Showing posts with label AIG. Show all posts
Showing posts with label AIG. Show all posts

Sunday, September 25, 2011

Bankster Back Door Bailouts Explained



Girl Bear: "What about the Goldman Sachs? Did they buy another bank?"
Boy Bear: "Because when you already own the U.S. government, you don't need to buy any more banks."
Boy Bear: "Actually, the Goldman Sachs probably profited from the failure of the AIGs".
Girl Bear: "How could someone profit from the downfall of one of their biggest clients?"
Boy Bear: "Because while the Goldman Sachs was loaning money to the AIGs, it was also making a secret bet that they would go under."
Girl Bear: "My god! Is this some kind of science fiction movie? Like the Star Wars?"
Girl Bear: "Are any of the bailouts going on today?"
Boy Bear: "Yes, the Ben Bernanke keeps the short term rate at zero."
Girl Bear: "How is that a bailout?"
Boy Bear: "Low rates means the banks have to pay the American very little interest in their savings accounts?"
Girl Bear: "That is very nice gift from the American people to the banks."
BoyBear: "Yes."
Girl Bear: "And to show their gratitude, did the banks stop their foreclosures?"
Boy Bear: "No".
Girl Bear: "Did they give them mortgages?"
Boy Bear: "No".
Girl Bear: "Did they do anything at all?"
Boy Bear: "Yes, they increased the monthly fees on all bank accounts."
Girl Bear: "That does not sound like the gratitude, that sounds like the screwing over of the American people."

Read more...

Monday, September 12, 2011

The Towers Kept Falling: The Hijacking of Our Minds

Taken directly from the film, Who Killed John O'Neill? :

On July 3rd, 1979, the CIA gave birth to Islamic fundamentalism when President Carter signed a directive for United States intelligence to provide radical Islamic thinking and arms to Afghan fighters, before the Soviet Union invaded. This is documented in a 1998 interview with Zbigniew Brzezinski, Carter's National Security Advisor.

Creating a radical branch of Islam was a way to draw the Soviets into a war with Afghanistan, giving them their Vietnam War. It destroyed their economy. During this war, the US, UK, and Pakistan all supported groups of Arab fighters known as the Mujahedeen. Two of the freedom fighters were Ramzi Yousef and Osama Bin Laden. Books printed by the University of NE and paid for by the US Department of Education taught the Mujahedeen radical theories of Islam and treated them to math problems and literature riddled with allusions to guns, bombs, tanks, war, overall training them to be violent.

After the Soviets withdrew, the Mujahedeen were left, without support, in a war-torn, and socially unstable nation state. So they started a second resistance movement aimed toward the U.S.

In the late 1980s, Al Qaeda was formed, an intelligence operation that from its inception has been trained, funded and supported by the Pakistani Intelligence operation, the ISI, which is an arm of the CIA.

Iran Contra channeled money to countries considered terrorist nations like Iran, Iraq, Libya, Lebanon. And as the other half of the hand-shake, trillions of dollars of narcotics from the Middle East, the far East and Latin America have made their way into this country. This shows a pattern of fraud and complicity by the US government to promote instability abroad to promote their domestic agenda

Meanwhile, the media is trying to scare us all into submission, ignoring the links between our government and terrorist nations.

Now, the official story says Omar Saeed Sheikh is the pay master for lead hijacker Mohammad Atta, and Khalid Shaikh Muhammad as the operational master-mind behind the attacks. Both men are well-known ISI agents, and Omar Saeed Sheikh murdered Daniel Pearl in 2002. Pearl was investigating ISI ties to Al Qaeda and 9/11, so he was killed to prevent Pearl from printing a major story linking ISI to Al Qaeda, because that, in turn, would implicate the CIA.

Could it be that specific agendas within specific parts of government, media and industry, have created a propaganda campaign to wage war, with 9/11 as the prime selling point?

On February 26, 1993, the second anniversary of the end of the Gulf War, a bomb went off in the WTC. Six people were killed and thousands were injured.

Could the 1993 event have been a staged event, a psyop (a clandestine intelligence operation used to shift people's perceptions to a pre-defined agenda that are sometimes used with more overt actions called military ops) to shine a light on the towers to convince people that they were future targets of terrorism?

After 1993, a series of terror attacks plagued the US: the OKC bombing in 1995, the Embassy bombings in Africa in 1998, the USS Cole in 2000 in Yemin, and the biggest "selling point" of all, 9/11/2001, after which, the counter terrorism pundits said, Al Qaeda always wanted to finish the job.

But, wait a minute. The OKC bombing? It doesn't fit in. Or, does it? Timothy McVeigh's lawyer contends that Terry Nichols made several trips to the Philippines to meet with Ramzi Yousef , master mind of 1993 WTC bombing. McVeigh served in the Gulf War, and he slipped out of the country with an Iraqi passport. McVeigh and Nichols both visit Al Qaeda training camps after the Gulf War. Coincidence? Moreover, hundreds of thousands of documents were withheld by the FBI from McVeigh's attorneys. The director of the FBI at the time was Louis Freeh.

Moreover, the OKC bombing clearly sent the message that dissenters are dangerous. Therefore, anyone who questions the government can be lumped in with people as crazy as Timothy McVeigh..

Kroll Associates

A Managing Director at Kroll has said, "Kroll is like a private CIA."

Kroll Associates is a global security and intelligence company. Publicly traded and privately managed, Kroll specializes in large building security and industrial espionage. In 1993, Kroll got a contract to manage security at the World Trade Center. They held that position up until the moment the Towers fell.

The CEO of Kroll was  Michael Cherkasky, who was a former assistant district attorney under Robert Morgenthau in Manhattan. Former employees of Kroll include people like, William Bratton, former police Commissioner in Boston and New York City, and now Chief of the LAPD. And then of course, Brian Jenkins, who is based out of Los Angeles, and was the country's foremost "expert" on aviation terrorism. Now working for the powerful think-tank, The RAND Corporation, Jenkins is a noted counter-terrorism pundit and appears on many talk shows and news magazines.

Which brings us to Jerome Hauer   (left), the go-to-guy for bio-terrorism. As a Managing Director of Kroll in New York City, Hauer was responsible for doing security at the World Trade Center. John Hauer is also the guy who got John O'Neill his job, as head of security at the World Trade Center.

“John O’Neill was head of the FBI’s counterterrorism branch in Washington. He led every important investigation you can name — the USS Cole, Tanzania, Kenya bombings. He retired three weeks ago. I helped him get the job as head of security for the World Trade Center. And the irony is, the guy he chased for most of his career killed him."- Jerome Hauer

Prior to this, Jerome Hauer was Rudi Giuliani's right-hand-man in New York, where he headed up the Office of Emergency Management, OEM - FEMA in New York City. And it was by Jerome Hauer's suggestion, that Mayor Giuliani constructed what became known as the 'federal bunker offices' in World Trade Center building number 7. Fire-proof, bomb-proof, bullet-proof... these OEM offices were basically Giuliani's headquarters in New York City, until WTC7 collapsed on 9-11.  Hauer is also a well-known advisor to the 'Council on Foreign Relations', formerly worked for the 'National Institutes of Health', and is currently the head of the 'Office of Public Health Preparedness'.

On the morning of 9-11, just as the attacks were happening, Hauer instructed the entire White House staff to go on Cipro, the anti-Anthrax drug.

How did he know Anthrax was going to become an issue?

Well, Hauer worked in 1999 with Stephen Hatfill, the prime suspect in the Anthrax attacks, at the Scientific Applications International Corporation, the SAIC. This company, the SAIC, was awarded a huge bio-defense contract after 9-11. Hatfill, a well-known friend of Jerome Hauer, was working for the military grade Anthrax program at USAMRIID at Fort Detrick, Maryland, and Battelle, a chemicals company with long-standing ties to the CIA. Hauer was well-aware of the USAMRIID project in Maryland.

In a nutshell, Kroll has been involved in a host of shady operations. In 1991, the Kuwaiti government hired Kroll to investigate Saddam Hussein's finances. In 2002, Kroll was given the massive responsibility of reorganizing Enron. Through '97 and '98, Kroll oversaw the elections of the Teamsters Union. And just following 9-11, Kroll was tapped by the LAPD to monitor all counter-terrorism efforts in Los Angeles.

Kroll is also tied to the FBI, as well. The director of the FBI during WACO and the first World Trade Center bombing was a man by the name of William Sessions. When he left the bureau, he became a shareholder of Kroll. The next FBI Director was Louis Freeh, and Louis Freeh's top advisor at the Bureau was a guy named James Bucknam. Guess where he works now? He's a Managing Director of Kroll.

