As promised, here is part two of Bruce Wiseman's latest article, detailing who's "pulling the strings" on the financial crisis.
If you still think that "these things just happen," then I suggest you get comfy on the couch again and wait patiently for the next episode of The Real Housewives of Atlanta. We'll check in with you later.
NEIL LEVIN
THE DERIVATIVES BOOM
The acknowledged boogie-man of the world’s financial crisis were mortgages, many of which were sub-prime, packaged up into investment products called mortgage backed securities - also called derivatives because the package, the security, derived its value from the underlying mortgages. There is much more to this story (See: The Financial Crisis: A Look Behind the Wizard’s Curtain) but the point here is that these mortgages were a critical component to the crisis.
For reasons we detail in a follow up article, The Financial Crisis: The Hidden Beginning, the explosive growth of these products was due in large part to the fact that the securities carried a AAA investment grade rating. That rating was granted because Goldman Sachs and other banks were able to purchase what was essentially credit insurance for the investment. In other words, if the investment went bad, it was “insured” against loss.
This kind of protection was called a credit default swap. Though “swaps” looked like insurance and acted like insurance, they were remarkably adjudicated not to be so, thus eliminating the need for the “insurer” to hold reserves against possible losses. This opened the door to a torrent of speculation in the derivatives.
Let Matt Taibbi tell it. “AIG, a major purveyor of default swaps, approached the New York State Insurance Department in 2000 and asked whether default swaps would be regulated as insurance. At the time, the office was run by one Neil Levin, a former Goldman vice president, who decided against regulating the swaps. Now freed to underwrite as many housing-based securities and buy as much credit-default protection as it wanted, Goldman went berserk with lending lust. By the peak of the housing boom in 2006, Goldman was underwriting $76.5 billion worth of mortgage-backed securities - a third of which were subprime - much of it to institutional investors like pensions and insurance companies.”
GARY GENSLER
THE COMMODITIES EXCHANGE
But not to worry. We’re protected now. The regulation of many derivatives and other exotic financial instruments - the $5 trillion dollar commodity futures industry (gold, silver, oil, treasury bills, corn, cotton, sugar, etc.) - has recently been delegated by President Obama to Gary Gensler.
Gensler was confirmed as the head of the Commodity Futures Trading Commission (CFTC) in May, but it took a little arm twisting. Some members of Congress had misgivings.
You see, back in 2000, when he was at Treasury, Gensler advocated legislation, which eventually passed exempting - credit default swaps and some other derivatives from regulation.
Still, it’s hard to argue with his understanding of derivatives. He spent 18 years at Goldman Sachs, the most aggressive derivative trader on Wall Street, where he became a Partner. He subsequently went to the Treasury Department where he pushed for the deregulation of the industry. Now President Obama has put him in charge of it.
Change we can believe in…
DUNCAN NIEDERAUER
THE NEW YORK STOCK EXCHANGE
Goldman alumni not only control the commodities markets, but the major stock markets of the world, as well. In May of 2007, the grand daddy of stock markets, the New York Stock Exchange (NYSE), bought Euronext (a pan-European stock exchange with subsidiaries in Belgium, France, Netherlands, Portugal and the United Kingdom) which, now branded as NYSE Euronext, operates the largest securities exchange on the planet.
To run the show, the newly combined entity brought in Duncan Niederauer and appointed him Chief Executive Officer. Niederauer had been a Partner and Managing Director at Goldman Sachs before joining NYSE Euronext.
STEPHEN FRIEDMAN
The NEW YORK FED
The Federal Reserve System controls the country’s money supply. Nice gig if you can get it. It is made up of a Board of Governors (7) appointed by the President for 14 year terms, and 12 Federal Reserve Banks around the country. The New York Fed is a first among equals. An institution of awesome power, it supervises and controls the major money center banks in New York, the capital of the US financial industry.
The New York Fed worked closely with Treasury Secretary Paulson on numerous aspects of the bailout during the chaos of the financial meltdown in the Fall and Winter of ’08.
Much of this work was carried out by Timothy Geithner, then President of the New York Fed until Rubin helped get him the job as the Secretary of the Treasury. The Chairman of the New York Fed at this time was Stephen Friedman. He picked up the reins when Geithner left while looking for a replacement.
Friedman was a former CEO of Goldman Sachs, and later Chairman at Goldman. He’d left Goldman in 2002 to oversee economic policy in the Bush White House as the Chairman of the National Economic Council. Later, Bush appointed him to the Chairmanship of the President’s Foreign Intelligence Advisory Board.
