STORMS HURRICANES-TORNADOES
LUKE 21:25-26
25 And there shall be signs in the sun, and in the moon, and in the stars; and upon the earth distress of nations, with perplexity;(MASS CONFUSION) the sea and the waves roaring;(FIERCE WINDS)
26 Men’s hearts failing them for fear, and for looking after those things which are coming on the earth: for the powers of heaven shall be shaken.
ND univ cancels classes to help with sandbagging By DAVE KOLPACK, Associated Press Writer - Mon Mar 23, 1:37 pm ET
FARGO, N.D. – High school and college students were let out of class Monday to help with sandbagging as residents raced to hold off a threat of flooding from the rising Red River.City officials planned to fill more than 1 million sandbags, but with more rain forecast they increased the need to nearly 2 million sandbags — about 500,000 each day by the end of the week.We're confident that we can get the bags delivered, said Bruce Grubb, Fargo's enterprise director. Getting them made is a more daunting challenge.North Dakota State University canceled classes Monday and Fargo high schools also excused students to help.The students are eager to help. We're ready to go,Fargo school spokesman Dan Huffman said.Across the river outside Moorhead, Minn., Dilworth-Glyndon-Felton High School junior Luke Gable said he was given the option of studying or sandbagging, and decided school could wait.Everyone needs help right now, Gable We've got fresh legs and fresh arms.North of Moorhead in Oakport Township, where residents had to be evacuated by boat during the 1997 flood, homeowner Barb Groth helped volunteers fill sandbags near her house Monday.We're consider the dry side of the township, but we flooded anyway in 1997. This flood is supposed to be worse,Groth said.We're nervous.Fargo city administrator Pat Zavoral estimated the city of some 90,000 residents was about 40 percent protected as of Monday.
Flood stage at Fargo is 18 feet, and the National Weather Service said the Red River had reached 25.3 feet Monday morning. The weather service said the river is expected to crest in Fargo early Friday at around 40 feet — a record.Officials said the dike protecting downtown Fargo was being raised to about 43 feet and an emergency levee south of the city was being completed.Minnesota and North Dakota both were sending National Guard troops to help.Fargo is borrowing some expertise from Louisiana. The National Guard and the city plan to bring in seven miles of 4-feet high interlocking plastic containers that can be filled with sand to form temporary dikes, a system that was used during Hurricane Katrina.It's collapsible and easy to move, Zavoral said.Flooding had already forced people from their homes in small ranching and farming communities in south-central North Dakota.North Dakota National Guard members used boats Monday morning to ferry about five rural residents from farms in Emmons County, said county spokeswoman Marlys Ohlhause.Also in Emmons County, 50 to 75 homes were evacuated Sunday night in Linton, a town of about 1,300 south of Bismarck, said county emergency manager Shawna Paul. About 40 families had abandoned their homes in Beulah, said Mercer County emergency manager Richard Sorenson. Beulah is a coal country town of about 3,150 people, northwest of Bismarck. There are no injuries — just a lot of people stressed out and worried,Sorenson said. Associated Press writer James MacPherson in Bismarck contributed to this report.
Labor votes to join Netanyahu government MAR 24,09
JERUSALEM – Israel's Labor Party voted Tuesday to join the incoming government of Benjamin Netanyahu, giving a centrist tone to the coalition that has looked hard-line up to now.Party secretary Eitan Cabel announced the results of the voting after a heated debate — 680 in favor and 507 against.Ofer Eini, head of the Histadrut labor union and a senior Labor Party operative, told Israel's Army Radio, I'm happy that party delegates have decided to enter the government.But others chanted slogans like Disgrace after the announcement.Netanyahu has signed coalition agreements with Yisrael Beitenu and Shas, two parties known for their tough policy lines toward the Palestinians, as is Netanyahu's own Likud Party. Labor, in contrast, has been in the forefront of Mideast peace efforts.Labor's 13 seats in the parliament would give Netanyahu a majority of 66 in the 120-seat house, but there is a possibility that the party could split as a result of the vote, and some members might choose to remain in the opposition.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
JERUSALEM (AP) — A Labor Party official says his party has voted to join the incoming government of Benjamin Netanyahu, giving a centrist tone to the coalition that has looked hard-line up to now.Ofer Eini, head of the Histadrut labor union and a senior Labor Party operative, told Israel's Army Radio that the party's central committee agreed to Netanyahu's partnership offer.Eini said: I'm happy that party delegates have decided to enter the government.Army Radio said the vote was 680 in favor and 507against.Netanyahu has signed coalition agreements with Yisrael Beitenu and Shas, two parties known for their tough policy lines toward the Palestinians, as is Netanyahu's own Likud Party. Labor, in contrast, has been in the forefront of Mideast peace efforts.
DOCTOR DOCTORIAN FROM ANGEL OF GOD
then the angel said, Financial crisis will come to Asia. I will shake the world.
JAMES 5:1-3
1 Go to now, ye rich men, weep and howl for your miseries that shall come upon you.
2 Your riches are corrupted, and your garments are motheaten.
3 Your gold and silver is cankered; and the rust of them shall be a witness against you, and shall eat your flesh as it were fire. Ye have heaped treasure together for the last days.
REVELATION 18:10,17,19
10 Standing afar off for the fear of her torment, saying, Alas, alas that great city Babylon, that mighty city! for in one hour is thy judgment come.
17 For in one hour so great riches is come to nought. And every shipmaster, and all the company in ships, and sailors, and as many as trade by sea, stood afar off,
19 And they cast dust on their heads, and cried, weeping and wailing, saying, Alas, alas that great city, wherein were made rich all that had ships in the sea by reason of her costliness! for in one hour is she made desolate.
EZEKIEL 7:19
19 They shall cast their silver in the streets, and their gold shall be removed: their silver and their gold shall not be able to deliver them in the day of the wrath of the LORD: they shall not satisfy their souls, neither fill their bowels: because it is the stumblingblock of their iniquity.
REVELATION 13:16-18
16 And he(FALSE POPE) causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:(CHIP IMPLANT)
17 And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.
18 Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six.(6-6-6) A NUMBER SYSTEM
WORLD MARKET RESULTS
http://money.cnn.com/data/world_markets/
SPECIAL CONFERENCE MAR 23-24,2009,ALL FINANCIAL INSTITUTIONS WILL BE THERE,ALL THE EU MEMBERS WILL BE THERE,AND THE G-20 WILL BE THERE.THIS SAME GROUP OF EU,BANKERS,G-20 WILL ALSO BE IN LONDON IN APRIL TO LAY PLANS FOR THE NEW WORLD ORDER,ESPECIALLY THE G-20.https://futurefinance.wsj.com/index.php
HALF HOUR DOW RESULTS TUE MAR 24,2009
09:30 AM -2.39
10:00 AM -58.38
10:30 AM -98.45
11:00 AM -84.99
11:30 AM -52.17
12:00 PM -69.46
12:30 PM -42.37
01:00 PM -18.32
01:30 PM +13.22
02:00 PM -19.99
02:30 PM -39.46
03:00 PM -59.90
03:30 PM -62.21
04:00 PM -115.65 7660.21
S&P 500 806.38 -16.54
NASDAQ 1518.66 -37.11
GOLD 925.90 -26.60
OIL 53.55 -0.25
TSE 300 8849.39 -109.12
CDNX 924.29 +0.26
S&P/TSX/60 537.69 -8.95
MORNING,NEWS,STATS
YEAR TO DATE PERFORMANCE
Dow -11.40%
S&P -8.89%
Nasdaq -1.35%
TSX Advances 1,117,declines 449,unchanged 267,Volume 2,818,613,097.
TSX Venture Exchange Advances 464,Declines 336,Unchanged 366,Volume 178,267,909.
Dow -73 points at 4 minutes of trading today.
Dow -109 points at low today.
Dow +23 points at high today so far.
GOLD opens at $923.40.OIL opens at $52.68 today.
Geithner,Bernanke to emphasize importance of new regulations to wind down nonbank institutions during capital hill testimony today.
AFTERNOON,NEWS,STATS
Dow -109 points at low today so far.
Dow +23 points at high today so far.
DAY TODAY PERFORMANCE - 12:30PM STATS
NYSE Advances 1,262,declines 2,351,unchanged 124,New Highs 9,New Lows 78.
Volume 3,813,469,009.
NASDAQ Advances 866,declines 1,741,unchanged 125,New highs 9,New Lows 19.
Volume 981,875,154.
TSX Advances 571,declines 763,unchanged 265,Volume 1,418,330,363.
TSX Venture Exchange Advances 257,Declines 306,Unchanged 302,Volume 92,950,278.
WRAPUP,NEWS,STATS
Dow -109 points at low today.
Dow +23 points at high today.
Dow -1.49% today Volume 379,502,328.
Nasdaq -2.39% today Volume 1,888,065,606.
S&P 500 -2.01% today Volume N/A
Dow falls 1.5% today after gaining 6.8% yesterday.
