Thursday, May 10, 2012
Thursday, May 10, 2012 3 comments
JP Morgan Chase that is the largest of the monster banks admitted this afternoon in taking 2 billion in losses on “trading” over the past six weeks, and may take “additional losses” of another billion (or more) according to CEO Jamie Dimon. He called it stupid mistakes, I really wish he wasn’t lying.
The thing is that the “trading” wasn’t in stocks, bonds or even oil futures. They were trading in derivatives, perhaps Credit Default Swaps (CDS) but reports are sketchy so far. For CDS contracts to be activated on that scale would require somebody to default on a lot of debt, or at least have their credit rating downgraded. We haven’t heard about anything like that, so where did this come from?
The most likely explanation is that they’ve been inflating the value of their portfolio by churning trillions in derivative contracts based on god knows what. These vampire banks do skim off the economy in general by selling CDS contracts to other people with money to “protect” them from wild swings in the markets, or from the volatility in a particular sector like oil, or the economy in general. These banks are of course the people who are really responsible for the wild swings in the markets they are willing to insure you against.
The scary thing is that JP Morgan was supposed be run by the smart guys who were able to stay above the fray. The thing about crashes is that they usually start with something nobody was expecting, and this could turn out to be the mother of all bank crashes.
If you don’t have your canned goods, why are you still sitting here reading this…. Good, you’re back, something else you really need to get is drinking water, a few gallons of bleach, coffee filters and a shovel. Actually this has nothing to do with the banks, this is about 5th grade science. Remember learning that if you pass a wire through a magnetic field it will generate electricity? Take my word for it, you really did learn that.
When they talk about the all the sun spot activity on the news you might want to pay attention. It seems that the ancients had the right idea about the sun being god, our sun seems to be PO’d at us. (maybe we could sacrifice some Republicans) When the sun goes through an “active” period it throws big chunks of itself out into space. These are multi billion ton gobs of ionized gas many times the size of the earth and when one hits us it produces the so-called Northern Lights. You see our planet’s magnetic field shields us from all this ionized gas and the accompanying radiation.
The problem is that it sometimes throws out really, really big ones, and it seems to be doing that lately and won’t even peak in this cycle until next year. If “the big one” hits us when the earth is turned at the right angle so that charge of the ion cloud and the charge of our earth’s magnetic field line up, this pushes the magnetic field down to ground level. This is where the 5th grade science comes in, we would then have lots of wire passing through a very intense magnetic field as the earth rotates through it at 1000 mph.
This has happened quite a few times over the past century, knocking out localized power grids, but we had a really big one in 1859. The only long line “grid” in those days was the telegraph system, and the show down at the Western Union office was quite spectacular, we almost went back to Pony Express. The National Academy of Sciences estimates that if such an occurrence on the same scale were to happen today, it has the potential of taking out the long line electrical grids of the entire planet.
We’re not talking about just blowing the fuses. The real potential threat is that it could take out all the big substation transformers. It has happened before on a local basis. They estimate the recovery time, depending on how many transformers were actually destroyed from days or weeks to ten years. (let that sink in) The problem is that these transformers are designed to last decades and there aren’t that many on hand. Nor do we have the ability ramp up production quickly, even if we had electricity. BTW, all of ours are made in China anymore. (strategic planners those Republicans)
The immediate threat to the public would be that many large municipalities don’t have diesel backups for their water systems, they depend on gravity fed tanks to keep things going in an ordinary power outage. Even if the local power plant survives, without substation transformers there is no way to get electricity to the pumps.
This is where the bleach comes in, a couple of drops will sterilize a gallon of pretty much any water, but run it through the coffee filter first to take the chunks out. The shovel? Sewer systems won’t be working either. Also handy for burying the people who drink the bad water. Bet you aren’t worried about the banks anymore. www.prairie2.com