In 2004, he returned to New York and the Chairmanship of the Fed. He also returned to Goldman to become its Chairman while he was also the Chairman of the Federal Reserve Bank of New York.
WILLIAM DUDLEY
To replace Geithner as President of the NY Fed, Friedman selected William Dudley. Dudley had been a Partner and Managing Director at Goldman Sachs for ten years prior to the Fed appointment.
Incest doesn’t begin to say it.
From the White House to Treasury; from the New York Fed to AIG; from the Commodity Futures Trading Commission to the New York Stock Exchange, Goldman is there.
ROBERT ZOELLICK
The WORLD BANK AND THE INTERNATIONAL MONETARY FUND
But it doesn’t stop at our shores. It’s a global economy today, which requires global control.
The World Bank was founded in 1945 to help with the reconstruction of Europe after the Second World War. Over the years, their mission changed.
Today they claim that their purpose is to eliminate world poverty. Kind of a pin-striped Mother Theresa for the planet. Unfortunately, this is at odds with what they actually do. If they were achieving their aims, the countries that they worked with would be prospering. But the reverse is true. In fact, an objective view of the results of the bank’s activities leads one to the inescapable conclusion that what the World Bank produces is indebted nations.
In their beneficence, the World Bank makes loans to third world countries, countries that can’t borrow elsewhere. The loans carry conditions that dictate domestic policy “adjustments” in health, education, tax policy, judicial matters, agriculture, manufacturing….
You get the picture. The Bank and its sister organization, The International Monetary Fund, have about ¾ of the planet in debt like this.Medieval doctors always prescribed the same “cure”; no matter what the ailment, they applied leeches to patients and bled them. For the past decade and a half, critics have likened the World Bank and the International Monetary Fund (IMF) to these doctors.
The President of the World Bank is Robert Zoellick. In this position, Zoellick walks in the shoes of great Humanitarians like uber-Neocon Paul Wolfowitz, “Architect of the Iraq War,” and Robert McNamara, the Johnny Appleseed of Agent Orange.
The two institutions have thrown millions of people deeper into poverty by promoting the same harsh economic reforms… regardless of local culture, resources or economic context. Strapped with heavy debts, most developing countries have reluctantly accepted these reforms, know as Structural Adjustment Programs (SAPS), as a condition for receiving IMF or World Bank loans.
In recent years, the doctors’ harsh medicine has been exposed in dozens of studies and in increasingly vocal street protests. In response, the World Bank and the IMF have been attempting to revamp their public image into that of anti-poverty crusaders.
http://www.thirdworldtraveler.com/IMF_WB/IMF_CosmeticMakeover.html
Zoellick is in charge of spreading loans around the world to eliminate poverty, not unlike McNamara’s blanketing of South East Asia with Agent Orange to stop Communism. Both agendas produce the same results – toxicity, and in some cases, death – of the corporal body or the body politic.
Prior to joining the World Bank, Zoellick served as Vice Chairman, International, of the Goldman Sachs Group.
You gotta love these guys.
The World Bank and the International Monetary Fund (whose most powerful Board member is our very own Timothy Geithner) are the key tacticians in ensuring that the planet’s smaller economies remain deeply in debt. But they are no longer at the apex of international finance today.
As I have made clear in our earlier articles, The purpose of this financial crisis was to take down the United States and the U.S. dollar as the stable datum of planetary finance and, in the midst of the resulting confusion, put in its place a Global Monetary Authority—a planetary financial control organization to “ensure this never happens again.”
This purpose has now been accomplished.
To explain how, I quote from an article I wrote on this subject a few weeks ago.
THE FINANCIAL STABILITY BOARD
On April 2, 2009, the members of the G-20 (a loose-knit organization of the central bankers and finance ministers of the 20 major industrialized nations) issued a communiqué that gave birth to what is no less than Big Brother in a three-piece suit.
The communiqué announced the creation of the all too Soviet sounding Financial Stability Board (FSB). The Financial Stability Board. Remember that name well, because they now have control of the planet’s finances . . . and, when one peels the onion of the communiqué, control of much, much more.
THE 12 INTERNATIONAL STANDARDS AND CODES
While several press releases from the G-20’s London conclave reference these codes as though they were handed down from a fiscal Mount Sinai, finding the specifics takes some digging.
But then the Bank for International Settlements (BIS), out of which the FSB operates, has never seen transparency as one of its core values. In fact, given its fascist pedigree, transparency hasn’t been a value at all. Known as Hitler’s bank, the Bank for International Settlements worked arm in arm with the Nazis, facilitating the transfer of gold from Nazi-occupied countries to the Reichsbank, and kept their lines open to the international financial community during the Second World War.
