# FED emergency meetings



## Tweto (Nov 26, 2011)

The FED has been having emergency meetings all this week with the Obama and Biden. Nothing like this has happen since about 2008.

All that the White house will say is that Janet Yellen is doing a good job and all the rest of the report is just repeated white noise.

The talking heads on TV are talking about it and several you tube videos have surfaced about this.

Earlier this week the previous quarter GNP numbers for the US came out at +.1 which are the lowest in decades with speculation that when all the numbers come in that the GNP will be negative. Two quarters of negative numbers makes recession official.

There is a glut of oil that has ocean tankers lined up across the Atlantic ocean and this is bringing the oil supply line to a halt.

The oil cartels are having emergency meetings in Morocco today.

China and Russia are making attempts to change the international money exchange to use gold as the transfer media instead of US dollars (news today).

If anyone wants to attempt to connect-the-dots on this it could be entertaining. All I can say is that everything is happening very quickly and that's not good.


----------



## hiwall (Jun 15, 2012)

Things DO look rather bad. But so many times in the past the central banks/governments have pulled a rabbit out of their hats. I think I see them reaching in again.


----------



## Tweto (Nov 26, 2011)

*More fuel for the fire*

This letter from the FED just went out today (Friday April 15, 2016)

The Fed Sends A Frightening Letter To JPMorgan, Corporate Media Yawns

Tyler Durden's picture
Submitted by Tyler Durden on 04/15/2016 11:20 -0400

AIG
BAC
Bank of America
Bank of America
Bank of New York
Citigroup
Comptroller of the Currency
Counterparties
default
Federal Reserve
goldman sachs
Goldman Sachs
Great Depression
Jamie Dimon
JPMorgan Chase
Krugman
Meltdown
Morgan Stanley
Office of the Comptroller of the Currency
Paul Krugman
President Obama
Rating Agencies
ratings
State Street
Wells Fargo

.

in

Share
.

22

.

Submitted by Pam Martens and Russ Martens via WallStreetOnParade.com,

Yesterday the Federal Reserve released a 19-page letter that it and the FDIC had issued to Jamie Dimon, the Chairman and CEO of JPMorgan Chase, on April 12 as a result of its failure to present a credible plan for winding itself down if the bank failed. The letter carried frightening passages and large blocks of redacted material in critical areas, instilling in any careful reader a sense of panic about the U.S. financial system.

A rational observer of Wall Street's serial hubris might have expected some key segments of this letter to make it into the business press. A mere eight years ago the United States experienced a complete meltdown of its financial system, leading to the worst economic collapse since the Great Depression. President Obama and regulators have been assuring us over these intervening eight years that things are under control as a result of the Dodd-Frank financial reform legislation. But according to the letter the Fed and FDIC issued on April 12 to JPMorgan Chase, the country's largest bank with over $2 trillion in assets and $51 trillion in notional amounts of derivatives, things are decidedly not under control.

At the top of page 11, the Federal regulators reveal that they have "identified a deficiency" in JPMorgan's wind-down plan which if not properly addressed could "pose serious adverse effects to the financial stability of the United States." Why didn't JPMorgan's Board of Directors or its legions of lawyers catch this?

It's important to parse the phrasing of that sentence. The Federal regulators didn't say JPMorgan could pose a threat to its shareholders or Wall Street or the markets. It said the potential threat was to "the financial stability of the United States."

That statement should strike fear into even the likes of presidential candidate Hillary Clinton who has been tilting at the shadows in shadow banks while buying into the Paul Krugman nonsense that "Dodd-Frank Financial Reform Is Working" when it comes to the behemoth banks on Wall Street.

How could one bank, even one as big and global as JPMorgan Chase, bring down the whole financial stability of the United States? Because, as the U.S. Treasury's Office of Financial Research (OFR) has explained in detail and plotted in pictures (see below), five big banks in the U.S. have high contagion risk to each other. Which bank poses the highest contagion risk? JPMorgan Chase.

The OFR study was authored by Meraj Allahrakha, Paul Glasserman, and H. Peyton Young, who found the following:

"&#8230;the default of a bank with a higher connectivity index would have a greater impact on the rest of the banking system because its shortfall would spill over onto other financial institutions, creating a cascade that could lead to further defaults. High leverage, measured as the ratio of total assets to Tier 1 capital, tends to be associated with high financial connectivity and many of the largest institutions are high on both dimensions&#8230;The larger the bank, the greater the potential spillover if it defaults; the higher its leverage, the more prone it is to default under stress; and the greater its connectivity index, the greater is the share of the default that cascades onto the banking system. The product of these three factors provides an overall measure of the contagion risk that the bank poses for the financial system."