At the time this film was made, Freeh was Senior Vice President at the MBNA credit card corporation. His specific duties include personnel and security. Next to Enron, MBNA was the largest campaign contributor to George W. Bush in 2000

One of Freeh's Deputy Directors was James K. Kallstrom. At the time of 9-11, Kallstrom was head of New York State's Office of Public Security. He also worked at MBNA with Louis Freeh. Both are well-known friends of Jerome Hauer. Supposedly, MBNA was one of the companies heavily involved in pre-9-11 insider trading, which would have been investigated by the SEC, if not for the destruction of all of those records WTC #7. How convenient!

There are other companies like Kroll, such as T and M Protection, run by Robert Tucker, who met with O'Neill and Hauer the night before 9/11.  Then there's Strang-Hayes Consulting, Wackenhut Corporation, CTC International, and The Cohen Group.

And let's not forget Stratesec - formerly called SecuraCom. Stratesec also had a contract to do security at the World Trade Center. SecuraCom also had security contracts for Dulles International Airport and United Airlines. Remember, United had two planes crash on 9-11, and one of those planes came from Dulles.

Now an interesting note about SecuraCom is that from 1993 to 2000, one of its principle shareholders was a man by the name of, Marvin Bush (left) the president's younger brother.

So how did all of these guys - Cherkasky, Jenkins, Bratton, Hauer -  become terrorism pundits?  Where do they get all their information?

They aren't official law enforcement or intelligence. Yet, somehow, they became the foremost experts on counter-terrorism?  Many of them are former law enforcement, but since terrorism is one of the most closely guarded fields in all of intelligence, what's the deal with them broadcasting this information on national television? Well, to build up the propaganda, obviously. To frame up al Qaeda before and after the fact. There is no question that Kroll is intimately linked to the CIA. So, these people have so much information about terrorism because they are either deeply rooted to intelligence, or they are intelligence, privatized in order to make their work legal and untouchable by Congress. Brilliant, indeed!

It's no coincidence that Kroll did security at those buildings, and have more inside knowledge about terrorism than even the FBI and CIA do.  They are well-placed operatives working a specific agenda, to frame the patsies. These people profit from insider knowledge of coming terrorist attacks. They don't disclose their credentials or their contacts. They merely claim they are "experts" from "Kroll" and that's supposed to mean they are trustworthy.

Cherkasky was the CEO of Kroll until it was acquired by Marsh and McLennan Companies, Inc., of which Mr. Cherkasky was appointed President and CEO. He held this position until 2008. Cherkasky takes us back to New York and the US Attorney's office in the Southern District of Manhattan. Louis Freeh spent his entire career in law enforcement in New York City before becoming FBI Director. From 1981 to 1991, Freeh worked as a U.S. Attorney in the Southern District of New York City, and Rudi Giuliani worked in that same office from 1983 to 1993, just before he became mayor. Cherkasky was in New York at the same time. Cherkasky was doing a lot of prosecutions too... including Gotti and BCCI, under the oversight of Robert Mueller III. Mueller also oversaw the Noriega case. Noriega, Gotti and the BCCI have one other thing in common: they were all key players in the global drug trade.

Drugs are at the core of this story. The global drug trade is covered with even less honesty in the mainstream press than 9/11 is.

The war between the Soviets and the Afghans ended in 1979. Meanwhile, the drug trade from Latin America was heating up, with significant assistance from the CIA. It started big time with the formation of the Medellin drug cartel in Colombia in 1978.

Founded by Carlos Lehder, the Ochoa bothers and Pablo Escobar, the Medellin cartel operated by manufacturing the Coca plant into cocaine and distributing it into the US. The collaboration began when Lehder purchased an island in the Bahamas where corporate tax and banking laws are extremely lenient. He used that land to launder the money taken in by the drug sales. The Bahamas are home to thousands of tax-exempt corporations, including companies owned and managed by American International Group, AIG, the largest insurance company in the world and the sixth largest corporation in the world. One of AIG's companies in the Bahamas is named after a woman called Coral Talavera. And who is she? She's Carlos Lehder's wife. She is the head of an AIG branch in San Francisco.

Carlos Lehder was extradited from Columbia to the United States for trial in 1987. A year later he was convicted and sentenced to life plus 135 years for drug trafficking and murder. While he was in prison Carlos Lehder struck a deal with the United States. Take down the cartel and he would be granted freedom. Along the way, he implicated and then testified against Manuel Noriega, Panamanian dictator and middleman for the Medellin cartel. Noriega was captured through an invasion of Panama in 1989 under the first President Bush. He was convicted of drug running, money laundering and racketeering in 1992. And Lehder? According to the official US record, whereabouts unknown.

See, there's one thing that ties all these points together - the cartel, AIG, de CIA, the Contras, Noriega - one thing connects them all.

The BCCI. The Bank of Credit and Commerce International, or for our discussion today, the granddaddy of all money laundering scams. The BCCI was and remains the largest instance of fraud and bankruptcy in global history. Operated out of Abu Dhabi, the BCCI operated without fail throughout the 70's and 80's as a money laundering and investment finance bank. This is documented by the investigation of Morgenthau and Cherkasky in New York, also by the investigation in the United States Senate which was headed by Senator John Kerry.

Financial ties can be made between the BCCI and Manuel Noriega through his facilitation of the drug trade. By 1992 the BCCI was broke and busted up by U.S. authorities. The primary shareholder of the BCCI is a guy named Bin Mahfouz, a Saudi financier and investment banker whose other claim to fame is  his dubious investment in Harken Energy in the late 80s, one of George W. Bush's companies.  Yes, this man with a 20% stake in the largest money laundering operation the world's ever seen saved W's business career.  Yes, this man who was known to have funneled money to Osama Bin Laden.

The drug trade escalated in the 1980's with Reagan as president and Bush as V.P. The greatest drug smuggler in the history of drug smuggling is a guy named Barry Seal. He was an admitted CIA agent, who contracted at least as far back as the early 60's. In the early 60's, Barry Seal is living in New Orleans, where he joins the Civil Air Patrol Unit, whose captain is an eccentric fellow by the name of David Ferrie. Ferrie was by all indications a conspirator in the JFK assassination. Another member of the Civil Air Patrol Unit was Lee Harvey Oswald. So seemingly the drug trade is somehow tied to the JFK assassination.

But the connections don't stop there. Barry Seal was a pilot, a great pilot by all accounts. In late 1963 Seal is seen is a photo with Frank Sturgis,  identified and convicted as one of the five Watergate burglars, and Felix Rodriguez. Sturgis  testified in court that his handler on that assignment was E. Howard Hunt, who  went on to work in the Nixon White House. The Rockefeller Commission, who investigated illegal acts by the CIA in 70's, regarded both Hunt and Frank Sturgis as possible conspirators in the JFK assassination. What is Barry Seal doing in a photograph with a possible JFK assassin? But it's the other man in the Seal photograph who has a more ominous distinction.

Felix Rodriguez was a Cuban refugee. In the late 50's he began working with the CIA to recruit more refugees for an invasion of Cuba. This was done under the direction of CIA agent Ted Shackley. Incidentally, Ted Shackley also worked the Far East drug trade with Richard Secord in the early 50's. Felix Rodriguez also figures into the assassination of Bolivian president Che Guevara in 1967. So where is Barry Seal in all of this? He's in New Orleans until at least 1968, when he takes over for the late David Ferrie as captain of the Civil Air Patrol.

Now in the early 70's, Barry Seal's running cocaine through New Orleans. He's running it on planes later identified to be former Air America planes. Planes used by the CIA in the 50's and 60's to ship heroin from the Far East. When the Medellin cartel is founded, Seal immediately hooks up with their operation. By 1981, he is trafficking in more drugs than anyone in the history of this country. And it is around this time that Barry Seal moves his operation from New Orleans to Mena, Arkansas, about 180 miles from Little Rock, a small, little out-of-the-way mountain town. A small, little out-of-the-way mountain town that just happens to have a major U.S. airport, the Mena Intermountain Municipal Airport.

From at least 1981 to 1986 this airport is ground zero for all illegal narcotics activity in the United States. You see, Barry Seal began flying his drugs into this airport, most likely with the knowledge of then-president Reagan and the next two presidents, Bush and Clinton.  It is suspected that Seal traffics in nearly $5 billion worth of cocaine in this five-year period.

The U.S. Attorney for Arkansas at this time, Asa Hutchinson, never opens an investigation, even though FBI informants, Mena employees, and the Arkansas State Police have all told him that this illegal drug trafficking has been occurring. Ironically, Hutchinson went on to head the DEA and is now the Undersecretary for Border Transportation and Security in the Department of Homeland Security.

So Seal is virtually untouchable for this period. Even though the FBI and the DEA have opened up investigations into his operation, he remains a contract agent with the CIA. But with overwhelming evidence of drug trafficking mounting against him, he finally turns State's evidence in 1985, and testifies in several trials against Medellin traffickers.

