Walter Burien comments to Bloomberg News (Derivatives)
| To: Abigail Moses writer for: Bloomberg News May 20th 2009 Ms. Abigail Moses: Your derivatives article at http://www.bloomberg.com/apps/news?pid=20601102&sid=aH8SyaUL.9H0&refer=uk I read with interest having traded derivatives for 32 years and having been a CTA (Commodity Trading Advisor) for fourteen years - 1978 through 1992 Very Good article per identifying the "what is" at this time but with the total omission of the "why is" at this time. Up front let me state one fact: For every one dollar lost in one account a credit of one dollar is made to another account. Start with the Greenspan quote from the wall street journal in 2000: "He was concerned about the 80 trillion dollar a year international derivatives market." What he forgot to mention was that government accounts were generating about 60%+ of the paper written in that market place. Additionally they were doing a large percentage of that activity through off-shored government managed accounts scattered around the globe. For all intents and purposes they were acting as one body networked by several private associations with nice sounding government acronyms. Then as time goes by up comes 911, the run up in the stock market to 15,000, crude oil prices go to 154, the dollar index worked down to 70, the US 30 Bonds were at 110 gearing up for a run to contract highs of 142, trillions of dollars of wealth pulled out of the public's pockets. The worldwide derivative market is expanded to 600 trillion dollars. Between 2000 and 2008 truckloads of cash were pulled out of the derivative markets through institutional government fund market manipulations. Individuals from the private sector who dabbled in derivatives, if they managed to stay even, or showed a profit, then they were very lucky and the extreme exception. The tip-off to me of the impending crash was when AP had a release about ten months ago that CALPERS International (the California Government off-shore transfer agent for pension fund management funds) would be hiring 450 new derivative traders for their international desk. Well, that is more than Merrill Lynch had and this was just CALPER's plans for an add-on. It was obvious they were gearing up for a very big and dynamic move from the tops. It is my assertion that the off-shored government funds in conjunction with some domestic operations then heavily shorted the derivatives market worldwide. Done within the international stock indexes, crude oil, and precious metals. At the same time they went long the dollar and US30 Bonds. Then it was arranged on the domestic side to start dumping the government physical equity holdings starting and then perpetuating the collapse. As the collapse ensued, more was dumped, then again, and again. Here book values on the domestic government accounts took a hit, the private sector public accounts were decimated. In turn the off-shored accounts and a few domestic accounts had the wealth transferred to them in settlement through their pre-positioned derivative holdings. Trillions of dollars sucked out of the domestic government operations and private sector accounts, with trillions of dollars now transferred to the off-shored operations. This all took place primarily over a three-month period at the end of 2008. The stock market goes from 15,000 to 6000, the crude oil price goes from 154 to 28, the dollar index goes from 71 to 89, and US 30 Bonds go from 110 to 142. Per the dollar index, when about four to five trillion dollars in value is cashed in (dumped) from international holdings, after being sold they were converted back into US Dollars from foreign currencies with dollars bought and thus the spike from 71 to 89 on the dollar index. Logistically, as this was taking place, the press and government promotes "the sky is falling" and the "Oh how terrible" syndrome is then saturated on the populace. This was important to do being that the populace would have gotten a tad bit pissed off if they had a clue as to the how and who were taking their wealth, and taking it so quickly. Selective examples are then shown per local government account losses; EXAMPLE: "Florida state retirement fund looses 30% in value last year!" Oh how terrible! What they forgot to mention was that on a ten year average they were 100% over-funded even after the loss from the previous year. URGENTLY needed is an audit per the last three years specifically targeting off-shored government accounts and domestically managed government accounts to compare the NET results from the 2008 end orchestrated market collapse. If done, I am confident you will find government's NET and final offset results from the big picture are squarely in the black. Getting access to the off-shored market accounts for transparency to accomplish public visibility may be a very difficult thing to do. An equal task would be similar to getting the shipping records and financial transaction records of the Colombian cocaine cartel. But as I and others always say; "When there is a will, there is a way!" Again I will say; keep in mind that on derivatives for every $1 lost in one account, a dollar is credited to another account. Here we are talking trillions of dollars transferred and not billions. The world exchanges "settle" every transaction, and all transactions were settled! Then for the definition of arrogance, the government players then use a trillion here and a trillion there of taxpayer revenue to shore-up the playing field that they dis-stabilized exercising their own greed as they sucked out at least fifteen to twenty trillion dollars in cash through their own domestic and international market manipulations. The public continues to be masterfully entertained and the boys continue to laugh their (you know what) all the way to the bank each and every day. A little tip-off for you in your quest when looking at key players, take a look at the US Auditor General's audit presented of the bank derivative positions from March of 2008. You will note on page one that three banks controlled 94% of the derivative activity. Then go 2/3rds down in the report until you get to the "Table" section. Table 1 shows JPM CHASE as the number one holder of derivatives with 90 trillion dollars worth (greater than all derivatives traded in 2000). The report as noted is in millions so add six zeros to the numbers shown. I note this is not primarily JPM CHASE's investment capital, it is the investment capital for their clients that they act as clearing agent for. Who are these clients? The Lion's share is local and federal investment fund capital. I will also note that you will see as you look through the table section a few of the banks that were not playing the derivatives game to any degree were the ones that were hit and then bought out for 10c on the dollar by those at the top of the food chain. As the saying goes: "What comes around goes around" when it comes to cooperation with government financial profits, agendas, and NET end results. Have you listened to your latest news headlines: "Will the banks survive? Wall Street jitters!". The headlines should read: "What competitive outside player banks are the sharks at the top of the heap going to mercilessly eat today?" Per JPM CHASE, as one of the key players acting as a fiduciary clearing operation that staged the manipulation of the derivative market starting last March (2008) that sucked a few trillion out of the world economy, look and see the scope of their involvement: The NET results of JPM CHASE for final settlement on that ninety-trillion dollars worth of world derivative transactions from March 2008 to February 2009, I would be very interested to see and find out the net results therefrom. Then the next step would be to see the NET settlement on those world derivative transaction for the many off-shored government managed funds that are in the trillions of dollars when totaled. That would be the final step in getting a good look at the NET results! Again, per derivatives; for every $1 lost in one account, a dollar is credited to another account. But then we all are conditioned to be masterfully entertained to keep our blinders on and our focus misdirected due to the money involved as it is transferred to others, so I don't expect more than a few people to have the wisdom, intelligence, fortitude, wherewithal, and driving desire to apply the necessary effort to flip over this well entrenched rock of financial non-transparency to see what the true view underneath of it is.. TREASON: "Treason doth never prosper; what's the reason? For if it prosper, none dare call it treason." Sir John Harrington, 1561-1612 The decline in derivative activity is due to two reasons: 1. They burnt all of the small players and outside the loop larger players so, burn me once same on you, burn me twice shame on me. 2. A thief after robbing a bank does not hang around the bank after the robbery. He is busy covering up his trail.
Truly yours, Walter J. Burien, Jr.P. O. Box 2112 Saint Johns, AZ 85936
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