Running Commentary On Derivative Beast Eating Everything In Next 24 Hrs

10/9/8 and 10/10/8

Elaine Meinel Supkis

All hell is breaking loose before Halloween. The next 24 hrs will see many insurers and banks across the planet go belly up as the monstrous Derivatives Beast begins to rip and tear it all apart as the grim Goddesses unleash this great creature upon our unbalanced international finances! Things will happen FAST. So feel free to add lots and lots of links and news stories here today. I will revise this story as it unfolds and will be very happy for any information everyone brings here! Thanks in advance!

HERE IS THE BIG STORY FOR TOMORROW: THE AUCTION OF $400 BILLION IN CREDIT DEFAULT SWAPS!

Lehman Bonds Given Initial Value of 9.75 Percent in CDS Auction

(Bloomberg) -- Credit-default swap dealers set an initial value of 9.75 cents on the dollar for Lehman Brothers Holdings Inc. bonds in what may be the biggest-ever payout in the $55 trillion market.

An auction held between dealers today is determining how much buyers of default protection can claim after New York-based Lehman filed for the largest bankruptcy with $128 billion in bonds outstanding.

Sellers would have to pay out the difference between the amount of debt protected by the derivatives and the bond value, meaning they'd have to pay out 90.25 cents on the dollar if the initial auction results held. A final price is scheduled to be announced at 2 p.m. in New York, according to Creditfixings.com, a Web site run by auction administrators Creditex Group Inc. and Markit Group Ltd.

A 90% DIFFERENTIAL! LOTS OF BANKRUPTCIES IN THE PIPELINE NOW AS ALL THE CD SWAPS ARE SWAMPED! THIS IS WHAT PAULSON NEEDED FOR THE $700 BILLION BAIL OUT FOR 'GOOD BANKS' AS WELL AS BAD BANKS! THEY ARE ALL MADE 'BAD' WITH THIS SWAP GOING DOWN.

Lehman CDS sellers face massive losses in auction

(Reuters) - Banks, hedge funds and other sellers of protection on Lehman Brothers' (LEN.N: Quote, Profile, Research, Stock Buzz) (LEHMQ.PK: Quote, Profile, Research, Stock Buzz) debt are facing losses in the area of 90 percent the insurance sold when the value of the failed bank's credit default swaps are settled in an auction on Friday.

If sellers of protection outweigh buyers in the auction, as some analysts expect, losses may be even higher.

Lehman's bankruptcy filing last month sent its bond values plunging as the majority of the investment banking assets that had supported the debt were purchased by Barclays Bank, leaving debt holders at the abandoned holding company with little to reclaim.

The auction to settle credit default swaps protecting the debt will be one of the largest settlements of contracts in the $55 trillion market, with around $400 billion in contract volumes estimated on Lehman's debt.

I AM BETTING THE MAJOR AND MAYBE ONLY BETTOR AT THIS AUCTION WILL BE PAULSON. USING OUR MONEY.

CME, Citadel working together on credit default swaps

CME Group Inc. and hedge fund Citadel Investment Group LLC plan a venture to compete with Chicago-based Clearing Corp. to guarantee credit default swaps in the $54.6 trillion market, Bloomberg News reported.

The partnership between the world's largest futures exchange and the Chicago-based hedge fund is non-binding, Bloomberg said, and the agreement should begin this month, according to Chicago-based CME.

Morgan Stanley debt protection costs jump

(Reuters) - The cost to insure the debt of Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) jumped on Thursday, as its stock price plunged more than 16 percent.

Morgan Stanley's credit default swaps jumped to a cost of around 25 percent of the the sum insured on an upfront basis, or $2.5 million in a lump sum to insure $10 million for five years, plus annual premiums of 5 percent, said an analyst.

The swap had traded at around 18 percent on Tuesday afternoon. Credit default swaps trade upfront when a company is considered distressed. (Reporting by Karen Brettell; Editing by Theodore d'Afflisio)

Asian credit defaults costs soar tonight.

Yamato Life Files for Bankruptcy, Citing Investments

(Bloomberg) -- Yamato Life Insurance Co., a Japanese insurer, filed for court protection from creditors in the nation's first bankruptcy in the industry in seven years, with debt exceeding assets by 11.5 billion yen ($116 million).

A decline in the value of securities holdings widened losses at the Tokyo-based company, whose debts total 269.5 billion yen, Yamato Life said at a press briefing in Tokyo.

The global credit crisis sparked by the U.S. subprime collapse has wiped out more than $670 billion in market value from the Tokyo Stock Exchange's first section this week as investors flee equities. The collapse of closely held Yamato is the eighth by a Japanese life insurer since World War II, according to Teikoku Databank Ltd.

Japan, tonight, just threatened the US with utter destruction. The nuclear bomb they used was the threat to no longer use the dollar as the global exchange medium for determining relative values of trade goods! Or banking! The FIAT DOLLAR WILL DIE.

Most people thought China would do this. I always bet on Japan for many reasons. Quite a few online experts thought I was nuts. When I said, 'Japan hasn't forgiven us for nuking them,' I was scoffed at. When I warned everyone, Japan would drop us in a heartbeat if we can't buy tons of excess Japanese trade goods, people thought I was crazy. But this is now happening as I foresaw.

