Bank Apocalypse Drill: False Flag Event or Reset?

BANK APOCALYPSE DRILL: FALSE FLAG OR RESET?

For the first time in the industry’s history, a banking “apocalypse drill” is scheduled for next week.

The “too big to fail” banks are going to “simulate” a bank collapse next week,  because they do realize they are actually failing, which could mean they will simulate a confiscation of all deposits.

How else could a real banking collapse? Would the simulation include erasing all financial debts, too?

Empirically, most government simulations turned out to be nothing but false flag events which have increased the corporate grip on us all. The Ebola narrative is falling. It’s time for another event to keep the masses preoccupied.

That’s the pessimistic scenario.

What if this is just a face-saving event to implement a global financial reset that we have been anticipating this month?

Is the Chinese Premiere Li Keqiang’s visit to Germany, Russia, and Italy this week related to this event?

Aside from previous attacks on the dollar, China has imposed levies on Australian Coal importation. This will protect local coal miners, while maximizing its investment on Russian gas production.

How cool would that be if the whole banking industry would just disappear, and people just share goods and services in the spirit of cooperation and peaceful coexistence?

The system of money is what made us slaves in the first place. What we really need is more than just putting the bankers in jail. We need the whole scam to go.

There are other forms of social competitions that we can explore, that don’t include putting a big segment of our society in generational poverty.

In any case, please be ready.

Bankocalypse drill: US and UK to run ‘too big to fail’ collapse simulation

Published time: October 11, 2014 03:07
Britain's Chancellor of the Exchequer George Osborne (R) speaks to U.S. Treasury Secretary, Jack Lew.(Reuters / Alastair Grant)
Britain’s Chancellor of the Exchequer George Osborne (R) speaks to U.S. Treasury Secretary, Jack Lew.(Reuters / Alastair Grant)

The US and UK will stage a comprehensive simulation next week check whether the countries’ financial and banking sectors are still vulnerable to the problem of the ‘too big to fail’ institutions and coordinate their actions in case of such collapse.

Government financial leaders from Britain and US will simulate a failure of a large banking institution on Monday in Washington, DC, to test the effectiveness of each county’s banking regulations.

They hope the simulation – which will not mimic the collapse of any particular ‘too big to fail’ institution – will demonstrate what the officials have learned from the financial crisis about their respective roles, and how new practices should shield taxpayers from further bailouts. The simulation will run through procedures if a large UK bank with US operations failed, and those for a US bank with a British presence.

We are going to make sure we can handle an institution that was previously regarded as too big to fail,” said UK chancellor, John Osborne, speaking to journalists at an International Monetary Fund meeting in Washington on Friday. “This demonstrates the distance we have come over the last few years to build resilience and learn the lessons of the financial crisis.”

AFP Photo / Spencer Platt

AFP Photo / Spencer Platt

READ MORE: ‘Too big to fail’ status gives US banks ‘free pass’ – Fed study

Participating in the “war game” along with Chancellor Osborne will be US Treasury secretary Jack Lew, head of the Federal Reserve, Janet Yellen, and the governor of the Bank of England, Mark Carney, with senior officials from both countries.

The purpose of the simulation was to make sure every player, including politicians, knew their own responsibilities and who needed to act, which creditors would take a hit, and how to communicate the authorities’ actions to the public,” Osborne told the Financial Times.

the only winning move is not to play RT @vgmac On Monday, US and UK regulators will “war game” a big bank failure. http://t.co/b7RWCsngYU

— Matthew Zeitlin (@MattZeitlin) October 10, 2014

It has been six years since the 2008 financial crisis when $700 billion in taxpayer dollars was used to shore up failing institutions, besides the cost of other bailout programs such as for Fannie Mae and Freddie Mac that totalled at least $135 billion more. The financial crisis lead to mass unemployment, drastic cuts to US government social programs, and contributed to the economic downfall of several European states.

READ MORE: JPMorgan ‘agrees’ to tentative $13 billion penalty for role in 2008 financial crisis

Since then regulations have passed in the US – the Dodd Frank Act of 2010 that forced banks to have in place capital and to draw up plans of how they would go through an ordinary bankruptcy and which groups would be paid off first.

Next week’s simulation, the results of which are expected to be released to the public, is designed to reassure the taxpayers in both UK and the US that their money will not be misused next time when a large financial institution turns out to be not that big to fail.

READ MORE: Record global debt risks new crisis – Geneva report

source »

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As Monday Looms, Experts Warn Japan’s Half-Trillion Dollar Fat-Finger-Trade “Could Absolutely Happen” In The US

Tyler Durden's picture

Just over a week ago, the Japanese stock market participants were stunned when stock orders amounting to a whopping $617 billion (yes Billion with a B) – more than the size of Sweden’s economy – were canceled for reasons still unknown in what was one of the biggest ‘fat finger’ trading errors of all time. Since then, US equity markets have suddenly become notably more volatile – and fallen significantly, VIX has seen odd intraday ‘spikes’, S&P futures saw the very odd ‘satan signal’, and USDJPY has suffered its worst losses in 3 years. This raises the question of whether US market microstructure is any better than Michael Lewis’ Flash Boys’ book describes.. (as we head into a bond market holiday, dismal liquidity, and a potential Black Monday), “That could absolutely happen here,” Tabb Group’s Larry Tabb warns Bloomberg.

