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A Secretive Banking Elite Rules Trading in Derivatives

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posted on Dec, 12 2010 @ 06:38 PM
check this no further comments

original youtube upload title is "Alan Grayson: Is Anyone Minding the Store at the Federal Reserve?" (over 1milion views)
just linked the one above because of better sound quality.

posted on Dec, 12 2010 @ 06:50 PM
reply to post by Nicorette

I agree with you that there are countless types of derivatives. They cover equity, interest rates, credit, foreign exchange and commodities. My point is that there are many 'independent' organisations that specialise in providing prices to the main financial institutions.

Behind these organisations are individuals with a background in Physics. This is always the case. My own personal view is that they are one step ahead of the rest, due to the complex models that even bankers would not understand. However, as long as profit is made both sides are happy.

The market is forever growing and new types of derivatives are coming into play. It is quite frightening just to contemplate the size of that market. It is therefore not surprising that central banks will be keen to monitor closely what is going on. As to where is it all leading to, not even a physicist would know (or care).

posted on Dec, 12 2010 @ 06:52 PM
reply to post by shr4n

I like Greyson.
too bad TPTB sacked his
last campaign. he did not
get re-elected.

posted on Dec, 12 2010 @ 07:49 PM
Derivatives are a invention of the banks.
The banks make the rules for derivatives
The banks make money selling derivatives
The banks control derivatives.

Derivatives are a form of gambling.
The banks are the casino and control the payout.
And the HOUSE is crooked the dice are loaded the deck is stacked and the wheel is rigged.

And last but best is the government has no idea how the game is played or how to protect the players.

The government because they don't understand how the game is played rely on the banks to give them directions on how laws are made to control the derivatives market.

The banks knowing the government does not understand will never give the government a hint on how to control the banks control of derivatives.

posted on Dec, 12 2010 @ 08:05 PM
What would happen if the derivatives market collapsed? The world's financial systems would collapse.

posted on Dec, 12 2010 @ 10:42 PM
Who comes up with these names, "derivatives" were are these derivatives derived from? It's all to complicated for me especially since it involves math's, I freaking hate math, it's to many numbers, and to hard, and also boring. I remember they tried to make me learn that stuff when young, and I never got it, I still dont quite get why 2+2 always has to equal 4, all the time, or any other given calculation it's all the time the same answer, that's unsane, but it's an unsane world out there so it works I guess. Anyways it's likely these bankers are as bad at math as me, how else can one trillion + one trillion equal three trillion.
edit on 12-12-2010 by galadofwarthethird because: bananas exist

posted on Dec, 13 2010 @ 01:12 AM
reply to post by Nicorette

what are the toxic assets
That the Fed is throwing $$$ at?

The answer is that the toxic assets include:

•Credit default swaps (CDS)
•Collateral debt obligations (CDOs)
•Mortgage backed securities
In fact, these different classes of toxic assets are related.

Some CDOs are bundles of subprime and other mortgages sold in "tranches" (when you use a fancy word which sounds French, people assume it must be good). The rating agencies like Moody's, S&P and Fitch's gave crazily high AAA ratings to many of the tranches on the assumption that real estate prices wouldn't fall nationwide.

They did, and so the CDOs plummeted in value and became "toxic".

Other CDOs - called "structured finance CDOs" - are bundles of mortgage-backed securities and other asset backed securities.

Moreover, some CDOs - called "synthetic CDOs" - are bundles of CDS and other credit derivatives.

Similarly, there were huge CDS bets made that the companies buying or selling CDOs would stay solvent. When those companies started becoming insolvent, the CDS became toxic.

Can you see the relationship between all of the toxic assets?

What Should We Do With the Toxic Assets?

I obviously agree with Krugman, Smith, Mish and everyone else who is not directly making money off of this scam that it is a horrible plan which will probably fail and end up sticking it to the taxpayer.

posted on Dec, 13 2010 @ 03:32 AM
reply to post by Nicorette

OH YEAH! First of all gotta say, I love Blade Runner to death so I immediately love you, no joke, I'm full of love. But yes, the NY Times covered this today and I wrote about it on my blog.

This story is over 6 months old!!

That's the funny f'd-up thing!!!

Damn man,


posted on Dec, 13 2010 @ 04:06 AM

Originally posted by alonzo730
What would happen if the derivatives market collapsed? The world's financial systems would collapse.

