Archive for January, 2012

ISDA: The most powerful financial institution in the world (for now)

Tuesday, January 31st, 2012

The International Swaps and Derivatives Association (ISDA) is the “regulatory” body who determines when a default occurs for a financial instrument backed by credit default swaps (CDS).  Why is this so important?  The five largest banks in the U.S. control 97% of all CDS’s.  If a default on a Greek Bond occurs, the CDS or “insurance” must pay up.  Each bank’s liability of credit default swaps exceeds their capital structure.  They would owe more than they could pay thus they would have to file for bankruptcy.  Therefore, it is in the banks’ best interest for there to be no “default” proclaimed.  Get the picture?

Who is the ISDA?  From their brochure:

Since its founding in 1985, the International Swaps and Derivatives Association (ISDA) has focused on making the over-the-counter (OTC) derivatives markets safe and efficient.

Who is the current Chairman of ISDA?  Stephen P. O’Connor is global head of the Counterparty Portfolio Management division at Morgan Stanley. O’Connor also serves as a member of the board of directors of the International Swaps and Derivatives Association.  It was announced that he would be named chairman of ISDA on Apr. 14, 2011 at the organization’s annual general meeting in Prague.  Mr. O’Connor is charged with oversight of the very institution he works for?

Here’s the short story of the problem.  Greece is in dire straits and it is negotiating with the bondholders of its national debt to take a 50% haircut (loss) on the bonds they hold.  These bondholders bought insurance (CDS) for this very reason.  They wanted to be insured in case Greece defaulted and they paid their premiums for these swaps.  The issuers (large banks) booked the profit and took bonuses for the money they made on issuing the swaps.  Sweet!

All is well with the banks unless a default of the Greek bonds is declared.  Who determines this?  The ISDA Determinations Committee.  Who makes up the Determinations Committee?  Generally the banks who issued the swaps!  Here is a recent decision made by the Determinations Committee:  If a default occurs, the insurance pays and makes the bondholder whole on the investment.  Otherwise, the bondholder assumes the loss even though he paid his insurance premiums.

From the outside looking in, this is the epitome of unbalanced weights and measures AND partiality of judgment, both acts of sin from a Scriptural standpoint.  If the Determinations Committee who is charged with deciding the fate of Greek Bonds will not declare a default at 50%, at what level will a default occur?  It may have to go to 0.  By that time, we will be in full global meltdown of the financial house of cards.  Complexity will give way to simplicity.

Do you think the wolf will really guard the hen house?

The Power to get Wealth

Sunday, January 29th, 2012

People strive to get wealth and influence.  Often their motivation is due to an orientation of scarcity and the current economic system promotes this view.  Advertisers attempt to convince us that we lack something and must purchase their product to be fulfilled.  People are sucked into debt by this scarcity mentality only to see themselves in greater scarcity.  The current economic system would have us believe that wealth will solve our problems.  But time and time again we hear stories of lottery winners leading disastrous lives after they receive their windfall.

How is wealth obtained?  Deuteronomy 8:17 "then you say in your heart, ‘My power and the might of my hand have gained me this wealth.’  Men believe they have a special gift to acquire wealth that sets them apart from others.  They exalt themselves as being entitled.  Their arrogance sets them up for a fall.  Why?  They don’t understand the purpose of wealth.

What is the purpose of wealth?    It is to establish the Covenant of Our Heavenly Father on earth:  Deuteronomy 8:18    "And you shall remember the LORD your God, for it is He who gives you power to get wealth, that He may establish His covenant which He swore to your fathers, as it is this day.”

HIS Covenant is based on Love and Love serves mankind.  We are called to be good stewards of the wealth HE had directed our way.  Stewardship implies acquiring and maintaining assets for  current and future use.  If you want to establish the Kingdom of GOD on earth, you must be prepared to mobilize the wealth you have been given to steward.

Every paycheck is a prosperity test.  If you don’t honor Our Heavenly Father first, how can you expect to participate in establishing HIS Covenant.  Every farmer know you must plant seed in order to reap a harvest.  It must be planted in good ground.  Giving into man’s kingdom does not produce fruit in Our Heavenly Father’s Kingdom.  You must ask Our Heavenly Father where to give your firstfruits.  Each and every month my wife and I ask Our Heavenly Father where HE wants HIS finances to go.  Not all of the firstfruits will be tax deductible.  HE may have you bless an adversary.  HE may have you give a server at the local restaurant an exceptional tip.  HE may have your bless a widow in another state.  Servias Ministries was set up to be a conduit of blessing to mankind and to establish The Kingdom of GOD on earth.  If HE tells you to send us the firstfruits to distribute, we will.  If HE tells you to send money directly to an individual or other organization, do it.

Prosperity has been given a bad name.  However, Our Heavenly Father specifically deals with prosperity and its intent.  If we will “get to give” rather than “give to get”, we will be found worthy to steward over greater wealth.