Dow below 7700 points today.
Nasdaq down 2.5% today after gaining 6.8% yesterday.
S&P down 2.0% today after gaining 7.1% yesterday.
Stocks give back slice of yesterday's big gains.
Stocks sink under morning lows.
Stocks retreat from days highs after erasing early losses.
Selling accelerates in last minutes of trading.
RECORD LOWS DOW
-Sept 30,1996 5,882.17
-Oct 30,1996 5,993.23
-Nov 6,1996 6,177.71
-Dec 16,1996 6,268.35
-Apr 15,1997 6,587.16
-Apr 21,1997 6,660.21
-Apr 28,1997 6,783.02
-May 1,1997 6,976.48
-May 7,1997 7,085.65
RECORD LOWS S&P 500
-Sept 5,1996 649.44
-Sept 6,1996 655.68
-Sept 11,1996 667.28
-Sept 12,1996 671.13
-Oct 1,1996 689.08
-Oct 28,1996 697.26
-Nov 4,1996 706.73
-Nov 5,1996 714.14
-Dec 17,1996 726.04
BOHEMIAN GROVE OCCULT WORSHIP
http://video.google.com/videoplay?docid=-82095917705734983
Brown calls on EU to lead the way out of financial hurricane
ELITSA VUCHEVA Today MAR 24,09 @ 18:56 CET
EUOBSERVER / BRUSSELS – In an unusually pro-European speech on Tuesday (24 March) UK prime minister Gordon Brown insisted that Britain was one of the EU's key players and that the 27-nation bloc was in a unique position to lead the way out of the global financial crisis by re-inserting a strong sense of values in the financial markets.I stand here today proud to be British and proud to be European,Mr Brown said (Photo: European Parliament - Audiovisual Unit)I stand here today proud to be British and proud to be European,Mr Brown told MEPs in Strasbourg.The UK has often been subject to criticism for not being sufficiently involved in EU affairs, notably due to its opt-outs from various EU areas such as justice and home affairs or the common European currency.But the British premier stressed that he was representing a country that does not see itself as an island adrift from Europe but as a country at the centre of Europe; not in Europe's slipstream but firmly in its mainstream.He also said the EU was uniquely placed to provide world leadership in finding a way out of the international hurricane that is sweeping the world.The bloc has a long history of cross-border co-operation and a strong sense of values it can bring to the markets, he added.
I propose that we in Europe take a central role in setting up a new principled economy for our times,Mr Brown said.The prime minister's speech in the European Parliament was the first stop in a quick world tour that will also see him landing in the US, Brazil and Chile, ahead of the G20 meeting he is is host next week (2 April) in London.At the G20 summit, the EU is going to push for additional financial regulation as well as for the beginning of the end for offshore tax havens and offshore centres,Mr Brown said.
Protectionism the politics of retreat and fear
The British premier also re-iterated his warnings against economic protectionism, which he called the politics of defeatism.I know that the temptation for some is to meet this new insecurity with retreat, to try to feel safe by attempting to pull up the drawbridge or turn the clock back,Mr Brown told MEPs.But I tell you if there's anything we know from history, it is that protectionism is the politics of defeatism, retreat and fear and in the end protects no one at all,he added.The debate on protectionism in Europe was sparked by French President Nicolas Sarkozy, who was accused of economic nationalism after unveiling a package in February to help the French car industry.But an EU summit on 1 March in Brussels ended with the assurance that no EU country intended to breach the bloc's single market rules by putting in place policies aimed at protecting their own industries.
EU – US co-operation
In its bid to exit the crisis and building a more moral financial system, Europe must also work for a strong co-operation with the new American administration, according to Mr Brown.Never in recent years have we had an American leadership so keen at all levels to co-operate with Europe on financial stability, climate change, security and development, and seldom has such co-operation been so obviously of benefit to us and to all the world,he said.For his part, US President Barack Obama also called for joint action ahead of the G20 summit.My message is clear: The United States is ready to lead, and we call upon our partners to join us with a sense of urgency and common purpose,Mr Obama wrote in an article published in 30 newspapers around the world on Tuesday.Only co-ordinated international action can prevent the irresponsible risk-taking that caused this crisis. That is why I am committed to seizing this opportunity to advance comprehensive reforms of our regulatory and supervisory framework,the American president wrote.He also re-iterated calls on world governments to stimulate growth.The US had previously defended the stance that countries should focus more on additional fiscal measures and spending, but most EU states – notably France and Germany – have been arguing that the bloc is already spending enough and that the emphasis should now be put on tighter regulation.I know that America bears our share of responsibility for the mess that we all face. But I also know that we need not choose between a chaotic and unforgiving capitalism and an oppressive government-run economy. That is a false choice that will not serve our people or any people,Mr Obama wrote.
World trade set for largest contraction since WWII
ANDREW WILLIS Today MAR 24,09 @ 09:19 CET
EUOBSERVER / BRUSSELS - The volume of world trade is predicted to plunge by nine pecent this year, according to a World Trade Organisation annual report due out on Wednesday (25 March), in the largest contraction since World War II.WTO director-general Pascal Lamy said the new forecast highlighted the need to kick-start world trade, with the 9 percent dip to help cause a one to two percent contraction in the world economy overall this year - the first time since the 1930s. Trade can be a potent tool in lifting the world from these economic doldrums,he said. In London, G20 leaders will have a unique opportunity to unite in moving from pledges to action and refrain from any further protectionist measure that will render global recovery efforts less effective.Pressure is also increasing for a resumption of the Doha development round of trade talks that broke down last year.The trade contraction in developed countries such as Germany, the world's largest exporter by volume, will be severe says the report, with WTO economists forecasting a 10 percent fall in exports.
Developing countries will see a smaller fall in the range of two to three percent, but their heavy reliance on exports for growth make this figure no less alarming. Mr Lamy said the global credit shortage was exacerbating the problem as companies around the world struggle to finance deals. The depleted pool of funds available for trade finance has contributed to the significant decline in trade flows, in particular in developing countries,he said. As a consequence, many thousands of trade related jobs are being lost. Governments must avoid making this bad situation worse by reverting to protectionist measures that in reality protect no nation and threaten the loss of more jobs.EU leaders also repeated the need to reject protectionism last Friday at the bloc's spring summit in Brussels, while on the same day French carmaker Renault announced its intention to move a production plant employing 400 workers from Slovenia to a site just outside Paris. The move was supported by French President Nicholas Sarkozy. The promises of European leaders contrast sharply with the severity of the current situation, particularly in the automobile sector. The European Automobile Manufacturers Association (ACEA) reports that passenger car registrations were down 18 percent in Europe in February 2009, compared to the previous year. The sector is a huge provider of jobs in Europe.The WTO's report highlights the need to unblock the banking sector as a crucial first step in tackling the problem.
Under normal recessionary conditions, consumer reticence to spend is transferred into a larger pool of savings that in turn can be lent out to businesses that are keen to invest in future production.However, current uncertainty over assets held by banks, means this process is not taking place.The annual report also emphasises the unprecedented global nature of the fall in consumer demand that has effected all regions of the world, but suggests that some initial signs of recovery may be visible in parts of Asia.
TSX pulls back after big rise; commodities weigh By Jennifer Kwan – Tue Mar 24, 10:26 am ET
TORONTO (Reuters) – Toronto's main stock index pulled back on Tuesday after surging more than 5 percent in the previous session, led down by weakness in resource issues on slumping commodity prices.The biggest contributors to the index's slide included a mix of commodity issues and financials stocks, the main drivers of the market's recent rise.We've had, to state the obvious, quite a run over the past two weeks or so and I think you're having just a natural selling that you get inevitably in these sorts of situations,said Bob Gorman, chief portfolio strategist at TD Waterhouse.It's two steps forward, one step back. It's very seldom a V-shape.At 9:55 a.m. EDT, the S&P/TSX composite index was down 176.61 points, or 1.97 percent, at 8,781.90, with nine of its 10 main groups lower. The utilities sector eked out a 0.32 percent gain.
The index had its highest close in six weeks on Monday.
