The Derivatives Beast Begins Growing Again! OTC Trades Resume

Japan’s Nikkei continues to self-destruct as China buys US corporations left and right while the US Wall Street con artists and gangstas revive the dreaded Derivatives Beast playing wild Ponzi gambling games using no capital base and waiting for the Fed to bail them all out again and again and again.  Time to snarl and snap about all this!  And we seem helpless to stop them.  Instead, we are debating sex, abortion, guns and other matters such as the need for FEMA.  Oh, by the way, a tornado passed to the north of my home last night.  We need FEMA functional.


China continues to invest its trade surplus in the US buying up our corporations just as Germany, Saudi Arabia and Japan have done previously:  Stock Rise On Smithfield Hopes Lifts Shuanghui Chairman’s Public Fortune To Nearly $500 Mln – Forbes


Shuanghui International Holdings, Henan Shuanghui’s parent, has agreed to buy Smithfield for $4.7 billion, including the assumption of Smithfield’s net debt. The purchase would be the largest in the U.S. by a mainland Chinese company.


The Abe bailout flounders as Nikkei plunges 5.15% by close ‹ Japan Today: Japan News and Discussion

Nikkei continues Ice Age

NIKKEI 225 Index Chart – Yahoo! Finance


Risky derivatives make return for returns’ sake: the same unregulated ‘Over The Counter ‘ OTC derivative deals continue to grow again thanks to the immense bail out by central banks and the same guys who created the previous mess are still in place and committing the exact same economic crimes they did before…all for ‘return’s sake’.  The problem here is, there is no safe investment anymore due to ZIRP lending by central banks during inflationary times.


The Bank of Japan began that business and the US has expanded it greatly.  But these same dealers scamming the public with their international derivative OTC games are the ones who demanded a ZIRP bail out.  They paid back the money, more or less, but didn’t pay any interest.  Which they liked…back then.  This ridiculous balloon, the biggest economic scam in the history of civilization, has remained at roughly $633 TRILLION, is now beginning to grow again because  it is a Ponzi scheme and these can only grow, if they go stable or fall even slightly, they destroy everything previously made.


This is exactly what happened.  When the Ponzi derivative contract gambling game blew up, it was preserved by the central banks who work for the Ponzi scammers, not the public.  The public was immediately put into an economic straightjacket to pay for this bail out and it continues to this destructive day.  All, while the Wall Street gamblers borrow cheap loans to play dangerous derivative games.


The reforms are fake.  They are dawdling on the reforms while Wall Street bagmen and London Whales assail politicians with bags of loot.  The corruption in the system is going to kill capitalism for the entire OTC derivatives game is totally anti-capital which is why capital has zero interest value today.  Instead, the ‘valuable’ items are these stupid pieces of paper that are script for a ridiculous and obviously rigged gambling operation!


Benoit Petit, the head of the Societe Generale in Paris even has the temerity to openly say, ‘…clients seeking a 5-10% return…need a NON-capital guaranteed product…’ in order to get around the ZIRP problem.  I pointed this out a number of years ago back in 2006 and predicted the outcome correctly and stand against this ‘product’ since I began writing about the economy online way back in 1996 when it was first taking off.


These digbats don’t understand why capital is part of capitalism.  Without capital returns, no one saves and the US has a terrible savings rate and has this for many years and it is the world’s deepest in debt/highest sovereign debt nation bar none.  When the floating fiat currency/free trade/derivatives ZIRP capital game began, the US was hollowed out, our infrastructure sold off to foreign powers or allowed to collapse, entire cities turned into abandoned ruins, a quarter of the population tossed onto the scrap heap and forced into drug dealing to stay alive and of course, foreigners hold half of our currency in FOREX accounts and a huge, huge hunk of our debts.


This has been a total disaster for our country and it continues to bleed us dry.  And a corrupt DC could care less.

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Filed under .money matters

13 responses to “The Derivatives Beast Begins Growing Again! OTC Trades Resume

  1. Joseppi

    “capital is part of capitalism”

    This time it’s different – through financial innovation and manufactured perceptions – hope and entitled expectations have become our new fiat capital. In this new financial world order, doubt and critical analysis have become a social act of terrorism.

    There is a conspiracy of doubters that believe that this temptation to follow an artificial world order of greed that ignores the natural laws will sooner or later lead us into social chaos. Time will reveal the real narrative to this unfolding story.

