[otheloComRole]

The following interview with Ellis Martin of www.EllisMartinReport.com covers in detail the impending undeclared default of 5 major US banks this week by the International Swaps and Derivatives Association.



This even has the potential to cause a second financial crisis that would require significant financial intervention. If you have time to spare, listen to this interview. If you don’t have time to spare, listen to it anyway.

[ssupermegatone]

Batten down the hatches.

Apparently 5 U.S. banks own 97% of the credit default swaps.

[dXI9XFOA]

Float the Euro on the Titanic's back...

property values fall what ? say another 30%

[ssupermegatone]

Eraj Shirvani, Chairman
Managing Director, Head of Fixed Income
for EMEA Region
Credit Suisse Michele Faissola, Vice Chairman
Managing Director and Global Head of
Rates and Commodities, Global Markets Division
Deutsche Bank Gay Huey Evans, Vice Chairman
Consultant, Non-Executive Chairman of Europe
ISDA Diane Genova, Treasurer
Managing Director and Deputy GeneralCounsel, Investment BankJPMorgan Chase & Co. Stephen O’Connor, Secretary
Managing Director
Morgan Stanley
Guillaume Amblard
Global Head Fixed Income Trading
BNP Paribas TJ Lim
Global Co-Head of Markets
UniCredit Brian Archer
Managing Director, Global Head of Credit Trading
Citi Eric Litvack
Managing Director, Chief Operating Officer of
Global Equity Flow, Société Générale Corporate and Investment Bank
Société Générale R. Martin Chavez
Managing Director
Goldman, Sachs & Co. Ted MacDonald
Managing Director of D. E. Shaw & Co., L.P.
Treasurer of the D. E. Shaw group
The D. E. Shaw Group Bill De Leon
Executive Vice President, Global Head of Portfolio
Risk Management
PIMCO Yutaka Nakajima
Group Senior Managing Director, Nomura Securities
Nomura Securities CO., LTD. Thibaut de Roux
Global Head of Structured Derivatives
HSBC Bank plc Robert Pickel
Executive Vice Chairman
ISDA Nitin Gulabani
Global Head of Rates
Standard Chartered Bank Riccardo Rebonato
Head of Front Office Risk Management and Quantitative Analytics
Royal Bank of Scotland Harry Harrison
Managing Director
Barclays Capital Nobukazu Saeki
Deputy General Manager
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd Alan Haywood
Chief Operating Officer, IST Global Gas
BP p.l.c Gerhard Seebacher
Managing Director, Head of Global Credit Products
Bank of America Merrill Lynch Peter Healey
COO, Fixed Income, Currencies and Commodities
UBS AG Stuart Spodek
Managing Director
BlackRock Jonathan Hunter
Managing Director and Global Co-Head, Fixed Income and Currencies
RBC Capital Markets Lili Wang
Senior Executive Vice President
ICBC Ltd. Conrad Voldstad
Chief Executive Officer
ISDA

[ssupermegatone]

Here's the board





Eraj Shirvani, Chairman
Managing Director, Head of Fixed Income
for EMEA Region
Credit Suisse Michele Faissola, Vice Chairman
Managing Director and Global Head of
Rates and Commodities, Global Markets Division
Deutsche Bank Gay Huey Evans, Vice Chairman
Consultant, Non-Executive Chairman of Europe
ISDA Diane Genova, Treasurer
Managing Director and Deputy GeneralCounsel, Investment BankJPMorgan Chase & Co. Stephen O’Connor, Secretary
Managing Director
Morgan Stanley
Guillaume Amblard
Global Head Fixed Income Trading
BNP Paribas TJ Lim
Global Co-Head of Markets
UniCredit Brian Archer
Managing Director, Global Head of Credit Trading
Citi Eric Litvack
Managing Director, Chief Operating Officer of
Global Equity Flow, Société Générale Corporate and Investment Bank
Société Générale R. Martin Chavez
Managing Director
Goldman, Sachs & Co. Ted MacDonald
Managing Director of D. E. Shaw & Co., L.P.
Treasurer of the D. E. Shaw group
The D. E. Shaw Group Bill De Leon
Executive Vice President, Global Head of Portfolio
Risk Management
PIMCO Yutaka Nakajima
Group Senior Managing Director, Nomura Securities
Nomura Securities CO., LTD. Thibaut de Roux
Global Head of Structured Derivatives
HSBC Bank plc Robert Pickel
Executive Vice Chairman
ISDA Nitin Gulabani
Global Head of Rates
Standard Chartered Bank Riccardo Rebonato
Head of Front Office Risk Management and Quantitative Analytics
Royal Bank of Scotland Harry Harrison
Managing Director
Barclays Capital Nobukazu Saeki
Deputy General Manager
Mitsubishi UFJ Morgan Stanley Securities Co., Ltd Alan Haywood
Chief Operating Officer, IST Global Gas
BP p.l.c Gerhard Seebacher
Managing Director, Head of Global Credit Products
Bank of America Merrill Lynch Peter Healey
COO, Fixed Income, Currencies and Commodities
UBS AG Stuart Spodek
Managing Director
BlackRock Jonathan Hunter
Managing Director and Global Co-Head, Fixed Income and Currencies
RBC Capital Markets Lili Wang
Senior Executive Vice President
ICBC Ltd. Conrad Voldstad
Chief Executive Officer
ISDA

