When the Blackbird's Neck Breaks

When the Blackbird's Neck Breaks by Tom Heneghan, International Intelligence Expert

Sunday February 5, 2012

UNITED STATES of America - It can now be reported that a major liquidity crisis (aka black swan event) is about to occur or is occurring now that could turn the world financial markets on their head.

The world banking system is now contaminated with at least $39 TRILLION of worthless, toxic derivatives.

Note: If you include the non-transparent derivatives loaded up in hedge funds the outstanding derivatives escalates to $600 TRILLION in derivative debt.

The privately owned U.S. Federal Reserve (which continues to violate its charter on a daily basis), along with the European Central Bank (ECB), continue to treat these derivatives as assets when, in truth, they are liabilities.

What we have here, folks, is accounting hocus pocus.

The Fed and the ECB continue to roll over this toxic debt out to the calendar years of 2013 and 2014. This is called "Operation Twist" aka operation defer your debt.

This accounting trickery allows the Federal Reserve and ECB to mark up their toxic derivatives using time-weighted algorithms and pretend something that is worth nothing is worth something.

Reference: These TRILLION dollars worth of toxic derivatives date back to the 2003-2007 marketing of bundled mortgage-backed securities aka a massive ponzi scheme that helped LOOT the U.S. Treasury and destroy the retirement accounts of average hard-working Americans.

Again, folks, this occurred under the BushFRAUD Administration's then Federal Reserve Chairman Alan Greenspan, along with then crooked U.S. Treasury Secretary Henry 'Hank' Paulson.

Operation Twist cleans up the balance sheets of derivative-laden banking institutions while simultaneously these crooked banking institutions aka financial terrorists are allowed to use an IRS depreciation schedule to write down the book value of the toxic assets in the current calendar year.

This allows these financial terrorists to use a corporate Schedule C to file for tax credits aka tax refunds aka bail outs.

Translation: In other words, folks, these crooked banks actually receive massive tax refunds, which allows them to:

1. Declare a profit

2. Pay massive bonuses at the end of the year

3. And then use the tax credits to absorb the cost of rolling the toxic derivatives into future calendar years in which they are, once again, immediately marked up in value based on a policy of hypothesized securitization.

Accounting lesson: To simply it for you, folks, in other words for tax purposes in the current calendar year the derivatives are worth nothing but for future collateralization of deferring debt the derivatives are worth something.

That is right, folks, in Ponzi Land "Now you see it and now you don't" and believe me, you ain't seen nothing yet.

We can also divulge that the Clearing House Interbank Payment System (CHIPS) ground to a halt as the financial markets were about to close last Friday.

There is clearly a lack of liquidity caused by Operation Twist, which has created a deflationary expectation and a massive imbalance in the libor (the imbalance between short term and long term interest rates).

CHIPS is a privately owned clearing house tied to the Federal Reserve Bank of New York that settles over $1 TRILLION of derivative transactions on a daily basis, which is also connected to the Federal Reserve wire transfer funds service, which apparently ran out of money last Friday.

This liquidity crisis was allegedly triggered by the CME Group issuing massive market calls against Bank of America, Wells Fargo, Citibank of New York and, of course, J.P. Morgan.

All of these aforementioned financial institutions have overextended, undermargined long positions in EURO currency, Japanese yen, precious metals, stock index futures and energy futures markets.

At this hour lawyers for the CME Group have informed the CFTC (Commodity Futures Trading Commission) that they will no longer honor illegal cross-collateralized, compounded derivatives as margin when it comes to trading these aforementioned financial markets.

Note: This decision was also triggered by a very suspicious trade in the Japanese yen market made about a week ago, which moved the Japanese yen from 128 (exchange rate .78) to 131 (exchange rate .76) in less than two (2) hours. The decision by the CME Group to outlaw cross-collateralized compounded derivative trading comes on the heels of the corrupt financial regulators CFTC, the NFA (National Futures Association), and the SEC (Securities Exchange Commission) allowing J.P. Morgan and the crooked London LIFFE Exchange to LOOT $1.8 BILLION of customer segregated accounts that represented the MF Global bankruptcy fiasco.

At this hour one can conclude that the CME Group has issued a margin call to the Federal Reserve Wire Transfer Funds Service.
I personally talked to a member of the CME Group Board of Directors, and a former Chicago Board of Trade member, who said to me, and I quote:

"It is time that we stick it to these electronic discount broker geeks and these corrupt banking whores that have ruined the reputation and integrity of commodity and financial trading."

P.S. Math Lesson: It is important to remember that this massive derivative trading is all electronic and computerized.

This derivative trading is actually based on a mathematical formula called algorithyms. Simple definition: The sum of any three single digit number is two. Example: 9 plus 9 plus 9 equals 27.

However, these are not just algorithyms, these are quantum algorighyms tied to electronic quantum trading computers.

When the time-weighted value of the derivative holdings draw down based on a lack of liquidity or a computerized margin call the quantum computers can no longer calculate the prime number 10 and convert the quantum algorithyms from base to base.

What happens then, folks, is the weighted average of the time-weighted algorithyms collapse and what we experience is called a "black swan event"; reference the recent flash crash.

 P.S. Stay tuned for future intelligence briefings, which will include an update on the HMO kickbacks that Republican presidential candidate Mitt Romney, along with the Bush-Clinton Crime Families, illegally extorted from the medicare program.

 We will also deal with a recent warning given to Israeli Prime Minister Benjamin Netanyahu aka BibiFRAUD by former Iraq war commander General Petraeus.

In the last 48 hours neo-Nazi Netanyahu tried to incite terrorist activity on U.S. soil for the purpose of his domestic political agenda in Israel, which is to attack Iran.

Netanyahu sent cables and emails to the Israeli Embassy and its Consulates across the United States stating that Iran may attack American Jews in American cities.

This, of course, was all bullshit!

What has enraged Petraeus and the U.S. military is that Netanyahu bypassed the U.S. State Department with these communications and then leaked the cables and emails to ABC News and its Mossad stooge Brian Ross.

I am told that Petraeus told Netanyahu to cease and desist or else!
 We will also reveal in our future intelligence briefings the details of the recent physical threats made against Republican presidential candidate Ron Paul and his family.

The U.S. Justice Department is looking into these threatening calls deriving from cell phone numbers linked to the Washington Post and Israeli Mossad.

It is quite revealing that in a recent interview presidential candidate Ron Paul had with CNN's Wolf Blitzer about the prospect of bombing Iran, candidate Paul stated that there was more pro and con discussion about the prospect of bombing Iran in the Israeli media than the U.S. media.

What presidential candidate Paul confirms is that the corporate fascist, extortion friendly U.S. media is totally controlled by the right wing government of neo-Nazi Netanyahu.

As reported last week by the world press agency the United States ranks 47th in terms of what is reliably looked at as a free press in comparison to the rest of the nations of the world.

Again, let the revolution commence.

No more Patriot Acts. No more National Defense Authorization Acts (NDAA). No more attacks against religious freedom and no more illegal healthcare mandates.

Accordingly, shut down CNN. Shut down FOX News. Shut down MSNBC. Shut down ABC Mickey Mouse.

The only worthwhile network left with real journalists like Bill Plante, Scott Pelley and Bob Schieffer is CBS News.

When the American People look for the truth they look to CBS News.


http://www.myspace.com/tom_heneghan_intel/blog/545261853