Posted on 04/07/2010 5:53:20 PM PDT by dangthis
"At today’s Financial Crisis Inquiry Commission hearing, Brooksley Born, the former head of the Commodity Futures Trading Commission, declared Alan Greenspan’s tenure at the Federal Reserve an unmitigated failure – to his face. Greenspan accords a certain degree of respect on Capitol Hill, despite Born’s accurate take on his many failures, and so this outburst was highly unusual – and gratifying.
Born, who pushed to strictly regulate derivatives under the Clinton Administration, but lost the battle to, among other people, Alan Greenspan, told the former Federal Reserve chair that his agency “failed to prevent housing bubble, failed to prevent the predatory lending scandal, failed to prevent the activities that would bring the financial system to the verge of collapse.”
“You failed to prevent many of our banks from consolidating and growing to a size that are now too big or too interconnected to fail,” Born added. She added that Greenspan’s views on deregulation, which he took as an article of faith, contributed to the Federal Reserve’s failure in delivering on its mandate."
(Excerpt) Read more at news.firedoglake.com ...
Paulson: Russia and China plotted an economic meltdown
http://www.freerepublic.com/focus/f-news/2440456/posts
http://www.drudge.com/news/129591/paulson-blames-russia-fanniefreddie
http://blogs.dailymail.com/donsurber/archives/8465
http://www.freerepublic.com/focus/f-news/2440456/posts
Did they notice Sep 15, 2008 was a Monday?
“Investors were rushing out of these [Treasury and Federal Reserve] funds—$105 billion out of $1.8 trillion on Thursday alone—which in turn caused the funds to redeem their commercial paper investments.”
How do you redeem commercial paper?
“On Thursday at about 11 o’clock in the morning the Federal Reserve noticed a tremendous drawdown of money market accounts in the United States, to the tune of $550 billion was being drawn out in a matter of an hour or two.
How would the Fed notice people making withdrawal requests from their money market accounts?
Nearly $3 trillion travels thru the Fedwire system every day. How would they even notice?
The Treasury opened up its window to help. It pumped $105 billion in the system
The Treasury doesn't have a "window".
The Federal Reserve does. You'd think something this important wouldn't get confused like that.
and quickly realized that they could not stem the tide; we were having an electronic run on the banks. They decided to close the operation,
Close what operation?
close down the money accounts and announce a guarantee of $250,000 per account so there wouldn’t be further panic out there.”
Who decided to "close down the money accounts"?
The $550 Billion withdrawn in an hour or two that Rep. Kanjorski refers to in his statement has never been independently confirmed or refuted.
Yeah, that's what I thought.
It's a story too good to confirm.
“The Federal Reserve does. You’d think something this important wouldn’t get confused like that.”
Interesting point. I’m out of my league here, but as I understand it, banks are given secret membership in the Federal Reserve. There’s a lot of secrecy about it. Based on the way Greenspan propped up Goldeman Sachs, there’s a good guess about an important member.
[Goldman Sachs was heavily invested in China in the late 90s. Paul Weyrich’s America Voice/NET had an expose, Red Chips, that caused Chinese investments to plummet, and Greenspan propped up Sachs.
‘Who decided to “close down the money accounts”?’
Once again, secrecy. Secret control and manipulation by a government run entity, all started by FDR’s banking regulations.
“The $550 Billion withdrawn in an hour or two that Rep. Kanjorski refers to in his statement has never been independently confirmed or refuted.”
He’s not the only one. Paulson talked about it himself. I posted several links about Paulson on this thread. He is convinced that Russia and China orchestrated the meltdown, and the timing is highly suspicious.
If Soros were involved, Obama gave him a payoff with Brazilian oil. Goldman Sachs received payoffs.
I’m next going to get into an undeniable truth about government control of capitalism. FRegards ....
Membership in the Fed is not secret.
Based on the way Greenspan propped up Goldeman Sachs
When did Greenspan do that?
He’s not the only one. Paulson talked about it himself.
I didn't see any Paulson comments about Kanjorski's run on the MMAs.