The Federal Reserve and FDIC are clearly fingering their worry beads over the issue of "liquidity" in the next Wall Street crisis. That obviously has something to do with the fact that the Fed has received scathing rebuke from the public for secretly funneling over $13 trillion in cumulative, below-market-rate loans, often at one-half percent or less, to the big U.S. and foreign banks during the 2007-2010 crisis. The two regulators released background documents yesterday as part of flunking the wind-down plans (living wills) of five major Wall Street banks. (In addition to JPMorgan Chase, plans were rejected at Wells Fargo, Bank of America, State Street and Bank of New York Mellon.) One paragraph in the Resolution Plan Assessment Framework and Firm Determinations (2016) used the word "liquidity" 11 times:

"Firms must be able to reliably estimate and meet their liquidity needs prior to, and in, resolution. In this regard, firms must be able to track and measure their liquidity sources and uses at all material entities under normal and stressed conditions. They must also conduct liquidity stress tests that appropriately capture the effect of stresses and impediments to the movement of funds. Holding liquidity in a manner that allows the firm to quickly respond to demands from stakeholders and counterparties, including regulatory authorities in other jurisdictions and financial market utilities, is critical to the execution of the plan. Maintaining sufficient and appropriately positioned liquidity also allows the subsidiaries to continue to operate while the firm is being resolved. In assessing the firms' plans with regard to liquidity, the agencies evaluated whether the companies were able to appropriately forecast the size and location of liquidity needed to execute their resolution plans and whether those forecasts were incorporated into the firms' day-to-day liquidity decision making processes. The agencies also reviewed the current size and positioning of the firms' liquidity resources to assess their adequacy relative to the estimated liquidity needed in resolution under the firm's scenario and strategy. Further, the agencies evaluated whether the firms had linked their process for determining when to file for bankruptcy to the estimate of liquidity needed to execute their preferred resolution strategy."

Apparently, the Federal regulators believe JPMorgan Chase has a problem with the "location," "size and positioning" of its liquidity under its current plan. The April 12 letter to JPMorgan Chase addressed that issue as follows:

"JPMC does not have an appropriate model and process for estimating and maintaining sufficient liquidity at, or readily available to, material entities in resolution&#8230;JPMC's liquidity profile is vulnerable to adverse actions by third parties."

The regulators expressed the further view that JPMorgan was placing too much "reliance on funds in foreign entities that may be subject to defensive ring-fencing during a time of financial stress." The use of the term "ring-fencing" suggests that the regulators fear that foreign jurisdictions might lay claim to the liquidity to protect their own financial counterparty interests or investors.

JPMorgan's sprawling derivatives portfolio that encompasses $51 trillion notional amount as of December 31, 2015 is also causing angst at the Fed and FDIC. The regulators wanted more granular detail on what would happen if JPMorgan's counterparties refused to continue doing business with it if rating agencies cut its credit ratings. The regulators asked for a "narrative describing at least one pathway" for winding down the derivatives portfolio, taking into account a number of factors, including "the costs and challenges of obtaining timely consents from counterparties and potential acquirers (step-in banks)." The regulators wanted to see the "losses and liquidity required to support the active wind-down" of the derivatives portfolio "incorporated into estimates of the firm's resolution capital and liquidity execution needs."

According to the Office of the Comptroller of the Currency's (OCC) derivatives report as of December 31, 2015, JPMorgan Chase is only centrally clearing 37 percent of its derivatives while a whopping 63 percent of its derivatives remain in over-the-counter contracts between itself and unnamed counterparties. The Dodd-Frank reform legislation had promised the public that derivatives would all become exchange traded or centrally cleared. Indeed, on March 7 President Obama falsely stated at a press conference that when it comes to derivatives "you have clearinghouses that account for the vast majority of trades taking place."

But the OCC has now released four separate reports for each quarter of 2015 showing just the opposite of what the President told the press and the public on March 7. In its most recent report the OCC, the regulator of national banks, states that "In the fourth quarter of 2015, 36.9 percent of the derivatives market was centrally cleared."

Equally disturbing, the most dangerous area of derivatives, the credit derivatives that blew up AIG and necessitated a $185 billion taxpayer bailout, remain predominately over the counter. According to the latest OCC report, only 16.8 percent of credit derivatives are being centrally cleared. At JPMorgan Chase, more than 80 percent of its credit derivatives are still over-the-counter.

Wall Street Mega Banks Are Highly Interconnected: Stock Symbols Are as Follows: C=Citigroup; MS=Morgan Stanley; JPM=JPMorgan Chase; GS=Goldman Sachs; BAC=Bank of America; WFC=Wells Fargo.