[Emunsesoxmete]

If they had to mark to market their assets it would already be over.

us-bank-derivative-exposure.jpg

[Pa33anger]

tick...tick..tick

[irresseni]

i haven't seen anything about this on zerohedge. odd.

[baskentt]

i haven't seen anything about this on zerohedge. odd.

I was thinking the same thing.

Here are a few links. Some are a few months old.

from 1-23-12
Why Are Greek Credit Event Swaps Still In The Mid 60s?


from 10-26-11
Credit Event Or No Credit Event, This Will Get Messy

Barclays Explains Why A 50% Greek Haircut "Would Be Considered A Credit Event, Consequently Triggering CDS Contracts"

from 10-27-11
Farce Is Complete As ISDA Finds 50% "Haircut" Is Not A Credit Event

[orillaVar]

Can't The Bernak simply turn on the printing presses again?

[ZenDers]

theys banks will not fail without a war here , are someone with more power . no way will they let this happen without a fight... im with ximmy turn on the presses full speed a head

[bahrain41]

Who knew printing presses were also time machines?!?!?!

Here's we come 1920's Germany!

[Abnorbprootly]

I'm a little confused, where did Jim get the information that this is all going to transpire this week?

I thought Greece D-DAY was scheduled for March.

[dXI9XFOA]

Who knew printing presses were also time machines?!?!?!

Here's we come 1920's Germany!

First there has to be a dictator who can raise the standard .gov pay increases.

Where's the demand to soak up anything from the printing presses?

[awagsFare]

Originally Posted by chad i haven't seen anything about this on zerohedge. odd.

I was thinking the same thing. Sinclair and Tyler Durden view different "ends" of the same horse. Sinclair is the "older, greyer, macro" viewer/commentator.

Bottom line:
Equities are about to take off: Time to buy calls on S&P 6 months out minimum

MF Global's = model...the "undeclared ISDA default model" that is. This one is 3x as severe x 5 major banks instead of one clearing house in size. Oh, wow!

Dollar Down, (another fiat "goes up.")

Oil definitely higher in next 6 months...possible double directly ahead. (yes, ala Lindsey Wm's Mr X's)

MAJOR DIFFERENCE: Gold is going HIGHER this time...
....Silver will tag along, as well, and take out the $50 mark.

Why THIS TIME?

BECAUSE of the loss of the SACRED 1st position of segregated funds account holder in a restitution queue default/bankruptcy settlements, (declared or not) by the ISDA.

This secondary class status is now "the new paradigm", since MF Global has "credit evented" and set into clear and prominent public view--even Gerald Celente "gets it now"--the NEW bankruptcy bar. All AFTER DERIVATIVE POSITION HOLDER is relegated and revealed to be nakedly vulnerability and below Swap holder. And it's now by "law" as being designated in secondary position to making whole the Derivative/Swap holder...(thank you so much, Bushy Jr.)

This LOSS this time, of:
-- 3x the amount of segregated MFG customer balances, (MF Global was a 25% immediate write down/seizure)

---paralazed ability to close out open positions x 5 in these 5 banks and their foreign hypothecating fools' subsidiaries

----seizure of actual HISTORICAL transaction profitable proceeds by unraveling of closed trades by the bankruptcy judges and exchanges...

...only 30c of every $1 "customer accessible balances" in accounts to "customer re-deploy to safe haven US$" as the "CREDIT EVENT" is unveiled. Leave your 30c or grab your 30c and run away? TO WHERE!!!?