  2. IAmSpartacus

    “Instead, we are talking about sex, abortion, guns, and other such matters as the need for FEMA.” It’s even worse than that… much worse. The GOP’s lead war monger, Johnny Mac (bomb, bomb, Iran) snuck into Syria, Obama’s talking “no fly zone”, and the Israelis are threatening to attack Russian ships! Distractions like this will get us all killed!

  3. Just Ice

    In 2008 for the first time in financial history, credit expansion appeared to stop, and then contract. Based on history, let alone looming peak oil, the U.S. and the West had two alternatives to deal with unsustainable debt: either hyper-inflate or default.

    Likely by design, the derivatives beast offered a third alternative: jigger everything so the day of reckoning never comes. Seems that third alternative is working. Problem is the derivatives beast has to keep growing to cover up all the losses it must absorb.

  4. John

    However, as Elaine hasd often pointed out, nothing can go to infinity without immediately crashing to zero. The concepts of infinite and infintesimal are represented by very similar words for a very good reason..

  5. Just Ice

    I think everyone agrees it isn’t sustainable, the question is when? Seems the Soviets, and maybe the Chinese, miscalculated by a couple decades, at least. So, that’s a win. Nowadays it seems everyone is banking on it lasting at least long enough to suck the Arab milkshake dry of dwindling oil. Seems they drew the (first) short straw.

    Interestingly, part of the process of those pricing controls seems to be de facto centralization and corporate consolidation such that our model approaches that of the Soviet system, particularly with fewer and fewer competitive choices. For example, whenever it rains I run into people with kids wearing the exact same rain boots mine have from Costco. Maybe Stalin wouldn’t have picked the polka dots. . .

  6. Being There

    Yes, it’s truly outrageous that this country is reduced to the lowest level fighting while the real problem, namely the Trans Pacific Pact trade treaty will be discussed and passed in secret without a whimper this summer.

    The TPP will make it possible for transnationals to sue the people of a sovereign state if they interfere in any way to their making money. This means that BP could have sued we the people if we dare to ask them to clean up the gulf or went after them for destroying the gulf. Same with banks. When the derivatives beast belches again, we will all be on the hook…..

    A brilliant trade treaty made in hell……

  7. Being There

    Oh, and by the way, listen to the last 2 sessions of Guns and Butter re: national banks. The TPP will make the only thing that could turn the plutocratic banking cartel around. That’s why they won’t allow it.

  8. ziff house

    The derivatives beast, i know its about insuring bets so you can make more, but what a mess it must be, does anyone understand it besides lloyd blankster [fein] ?

  9. ziff house

    it keeps going because its in no ones interest to stop it.

  10. John

    The TPP will make the only thing that could turn the plutocratic banking cartel around. That’s why they won’t allow it.

    ‘Splain, Lucy.

  11. Paul S

    ” Instead, we are debating sex, abortion, guns and other matters such as the need for FEMA….” The political Class in DC talks about these subjects for a very specific reason. They don’t want the leading news item to be something like, say, filibuster reform. That topic reflects poorly on them. Sex, guns and abortion are ‘hot button’ issues. Gets the soiled masses riled up–and distracted. Distracting the masses is critical for the DC political class to do. They don’t want to talk about political transparency or their accountability. That would turn over too many rocks, so to speak. Also: talking about guns and abortion (and Benghazi and the AP “scandals”) keeps the bootlicking Washington Press Corps from having to ask painful questions about things like the economy and unemployment The DC Political Class has no intention of doing ANYTHING about improving the econoomy for those hit hardest by a bad economy. That’s why they don’t want to talk about it. The DC Political Class caters to Wall Street, not the grubby masses who aren’t qualified to rate them anyway–in their not-so-humble opinion. Always remember: the folks inside the Beltway have inside information; they know what’s going down before the rest of us. Why wouldn’t they know? They cause alot of it.

  12. floridasandy

    they not only know- they profit -with pope obama’s blessing.

    it is amazing to me that the head of the snake is no longer even considered part of the snake, and bears no responsibility for anything that happens anymore.

    it’s not like the press has an interest in asking any real questions anyway.

    we will crash and burn.

  13. Christian W

    Benoit Petit, the head of the Societe Generale in Paris even has the temerity to openly say, ‘…clients seeking a 5-10% return…need a NON-capital guaranteed product…’ in order to get around the ZIRP problem.

    5-10% return, that’s what the Cypriot bankers were promising their clients too 8)

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