No they would not. The Robbery from us would end. Governments would have to live off of their Revenue.

Only 5% of Russia is considered "middle class" now. They are the business owners and Company CEO's. Nobody else has 4 months of income stashed away to be considered "middle class".

The same applies to America.

The fruits of our labor is not getting us anything. It's all being stolen from us.

posted on Dec, 13 2010 @ 05:34 AM
The derivative scam was somewhat down to earth explained in "Capitalism a Love Story" film, one should watch it but ignore the blatant socialism propaganda towards the end, it has some really good bits collected from the movie archives and interwebs.
I work in the betting industry and I know how lucrative "wall street betting" can be but it takes a lot of effort to build the whole enterprise and then kill the competition (through government bailouts in this case). The logic behind profit/liability on these bets are not made to look complicated, they are truly complicated and extremely difficult to understand as a whole. I doubt anyone in your congress actually even knows how derivatives work or even what they are, even ex-employees of WS firms.

posted on Dec, 13 2010 @ 06:19 AM
reply to post by Whiffer Nippets

The whole betting system IS a pyramid scheme with no real way to cover all potential loses. A single winning bet can ruin the whole enterprise but that can only happen when some prices have been "wrongly" set - which is why they need complex math, to calculate all the liabilities and fix appropriate prices for these derivatives. If someone has some way of knowing that he's likely to win on a high price he'll put high stakes and others will see and follow causing the pyramid to crumble if the bet does win but massive profit for bookie if it looses. Its pretty similar to fixed odds sport betting except that sport bookies are not tax funded (instead, they pay massive taxes), they have no government bailouts to cover insane irrational prices, not everyone bets on them, they have a million of government regulations and finally there's also that pesky competition. Therefore, you can now imagine how the system works if you know how lucrative game betting industry is even with all these rules. Also, these WS firms use very diabolical ways to destroy competition, they use wars, mass panic and government infiltration giving them yet even more profit. At then end, when they destroy the pyramid, a good Christian God-fearing American tax payer will bail out select chosen firms because of artificially created lie that his life and security depends on it.
To answer your questions in more detail, you could research on how gambling prices are calculated because all but lottery selections (derivatives) use very complex formulas to extract the liability upon on which traders fix their prices. There are also so called virtual selections in betting industry but they are computer generated derivatives with generic (predefined, rounded, fixed) prices which is basically all random so just like lottery. Other, real, non generic selections like horses, dogs, football players, celebrities, banks, businesses etc. use very complex math to extract the liability and automate the process as much as possible but the real (final) price must be set by a real person, trader that is. I hope this sheds some light on what I think is going on in a nutshell.
edit on 13/12/2010 by SassyCat because: (no reason given)

posted on Dec, 13 2010 @ 06:46 AM
reply to post by Nicorette

It amazes me how disproportionately much money is traded compared to the actual amount of real value produced by workers., you know, actual goods and services.

edit on 13-12-2010 by rickyrrr because: (no reason given)

posted on Dec, 13 2010 @ 07:42 AM

Originally posted by Nicorette
The details of their meetings, even their identities, have been strictly confidential.

Well I can tell you one of the identities -

One thing that puzzles me?? why would the NY times publish an article that is months old? I mean this was kicking around more than 6 months ago??? agenda at play me thinks
edit on 13-12-2010 by franspeakfree because: (no reason given)

posted on Dec, 13 2010 @ 09:02 AM
i saw moorse movie, capitalism a love story too sassycat* in it, he was talking about how wallstreet much preffers to hire physics people fresh from college. instead of working for NASA, or making world solutions, wallstreet hires them, to conjure up comlpex business formulas nad loopholes. In other words, fancy ways to screw people outta thier money*
this is modern day america. we dont have bright minds anymore. wallstreet has hired them all to hijack us and hte freemarket under a dark shadow. I guess simply making an even exchange is too easy these days. cash i hand passed to the buyer and an exchange is made. when things like this, become over complicated, its sinister and obvisously means they have someting or lots to hide. Its really no different, then when yuo were a kid, and broke something.lying too your parents, trying to conjure up a long n lengthy belivable yet outta this world story, when they know your full fo it. well these wallstreet geniuses are the kids, and we are the parnets..get it

imagine that, $9 trillon missing. and no one was ever held accountable? thats bull and you all no it. i highly doubt it got and walked away* man, in any job you go to, any money missing means job termination...yet it dosnt seem too apply at the FED Or wallstreet... must be a big boys club and too much money to steal for that too happen. capitalism needs to go, and good old fashioned democracy needs to come back in.