Is Our Heavenly Father first in your life?  “Tithing” removes the curse of scarcity.  Men want to argue the legality of tithing or that tithing is no longer necessary or required.  Love does not require you to tithe, Love simply gives you the choice.  Giving of your firstfruits is a straightforward way to allow Our Heavenly Father to broaden your influence.  Am I telling you to bypass paying your bills?  No.  I would suggest that you adjust your lifestyle and live below your means rather than living on the edge.  If you simplify your life, you require less and can invest more in the Kingdom.  Our Heavenly Father is looking for obedience, not sacrifice.  As you develop an obedience to honor HIM first with your productiveness, you allow Love to respond.

Betraying Love

Friday, January 27th, 2012

What is betrayal?  It is  to deliver to an enemy by treachery,  to fail or desert especially in time of need,  to reveal unintentionally, to disclose in violation of confidence, to be disloyal to someone who trusts you so that they are harmed or upset.

What is treachery?  It is a violation of allegiance or of faith and confidence.  Someone who is treacherous cannot be trusted because they are not loyal and secretly intend to harm you.

The Bible has many examples of betrayal and treachery.  Joseph was betrayed by his brothers but Judah was treacherous also.  Judas Iscariot betrayed Jesus but the chief priests were treacherous.  The difference of the two words has to do with the timing of the intent.  In a betrayal, the intent started out in faithfulness but later a violation occurred.  Treachery’s intent began at the onset of the situation and falsely established a relationship in order to do harm.  The end result is the same with both, the innocent party is violated and harmed.

Our egos are open to both betrayal and treachery, often having to do with money.  Other areas of importance to the ego include self-promotion, being condescending towards others, and evoking judgment.  These are all in opposition to Love.  As men and women purpose to walk in Love, treachery and betrayal will seek them out to test their response.  Love will be tested to determine its maturity level within us.  Men will justify and rationalize their treacherous acts as though they had no alternative.  They will see betrayal as an alternative by focusing on the other person’s actions and judging them to deserve the betrayal.  Instead, they are simply revealing what is in their own heart.

In business, betrayal and treachery have become useful alternatives to those who run their business by greed.  They produce products and betray the customer with false and misleading claims.  They create a service never intending to perform the stated purpose.  Men are deceiving themselves thinking that they can betray Love and get away with it.  Love is merciful but also has a corrective aspect to it.  Love demands righteousness and will become an adversary to those who have developed patterns of deception and treachery.  When Our Heavenly Father proclaimed “Vengeance is Mine”, HE meant it.  As we who follow the path of Love transfer our right of justice for being harmed to Our Heavenly Father, HE will evoke righteous judgment to those who have wronged you.  Over the years, I have found that to be true and it makes life much simpler.  If you really believe that Our Heavenly Father is our source and not some man, company, or government, you will navigate through life with Our Heavenly Father providing for you every step of the way.  You set yourself up for blessings whereas those who would deceive you wonder why bad things are happening to them?

Economic Points of Interest

Thursday, January 26th, 2012

1. The next phase of problems will come about because of a loss of confidence in currencies themselves.

2. Regulators are totally ineffectual in dealing with what is occurring.

3. If we have a failure of Greek debt it will be catastrophic and you and I will pay. If Greece does not fail, we will have money printing (quantitative easing is the buzz word) to infinity.

4. China is actively seeking control of the resources of the world.

5. To balance the US balance sheet, gold would have to go to insane numbers. The mechanism is in place to drive gold to incredible numbers.

6. Sovereign debt is the next bomb to implode.

7. The only currency that will sustain what is coming is gold.

8. We are headed for a one world currency with a central bank of central banks. The world is going to change dramatically.

9. The individual states in the US, which are bankrupt in many cases, will be attacked next. Big money is already hugely short of state debt. Ultimately this will take down the US dollar as well.

10. A one world government is coming.

11. Hyperinflation is a loss of confidence in paper currency.

12. Gold is money without liability on the other side. It stands alone. Make your balance sheet as good as it can be.

13. Gold is an insurance policy.

14. Focus on simplicity in your personal life. Be focused, balanced, and go back to basics. This is not a time to get fancy.

15. Hold any stocks you happen to own in certificate form in your hand, and don’t lose the certificate. If you are a stock player, check out true custodial accounts. Make certain that your holdings are in fact yours and NOT on the books of the bank.  Direct registration is an alternative.

16. Expect mining company consolidations to greatly accelerate.

The Federal Reserve Bank has provided us a roadmap for gold to move to $2,100 and $4,500 and it isn’t that far off.  The global debt problem is as big now as it was in 2008.  If a default is declared that affects the credit default swaps, five major U.S. banks will go under as well as three Euroland banks.  This is why those in power are trying to avoid the legal trigger of “Default”.  We are extremely close to the  edge of financial mass destruction.  In an election year, do you think that the Fed will simply hold back printing of money?

Ben Bernanke Speaks

Wednesday, January 25th, 2012


The Federal Reserve committed to low interest rates through 2014.  What was the impact?

My Yahoo Finance tracking screen went green:


UXG was up 12.45% in one day.  for those who recently bought the stock at 2.99 in mid December.

