Banks – Wall Street Underground

By Nick Guarino | October 22, 2015

Too Big to Fail = Too Big to Save
Too Big to Regulate = Too Big to Manage

Dead Broke Banks are out of control


This is the start of the next banking wipeout. I have been busy this past 2 weeks as the worlds biggest banks report the earnings disaster the 3rd quarter really was. As bad as it is, the big banks financials are impossible to decipher. And if they can’t be figured out, it’s because they don’t want you to… It ain’t no accident.

What I can tell you for sure is that our banker buddies are losing huge amounts of money. Their trading desks and their commodity trading partners (who they have loaned trillions to) are evaporating money faster than a beer spilled on a New York city sidewalk on a hot day in August. The last time I have seen this was right before the 2007/2008 financial wipe out.

See for yourself. Here is short list of what they fess up to:

*Glencore the worlds largest commodities trading firm has posted staggering losses. and their share prices are also taking a huge hit.

*Reo Tinto the worlds largest miner is also posting record breaking losses

*Fortress Investment Group confirmed that it was closing its flagship Fortress Macro Funds, and returning all the capital to investors, by the end of the year. It has dropped 29% year to date

*Norway’s Sovereign wealth fund, the world largest in essence, is in liquidation because of the plunge in oil prices.

*Black Rock the worlds largest asset manger said net income fell 8 percent.

*HSBC worlds largest banks have already started admitting to massive trading losses.

*Goldman Sachs one of the worlds largest investment banks just reported a 38 percent drop in earnings in the third quarter. The bank was hurt by recent market turbulence and lower commodity prices. Revenue fell almost 20%.

*Bank of New York Mellon Corp reported that third-quarter profit fell 23 percent from the year-ago period.

*Morgan Stanley profits plunged in the third quarter as revenues for commodity, bond and foreign exchange trading fell. Net profit fell 42%.

*Citigroup “Citi Holdings reported revenues were down 8% and its assets declined 20% year-over-year

*JPMorgan Chase reported total revenue declined 6.4% and trading revenue declined 15%

As you can see, it’s not a very pretty picture this earning season. The truth is, the balance sheets have a lot of tricks to lessen the published losses. I want you fully aware that the most recent stock market and commodity plunge is far, far, far from over.

Wall Street, knowing the earnings season would be a disaster, put on the full court press. Fireman to the rescue. Everyone is doing their part to try to stall off the next stock market down turn for as long as possible. This is not business as usual. That is why you are seeing this very small rally back in the commodities and stock market. This will not last much longer. Soon it will back to the losses.

The fact of the matter is, the dead broke banks will wipe out the US economy again. You already see the cracks in the concrete. And I want you prepared for another wipe out like the 2007 wreck at the end of the runway. This time it will be far, far worse. Because the banks have far more leverage and are hiding bigger losses than ever on their balance sheets.

Banks have gotten so big that they can not be bailed out. The money does not exist.

Now you may believe the popular myth that the FED will pump all the money into the banks to hose down the fire storm of their massive losses with endless money…. WRONG! The fact of the matter is, the FED is a creature of the banking system. BUT they will not trash the dollar or wipe out the US Treasury market to save the banks… For two reasons.

1. If they tried it, an outrageous Congress that is already very distrustful of the FED would pull their franchise quicker than a drag racer pushes the gas pedal when the light turns green.

2. It would not work anyway. In these days of free floating currency markets, the dollar would wipe out and the fed would have an even bigger problem.

You need to accept the fact and prepare for half the banks and financial institutions in the US wiping out. And they are now far, far too big to save. It is a massive deflation not an inflation and you damn well better learn the difference.

But there is another problem. We have allowed the banks to become these HUGE dinosaurs that will soon be extinct.

They are so big that they are impossible to manage.

Time and time again, we have seen near death experiences in the banking system where some trader has a blow up. These “sticky finger” events are more common place than you may realize. Banks trading departments have replaced their loan operations. Banks no longer compete for funds or loan money… If you want to buy a CD, they will pay you virtually nothing. The reason is, the banks can borrow all they want from the FED. Banks have become great big market trading entities. That most of the time get it wrong.

Bankers are smart enough to know another economic melt down is on the near horizon. That is why they are lending out very little money… Unless it’s to roll the dice in the derivatives trading casino.

The ugly truth is, banks have become these great big, out of control trading machines. And no one is minding the store. They are so big and the trades are so complex and the counter parties are endless. No one knows who they are trading with and if they can cover their losses. Any assessment of risk is out the window. IMPOSSIBLE!

I want you to ponder this for a moment. Banks are trading on 300 times leverage, hundreds of trillions of borrowed from the FED dollars. Instruments are so diverse and so complex, it takes super computers to initiate these trades. Never mind keep track of them. The accounting rules allow them, in fact encourage them, to hide losses. Traders who lose money get fired. And traders who make money (at least on paper) become richer than Midas… All by risking someone else’s money. In trades that their bosses don’t understand and the accounting departments can’t track. One trader in a remote branch office can obligate the bank for all its capital times a hundred and do so on a daily basis.

You can understand how the system has been corrupted. You heard you can see who is swimming naked when they drain the pool. Well prepare yourself for the shock of your lifetime. The emperor has no cloths and neither does anyone in the banking community. The banks trading departments are out of control, hiding massive losses in this commodity market and oil wipe out. You may think the FED is here to help… WRONG!