If Soros were involved, Obama gave him a payoff with Brazilian oil. Goldman Sachs received payoffs.
Yeah, sure.
Philosophical truth about capitalism [very basic]
George Washington: “Government is not reason; it is not eloquence; it is force. Like fire, it is a dangerous servant and a terrible master.”
Here’s the the problem with government power in the nutshell — corrupt people gravitate toward easy money. Right now, the easy money is found through D.C. mispending tax money and misusing Federal power [such as Kelo]. It’s really that simple. Honest money is earned in the private sector. You have to work for that. No, not completely honest — but the buyer is a better caretaker of his wealth than the government ever will be.
Government control can appear helpful if good leaders are in charge. But good leaders are precious few. Ambition comes mainly from selfish desires. The best leaders of government don’t even want the job. Example — George Washington. They wanted to make him king. He didn’t want it. He resigned after eight years of president. Seeking no perks, he hated the job.
Contrast that with FDR, Bill Clinton, and Obama.
FDR was the only president who to remain in power beyond eight years. He wanted the job. How did he lead? Ham fisted government control. What was the result? Perks to cronies, more centralized government power, and a lenghtened, deepened recession.
Destruction of the US court system through a threat to pack the courts. An amendment DEMANDING that presidents must step down after eight years, and also amending the Constitution to prevent more than nine justices — the closest thing to a Magna Carta on Prince John we have had to date.
Bill Clinton — not satisfied with eight years, sought to make wife president. Tireless work. Ramped up risky loans which led to the 08 Meltdown. Sought to regulate firearms. Escalante Land Grab which barred us from cheap, clean burning coal. Payoffs from China. Nukes to China for campaign cash. Corruption that made him cowtow to Islamic fanatics for oil, a weakness that led to 9-11. Took control of national media, leading to massive misinformation to voters. Desired gatekeeper of internet to stop “lies” about a tax funded mistress.
Obama — plenty known about him in recent news.
“Membership in the Fed is not secret.”
Please correct me. As I said, I just heard that once and am not an authority. What banks work closely with coordinating with the Federal Reserve behind the scenes to prevent insider trading?
“Based on the way Greenspan propped up Goldeman Sachs. When did Greenspan do that?”
It was right after the Red Chip scandal in the late 90s. Sachs was given special treatment, threatening to go under without a government loan. Greenspan gave them that.
“I didn’t see any Paulson comments about Kanjorski’s run on the MMAs.”
Maybe so, but Paulson is convinced that Russia and China orchestrated the meltdown. That’s more significant, don’t you think?
“If Soros were involved, Obama gave him a payoff with Brazilian oil. Goldman Sachs received payoffs. Yeah, sure.”
Obama Helps Soros Drill For Oil In Brazil | Sweetness & LightFrom RIGZONE:
http://sweetness-light.com/archive/obama-helps-soros-drill-oil-in-brazil
US Ready to Finance Oil Drilling in Brazil EFE News Services 8/5/2009 The US government is prepared to provide up to $10.
sweetness-light.com/.../obama-helps-soros-drill-oil-in-brazil
Counterpoint can be found by FactCheck, which I told is run by Annenberg [who supports America-hating terrorist Bill Ayers and tweaked the vetting of Obama]
As for Goldman Sachs, it’s a sleazy firm from the word “go”. They have made out like bandits since the meltdown. It doesn’t take a rocket scientist to guess they knew it was coming and planned accordingly.
Wall Street’s Bailout Hustle
http://www.freerepublic.com/focus/f-news/2456899/posts
On January 21st, Lloyd Blankfein left a peculiar voicemail message on the work phones of his employees at Goldman Sachs. Fast becoming America’s pre-eminent Marvel Comics supervillain, the CEO used the call to deploy his secret weapon: a pair of giant, nuclear-powered testicles. In his message, Blankfein addressed his plan to pay out gigantic year-end bonuses amid widespread controversy over Goldman’s role in precipitating the global financial crisis. The bank had already set aside a tidy $16.2 billion for salaries and bonuses — meaning that Goldman employees were each set to take home an average of $498,246, a number roughly...