Wall Street Mega Banks Are Highly Interconnected: Stock Symbols Are as Follows: C=Citigroup; MS=Morgan Stanley; JPM=JPMorgan Chase; GS=Goldman Sachs; BAC=Bank of America; WFC=Wells Fargo.

Three of the five largest U.S. banks (JPMorgan Chase, Bank of America and Wells Fargo) have now had their wind-down plans rejected by the Federal agency insuring bank deposits (FDIC) and the Federal agency (Federal Reserve) that secretly sluiced $13 trillion in rollover loans to the insolvent or teetering banks in the last epic crisis that continues to cripple the country's economic growth prospects. Maybe it's time for the major newspapers of this country to start accurately reporting on the scale of today's banking problem.

Average:

4.96774

.

Your rating: None Average: 5 (31 votes)

.

in

Share
.

22

.

» Login or register to post comments
40,713 Reads
Printer-friendly version
Send to friend
.

- advertisements -


----------



## bkt (Oct 10, 2008)

If you ask the average human - anywhere - what money is, they'll show you their local currency and they'll be blissfully ignorant that it's fiat garbage that isn't worth anything. If you tell the average human - anywhere - that various entities have been suppressing the price of gold and silver and other commodities, their eyes will glaze over and they'll lose interest immediately because they don't understand what that means or how it impacts them. When the decoupling occurs and reality collides with the b.s. we've been taught, things will get nasty.

If hyperinflation sets in, the only thing most people will know is that the economy is broken and that their country is at war with the Bad Guy[tm] (Russia, China, North Korea, some country/countries in the Middle East) who allegedly caused the problem. It won't be true, but you can bet these people will side with their government that is providing them and their kids with food over you who are telling them that those who caused the problem are the banks and the governments.


----------



## Tweto (Nov 26, 2011)

War covers up a lot of sins of the economy of a failing administration.


----------



## Genevieve (Sep 21, 2009)

Between this and a few other things happening I've been working on gathering more staples food wise. Also extra supplies for the vehicles ( bits and bobs).

Have worked hard to make sure I have no CC debt. Just the mortgage and one vehicle payment every month

There is no extra spending here at all. Only essentials. Really don't need anything but maybe some new glasses.

Governments all over the world are scrambling to make sure the populations don't notice what is going on economically either nationally or globally. Ignorance is their aim


----------



## BillS (May 30, 2011)

If Rob Kirby is right and a dollar devaluation is coming it will be the biggest economic event in American history.

Jim Willie has said that TWO 35% dollar devaluations are coming. A 35% devaluation means that prices increase by about 50%. Once that happens every country in the world that holds dollars will be dumping them for whatever they can get as fast as they can get it. We'll be on our way to a Zimbabwe level of hyperinflation in no time. 

If prices suddenly increase by 50% overnight there will a lot of people who can't pay their bills and won't be able to buy enough food. There will be a lot of violence throughout the country.

I think if we have a dollar devaluation in the next month we'll be looking at an economic collapse by the fall. It could happen that quickly.


----------



## bkt (Oct 10, 2008)

In a sense, we have been experiencing a dollar devaluation since just before World War I to the tune of approximately ~97% loss of purchasing power in 1913 dollars.

It seems highly unlikely there would be any deliberate devaluation of the dollar unless there are corresponding devaluations of other major currencies. The game being played right now is essentially this: It's a race to the bottom and who ever finishes last wins. The U.S. controls too much and is still way too wealthy and powerful; we won't devalue the dollar and let the euro or rupee or ruble or yuan overtake us. Wars are fought over a lot less. (But you CAN expect more wars. That's a given.)

Yes, if there is a sudden drop in the purchasing power of the dollar people will feel it acutely and there may well be rioting/violence/looting in many urban areas. People may not have a clue what's going on but they know when they're hungry. But a sudden drop is unlikely. Economic decline is a process that takes place over time, not an event that happens overnight.

Usually, when people predict a calamitous event, two things hold true: 1) There's no consequence when they're wrong; they just keep on making more predictions. And 2) They're usually selling something like precious metals or survival items.


----------



## hiwall (Jun 15, 2012)

To give everyone an idea just look at Venezuela that had an inflation rate of close to 200% in 2015 and is expected to be 4 to 500% this year.

There sure has been a lot of central bank 'activity' in the last week or so. It sure looks like something is afoot.
I had to be in town today so as long as I was there I pulled some more cash out of the bank. Can't hurt nothing


----------



## tsrwivey (Dec 31, 2010)

I really hope everything can hold on for another couple of years, till we get the big house built. Or at least until the end of summer so we can get moved out to the river permanently. I guess we're prepped either way but we'd be in a much better position for the long haul in a few years.