This compromises the entire CIA operation. Barry Seal isn't only running drugs for the cartel, he's also involved in the drugs for arms trade in Nicaragua. The DEA even places him in a sting to photograph Contras loading cocaine onto an airplane in Nicaragua. And this pisses the CIA off, but good.

Seal's next mission is to trick Pablo Escobar and the Ochoa brothers into coming to a neutral third-party country where they'll be extradited. He's about to take down the entire Medellin cartel. But then news of Seal's cooperation with the DEA became leaked to the national media. He has to be called back in mid-air from his task to meet with the Ochoa brothers and Pablo Escobar. And who's responsible for this press leak? Admittedly, it is none other than Oliver North, the primary figure in the Iran-Contra scandal. Barry Seal is later gunned down in Baton Rouge, assassinated by the Medellin cartel. It is rumored that on his dead body is the personal private phone number of George H. W. Bush.

The Mena operation is already in jeopardy, but it becomes a major problem when one of Seal's former planes is shot down by Sandinistas later in 1986. The only survivor of the crash is a man named Eugene Hasenfus, and he claims he is running cocaine for the CIA. The plane can be tracked back to Mena. So for the time being, the Mena operation is close to being exposed.

No president has ever spoken directly about the events in Mena, Arkansas. However, Governor Clinton, just when he was rising from obscurity to become president, made his only public comments about the massive drug operation being conducted right in his own backyard. In 1991 Clinton referred to the Arkansas State Police investigation into Mena, and the drug trafficking thereof, as having "linkages to the federal government" and "all kinds of questions as to whether he," meaning Seal, "had any links to the CIA, and if that backed into the Iran-Contra deal."

The War on Drugs is just a war against the inner cities....against the underclass. 

The wealthy line their pockets with all the illegal drug money, drugs that they bring into the country themselves, then they peddle them off to the poor people in the ghettos. In the 1980's the number of Americans in prison doubled, from 500,000 to one million. Most of these convicts are drug offenders. And from '85 to '88 alone, prosecutions for white drug offenders dropped 15% while they rose 88% for blacks, even though it is estimated at this time that 80% of all drug users are white.

Ironically, one of the security companies linked to the CIA, Wackenhut Cooperation, owns and maintains its own private prisons here in the U.S. It is another form of government-sponsored terrorism. Poverty, violence, death... these all stem from drug abuse. Think about Prohibition. The government lifted the ban on alcohol because the social ills of alcohol abuse weren't nearly as bad as the violence that went along with the criminal importation of alcohol. So why not legalize all drugs? Surely there would be more drug addiction, more drug-related death,but there would be far less violence associated with the illegal sale of narcotics. Which is the lesser of two evils?

The CIA has destroyed the inner cities of this country. Destroyed millions of lives, at a profit. I'll give you one guess as the primary bank used in laundering the money from the global drug trade. The BCCI.

And then there's AIG, who owns and maintains over 400 airplanes. Any number of these planes can be used for the transfer of narcotics. And in 1987, the Arkansas Development Financial Agency collaborated with AIG to found Coral Reinsurance. Named after Carlos Lehder's wife the same year Lehder was extradited. The formation of this company has never been filed with the SEC. There's no known paperwork on it at all. And Arkansas was where Seal was flying in his drugs, with Bill Clinton as governor of Arkansas, during the heyday of the BCCI, with Noriega still in power in Panama and with John Gotti heading the New York mafia where more drugs end up than anywhere in the world.

AIG's founder is a well-known CIA operative, C.V. Starr, and one of AIG's current directors is the son of CIA founder Frank Wisner. The chairman and CEO of AIG is a man named Maurice "Hank" Greenberg. He's formerly the head of the New York Stock Exchange and the Federal Reserve. Not only that, in 1995 his name was floated by of all people, J. Rockefeller to be head of the CIA.

Instead, Bill Clinton appointed John Deutsch, who had been a director of the SAIC, the technology and bio-defense company that had formerly been advised by Jerome Hauer and Stephen Hatfill. Maurice Greenberg has also chaired the Council on Foreign Relations, the CFR, one of the most powerful organizations in the world.

Founded in 1921 by President Wilson's chief counsel, Colonel Edward House, the CFR operates as the primary advisor to the United States government. The CFR's principal contact in the U.S. is the CIA. And the chairman of the CFR is the CEO of AIG. With its obvious intelligence links, insurance companies are the foremost private intelligence gathering agencies in the world.  Who knows more about you than your insurance company? Your medical records, your bank records, your driving records, your personal history. Your life story. Just think if that company was sharing information with the government. Worse, just think if that company had 100 billion dollars in assets, and could invest that money at will. In 1993 AIG became the principal shareholder of Kroll Associates.

The CIA runs the global drug trade. For what purpose? And what does it have to do with 9/11?

70% of the world's opium is produced in Afghanistan. Think about that for a second. The CIA has run heroin and cocaine for 50 years. They had a military presence in Afghanistan in the 80's, and they created the Mujahedeen. After the fall of the CIA in the 70's, and with the near-disastrous Iran-Contra and Mena exposures the intelligence community, it had to realize that its facilitation of the drug trade, if revealed to the public, could prove fatal to any and all future endeavors. So if you're the CIA you might get a little smarter about it.

With Mena, the CIA had no cover story. No backup plan. Instead the entire operation was nearly outed and the whole global drug trade almost became public knowledge. You have to move the Mena operation. Well where do you move it to? Someplace even more out of the way than Mena. And what's more out of the way than flight school?

Where did Mohammed Atta get his flight training?

Huffman Aviation School in Venice, Florida. There are over 200 flight schools in Florida. Why did the hijackers just happen to choose Huffman? Huffman Flight school is authorized by the INS to offer these very popular vocational student visas to foreigners. These allow people to enter the country legally and without much paperwork. Mohammed Atta had one of these visas. Guess who gave it to him? Rudy Deckers, CEO of Huffman Aviation. And there is overwhelming evidence that Rudy Deckers works for the CIA.

Why would a CIA agent run a flight school?

On July 5th, 2000, the DEA discovered over 30 pounds of heroin on a plane owned by Wally Hilliard, the owner of Huffman Aviation. The same Huffman Aviation which in the 1990's induced hundreds of Arab students to come and train at their school by issuing these highly coveted visas. Is it starting to make sense now?

30 pounds of heroin, Arab men posing as students, a CIA agent as CEO...Aha! the Mena operation didn't stop, it just changed locations, to this flight school and probably dozens of others.

And Mohammed Atta's role in all of this?

He is not training to be a pilot, he is a pilot. He is the new Barry Seal. There is evidence that Mohammed Atta had flight training at Maxwell Air Force Base in Alabama. And if he already has flight training, why is he attending a flight training school? Who says Al Qaeda is a terrorist operation? Al Qaeda was formed in the wake of the fall of the Soviet Union in Afghanistan. The phrase translates literally to mean "the Base." They're essentially an arm of the former Mujahedeen, which was created by the CIA. The CIA runs drugs globally. The CIA trains its own armies and pilots. and instills a military presence in every country, all around their crop.

 The Sandinistas, the Colombian death squads... and now, Al Qaeda. If you're pushing 70% of the world's heroin out of one country, and something goes wrong and the operation becomes public, you need a backup plan. Al Qaeda isn't involved in terrorism. They're just framed up as terrorists to hide their true nature. They're a drug cartel, plain and simple.

On that video they show, of Osama firing his machine gun and training all those people... he's not training terrorists, he's training soldiers. Soldiers to guard the heroin trade. When 9/11 happens, and Al Qaeda is pinned for the crime, no one cares at all about the heroin smuggling. Because drug smuggling means nothing to people who have just watched the World Trade Center explode.

How could Al Qaeda smuggle all this heroin out of Afghanistan when the Taliban abolished all poppy farming in 1999?

They did?  Sure, the U.S. claims they did. But if the Taliban did this, how did they make $40 million in taxes on opium farmers in 2000? The Taliban only eradicated their crop on paper. In reality, the heroin trade continued.

But, There were ariel photographs, surveillance, satellite imagery, showing the fields being burned.

Of course, because part of the process of growing any crop is eradicating the fields to then re-grow the plants. And it makes no sense for the Taliban to stop the flow of opium. It's the only thing keeping their economy afloat at all. And the Taliban is installed in Afghanistan specifically for the purpose of keeping the heroin flow coming. Because if you have a cartel like Al Qaeda, functioning as a patsy, being blamed for terrorist attacks all over the world, you would need a government not recognized by the United Nations. And that way, you couldn't extradite any of the terrorists, and the heroin trade goes on without missing a beat.

So, the only reason they do 9/11 is specifically to hide the fact that Al Qaeda is a drug cartel?  No way!