China and Japan already are working on a joint system, step by painful step. They hate each other. But Japan will die if Japan doesn't get a good grip on the right side of China. I expect them to swallow their pride and kow tow to the Dragon Throne while holding a dagger behind their backs. They can't get the Koreans to side with them. The Koreans hate the Japanese for WWII, too! So they are boxed in. But they can't keep feeding the US finances.

I also predicted this in the past: they would give up if they had to hold up the US debt diet by themselves. They need Korea and China's cooperation.

Asian Stocks Plunge as Credit Crisis Widens; Nikkei Tumbles

(Bloomberg) -- Asian stocks tumbled, driving Japan's Nikkei 225 Stock Average down as much 11 percent, and U.S. futures fell on concern the deepening credit crisis will push the global economy into recession.

Mizuho Financial Group Inc. fell 9.6 percent after Japanese bank lending growth slowed. Neptune Orient Lines Ltd., Southeast Asia's largest container shipping company, plunged 11 percent after Goldman Sachs Group Inc. slashed its target price. BHP Billiton Ltd. lost 7.2 percent after crude oil declined to the lowest level in a year.

``It's a financial panic,'' said Choi Min Jai, who oversees the equivalent of $2.1 billion at KTB Asset Management Co. in Seoul. ``The recession can only get worse. You can't find the link that will break the vicious cycle.''

All the Japanese big export guys used the same hedges as the US, UK and Europe. So they have all the same problems. They pretended since last August to be above all this. But that was self-delusion. China knew very well, they were exposed to danger which is why they madly built up their FOREX reserves to about $2 trillion. So they have a monumental cushion to absorb the blows of a destroyed banking system.

But if Japan drops the dollar? This could be a gambit to bankrupt China? It will destroy the US. But might save Japan from having to be nice to the Chinese! Lord knows what is going through the hive minds of the LDP leadership of Japan!

Hong Kong stocks open down 7.69%

(Xinhua) -- Hong Kong stocks on Friday tracked overnight tumbles on Wall Street to open at 14,717.52, down 1,225.72 points, or 7.69 percent.

The Dow Jones industrial average shed 678.91 points, or 7.33 percent, after an afternoon sell-off to close below the 9,000 mark for the first time in five years.

Peru's government poised to quit

Peruvian cabinet ministers are poised to tender their resignation to the country's president over an alleged scandal over oil concessions.
Prime Minister Jorge del Castillo said that he and his cabinet were ready to put their fate in the hands of President Alan Garcia Perez.

The move follows a frustrated attempt by the cabinet to explain its decisions before parliament.
Congress is to investigate alleged bribe-taking by politicians.

Mexico unveils emergency spending

Mexican President Felipe Calderon has announced plans for $4.3bn (£2.5bn) in emergency spending on infrastructure to help Mexico amid world financial woes.
In a televised address, Mr Calderon warned that Mexico faced a fall in exports, investment and remittances as a result of the US economic slowdown.

Mexico and Brazil, Latin America's biggest economies, have also acted to prop up their falling currencies.
Their central banks auctioned dollars from their reserves on Wednesday.

US superpower status is shaken

The financial crisis is likely to diminish the status of the United States as the world's only superpower.
On the practical level, the US is already stretched militarily, in Afghanistan and Iraq, and is now stretched financially.
On the philosophical level, it will be harder for it to argue in favour of its free market ideas, if its own markets have collapsed.
*snip*
Not all would agree that an American apocalypse has arrived. After all, the system has been tested before.

In 1987 the Dow Jones share index fell by more than 20% in one day. In 2000, the dot-com bubble burst. Yet both times, the US picked itself up, as it did post Vietnam.

Prof Gray's comments certainly did not impress one of the more hawkish figures who served in the Bush administration, the former UN ambassador John Bolton.

When I put them to him, he replied only: "If Professor Gray believes this, can he assure us that he is selling his US assets short? "If so, where is he placing his money instead? And if he has no US assets, why should we be paying any attention to him?"

Nevertheless, it does seem that the concept of the single superpower left bestriding the world after the collapse of communism (and the supposed end of history) is no longer valid.

No shit, Sherlock. Our empire is finished. We are pretty much bankrupt.

BBC: It is shaping up to be one of the most tumultuous times on record in the global financial markets.

Morgan Stanley Put on Review for Possible Downgrade at Moody's

(Bloomberg) -- Morgan Stanley, the U.S. securities firm whose shares dropped 26 percent yesterday, had its long-term credit ratings put on review for a possible downgrade at Moody's Investors Service.

About $200 billion of long-term debt is affected by the review of Morgan Stanley's A1 credit rating, Moody's said in a statement today. The ratings agency affirmed its Prime-1 grade for Morgan Stanley's short-term debt.

I wonder if ANY of the big banking investment houses will be left occupied by Saturday. Time to bring in the cops to evict them from their huge corporate towers in Manhattan.

Councils trapped in £1bn black hole

Council tax payers are facing increased bills or cuts in services to pay for a £1bn black hole in Britain's town hall finances caused by the sudden collapse of Iceland's banks.

One by one, 127 public bodies owned up yesterday to having multimillion-pound sums frozen with Icelandic financial institutions that have gone bust. Gordon Brown, threatened to retaliate against Iceland's "unacceptable behaviour" by taking legal action to seize its assets in the UK.

So far, public and voluntary bodies are estimated to have frozen deposits of £973m, and rising. The Local Government Association put the total loss for English and Welsh local authorities at £798m. Fifteen police authorities have a further £100m deposited in Iceland. Transport for London, which runs the capital's transport system, cannot access £40m.