Materials, down 3.1 percent, led the resource-laden market lower as the price of bullion and base metals drooped. Goldcorp was down 4.6 percent at C$39.90, while Potash Corp of Saskatchewan Inc fell 0.8 percent to C$100.51.Oil and gas stocks sagged 3 percent as oil retreated to around $52.50 a barrel after a 3 percent surge in the previous session. Suncor Energy pulled back 4.6 percent to C$29.33.Financials sagged 1.4 percent with Royal Bank of Canada down 1.4 percent at C$37.41.Elsewhere, Canadian forest products company Tembec announced a temporary curtailment of operations in the Kapuskasing region in Ontario, affecting about 510 employees at its sawmill, newsprint and forestry operations. Tembec shares fell 18.6 percent to 70 Canadian cents.HudBay Minerals Inc rose 0.2 percent to C$5.81. Late on Monday the company said its board of directors resigned and will be replaced by a slate put forward by dissident shareholder SRM Global Master Fund.Issues gaining on Tuesday included Rogers Communications, which climbed 1.3 percent to C$30.73, and BCE, up 1.6 percent at C$23.71.(Reporting by Jennifer Kwan; Editing by Jeffrey Hodgson)
Canada finance minister to attend G20 summit Tue Mar 24, 10:18 am ET
OTTAWA (Reuters) – Canadian Finance Minister Jim Flaherty will join Prime Minister Stephen Harper at a summit of G20 major and emerging economies next week in London, a spokesman for the minister said on Tuesday.Chisholm Pothier, spokesman for Flaherty, confirmed to Reuters that the finance minister would attend the meeting, which will discuss how to resolve the global financial crisis.(Reporting by Louise Egan; Editing by Jeffrey Hodgson)
Canada finance minister says oil merger important Tue Mar 24, 8:16 am ET
OTTAWA (Reuters) – Finance Minister Jim Flaherty said on Tuesday Suncor Energy's proposed takeover of Petro-Canada is an important deal for Canada and for the oil patch.Flaherty, speaking to CTV television, said it was a good thing that regulators were reviewing the deal to ensure fair competition in the oil industry, but added that,We believe in investment as well in this country. We want to grow this economy.
Suncor has agreed to acquire Petro-Canada for C$18.43 billion ($14.9 billion) to create Canada's largest oil company.It has to be reviewed by the Competition Bureau and its quasi-judicial function will deal with that,Flaherty said.It's important for Canada overall and for development of the oil patch.Flaherty also has a role in approving the deal because his ministry is responsible for legislation affecting the formerly state-owned Petro-Canada that prohibited anyone from holding more than 20 percent of the company.Ron Brenneman, Petro-Canada's chief executive, said on Monday that because of the structure of the agreement, he expected the existing legislation will now apply to the new company, which will retain the Suncor name.Flaherty did not comment on that aspect of the deal.(Reporting by Louise Egan, Editing by Chizu Nomiyama)
Geithner seeks new powers over financial companies By JEANNINE AVERSA, AP Economics Writer MAR 24,09
WASHINGTON – Treasury Secretary Timothy Geithner asked Congress on Tuesday for broad new powers to regulate nonbank financial companies like troubled insurer American International Group whose collapse could jeopardize the economy.AIG highlights broad failures of our financial system, Geithner told the House Financial Services Committee. We must ensure that our country never faces this situation again.At the same time, Federal Reserve Chairman Ben Bernanke revealed that he had considered filing suit to keep AIG from paying millions in executive bonuses but that his legal advisers counseled him against it.Geithner acknowledged that the current climate of anger, including the furor over those retention bonuses, will complicate any effort by the Obama administration to get more bailout money from Congress.We recognize it will be extraordinarily difficult,he said.The administration sought to use that rancor to build support for its financial overhaul proposals.Geithner joined Bernanke in calling for greater governmental authority over complicated and troubled financial companies — power they likened to the authority wielded over banks by the Federal Deposit Insurance Corporation. That includes the power to seize control of institutions, take over their bad loans and other illiquid assets and sell good ones to competitors.AIG is a globally interconnected colossus, with 74 million customers worldwide and operations in more than 130 countries. The government decided it was simply too big to let fail.Its failure could have resulted in a 1930s-style global financial and economic meltdown, with catastrophic implications for production, income and jobs, Bernanke told the panel.Geithner, Bernanke and New York Fed President William C. Dudley testified in a rare joint appearance before the panel. Their testimony came a day after the Fed unveiled a new bank rescue plan under which the government would take responsibility for up to $1 trillion in sour mortgage securities with the help of private investors.
That delighted Wall Street and the Dow industrials shot up nearly 500 points. On Tuesday, Wall Street gave back some of its gains and the Dow was down just over 45 points in midday trading.Much of Tuesday's discussion centered on ways to help the government better deal with future AIG-like companies whose failure could devastate the financial system and the drag down the economy.As we have seen with AIG, distress at large, interconnected, non-depository financial institutions can pose systemic risks just as distress at banks can, Geithner said. The administration proposes legislation to give the U.S. government the same basic set of tools for addressing financial distress at non-banks as it has in the bank context.Geithner made it clear he believes the treasury secretary should be granted unprecedented power, after consultation with Federal Reserve Board officials, to take control of a major financial institution and run it. The treasury chief is an official of the administration, unlike the FDIC, which is an independent regulatory agency.The witnesses were asked if AIG would have been treated any differently, including the payment of $165 million in bonuses earlier this month, if such powers had existed last September, when the Fed began the government bailout of the insurer.Quite differently. It could have been taken into receivership or conservatorship. ...The bonus issue would not have arisen, Bernanke said.He said that contracts providing for the bonuses could have been adjusted and we could have taken haircuts against some of AIG's financial obligations to other companies.AIG has become a symbol of reckless risk-taking on Wall Street. The bonuses came even as AIG reported a stunning $62 billion loss, the biggest in U.S. corporate history.The government has bailed out AIG four times, to the tune of more than $180 billion altogether. New York Attorney General Andrew Cuomo said Monday that 15 employees who received some of the largest bonuses from AIG have agreed to return them in full, totaling about $50 million. The House last week voted overwhelmingly to slap 90 percent taxes on the largest bonuses. Similar but more limited legislation is before the Senate. Still, White House support for using the tax code in such a fashion has been tepid at best. And Democrats seem to be moving off the concept. If the money is returned, the legislation may no longer be necessary,said House Majority Leader Steny Hoyer, D-Md. As to Geithner seeking more authority, Hoyer said he wanted to discuss with committee Chairman Barney Frank, D-Mass.,whether or not such delegation is appropriate or whether there should be greater oversight.Geithner has been sharply criticized for his role in the AIG bailout because he helped put the deal together last September as then-president of the New York Fed, yet said he did not learn of the big bonuses until two weeks ago.
In a sharp exchange, Geithner was asked by Rep. Brad Sherman, D-Calif., whether there were other financial companies besides AIG who took taxpayer bailouts and then paid big bonuses to their executives. You're right, this goes well beyond AIG, said Geithner.Sherman asked for a public list of those companies and an accounting of the bonuses they paid.Geither was noncommital. Sherman told him he was trying to hide the ball.I'm not going to hide the ball, Geithner said.I'll reflect on the suggestion you made.Bernanke said it was highly inappropriate to pay substantial bonuses to the employees. Bernanke said he asked that the payments be stopped but was told that they were mandated by contracts agreed to before the government seized control of AIG on September 16. I then asked that suit be filed to prevent the payments, he said. Bernanke said that his legal staff counseled against this action on the grounds that Connecticut law provided for substantial punitive damages in the event any such suit failed. AIG's financial products division has a base in Connecticut. The AIG bonuses created a public relations headache for President Barack Obama at a time when he was trying to gin up public and political support for his economic policies, bank-rescue plan and overhaul of the nation's regulatory structure. Government bailouts of AIG, Citigroup Inc., Bank of America Corp. and others have put billions of taxpayers' dollars at risk over the past year and have angered the American public. Associated Press writer Martin Crutsinger contributed to this report.
Oil prices slip after a week of gains By DIRK LAMMERS, AP Energy Writer MAR 24,09
SIOUX FALLS, S.D. – A stronger dollar helped pull down oil prices Tuesday, halting a week of gains as markets brace for possible news of growing crude stockpiles.
Benchmark crude for May delivery fell 75 cents to $53.05 a barrel in trading on the New York Mercantile Exchange. The contract climbed as high as $54.05 on Monday before settling at $53.80, up $1.73.The dollar has taken a hit in recent weeks as the U.S. government plows billions into the economy and currency investors flee to commodities like oil.Over the last three weeks the U.S. dollar has dropped by around six-and-a-half percent, while NYMEX crude oil has jumped by more than one-fifth, trader and analyst Stephen Schork wrote in his Schork Report.Coincidence? Of course not.Oil prices rallied all last week and again on Monday as the Dow Jones industrials jumped nearly 500 points. Investors grew more optimistic because of a new plan to resolve the nation's banking crisis. Better-than-expected housing news helped too.Wall Street declined slightly Tuesday, as did oil prices ahead of a government report Wednesday about domestic crude inventories. Analysts expect a build up of 1.4 million barrels in commercial crude oil stocks, a Platts survey showed Monday.
