Rob Kirby: http://www.marketoracle.co.uk/Article351....

.....

Ladies and gentlemen, the ENTIRE GLOBAL BANKING COMMUNITY DOES NOT HAVE SUFFICIENT CREDIT LINES, FOR MS, TO ALLOW MORGAN STANLEY TO GROW THEIR SWAP BOOK BY 8 TRILLION IN 6 MONTHS. Do remember, the Federal Reserve has purview over Bank Holding Companies – so the Fed necessarily knows “who” the other side of these trades really is – and they are implicitly “comfortable” with the counter-party risk.

Ergo, Morgan Stanley necessarily had a NON-BANK counterparty for this 8 Trillion increase in the SWAPS component of their book. The counter-party for Morgan Stanley’s swaps book is, by-and-large, the same counter-party as J.P. Morgan, Citi, B of A and Goldman.

Now, you have to think about “WHO” or “WHAT” would have the motivation to do this business with Morgan Stanley et al? In light of the psychedelic, incomprehensibly large amounts of swaps being consummated between Morgan Stanley and this “unidentified” counterparty – it is most likely that the counterparty is none other than the U.S. Treasury’s Exchange Stabilization Fund [ESF] ...

They're building out synthetic bond portfolios which is desirable when the reference entity is scarce.

Here is a primer I made back in 2008. Synthetic bond portfolios begin at 3:08.

This HAS to be bullish....

"Don't worry, granny..."

Thanks for posting that USK. Wow, I didnt know this little 2006 tidbit authorizing fraud. So all the gnashing and thrashing about financial reforms since 2008 is a sham, they can keep two sets of books, by law. Funny, I must have missed the MSM coverage about it:

"The following underscores what lengths the governing apparatus will go to – to ensure the perpetuation of actual/perceived U.S. Dollar hegemony:

First reported by Dawn Kopecki back in 2006 when she reported in BusinessWeek Online in a piece titled, Intelligence Czar Can Waive SEC Rules,

"President George W. Bush has bestowed on his [then] intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations. Notice of the development came in a brief entry in the Federal Register, dated May 5, 2006, that was opaque to the untrained eye."

What this means folks, if institutions like J.P. Morgan, Citi, B of A, Goldman or Morgan Stanley are deemed to be integral to U.S. National Security - can be "legally" excused from reporting their true financial condition – including KEEPING TWO SETS OF BOOKS. The entry in the Federal Register is described as follows:

The memo Bush signed on May 5, which was published seven days later in the Federal Register, had the unrevealing title "Assignment of Function Relating to Granting of Authority for Issuance of Certain Directives: Memorandum for the Director of National Intelligence." In the document, Bush addressed Negroponte, saying: "I hereby assign to you the function of the President under section 13(b)(3)(A) of the Securities Exchange Act of 1934, as amended."

A trip to the statute books showed that the amended version of the 1934 act states that "with respect to matters concerning the national security of the United States," the President or the head of an Executive Branch agency may exempt companies from certain critical legal obligations. These obligations include keeping accurate "books, records, and accounts" and maintaining "a system of internal accounting controls sufficient" to ensure the propriety of financial transactions and the preparation of financial statements in compliance with "generally accepted accounting principles.""
http://www.marketoracle.co.uk/Article351....

Txin1880: And of course, any transparency would be precluded as it would defeat the whole purpose...

Bull-ish....to the mooooooooooon, Alice

I stopped studying companies, the market, evaluations, fundamentals, technicals a long time ago because most of the data used in those activities is fabricated.

Rob Kirby was on Max's show "on the Edge" yesterday.
A must watch.

thanks for the post

bill

For whatever reason, BusinessWeek doesn't offer the Kopecki article any longer. Here's the text via Infowars:

http://www.infowars.com/articles/ps/inte....