----------



## BillS (May 30, 2011)

I took most of my physical cash, put it in the credit union, and then tried to buy a big gold and silver order online. The credit union has a limit of $2500 per day for debit card transactions. I'm not sure why. During the week in can be temporarily raised to $5000. So I had to split up my orders among my debit and credit cards in order to buy what I wanted.

When the dollar is devalued you can expect your loan amounts to be increased by that same amount. You can also expect metals prices to increase the same way. Greg Hunter on USA Watchdog has said that once metals prices take off, the metals dealers will stop selling for awhile. Let's say I'm a dealer with 10,000 ounces of silver. I sell at $2.50 an ounce over the spot price and silver is going up $5 a day I'd make more money by hanging on to my inventory than by selling it. So once metals prices take off they will become difficult to buy.

Once metals get difficult to buy there will be some good deals to be had on Craigslist. Maybe you could buy that $10,000 truck for $6,000 worth of silver at $100 an ounce because they will recognize that as a good deal.


----------



## BillS (May 30, 2011)

There's something big on the horizon as well. On Tuesday, April 19th the Shanghai Gold Exchange opens for business. People will buy and sell physical gold. That will eventually spell doom for the paper gold market in the US. How quickly that happens depends on how much of a difference there is between the physical price and the paper price. 

There's also speculation that China is about to announce the creation of a new currency backed by gold. If that happens that will also put downward pressure on the dollar and upward pressure on the gold price.


----------



## hiwall (Jun 15, 2012)

> When the dollar is devalued you can expect your loan amounts to be increased by that same amount.


I do not believe they can do that. A loan is a signed contract between two or more parties. Both have to abide by that contract. Unless it is written out in the contract that repayments are tied to the value of the dollar then the lender can not raise it just because he wants to.


----------



## readytogo (Apr 6, 2013)

*Be happy with what you now have*

I guess the economy is a big issue for many after all money buys toilet paper which happens to be a very valuable commodity during a crisis or in a building toilet without it but, that is why I always carry a wad of it, toilet paper that is; but let's be realistic and positive, there is nothing you or I can`t do about big banks or world economy we can talk all day but only those involved in it or government know what really is going on ,before the Great Depression government encourage credit it was actually anti-American not to have it but after the collapse it was very American to blame all in government .I remember my family and friends talking about it and also reading about it and those who had no credit or the banks had refuse it where the happiest of the bunch , an outhouse full of the news on the nail, chickens and eggs all over ,a cow or two , pigs and a plot of dirt full of vegetables ,hell my family was bartering some of their products for other items ,not one of them complain not one of them had credit or own anybody anything ,and like them I lived their lessons ,I own what I have don`t own anybody anything and could care less if this next time the big corrupt banks go under quick and deep after all government should have never bail them out because even with the bail money their big executives continue to give themselves big bonuses and continue with their corrupt ways while many hard working families didn't get a brake nor bonuses thru no fault of their own . Actual living in a totalitarian government has taught me a great lesson a lesson that I truly recommend to many here living in the land of plenty ;no electricity ,total food rationing ,limited water use ,limited fuel ,limited freedom of movement and no toilet paper ,so I learn my lesson well my friends ,keep away from credit and banks ,stop buying junk , pay your possessions and learn how to bake bread/biscuits and above all ,be happy with what you now have .


----------



## BillS (May 30, 2011)

hiwall said:


> I do not believe they can do that. A loan is a signed contract between two or more parties. Both have to abide by that contract. Unless it is written out in the contract that repayments are tied to the value of the dollar then the lender can not raise it just because he wants to.


Obama could just sign an executive order making that legal. Obama has done a lot of things that are illegal. This would be just one more. It's not like the Republicans will do anything.


----------



## bkt (Oct 10, 2008)

I think maybe we've spun off into the weeds and are worrying about stuff that isn't terribly likely to happen. The WH demanding individuals pay more than our loan agreements stipulate would imply the U.S. is willing to pay China et al more toward the debt we owe those foreign nations. Not gonna happen.

The Fed and other central banks are a mess. National economies are a wreck. Currencies are backed by nothing. Things *will* break; that much is a given. When things break, who breaks first, and how quickly things fall apart remain unanswerable questions.


----------



## hiwall (Jun 15, 2012)

If the emergency fed meetings really were for an emergency then this week should tell the tale. By next Friday if nothing has happened then I think the meetings mean little. Only time will tell though. Good luck to everyone here.


----------