Also on Tuesday, the dollar began to strengthen.After some of the euphoria wore off from the big rally in stocks yesterday, the market started to react to the stronger dollar,said Phil Flynn, an analyst at Alaron Trading Corp. The strong dollar obviously will ease some of the inflation fears that we've seen and that's bringing oil prices back down.The Obama administration's latest initiative to revive consumer and business lending, introduced Monday by Treasury Secretary Timothy Geithner, seeks to combine government and private resources to purchase an initial half-trillion dollars of bad assets off the balance sheets of banks. Eventually, the plan could grow to $1 trillion.With summer just around the corner and refineries switching over to summer blends, the yearly rise in gasoline prices has begun.U.S. prices at the pump rose overnight to a new national average of $1.966 for a gallon of regular unleaded, up 1 cent from Monday, according to auto club AAA, Wright Express and Oil Price Information Service. Gasoline is about 5 cents a gallon higher than a month ago and about $1.30 a gallon cheaper than it was last year this time.China on Tuesday increased the benchmark retail price of gasoline and diesel fuel amid rising global prices for crude.The hikes, taking effect from midnight Tuesday, boost the prices that suppliers charge retailers for gasoline by 290 yuan ($42) per metric ton and diesel by 180 yuan ($26) per metric ton.Beijing had been using its system of government-set energy prices to shield its citizens from surging global crude prices, although the government has tried to make the system more flexible and responsive to international price shifts.Russian Finance Minister Alexei Kudrin said Tuesday his country should not become complacent about the recent rise in oil and stock prices, calling the increase temporary.Russia's economy, which is heavily dependent on exports of oil and gas, was hit hard over the past year as prices for oil plummeted. Oil and gas prices have recently rallied — 30 percent this month alone — helping Russia's stock market rebound.In Venezuela, which relies on oil for 93 percent of its exports and nearly half its federal budget, President Hugo Chavez asked lawmakers to hike sales taxes and nearly triple domestic debt sales this year to boost state coffers amid plunging oil income.In other Nymex trading, gasoline for April delivery dropped 1.3 cents to 1.475 per gallon, and heating oil was essentially flat at $1.47 a gallon. Natural gas gained 3 cents at $4.32 per 1,000 cubic feet. In London, Brent prices fell 50 cents to $52.97 on the ICE Futures exchange. Associated Press writers John Porretto in Houston, George Jahn in Vienna and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.
Debate unfolding on Larosiere financial proposals
ANDREW WILLIS Today MAR 24,09 @ 18:39 CET
EUOBSERVER / BRUSSELS - Members of the high-level Larosiere group, whose recent report will form the basis of commission recommendations to member states on financial regulatory reform, defended their proposals on Tuesday (24 March) in a debate with financial experts. Particularly controversial is the group's proposal for a European System of Financial Supervision made up of banking, insurance and securities authorities that will oversee national supervisors. A number of major European banks have been nationalised due to their exposure to US sub-prime assets and other poorly regulated securities (Photo: Wikipedia)Discussion moderator Wolfgang Munchau of Eurointelligence asked why the group had not opted for a more centralised approach at the European level.A centralised body would operate in a vacuum,said Leszek Balcerowicz, a member of the Larosiere group, who added that the political will for this option was also lacking. Last Friday, the Larosiere report won the backing of EU leaders who said in the conclusions of their meeting in Brussels that the paper is the basis for action.The UK's national financial regulator, the Financial Services Authority, also recently published a report on the subject named after its chairman, Lord Turner.The Larosiere report proposes two main structures to prevent a repeat of the current financial crisis.
The setting up of a European Systemic Risk Council (ESRC) under the auspices of the European Central Bank, which would focus on threats to the EU economy as a whole rather than to individual companies. This idea is largely uncontroversial. However, the report's proposal for a European System of Financial Supervision (ESFS) to monitor individual companies is proving more contentious. Under the draft ESFS framework, national supervisors for each of the banking, insurance and securities sectors would remain the main watchdogs of financial companies such as large banks or insurance firms that operate under their jurisdiction.
Toothless committees
At present, the actions of these national watchdogs are monitored by pan-European bodies known as level-three committees that have the aim of promoting convergence in European supervisory standards. They are relatively toothless however, and the Larosiere report suggests the committees be renamed authorities and given the power to instruct national supervisors to take action when they feel the activities of a particular company pose a serious risk to the stability of the financial system. The new powers would also enable the three sectoral authorities to mediate more efficiently between national supervisors.The system of authorities is ambitious, said David Wright, the deputy director-general of the European Commission's internal market and services department and rapporteur for the Larosiere group. New powers mean they can tell national supervisors to act and if they do not act, they must explain why not.To ensure national supervisors are forced to act on recommendations from the authorities, the Larosiere report suggests that the ESFS be linked to governments in some way so that political pressure from other member states can be applied.Added to this, the negative publicity and market pressure will ensure national supervisors are forced to act, argued Mr Wright, even if it means dealing with a national banking champions.
Industry doubts
Nevertheless, it is evident that many working within the financial sector harbour doubts over the efficient functioning of the ESFS, although their reasons differ.
Nicolas Veron, a researcher with Bruegel, a Brussels centrist think-tank, feels the Larosiere proposals still contain many gaps when it comes to the supervision of individual companies.Without the detail, we could end up with a system that is worse than what we have at the moment,he says. Following Tuesday's debate by industry experts, EU finance ministers will discuss the topic when they informally meet in Prague on 4 April.The commission is set to publish its first list of legislative proposals in May in time for approval by EU leaders when they meet in June.
Europe needs social package fit for 21st century
HONOR MAHONY Today MAR 24,09 @ 17:38 CET
EUOBSERVER / BRUSSELS - The European Union's social, education and business systems need a complete shakedown if the bloc is to be a meaningful player in the 21st century, the head of a group looking at future challenges of Europe has said.Felipe Gonzalez, a former Spanish prime minister, on Tuesday (24 March) condemned what he called the current sclerosis on taking necessary structural measures in Europe and called for a new social package for the 21st century.He noted that Europe's much vaunted social model was built for another era - a post-World War II Europe of industrial nations, with a population that was much less grey than it is today.He said the "one advantage of the current global downturn, which is expected to push EU unemployment into double figures and has already caused social unrest in several member states, is that there will be a clear before and after for Europe, representing a chance for change.But Mr Gonzalez questioned whether EU leaders and policy-makers are yet taking the economic crisis seriously enough, noting that the issue has completely dominated the first meetings of his 12-strong wise group, due to make its recommendations for a Europe from 2020 to 2030 some time in the middle of next year.Is there enough awareness of the gravity of the crisis? he asked his audience at the Brussels-based Lisbon Council think-tank.
Sweet decadence
Pre-crisis Europe saw an EU that was fading in global significance and had entered a period of sweet decadence, said Mr Gonzalez. He said that Europe was well known for being a paymaster but not a real player, taking as an example Sarajevo airport – paid for by Europeans but unveiled by Americans.We have to revisit the foundations of our social pact,he said, highlighting the well-documented European problems of an ageing population and its strains on the welfare system.We cannot continue to talk about how good the social model is without looking at the economy as a whole and ... research and development spending,he said.The centre-left Spanish politician urged EU leaders to approach Europe's many challenges differently, with a rethink needed of social and industrial relations as well as of education systems.Amongst other things, retirement should be a right not an obligation; work should be judged on productiveness per hour and not on the length of the day, there should be less corporate rigidity and people should finish the education system with a clear idea of what they can bring to the jobs market.According to Mr Gonzalez, EU society does not allow for upward mobility in the business world. He noted that the US has no category of small and medium-sized enterprises, only start-ups that eventually get bigger.
He called the bloc's Lisbon Strategy, its tattered goal to make the EU the most competitive economy in the world by 2010, a failure but said that if leaders use the crisis, it can help Europe on the way.The European reflection group began its work in December and is due to deliver its report in June 2010, with other members of the committee including Dutch architect Rem Koolhaas, Italian former EU commissioner Mario Monti and Lykke Friis, vice-chancellor of Copenhagen university.
North Korea warns against UN action on rocket
ReutersMarch 24, 2009 9:01 AM
North Korean leader Kim Jong-il (R) waves to soldiers during a meeting with front-line soldiers at a military gathering in Pyongyang, North Korea, in this picture released by North Korean news agency KCNA March 21, 2009.Photograph by: Handout, Reuters/KCNASEOUL - North Korea said on Tuesday any attempt by the UN Security Council to punish it for trying to put a satellite in space would mean the collapse of international disarmament talks aimed at ending its nuclear programme.North Korea has said it would launch a satellite between April 4 and 8. Regional powers see the launch as a disguised test of its longest-range missile and a violation of UN sanctions forbidding the reclusive state from firing ballistic missiles.It is perversity to say satellite launch technology cannot be distinguished from a long-range missile technology and so must be dealt with by the UN Security Council, which is like saying a kitchen knife is no different from a bayonet,state media quoted a North Korean Foreign Ministry spokesman as saying.The unidentified spokesman said such an act of hostility would be in defiance of the Sept. 19 joint statement, a disarmament-for-aid deal the impoverished North reached with China, Japan, Russia, South Korea and the United States.If the Sept. 19 joint statement is nullified, there will be neither the foundation nor the meaning for the existence of the six-party talks,the spokesman said.
