A Secretive Banking Elite Rules Trading in Derivatives

A Secretive Banking Elite Rules Trading in Derivatives

www.nytimes.com

On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan.

The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential.

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Related News Links:
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Related AboveTopSecret.com Discussion Threads:
The $531 Trillion Dollar Derivatives Time Bomb

This article appeared in the NY Times yesterday. It explains how the biggest banks set the prices and control access to the derivatives market. A little late on their part, but better than nothing.

Derivatives are extremely important, though little known, because like most banking secrets it's hidden in boring, technical language that will make your eyes glaze over.

But the amount of derivatives out there dwarfs the stock market, the money supply, the federal deficit and even the US national debt. CDOs, mortgage backed securities - all those things are derivatives. It is a $600 trillion market. All those trillions of dollars in "banking bailouts" went to cover bad bets in the derivatives market.

And as this article explains, this vast market is completely controlled by this monopoly, this cartel. Finally the Justice Dept. is looking at it, but since the bankers own the politicians, the regulators, in the US and the UK, nothing will be done about this. These are the things that disgusting bald-faced liar Ben Bernanke refuses to discuss or disclose.

This article is an interesting look behind the scenes at one of the ways that the money mafia rules the world: criminal collusion and price-fixing, and control of politicians and regulators.

www.nytimes.com
(visit the link for the full news article)

Wow, thanks for posting mate!

And the dream is collapsing.

WAKE UP!

Duh? Smoking or non-smoking? Did you just wake up? Alex Jones has been saying this for ten years. And I've been listening for eight. You can tell the disinfo people on ATS(or anywhere) because they ALWAYS trash him. Welcome to the party, pal.

It might also be worth mentioning that , over the last 15 years, there has been a big drive by banks to recruit individuals with PHDs in Physics for their financial instruments departments. There has been a lot of talk about it on the internet; particularly the relationship between money and physics.

I am not entirely convinced that there is a central group controlling this huge market of derivatives. However I am inclined to think that many companies offering real-time option prices (options being one type of derivative) have some questionable access to funding.

Originally posted by thewanger
Duh? Smoking or non-smoking? Did you just wake up? Alex Jones has been saying this for ten years. And I've been listening for eight. You can tell the disinfo people on ATS(or anywhere) because they ALWAYS trash him. Welcome to the party, pal.

There is no call to be rude. This is a news article, I did not write it. And as I said in my comment, it's rare to see it covered in the mainstream media, or the names of the players.

Expect NY times staff to be charged with broken condom soon. Then they can shove them into jail to wait for some trumped up charge

Originally posted by crowdedskies
...I am not entirely convinced that there is a central group controlling this huge market of derivatives. However I am inclined to think that many companies offering real-time option prices (options being one type of derivative) have some questionable access to funding.

This isn't really about stock (put or call) options, which while yes they are derivatives, they are traded in a (relatively) free market. This is more about illiquid assets which are complicated and extremely expensive - credit default swaps and the like. The article is saying how this secretive group meets and could be fixing prices on these things.

As for central control groups, you might want to read about the Bank of International Settlements, which is the central bank for central banks like the Federal Reserve, the European Central Bank, and the Bank of England.

Only so few comments?
Come on man, this is fairly huge news to hit mainstream

So there is more to it than just the FED
Of course we all knew that but to have this on the NY Times is very much an important milestone

look at this:


Does the above prove that there are higher powers at hand?
Obama left on purpose..... obviously!!!!

How can the President of the United States leave a press conference because his wife is calling him

Thank you for posting this.

Many seems to shrug off the nature of high-finance; in particular the 'gambling' and 'fixed' nature of the game.

By the way, and quantum cryptography and mechanics will soon shield the financial shenanigans..... that's what the physicists are for.... they are beginning to realize that the general public is waking up to the dogmatic nature of 'economic' theory and the faith-based game theory they use to give them the ability to siphon off wealth at their whim.

By the way, the announcement was made yesterday (I believe) that the S&P (Standard and Poor) were removing the NY Times media conglomerate from their market index and replacing it with Netflix. At the time I couldn't fathom what possible reason they have for doing this... and that perhaps the NY Times had somehow 'offended' the financial cartels..... then this article.... That may be related I guess... (as to why the S&P chooses to measure the market via the financial welfare of an internet streaming entertainment service and high-level broadband consumer, as opposed to a media conglomerate.)

What a surprise, the lapdogs of the scumbag elite doing what the scumbag elite do, control all sides of the game going in so that they always win. It's like playing against the house in Vegas, in the long run, nobody but these bankers win.

Thanks for the thread though as there is a reason they hide from the light like rats, and the more the normal people of the world get to see, the better shot we have at taking OUR freedom and OUR world back from them!

S&F

somewhere behind all of this, is the REAL issue, and i do believe that is, the capitalists have had to go to great measures to keep from being taken over by communism. so, rather than have it happen all at once, it has been a slow trek to communism with capitalists fighting it tooth and nail, all the way, even to the point of being offensively greedy. now i think it has just become the norm and a given, that this wall of resistance must always be maintained, regardless of the costs, and any such efforts on the part of capitalists, will always always be better than the alternative. i tend to agree, as communism always resolves into tyranny.

for example: you can't play wow or halo or lord of the rings, etc, in venezula because chavez has outlawed "violent video games." and that's not just for kids, it's for adults as well. you also can't have a facebook or myspace page. i don't need a nanny, thanks anyway

Originally posted by ModernAcademia
How can the President of the United States leave a press conference because his wife is calling him

That is really weird seeing Bill Clinton being the president again. What a flashback! Maybe the secret of 2012 is that it will loop back to 1992
Thanks for sharing.

Originally posted by Maxmars
Many seems to shrug off the nature of high-finance; in particular the 'gambling' and 'fixed' nature of the game.