Goldman profits on both AIG’s collapse, breakup
http://www.freerepublic.com/focus/f-news/2462245/posts
More about Goldman Sachs:
Goldman Denies It Bet Against Clients
http://www.freerepublic.com/focus/f-news/2488938/posts
In rare letter to shareholders, Goldman denies double-dealing
http://www.freerepublic.com/focus/f-news/2488507/posts
http://www.freerepublic.com/focus/f-news/2451036/posts
Wall St. Helped Greece to Mask Debt Fueling Europe’s Crisis ...50 posts - 22 authors - Last post: Feb 14
Der Spiegel: How Goldman Sachs Helped Greece to Mask its True Debt .... to understand that all of this stimulus money and public spending has to be paid back. ... a bad name by labeling the array of shenanigans as “Crony Capitalism”. .... Disclaimer: Opinions posted on Free Republic are those of the ...
The Fed isn't involved in preventing insider trading.
Sachs was given special treatment, threatening to go under without a government loan. Greenspan gave them that.
He gave them a loan? You have any proof?
but Paulson is convinced that Russia and China orchestrated the meltdown. That’s more significant, don’t you think?
You bet, if you can prove it.
Obama Helps Soros Drill For Oil In Brazil
That proves Soros was involved in Kanjorski's imaginary run?
In his message, Blankfein addressed his plan to pay out gigantic year-end bonuses amid widespread controversy over Goldman’s role in precipitating the global financial crisis
Precipitating the global financial crisis, how'd that do that?
“It was a Democrat party social engineering program. It was a Wall Street greed scheme that benefited every politician in power.”
Correct. And that weakness was exploited by Putin and his secret allies who acted like arbs [one of the few trading terms I know].
“The Fed isn’t involved in preventing insider trading.”
So the Fed is allowed to give insider tips ahead of time to cronies? That’s legal?
“He gave [Sachs] a loan? You have any proof?”
I remember that report clearly. It infuriated me. But it’s not easy to dig that far back in google. It’s over ten years ago.
“Paulson is convinced that Russia and China orchestrated the meltdown. That’s more significant, don’t you think? You bet, if you can prove it.”
It’s all over the internet. Here are the links again:
Paulson: Russia and China plotted an economic meltdown
http://www.freerepublic.com/focus/f-news/2440456/posts
http://www.drudge.com/news/129591/paulson-blames-russia-fanniefreddie
http://blogs.dailymail.com/donsurber/archives/8465
http://www.freerepublic.com/focus/f-news/2440456/posts
“[Oil In Brazil] That proves Soros was involved in Kanjorski’s imaginary run?”
I never said I could prove that Soros was involved. I said “if”. Soros is a slippery one, but this is his MO.
As for your last question, the report is linked.
And by the way, you make me feel like I’m being cross examined by a hostile attorney. What the heck is your beef?
No.
That’s legal?
No. And just what inside tips are you imagining? Be specific.
I remember that report clearly.
I never heard such a report.
It’s all over the internet. Here are the links again:
Russia trying to get China to sell some Fannie Mae bonds cause the meltdown? LOL!
Even if China and Russia sold some bonds, to imagine that was the cause of the crisis is funny.
I never said I could prove that Soros was involved.
You have a whole lot of can't proves in your claims, don't you?
Hostile? It only feels that way because you can't come up with any proof for your claims.
What the heck is your beef?
Tired of people making silly claims on FR. Makes us look bad.
The Great American Bubble Machine how Goldman Sachs has engineered every major market manipulation
http://www.freerepublic.com/focus/f-news/2451220/posts
‘The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling...
Greece Paid Goldman $300 Million To Help It Hide Its Ballooning Debts
http://www.freerepublic.com/focus/f-news/2451481/posts
Simon Johnson: Goldman Is About To Be Blacklisted And Possibly Banned In Europe
http://www.freerepublic.com/focus/f-news/2452042/posts
Simon Johnson: Goldman Is About To Be Blacklisted And Possibly Banned In Europe Joe Weisenthal Feb. 15, 2010, 6:45 AM MIT professor Simon Johnson raises some provocative scenarios in regards to Goldman’s participation in Greece’s scheme to obfuscate its debt levels. In particular, he expects a full audit of the company, and perhaps some kind of ban: If the Federal Reserve were an effective supervisor, it would have the political will sufficient to determine that Goldman Sachs has not been acting in accordance with its banking license. But any meaningful action from this direction seems unlikely. Instead, Goldman will probably...