North Korea has given international agencies notice of the rocket’s planned trajectory that would take it over Japan, dropping booster stages to its east and west.Analysts said the notice was given to help the North argue the rocket launch does not violate UN sanctions put in place after it test-launched a series of missiles in 2006.South Korea, Japan and the United States have all said they want to press sanctions against the North for a launch and see no difference between a satellite launch and a missile launch because they use the same rocket — called the Taepodong-2.
ACT OF WAR
Japan may deploy two Aegis-equipped destroyers, capable of shooting down missiles, to waters between North Korea and Japan, Japanese media have said. The United States also has naval ships deployed in Asia that can intercept missiles.North Korea has said shooting down the rocket would be an act of war.Japan’s foreign minister said it would be difficult to intercept debris falling from the rocket.Our country has not done this before. We don’t know how or where it will fly, Hirofumi Nakasone told reporters.The first and only time the North test-launched the Taepodong-2 in 2006, it fizzled shortly into flight and blew apart after about 40 seconds.China, which hosts the often-stalled nuclear disarmament talks, urged restraint.The most recent snags in the talks are the North’s complaints that aid is not being delivered as promised, with the other five parties objecting to Pyongyang’s refusal to accept a nuclear inspection system.North Korea has been working hard over past weeks to prepare its launch tower to launch the rocket, Jane’s Intelligence Review said after reviewing satellite images.Other experts have said it would take about a week to 10 days to prepare the rocket for launch once it is set vertically and placed on the launch pad.
Diplomats from Japan, South Korea and the United States will meet on Friday in Washington to discuss the planned rocket launch, Kyodo news agency said.
Tuesday, March 24, 2009
MIKE EVANS BOOK CARTER LIBERAL CHAOS
VIDEO TO STORY
http://www.cbn.com/cbnnews/563727.aspx
BUY NOW Jimmy Carter the Liberal Left and World Chaos: A Carter/Obama Plan That Will Not Work (Hardback)Evans, Mike (Author)
http://shop.cbn.com/cbn/item.Jimmy-Carter-the-Liberal-Left-and-World-Chaos-A-Carter-Obama.9780935199338.htm
Mike Evans on new book by Stan Bowman Jr Mar 23,09 11:30 AM
Mike Evans has a new book out called Jimmy Carter the Liberal left and world chaos. On Pat Robertson this morning Mike says ISRAEL is going to bomb IRANS NUKE SITES this year for sure.
Benjamin Netanyahu's going to be great.Moshe Yolan will become ISRAELS MINISTER OF DEFENCE. There going to have to take out IRANS NUCLEAR REACTORS,they will do it this year. Its 1,100 TARGETS. They will take out RETALITORY TARGETS ALSO. Its going to be a 5 to 7 day operation says Mike. Its going to be easier to do then the SYRIAN ATTACK as IRAN has no air force.
Its going to be an I.C.B.Missle operation perdominantly in high altitude bombs,their going to do it. All the Sunni Muslims are gonna cheer because they don't wanna go NUCLEAR. 200 mile gulf with a SHIA-PERSIAN NUCLEAR,they are all in deep trouble if it happens.
Carter gave $50 MILLION to the MUSLIM BROTHERHOOD which OSAMA BIN LADEN ended up on the payroll.
MIKE also says Jimmy Carter was possibly the worst US president in History and should be charged with treason but he won't. On 4 different occasions in a 4 month period,Carter gave Khomeini of IRAN $165 MILLION. $660 MILLION in 4 visits to fund a Khomeini terrorist radical ISLAMIC REVOLUTION. Carter funded terrorism plain and simple. Carter has a world view that ISLAMIC states would be ok.
Obama in his plea to IRAN video FRIDAY thought the same thing,so lookout.
http://www.youtube.com/watch?v=yft9ZCe3VCw&feature=player_embedded
Obama gives into IRAN
http://www.youtube.com/watch?v=u7hc_CI3f1A&feature=player_embedded
This OBAMA administration is doing the same thing ,tolerance for TERROR. America is sending signals to radical ISLAM that they fear them. If you do that ISLAM will come to AMERICA and hit it,like they do ISRAEL. A Semetrical suicide BOMBERS. But the fear right now is centrifuge material deadline.
A BACKPACK 625 WITH CENTRIFUGE MATERIAL COULD KILL 100,000 PEOPLE IN A POPULATED AREA.
Why is the Left aligning itself with radical ISLAM?
In the 1960s when the idiological revolution was birthed in America they said GOD is DEAD and their trying to bury him. Those idiots of the 60s are in the state Department,the MEDIA,the UNIVERSITIES and they are also running the OBAMA WHITE HOUSE ADMINISTRATION.
Author: Carter Godfather of World Chaos By Dale Hurd
CBN News Sr. Reporter March 20, 2009
CBNNews.com - Some have said that George W. Bush was the worst president in modern American history.A best-selling author says that that title goes to Jimmy Carter. He warns that Carter's blueprint for peace in the Middle East could cause havoc.In the new book, Jimmy Carter - The Liberal Left and World Chaos: A Carter/Obama Plan That Will Not Work, author Mike Evans makes the case that Carter's potential influence in the current debate over Middle East policy could have catastrophic results for the United States and the world.
Dialoguing with the Enemy
Evans calls Carter the godfather of world chaos, because he says Carter created the firestorm that destabilized our greatest ally in the Muslim world, the Shah of Iran, in favor of the Ayatollah Khomeini.Evans traces Iraq and the War on Terror back to the policies of Carter. And he warns that if the Obama administration follows in Carter's footsteps, there will not be peace, and Israel will be sacrificed.
http://www.cbn.com/cbnnews/563727.aspx
BUY NOW Jimmy Carter the Liberal Left and World Chaos: A Carter/Obama Plan That Will Not Work (Hardback)Evans, Mike (Author)
http://shop.cbn.com/cbn/item.Jimmy-Carter-the-Liberal-Left-and-World-Chaos-A-Carter-Obama.9780935199338.htm
Mike Evans on new book by Stan Bowman Jr Mar 23,09 11:30 AM
Mike Evans has a new book out called Jimmy Carter the Liberal left and world chaos. On Pat Robertson this morning Mike says ISRAEL is going to bomb IRANS NUKE SITES this year for sure.
Benjamin Netanyahu's going to be great.Moshe Yolan will become ISRAELS MINISTER OF DEFENCE. There going to have to take out IRANS NUCLEAR REACTORS,they will do it this year. Its 1,100 TARGETS. They will take out RETALITORY TARGETS ALSO. Its going to be a 5 to 7 day operation says Mike. Its going to be easier to do then the SYRIAN ATTACK as IRAN has no air force.
Its going to be an I.C.B.Missle operation perdominantly in high altitude bombs,their going to do it. All the Sunni Muslims are gonna cheer because they don't wanna go NUCLEAR. 200 mile gulf with a SHIA-PERSIAN NUCLEAR,they are all in deep trouble if it happens.
Carter gave $50 MILLION to the MUSLIM BROTHERHOOD which OSAMA BIN LADEN ended up on the payroll.
MIKE also says Jimmy Carter was possibly the worst US president in History and should be charged with treason but he won't. On 4 different occasions in a 4 month period,Carter gave Khomeini of IRAN $165 MILLION. $660 MILLION in 4 visits to fund a Khomeini terrorist radical ISLAMIC REVOLUTION. Carter funded terrorism plain and simple. Carter has a world view that ISLAMIC states would be ok.
Obama in his plea to IRAN video FRIDAY thought the same thing,so lookout.
http://www.youtube.com/watch?v=yft9ZCe3VCw&feature=player_embedded
Obama gives into IRAN
http://www.youtube.com/watch?v=u7hc_CI3f1A&feature=player_embedded
This OBAMA administration is doing the same thing ,tolerance for TERROR. America is sending signals to radical ISLAM that they fear them. If you do that ISLAM will come to AMERICA and hit it,like they do ISRAEL. A Semetrical suicide BOMBERS. But the fear right now is centrifuge material deadline.
A BACKPACK 625 WITH CENTRIFUGE MATERIAL COULD KILL 100,000 PEOPLE IN A POPULATED AREA.
Why is the Left aligning itself with radical ISLAM?
In the 1960s when the idiological revolution was birthed in America they said GOD is DEAD and their trying to bury him. Those idiots of the 60s are in the state Department,the MEDIA,the UNIVERSITIES and they are also running the OBAMA WHITE HOUSE ADMINISTRATION.
Author: Carter Godfather of World Chaos By Dale Hurd
CBN News Sr. Reporter March 20, 2009
CBNNews.com - Some have said that George W. Bush was the worst president in modern American history.A best-selling author says that that title goes to Jimmy Carter. He warns that Carter's blueprint for peace in the Middle East could cause havoc.In the new book, Jimmy Carter - The Liberal Left and World Chaos: A Carter/Obama Plan That Will Not Work, author Mike Evans makes the case that Carter's potential influence in the current debate over Middle East policy could have catastrophic results for the United States and the world.