9/11 didn't just  hide the opium trade. It gave the United States a free pass to invade Afghanistan and build the oil pipeline they'd been planning for years. It set up a race war. It set up a religious war. It opened the door for the United States to invade anybody it deemed was "harboring terrorists," internationally or domestically.

And what did W say? "You're either with us, or you're with the terrorists." And 9/11 instilled in us the basest of all fears. Any time, any day, any place, an airplane, a tall building, the subway, shopping mall, grocery store, local newsstand... chemical, biological, nuclear... it doesn't matter. 9/11 could happen again. And guess what? It will happen again. It's inevitable. This is a lifelong battle.

In this corner, you have the United States, the shining example of freedom, peace, and good will. And in the other corner, you have Al Qaeda. Dirty, bearded, hate-mongering terrorists. The whole thing's a setup. It's a show, it's theater. It distracts all of us from what's really going on. The systematic destruction of national sovereignty all across the world.

What's easier to believe? That Al Qaeda is a vicious terrorist organization bent on annihilating all freedom and peace in the world? Or it's a cartel, whose sole purpose is to ensure the safety of the heroin trade out of the Middle East?

If I were to tell you that a man habitually does cocaine, frequents strip clubs and escort services... Would you believe he were, A: a drug runner, or B: an Islamic fundamentalist?

The man I am referring to is Mohammed Atta. Mohammed Atta was seen doing cocaine several times before 9/11. And what's more, Atta isn't seen doing this all by himself. Often, Rudy Deckers is with him, the guy who runs the flight school. Islamic fundamentalism strictly forbids the ingestion of any unnatural drug, and it firmly teaches that treating women as objects of desire is a sin. So if Mohammed Atta is already committing sins he ain't going to Paradise to see Allah, that's for sure. So why would he then take his own life in a terrorist attack? If you can conclude that Mohammed Atta did not fly one of those planes into the World Trade Center then you must conclude that something else happened on 9/11.

And that begs the question... What really happened on 9/11?

War and drugs are the biggest businesses in the world. They are tools to amass the greatest fear and exercise the mightiest control... control over the mind. They wave the flag of war, posing to wield the ultimate power over places afar, using 9/11 as a fucking bargaining chip.

Support this war or you're going to get attacked again. Bow down to our unconstitutional security measures, or else the guy sitting next to you, he might blow you up. Allow us to attack our enemies before they attack us otherwise all freedom is lost. It's a protection racket. All the government is, is the mob. And their greatest crime is profiting from acts of war. And everybody's in on it.

Defense contractors manufacture weapons for use during war, while supporting and financing political candidates who will go to war. The government that buys weapons from these companies in the event of war. And with war crippling to most economies, nations must then borrow money and go into debt. And all that money goes right up to the top of the food chain... to the banks, which is where it came from in the first place. Only now there's a difference, because the money now has an insane amount of interest attached to it... more than most nations can afford to pay off. And then the cycle repeats itself.

No one ever wonders where the national debt comes from. Who lends countries the billions of dollars it takes to fund a national budget? Is it us? Is it the people? If that's true then the government owes us $7 trillion. It's not us. We didn't give them $7 trillion. There are only 250 billion federal reserve notes in circulation!

So, where does all this money come from?

From banks. From private multinational institutions that conserve immense power behind the scenes. The kind of clout gained from having every person, state, province, and nation in debt to you. By controlling all the money in the world, you can control all the people in the world. And the more war there is, the more money there is. Boeing, Raytheon, Lockheed-Martin, the SAIC, Carlyle Group. The list goes on. Every single one of these companies makes its money off of the misery of others, and to them, it's just 'business as usual'. These companies even arm our enemies before we fight them.  They can even control the people with the threat of war.

And when a tragedy strikes, when the nation is in mourning, when we are at our most vulnerable state, what do they tell us to do?

Shop! They tell us to spend money. Trying to make a quick buck off of grieving people. That's not capitalism. That's not consumerism, it's not even corporatism. You know what it is? It is corporate fundamentalism. All these people know how to do is bring everything to market. The banks, the corporations, the government... the elite. They use poverty to marginalize the rest of the world. The upper one percent... when they tell us there are minorities, blacks, latinos, asians... the only minority that counts is the upper one percent. The rest of us are just slaves. Slaves to the dollar, slaves to the elite, slaves to their dogma. And dogma is so powerful because as soon as you believe it, you become afraid of its opposite.

It's divide and conquer. Divide and conquer.

And they do more than just that. They brainwash us in other ways. Just think back to 9/11. Think back to how confused and helpless we all were. Over and over and over and over, the TV just kept showing the replays. The towers kept falling. A patient suffering from post-traumatic stress disorder will often face a recurring trauma. In this state, scientists have proven, that the human mind is very susceptible to suggestion. These people will believe anything you tell them. We all incurred major trauma on 9/11.

They could have told us that UFO's piloted those planes into the twin towers, and on 9/11, we would have believed them. Because we just needed it to stop. We just needed to point the finger at someone, and say they are responsible, and because we needed to know our government could protect us. It's PTSD on a national scale. All the images, the rhetoric, the patriotic American themes... it has all hijacked our minds.

Senator Johnson said in 1917, 'The first casualty when war comes is the truth.'

And what are we going to do about that? We must do something. And if you don't do something about that right now, all of this will be for naught.

How can you fight a machine that's been running on autopilot for thousands of years. The beast has been alive forever.  So, what do we do?

Revolt?
Vote?
Vote Democrat? Any Democrat? (Remember, this was made when Bush was in office)
Don't Vote at all?
Vote a third party?
Protest? How?
Petition the government?
Write your congressman?
Form an assembly outside the capital?
Rally the troops?
Tell your friends?
Support a conspiracy theory? Any conspiracy theory, so long as it proves your point?
What then? What do people do?
Shout to the Heavens?
March on Washington?
Insurrection? To the death?

Give me liberty or give me death!

Guess what? You might get your wish.



* * * * * * *

On July 8, 2004, Kroll was acquired by insurance brokerage giant Marsh McLennan Companies Inc., run by Jeffrey Greenberg, son of AIG CEO and former director of the Council on Foreign Relations, Maurice "Hank" Greenberg. On October 25, 2004 Jeffrey Greenberg resigned as Chairman and CEO of Marsh McLennan Companies, Inc. The board named Michael G. Cherkasky President and CEO of Marsh & McLennan Companies, Inc., and Chairman and CEO, Marsh Inc.

Banker and oilman Khalid bin Mahfouz is allegedly under house arrest in Saudi Arabia. His actions regarding the BCCI scandal and its money laundering practices have never been completely unearthed. As of the release of this film, bin Mahfouz claims he has never financed Al Qaeda and refutes former CIA director James Woolsey's contention that he is Osama bin Laden's half brother.

On September 10, 2001, it is reported that Osama bin Laden checked into a hospital in Rawalpindi, Pakistan. Rawalpindi is the headquarters of both Pakistani intelligence and the Pakistani military. Presumably, no one has seen bin Laden since.

The 9/11 Commission, chaired by Thomas Kean, released its findings in July of 2004. Although the report indicates that sweeping changes must be made within America's intelligence community, at no point does it mention any relevant connection between the CIA, Al Qaeda, the ISI and Osama bin Laden. To this date, this is the only official public inquiry into the 9/11 attacks.

As of the release of this film, 2,998 people died in the 9/11 attacks. One of those victims is reportedly FBI Agent John O'Neill. However, it should be noted that the body was identified by Kroll employee Jerome Hauer.

The perpetrators of the attacks remain at large.

This film is dedicated to those who seek a just society.

All information in this movie is factual to the filmmaker's knowledge.

"Terrorism is theater"

***********
Building 7 collapse at 5:20 PM 9/11/2001

The evidence is destroyed.  Fires raging on floors 8,11,12,13 and 18. Those floors were the American Express Bank, SEC, Standard Charter Bank and Citigroup. Not to mention, the building had the Secret Service, IRS, NY branch of the CIA, which was the headquarters for the joint FBI/CIA investigation into Al Qaeda. Moreover, Standard Charter bank was used by Omar Shieak Saeed to wire $100,000 to Atta. Those offices of the SEC were ground zero for preemptive investigation in pre 9/11 insider trading. Therefore, getting rid of Building 7 got rid of lots of incriminating evidence.

Read more...

Wednesday, December 09, 2009

Goldman Sachs Responds to Outcry

Goldman Sachs Employees
In Government..Past and Present
:
Goldman Sachs'- The Great American Bubble Machine - expertise in reaping the benefits of generating inflated speculations paid off with a spectacular year, while the rest of us struggled to either keep the jobs we have or replace the jobs we lost.