You still lack one thing

Monday, January 23rd, 2012

Wealth brings with it a great challenge.  The ego especially feeds on greed whereas greed is the root of all evil.  Hoarding is the ugly sister to greed.  When people find their value of identity in possessions the outworking is to get more and more.  What you have is never enough.  Consider all of the offsite storage buildings in the U.S.  Many are full of possessions that are slowly deteriorating.  Don’t get me wrong, the size of your house, car, or bank account does not mean that you are greedy.  Each of us has a ministry that requires different assets to fulfill.  We all don’t need to be driving a Smartcar to show we are not being led by greed.  We are also to be good stewards over what we have been given.  Lack of stewardship isn’t a good testimony to those who are watching your walk while you are “talking your talk”.  In Luke 18:22 Jesus said:

So when Jesus heard these things, He said to him, "You still lack one thing. Sell all that you have and distribute to the poor, and you will have treasure in heaven; and come, follow Me."

What an unpopular thing to say in America, the wealthiest country on earth.  This affluent society has elevated itself to the point where it no longer needs GOD in the center of its society.  The children no longer recite The Lord’s Prayer in school.  Since this happened, the discipline problems in schools have risen exponentially.  Those children, now adults, are no longer restrained in their behavior.  Corporate greed is at an astronomical high.  The loyalty to the employee is all but gone.  Defined benefit plans designed to reward long term service by employees have been disemboweled by corporate greed.  Politicians bought off by lobbyists have thrown the average man and woman under the bus.  The moral fiber of this country is in dire straits but not for long.

This year I expect an awakening of men and women who are called to be the “elect”.   I expect this awakening to bring forth a new paradigm of business thinking.  Many in the past have given lip service to serving mankind.  As this awakening materializes into a Kingdom structure. men and women will be given the opportunity to be a part of this new paradigm.  No longer will greed and self interest dictate the direction of an organization.  Kingdom principles resulting from the revelation of Love will be the guiding force.  Serving mankind will be the burning desire in the bellies of the people who are called to participate in Kingdom companies.  Accumulated wealth will be mobilized as men and women see that their calling is being summoned by the Most High God.  Dysfunction of the masses will no longer be exploited by those who have been in power by exploitation.

As the Body of Christ is fitly joined together, each part will truly supply the other parts… really!

$10,000 Gold

Saturday, January 21st, 2012

In 1978, the total debt in the U.S. was $719 Billion.  Today it is $56 Trillion. This is a 77X increase.  How much more debt can we handle?  Hyperinflation is moving closer and it will be a time of great change.  We must muster up the courage to face change.  Having faith in Our Heavenly Father will see us through any upheaval before us.  If we think outside the box.  We can soar to new heights just as Jetman in the video below:



The Speed of Cash

Thursday, January 19th, 2012

In these days of leverage, any interruption in the flow of cash can be disastrous.  Often, your bank’s signature card will include a statement whereby they have 30 days to respond to a cash withdrawal request.  Though they rarely exercise this stipulation, it does exist.  What would happen if you could not get to your cash for thirty days?  Selah!

MF Global claims the JP Morgan Chase slowed down their cash which helped move them into bankruptcy.  See 

The strong get stronger, the weak fall by the wayside.  Be careful with your assets.

SIPC Protection of your Brokerage Account

Monday, January 16th, 2012

From the Securities Investor Protection Corporation website, :

“Terms of SIPC help. Customers of a failed brokerage firm get back all securities (such as stocks and bonds) that already are registered in their name or are in the process of being registered.”

Securities registered in the “Street Name” of the brokerage do not appeared to be covered.  Beware!  Do not delay or fail to insure your stocks are placed in your name.  If a large scale financial event were to happen, the reserve funds of the SIPC could be depleted and you would be at risk of notable losses.

Separating the sheep and the goats

Monday, January 16th, 2012

In Matthew 25, Jesus said:

33 And He will set the sheep on His right hand, but the goats on the left.

34 Then the King will say to those on His right hand, ‘Come, you blessed of My Father, inherit the kingdom prepared for you from the foundation of the world:

35 for I was hungry and you gave Me food; I was thirsty and you gave Me drink; I was a stranger and you took Me in;

36 I was naked and you clothed Me; I was sick and you visited Me; I was in prison and you came to Me.’

His sheep served Him by acts of Love toward mankind.

I sense the separation has now started.  Men’s hearts will be judged and placed in one of two groups: the left side of judgment or the right side of mercy.  Each of us can easily determine which side we will be on by simply looking at our acts and their impact on others.  Is our individual focus on ourselves or others?  Jesus very specifically associates Himself with the hungry, the stranger, the naked, the sick, and the prisoner.  Why?  Because the Face of GOD can be found in everyone.  There is no place where Our Heavenly Father isn’t.  Each of us comes from the same Creator and all of us belong to the brotherhood.  Jesus specifically picked those who were down and out to make His point.

Each of us will be challenged in our responses to others in need.  Can we give to the unlovely?  Will we help out those who have stolen from us?  Will we help our enemy in his time of need?  The most important question to ask:  Are you currently doing it?  The time is now!