- Got physical gold yet?
- A Derivatives Bomb Exploded Within The Last Two Weeks
I’ve never seen so many sophisticated Wall Street’ers this scared in my entire career. – This comment comes from a very well-connected Wall Street/DC insider and is in reference to how illiquid the bond markets have become
Something deep and dark has transpired behind the Orwellian “curtain” used by the elitists to hide the inner workings of the financial markets, especially with regard to big bank balance sheets and OTC derivatives. What’s happening right now reminds of the movie “Jurassic Park.” You can hear and feel the monster coming but you can’t see it yet and you don’t know it will pop up in your face or how big it is.
It was the sudden firing of Deutche Bank’s co-CEOs this past weekend – The Brown Stuff Is About To Hit The Fan – that prompted me to spend more time analyzing a sequence of events which indicate to me some sort of derivatives position, possibly at Deutsche Bank, has exploded. In addition, the stock and bond markets have been emitting some curious signals which reflect that fact that something happened in the global economic and financial system.
A collapsing global economic system will exert an unanticipated and extreme amount of stress on highly leveraged financial systems. This stress is “magnified” by the enormous amount of derivatives which are connected to the disastrous amount of global debt.
I believe the illogical movement in 10yr Treasury yields reflects the fact the Fed is losing control of its tight grip on the bond market and longer term interest rates. Note that German bunds have also experienced a similar spike up in interest rates and volatilty. In the context of my view that there was a derivatives accident somewhere in the global banking system in the last two weeks, it could well have been an OTC interest rate swap bomb that detonated.