posted on Dec, 13 2010 @ 09:21 AM
reply to post by thewanger

First of all your post is way out of line, Alex Jones says plenty of crap that isn't remotely accurate. This is important as it is in the NYT, which with it brings some legitimacy. Well done OP.

posted on Dec, 13 2010 @ 09:31 AM
I have a feeling any investigation, will only find thiers no papertrail* thier only gunna hit a dead end wall i think. its missing and the FED has had zero interest in looking for it. You do the math on this. I bet a good chunk of it too was taxpayers money thats gunna hurt us in the long run. I suppose its things like this, that make them in congress wanna come up with all these fictastious taxes..cover thier butts to cover the laundered money. man i dont know if they really smart or stupid accountants.

posted on Dec, 13 2010 @ 10:23 AM
All the money being spent on death and destruction could better serve to help others and make a better world. However, in these times of governance by psychopathy, we will never see this come to fruition. The only things that they are interested in, is death and destruction. That is what makes them rich and feel powerful.

Keeping us normal people afraid, poor and sick, if not dead, is at the top of their lists of things to do. Along with the getting richer and more powerful.

posted on Dec, 13 2010 @ 11:18 AM
reply to post by Whiffer Nippets

a derivative is just a bet on the future price of a stock, whether or not will go down.

Personally I think this kind of investing is dangerous to allow.

Why allow people the bet a business will go under? wouldnt that give people a reason to work towards that business going under? just seems like we're opening a whole new can of worms so a select few can stash away more money.

posted on Dec, 13 2010 @ 11:28 AM
reply to post by Nicorette

EXCELLENT! Great find. Well written OP by you, easy to understand.

And what a mess.

From Mother Jones:

Bob Litan warned (in my paraphrase) "that even if we pass regulatory reform, the dealer-banks that currently control the market in OTC derivatives have a ton of incentive to slow-walk anything that creates genuine transparency."

Well, guess what? He was right! Dodd-Frank may mandate exchange trading and transparency for derivatives, but who's going to run those exchanges? Big banks, of course.

...and the NYT:

The banks already have a head start. Even a newly proposed rule to limit the banks’ influence over clearing allows them to retain majorities on risk committees. It remains unclear whether regulators creating the new rules — on topics like transparency and possible electronic trading — will drastically change derivatives trading, or leave the bankers with great control.

One former regulator warned against deferring to the banks. Theo Lubke, who until this fall oversaw the derivatives reforms at the Federal Reserve Bank of New York, said banks do not always think of the market as a whole as they help write rules.

“Fundamentally, the banks are not good at self-regulation,” Mr. Lubke said in a panel last March at Columbia University. “That’s not their expertise, that’s not their primary interest.”

No kidding it's not their primary interest!

Seems like we're lacking transparency across the board - in our financial institutions, governments, everything that counts.

Interesting pattern.

S&F btw
edit on 13/12/10 by soficrow because: (no reason given)

posted on Dec, 13 2010 @ 01:38 PM

Originally posted by soficrow

“Fundamentally, the banks are not good at self-regulation,” Mr. Lubke said in a panel last March at Columbia University. “That’s not their expertise, that’s not their primary interest.”

No kidding it's not their primary interest!

Seems like we're lacking transparency across the board - in our financial institutions, governments, everything that counts.

Yes, typical ridiculous understatement that downplays the hypocrisy and basic criminal nature of the financial system as it's currently operated.

It's interesting how it's always "free-market capitalism" and "buyer beware" when it's the other 99% of people borrowing for college, paying for giant medical bills, or competing with foreign sweatshops, but when it comes to the 1% and the billionaires and their companies that are "too big to fail", suddenly everyone has to tighten their belts and lose benefits to bail out the banks, who continue to pay themselves grotesque heaps of money.

It's not just a US/UK problem, they are doing it to Greece, Ireland, Iceland...and they been doing it to the third world countries for years. Sigh.

Thanks for all the people's great replies on the thread, glad to see people are aware and care.

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