Wednesday, December 14, 2011

An Underground Earthquake??

Did anyone astute enough to notice recognize something unusual between 4pm European time (10 am in New York) and around 1 pm Eastern Standard time today on Tuesday, the 7th day of the VaYishlach effect? I simply present the following evidence. Perhaps I am all wet. Yet, I am no fool. And the strange sequence of events simply represents pieces of a puzzle that smoothly fit into each other. Exhibit One: the following chart of the DAX (German stock exchange). Press 1D on the chart in order to see the intraday rate: Notice that the times are NY times. So the plunge at the end of the day began about 4pm in Germany.

CAC 40: The French stock exchange: Again another plunge after 10am NY time, same effect.

FTSE-MIB: The Italian stock exchange: Another plunge at the same time with the same effect.

Here is a control that shows outside of the Euro the same effect is simply not there.
FTSE 100: The British stock exchange: Notice here that in a country in Europe whose currency is not the Euro, the plunge right after 10am New York time did not occur at all. In Great Britain business continued as usual, and stocks were up over 1% during the day.

About two to three hours later there was a major bond auction in the United States. There was a huge inflow of foreign money, very likely from Europe, into the US ten year bond market. Here is the chart:

Notice the plunge in bond yields on US savings bonds at 1pm in the afternoon, New York time. Now Tyler's analysis is very coy. He does not always come out and say exactly what he is thinking. He often gives enough hints that a thinking person can draw his/her own conclusions. Notice what he says in red here: even as credit continues to flood into the relative safety of US paper (earlier we saw 4 week Bills price at 0.000% - some "risk taking"). One wonders where and why the surge in foreign demand for safety came from. We will likely very soon know.

Now here is the scary/interesting part. Apparently, the drawing of Euros to buy US dollars to pay for these relatively safe American bonds did not just come from the European stock markets which trade in Euros. Apparently, the money has been withdrawn from European banks. Here is a article sent to me by Tamar Yonah of israelnationalradio (Arutz 7):

This is from Shabbat, December 10th:

Back-Door Bank Runs in Europe Have Started

In his interview at King World News, James Turk, founder of GoldMoney and author of The Coming Collapse of the Dollar, noted in his travels around Europe that “there is one common trait, regardless of which country I am in: people are really frightened about the possibility of the collapse of the euro. Money continues to move out of the European banking system, which explains why central banks stepped in with some money printing last week.”

He then went on to explain that there are only three sources of funding available to a bank: its customers lending it capital through checking and savings accounts, the issuing of long-term bonds which it sells to bond investors, and short-term financing provided mostly through money market funds. If any of these sources dries up, it puts the bank almost immediately into a precarious financial position. He said that the day before the world’s central banks stepped in to make short-term money more available was “frightening:”

Even though I’ve been saying this has been coming, last week was truly frightening with the banking system about to fall into the abyss. Had the central banks not stepped in it would have been a Lehman moment.

Sadly, they haven’t solved the problem. They have bought time and whether that time is one or two weeks or maybe a month, we will soon find out.

Two days later, The Economist wrote that a back-door run on European banks had begun in earnest. This is not the typical visible bank run with depositors lined up at the front doors waiting to withdraw their funds. Instead, as The Economist noted, “billions of euros are flooding out of Europe’s banking system through [the back door of] bond and money markets.” It started just after Dexia failed. In the third quarter bonds issued by European banks were just 15 percent of the amount they sold over the same period in the last two years.

An analyst for Citi Group wrote that corporations also have started withdrawing excess balances from banks in Spain, Italy, France, and Belgium. This is forcing banks to begin to act like pawn brokers, putting up real assets as collateral for loans. The president of UniCredit, an Italian bank, for instance, has asked the European Central Bank to broaden its range of “acceptable assets” against which it will lend. And an increasing number of banks are now engaging in “liquidity swaps” where banks borrow an asset that the ECB will accept as collateral in exchange for one that it won’t accept, and paying a hefty premium for the privilege.

