99.7%

If ever there was a "must read" financial piece, it is this one: http://www.zerohedge.com/article/fitch-financial-companies-hold-997-all-derivative-contracts.

The article begins as follows: "Fitch has released a comprehensive study on derivatives held by various corporations and has come out with some disturbing results: as Zero Hedge's recent disclosure of data from the Office of the Comptroller of the Currency confirmed, the bulk of the derivative risk is concentrated not merely in the "financial company" category (99.7%) but in a subset of just five companies, which account for an "overwhelming majority" of derivative assets and liabilities.

The companies in question (Total Notional Derivatives: Assets & Liabilities, $ in Trillions)

• JP Morgan:$81.7;
• Bank of America:$80.0;
• Citigroup:$31.5;
• Morgan Stanley:$39.3, and of course
• Goldman Sachs: $47.8 (this is an OCC estimate: Goldman has not disclosed notional amounts in their derivative book, only # of contracts);

If you want a preview of what the Basel III definition of "Too Big To Fail" will look like, the above five companies is a great place to start."

"Too big to fail," as in "more important than you or I or our nations." Lords and Masters of the Earth.

It's time for all of us who are NOT too big to fail to turn up the volume on what must become our anthem: the now-gender-neutral disco classic "Enough Is Enough," (aka "No More Tears") belted out by Donna Summer and Barbara Streisand.

The article, the reading of which I cannot recommend too highly, adds the following very useful information: "For those unfamiliar with the concept of derivatives, here is a good blurb provided in the Fitch report:

Companies use derivatives to manage risks related to interest rates, foreign currency exchange rates, equities, and commodity prices, as well as more obscure risks such as weather and longevity. According to the Bank of International Settlements, the notional amount of the global over-the-counter derivatives market was nearly $600 trillion at the end of December 2008. Furthermore, gross market value (the sum of gross derivative assets and gross derivative liabilities) stood at $33.9 trillion.

While improved disclosures and transparency are a good start to helping gauge the risks posed by these instruments, it is important for analysts and investors to take a fresh look at risk management practices, including the use of derivatives within that context.

The need for better disclosure on derivatives has been obvious since the implementation of Statement of Financial Accounting Standards (SFAS) 133, “Accounting for Derivative Instruments and Hedging Activities” (now Financial Accounting Standards Board [FASB] Accounting Standards Codification [ASC] 815). However, comprehensive derivatives disclosure did not become a U.S. GAAP requirement for most companies until March 2009 with the implementation of SFAS 161 (now ASC 815-10-50), “Disclosures about Derivative Instruments and Hedging Activities.”

For a more quantifiable overview of derivatives, we recommend the most recent quarterly report from the BIS, especially the data starting on page 28.

The key findings presented by the Fitch report are as follows:

• Not surprisingly, an overwhelming majority (approximately 80%) of the derivative assets and liabilities carried on the balance sheets of the companies reviewed were primarily concentrated in five financial services firms: JPMorgan Chase & Co. (JPMorgan); Bank of America Corp. (Bank of America); Goldman Sachs Group Inc. (Goldman Sachs); Citigroup, Inc. (Citigroup); and Morgan Stanley (Morgan Stanley).
• Fifty-eight percent of the companies reviewed disclosed the presence of credit risk related contingent features in their derivative positions. These contingent features generally require a company to post additional collateral or settle any outstanding derivative liability in the event of a downgrade of the company’s credit rating.
• The use of credit derivatives was limited to financial institutions, with 17 of these reporting such exposure.
• Proprietary derivatives trading by utilities and energy companies appear to be very limited, but most of the companies reviewed in both industries report the use of derivatives for hedging commodity risks.
• Generally, non-financial companies appear to use derivatives only for hedging specific risks.
  Derivative valuation is often model-based, making changes in significant valuation assumptions particularly important. Analysis would be enhanced if issuers provided additional disclosure on the sensitivity of their derivative valuations to major assumptions."

There is much more, but for the non-financially-minded among you, or those who are uncomfortable with technical-talk, the above summary tells you all you need to know.

Bankers own the world; they own governments; they are a cabal, and unless an end is put to their privileges, societal suzerainty and social engineering that reward untrammeled greed, their stranglehold will only become more suffocating. Matt Taibi's "giant squid" metaphor must surely have occurred to many of us; it came to me as a memory of a science-fiction novel title: The Kraken Wakes, published in 1953.

Ninety nine point seven per cent. How much of that is in your portfolio? How is it that a government tasked with protecting the well-being of its citizenry permits these financial leviathans to suck every last drop of the lifeblood out of the poor schleps (US, in case you hadn't noticed) in the name of a "free market?" How is it that nearly all of the people can be fooled nearly all of the time? How long can this go on before some sort of breaking point is reached?

And the most important question of all: Are the above questions all rhetorical questions?

It is probable safe to say that approximately ninety nine point seven per cent of the population takes no interest in any of these matters and that is the main reason the financial cabal can lord it over them and those of us trapped in the grip of those tentacles. Those of us who do take an interest find ourselves largely powerless to do anything about what we learn, but we are not necessarily powerless to take steps for ourselves that will put us largely out of the reach of those ever-further-extending tentacles, and it is that Paradigm Change that this site advocates and hopes to assist in making such change possible for those who have just recently begun to recognize the need for it.

Unless you truly believe in the dangers--political,social,economic--stalking you and your fellow citizens, there will be little point in postulating a Paradigm Change; posturing it will be the only result. Step One--tangible step one is the planning and execution of a move from the urban/suburban setting to a rural area in which you can either own arable land adequate for providing a high degree of self-sufficiency, or finding someone who owns such land and making an agreement with that person to carry out some sort of cooperative and mutually beneficial arrangement that will improve the position of both parties.

How is that to be done? Future posts will explore potential solutions.