Do not confuse endless easing with endless bail outs. You may ask how we know… It’s pretty darn simple when you think about it. Banks favorite speculative vehicles in commodities, especially oil, have taken a 50% loss on average. Oil, gold industrial metals and agriculture commodities are all wiping out. And the latest reporting of banks show they are taking and hiding serious losses in their trading departments.

And it gets worse. 3 major sectors of the world are in desperation, deploying quantum easing. Central banks are in a panic about the spreading deflation. Quantum easing, which is virtually free money for the banks is not working. These regions in endless easing and damn near free money for the banks are Europe, Japan and the United States. They represent 2/3 of world GDP. And the fact of the matter is, all 3 regions are in a massive, ever growing deflation. The great quantum easing experiment is failing. Money is being lost faster than the banks can create it. Think about it, every commodity in the world has lost half its value… That’s a lot of losses… AND quantum easing can not fill the gap.

Helicopter money won’t work either

Let me explain what helicopter money is. That is where central banks push money into the system. Hence my analogy of FED reserve helicopters flying over the cities of America dumping out money from the air. Obviously that is not going to happen.

The point is that pushing massive amounts of cash into the system will not work. The reason being, in the day of free floating currencies like we have everyone is watching. If they tried a desperate stunt like that (flooding the economy with money)it would not work. The reasons being, if the markets got a sense that inflation was about to return big time, investors would flee the dollar and US treasuries in mass. The dollar and debt markets would collapse. Giving the FED a much greater problem than half the banks and financial institutions in the country failing.

In fact, we face quite the opposite of much ballyhooed inflation, dollar collapse and debt wipe (with soaring interest rates) like everyone and their dog is predicting. We have negative inflation (deflation), the dollar is soaring. Every one wants the dollar. And US government debt is the most desirable of all debt. And interest rates on US debt are plunging.

They keep coming back for more and more US government debt

Popular Wall Street myth is the US issues so much debt that it will flood the market. Interest rates will soar, inflation will run rampant and the dollar will become worthless… WRONG, WRONG, WRONG.

US government deficits are plunging… YES it’s true

Runaway US government debt… In fact, quite the opposite is happening. In 2009 the US government yearly deficit was 1.459 trillion dollars. For fiscal year 2015 the budget deficit was 439 billion. A trillion dollars less. FUNNY what THEY WONT TELL YOU! Now you might say a 500 billion dollar deficit is a crisis. Not really, the US is a huge economy… The worlds biggest and US debt as a percent of yearly GDP is only 2.5%. Among the lowest in the world.

But you are right, there is a debt crisis. The crisis is the US is not issuing enough debt to meet market demand. US government debt, contrary to Wall Street bullshit myth, is the most sought after debt in the world. Despite record low yield. With US government yearly deficits plunging, our government now issues much less debt than it used to.

There is a debt crisis. There is not enough debt being issued. Despite the lowest interest rates on US government debt since the last depression, people cannot get enough US government Treasuries. Every auction sees at least 3 times as many buyers than the debt being sold.

Yes, you got it, for every billion dollars in debt issued there are 3 billion dollars in bids. 2/3 of the buyers go home empty handed… So why are the smartest, biggest players scooping up US government debt with both hands?

It does not take an Einstein to understand that there is something big afoot. And US treasury debt is the safest in the world. Absolutely, positively it will be there. I want you prepared and safe and secure and hopefully making money in the coming banking crises. In the next phase of the ongoing banker wipe out, the banks will go broke and stay broke. Just like Lehman was allowed to fail in 2007.

And I hasten to add, it will be like what happened in the last great depression in the 1930′s only worse. Banks wiped out and depositors lost their money. The stock market crashed, erasing three generations of wealth. And real estate plunged in value, trading at ten cents on the dollar. This is the hallmark of a great deflation/depressionary wipe out.

Every Man for HIMSELF

Ask yourself, why are they telling you to prepare for a hyper inflation? An event that has never occurred in America. When we are headed for another great depression, an event that has occurred in America every 70 to 100 years.

Great financial panics represent, for most people, a life changing event they never recover from. For most people, the coming bank wipe out and financial panic will be THE defining event for their lifetime. An event that will blindside them that they will never recover from. The majority of Americans are about to be reduced to abject poverty. They will stand in bread lines for their food and dining out will be in a soup kitchen. It’s happened before and it’s about to happen again.

Remember, the houses that will be lost and the money that is gone out of your account will not be blasted off into space… Money and real estate will change owners. In an instant, trillions of dollars in bank deposits will disappear. And there will be many, many losers and a blessed few winners.

The good part is, there will be phenomenal money making opportunities. Most people will be caught napping and lose everything. Instruments that are money losers will turn on a dime… Instruments that are little understood, that appear to be nothing, will shock people with how well they do. Wall Street and those internet guys are clueless. Little more than paid pimps for the wall street whores. Offering the latest load of money losing wall street schemes.

In closing, the last thing Wall Street wants you to understand, never mind know how to trade, is a deflation AKA Great Depression.

I want you prepared and to know how to prosper. I am making a tape on this. When it’s ready, I’ll send you an email and an SMS (text) message…

Thank You,
Nick Guarino




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