“Russia trying to get China to sell some Fannie Mae bonds cause the meltdown? LOL!”
You are AMAZING. There was a major run on banks that led to Bush’s panic. You think Russia is too weak to do something like that? YOU are the one who is funny. For crying out loud, it’s delusional to assume that Russia is weak and poor. Hah! For crying out loud, you’re starting to sound desperate to discredit me.
“You have a whole lot of can’t proves in your claims, don’t you?”
I think you helped me prove something about YOU.
Rolling Stone? LOL!
In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future
OMG! Governments borrowed money?
with those liabilities then left off the books.
OMG! Governments lied?
There was a system wide panic, still haven't seen any evidence Kanjorski's story is true.
You think Russia is too weak to do something like that?
Yes, Russia is too weak to cause a system wide panic. Short of launching some nukes.
For crying out loud, it’s delusional to assume that Russia is weak and poor.
Their GDP is about $1.2 trillion. Less than 10% of ours.
Ann Coulter: OBAMA’S OWNED — YOU CAN BANK ON IT (Bought and Paid for)
http://www.freerepublic.com/focus/f-news/2448703/posts
February 10, 2010 The New York Times and The Wall Street Journal are bristling with the news that Republicans have decided now is the time to suck up to Wall Street. As the saying goes, there is no truer friend than a Wall Street arbitrageur — they are the salt-of-the-earth, the most loyal men who ever drew a breath! What are Republicans thinking? While not every money-manipulator on Wall Street deserves to be treated like a heroin dealer, lots do. Could the Republicans be a little more discriminating in picking up the Democrats’...
Geithner’s Backdoor Bailout for AIG
http://www.freerepublic.com/focus/f-news/2444553/posts
Federal Reserve Bank of New York Subpoenaed in AIG
http://www.freerepublic.com/focus/f-news/2448855/posts
Here’s the latest in the question of the New York Fed, Treasury Secretary Tim Geithner and the AIG bailout, as we’ve covered here at Big Government before (here and here). Last year, Iraq war vet Kevin Murray brought a lawsuit against the Treasury Department and Ben Bernanke (Murray vs. Geithner, et al) for its acquisition of AIG– a scheme that made the US taxpayer the world’s largest provider of Shariah-compliant insurance products. Lawyers David Yerushalmi and The Thomas More Law Center’s Robert Muise found, in the course of discovery, that that was just the tip of the iceberg. Yerushalmi and...
Testy Conflict With Goldman Helped Push A.I.G. to Edge
http://www.freerepublic.com/focus/f-news/2446130/posts
Billions of dollars were at stake when 21 executives of Goldman Sachs and the American International Group convened a conference call on Jan. 28, 2008, to try to resolve a rancorous dispute that had been escalating for months. A.I.G. had long insured complex mortgage securities owned by Goldman and other firms against possible defaults. With the housing crisis deepening, A.I.G., once the world’s biggest insurer, had already paid Goldman $2 billion to cover losses the bank said it might suffer. A.I.G. executives wanted some of its money back, insisting that Goldman — like a homeowner overestimating the damages in a...
The Trojan Horse Meets the Vampire Squid (Goldman Sachs innovates to restructure Greece’s debts)
http://www.freerepublic.com/focus/f-news/2451175/posts
Goldman Sachs and the Cap-and-Trade Jackpot
http://www.freerepublic.com/focus/f-news/2450953/posts
Goldman Caught Using European Loophole To Help Massively Understate Greek Deficit
http://www.freerepublic.com/focus/f-news/2447561/posts
Goldman Sachs’s CEO Blankfein Gets $9 Million Bonus for 2009
http://www.freerepublic.com/focus/f-news/2445385/posts
THE FORGOTTEN BAILOUT OF THE 90s [which did indeed help Sachs]
LONG TERM CAPITAL MANAGEMENT
http://www.endgame.org/dtc/l.html
Hedge fund bailed out by the Federal Reserve Bank in 1998, on the grounds that its bankruptcy could cause worlwide financial panic.
