Eagle1 » August 23rd, 2013, 11:23 pm
Good Evening, Family:
With all of the hullabaloo over yesterday's Nasdaq outage and a bit of misinformation that's circulating and causing undue worries, it seemed appropriate for me to take everyone through a lengthy series of events that have been unfolding during the past few weeks.
Let's begin by going back to June 27th when the UN lifted the sanctions on Iraq and Chapter VII was signed off. There was strong expectation that we would see the release of the IQD, along with the Global Currency Reset, and behind-the-scenes intel said that things were moving forward for the imminent release. We learned that the Iraqi Stock Exchange (ISX) was integrated into Nasdaq on July 1.
We had reliable release date information that came from credible sources actually involved in the process, and yet those dates came and went without any visible change.
We learned of multiple efforts to load the FOREX screens along with the administrative FX bank screens and had reports from officials within WF and Chase that they could see the new rates on their screens; and yet we saw no RV or GCR.
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On July 23rd, we had confirmed eyewitness reports that Dr. Shabibi signed off on the new rate for the IQD/IQN and sent his paperwork to the UNSC. On July 24th, Ban Ki Moon signed off on that same paperwork and the following day, July 25th, rang the closing bell on the NYSE and at the same time introduced the president of Euronext.
The president of Euronext welcomed Iraq and four other ME countries into the Stock Exchanges. Everything seemed to be set for the immediate release of the IQD/IQN and the GCR.
Now we come to August 1st. The IQD ceased to trade on FOREX and flatlined. We learned that it had now officially become the IQN, marking what should have announced the Dinar's move to the newly revalued rate.
Still we saw nothing on FOREX and bank screens continued to display the old rates. I began to hear rumblings in the background that Wells Fargo was behind the delays. Because WF had been assigned the lead role in the GCR, I frankly dismissed the reports as bad rumors and pooh-poohed them.
Turns out I was wrong. We could have seen the RV on July 25, and should have seen it no later than August 1 when the IQD became the IQN.
However, as I have learned, WF's management (or at least a significant portion of it) was holding out for a larger spread after they had already agreed many months before to the fee structure in a meeting with the Secretary of the Treasury and the Managing Director of the IMF.
It has been reported by another blogger (whose name I will omit in this report) that because of WF's significant IT department, they were given the lead role in that same meeting to initiate the GCR.
That brings us to yesterday.
We had been hearing multiple and credible reports of Christine Lagarde's frustration over the delays, and a report was issued which indicated that she was at the end of her patience with WF. According to intel provided to us, Jack Lew stepped into the picture and met with WF's management.
They were advised to "stick with the agreed-upon fee structure" or WF would not be permitted to continue in its role as lead bank.
I'm told that the threat even included WF's removal from the exchange process. A threat like that would have meant the loss of multiplied billions of dollars in revenue to the bank. Wells Fargo quickly capitulated.
Now, let me change horses in the middle of the stream for just a bit.
For those of you who don't understand the makeup of the IMF it basically works like this. 24 Executive Directors make up Executive Board. The Executive Directors represent all 188 member-countries.
Countries with large economies have their own Executive Director, but most countries are grouped in constituencies representing four or more countries. Eight countries each appoint an Executive Director: the United States, Japan, Germany, France, the United Kingdom, China, the Russian Federation, and Saudi Arabia.
The remaining 16 Directors represent constituencies consisting of 4 to 22 countries. Christine Lagarde, as you all know, is the Managing Director of the IMF.
The way I understand the inner workings of the Executive Board, the aforementioned eight countries with their individual Executive Directors form the final authority.
When there is a major event to take place, such as the GCR, each of them has a coded "Key Card" with an electronic code which is transmitted to some unspecified central computer.
Each of them must "swipe" their card in order to activate an agreed-upon event. As long as the testing of the system has gone on, each of the eight countries has swiped their cards without hesitation.
However, as we have approached the completion of the testing phases and prepared for the final implementation, China has been the lone holdout in this process, objecting to WF's press for a higher fee structure.
China finally reached the end of their frustration and filed a lawsuit against WF's management. This was the point at which Jack Lew intervened. Once WF's management team capitulated, China swiped their card and things began to move yesterday.
Today, in televised interviews given on both FOX Business News and Bloomberg News at the Jackson Hole Conference, Christine Lagarde made it clear that "The banking system needs to be unclogged, and liquidity as well as "instruments" need to move fluidly throughout the system, which has not been the case."
Just prior to her television interviews she said the following as part of a prepared speech to the entire symposium, "Global policymakers—all policymakers, within countries and across countries—have a responsibility to take the full range of actions needed to restore stability and growth, and to reduce imbalances."
Got the picture? Think she means it?
Now, let's get back to where we were before we changed horses.
Once the decision was made to press forward with the GCR, the process began and the trigger was pulled. Ooopssss!!!! Somebody forgot that no tests had been run using the Nasdaq Exchange.
The Security Information Processor (SIP) had never been reprogrammed to allow for changes as massive as this. You understand that the SIP was designed to deal with stock movements within a given trading period.
Maximum increases and Maximum losses are set for the various stocks as a percentage of their value, along with actual dollar fluctuations. The SIP was never programmed to deal with the kind of changes that would come along when the value of the currencies being used for trade suddenly changed -- in some cases by more than a thousand percent!
The SIP was programmed to reset itself after a thirty-minute wait to allow trading to resume. Normally this processor would stop certain trades with certain stocks or funds -- not shut down the whole exchange.
When all of the new numbers were pushed into the system, the SIP crashed. It reset itself and then crashed again.....and again.....and again -- six times!
Apparently it took that much time for some brilliant IT guy to figure out that the parameters had to be reset. And that process has been ongoing since.
Yesterday's Nasdaq activity, however, was not without other consequences -- and interesting activity otherwise! When the Nasdaq went down, the ISX went with it. Six minutes later, the NYSE went down, followed by the Toronto Stock Exchange. That was followed by other exchanges in other countries. The other exchanges did not stay down for long, having the ability to disconnect from Nasdaq and restore their own trading.
Here's the peculiar -- and verrrry interrrresting -- thing that took place on FOREX during this Nasdaq outage! The IQN, the VND and the IDR all moved suddenly. They rose together, mirroring each other's movements and spreads, then sank together -- again mirroring each other -- and finally returned to the previous programmed rates.
As the FOREX team noted, "this was manipulation! Somebody was trying to force these currencies to a whole new level." In truth, it was a reflection of the effort to move the GCR along to its conclusion.
There is a whole lot more information I could share but this is a good place to leave it. Let me end this post by saying that our intel from the IMF and the UN is telling us that they want this thing finished no later than September 1.
That's the end of next week. That doesn't mean they will wait until September 1 to implement the GCR. In fact, the evidence suggests that they will continue to work at this until every single programming parameter has been resolved.
If they push this thing through over the weekend, you won't get to do much in the way of exchange before Tuesday.
Don't forget the Tuesday, Wednesday, Thursday international banking rule. No major movements of funds take place on Monday or Friday. Friday is bank tabulation day for the week's business. Monday is audit day. New business is conducted on Tuesday through Thursday when it affects the global economy.
Hope this little discussion will be of help to all of you and help you understand the magnitude of what is taking place. The RV is not a local event: it is global!
Blessings on you.
(By the way, my apologies for not responding to some of your PM's before now. My telephone has become a mirror image of Frank's and it has been hard to get anything done.)