Huge bonuses for City high flyers will be hard to rein in

The government may have no concrete plans about how it will rein in the pay of bank bosses - and curbing the cash paid out to those below the most senior levels will be even more challenging.

In all publicly quoted companies, such as Lloyds TSB and Barclays, directors' pay has to be spelled out in an annual report on which shareholders can vote, and in most businesses the best-paid member of staff is the chief executive.

But bank bosses and board directors can be surrounded by staff making far more money. Even relatively junior traders, well down the pecking order but still taking big risks, expect six-figure bonus payouts.

London gnomes will fly the coop to China? HAHAHA.

New AIG loan renews concerns over insurer's health

Concerns about the health of American International Group Inc. were renewed Thursday, a day after the insurance giant said it would receive an additional $37.8 billion loan from the Federal Reserve.

"The bottom line is, they need more liquidity than they thought," said Mark Lane, an analyst for William Blair & Co. The new loan is on top of a two-year, $85 billion loan AIG received last month from the Fed in an effort to stay in business.

AIG shares fell 51 cents, or 16 percent, to $2.68 in early afternoon trading. Shares traded as low as $2.56 earlier in the session.

AIG is apparently facing a liquidity crunch greater than was anticipated a month ago when the U.S. government first bailed them out.

Japan suggests crisis loans tap global FX reserves

(Reuters) - Japan will propose an IMF loan scheme to give countries facing financial crisis access to the trillions of dollars in currency reserves held by Asian and Middle Eastern governments, the Nikkei newspaper reported on Friday.

Tokyo will make the proposal at a meeting of finance ministers and central bank chiefs from the Group of Seven (G7) rich nations in Washington on Friday, business daily said, without citing specific sources.

The IMF-led scheme would be available to smaller emerging countries, not G7 members or other large nations, the Nikkei said.

The Next $350 Billion Hole
By Alex Dumortier, CFA

Tomorrow will be a massive test for the credit default swaps market as dealers and investors get together to determine the settlement value of credit default swaps (CDSs) on failed broker Lehman Brothers. With approximately $400 billion in notional amount of swaps outstanding, if the swaps settle at 12.5 cents on the dollar (which is where Lehman’s reference bonds are trading), swap sellers could face losses totaling $350 billion.

That was no error: The figure is $350 billion -- half the amount of the Paulson bailout plan. For comparison, it’s almost ten times the CDS losses due to the nationalization of mortgage giants Fannie Mae (NYSE: FNM) and Freddie Mac (NYSE: FRE).

I am going to bed. Have fun, everyone.

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Comments

[WG]

I am currently scared to death over this, and frankly dare not watch a step-by-step unfolding. Just hoping to sleep through the next 24 hours or something...

When the market closes Friday, there will be no telling of where and when it will open again at. Am exiting all short ETFs since they depend on CDS to function as well, the possible systematic collapse is a risk I cannot take. Maybe I need a hug >_>

[Elaine Meinel Supkis]

This is like watching the WTC collapse. Just as swift. We have to look at it and study it and learn. I consider this, at this point in time, as a pure learning experience. We can't make the same stupid mistakes over and over again.

[K]

Thanks for the cute doggie Elaine! I'm in bad news overload, but I'm fighting it. Went to yoga practice today for the first time in ages.

[Elaine Meinel Supkis]

Sorry about the grim level of news. I love that puppy. It is from a Japanese/immigrant group in Tokyo. They play music and make bubbles and take wonderful pictures. Wish I could see them perform!

[Yusef]

I like this explanation,

http://tinyurl.com/4cc53y

I think it may have been written back in the gold old days, though...That more innocent time of long,long ago...Any time before about three weeks ago.

[OC]

Elaine,

Might be a feint by the Japanese to get a better deal with the Chinese. Bargaining tactic. Both are haggling over the spoils.

Eventually a deal will be struck and the Japanese will switch sides...oh so unwillingly...Ha! Ha! Ha!

[carli]

The following article explains the preparations being made by Jr. for tomorrow's CDS Festival. At this time, it is very important for all Americans to KNOW what their rights are as citizens and defenders of the Constitution.

And for those who have forgotten, just a reminder of who you are dealing with:

“Stop throwing the Constitution in my face, it’s just a goddammned piece of paper!” ~ George W. Bush, President of the United States of America

Thousands of Troops Are Deployed on U.S. Streets Ready to Carry Out "Crowd Control"
http://tinyurl.com/4w5vvu

[hakan with the reindeer]

"Russia Today: "It's Not 1929; It's 1358." Interview with LaRouche"

http://www.youtube.com/watch?v=ghDyibtXtn0

Who ho ho.. let's go mideval on each other.
Inquisition revisited.

[Yusef]

This is like watching the WTC towers collapse.

What I find striking is that even though the effect of the financial collapse will painfully touch every man, woman and child-practically every life on the planet--(which really the WTC collapse did, too, I have to say,andI have the sneaking suspicion that's partially because the WTC collapse was designed to set us up the financial collapse)--because it isn't somehow as dramatic as the WTC tower collapse, people aren't as frightened or worried.

I noticed a remarkable degree of incomprehension and even apathy among the people I spoke with today. So far, they don't seem to realize their lives have changed forever, very much for the worse. They seem to believe they'll go on with their lives and plans as before. They have no knowledge of catastrophe, I guess.