LTCM was founded in 1993 by Nobel Prize winners Robert C. Merton and Myron Scholes, together with Wall Street giant John Meriwether. LTCM involved the biggest investment banks, including Chase Manhattan, Citigroup, J. P. Morgan; Merrill Lynch, Morgan Stanley, Goldman Sachs, Bear Stearns, Lehman Brothers, UBS, Deutsche Bank, Credit Suisse, and Societe Generale. By early 1998 LTCM had assets of $130 billion and commanded a derivatives portfolio with a notional value of $1.25 trillion.
“The slide toward financial panic would have begun with a flutter of pages off a fax machine in Greenwich, Conn., each a notice of foreclosure. The instant that Long-Term Capital Management missed a payment to a creditor, it would technically have been in default to all of its roughly 75 creditors, thanks to loan provisions that required it to remain current on all its debts. Facing losses, those creditors would have sold assets that the firm had pledged as collateral, sending prices plunging. Dozens of markets, from Denmark to Brazil, would have bucked like terrified stallions. The selling frenzy would have roiled American markets in junk bonds, corporate takeover stocks, mortgage securities and even Treasury bonds. Businesses that depend on those markets for money to expand and add jobs would have suffered. So would consumers whose mortgage rates are influenced by those markets and who have billions in retirement savings in them. Fears of such a financial panic and its economic aftershocks prompted the Federal Reserve Bank of New York to help arrange an 11th-hour rescue of the fund by 14 Wall Street banks and brokerage firms in September... Top executives of banks and brokerage firms estimate privately that the collapse of Long-Term Capital alone could have cost their businesses a total of $8 billion to $15 billion, and one senior executive said he believed that the amounts could have been 10 times higher in a market stampede. “It would have turned a machine gun on the Street,” he said.” (Diana B. Henriques, Back From The Brink, New York Times, Dec 6, 1998).
The near-collapse of Long-Term Capital Management in October 1998 led to a $3.5 billion emergency bail-out organised by the New York Federal Reserve. Fourteen investment banks, including Goldman Sachs Group and Merrill Lynch, saved themselves by providing a $3.5 billion cushion to support LTCM while it was dismantled. Federal Reserve chairman Alan Greenspan cut interest rates to revive world markets. (Irish Times, Nov 26, 1999, p. 58).
Under the terms of the LTCM bail-out, the fund managers had to wait until 90% of the money was repaid before starting a new fund. William McDonough, president of the Federal Reserve Bank of New York, was quoted as saying that “I don’t think we quite said they were criminally stupid, but if you have any ability to read between the lines, it was there,” and in regards to LTCM staying in business, McDonough said, “If they continue in business at all it will be by another name, and they may not be in business at all, never mind by another name. I can assure you that is a result that pleases me considerably.” (Houston Chronicle, Oct 2, 1999, p. 2).
“Lawyers from the 14 financial institutions that bailed out Long-Term Capital Management in September have discussed how far they should comply with a request from the US General Accounting Office for detailed information on the events surrounding the rescue of the hedge fund. The GAO has been asked to report on the LTCM issue by Congress, which is considering whether there is a need for new legislation to regulate either hedge funds or the financial intermediaries whose lending activities allowed LTCM to build up massive exposure. It wrote to lawyers for the institutions, which include Merrill Lynch, JP Morgan, Goldman Sachs and Citigroup, several weeks ago, asking for detailed information and analysis on issues such as the role of the Federal Reserve Bank of New York in co-ordinating the rescue, and the need for further regulatory action.” (Financial Times (London), June 22, 1999, p. 1).