Dialoguing with the Enemy
Evans calls Carter the godfather of world chaos, because he says Carter created the firestorm that destabilized our greatest ally in the Muslim world, the Shah of Iran, in favor of the Ayatollah Khomeini.Evans traces Iraq and the War on Terror back to the policies of Carter. And he warns that if the Obama administration follows in Carter's footsteps, there will not be peace, and Israel will be sacrificed.
Monday, March 23, 2009
THE BANKER POWER GRAB TAKEOVER
EU DICTATOR (WORLD LEADER)
REVELATION 17:12-13
12 And the ten horns (NATIONS) which thou sawest are ten kings, which have received no kingdom as yet; but receive power as kings one hour with the beast.
13 These have one mind, and shall give their power and strength unto the beast.
REVELATION 6:1-2
1 And I saw when the Lamb opened one of the seals, and I heard, as it were the noise of thunder, one of the four beasts saying, Come and see.
2 And I saw, and behold a white horse:(PEACE) and he that sat on him had a bow;(EU DICTATOR) and a crown was given unto him:(PRESIDENT OF THE EU) and he went forth conquering, and to conquer.(MILITARY GENIUS)
REVELATION 13:1-10
1 And I stood upon the sand of the sea, and saw a beast rise up out of the sea, having seven heads and ten horns, and upon his horns ten crowns, and upon his heads the name of blasphemy.(THE EU AND ITS DICTATOR IS GODLESS)
2 And the beast which I saw was like unto a leopard, and his feet were as the feet of a bear, and his mouth as the mouth of a lion: and the dragon gave him his power, and his seat, and great authority.(DICTATOR COMES FROM NEW AGE OR OCCULT)
3 And I saw one of his heads as it were wounded to death;(MURDERERD) and his deadly wound was healed:(COMES BACK TO LIFE) and all the world wondered after the beast.(THE WORLD THINKS ITS GOD IN THE FLESH, MESSIAH TO ISRAEL)
4 And they worshipped the dragon (SATAN) which gave power unto the beast:(JEWISH EU DICTATOR) and they worshipped the beast, saying, Who is like unto the beast? who is able to make war with him?(FALSE RESURRECTION,SATAN BRINGS HIM TO LIFE)
5 And there was given unto him a mouth speaking great things and blasphemies; and power was given unto him to continue forty and two months.(GIVEN WORLD CONTROL FOR 3 1/2YRS)
6 And he opened his mouth in blasphemy against God,(HES A GOD HATER) to blaspheme his name, and his tabernacle, and them that dwell in heaven.(HES A LIBERAL OR DEMOCRAT,WILL PUT ANYTHING ABOUT GOD DOWN)
7 And it was given unto him to make war with the saints,(BEHEAD THEM) and to overcome them: and power was given him over all kindreds, and tongues, and nations.(WORLD DOMINATION)
8 And all that dwell upon the earth shall worship him, whose names are not written in the book of life of the Lamb slain from the foundation of the world.(WORLD DICTATOR)
9 If any man have an ear, let him hear.
10 He that leadeth into captivity shall go into captivity: he that killeth with the sword must be killed with the sword. Here is the patience and the faith of the saints.(SAVED CHRISTIANS AND JEWS DIE FOR THEIR FAITH AT THIS TIME,NOW WE ARE SAVED BY GRACE BUT DURING THE 7 YEARS OF HELL ON EARTH, PEOPLE WILL BE PUT TO DEATH (BEHEADINGS) FOR THEIR BELIEF IN GOD (JESUS) OR THE BIBLE.
THE WEEK OF DANIEL 9:27 WE KNOW ITS 7 YRS
Heres the scripture 1 week = 7 yrs Genesis 29:27-29
27 Fulfil her week, and we will give thee this also for the service which thou shalt serve with me yet seven other years.
28 And Jacob did so, and fulfilled her week: and he gave him Rachel his daughter to wife also.
29 And Laban gave to Rachel his daughter Bilhah his handmaid to be her maid.
DANIEL 9:26-27
26 And after threescore and two weeks shall Messiah be cut off, but not for himself: and the people of the prince that shall come (ROMANS IN AD 70) shall destroy the city and the sanctuary;(ROMANS DESTROYED THE 2ND TEMPLE) and the end thereof shall be with a flood, and unto the end of the war desolations are determined.
27 And he( EU ROMAN, JEWISH DICTATOR) shall confirm the covenant with many for one week:( 7 YEARS) and in the midst of the week he shall cause the sacrifice and the oblation to cease,( 3 1/2 YRS) and for the overspreading of abominations he shall make it desolate, even until the consummation, and that determined shall be poured upon the desolate.
WORLD GOVERNMENT
DANIEL 7:23-25
23 Thus he said, The fourth beast shall be the fourth kingdom upon earth, which shall be diverse from all kingdoms, and shall devour the whole earth, and shall tread it down, and break it in pieces.
24 And the ten horns out of this kingdom are ten kings that shall arise: and another shall rise after them; and he shall be diverse from the first, and he shall subdue three kings.
25 And he shall speak great words against the most High, and shall wear out the saints of the most High, and think to change times and laws: and they shall be given into his hand until a time and times and the dividing of time.
DANIEL 12:4,1
4 But thou, O Daniel, shut up the words, and seal the book, even to the time of the end: many shall run to and fro, and knowledge shall be increased.
1 And at that time shall Michael stand up, the great prince which standeth for the children of thy people: and there shall be a time of trouble, such as never was since there was a nation even to that same time: and at that time thy people shall be delivered, every one that shall be found written in the book.
REVELATION 13:1-3,7,8,12,16-18
1 And I stood upon the sand of the sea, and saw a beast rise up out of the sea, having seven heads and ten horns, and upon his horns ten crowns, and upon his heads the name of blasphemy.
2 And the beast which I saw was like unto a leopard, and his feet were as the feet of a bear, and his mouth as the mouth of a lion: and the dragon gave him his power, and his seat, and great authority.
3 And I saw one of his heads as it were wounded to death; and his deadly wound was healed: and all the world wondered after the beast.
7 And it was given unto him to make war with the saints, and to overcome them: and power was given him over all kindreds, and tongues, and nations.
8 And all that dwell upon the earth shall worship him, whose names are not written in the book of life of the Lamb slain from the foundation of the world.
12 And he exerciseth all the power of the first beast before him, and causeth the earth and them which dwell therein to worship the first beast, whose deadly wound was healed.
16 And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:
17 And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.
18 Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six.
REVELATION 17:3,7,9-10,12,18
3 So he carried me away in the spirit into the wilderness: and I saw a woman sit upon a scarlet coloured beast, full of names of blasphemy, having seven heads and ten horns.
7 And the angel said unto me, Wherefore didst thou marvel? I will tell thee the mystery of the woman, and of the beast that carrieth her, which hath the seven heads and ten horns.
9 And here is the mind which hath wisdom. The seven heads are seven mountains, on which the woman sitteth.
10 And there are seven kings: five are fallen, and one is, and the other is not yet come; and when he cometh, he must continue a short space.
12 And the ten horns which thou sawest are ten kings, which have received no kingdom as yet; but receive power as kings one hour with the beast.