Like prior to the WTC collapse, we've been lulled into believing this sort of thing doesn't happen to the good old USA.

[carli]

Yusef: I noticed a remarkable degree of incomprehension and even apathy among the people I spoke with today. So far, they don't seem to realize their lives have changed forever...

Yusef, the status quo is not limited to the elite , the greater majority is made up of regular everyday Americans who just want to keep the lifestyle they have become accustomed to. The difference between the two is, the elite planned, executed and knowingly, raped, pillages and debased the whole system; as the silent majority lived through it all, asleep. Blue pill, red pill.

And this is how the elite control, and continue to keep the American people in serfdom:
Who Owns The Federal Reserve?
http://tinyurl.com/42gxkr

[Jojo]

Halleluiah - We're all going to either die or learn to live in a new reality - This new reality will be a major improvement over our old way of socio/economic organizing with the economics of debt and the degradation of the environment for profit.
A new global society will emerge and with the grace of the gods and a lil' focused attention on humanity's part we will avoid Fascisism.
Celebrate - even if the change is scary and awkward, and just because we are insecure about letting go of our moving on in the evolutionary process doesn't mean we can't start preparing right now (buy gold and silver).
Team USA will morph into the earth community or incinerate everyone perceived not to be on the team.
Let us all contribute to our future and collectively use our intelligence and energy, and while we're at it, thank Elaine.

[WG]

Carli, doesn't matter who controls what at this point, everyone will suffer, elite or not, as the system crashes. For the 10 banks that hold stocks of the Fed, Lehman is already dead, and the others will soon follow.

Having failed to enter hibernation, I couldn't help but look through the news and commentary, and saw my fill of doom and gloom. Roubini is sounding alert of imminent meltdown, so is Denninger. With credit markets completely frozen, the Friday CDS settlements will be the lightning which set ablaze the economic landscape.

Well, this can't be the end of the world(hopefully). Run over to xkcd.com like I did if you need a good laugh.

[Capastorm]

The big question is: What is Japan going to do?
And what impact will their plan of action have?

[Yusef]

Most Americans were a part of an elite.

A few years ago I took an internet survey to determine where my income would place me when compared internationally. I am not part of the top 1% domestically, but when the scope of comparison is international, I am.

Shitty things have been happening all over the world most of our lives, and we have been oblivious. If this crisis would make us aware of what others have been going through, I would chalk that up as one good thing to come of this.

However, my jaw dropped to the floor the other night when our glorious female VP candidate spoke of American exceptionalism, and as if that were a good thing. Calls herself a Christian, too. We've been pigs, and we've flatter ourselves for being so.

I don't think we're going to change willingly. We may very well be forced, but it is going to be brutal, if so.

[carli]

WG, fun link.

WG & Yusef, the American elite referred to are in the .001%, or hyper-elite range. Less than 10 American families occupy this range, and they will only suffer if hanged. Otherwise, it's business as usual.

[carli]

WG, fun link.

WG & Yusef, the American elite referred to are in the .001%, or hyper-elite range. Less than 10 American families occupy this range, and they will only suffer if hanged. Otherwise, it's business as usual.

[carli]

WG, fun link.

WG & Yusef, the American elite referred to are in the .001%, or hyper-elite range. Less than 10 American families occupy this range, and they will only suffer if hanged. Otherwise, it's business as usual.

[K]

Wow Elaine. I just had a dozy of a dream. Apologies for types as I don't have my contacts in. My stepmom asked me to attend a service with her and I agreed out of poltelness. Next thing I remember my dead grandma was tlaking to me and was asking if I was going to be able to go dancing with her on Tuesday. She said someone had told her I couldn't make it but she wanted to be sure I was coming. Upside on this one - grandma died from complications of a broken hip so it is nice to think she is dancing now. Downside - do I really want an appointment with a dead person?

Next bit I recall was very clear. My husband, my brother and I were entering an auditorium of what looked to be an oldish church - wood pews. It was called something like the Church Of The Crack. The place was full of people of many different nations including many Africans. Everyone was watching a screen that was showing various images that I couldn't make sense of. There was a song leader and music. People were singing and acting out various motions with the songs. I could sort of sing along to the first one because I had heard it before though it was only mouth noise to me. A later song I got after awhile because there was Englis sprinkled in and it became apparent that the first word was a translation of the second word. Tower o fBabel?

The only two other bits I recall was that the "church" was crowded and I had to sit on a folding chair, my mom saying that she didn't approve of this church because some of the male members did unnatural things to increase their virility, and that my brother left during the song that started to make sense.

back to bed...

[flash]

K - here's a possible interpretation of your dream. Your grandmother represents your innermost, wisest self; she's telling you that (this coming or past) tuesday there will be a new "dance" or perhaps zeitgeist or society to participate in. The old one is represented by the church you were in, where everyone participates in a ritual you don't understand. Once you begin to understand that the present reality is toxic (compare the male members your mother disapproves of to Elaine's banking gnomes) you desire to leave (represented by your brother).

This isn't a definitive interpretation but I hope it helps.

[Buffalo Ken]

I'm not sure there is much more to say at this moment so here is a thought about the bubble in the photo.