Despite, our plight, and despite our sacrifice to bail Goldman Sachs out, the firm planned to distribute the biggest bonus payout in its 140-year history. This, of course, outraged Americans everywhere. After all, Goldman, at the mercy of we, the taxpayers, received $10 billion in TARP funds and an additional $12.9 billion in bailout money (as a counterparty to AIG's worthless credit default swaps) not to mention access to as much free credit as they need, amongst other windfalls, that the average American can only imagine in their wildest dreams. Yes, they paid back the $10 billion, but that's a drop in the bucket, considering the ocean of advantages they received. Not to mention, by paying the money back, they escaped the executive compensation limits, and the constraints that existed until the bailout money was paid back.

Well, it appears Goldman has responded to their largest shareholders who would like to see Goldman's profits lining their pockets, rather than the pockets of Goldman employees, and to the public outcry against the the biggest bonus payout in the firm's history. Goldman's 30 most-senior executives will be paid in the form of stock, rather than in cash.

“– The firm’s entire 30-person management committee, which comprises all global divisional and regional leadership, will receive 100 percent of their discretionary compensation in the form of Shares at Risk, which are subject to restrictions for five years. Discretionary compensation represents the vast majority of senior management’s compensation and is directly tied to the firm’s overall performance.”

“– Shares at Risk cannot be sold for five years, in addition to other restrictions.”

“– The five-year holding period on Shares at Risk includes an enhanced recapture provision that will permit the firm to recapture the shares in cases where the employee engaged in materially improper risk analysis or failed sufficiently to raise concerns about risks. Enhancing our recapture provision is intended to ensure that our employees are accountable for the future impact of their decisions, to reinforce the importance of risk controls to the firm and to make clear that our compensation practices do not reward taking excessive risk.”

“– The enhanced recapture rights build off an existing clawback mechanism which goes well beyond employee acts of fraud or malfeasance and includes any conduct that is detrimental to the firm, including conduct resulting in a material restatement of the financial statements or material financial harm to the firm or one of its business units.”

“– Shareholders will have an advisory vote on the firm’s compensation principles and the compensation of its named executive officers at the firm’s Annual Meeting of Shareholders in 2010.”
Links:

Goldman Sachs Announces Changes to 2009 Compensation Program

Goldman Sachs Alters Its Bonus Policy to Quell Uproar

$994,795 is what Goldman's employees contributed to President Obama's campaign, making them #1 amongst Obama's contributors.

Top 5 AIG executives may quit over pay: - Five top executives at troubled insurer American International Group (AIG) said last week they will quit if their compensation is cut significantly by the US pay czar, says a media report.

Read more...

Monday, October 05, 2009

The Calculated Dishonesty That Caused Financial Meltdown

Bill Moyers interviews William K. Black, the former senior regulator who cracked down on banks during the savings and loan crisis of the 1980s. about the financial crisis.



Transcript:

BILL MOYERS: Welcome to the Journal.

For months now, revelations of the wholesale greed and blatant transgressions of Wall Street have reminded us that "The Best Way to Rob a Bank Is to Own One." In fact, the man you're about to meet wrote a book with just that title. It was based upon his experience as a tough regulator during one of the darkest chapters in our financial history: the savings and loan scandal in the late 1980s.

WILLIAM K. BLACK: These numbers as large as they are, vastly understate the problem of fraud.

BILL MOYERS: Bill Black was in New York this week for a conference at the John Jay College of Criminal Justice where scholars and journalists gathered to ask the question, "How do they get away with it?" Well, no one has asked that question more often than Bill Black.

The former Director of the Institute for Fraud Prevention now teaches Economics and Law at the University of Missouri, Kansas City. During the savings and loan crisis, it was Black who accused then-house speaker Jim Wright and five US Senators, including John Glenn and John McCain, of doing favors for the S&L's in exchange for contributions and other perks. The senators got off with a slap on the wrist, but so enraged was one of those bankers, Charles Keating — after whom the senate's so-called "Keating Five" were named — he sent a memo that read, in part, "get Black — kill him dead." Metaphorically, of course. Of course.

Now Black is focused on an even greater scandal, and he spares no one — not even the President he worked hard to elect, Barack Obama. But his main targets are the Wall Street barons, heirs of an earlier generation whose scandalous rip-offs of wealth back in the 1930s earned them comparison to Al Capone and the mob, and the nickname "banksters."

Bill Black, welcome to the Journal.

WILLIAM K. BLACK: Thank you.

BILL MOYERS: I was taken with your candor at the conference here in New York to hear you say that this crisis we're going through, this economic and financial meltdown is driven by fraud. What's your definition of fraud?

WILLIAM K. BLACK: Fraud is deceit. And the essence of fraud is, "I create trust in you, and then I betray that trust, and get you to give me something of value." And as a result, there's no more effective acid against trust than fraud, especially fraud by top elites, and that's what we have.

BILL MOYERS: In your book, you make it clear that calculated dishonesty by people in charge is at the heart of most large corporate failures and scandals, including, of course, the S&L, but is that true? Is that what you're saying here, that it was in the boardrooms and the CEO offices where this fraud began?

WILLIAM K. BLACK: Absolutely.

BILL MOYERS: How did they do it? What do you mean?

WILLIAM K. BLACK: Well, the way that you do it is to make really bad loans, because they pay better. Then you grow extremely rapidly, in other words, you're a Ponzi-like scheme. And the third thing you do is we call it leverage. That just means borrowing a lot of money, and the combination creates a situation where you have guaranteed record profits in the early years. That makes you rich, through the bonuses that modern executive compensation has produced. It also makes it inevitable that there's going to be a disaster down the road.

BILL MOYERS: So you're suggesting, saying that CEOs of some of these banks and mortgage firms in order to increase their own personal income, deliberately set out to make bad loans?

WILLIAM K. BLACK: Yes.

BILL MOYERS: How do they get away with it? I mean, what about their own checks and balances in the company? What about their accounting divisions?

WILLIAM K. BLACK: All of those checks and balances report to the CEO, so if the CEO goes bad, all of the checks and balances are easily overcome. And the art form is not simply to defeat those internal controls, but to suborn them, to turn them into your greatest allies. And the bonus programs are exactly how you do that.

BILL MOYERS: If I wanted to go looking for the parties to this, with a good bird dog, where would you send me?

WILLIAM K. BLACK: Well, that's exactly what hasn't happened. We haven't looked, all right? The Bush Administration essentially got rid of regulation, so if nobody was looking, you were able to do this with impunity and that's exactly what happened. Where would you look? You'd look at the specialty lenders. The lenders that did almost all of their work in the sub-prime and what's called Alt-A, liars' loans.

BILL MOYERS: Yeah. Liars' loans--

WILLIAM K. BLACK: Liars' loans.

BILL MOYERS: Why did they call them liars' loans?

WILLIAM K. BLACK: Because they were liars' loans.

BILL MOYERS: And they knew it?

WILLIAM K. BLACK: They knew it. They knew that they were frauds.

WILLIAM K. BLACK: Liars' loans mean that we don't check. You tell us what your income is. You tell us what your job is. You tell us what your assets are, and we agree to believe you. We won't check on any of those things. And by the way, you get a better deal if you inflate your income and your job history and your assets.

BILL MOYERS: You think they really said that to borrowers?

WILLIAM K. BLACK: We know that they said that to borrowers. In fact, they were also called, in the trade, ninja loans.

BILL MOYERS: Ninja?

WILLIAM K. BLACK: Yeah, because no income verification, no job verification, no asset verification.

BILL MOYERS: You're talking about significant American companies.

WILLIAM K. BLACK: Huge! One company produced as many losses as the entire Savings and Loan debacle.

BILL MOYERS: Which company?

WILLIAM K. BLACK: IndyMac specialized in making liars' loans. In 2006 alone, it sold $80 billion dollars of liars' loans to other companies. $80 billion.

BILL MOYERS: And was this happening exclusively in this sub-prime mortgage business?

WILLIAM K. BLACK: No, and that's a big part of the story as well. Even prime loans began to have non-verification. Even Ronald Reagan, you know, said, "Trust, but verify." They just gutted the verification process. We know that will produce enormous fraud, under economic theory, criminology theory, and two thousand years of life experience.

BILL MOYERS: Is it possible that these complex instruments were deliberately created so swindlers could exploit them?

WILLIAM K. BLACK: Oh, absolutely. This stuff, the exotic stuff that you're talking about was created out of things like liars' loans, that were known to be extraordinarily bad. And now it was getting triple-A ratings. Now a triple-A rating is supposed to mean there is zero credit risk. So you take something that not only has significant, it has crushing risk. That's why it's toxic. And you create this fiction that it has zero risk. That itself, of course, is a fraudulent exercise. And again, there was nobody looking, during the Bush years. So finally, only a year ago, we started to have a Congressional investigation of some of these rating agencies, and it's scandalous what came out. What we know now is that the rating agencies never looked at a single loan file. When they finally did look, after the markets had completely collapsed, they found, and I'm quoting Fitch, the smallest of the rating agencies, "the results were disconcerting, in that there was the appearance of fraud in nearly every file we examined."

