Warren Buffet warned pre crash in 2008 that new off shore financial contracts, we call ETF or derivatives – are unregulated – not reported – and so leveraged they could cause a system crash. THEY DID.

The problem is we never fixed the PROBLEM. And the problem is now 1000 times worse and more global than 2008. The next one is SUPER CRASH world depression and world war based on repeating financial history that never ever varies. Read your own tea leaves.

Today Blackrock at 746% leverage in derrifivitives and PIMCO the super fund at 456% leverage in some of their bond silo’s are distorting global bond  markets. As the BOND market is strangled by liquidity – more sellers than buyers – the DERIVATIVE STRUCTURED ASSET MARKET provides phony liquidity that offsets instant fund tribulations through enormous leverage. This is a phony side bet folks that given the leverage is a musical chair game that when the music stops the best planners can no longer protect principle and deposits.

Since the crash we have written about:

  1. Shadow banking that fails to report its trillions in trading has exponentially grown
  2. The derivative ETF markets that act in unregulated global trading and fail to provide market transparency have grown 1000 times past the exposure in 2008 – nothing was ever fixed – not even a bit.
  3. DARK POOLs and their sisters and brothers now trading 440 trillion dollars leveraged against a market space of stake holder regulated trading of only 2.4 trillion annually have bankrupt all banks financial institutions and corporations by the tens of thousands soon to each the market place as the DE LEVERING and DEFLATION are entrenched now and beyond controls or repair. WEAPONS OF MASS AND TOTAL DESTRUCTION INTERLINKED AND NON REPORTING TO ANY NATION OR REGULATORY ACCOUNTABILITY.

The unregulated in “The dark” trading is so leveraged the system can’t withstand its collapse. The theory by pro’s is – that the huge silo managers – say BLACKROCK have experience in this area – appreciate the risk load and have “people” managing it. Our reply is – we are in new frontier on speculation in the market. These forms of contracts were criminal activities in fully regulated 1999 and became LEGAL in 2000. No one has experience as this is NEW IN THE MARKET at a level the entire world has never before known. The weapons of mass destruction are like Hydrogen Bombs – entirely new sales of digital risk. The cliff is so large no one should walk upon it but the world is all out on the edge together, Regulators are going – its outside our jurisdiction – DUH I DUNNO – I Don”T KNOW – NOT MY JOB MAN. Meanwhile the world is going to implode because NO ONE WILL TAKE RESPONSIBILITY in a global crises of leadership. The financial lobby is the leading an largest lobby due to this leverage and this is a crime by itself and needs regulation of its own.

In each prior instance where this form of glorified BUCKET SHOP ( see 60 Minute Special on the CRASH )  becomes a side bet market larger than the real markets – and all unregulated in the DARK ( non reporting ) the world financial system is bankrupt from irresponsible betting and leverage. Today the counter party context of the betting has left all CONTROL or REGULATION of financial markets out of the equation. WE have never had global digital non reporting BUCKET SHOPS but hey folks since 1999  we have the market of criminal activity all legal and destroying the world. Nice going law markers. What a mess.

Maryjo at the SEC also sensing the IMF Alarms ( this can sink the entire system ) as published today – has adverted to reduce the FUND exposure to % of derivatives  based in her jurisdiction – to leveraged derivative ratios. That will not work. The trades are in the cloud and the laws are local. We need a G 100 cooperative new regulatory frame work. A Global RE THINK of regulatory frame work and we need it NOW.

First – we need speculation to be a crime. Without that it is casino capitalism no real markets exist for nations or the world.

Second we need public investing to be transparent and fully reportable.

We require a global financial system, at these trade levels, that are fully digital, fully audible, fully reportable in real time, fully transparent, within a system that HAS NO SECRETS. Non reporting secret speculations lead to elites leveraging super capital against elites and the massive system is hostage to risk taking that spirals into unknown and eventually unmanageable collapse. WE are THERE THERE NOW.

We have advanced from 1999 of 800 billion in side bet speculations – via unreported leverage to 440 Trillion dollars globally, advanced by super funds in private equity, sovereign nation funds, global hedge funds, shadow banking, dark pools and ETF derivative trading at a leverage level no one has any governance over. The IMF suggested today they fear the leverage and black out lack of transparency can bring the entire system down.

We have agreed since 2008.

The problem today is exponentially worse than in 2008.

No nation has a handle on this.

When you read a report from Blockrock or Pimco funds the information on the leverage and derivative exposure is NOT PRESENT. It takes pouring over more than footnotes to even locate a fraction of this hard exposure and leverage ratio patterns. Worse the reporting is aggregate so specific silo risk is not identified. This form of hedging is a leveraged market side bet that adds no value to economic growth and nations. These side bets brought on all depression collapses before the massive trade and digital cloud world existed when trades where physical bets. Today the electronic digital bets have reached a leverage ratio where the ONCE CRIMINAL ACTIVITY is again going to sink the world . For what reason?

For misguided financial policy that stepped away from COOPERATION, versus COMPETITION and engineered a worse case destruction of the world financial foundational system. The system foundation destruction is now so complete that without emergency action the system standing upon this foundation will shatter.

The experts point out that in the short history of this new wild west economic frontier there is no easy pathology from past data to suggest an utter interconnect collapse. Why Dorothy click your economic heals. Watch the DEFLATION bring about a shuddering de-leverge in which in the short time frame the SUPER FUNDS will lose trillions all in such surprise. Their leverage dumps will destroy liquidity across all markets – as the unthinkable materializes after all the Canaries from Warren Buffet to CEO SPACE screaming at the top of our lungs over decades of the opaque side bet casino capitalism run up in leverage, out of any regulatory controls, moves the market into fatal space. How will Black Rock and Pimco manage the liquidity crises of deflation? Panic on their funds? One contagion event and the panic is ON. Hence the IMF joining the canary cry.

No one offers a solution. We have and continue to offer the ONLY solution:

  1. Account a G 100 Economic Constitutional Congress to reset the regulatory frame work for global world trade.
  2. Criminalize speculation and make all markets fully transparent.
  3. Merge Feds into national treasury – they are failed 100 year old policy mistakes. Too costly and fatally flawed to continue. They brought us all this pain an profit from it.

No one offers any solution. Ration Derivatives for American silo reporting 17% of the world market against 73% unregulated and fatally leveraging within the casino? RE-REGULATE GLOBAL FINANCIAL MARKETS – we either do it before the collapse or after world war. One way or the other we always do it – once we experience the irreversible pain of the speculation law makers in error re-introduced into the system for the first time since 1929 in 1999.

The unborn generation are robbed of their future by a failure to bettcr plan. The crises of leadership is the cause as the greed machine runs rabid throughout the casino capitalism we have in place today. Place your bets ladies and gentlemen before they close the tables down.

The barkers continue to call for your bet at the carnaval while the regulators of last resort – the IMF finally call for some one to see the LIGHT.

Hats off to them today.

Berny Dohrmann – Spitting in the wind for ya all.