Unless that dog can jump real high (which it probably can, but still...), I don't think it is going to get the bubble in the photo. That bubble will do what most "big" bubbles do. Float around for just a little while and then burst. Still, I betcha after the bubble burst a whole of bunch of teeny-weeny bubbles are made, and then by virtue of their much smaller diameter some of these (the "micro-bubbles") will stay intact until they encounter something else (besides the air they reside in) - then it just depends on what the individual bubbles encounter. If a micro-bubble hits another similar micro-bubble with enough combined momemtum, then the two might merge into a larger micro-bubble. I could keep going with this but so could a whole buncha others....

Peace,
Ken

[Buffalo Ken]

flash - I like that interpretation.

Peace,
Ken

[hIGHcastle]

Elaine,

Thanks for writing all this. The dynamics of this whole crisis on the global scale are not very well understood by many, even in the financial industry. Your analysis and knowledge of history provides a lot of insight on this.

As another poster noted, this is a global phenomenon that will touch every single person on earth. There will be food shortages everywhere if the problems are not resolved very soon (see Yves Smith's blog post). This will be a huge shock especially to many Americans who have been living in a fantasy land, oblivious to the problems of our society and the rest of the world.

P.S. I think it's really cool that Yves reads your blog and links to your articles occasionally!

[Elaine Meinel Supkis]

Dreams are the Other Reality.

This is when we enter the Outer Darkness. There are two aspects to this world: it is memories of the past. And it is our door to seeing the future.

I have always been very aware of my dream world since childhood. All great artists, scientists, novelists, religious leaders, etc live with tremendous awareness of this other world, the dream world.

Pegasus rules the dream world. This is 'Mt. Olympus' where the goddesses of music, art, poetry, dance, history, math, science, astronomy all live and they feed Pegasus golden apples. And he is the one who flies between the waking world and the sleeping world, he carried Mohammed when he saw god, he pulled the Jewish prophet, Elijah, in the golden chariot, he is the eldest of the Lightning Gods.

Back to the dream: I love interpreting dreams. Like Dr. Freud.

But from a different perspective.

My Watchers are the demonic critters who flit between the past and the future. They 'talk' to me in the dream world. They are rather like vultures. They ignore most things but focus on the Dead.

They are incredibly ancient, older than the gods themselves. Being elementals, they entered our minds when we were reptilian animals, creeping in the jungles of the earth millions of years ago. Watch a cat or dog sleep: they twitch and move, make various sounds playing out their dreams.

K, you went into a building which meant you entered a Chamber of Death. There, you saw many people. I would suspect, if you looked very closely, you would have seen that half of them were dead, half were not yet born and you and your family straddled both.

This is because you are in the crossroads where all things merge. Up is down and in is out but temporarily balanced on the point of a pin.

This is why you didn't 'know' many of the people and had a sense of inability to 'see' things clearly. It is heartbreaking to see things clearly!

So the Watchers showed you a movie! Yes, they use modern technologies. They use computers, TV, photography, etc. What you were watching was their latest production, 'The Meaning of Life' so to speak.

Naturally, you couldn't understand the progression of images. Since the Watchers are invisible to you, you couldn't call them over and have them perch on the backs of chairs and discuss what they are showing. To earn this ability, you have to be hit by lightning!

The first time I questioned these guys, I was only 5 years old. They showed me WWIII. I was outraged. I swore I would try my best to stop it from happening. They laughed.

Back to the dream you had: your dead grandmother is having a good time. She decided to hang out with the goddess of dance because, when she died, she met the Guardians at the Gates of Death and they looked into her heart and said, 'We grant one wish here. What do you desire?'

She said, 'I wish to dance on the mountain, in the bright sun'. So they granted her this boon and she now is with the Tree of Golden Apples and dances with others who are of the same loves of this great art form.

She spotted you in this 'church' and wanted you to know that on the time scale of eternity, she expects to meet you in good time. Tuesday is the day of the god of the Golden Apples in Norse mythology, by the way. The god that provides eternal life to the gods themselves!

A LOVELY GIFT she is offering you! Kiss her next time for it.

The Crack: All great artists know that there is this crack in the cup through which eternity flows. This crack is very small yet is great enough to let the entire universe flow through. It is the door to the Outer Darkness itself.

You can't see the Outer Darkness because it is impossible to grasp so we get contradictory images which is its essence. Accepting each set of contradictions is how one copes with this. When one cries, 'I don't want to see this,' it vanishes from sight but becomes a huge problem for it doesn't go away.

The best rule is, when seeing these images that are pouring out of the Crack, one says over and over, 'I accept this'. Only eventually one sees an image that is unacceptable. Then one must accept a Doom. This is the nature of the Crack of Doom.

The great writer, Tolkien, saw this Crack of Doom during WWI in the trenches. He was one of only three young men to survive in his unit, the murderous trench warfare of that monstrous war. His story, the Lord of the Rings, is his dream world attempt to grasping what he endured back then. Just for example.

This is why you were confused by what the Watchers showed you on the screen in your dream. Those of us who CAN see this stuff, it is very disturbing. When it comes real, we have a hard time holding onto our sanity.

I saw 9/11 one month before it happened. In that case, the Watchers came flying into my dream world through the Crack. They yelled that they found something really interesting. So I went with them out of my ordinary dream and was flying in a circle around lower Manhattan, slightly out over the Atlantic Ocean.

Suddenly, I looked over the the WTC and saw what I thought was a black tornado engulfing it! I screamed, 'What is happening, Watchers?'

They were silent and looked at me. 'Is that a tornado? Or a fire?'

The buildings then collapsed. I said, 'Where did this come from?'