Banks are reducing their lending to finance trade and fund aircraft leases as well in order to preserve cash. But that only slows down the bleeding and buys the banks precious little time.

And also this from Sunday, December 11th:

Is The Eurozone Banking System About To Collapse?

December 11, 2011

The Telegraph sounded alarm bells late Friday that the Eurozone banking system [is] on the edge of collapse. Specifically, the problem is related to a lack of acceptable collateral, or "collateral crunch", for overnight and other short-term bank funding [emphasis added]:

Senior analysts and traders warned of impending bank failures as a summit intended to solve the European crisis failed to deliver a solution that eased concerns over bank funding.

The European Central Bank admitted it had held meetings about providing emergency funding to the region's struggling banks, however City figures said a "collateral crunch" was looming.

"If anyone thinks things are getting better then they simply don't understand how severe the problems are. I think a major bank could fail within weeks," said one London-based executive at a major global bank.

Many banks, including some French, Italian and Spanish lenders, have already run out of many of the acceptable forms of collateral such as US Treasuries and other liquid securities used to finance short-term loans and have been forced to resort to lending out their gold reserves to maintain access to dollar funding.

The eurozone banking system is paralyzed by counterparty fears risk, where banks would rather park their excess funds with the ECB instead of lending to each other:

Bank deposits with the ECB now stand at their highest level since June 2010 at €905bn (£772bn) as lenders withdraw deposits held with their peers and put them into the central bank. At the same time, banks in major eurozone countries such as France and Italy have become increasingly reliant on central bank funding. This follows the trend seen in smaller countries like Ireland where lenders have effectively becomes taxpayer-funded "zombie" banks.

I will let you decide if the crisis of the VaYishlach effect is over. In my humble opinion it has just begun. Something happened on Tuesday, December 13th at about 4pm. It seems like a floodgate opened up and money poured out of Europe into the United States to buy US Savings bonds at a piddly 2% interest rate. Europeans are now jumping in massive numbers from the Lusitania to the Titanic, figuring that the Titaninc (the USA) may yet sink, but the Lusitania (The Eurozone) is in the last stages of sinking. It is your money. I leave it up to you to decide. Then someone can tell me. Who was at that Spanish auction today for short term Spanish treasuries? With a near panic of Europeans leaving the Euro for a safer haven, someone else was in Spain buying up all that Spanish debt for the sole purpose of calming the markets. Was in Ben Oni Bernanke, the ECB, the Chinese, or someone else??? Do not take me for a fool and tell me that it was a bunch of hopium inspired Europeans with infinite faith that the Spanish will pay back their debts, just like the Greeks, the Irish, and the Portuguese paid back their debts too.


Blogger DS said...


It just occurred to me:

Why wouldn't the buyer of Spanish bonds be George Soros? Actually, he has shown that he is quite fond of European bonds are rock-bottom prices, and he certainly has the means:


Doesn't necessarily have to be the Fed. It could be one nasty scavenger, unfortunately a so-called Jew, enemy of the Jews and enemy of the world.

12/14/2011 2:13 AM  
Blogger DS said...


I am the one who just left you a message about George Soros. For some reason it didn't register my name. So here it is:


12/14/2011 2:14 AM  
Blogger Leah said...

Something's definately a brewin.....

12/14/2011 2:23 AM  
Anonymous Anonymous said...

Interesting, but a blog post without any Torah?

12/14/2011 11:27 AM  
Blogger Dov Bar-Leib said...

Sorry, about that. Think of this post entry as a continuation of the previous two or three entries that I have written in rapid succession, starting with the VaYishlach Effect. This particular post had to be written to show that the VaYishlach Effect did happen in a dramatic, but hidden way.

12/14/2011 11:53 AM  
Blogger Daniela said...