18 And the woman which thou sawest is that great city, which reigneth over the kings of the earth.
CHARLIE ROSE FEDERAL RESERVE
http://www.charlierose.com/view/interview/9221
http://www.charlierose.com/view/interview/1908
http://www.charlierose.com/view/interview/2729
http://www.charlierose.com/view/interview/8995
RICHARD HAAS ON CHARLIE
http://www.charlierose.com/guest/view/975
BENJAMIN NETANYAHU ON CHARLIE
http://www.charlierose.com/guest/view/1452
http://www.charlierose.com/topic/current_affairs?keyword=Benjamin+Netanyahu
SHIMON PERES ON CHARLIE
http://www.charlierose.com/guest/view/144
YOSSI BEILIN
http://www.charlierose.com/guest/view/1527
EHUD BARACK ON CHARLIE
http://www.charlierose.com/guest/view/1169
JERUSALEM
http://www.charlierose.com/topic/current_affairs?keyword=Jerusalem
ARIEL SHARON
http://www.charlierose.com/topic/current_affairs?keyword=Ariel+Sharon
PEACE PROCESS
http://www.charlierose.com/topic/current_affairs?keyword=peace+process
JOSE MARIA AZNAR
http://www.charlierose.com/guest/view/1795
EUROPEAN UNION
http://www.charlierose.com/search/?text=European+Union
http://www.charlierose.com/search/?text=NATO
http://www.charlierose.com/guest/view/1125
http://www.charlierose.com/search/?text=France
UNITED NATIONS
http://www.charlierose.com/search/?text=United+Nations
GERMANY
http://www.charlierose.com/search/?text=Germany
HENRY PAULSON ON CHARLIE
http://www.charlierose.com/guest/view/1495
BARACK OBAMA ON CHARLIE
http://www.charlierose.com/guest/view/233
RAHM EMANUAL
http://www.charlierose.com/guest/view/71
HENRY KISSINGER ON CHARLIE
http://www.charlierose.com/guest/view/48
JIMMY CARTER
http://www.charlierose.com/guest/view/143
PETER MANDELSON
http://www.charlierose.com/guest/view/3211
TONY BLAIR
http://www.charlierose.com/guest/view/6463
http://www.charlierose.com/search/?text=Tony+Blair
THE EURO
http://www.charlierose.com/search/?text=Euro
MARTIN WOLF
http://www.charlierose.com/view/interview/10058
MAHMOOD AHMADINEJAD
http://www.charlierose.com/view/interview/8707
CONDI RICE
http://www.charlierose.com/view/interview/10154
ISRAEL
http://www.charlierose.com/topic/current_affairs?keyword=Israel
PALESTNE
http://www.charlierose.com/topic/current_affairs?keyword=Palestine
MIDEAST
http://www.charlierose.com/topic/current_affairs?keyword=Middle+East
ARAFAT
http://www.charlierose.com/topic/current_affairs?keyword=Yasser+Arafat
HAMAS
http://www.charlierose.com/topic/current_affairs?keyword=Hamas
ZBIGNIEW BRZESINSKI
http://www.charlierose.com/guest/view/119
THE OBAMA DECEPTION
http://www.youtube.com/watch?v=eAaQNACwaLw
The Big Takeover ROLLINGSTONE The global economic crisis isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution MATT TAIBBI Posted Mar 19, 2009 12:49 PM
It's over — we're officially, royally fucked. no empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline — a corporation that got rich insuring the concrete and steel of American industry in the country's heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire.The latest bailout came as AIG admitted to having just posted the largest quarterly loss in American corporate history — some $61.7 billion. In the final three months of last year, the company lost more than $27 million every hour. That's $465,000 a minute, a yearly income for a median American household every six seconds, roughly $7,750 a second. And all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG's 2008 losses).So it's time to admit it: We're fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we're still in denial — we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream. When Geithner announced the new $30 billion bailout, the party line was that poor AIG was just a victim of a lot of shitty luck — bad year for business, you know, what with the financial crisis and all. Edward Liddy, the company's CEO, actually compared it to catching a cold: The marketplace is a pretty crummy place to be right now, he said. When the world catches pneumonia, we get it too.In a pathetic attempt at name-dropping, he even whined that AIG was being consumed by the same issues that are driving house prices down and 401K statements down and Warren Buffet's investment portfolio down.
Liddy made AIG sound like an orphan begging in a soup line, hungry and sick from being left out in someone else's financial weather. He conveniently forgot to mention that AIG had spent more than a decade systematically scheming to evade U.S. and international regulators, or that one of the causes of its pneumonia was making colossal, world-sinking $500 billion bets with money it didn't have, in a toxic and completely unregulated derivatives market.Nor did anyone mention that when AIG finally got up from its seat at the Wall Street casino, broke and busted in the afterdawn light, it owed money all over town — and that a huge chunk of your taxpayer dollars in this particular bailout scam will be going to pay off the other high rollers at its table. Or that this was a casino unique among all casinos, one where middle-class taxpayers cover the bets of billionaires.People are pissed off about this financial crisis, and about this bailout, but they're not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — our partners in the government,as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.
I. PATIENT ZERO
The best way to understand the financial crisis is to understand the meltdown at AIG. AIG is what happens when short, bald managers of otherwise boring financial bureaucracies start seeing Brad Pitt in the mirror. This is a company that built a giant fortune across more than a century by betting on safety-conscious policyholders — people who wear seat belts and build houses on high ground — and then blew it all in a year or two by turning their entire balance sheet over to a guy who acted like making huge bets with other people's money would make his dick bigger.That guy — the Patient Zero of the global economic meltdown — was one Joseph Cassano, the head of a tiny, 400-person unit within the company called AIG Financial Products, or AIGFP. Cassano, a pudgy, balding Brooklyn College grad with beady eyes and way too much forehead, cut his teeth in the Eighties working for Mike Milken, the granddaddy of modern Wall Street debt alchemists. Milken, who pioneered the creative use of junk bonds, relied on messianic genius and a whole array of insider schemes to evade detection while wreaking financial disaster. Cassano, by contrast, was just a greedy little turd with a knack for selective accounting who ran his scam right out in the open, thanks to Washington's deregulation of the Wall Street casino.It's all about the regulatory environment,says a government source involved with the AIG bailout. These guys look for holes in the system, for ways they can do trades without government interference. Whatever is unregulated, all the action is going to pile into that.The mess Cassano created had its roots in an investment boom fueled in part by a relatively new type of financial instrument called a collateralized-debt obligation. A CDO is like a box full of diced-up assets. They can be anything: mortgages, corporate loans, aircraft loans, credit-card loans, even other CDOs. So as X mortgage holder pays his bill, and Y corporate debtor pays his bill, and Z credit-card debtor pays his bill, money flows into the box.
The key idea behind a CDO is that there will always be at least some money in the box, regardless of how dicey the individual assets inside it are. No matter how you look at a single unemployed ex-con trying to pay the note on a six-bedroom house, he looks like a bad investment. But dump his loan in a box with a smorgasbord of auto loans, credit-card debt, corporate bonds and other crap, and you can be reasonably sure that somebody is going to pay up. Say $100 is supposed to come into the box every month. Even in an apocalypse, when $90 in payments might default, you'll still get $10. What the inventors of the CDO did is divide up the box into groups of investors and put that $10 into its own level, or tranche. They then convinced ratings agencies like Moody's and S&P to give that top tranche the highest AAA rating — meaning it has close to zero credit risk.Suddenly, thanks to this financial seal of approval, banks had a way to turn their shittiest mortgages and other financial waste into investment-grade paper and sell them to institutional investors like pensions and insurance companies, which were forced by regulators to keep their portfolios as safe as possible. Because CDOs offered higher rates of return than truly safe products like Treasury bills, it was a win-win: Banks made a fortune selling CDOs, and big investors made much more holding them.The problem was, none of this was based on reality. The banks knew they were selling crap, says a London-based trader from one of the bailed-out companies. To get AAA ratings, the CDOs relied not on their actual underlying assets but on crazy mathematical formulas that the banks cooked up to make the investments look safer than they really were. They had some back room somewhere where a bunch of Indian guys who'd been doing nothing but math for God knows how many years would come up with some kind of model saying that this or that combination of debtors would only default once every 10,000 years,says one young trader who sold CDOs for a major investment bank.It was nuts.Now that even the crappiest mortgages could be sold to conservative investors, the CDOs spurred a massive explosion of irresponsible and predatory lending. In fact, there was such a crush to underwrite CDOs that it became hard to find enough subprime mortgages — read: enough unemployed meth dealers willing to buy million-dollar homes for no money down — to fill them all. As banks and investors of all kinds took on more and more in CDOs and similar instruments, they needed some way to hedge their massive bets — some kind of insurance policy, in case the housing bubble burst and all that debt went south at the same time. This was particularly true for investment banks, many of which got stuck holding or warehousing CDOs when they wrote more than they could sell. And that's were Joe Cassano came in.
Known for his boldness and arrogance, Cassano took over as chief of AIGFP in 2001. He was the favorite of Maurice Hank Greenberg, the head of AIG, who admired the younger man's hard-driving ways, even if neither he nor his successors fully understood exactly what it was that Cassano did. According to a source familiar with AIG's internal operations, Cassano basically told senior management, You know insurance, I know investments, so you do what you do, and I'll do what I do — leave me alone. Given a free hand within the company, Cassano set out from his offices in London to sell a lucrative form of insurance to all those investors holding lots of CDOs. His tool of choice was another new financial instrument known as a credit-default swap, or CDS.The CDS was popularized by J.P. Morgan, in particular by a group of young, creative bankers who would later become known as the Morgan Mafia,as many of them would go on to assume influential positions in the finance world. In 1994, in between booze and games of tennis at a resort in Boca Raton, Florida, the Morgan gang plotted a way to help boost the bank's returns. One of their goals was to find a way to lend more money, while working around regulations that required them to keep a set amount of cash in reserve to back those loans. What they came up with was an early version of the credit-default swap.In its simplest form, a CDS is just a bet on an outcome. Say Bank A writes a million-dollar mortgage to the Pope for a town house in the West Village. Bank A wants to hedge its mortgage risk in case the Pope can't make his monthly payments, so it buys CDS protection from Bank B, wherein it agrees to pay Bank B a premium of $1,000 a month for five years. In return, Bank B agrees to pay Bank A the full million-dollar value of the Pope's mortgage if he defaults. In theory, Bank A is covered if the Pope goes on a meth binge and loses his job.When Morgan presented their plans for credit swaps to regulators in the late Nineties, they argued that if they bought CDS protection for enough of the investments in their portfolio, they had effectively moved the risk off their books. Therefore, they argued, they should be allowed to lend more, without keeping more cash in reserve. A whole host of regulators — from the Federal Reserve to the Office of the Comptroller of the Currency — accepted the argument, and Morgan was allowed to put more money on the street.