BILL MOYERS: So if your assumption is correct, your evidence is sound, the bank, the lending company, created a fraud. And the ratings agency that is supposed to test the value of these assets knowingly entered into the fraud. Both parties are committing fraud by intention.

WILLIAM K. BLACK: Right, and the investment banker that — we call it pooling — puts together these bad mortgages, these liars' loans, and creates the toxic waste of these derivatives. All of them do that. And then they sell it to the world and the world just thinks because it has a triple-A rating it must actually be safe. Well, instead, there are 60 and 80 percent losses on these things, because of course they, in reality, are toxic waste.

BILL MOYERS: You're describing what Bernie Madoff did to a limited number of people. But you're saying it's systemic, a systemic Ponzi scheme.

WILLIAM K. BLACK: Oh, Bernie was a piker. He doesn't even get into the front ranks of a Ponzi scheme...

BILL MOYERS: But you're saying our system became a Ponzi scheme.

WILLIAM K. BLACK: Our system...

BILL MOYERS: Our financial system...

WILLIAM K. BLACK: Became a Ponzi scheme. Everybody was buying a pig in the poke. But they were buying a pig in the poke with a pretty pink ribbon, and the pink ribbon said, "Triple-A."

BILL MOYERS: Is there a law against liars' loans?

WILLIAM K. BLACK: Not directly, but there, of course, many laws against fraud, and liars' loans are fraudulent.

BILL MOYERS: Because...

WILLIAM K. BLACK: Because they're not going to be repaid and because they had false representations. They involve deceit, which is the essence of fraud.

BILL MOYERS: Why is it so hard to prosecute? Why hasn't anyone been brought to justice over this?

WILLIAM K. BLACK: Because they didn't even begin to investigate the major lenders until the market had actually collapsed, which is completely contrary to what we did successfully in the Savings and Loan crisis, right? Even while the institutions were reporting they were the most profitable savings and loan in America, we knew they were frauds. And we were moving to close them down. Here, the Justice Department, even though it very appropriately warned, in 2004, that there was an epidemic...

BILL MOYERS: Who did?

WILLIAM K. BLACK: The FBI publicly warned, in September 2004 that there was an epidemic of mortgage fraud, that if it was allowed to continue it would produce a crisis at least as large as the Savings and Loan debacle. And that they were going to make sure that they didn't let that happen. So what goes wrong? After 9/11, the attacks, the Justice Department transfers 500 white-collar specialists in the FBI to national terrorism. Well, we can all understand that. But then, the Bush administration refused to replace the missing 500 agents. So even today, again, as you say, this crisis is 1000 times worse, perhaps, certainly 100 times worse, than the Savings and Loan crisis. There are one-fifth as many FBI agents as worked the Savings and Loan crisis.

BILL MOYERS: You talk about the Bush administration. Of course, there's that famous photograph of some of the regulators in 2003, who come to a press conference with a chainsaw suggesting that they're going to slash, cut business loose from regulation, right?

WILLIAM K. BLACK: Well, they succeeded. And in that picture, by the way, the other — three of the other guys with pruning shears are the...

BILL MOYERS: That's right.

WILLIAM K. BLACK: They're the trade representatives. They're the lobbyists for the bankers. And everybody's grinning. The government's working together with the industry to destroy regulation. Well, we now know what happens when you destroy regulation. You get the biggest financial calamity of anybody under the age of 80.

BILL MOYERS: But I can point you to statements by Larry Summers, who was then Bill Clinton's Secretary of the Treasury, or the other Clinton Secretary of the Treasury, Rubin. I can point you to suspects in both parties, right?

WILLIAM K. BLACK: There were two really big things, under the Clinton administration. One, they got rid of the law that came out of the real-world disasters of the Great Depression. We learned a lot of things in the Great Depression. And one is we had to separate what's called commercial banking from investment banking. That's the Glass-Steagall law. But we thought we were much smarter, supposedly. So we got rid of that law, and that was bipartisan. And the other thing is we passed a law, because there was a very good regulator, Brooksley Born, that everybody should know about and probably doesn't. She tried to do the right thing to regulate one of these exotic derivatives that you're talking about. We call them C.D.F.S. And Summers, Rubin, and Phil Gramm came together to say not only will we block this particular regulation. We will pass a law that says you can't regulate. And it's this type of derivative that is most involved in the AIG scandal. AIG all by itself, cost the same as the entire Savings and Loan debacle.

BILL MOYERS: What did AIG contribute? What did they do wrong?

WILLIAM K. BLACK: They made bad loans. Their type of loan was to sell a guarantee, right? And they charged a lot of fees up front. So, they booked a lot of income. Paid enormous bonuses. The bonuses we're thinking about now, they're much smaller than these bonuses that were also the product of accounting fraud. And they got very, very rich. But, of course, then they had guaranteed this toxic waste. These liars' loans. Well, we've just gone through why those toxic waste, those liars' loans, are going to have enormous losses. And so, you have to pay the guarantee on those enormous losses. And you go bankrupt. Except that you don't in the modern world, because you've come to the United States, and the taxpayers play the fool. Under Secretary Geithner and under Secretary Paulson before him... we took $5 billion dollars, for example, in U.S. taxpayer money. And sent it to a huge Swiss Bank called UBS. At the same time that that bank was defrauding the taxpayers of America. And we were bringing a criminal case against them. We eventually get them to pay a $780 million fine, but wait, we gave them $5 billion. So, the taxpayers of America paid the fine of a Swiss Bank. And why are we bailing out somebody who that is defrauding us?

BILL MOYERS: And why...

WILLIAM K. BLACK: How mad is this?

BILL MOYERS: What is your explanation for why the bankers who created this mess are still calling the shots?

WILLIAM K. BLACK: Well, that, especially after what's just happened at G.M., that's... it's scandalous.

BILL MOYERS: Why are they firing the president of G.M. and not firing the head of all these banks that are involved?

WILLIAM K. BLACK: There are two reasons. One, they're much closer to the bankers. These are people from the banking industry. And they have a lot more sympathy. In fact, they're outright hostile to autoworkers, as you can see. They want to bash all of their contracts. But when they get to banking, they say, ‘contracts, sacred.' But the other element of your question is we don't want to change the bankers, because if we do, if we put honest people in, who didn't cause the problem, their first job would be to find the scope of the problem. And that would destroy the cover up.

BILL MOYERS: The cover up?

WILLIAM K. BLACK: Sure. The cover up.

BILL MOYERS: That's a serious charge.

WILLIAM K. BLACK: Of course.

BILL MOYERS: Who's covering up?

WILLIAM K. BLACK: Geithner is charging, is covering up. Just like Paulson did before him. Geithner is publicly saying that it's going to take $2 trillion — a trillion is a thousand billion — $2 trillion taxpayer dollars to deal with this problem. But they're allowing all the banks to report that they're not only solvent, but fully capitalized. Both statements can't be true. It can't be that they need $2 trillion, because they have masses losses, and that they're fine.

These are all people who have failed. Paulson failed, Geithner failed. They were all promoted because they failed, not because...

BILL MOYERS: What do you mean?

WILLIAM K. BLACK: Well, Geithner has, was one of our nation's top regulators, during the entire subprime scandal, that I just described. He took absolutely no effective action. He gave no warning. He did nothing in response to the FBI warning that there was an epidemic of fraud. All this pig in the poke stuff happened under him. So, in his phrase about legacy assets. Well he's a failed legacy regulator.

BILL MOYERS: But he denies that he was a regulator. Let me show you some of his testimony before Congress. Take a look at this.

TIMOTHY GEITHNER: I've never been a regulator, for better or worse. And I think you're right to say that we have to be very skeptical that regulation can solve all of these problems. We have parts of our system that are overwhelmed by regulation.

Overwhelmed by regulation! It wasn't the absence of regulation that was the problem, it was despite the presence of regulation you've got huge risks that build up.

WILLIAM K. BLACK: Well, he may be right that he never regulated, but his job was to regulate. That was his mission statement.

BILL MOYERS: As?

WILLIAM K. BLACK: As president of the Federal Reserve Bank of New York, which is responsible for regulating most of the largest bank holding companies in America. And he's completely wrong that we had too much regulation in some of these areas. I mean, he gives no details, obviously. But that's just plain wrong.

BILL MOYERS: How is this happening? I mean why is it happening?

WILLIAM K. BLACK: Until you get the facts, it's harder to blow all this up. And, of course, the entire strategy is to keep people from getting the facts.

BILL MOYERS: What facts?