The BIS is completely above the law.
It is like a sovereign state. Its personnel have diplomatic immunity for their persons and papers. No taxes are levied on the bank or the personnel’s salaries. The grounds are sovereign, as are the buildings and offices. The Swiss government has no legal jurisdiction over the bank and no government agency or authority has oversight over its operations.
In a 2003 article titled “Controlling the World’s Monetary System the Bank for International Settlements,” Joan Veon wrote:“The BIS is where all of the world’s central banks meet to analyze the global economy and determine what course of action they will take next to put more money in their pockets, since they control the amount of money in circulation and how much interest they are going to charge governments and banks for borrowing from them. . . .
And if you don’t find that troubling, the “Key International Standards and Codes” just adopted by the Financial Stability Board cover such things as:
“When you understand that the BIS pulls the strings of the world’s monetary system, you then understand that they have the ability to create a financial boom or bust in a country. If that country is not doing what the money lenders want, then all they have to do is sell its currency.”
• specification of the structure and functions of government;(!)
• data gathering from ministries of education, health, finance and other agencies;
• matters dealing with personal savings accounts, retirement incomes.
Here’s an example of the FSB in action from an article written by former Clinton advisor and political strategist Dick Morris for The Bulletin on April 6, 2009.“The FSB is also charged with ‘implementing . . . tough new principles on pay and compensation and to support sustainable compensation schemes and the corporate social responsibility of all firms.’
Almost no one on the planet has grasped what has occurred here.
“That means that the FSB will regulate how much executives are to be paid and will enforce its idea of corporate social responsibility at ‘all firms.’”
Most central banks are answerable to no one. The U.S. Federal Reserve, for instance, is a private bank. It is owned by shareholders. Yes, the President appoints the Chairman, and the Chairman must testify before Congress, but no one gives them orders or tells them what to do. Again, they are a private, not government, institution (a very good reason to support Ron Paul’s bill [H.R. 1207] calling for Congressional authority to audit the Fed – something they currently have no right to do.)
And it is the newly created Financial Stability Board, operating as an arm of the Bank for International Settlements, that now structures and dictates the rules and regulations to be carried out by the central banks of the world.
And given the fact that central banks essentially operate independently of their national congresses or parliaments, the FSB now controls the monetary policy of the planet.
It is now, for all practical purposes, the Politburo of international finance. And who is the Chairman of this little known entity based in Basel, Switzerland? Mario Draghi. Draghi was a Partner at Goldman Sachs, until, like Henry Paulson, he left Goldman in 2006. Paulson took over the U.S. Treasury and Draghi become the Governor of the Bank of Italy (Italy’s central bank) and in April of this year, Chairman of the Financial Stability Board.
Draghi is also a member of the Board of Directors of the Bank for International Settlements. In fact, the BIS board reads like a Goldman reunion committee. Mark Carney, had a thirteen year career with Goldman Sachs where he became the Managing Director of Investment Banking before becoming the Governor of the Bank of Canada and a member of the BIS Board.
William Dudley, President of the New York Fed and former Partner at Goldman Sachs is also a member of the Board, along with Draghi.
And there, you have it. Complete financial control of U.S. financial policy and markets, from the White House, Treasury, the New York Fed and the New York Stock Exchange and the Commodity Futures Trading Commission. Control of the World Bank, most powerful member of the International Monetary Fund and, at the top of the fiscal food chain, the Bank for International Settlements and its Financial Stability Board.
This is my fourth article in a series about the financial crisis. Despite our exposure of what some commentators have called Goldman’s economic terrorism, it is important to understand that they are but a part – soldiers in pin-stripes - of a more basic agenda, which is nearly complete at this point.
This agenda is set forth in my previous articles – A Look Behind The Wizard’s Curtain, Hitler’s Bank Goes Global and The Hidden Beginning – which can be found at http://www.brucewiseman.com/.
But “nearly complete” is not a fait accompli. And so I am providing you here with the link to “Hitler’s Bank goes Global,” the closing paragraphs of which set out specific actions to take to help bring this situation under control.
Goldman is like a Rottweiler on a leash. The key is bringing the handler, the Bank for International Settlements, under control.
Best,
Bruce
Bruce Wiseman is financial consultant and writer living in Los Angeles. He can be contacted at the address below.
Bruce@brucewiseman.net
www.brucewiseman.net
© 2009 Bruce Wiseman.
All rights reserved.
Sunday, August 23, 2009
The Goldman Connection: Part 2
THE GOLDMAN CONNECTION: PART 2
Email this article
Subscribe to:
Post Comments (Atom)
Posts
Just Brilliant.
ReplyDelete