By the way, and quantum cryptography and mechanics will soon shield the financial shenanigans..... that's what the physicists are for.

Thanks. Yes the money angle is the most important, because with unlimited amounts of money you can buy almost anything. We're told it's a "free market" and a "level playing field" when it's anything but. I didn't know that about the physicists, will have to keep an eye on that.

I'd wager S&P's actions were a coincidence but it could be connected. Although you raise a good point - if the NY Times and Washington Post etc. are publicly traded companies, their management will have a huge incentive not to investigate their own investment bankers, etc. or they won't get more loans, their stock will get downgraded, raided, naked shorted...

Pretty insidious system, all around. Media should be run as a non-profit, citizen enterprise to remove this conflict of interest.

Originally posted by Nicorette

Finally the Justice Dept. is looking at it,

Ya...like Eric Holder is going to do anything about this LMAO.

Good article!

I like the graph on the second page that illustrates the total global face value of derivatives from 1998-2010.

1998- total value of derivatives is just under $100 trillion
2002- increases to just over $100 trillion
2004- increases to $250 trillion
2006- increases to $350 trillion
2007- increases to $700 TRILLION DOLLARS! (derivatives peak, and time of the financial collapse)
2010- decreases to $600 trillion

In under 10 years the derivative market grew by 600 trillion dollars!
W T F !

reply to post by Nicorette


As an astute commenter in The NYT already pointed out: Assange publishes government-stuf..mwah..no biggie..some muttering, but not much else. The moment he threatens to publish documents from the BANKING world...pooof..in the slammer.

Things that make you go: Hmm

Same goes for the Clinton video..odd... Maybe it is a silent aknowledement from Obama to Clinton that Clinton is somewhat better in fixing the economy, since he ended his presidency with a (small) surplus(despite his ill-advised repeal of the 1933 Glass-Steagall act)???

Why doesn't Obie just boot Bernanke???? Bernanke is the fox in the hen-house here....

Here is how these bandits, I mean Bankers, get away with billions of dollars of profits:

How the Banks make a killing off Derivatives:

And the profits on most derivatives are masked. In most cases, buyers are told only what they have to pay for the derivative contract, say $25 million. That amount is more than the seller gets, but how much more — $5,000, $25,000 or $50,000 more — is unknown. That’s because the seller also is told only the amount he will receive. The difference between the two is the bank’s fee and profit. So, the bigger the difference, the better for the bank — and the worse for the customers.

www.nytimes.com...

reply to post by crowdedskies

It might also be worth mentioning that , over the last 15 years, there has been a big drive by banks to recruit individuals with PHDs in Physics for their financial instruments departments. There has been a lot of talk about it on the internet; particularly the relationship between money and physics.

I too have seen this, in actual "help wanted" ads. Which intrigued me because I'd have guessed they'd want "business" people.

This whole issue intrigues me as I have alot of math. MS, Physics.

I have always done "technical" work and I can't quite understand what these "derivatives" are. To me, "derivatives" mean differential calculus. Which is something you'd use to, as example, calculate the gearing differentials on your car.

Can be done with multiple variables and complex situations too - like weather modeling. But this is fairly predictable stuff.

I am just not seeing how you can lay this type of math on complex situations with wildly unpredictable variables.
As example - an actuary could try to predict, for an insurance company, how many claims and damage will come with various seasons - but if a hurricane comes out of nowhere - that upsets the model. So then you'd try to control for that. But then - what if there is some unforeseen thing you cannot imagine? Like a Volcano all of a sudden springing up where none ever was?

So how can they lay this stuff on "the market"? There's too many unpredictable variables.

I'm really not seeing this. Take a "lottery" as example. Say the prize is 10 million. But there are 60 million possible combinations of numbers. You can "cover" all possible outcomes - but you'll spend 60 to make 10.

But then I suppose they're betting on possible losing combos also.

I still think that trying to foresee ALL positive and negative outcomes - and betting them all - is eventually going to result in a loss.

I am not stupid but I'm just not "getting" this. I don't plan on getting into this game - I would like to understand it better though.

I should probably stick to mechanical modeling

Another thing I noticed - while I was still in school. You used to see calculus classes geared to the sciences. Then, you began seeing more of classes like "calculus for business and social sciences".

Yeah. I'm not seeing calculus used to predict people's behavior/social issues. There's too many wild cards that cannot be predicted.

This is crazy stuff and someone with a better (or less lazy ) mind than mine should examine it all carefully and speak out about it. Plenty of people like me, and experienced gamblers, would probably get the gist of it anyway.

Something does seem very "off" on this though. I'm not seeing this kind of math - if it *is* what I think it is and they're not just using the word "derivative" as a descriptor or something - I'm really not seeing this used in the stock market.

Hate to serial post but I just scanned over again the one thread Nicorette posted - and it does look (at a glance) to be just another (albeit complex) "pyramid scheme".

I cannot see how you can perpetually gain money. There's got to be losses, and even if you bet the losses, you can't really "cover" everything - attempting to cover ALL possible outcomes will cost more than the eventual gain in any direction.

As someone else mentioned - the "house" always wins in the end. They have to stack the odds (predict all variables + gain for them) in their favor to do so. And even if you can manage to "break even" - you'll still need fresh money to keep it going.

If people could predict and control for all variables - all these insurance companies would not have failed.

The closest thing I can think of as comparison is actuarial science. And they cannot predict and control for ALL variables - which is why they took massive losses over things like Hurricane Katrina. Of course in situations like these - you'd have to try to anticipate such variables - and you have the variable that money (current and new customers) are always coming in. But - if a giant wildcard event hits you - the new money will not 'cover' the loss.

I'm beginning to think this "derivative" market is yet another complex pyramid scheme.