GAO report: “GAO noted that: (1) LTCM was able to establish leveraged trading positions of a size that posed potential systemic risk, primarily because the banks and securities and futures firms that were its creditors and counterparties failed to enforce their own risk management standards; (2) other market participants and federal regulators relied upon these large banks and securities and futures firms to follow sound risk management practices in providing LTCM credit; (3) however, weaknesses in the risk management practices of these creditors and counterparties allowed LTCM’s size and use of leverage to grow unrestrained; (4) the effects of these weaknesses became apparent during the unsettled market conditions that occurred in the summer of 1998; (5) LTCM began to lose large amounts of money in various trading positions worldwide and by mid-September was on the verge of failure; (6) the Federal Reserve facilitated a private sector recapitalization of LTCM because of concerns that a rapid liquidation of LTCM’s trading positions and related positions of other market participants in already highly volatile markets might cause extreme price movements and cause some markets to temporarily cease functioning; (7) although regulators were aware of the potential systemic risk that hedge funds can pose to markets and the perils of declining credit standards, until LTCM’s near-collapse, they said they believed that creditors and counterparties were appropriately constraining hedge funds’ leverage and risk-taking; (8) however, examinations done after LTCM’s near-collapse revealed weaknesses in credit risk management by banks and broker-dealers that allowed LTCM to become too large and leveraged; (9) regulators for each industry have generally continued to focus on individual firms and markets, the risks they face, the soundness of their practices, but they have failed to address interrelationships across each industry; (10) lack of authority over certain affiliates of securities and futures firms limits the ability of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) to identify the kind of systemic risk that LTCM posed; and (11) the President’s Working Group report recommended that Congress provide SEC and CFTC expanded authority to obtain and verify information from unregistered affiliates of broker-dealers and future commission merchants.” (U.S. General Accounting Office, Long-Term Capital Management: Regulators Need to Focus Greater Attention on Systemic Risk, Letter Report, Oct 29, 1999, GAO/GGD-00-3).
“By mid-1999, David Mullins, a former vice-chairman of the Federal Reserve, and Greg Hawkins told LTCM staff that they will not be part of the attempt by some of the original partners to start a new company and attempt to take back control of the fund. Other original partners, including Myron Scholes, had already announced their departure from LTCM. It leaves a core group of six original LTCM partners negotiating with the institutions that now control the hedge fund’s assets. The six are led by John Meriwether and are all former employees of Salomon Brothers, the investment bank now called Salomon Smith Barney. They also include Larry Hillibrand, and have been dubbed “Larry and the Leftovers” by LTCM staff.” (New York Times, Jan 29, 1999, p. C3).
But by November 1999, with the fund nearly repaid, Meriwether and five other founding members of LTCM were planning to launch a new hedge fund called JWM with between $ 300 and $500 million in assets. (The Guardian (London), Nov 5, 1999, p. 27).
“It shouldn’t take international financial regulators long to sort out the problems thrown up by the near-collapse of Long-Term Capital Management. The issues are devilishly complex - but those involved all seem to know each other. When a dozen large banks and investment houses got together this week to figure out how to handle hedge funds, who better to lead their deliberations than Steve Thieke of J.P. Morgan, and Gerald Corrigan of Goldman Sachs? Experienced hands, both. It should help that Thieke used to work for Corrigan when he was president of the New York Federal Reserve. Meanwhile, Bill McDonough, Corrigan’s successor in that post, is chairman of the Basle committee of banking supervisors, also grappling with the problem of how to control hedge fund exposures. The only face missing from the reunion is Ernie Patrikis, who left the New York Fed last year to join American International Group, the insurer. Still, with regulators trying to grapple with banking and insurance conglomerates, it can’t be long before he joins the party.” (Financial Times (London), Jan 8, 1999, p. 15).
“Bank regulators meeting in the Basle Committee, under the auspices of the BIS [Bank for International Settlements], as well as securities regulators in the International Organisation of Securities Commissioners (Iosco), have been looking at ways of avoiding a repeat of LTCM’s problems.” (Financial Times (London), April 14, 1999, p. 4).
Sources of information:
Roger Lowenstein, When Genius Failed: The Rise and Fall of Long Term Capital Management.
How did Putin act like an arb?
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