Wall Street Banks Hold $2 Trillion In Exposure TO European Banks

Not confidence inspiring:

“U.S. global systemically important banks (G-SIBs) have more than $2 trillion in total exposures to Europe. Roughly half of those exposures are off-balance-sheet…U.S. G-SIBs have sold more than $800 billion notional in credit derivatives referencing entities domiciled in the EU.”

When a Wall Street bank buys a credit derivative, it is buying protection against a default on its debts by the referenced entity like a European bank or European corporation. But when a Wall Street bank sells credit derivative protection, it is on the hook for the losses if the referenced entity defaults. Regulators will not release to the public the specifics on which Wall Street banks are selling protection on which European banks but just the idea that regulators would allow this buildup of systemic risk in banks holding trillions of dollars in insured deposits after the cataclysmic results of similar hubris in 2008 shows just how little has been accomplished in terms of meaningful U.S. financial reform.

So not only will our banks go under when their depositors find out all their money was invested in worthless investments that ended up being worth nothing. Our banks will have to pay insurance payouts to the European Banks which invested their depositor savings and checking account balances in worthless investments that ended up being worth nothing.

It has the desperate feel of the last stages of a Ponzi scheme, where our banks needed money to pay out withdrawals to depositors, but they were not going to have the cash, so they said to the European banks, “Sure we’ll cover all your trillions in losses later on. Just give us a few hundred million now so when our depositors make withdrawals, we can give them some money and they won’t know anything is wrong.” It seems almost as if had they not done this, they would have had to admit they have no money and turn away depositors who tried to make withdrawals, and the bank runs would have begun. It puts a new spin on all those stories a few years back of people trying to withdraw their savings in cash, and banks telling them they couldn’t do that.

Whenever all of Trump’s winning and endless success makes you scared that maybe he will stave off the Apocalypse, never forget that there are still a lot of greedy immoral imbeciles in charge of everything, and they might as well be working specifically to bring everything down at some point. There are still multiple Apocalypses coming at us from all different directions, and any one will set all the others off.

Trump will probably be the anti-Obama. Obama, through regulations, taxes, and a general animus toward success suppressed the business community artificially, to the point that just removing his actions from the picture could produce a bubble. Now Trump will go in the other direction. He will undo everything Obama did, and enact his own pro-business/pro-success policies, which should ignite a bubble that will last until the next President returns to the status quo, by which point, if it hasn’t already, it will all come down at once. With this many trigger points, all it will take is one to get the contagion started.

In the interim, to steal a line from The Matrix, we’re going to need guns… lots of guns. The anarchy that is coming will be epic.

Spread r/K Theory, because we only have a small window of breathing room now to set the stage for K