A week ago, this happened… (From Bloomberg)

At 9:25 a.m. Tokyo time, orders for shares in 42 companies totaling 67.78 trillion yen ($617 billion) were canceled, according to data compiled by Bloomberg from the Japan Securities Dealers Association. A representative at the organization wasn’t immediately available to comment.

The biggest order was for 1.96 billion shares of Toyota Motor Corp., or 57 percent of outstanding shares at the world’s biggest carmaker, for 12.68 trillion yen through an off-exchange transaction. Toyota declined to comment. Other stocks with scrapped transactions included Honda Motor Co. (7267), Canon Inc., Sony Corp. and Nomura Holdings Inc.

“Fat finger” trading mistakes occur periodically. In 2009, UBS AG mistakenly ordered 3 trillion yen of Capcom Co. convertible bonds. Still, today’s scrapped trades were of a different magnitude.

“I’ve never heard of orders this big being canceled before,” said Ayako Sera, a Tokyo-based market strategist at Sumitomo Mitsui Trust Bank Ltd., which oversees about $474 billion in assets. “There must have been an error.”

While no harm’s been done because the orders were canceled, there should be an explanation to alleviate concerns, Sera said.

“It’s not rocket science that there was a fat finger here, but it reopens the question about accountability,” said Gavin Parry, managing director at Hong Kong-based brokerage Parry International Trading Ltd.

It may not be rocket science, but one wonders: just who has the potential to trade over half a trillion in market orders, let alone screw it up?

*  *  *

And since then..VIX Spikes have been frequent – and unexplained (as Nanex showed in the past)

Recently there have been frequent spikes in the VIX index such as the ones shown in the 1 minute chart below. We drilled down to the underlying data (option prices) used in calculating the VIX and found that almost all the quotes in the near term options used in the VIX calculation suddenly widened which causes the spike. Why this happens is unknown…

Stocks have dropped notably with very high intraday volatility, and USDJPY has collapsed…

*  *  *

And ahead of Monday’s open, with the bond-market closed (and liquidity likely extremely low), market infrastructure experts raise a red flag…

A funny thing happened after Michael Lewis’s book “Flash Boys” put the structure of the U.S. stock market under a microscope in March: The whole system ran pretty smoothly, at least compared with its recent past.

Sure, the electronic cat-and-mouse trading game that Lewis called a “rigged” system and others called “market making” may not have changed much. On the bright side, however, there have been no major technological meltdowns like the one that almost bankrupted Knight Capital Group Inc. or fouled Facebook Inc.’s initial public offering in 2012, or caused an almost 1,000-point plunge in the Dow Jones Industrial Average in 2010.

Now today, that nascent confidence is being undermined in a big way after 67.78 trillion yen ($617 billion) of mistaken over-the-counter stock orders flooded Japan’s equity market. Don’t for a minute believe that the U.S. market structure is fine-tuned enough to avoid a similar situation, according to Larry Tabb, founder of research firm Tabb Group LLC.

“That could absolutely happen here,” Tabb said in an e-mail. “While we do have circuit breakers and pre-trade checks for items executed on exchange, I do not believe that there are any such checks on block trades negotiated bi-laterally and are just displayed to the market.”

Just a month ago, a technical error at CME Group Inc. prompted a four-hour trading halt at the world’s largest futures market, preventing buying and selling of contracts tied to major stock indexes, Treasuries, oil and gold. In May, a trading error at Barclays Plc caused split-second swings in dozens of U.S. stocks including AOL Inc. and Caterpillar Inc., people familiar with the matter told Bloomberg News at the time.

No human system is perfect and every day computer systems that interact with the markets are being upgraded and modified, said James Angel, a Georgetown University finance professor who studies market-structure issues.

“As Darth Vader said in one of the Star Wars movies, ‘Don’t put all your faith in technology,’” Angel said in an e-mail.

*  *  *

Don’t forget who is long (and looking for a greater fool to dump to)…

source »

China, Russia to sign 30 agreements during annual meet
October 4, 2014, 5:20 am

File photo of Chinese President Xi Jinping (left) with Russian Prime Minister Dmitry Medvedev [PPIO]

Russia and China will ink more than 30 agreements on energy, finance and high-speed rail cooperation during the annual Russia-China Prime Ministers summit to be held on 13 October, China’s Foreign Ministry spokesperson announced on Saturday.

The two states’ premiers will also hold a meeting at the international forum Open Innovations on 14 October, said Chinese Foreign Ministry spokesman Hong Lei in Beijing. Russia has been attempting to shrug off its dependence on European energy markets and instead adopt a “look-east” policy towards China and India.

Chinese Premier Li Keqiang and Vice Premier Wang Yang will head for Russia for the 19th annual meet to hold talks with their Russian counterparts Dmitry Medvedev and Dmitry Rogozin.

The Prime Ministers summit this year follows successful meetings between President Xi Jinping and his Russian counterpart Vladimir Putin where the two leaders have overseen enormous Sino-Russian joint ventures, including a landmark $400 billion gas deal in Shanghai after a decade-long gas supply talks between the two countries.

Russia also plans to sign a new 30-year gas supply contract with China via the western route, Russian energy giant Gazprom’s CEO Alexei Miller told President Vladimir Putin last month.

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