Collapse Of Entire Global Banking System Is Underway Signals CEO of Worlds Largest Mutual Fund


PIMCO CEO signals the collapse of entire global banking system underway as a panic driven institutional bank run drains French banks of nearly all their capital.

PIMCO’s CEO tells the Financial Times that the institutional bank run on French Banks has left them with as little as 1% capital against the total assets reported on their balance sheets and institutional panic in the global financial system is underway

If this is true, we are looking at the collapse of the very foundation of the entire European banking system which in turn means the collapse of an essential pillar of the entire global banking banking system

Seriously, the Europeans have been pulling their money out of banks for weeks and so have many of the world’s most important corporations. Don’t be a fool and wait until the last minute to do the same.

I provided complete background context to this story when it became evident that the bank run that started Greece had spread into French banks, then across Europe and even into China.

Global Market Meltdown Worsens: Corporations And China Join In On Global Bank Run

Global Financial Meltdown Worsens - Bank Run Goes Global

The Global Financial Meltdown has dramatically worsened as Corporations and China Jump Aboard The “Institutional” Global Bank Run As Banks Fall Apart As Their Seams.

Earlier today the world saw a global financial meltdown as investors dumped everything from stocks to commodities and literally everything in between.

Global Financial Meltdown: Investors Dump Nearly Everything Amidst Worldwide Market Crash

Global Meltdown - Investors Are Dumping Everything

Major Stock Market Indexes, Commodities, Currencies And Everything In Between Is Being Dumped By Investors Across The Globe In The Midst Of A Global Financial Meltdown.

The financial markets across the globe are facing one of the most massive sell-offs in recent memory.

The Dow Jones Industrial average has sold off over 467 points today. When and when you add that on top of 284 point drop following yesterday’s crash FED’s statement, which announced operation ‘twist’ and warned of significant downside risk and strains in global financial markets, we have a 751 point drop in the DOW since 2:45 PM est yesterday, which is the largest 2 day slump since 2008.

There are an endless parade of economic statistics many of which are the worse since the Great Depression and World War 2 era. We have also seen 111 of the s&P 500 hit fresh 52 week lows, a drop in global currencies – beside the dollar, oil dropping into the high $70 per barrel range and gold plummeting over 5% to trade in the low $1,700 per ounce range.

Business Week points out the massive crash in U.S. stocks immediately below while CNBC points out further below that this in fact a global meltdown – investors are dumping everything.


Read The Rest…

While today’s sell off was monumental and in fact is on course for the 3rd worse week on Wall Street ever, the sell-off was on the heels of the FED’s economic outlook. Today’s Global Financial Meltdown is about to become much worse as a slew of news reports out today reveal the run on the European banks has spread to include corporations and institutions pulling their money out of banks and China finally arriving at the party.

However, it appears as PIMCO’s CEO tells us, that instead of dealing with the crisis, officials chose to deny it by reiterating for days now that the French Banks did not need to be re-capitalized.

Well, it appears the statements from officials in France were outright lies.

The Daily Baily Reports on a new article from the Financial Times:

PIMCO’s El-Erian Drops The F-Bomb: “French Banks Are Down To 1% Capital, Institutional Panic Underway”

El-Erian just screamed ‘shut their ass down‘ from New York to Paris.

French banks have 1% capital. No polemic is needed. This is a solvency and liquidty crisis.

Notice below the bold quote from the CEO of the world’s largest bond fund. Not to overstate the obvious, but 1% capital ratios imply leverage of 100:1.

Calling Helicopter Ben…Sarkozy would like you at the launch pad, immediately.

How soon does Bernanke’s central bank rain dance begin?

FT via Marketwatch

Meanwhile, high-profile warnings over the state of Europe’s banks, particularly in France, came from a variety of sources.

Mohammed El-Erian, chief executive of bond fund giant Pimco, warned in an op-ed in the Financial Times published Thursday that French banks could tip Europe back into recession.

Private institutions around the world have sharply reduced short-term lending to French banks, while a plunge in bank shares since August has left bank equity trading at a 50% discount to tangible book value on average, he wrote.

At the same time, El-Erian noted that the ratio of market capital to total assets for the sector has fallen to 1% to 1.5% — far short of the range of 6% to 8% typically seen for healthier banks.

“These are all signs of an institutional run on French banks,” he wrote. “If it persists, the banks would have no choice but to de-lever their balance sheets in a very drastic and disorderly fashion.”

Read The Rest

To be clear, the run on the banks and the collapse it will cause is already underway and “If it persists” the French Banks will have “no choice but to de-lever their balance sheets in a very drastic and disorderly fashion” which means forget about the plans of propping up or bailing out Greece, Ireland, Portugal, Italy and Spain.

In fact, such an event in happening in “very drastic and disorderly fashion” would trigger a Lehman style collapse wiping out any hope of those nations being able to pay off their debt.

The resulting financial turmoil drag down Germany and the entire Euro-zone resulting in sovereign debt defaults in many of those nations as well.

From there the counter-party risk turns to contagion and drags down banks in Great Britain, China and even the U.S , resulting in the greatest economic crash in the history of man kind.

The question is will officials fess of to reality or continue to pretend the patient is not sick until he reaches the point where his vitality can no longer be preserved.