The Watchers said, 'It came down the Hudson River and then over New Jersey. It came over your house, too.'

I woke up my husband with my screams and told him the dream.

On 9/11, I went out on the deck and looked up. An American Airlines jet was flying very low over my house! This is not normal!

I yelled, 'Chris, Chris, I know what is going to happen! Look, this jet is not flying to Albany, it is turning and going down the Hudson!'

I realized it was going to do something hideous. In the past, I call the FBI and warn them. But this time, as I tried to use the phone, I was unable to dial the number. Then, I couldn't get through. It was like being in slow motion collapse. I was screaming and fell to the floor and couldn't even crawl.

My daughter called and yelled, 'Turn on the TV.' My husband did so and I took one look and said, 'There are four planes! I have to call Washington now!' and then a Watcher appeared and said to me, 'You can't do that. They are doing this. They don't want you to call. Go, and pray in the mountains.'

Then the second jet hit. My ex-husband was sitting in the living room with us. He used to work on the 64th floor of Building #2. The second jet hit there. I then got a call from a girlfriend who I begged to not work in that building too [I told my husband to leave it in 1989]. She worked for the Port Authority on the 102 floor. She was yelling, 'You saved my life!' I was unable to talk for a while.

This is probably why you couldn't understand what you were singing but knew the song. You see, everyone 'sees' the future in their dreams but forget these dreams or refuse to accept the business they are seeing or are unable to question the Watchers.

So this world you saw in your dream is very dangerous. The only way you can handle what is there is to have guides or a belief system that helps you 'name' things and then have them assist you.

When I was falling into the Crack of Doom when five years old, I was in deep despair and total fear. Then, like a comet, along came Pegasus and I grabbed his mane and he then pulled me upwards again. I 'saw' him because he is part of the Yerkes Observatory artwork done by a great Victorian carver and in the mosaics of the Zodiac and other constellations. I grew up pondering these so this is what I 'saw.'

People in the Amazon see a big, glosssy, glowing hummingbird, for example. The Firebird of Asia is Pegasus. The eagle is also Pegasus to the the American Indians. When you go in your dream world awake and aware, try summoning this celestial being. You won't see it, probably, but you will feel its presence. And your dreams will be remembered.

For being able to remember dreams is the Key to understanding the innermost workings of this universe we inhabit as humans.

[joebhed]

This MIGHT be the point where we actually STOP to consider that all of that new capital STUFF that funded all that expansion in the economy mostly over the past ten years came into existence as another debt.
Hedge Funds. Derivatives. Financial Futures. SIVs.
CDSs being just one of those.
All of it new debt.
Payable with interest.
All of it.
Sooooooo,,,,,,,
Where does the money come from to pay back all that debt?

Anyone ???????

ALL new money is created as debt.
So, it comes from more debt.

And, if that ain't exactly the problem that has you by the gut right now, then I don't think that either of us know what is.

Ultimately all of that debt old and new is on the tab of the US taxpayer.
In case you missed Paulson's call.

The ANSWER.
Public credit.
Debt-free money.
ONE HUNDRED PERCENT RESERVES.
Bankers loan out real money.
Capital FROM main street TO main street.
WE are the only banker needed in this deal.
Do not pass WALL STREET.
One get out of jail card.

Monetary Transformation.
Begin again.

[Buffalo Ken]

The debt could be paid back over time using products produced with the "capital"....I supppose its just some of the previous contracts may need to be big-time amended or preferably written from a clean slate. This could be done. Crap theres a zillion-quignitillion-squared lawyers in the US - why not get them to do something worthwhile for a change?

I don't know about all the other vernacular you were using really and my thought above might not have merit, but even still I think the "get out of jail cards" have already been used up. There needs to be some enforcement of LAW don't you think? There needs to be some accountability so that we can learn a bit more about how this all came to be and then hopefully avoid it for the future....because the future (particularly for all the youngsters...) is what really matters isn't it? Shouldn't we all individually and collectively try to make the future the "best it can be". At this moment it should be so obvious that we are all connected. Duh!

Peace,
Ken

[Buffalo Ken]

Obviously some incredibly serious "re-engineering" of the "capital" (presumably the capital is actual physical items such as structures, equipment, etc...) is going to be needed I think so that it is utilized in an "ecologically appropriate" manner - this will take some serious community planning. Short-term and long-term planning.

There is considerable infrastructe out there (at least in the US) now that is useful for the short-term, but probably not long-term sustainable. Nonetheless it should be utilized to help transition to more ecologically sound "configurations". This is going to take labor and there is plenty of that. As long as the labor gets a fair wage, then I'd be willing to bet, that some awesomely beneficial changes can start happening.

I'm a dreamer and I don't particularly care for money.

Peace,
Ken

[PK Scott]

Yep! It's the derivatives that have the Big Boyz soiling themselves.

The estimated notional "value" of CDS (credit default swaps) which is only a FRACTION of the derivatives market is from 50 to 60 TRILLION dollars. That is 50 to 60 thousand billion.

The $700 billion bail out is going to be about as effective as bailing out the ocean with a soup spoon.