In my humble and perhaps wrong opinion, the collapse needs to take a long time (months, or more) in order to drain the residual liquidity, such as individuals' savings. I see no reason for EU banks or investors to buy US$ bonds, especially given that just about everyone in EU lacks liquidity. However, the chance of european banking system collapsing is exactly zero at this time, because the guarantee funds etc. have recently been multiplied by tenfolds and more, all over EU. When problems occurs (either spontaneous, or arranged) solvibility is 100% guaranteed: it is the taxpayer who will provide. There is expected to be a point in the future in which the collapse happens, and this has the objective of cashing upon the CDS and other derivatives, for those who invested in it. They will even recoup the bonds and everything, in the long term, because Europe (like Japan or China, and unlike USA) is everywhere solvent, it has way more assets than debts; again, the taxpayer will provide. Check out the Ireland investment fund that, upon evaporation, offered investors a haircut (I think 40% + their portion in the restructured investment fund) while the cattle (once for slaughter, now for milking) have received 0.01 euro per each thousand euro of savings (yes I wrote correctly and yes you read correctly: 15K euro? Turned into 15 eurocents... And so on) an amount not subject to negotiation. Yes, everything legal, they used astute loopholes to avoid informing the victims, which prevented them from their only last-ditch option: attempting a legal action in time.

When the collapse happens (and let me clarify I do not wish it to happen, but it's likely), someone will make huge lots of money, most ordinary people will lose some or all of their savings, but economy will restart, with more realistic currency ratios, that GDP, manufacture, trade, etc. will benefit from. This will be the case for an eurozone collapse, unless it goes global: however, such an option is not necessarily bad, and would force all of us to rethink "what money is worth". Derivatives are currently well over an order of magnitude the sum of GDP of every country on the planet, what does this mean? What about gold and its absurd trading price? What about commodities? The whole economical system needs to become more realistic, and most agree it soon will. But first, commodities are likely to skyrocket, in order to ease their profitable unloading.

The very best investment at this time is helping our fellow jews and their businesses with liquidity, keeping them afloat. It will pay off very shortly, and I am not referring to the world to come.

12/14/2011 12:43 PM  
Blogger Fofo said...

Dov its wed morning. Please read pages 62-65 of homo mysticus by Jose faur. Try to read the whole book. You've let your imagination run wild with the text. You are seeing things that aren't there. You are seeing midrashim that were created by our holy rabbis that were written as sermons to their crowd, in context, Roman invasion. Do u see what I am talking about ?

12/14/2011 6:39 PM  
Anonymous Anonymous said...

Dov has a yearning for the geulah that few have.
I follow his posts eagerly yet I understand that
His timetable might not be the exact one that
God is using. With that in mind I say keep posting and
Keep yearning for the redemption. I and a lot of us
Here are right with you! May Hashem bring us
The moshiach Asap as we need it!

12/15/2011 2:55 AM  
Blogger Leah said...

I believe that it could be that a particular date could be the start of something and not necessarily the major part of it. We know thru our gedolei hador that we are at the ketz. This is for sure. As for an exact date? We don't know...yet I eagerly anticipate and pray for Hashem to send Moshiach every day.

12/15/2011 5:45 AM  
Blogger dmt,texas said...