WILLIAM K. BLACK: The facts about how bad the condition of the banks is. So, as long as I keep the old CEO who caused the problems, is he going to go vigorously around finding the problems? Finding the frauds?

BILL MOYERS: You--

WILLIAM K. BLACK: Taking away people's bonuses?

BILL MOYERS: To hear you say this is unusual because you supported Barack Obama, during the campaign. But you're seeming disillusioned now.

WILLIAM K. BLACK: Well, certainly in the financial sphere, I am. I think, first, the policies are substantively bad. Second, I think they completely lack integrity. Third, they violate the rule of law. This is being done just like Secretary Paulson did it. In violation of the law. We adopted a law after the Savings and Loan crisis, called the Prompt Corrective Action Law. And it requires them to close these institutions. And they're refusing to obey the law.

BILL MOYERS: In other words, they could have closed these banks without nationalizing them?

WILLIAM K. BLACK: Well, you do a receivership. No one -- Ronald Reagan did receiverships. Nobody called it nationalization.

BILL MOYERS: And that's a law?

WILLIAM K. BLACK: That's the law.

BILL MOYERS: So, Paulson could have done this? Geithner could do this?

WILLIAM K. BLACK: Not could. Was mandated--

BILL MOYERS: By the law.

WILLIAM K. BLACK: By the law.

BILL MOYERS: This law, you're talking about.

WILLIAM K. BLACK: Yes.

BILL MOYERS: What the reason they give for not doing it?

WILLIAM K. BLACK: They ignore it. And nobody calls them on it.

BILL MOYERS: Well, where's Congress? Where's the press? Where--

WILLIAM K. BLACK: Well, where's the Pecora investigation?

BILL MOYERS: The what?

WILLIAM K. BLACK: The Pecora investigation. The Great Depression, we said, "Hey, we have to learn the facts. What caused this disaster, so that we can take steps, like pass the Glass-Steagall law, that will prevent future disasters?" Where's our investigation?

What would happen if after a plane crashes, we said, "Oh, we don't want to look in the past. We want to be forward looking. Many people might have been, you know, we don't want to pass blame. No. We have a nonpartisan, skilled inquiry. We spend lots of money on, get really bright people. And we find out, to the best of our ability, what caused every single major plane crash in America. And because of that, aviation has an extraordinarily good safety record. We ought to follow the same policies in the financial sphere. We have to find out what caused the disasters, or we will keep reliving them. And here, we've got a double tragedy. It isn't just that we are failing to learn from the mistakes of the past. We're failing to learn from the successes of the past.

BILL MOYERS: What do you mean?

WILLIAM K. BLACK: In the Savings and Loan debacle, we developed excellent ways for dealing with the frauds, and for dealing with the failed institutions. And for 15 years after the Savings and Loan crisis, didn't matter which party was in power, the U.S. Treasury Secretary would fly over to Tokyo and tell the Japanese, "You ought to do things the way we did in the Savings and Loan crisis, because it worked really well. Instead you're covering up the bank losses, because you know, you say you need confidence. And so, we have to lie to the people to create confidence. And it doesn't work. You will cause your recession to continue and continue." And the Japanese call it the lost decade. That was the result. So, now we get in trouble, and what do we do? We adopt the Japanese approach of lying about the assets. And you know what? It's working just as well as it did in Japan.

BILL MOYERS: Yeah. Are you saying that Timothy Geithner, the Secretary of the Treasury, and others in the administration, with the banks, are engaged in a cover up to keep us from knowing what went wrong?

WILLIAM K. BLACK: Absolutely.

BILL MOYERS: You are.

WILLIAM K. BLACK: Absolutely, because they are scared to death. All right? They're scared to death of a collapse. They're afraid that if they admit the truth, that many of the large banks are insolvent. They think Americans are a bunch of cowards, and that we'll run screaming to the exits. And we won't rely on deposit insurance. And, by the way, you can rely on deposit insurance. And it's foolishness. All right? Now, it may be worse than that. You can impute more cynical motives. But I think they are sincerely just panicked about, "We just can't let the big banks fail." That's wrong.

BILL MOYERS: But what might happen, at this point, if in fact they keep from us the true health of the banks?

WILLIAM K. BLACK: Well, then the banks will, as they did in Japan, either stay enormously weak, or Treasury will be forced to increasingly absurd giveaways of taxpayer money. We've seen how horrific AIG -- and remember, they kept secrets from everyone.

BILL MOYERS: A.I.G. did?

WILLIAM K. BLACK: What we're doing with -- no, Treasury and both administrations. The Bush administration and now the Obama administration kept secret from us what was being done with AIG. AIG was being used secretly to bail out favored banks like UBS and like Goldman Sachs. Secretary Paulson's firm, that he had come from being CEO. It got the largest amount of money. $12.9 billion. And they didn't want us to know that. And it was only Congressional pressure, and not Congressional pressure, by the way, on Geithner, but Congressional pressure on AIG.

Where Congress said, "We will not give you a single penny more unless we know who received the money." And, you know, when he was Treasury Secretary, Paulson created a recommendation group to tell Treasury what they ought to do with AIG. And he put Goldman Sachs on it.

BILL MOYERS: Even though Goldman Sachs had a big vested stake.

WILLIAM K. BLACK: Massive stake. And even though he had just been CEO of Goldman Sachs before becoming Treasury Secretary. Now, in most stages in American history, that would be a scandal of such proportions that he wouldn't be allowed in civilized society.

BILL MOYERS: Yeah, like a conflict of interest, it seems.

WILLIAM K. BLACK: Massive conflict of interests.

BILL MOYERS: So, how did he get away with it?

WILLIAM K. BLACK: I don't know whether we've lost our capability of outrage. Or whether the cover up has been so successful that people just don't have the facts to react to it.

BILL MOYERS: Who's going to get the facts?

WILLIAM K. BLACK: We need some chairmen or chairwomen--

BILL MOYERS: In Congress.

WILLIAM K. BLACK: --in Congress, to hold the necessary hearings. And we can blast this out. But if you leave the failed CEOs in place, it isn't just that they're terrible business people, though they are. It isn't just that they lack integrity, though they do. Because they were engaged in these frauds. But they're not going to disclose the truth about the assets.

BILL MOYERS: And we have to know that, in order to know what?

WILLIAM K. BLACK: To know everything. To know who committed the frauds. Whose bonuses we should recover. How much the assets are worth. How much they should be sold for. Is the bank insolvent, such that we should resolve it in this way? It's the predicate, right? You need to know the facts to make intelligent decisions. And they're deliberately leaving in place the people that caused the problem, because they don't want the facts. And this is not new. The Reagan Administration's central priority, at all times, during the Savings and Loan crisis, was covering up the losses.

BILL MOYERS: So, you're saying that people in power, political power, and financial power, act in concert when their own behinds are in the ringer, right?

WILLIAM K. BLACK: That's right. And it's particularly a crisis that brings this out, because then the class of the banker says, "You've got to keep the information away from the public or everything will collapse. If they understand how bad it is, they'll run for the exits."

BILL MOYERS: Yeah, and this week in New York, at this conference, you described this as more than a financial crisis. You called it a moral crisis.

WILLIAM K. BLACK: Yes.

BILL MOYERS: Why?

WILLIAM K. BLACK: Because it is a fundamental lack of integrity. But also because, if you look back at crises, an economist who is also a presidential appointee, as a regulator in the Savings and Loan industry, right here in New York, Larry White, wrote a book about the Savings and Loan crisis. And he said, you know, one of the most interesting questions is why so few people engaged in fraud? Because objectively, you could have gotten away with it. But only about ten percent of the CEOs, engaged in fraud. So, 90 percent of them were restrained by ethics and integrity. So, far more than law or by F.B.I. agents, it's our integrity that often prevents the greatest abuses. And what we had in this crisis, instead of the Savings and Loan, is the most elite institutions in America engaging or facilitating fraud.

BILL MOYERS: This wound that you say has been inflicted on American life. The loss of worker's income. And security and pensions and future happened, because of the misconduct of a relatively few, very well-heeled people, in very well-decorated corporate suites, right?

WILLIAM K. BLACK: Right.

BILL MOYERS: It was relatively a handful of people.

WILLIAM K. BLACK: And their ideologies, which swept away regulation. So, in the example, regulation means that cheaters don't prosper. So, instead of being bad for capitalism, it's what saves capitalism. "Honest purveyors prosper" is what we want. And you need regulation and law enforcement to be able to do this. The tragedy of this crisis is it didn't need to happen at all.

BILL MOYERS: When you wake in the middle of the night, thinking about your work, what do you make of that? What do you tell yourself?

WILLIAM K. BLACK: There's a saying that we took great comfort in. It's actually by the Dutch, who were fighting this impossible war for independence against what was then the most powerful nation in the world, Spain. And their motto was, "It is not necessary to hope in order to persevere."

