Here’s What AGXIIK Is Worried About Post BREXIT – FULL ON CORZINE
SilverDoctors.com
June 27, 2016
The only sources of funds that can be drawn upon, confiscated, and large enough to backstop the bad bets that will float to the surface after the BREXIT tsunami are Just US; our funds, savings and pension plans…
By AGXIIK:
A thought comes to mind regarding the potential problems post-BRExit.
The large hedge funds that end up on the wrong side of the trade will GATE their clients withdrawals to prevent a hard and fast bleeding of their fund. That’s happened several times this year. Some of these funds trade $2, $5, $10 and even $50 billion in client funds. When some large negative trades take net values down 5-20% in less than a few days, there’s a virtual certainty that some of these funds will find leverage bites them in the butt and go FULL ON CORZINE.
Some of the fund managers are sufficiently well connected to think they can pull off a Corzine and get away with it too boot.
Others will expect and demand some sort of mini-bail in because of their supposed SIFI status, particularly if they hold the assets of top politicians and others who pull the levers of power in various countries. Bernanke and his cronies signed off on a bail in provision a few years back that allowed MMA funds to GATE their client withdrawals, permit Breaking the Buck if their trades go sufficiently bad as their leverage and mediocre returns fail to protect the $1 per share value that MMAs have almost always enjoyed. My concern is something on the order what happened when LTCM or other large funds that suffer a fatal reversal caused in the stock markets to fall hard, like the 1987 ELE that smashed the DOW by nearly 40%.
Greenspan’s Y2K funny money juiced the idiocy of the tech bubble and its consequent wreck as did his trillions funneled into the housing market that ended up creating that bubble. His moniker should be Mr Bubbles because that is the only thing he accomplished in his years as the Fed Head.
The big enchilada was the Lehman crash. It was so bad it caused some funds to go well below $1, precipitated a crisis of such magnitude that the US government was forced to intervene or see a huge loss of public confidence in MMA and bank accounts. There were plenty of multi billion dollar banks that also failed, with a few showing depositors lined up outside the doors to withdraw their funds, fearing a 1932 bank crash that saw their deposits vaporized.
The Rest…HERE