Source: Collapse Of Entire Global Banking System Is Underway Signals CEO of World’s Largest Mutual Fund ©

12 Responses

  1. I sat down to with a financial advisor of New York life Insurance Company for a 1 hour lecture blowing smoke up my ass. We talked about investments in annuities, mutual funds and inflation. He told me since 1960 there has only been 4.5% inflation a year. If you round it off to 5% and compound it yearly, it comes to 2,000% percent inflation. If you go back to 1913 when the Federal Reserve was created it is 3,000% percent. Why would I want to even tocontemplate ivesting in a government bond fund? If a ship is sinking I would wan’t to reach out for the life preservers of gold and silver. Anyone that invest in debt is a willing participant in a fraud. All ponzi pyramid scams eventually collapse when they can’t get any new investors or suckers. This financial and economic crisis that this country is experiecing now is due to the following 1- When NAFTA and GATT was passed, outsourcing the manufacturing. 2-When they deregulated the banks. Before they deregulated the the banks, they were restricted to depository institutions and loaning out money. Insurance companies were limited to selling insurance. Now these financial institutions are in the securities business. That is when they let the fox in the hen house. If you wan’t some one to blame for this financial and economic crisis, blame the 435 members of congress that are in the hip pockets of special interest that voted to move your jobs off shore and tro deregulate the banks.

  2. Fractunal Reserve Deposit Expansion banking is a gigantic Ponzi Pyramid Scam. The banks can loan out 10 times the money out on time deposits and 8 times on demand deposits. There is no reserves becaise all the money is created from debt. It’s the biggest fraud that has ever been created in the history of the world. Bankers have been practicing swindles for centuries. You can trace it to ancient Babylon. Archeologist found clay tablets where the money changers kept track of the interest that they charged their borrowers. The fraud is just more sophisticated today.

  3. maitry says:

    well said, and you nailed it

  4. Abaddon says:

    The lubricant (money) of the global system is running out, and the world is overheating, bringing to the surface all mans frailties and prejudices, as he seeks to hold on to his way of life. What is coming is beyond words to describe, as nations disintergrate from within and without, leading to wars from within and without and which will spread as global breakdown intensifies. This global monster of a corrupt financial, political and religious system is out of control, and it will be interesting to see what the catalyst will be to send it off into hell. My money is on religion.

    • maitry says:

      that would have to be the quote of the century, well said and you nailed it.

    • pookie boy says:

      I used to think religion was just a distraction to keep us from looking at the core issues of power, land and money.

      The truth is when you dig deep enough this is all about religion. There are only two. Either you are with the prophets or with the dark one. Sounds zany right? it’s true, just accept it and go with it.

      The religion that has kept out the lies best, is Islam. This is why it is under such heavy attack. Going to catholic school and now seeing the truth it is all so clear to me. Jesus is real and coming back and he is our only hope.

      That said we need to prepare and get ready. Buy gold, and strengthen your body and mind.

      This is a great website and it has opened up my eyes. also checkout jinnwe

      all the occupy kids are on it now.

  5. The central banking system with it’s fiat currency based on debt finance or smoking mirrors is inherently fraudulent, unconstirutional and inimical to the public interest. Your money in the bank is based on faith and trust. You are not going to lose your money in the bank, they are just going to pay you in depreciated currency or worthless paper. Don’t buy toilet paper, just use Federal Reserve Notes. The younger generation just does not get it yet. They were born into inflation which now progressing into hyper-inflation. It is so gradual that they don’t even notice it. It is a war of atrition. They are brain washed through the news media and the spin doctors in Washington. Inflation is theft, pure and simple. When are you people going to wake up from your slumber. My people are destroyed because of their lack of knowledge. The people that are protesting on Wall Street are not even organized. And they don’t even realize what the cause of the financial and economic crisis was. When the 2/3 rds majority of the 435 members of congress deregulated the banks during the Clinton administration and slick Willy signed the bill, they let the fox into the hen house. Wake-up America. Organize and direct your attention to the politicians and the shadow government which is ruling behind the scenes. Mainly, international finance. They new that these new jobs created in the service and information economy would force down wages and the living standards of the shrinking middle class, so these corporation went into the credit card business. In order to maintain your same standard of living, you either have to work more hours or buy on credit.

  6. Too bad, too bad in one hour, the Babylonian debt based money system which is comprised of part of the following 3 elements, false religion, the commercial and political system, in one hour her riches have been devastated. As I said before, any system that is based on fraud, eventually collapses. The world is ruled by very different personages from what is imagined from those who are not behind the scenes.

  7. GJS says:

    It truly does make one wonder how long this fiasco can go on, unfortunately taking your money out of the bank might help in the very short term BUT it’s paper money itself that has been abused to a point where it has become worthless so realistically you will have your money from the bank BUT it’s value (buying power) will nosedive. People must invest in things with inbuilt value NOT paper with a promise from corrupt bankers & politicians but I’ve been saying that for years now, the only difference now is that things are worse & it will cost way more for people to convert to rational investments. They can only apply so many bandaids until the crap truly hits the fan at phenomenal speed.
    I wish you well.

  8. maitry says:

    im sure your superannuations gone though.

  9. Archie1954 says:

    All I want to know is that my savings are safe. I have them in the largest bank in Canada, the Royal Bank. Please tell me they’re fine.

  10. Sookie says:

    What do you think will happen to banks in the closer non-eu-zone, for example croatia? got funds there in canadian, australian dollar and norwegian currency and I wonder if there would be a contagion soon?
    what i found out it is that the croatian bank is owned by an italian bank to 60 percent and so I am worried.

    so would the croatian bank fall immediately when the italian market crashes?

Leave a Reply

© 2011 Pakalert Press. All rights reserved.