The total notional "value" of all derivatives is estimated at (hold onto your panties here boys and girls) $1.125 QUADRILLION. (How the f@%! many zeros is that anyway?) Global annual GDP is 50 trillion dollars (coincidently enough, about the notional "value" of the CDS)

This market was completely UNREGULATED and generating such yummy piles of cash that nobody was making sure that there was enough capital to pay off if the "bets" went bad. Nobody knows who has, how much, or the ultimate extent of the anyone's liability but EVERYONE has a mountain of this crap swept under the carpet. This is why Banks are hoarding cash and eying each other with suspicion.

Iceland is in effect bankrupt. Countries in Europe are guaranteeing total bank deposits to the tune of three times their annual GDP. And Letters of Credit that are the lifeblood of international shipping ARE NOT BEING HONORED. In two weeks this will mean shortages in the US of many things that are imported.

I'm going to go fondle my one year supply of coffee now.

It's going to get ugly really fast.

[PK Scott]

Oh, and all you people that are rooting for this calamity and dreaming about a "new paradigm" are delusional. Remember we are one presidential decree away from a national emergency (the nature of which is entirely up to the discretion of our fearless leader GW) from total suspension of the constitution and martial law.

Ok, I'm taking off my snazzy tinfoil beret now and going back to my coffee.

[Elaine Meinel Supkis]

Japan just aimed a gun right in our bellies. The threat of dropping the dollar as a reserve currency came from them, not China.

The yen is 98 to the dollar and the Japanese are in hysterics over this.

[hal]

Elaine, I read your dream and I interpret it to mean that this is all a part of the same gigantic scheme, from 9-11 to the present day. Am I seeing this clearly?

[Buffalo Ken]

PK Scott - who the hell is rooting for this shit? I know I'm not.

I appreciate that you have you coffee, but one-year can pass in a heart-beat and then what are you gonna do?

Its good to make cordial acquantances with as many as you can, but its better to be good. Especially if you dream good dreams.

New paradigms happen and just about always when they do there are zillions who hold onto the old ways. They get left behind.

Peace,
Ken

[Buffalo Ken]

and if you haven't figured it out yet, there is a lot of energy blowing around in the wind just now....this is when new paradigms often begin.

[Buffalo Ken]

Incidently, I'll say this for an old buddy....some of that "energy" could be in the form of "depleted uranium" - why the hell is this most harmful substance in the air anywhere? That is playing with a force that is not understood. Come on. Who is blowing up who here? The rest of us are sick of it I think. I know I am. I suppose the "banker-pyramid" needs to be the first to fall, then lets see what happens next. I could be totally wrong, but it sure seems like this is how it is going down now.

Peace,
Ken

[K]

Thanks Flash. And wow Elaine. Thanks for your interpretation and advice. Your recounting of your dream and events of 9/11 gave me chills.

Glad I drug my hiney out of bed. I had a feeling that this dream was significant and that if I just went back to sleep I would forget something important.

[Jeremy]

Dear Elaine and all blog readers,

I am always a calm, relaxed, stress-free, worry-free person. But this economic news is making me afraid. I am seriously thinking about leaving work for a moment to go take my money out of the bank. Perhaps that is a dramatic thing to do, but I am reading all of these stories, trying to think of what I need to do to be prepared for a total economic crash. I have been buying canned food for several weeks, storing it at home, but I am very-very concerned about what will happend next...within a day!! Who else feels like this?

[Buffalo Ken]

I'm not worried about whats going to happen tomorrow from a large-scale standpoint cause its out of my hands. For the long-term on a local level I think daily (just about) about what the future has in store and then I try to plan accordingly.

I storing food is not a long-term solution. If we understand that the water belongs to the commons, then the commons can come up with ecologically appropriate ways to produce the food for common use. If food, is not of concern, then we can start concerning ourselves with other "basic needs" including shelter and medical care. One step at a time I suppose and there is going to be some serious transition here --- obviously. The specifics depend upon your own personal situation (where you live, whom your neighbors are, etc....).

Thats my take on it. Sorry for any typos.

Peace,
Ken

[Buffalo Ken]

The bottom line is love and maybe the other bottom line is that we need each other, because for heaven's sake we are all connected...

connected, unique, equal, uniquely capable, equally able, etc.

[PK Scott]

Ok, Ken, I apologise, you are not rooting for this mess. And yes one year can go by really fast. That is why I live in the country where I can grow my garden and raise my dairy goats and my chickens. I have friends and I am not a crack pot survivalist, I just think that whatever is comming at us is going to be VERY VERY bad and having positive energy and happy thoughts isn't going to be enough to change that.
I live in the path of IKE and got to see what a few days of disruption can do. I was lucky, my house was undamaged and I was prepared enough that I only had to deal with some minor discomfort. Down the road from me WHOLE communities were wiped off the face of the earth. There were convoys of materials and aid of all sorts rolling in within a day of the storm, including some very positive and good hearted people who helped in very meaningfull ways. That said, there are people here who are still living in cars and tents and the falling down remains of their homes. There is a dispora happening, where people are walking away from their former houses and leaving for good. Happy thoughts aren't helping them much. The vultures are starting to arrive now. The con men and women who take money to do repairs and dissapear and others who are trying to defraud with false claims to FEMA and insurance companies. Happy thoughts won't stop them.
After Ike, the small communities outside of Houston were set upon by people coming out of Houston and being stripped bare of gasoline and food. Again, happy thoughts didn't change that.
We could actually be looking at a global economic collapse (worst case, ok?) and if that is the case you will want to have a friend like me because I will be the one with a house, a farm, and food, and if you are willing to get off your happy ass and work, I will share.