Now, going forward, get rid of the people that have caused the problems. That's a pretty straightforward thing, as well. Why would we keep CEOs and CFOs and other senior officers, that caused the problems? That's facially nuts. That's our current system.

So stop that current system. We're hiding the losses, instead of trying to find out the real losses. Stop that, because you need good information to make good decisions, right? Follow what works instead of what's failed. Start appointing people who have records of success, instead of records of failure. That would be another nice place to start. There are lots of things we can do. Even today, as late as it is. Even though they've had a terrible start to the administration. They could change, and they could change within weeks. And by the way, the folks who are the better regulators, they paid their taxes. So, you can get them through the vetting process a lot quicker.

BILL MOYERS: William Black, thank you very much for being with me on the Journal.

WILLIAM K. BLACK: Thank you so much.

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Wednesday, April 15, 2009

If Big Banks Are Terrorists, It's Even More Important We Don't Give In.

In an attempt to explain why the government needed to bail out the troubled banks, President Obama said that AIG is like a suicide bomber.

“We had to step in, it was the right thing to do, even though it is infuriating. The same is true with AIG. It was the right thing to do to step in. Here’s the problem. It’s almost like they’ve got — they’ve got a bomb strapped to them and they’ve got their hand on the trigger. You don’t want them to blow up. But you’ve got to kind of talk them, ease that finger off the trigger.

While that may be true, it is the policy of the United States not to give in to terrorism. We've already eased their fingers off the trigger. At this point, as we enter the second or third phase of the bailout, it's important that we, the people take a stand and tell the financial sector that they do not run this country. We can start by standing up to Goldman Sachs, JP Morgan, Citigroup and Bank of America.

Take Goldman Sachs, who wants to pay back the $10 billion it borrowed from the Troubled Asset Relief Program (TARP). Sounds like a good thing, right?

Wrong, according to former International Monetary Fund chief economist, Simon Johnson, currently Professor of Entrepreneurship at MIT's Sloan School of Management, in addition to senior fellow at the Peterson Institute for International Economics, co-founder of BaselineScenario.com, and a member of the Congressional Budget Office's Panel of Economic Advisers

Initially, the government wanted to carefully manage the flow of information regarding the results of the stress tests that Obama ordered on 19 banks, because any time that kind of sensitive information is revealed, the risk of destabilizing the markets becomes much greater, and increases the pressure on rival banks, who are not ready to pay back TARP funds, by undermining their business models and hindering thier ability to raise capital, possibly putting them in a position of needing more TARP money.

Goldman Sachs, by announcing that they plan to pay back the TARP money, contingent upon the results of the stress test, sent a strong signal that they were going to ace it. This, of course would greatly tilt the playing field to Goldman Sachs' advantage, something we don't want at a time when "too big to fail" is something we are trying to discourage, especially considering that big financial players are even bigger now that Bear Stearns and Lehman Bros. have been eliminated.

Goldman Sachs still receives government assistance created last Fall when the crisis came to a head, that take several forms - access to credit from the Federal Reserve made possible by government allowing them to change legal forms in the midst of the crisis; government (FDIC) backing or guarantee of loans; $13 billion dollars that they received through the AIG bailout, due to thier counter party status to AIG that Goldman will never have to pay back, etc. At the same time that Goldman Sachs receives the continuing support of the government, by paying the TARP money back, Goldman Sachs can remove all the constraints set by the government, including the restrictions on executive pay, the very thing that contributed to the current finanical meltdown.

The very nature of these compensantion schemes encouraged and greatly rewarded the risk taking that brought our financial system to the brink of disaster.

In Simon Johnson's article "The Quiet Coup" in the May issue of The Atlantic Monthly, Johnson explains that in order to improve our economy, we must break the power of the financial oligarchy that is blocking reform. If we do not break this power structure, and allow the financial sector to take back its authority America could face a crisis that in Johnson's words, "could, in fact, be worse than the Great Depression — because the world is now so much more interconnected and because the banking sector is now so big."

"We face at least two major, interrelated problems. The first is a desperately ill banking sector that threatens to choke off any incipient recovery that the fiscal stimulus might generate. The second is a political balance of power that gives the financial sector a veto over public policy, even as that sector loses popular support." - Simon Johnson
If we've learned anything from this financial crisis, it should be that big business is only interested in bigger business, nothing else, therefore we should ask Goldman Sachs, "What's in it for you, and what do we have to lose?" The answer is: everything... to both questions.

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Tuesday, April 14, 2009

Imagine U.S. Without Texas.

Warning: This is mostly a "rant". If you're easily offended or love the state of Texas, DON'T READ the following.

* A fourth-grade teacher from Texas, asked her students to imagine themselves as AIG employees. She asked them to imagine a situation where they had not directly involved in the deals that ruined the company, but were left to clean up the mess. She asked them to imagine having to pay back money they felt they had earned. She asked them to imagine themselves and their families receiving death threats.

One boy raised his hand and asked if they could write notes to tell them it's going to be okay.

The teacher said they could and the class wrote sympathy notes to all the top executives.

According to employee Patrick O'Neil, who responded on behalf of AIG, this act of kindness made the executives break down and cry.

"There were more than a few moist eyes and tight throats. To have reached out to us in such a heartfelt way is really a testament to your individual and collective humanity."
In addition, Gerry Pasciucco, the current leader of AIG-FP, also wrote to say that the "gesture had deeply touched his battered staff."

It's clear that this group of elites who participated in causing the collapse of our financial markets are only concerned about one thing, themselves. This act only convinced them further that they are the ones to be pitied.

Imagine if this teacher, had, instead, explained how the behavior of this company, not only contributed to leaving tax payers with an enormous debt, that they will have to pay, but that billions of people around the world are suffering, and will continue suffering as the ripple effects of this crisis continue to billow outward.

It is estimated that ten million additional people will die of starvation around the world because of this crisis. That doesn't account for the numerous people who will descend into a deeper poverty. What about their sympathy notes?

And what happened to Texas' - the death penalty capital of the country - hard line ultra punitive politics that drive its tougher than tough system of law and order? Obviously, this "off with their heads" mentality only applies to the little people...the people who can't defend themselves. These people, the recipients of this outpouring of compassion can more than defend themselves, so they're above the law, in the eyes of Texas, anyway.

It's too bad Texas is so big, because without this "magnificent" state, our nation's map would resemble the bottom-toothless smile of the Calgary Flames's power forward, Todd Bertuzzi and we can't have that. So, despite its severe flaws, we can't let Texas secede.

Anyway, how could this country go on without the Dallas Cowboys? As much as I "loathe" Texas, I love the Dallas Cowboys.

* Although, my feelings about Texas (although I hear Austin, TX is a pretty cool place) and this situation are real, I do realize this teacher's actions do not represent the state of Texas, and that maybe's she's right...when children show compassion...it's important to take advantage of that opportunity. I just wish she had provided more options.

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Wednesday, December 10, 2008

As the Corporate Bread Line Turns.

AIG, who received more than $152 billion from American taxpayers, is handing out more cash rewards, that serve to double or triple the salaries of some senior executives. Did I say cash rewards? My mistake. AIG refers to these bonuses as retention payouts. This "retention" program will pay out as much as $4 million to 38 managers.

Retention? Where are these people going? Haven't they heard? Thanks to them, the economy is in rapid free-fall. And, if they do decide to leave...who cares? What did they achieve?

The "Cockroach Theory" certainly applies to AIG. We still can't see the extent of the "infestation" for all the solid walls still standing...a fresh $10 billion in losses just found. In other words, retaining inefficient, greedy and exploitative employees at our expense should not be tolerated, but it is.

"The gibberish about needing to pay that much just to keep superstars from fleeing to private-equity firms or hedge funds is just another Wall Street myth. The truth is most of them are lucky to have a job at all and they know it." - William D. Cohan
Merrill Lynch’s chief executive requested a $10 million bonus this year for all the hard work he had to do putting "Humpty Dumpty" back together. However, it appears CEO, John Thain may not get his wish, as well as many other Merrill execs.

Morgan Stanley is getting tough. They are attaching strings by imposing claw-back provisions to the bonuses they will eventually pay out, but they will be paid out.
The collective liability clause honored by partners was replaced with a system where bankers and traders were encouraged to take short-term risks with shareholders’ money. Gone, too was the idea of being held responsible for your actions (short of outright fraud). Managers at publicly traded banks constantly exhorted their traders to do bigger and bigger deals and to take increasing amounts of risk, and then rewarded them with millions of dollars in compensation — money that belonged to shareholders. Reputations were made not by turning down imprudent business but by seeing how much business could be done. - William D. Cohan
The same lack of oversight issues remain, as the Treasury has yet to do anything about it further enabling the corporate breadline.

Executive Paywatch Database

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