks involved in massive scheme?   The entire business is a fraud and should be eliminated.  Banks’ interest rate swap products ‘killed’ businesses – Telegraph


The number of businesses [affected] we really cannot know at the moment, but what you have here is a clear case of banks selling a product that in many cases actually killed their customer,” Harry Wilson said.


They say it comes to 10 billion pounds.  The demon Dimon scandal here in the US is coming to nearly $10 billion as JP Morgan flounders.  Breaking Up Big Banks Hard to Do as Market Forces Fail – Bloomberg


The stocks of five of the six biggest U.S. banks — JPMorgan, Bank of America Corp. (BAC), Citigroup Inc. (C), Goldman Sachs Group Inc. (GS) and Morgan Stanley (MS) — are languishing at or below tangible book value. That means the pieces are worth more than the whole, Price said.


These scandals hammer their stocks which means the executives lose money as the value of their holdings drop so they will now cannibalize their own banks and leave the crappy parts for the government to bail out while they cherry pick the carcass for the juicy, meaty parts.  Vultures, all.

And why holding gold in a safe is safer than paper:  Termites eat through £32,000 in woman’s safe in Taiwan.  This is the entire and main and most obvious reason why gold was chosen to be ‘money’.  It is durable, doesn’t degrade and lasts nearly forever, that is, until it falls into a black hole and is devoured.

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Filed under .money matters

3 responses to “The Derivatives Beast Prepares To Devour EU Banking Despite Bail Outs

  1. DeVaul

    I read that story and then the comments underneath it. The money comes to 1 million US I think, as one commenter pointed out, and another commenter asked why she did not notice the shredded paper while putting more money inside? Very good questions.

    If I can smell mildew in our airtight safe, then what about piles of insect crap? Over 2-4 years?

    The article stresses how important it is to put your money in a bank. What a complete fabrication! What a desperate story to put out. People must be removing their money from banks faster than we know.


    Hey! Presto Chango! the magic money fairy makes everyone whole once more. this can go on for a long time, what power is there to object?
    I’m not worried about that black hole.

  3. No matter how much money THEY steal or hoard, they will lose it ALL to the black hole of DEATH. How pathetic is the human frame!

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