[Buffalo Ken]

PK Scott - I'm glad you will share. You talk like you know a lot about me, but I don't think you do. I know better.

Good Luck PK.

Ken

[PK Scott]

Storing food may not be the "long term" solution, but I have seen how fast the stores are stripped of the things you need (food, flashlights, dog food, etc.) when the trucks quit rolling in to restock. There is literally 3 days of food on the store shelves.
I read a lot of credible finacial writers (I didn't pull those derivatives numbers out of my butt) and they say, store food, store water, and keep enough cash on hand for a minimum of 3 weeks and up to six months if you can do it. That "common" water that you talk about has to be treated to be safe to drink. We were lucky to be on a water system that had back up generators os we didn't have a problem.(we3 also have a water catchment system.) The fuel supply for those generators lasted for 3 days. (I know because my husband manages a water supply corp.) Fortunately the fuel supplier (who was down to one delivery guy for a 3 county area) made heroic efforts to keep the propane rolling in.
What does this have to do with anything?
Re read what I said about letters of credit not being accepted and international shipping being disrupted. It hasn't ground to a halt yet, but it could, and really fast. What do you use that's imported, besides gas and oil? We make darned little of what we consume here and I have no idea how fast the "shelves" get stripped if the whole darned country isn't getting re-supplied. Do you?
I have no doubt that "change" is blowing in the wind and indeed there may be a new paradigm, but there would be an upheaval and disruption the likes of which few would imagine.
I'm just a nice old lady with goats and chickens, there is a cadre of hard core people out there who aren't stocking up on anything but guns and bullets. They ARE rooting for anarchy.

[Buffalo Ken]

Well we'll get anarchy if everyone is running around like chickens with their head cut off. They we'll get it.

Otherwise, sounder minds can work together, and then, I suspect we'll get something better.

I have fooded stored also. About 100 pounds of rice or so plus a bunch of other things, but I know that this is short-term at best.

I'm not really trying to get into an argument with anyone, but I'm a bit tired of self-fulfilling dire talk. It tends to make what you fear more likely. Better to think about solutions that makes sense. Thats all.

Peace,
Ken

[Buffalo Ken]

But when a "system" is so deeply ravelled, then the unraveling releases quite a bit of uncertainty - this should be expected and does not need to be feared in my opinion. One day at a time is not a bad way to live.

Peace,
Ken

[PK Scott]

Ken, granted I don't know you. I did however live for years around Austin, Texas, which is second only to California for being populated with people who believe like you (seem)to.
Some of the people I've known were bio-regionalists and practitioners of permaculture. Others were green builders and people who were actively trying to build sustainable communities. One group even had an alternative "currency" and was involved in local micro-finance. Some of these people were really sincere and clear headed, most however talked the talk about things like "stewardship of the earth" but didn't walk the walk. There primary output was a feeling of self superiority.
Idealism is great, but meaningful action is better. You think about how to change the world. Bravo! First you had better survive to change it.
I've probably been stumping around this planet longer than you have and I have seen real goodness and sometimes in very unexpected places. I've also seen real hard core depravity. In the long term good may triumph over evil, but up close and personal if evil has bad intentions and a gun, evil usually wins.

[Buffalo Ken]

PK Scott - I think you are wrong.

If you have my posts here you would know about one that I posted awile ago from a fellow whose name I can't remember....anyhow, he told about this "meeting" in Tejas when some new Colt Revolvers were pulled out. Well, this meeting set some history in course and now it is coming to fruition. Guns always lose in the end.

Peace,
Ken

[Buffalo Ken]

But some dumb fools in Texas still haven't learned this very basic lesson that if I remember correctly was sort-of taught in kindergarden.

As far as I'm concerned Texas can be its own lone star damn self if that is what stinking Texas wants to be. Good riddance. Thank goodness you are out of the union in my mind. I think you should be split up Texas. That is what I think if you really want to know cause history (not history as mystery, but "real" history) has this ironic way of remembering....

[Buffalo Ken]

Good ole goofy Sam Houston should of just stayed with the Cherokee.

All them oil-fool-baron-wantabees in Texas should come to their senses. Maybe T. Boone Pickens has maybe not, but at least he is putting out some decent content for discussion.

The oil-assholes are getting sucked into the crack in my opinion. The Texas oil-assholes. If we used the oil for more refined product that would be a much better use. Burning it like their ain't no tomorrow will only hasten that reality.

[Buffalo Ken]

I'm done talking with you PK Scott cause you don't know me worth a diddily...and to talk harsly like you did is inappropriate. You should be ashamed you old fool.

My generation has inherited a bunch of this shit and if I have anything to say about it, we are gonna make some changes for the better one step at a time and using both hands.

[Buffalo Ken]

Thats called talking for a little while and then removing yourself from the conversation so that things don't get ugly like they did at that long ago tejas meeting when many were slaughtered in cold blood. Many chiefs.

After this meeting it was decreed I suppose that "all our chiefs". Then victory was achieved, but over time this victory became less so because of slow trickery, but the victory was achieved nonetheless, and now, better possibilities are just ahead.

Long live the Cheyenne.

Peace,
Ken

[Buffalo BS]

Elaine, please block Buffalo Ken's IP address, it is giving off such a negative aura and way to many demonic vibes

[Dutch]

http://fskrealityguide.blogspot.com/2007/09/did-usa-declare-bankruptcy.html

They are gonna sell off all of as slaves!