It is my personal assessment this last "run to where?" point is something Mr. ZERO is struggling to assess then address in his inimitable fashion. He simply does NOT have Sinclair's 50 years in these markets as a looking glass. I personally would go so far as to guess ZERO has NOT hardened his asset class positionally in personal portfolio allocation.

In 2008,
gold sold off hard,
dollar rallied hard.
Fed Reserve printed furiously.
Congress spent hard.
Paulson, Bush, et al FLED HARD.

Sinclair is on record last night as to categorically stating USDX 82 is the lid on the USDX this time. AND THIS TIME is worse by a factor of 5x the size and 3x the financial wipeout.

That is not a hard USDX rally.
Back to USDX 168 would be a "hard rally."

Got Gold?

Got "Food (non-radiated preferred)"

Got Fuel?

Got Car tuned up, new battery and new tires for next 2 years?

Got Guns/Knives/bug-out place stocked and ready?

Got clothing, underwear, socks, shoes? For all family under your roof, too?

As Lindsey advises... Got payment for 2 years minimal of your property taxes set aside in hard assets? ? ?

Heck, got a goldpan and shovel, map, troy scales, solar calculator, and gold/silver coin weight conversion chart printed out and tucked into wallet (laminated like mine?) for using in the " back door of the grocery store" scenario posited above by another GSus'er?


"deep in reflective thought" beefsteak

[ådrrraj]

We all know it's coming, whether or not it's this week or the next (or the next, etc), I'm not sure.

[awagsFare]

Your's truly believes Sinclair's point was that last night's Merkel/Sarkosy deal hammered out and reported on AOL *Huff Pooh" and others is THE watershed event.

After the multiple fingered decades (already well-onto the allotted number of digits on the R.H. here personally,) 6 months headszup is as close as I need, even tho' Sinclair is customarily early.

We only had about 6 weeks on the MF Global deal before the name of the "financial whale" washed up on the shore whose presence was telegraphed in the USDX market's recent reversal--said carcass was "identified post-mortem."

[mArVHDO6]

First there has to be a dictator who can raise the standard .gov pay increases.

Where's the demand to soak up anything from the printing presses?

that's exactly what Bush & Obama have done.

the US government has been outpacing private industry on the pay front the last 10 years.

[awagsFare]

.
.
.Clatter. Bang. CRASH!

=================



Wegelin clients pulled $4 bln, prompting sale-paper
Sun Jan 29, 2012 7:58am EST

ZURICH, Jan 29 (Reuters) – The break-up of Switzerland’s oldest bank Wegelin, involved in a row with U.S. authorities over tax cheats, became necessary when clients pulled 4 billion Swiss francs ($4.35 billion) of wealth, Der Sonntag newspaper reported on Sunday, citing unspecified sources.

Under pressure from the investigation, the 270-year-old institution moved assets of 21 billion Swiss francs ($22.9 billion) to a subsidiary Notenstein Privatbank, which was then bought by cooperative bank Raiffeisen.

Wegelin is still left with U.S. assets under scrutiny from U.S. prosecutors.

In his first interview since news of the sale broke on Friday, Wegelin head Konrad Hummler told the paper he had done the right thing at the right time.

"We became the victims of a larger matter. I don’t want to say more than that," he said in a separate interview.

Citing unnamed sources, Der Sonntag said the purchase price for the bank’s good assets was somewhere between 2.5 and 3 percent of the 21 billion-franc total, putting the price tag somewhere around 500 and 600 million francs.
More…

=====================
If yours truly doesn't screw up the math, 2.5 to 3% = BOT FOR $0.025c to $0.03 cents on the dollar.

Looks like Greece's 30c on the dollar "CREDIT EVENT" agreed to by Sarkozy/Merkel late last night US Time, is a raving financial success story.....(wishing for the dripping with sarcasm icon of the old GS to stick right here)

[onlineslotetes]

I don't see how default by itself is positive for gold.

Turning on printing presses, bailing out US banks and paying of CDSs on Greek bonds would have been opposite of default.

That would have increased liquidity and would have been positive for gold and equities.

I think what Jim is talking about is coming bailout of current Greek bond holders, which is not a certain thing yet.

If 70% haircut is not acknowledged as "default", then only the blind will not see the true value of CDS, which is close to zero.

We are talking in excess of $500 trillion worth of financial instruments getting re-evaluating into nothing.

Somebody somewhere got to bare the consequences. Something somewhere got to crack in world's financial system.