Today David Stockman warned King World News that people need to be prepared for tremendous chaos in global financialmarkets, and investors need to “get out of harm’s way.” Stockman is the man former President Reagan called on in 1981, during that crisis, to become Director of the Office of Management and Budget. Below is what Stockman had to say in part II of his powerful and exclusive interview.
Eric King: “You’ve talked about large carry trades, and I’m just wondering what your vision is of how those will unwind?”
Stockman: “That’s what’s wrong with zero interest rate policy and keeping the overnight rate at zero. It allows people to buy assets that have any kind of yield or any kind of appreciation, put them up as repo, and borrow 95 cents to 98 cents on the dollar.
This isn’t a natural way for a market to function. The point is that if confidence is ever lost that the Fed and the other central banks of the world can keep this game going, these massive trillions of dollars of carry trades of this sort will unwind….
As a reminder, it was Zero Hedge who broke the news in March about the location of JPM‘s vault, namely that it can be found 90 feet below street level at 1 Chase Manhattan Plaza (located over half a mile away on Liberty and William Streets). Which is relevant, because as the FDNY reports, and as the video clip below vividly confirms (with the Federal Hall National Memorial distinctly visible in the background), the fire response was focused on the area on Broad street between the New York Stock Exchange and what is now the 15 Broad Street block.
So did a sweeping fire “take place” (in broad daylight and in front of video camera armed streetwalkers) providing the fire brigade a pretext to abscond with JPM‘s gold on orders from above, or merely give JPM an alibi to say it’s gold is “gone… all gone” or rather “burned… all burned” (leaving aside the propensity of a fire to propagate in the confined oxygen constraints to be found on top of the Manhattan bedrock and far below street level)? No. For the simple reason that 1 Chase Manhattan Plaza is over two blocks away from where the fire did take place as can be seen on the map below:
In other words, if there was a “fire” in JPM‘s vault, the response would have been not at 15 Broad Street, but over half a mile away at the perfectly fire-accessible Liberty Street (between the NY Fed and 1 CMP), across from the real JPM vault fire doors which can be seen in the following interactive image:
And yes: those who may suggest that any amount of gold tonnage may have been quietly moved over two blocks by the Fire Brigade have never actually carried the not-so-light-bars of gold themselves, especially not in broad daylight.
So why the confusion?
It appears the confusion stems from the Fire Brigade‘s designation of the fire as taking place at “JP Morgan’s building” which indeed is where the Fire Brigade was located. However, it is the 23 Wall Street building, also known as the “JPMorgan building” formerly owned by JPM, and subsequently owned by Morgan Guaranty Trust Company, best known for being the site of the September 16, 1920 Wall Street bombing, when 38 people were killed and 400 injured. Ironically, as was then reported, “because the Morgan building was so well known, many assumed that the target of the assumed anarchist bombing was actually the bank itself.”
For modern generations, 23 Wall Street may be better known as the (incorrect) facade of the NYSE as represented in The Dark Knight Rises.
Of course, JPM has long since moved on from its landmark location just across from the NYSE, and now can be located at its Park Avenue headquarters (with its Bear Stearns annex), and of course, at 1 Chase Manhattan Plaza.
So what is now housed in the 15 Broad/23 Wall Street block to where the FDNY was responding, if not any JPM? 23 Wall and 15 Broad Street were sold in 2003 for $100 million to AfricaIsrael & Boymelgreen (there is likely a far more interesting story surrounding AfricaIsrael and Boymelgreen here than there is about the “fire in JPM‘s vault”). The two buildings have become a condominium development, Downtown by Philippe Starck, named for French designer Philippe Starck, one of a growing number of residential buildings in the Financial District. Starck made the roof of 23 Wall into a garden and pool, accessible to the residents of the development.
Could there be a vault in the Downtown residential building, and could the FDNY have been responding to a fire in such a “commercial vault”? Of course: as anyone who has ventured into the skyscraper forest of New York‘s Financial District knows, there is an underground vault in virtually every building.
Dubai, alarmed by the sudden rise in obesity among its citizens, has decided to offer an interesting incentive for its population to slim down — gold.
Obviously not satisfied with the weak efforts of fellow weight-adverse politicians (they laugh at Bloomberg’s “stairs” idea), Dubai is offering a gram of gold for each pound lost by participants. Dubai is synchronizing the 30-day challenge with the fast of Ramadan, to make weight loss easier.
“Ramadan is the most appropriate season to launch such initiatives as it reminds us about many health benefits of reducing weight and encourages us to take strong steps to change our bad lifestyles,” Hussain Nasser Lootah, the manager of the city of Dubai.
The campaign, called Your Weight in Gold, will also award the three highest weight-losers the chance to win a gold coin worth $5,400.
While some employers in the United States give employees gym memberships to keep them skinny (and attractive) and their insurance premiums low, nowhere in the United States has government ever incentivized fitness in such a brazenly free-market way. Paying citizens to get skinnier to avoid health care costs down the line seems like a pretty great idea. And paying in GOLD, no less! Let’s do this, America.