Dov Bar--What you explained yesterday in the time lapses during the slides was correct. I was trying to find information to confirm what I had seen in the slide in order to post a comment concerning the same things and when I got to your blog site, you already had it posted. I could feel the earth rumbling. MBY was definitely moving. MBY was also moving all day today against the Euro zone markets. And everybody's hand that was attached to it was getting burnt. Example...since this post Fitch downgraded five banks of which none were in the PIIGS zone. French banks--Banque Federatve du Credit Mutuel and Credit Agricole, Danish lender: Danske Bank, Finland's OP Pohjola Group, the Netherland's Rabobank Group. With these banks downgraded, it will make it virtually impossible for the Euro Zone to bond their way out of their crisis now. Not to mention, the near collapse of the Royal Bank of Scotland.
UBS Banking and Financial Services Group recommends three metals to buy for the Euro zone collapse: gold, tinned canned food and small caliber guns.
The US Congress(House and Senate) is considering the removal of $113 Billion out of the International Monetary Fund. OBuzzard wants to help the EU, but the House and Senate are pushing through HR 2313 to stop OBuzzard in his tracks. Bernake tells US Senators there is no fed plans to help European banks.
Germany and the Bundesbank again refused to allow the ECB to issue bonds and/or print money. Bundesbank said it would not provide funds to the IMF for European Zone members collapse or bailout fund unless other countries outside the Euro Zone contributed too.
The German government reinstated a bank failure reserve $400 Billion today for the recapitalization of banks in Germany only. Germany, France, and the Bundesbank are the only ones that have been guiding this train wreck for two years and still refused to listen to any other country in the world. But,yet they want to demand other countries to finance their actions.
Miss Merkel, I guarantee you and your actions will receive your austerity programs.
Now, all these things have just happened since the financial slide you have mentioned in this post, Dov Bar.
Now, Fofo, Daniela, and anonymous...if you don't see MBY's Hand in this facilitating a financial meltdown and blocking any hands to stop it from happening, maybe comic books would be more suited to your understanding. Or is the problem that MBY is moving now (which means He is alive Now) and not some hoped for MBY candidates that are still resting in the ground.
Dov Bar, you are doing a great job. Keep up the good work. Keep letting Hashem's people know what is going on to the best of your ability. --Signed dmt,texas

12/15/2011 7:16 AM  
Blogger DS said...

Germany wants to hold on to its gold - the largest gold reserves after the US, assuming the latter is for real of course, and not counting the Vatican's - most of which gold, of course, has very questionable origins: how much of it was taken from our grandparents' teeth? How much from our great-aunts' jewelry boxes? From our grandfathers' safes?

If they don't have it coming, I wonder who does.

12/15/2011 12:28 PM  
Blogger Daniela said...

Yes DS they have it coming, I don't think to worry about that.

To those who trust in metal, I wish good luck with gold (it is currently at historical max, and will plummet, as soon as the usual suspects finish offloading it) as trading gold in bad times, especially for a jew, works (if it does) only once.... good luck with tin, during bad times hoarders don't die a pleasant death, good luck with firearms, countless well-trained and well-equipped soldiers (not amateurs like you) died, usually an unpleasant death, despite the firearms they were holding. In my relations with nonjews, I prefer to invest in professionalism, connections, honesty and good manners. For liquidity, I reiterate my advice: invest in your brother's business.

The situation is very bad, but is currently in an equilibrium. I do not think it will be broken before Syrian events are completely out of control. And don't be deluded things will be different anywhere else, Israel included. With one significant difference. I am not eager to die at the hands of a muslim mob or shot by a lunatic fascist. Yet, with the current situations in Israel and jews (?) being unafraid to attack physically other jews and their property for whatever sick reasons that I don't even want to hear about, I am grateful I left the country a few years ago.

12/15/2011 3:43 PM  
Anonymous Anonymous said...

You can bet on Greece and make 2000%, but that might not be such a good idea afterall. Bankruptcy for Chanuka ?

12/15/2011 5:30 PM  
Blogger Daniela said...

After a not-so-pleasant interaction with a blogger who presents himself as "Orthodox Jew" with many years of yeshiva and kollel study, and who distorted completely the practice of lending without interest to our brother (apologies for not writing explicitly "without interest", I did not imagine any Jew, even unaffiliated, would equivocate), I wish to point out that the laws on ribbit are very intricate and very serious. People who wish to enforce the loan upon the (admissible) collateral have to consult with a halachic authority, and in any case, it is forbidden to charge or share expenses (including, say, bank overdraft incurred for the borrower's late payments). Please let no one be mislead by my words.

8/30/2012 3:40 PM  

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