SIGNS OF IMPENDING DISASTER

If you've been watching the nightly news or even reading the newspaper, many, many things are occurring that no one seems to be reporting. However, both CNN and FOX have done excellent jobs at covering some of this, so a thumbs up to them for at least approaching the subject.

War with Iran seems more and more likely with each passing day. This story has seen zero coverage for the most part even though it would almost certainly lead to a major war if not WW3. The IEAE report due next week will be a true shocker. For the first time in decades, the nuclear watchdog agency is expected to say that Iran's nuclear program has a clandestine nuke program that is much further along than previously thought. Considering that these boneheads have missed every major nuclear development in the past twenty years, this is an astonishing report. For those who don't remember, it was the IEAE who proclaimed that North Korea had no nuclear weapons or even a program until they tested that first nuke. Oops. That occurrence destabilized the region to such an extent that nuclear war has hung over our heads ever since. And we are still technically at war with North Korea as well.

Iran getting nukes would be the worst thing ever, regardless of what some may think. Radical Muslims with nukes would not be Russia, China, Israel or even North Korea. Why? Iran will use them if they think they can get away with it. The most likely scenario is a nuke smuggled into Tel Aviv or NYC or even a dozen in cities across the world. All out nuclear war will then occur and try to tell me that their culture of death would care. They would all see it as going to heaven to be martyrs. You cannot reason with religious fanaticism. Israel will attack Iran before that happens because they know that chances are, they would be the first to be wiped out. And since Hitler tried to commit genocide on them, they have a reasonable tendency to get a little uppity when their lives are at stake. The US is worried that they may attack without warning us first, an unlikely situation unless they think we will command them to stand down. As said earlier, I think an attack early next year is highly possible. If it does, things are going to change and drastically. Expect oil to top twelve dollars a gallon, severe rationing, and another worldwide Depression. It would also serve as a way to eliminate those pesky elections, protests and a great number of extra people that the elites would rather see dead. Stay tuned as this fluid situation develops.

On top of that is word from traders that Monday may see a steep drop in the DOW. With the bankruptcy of MF Global, and the resignation of Jon Corizone, for misuse of funds, one of the largest derivative traders in the world is about to go belly up. With the stock market's "head and shoulder" pattern worrying investors (an uneven up and down pattern signifying an uncertain market), major firms are warning investors that a crash is more likely than ever.

Zero Hedge broke the story yesterday:

"What exactly was the announcement. Unless we are completely reading it incorrectly, it is nothing short of a margin call for tens if not hundreds of billions worth of product. Because as of close of business on November 4, today, the CME just made the maintenance margin, traditionally about 26% lower than the initial margin for specs, equal. For everything. Which means that by close of business Monday, millions of options and futures holders will be forced to deposit billions in additional capital to the CME just so they are not found to be margin deficient, and thus receive a margin call. Naturally, since it is very unlikely that this incremental amount of liquidity can be easily procured in one business day, we anticipate the issuance of hundreds of thousands of margin calls Monday, followed by forced liquidations of margin accounts across America... and the world."

"There is a liquidity crunch in the options & futures markets for commodities worldwide. CME, the exchange for such transactions in the US, had made the initial margin and maintenance margin equal for every commodity with options and futures. This implies that options and futures holders will be forced to deposit addition capital to the CME in the form of maintenance margin, simply to hold their positions. This will put markets under pressure on Monday. The lack of liquidity and additional margin requirement comes in the aftermath of the bankruptcy of MF Global."

Margin calls are one of the reasons cited for the 1929 crash. Since banks and institutional investors are already in a liquidity crisis, this move could have a massive impact on the 1500 trillion dollar global derivatives market. Companies like Bank of America (with 75 trillion dollars in derivatives exposure), and JP Morgan (another 75 trillion dollars of exposure) could be wiped out by this event since they are both investing in, and providing loans (margin) to the derivatives markets.

This would explain the massive Put Option purchases against the S&P 500. It would also explain why Bank of America and JP Morgan have transferred their 150 trillion dollar exposure to the US taxpayer via FDIC. Their greatest exposure would be on their own derivatives holdings. Derivatives exposure is estimated at 600-1500 trillion dollars. The global economy is only 50 trillion.

In other words, with all the other problems the world is having like the failing Euro, may mean nothing if the entire world economy collapses due to the out of control derivative market tanking everyone's bank. Remember that since these losses are now covered by FDIC rules (illegally by the way as they violate section 23a of the Feds own laws), every bank account will be wiped out with it. For someone like me who has no money, big whoop. For anyone else with lots of money, have fun watching your bank account pull a David Copperfield and disappear. Anyone with money to lose may want to act and place put options on major banks for the next thirty days. If the above does happen, you'll make a fortune while everyone else loses theirs.

Speaking of banks, yestesday's Bank Transfer day saw some 650,000 people take their money elsewhere. For all of 2010, the number was 600,000. Ha Ha.