What Cassano did was to transform the credit swaps that Morgan popularized into the world's largest bet on the housing boom. In theory, at least, there's nothing wrong with buying a CDS to insure your investments. Investors paid a premium to AIGFP, and in return the company promised to pick up the tab if the mortgage-backed CDOs went bust. But as Cassano went on a selling spree, the deals he made differed from traditional insurance in several significant ways. First, the party selling CDS protection didn't have to post any money upfront. When a $100 corporate bond is sold, for example, someone has to show 100 actual dollars. But when you sell a $100 CDS guarantee, you don't have to show a dime. So Cassano could sell investment banks billions in guarantees without having any single asset to back it up.Secondly, Cassano was selling so-called naked CDS deals. In a naked CDS, neither party actually holds the underlying loan. In other words, Bank B not only sells CDS protection to Bank A for its mortgage on the Pope — it turns around and sells protection to Bank C for the very same mortgage. This could go on ad nauseam: You could have Banks D through Z also betting on Bank A's mortgage. Unlike traditional insurance, Cassano was offering investors an opportunity to bet that someone else's house would burn down, or take out a term life policy on the guy with AIDS down the street. It was no different from gambling, the Wall Street version of a bunch of frat brothers betting on Jay Feely to make a field goal. Cassano was taking book for every bank that bet short on the housing market, but he didn't have the cash to pay off if the kick went wide.In a span of only seven years, Cassano sold some $500 billion worth of CDS protection, with at least $64 billion of that tied to the subprime mortgage market. AIG didn't have even a fraction of that amount of cash on hand to cover its bets, but neither did it expect it would ever need any reserves. So long as defaults on the underlying securities remained a highly unlikely proposition, AIG was essentially collecting huge and steadily climbing premiums by selling insurance for the disaster it thought would never come.Initially, at least, the revenues were enormous: AIGFP's returns went from $737 million in 1999 to $3.2 billion in 2005. Over the past seven years, the subsidiary's 400 employees were paid a total of $3.5 billion; Cassano himself pocketed at least $280 million in compensation. Everyone made their money — and then it all went to shit.
II. THE REGULATORS
Cassano's outrageous gamble wouldn't have been possible had he not had the good fortune to take over AIGFP just as Sen. Phil Gramm — a grinning, laissez-faire ideologue from Texas — had finished engineering the most dramatic deregulation of the financial industry since Emperor Hien Tsung invented paper money in 806 A.D. For years, Washington had kept a watchful eye on the nation's banks. Ever since the Great Depression, commercial banks — those that kept money on deposit for individuals and businesses — had not been allowed to double as investment banks, which raise money by issuing and selling securities. The Glass-Steagall Act, passed during the Depression, also prevented banks of any kind from getting into the insurance business.But in the late Nineties, a few years before Cassano took over AIGFP, all that changed. The Democrats, tired of getting slaughtered in the fundraising arena by Republicans, decided to throw off their old reliance on unions and interest groups and become more business-friendly.Wall Street responded by flooding Washington with money, buying allies in both parties. In the 10-year period beginning in 1998, financial companies spent $1.7 billion on federal campaign contributions and another $3.4 billion on lobbyists. They quickly got what they paid for. In 1999, Gramm co-sponsored a bill that repealed key aspects of the Glass-Steagall Act, smoothing the way for the creation of financial megafirms like Citigroup. The move did away with the built-in protections afforded by smaller banks. In the old days, a local banker knew the people whose loans were on his balance sheet: He wasn't going to give a million-dollar mortgage to a homeless meth addict, since he would have to keep that loan on his books. But a giant merged bank might write that loan and then sell it off to some fool in China, and who cared? The very next year, Gramm compounded the problem by writing a sweeping new law called the Commodity Futures Modernization Act that made it impossible to regulate credit swaps as either gambling or securities. Commercial banks — which, thanks to Gramm, were now competing directly with investment banks for customers — were driven to buy credit swaps to loosen capital in search of higher yields. By ruling that credit-default swaps were not gaming and not a security, the way was cleared for the growth of the market,said Eric Dinallo, head of the New York State Insurance Department.
The blanket exemption meant that Joe Cassano could now sell as many CDS contracts as he wanted, building up as huge a position as he wanted, without anyone in government saying a word. You have to remember, investment banks aren't in the business of making huge directional bets,says the government source involved in the AIG bailout. When investment banks write CDS deals, they hedge them. But insurance companies don't have to hedge. And that's what AIG did. They just bet massively long on the housing market,says the source.Billions and billions.In the biggest joke of all, Cassano's wheeling and dealing was regulated by the Office of Thrift Supervision, an agency that would prove to be defiantly uninterested in keeping watch over his operations. How a behemoth like AIG came to be regulated by the little-known and relatively small OTS is yet another triumph of the deregulatory instinct. Under another law passed in 1999, certain kinds of holding companies could choose the OTS as their regulator, provided they owned one or more thrifts (better known as savings-and-loans). Because the OTS was viewed as more compliant than the Fed or the Securities and Exchange Commission, companies rushed to reclassify themselves as thrifts. In 1999, AIG purchased a thrift in Delaware and managed to get approval for OTS regulation of its entire operation.Making matters even more hilarious, AIGFP — a London-based subsidiary of an American insurance company — ought to have been regulated by one of Europe's more stringent regulators, like Britain's Financial Services Authority. But the OTS managed to convince the Europeans that it had the muscle to regulate these giant companies. By 2007, the EU had conferred legitimacy to OTS supervision of three mammoth firms — GE, AIG and Ameriprise.That same year, as the subprime crisis was exploding, the Government Accountability Office criticized the OTS, noting a disparity between the size of the agency and the diverse firms it oversees. Among other things, the GAO report noted that the entire OTS had only one insurance specialist on staff — and this despite the fact that it was the primary regulator for the world's largest insurer! There's this notion that the regulators couldn't do anything to stop AIG, says a government official who was present during the bailout. That's bull----. What you have to understand is that these regulators have ultimate power. They can send you a letter and say, You don't exist anymore, and that's basically that. They don't even really need due process. The OTS could have said, We're going to pull your charter; we're going to pull your license; we're going to sue you. And getting sued by your primary regulator is the kiss of death.
When AIG finally blew up, the OTS regulator ostensibly in charge of overseeing the insurance giant — a guy named C.K. Lee — basically admitted that he had blown it. His mistake, Lee said, was that he believed all those credit swaps in Cassano's portfolio were fairly benign products. Why? Because the company told him so. The judgment the company was making was that there was no big credit risk, he explained. (Lee now works as Midwest region director of the OTS; the agency declined to make him available for an interview.)In early March, after the latest bailout of AIG, Treasury Secretary Timothy Geithner took what seemed to be a thinly veiled shot at the OTS, calling AIG a huge, complex global insurance company attached to a very complicated investment bank/hedge fund that was allowed to build up without any adult supervision.But even without that adult supervision,AIG might have been OK had it not been for a complete lack of internal controls. For six months before its meltdown, according to insiders, the company had been searching for a full-time chief financial officer and a chief risk-assessment officer, but never got around to hiring either. That meant that the 18th-largest company in the world had no one checking to make sure its balance sheet was safe and no one keeping track of how much cash and assets the firm had on hand. The situation was so bad that when outside consultants were called in a few weeks before the bailout, senior executives were unable to answer even the most basic questions about their company — like, for instance, how much exposure the firm had to the residential-mortgage market.
III. THE CRASH
Ironically, when reality finally caught up to Cassano, it wasn't because the housing market crapped but because of AIG itself. Before 2005, the company's debt was rated triple-A, meaning he didn't need to post much cash to sell CDS protection: The solid creditworthiness of AIG's name was guarantee enough. But the company's crummy accounting practices eventually caused its credit rating to be downgraded, triggering clauses in the CDS contracts that forced Cassano to post substantially more collateral to back his deals.By the fall of 2007, it was evident that AIGFP's portfolio had turned poisonous, but like every good Wall Street huckster, Cassano schemed to keep his insane, Earth-swallowing gamble hidden from public view. That August, balls bulging, he announced to investors on a conference call that it is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing $1 in any of those transactions. As he spoke, his CDS portfolio was racking up $352 million in losses. When the growing credit crunch prompted senior AIG executives to re-examine its liabilities, a company accountant named Joseph St. Denis became gravely concerned about the CDS deals and their potential for mass destruction. Cassano responded by personally forcing the poor sap out of the firm, telling him he was deliberately excluded from the financial review for fear that he might pollute the process.The following February, when AIG posted $11.5 billion in annual losses, it announced the resignation of Cassano as head of AIGFP, saying an auditor had found a material weakness in the CDS portfolio. But amazingly, the company not only allowed Cassano to keep $34 million in bonuses, it kept him on as a consultant for $1 million a month. In fact, Cassano remained on the payroll and kept collecting his monthly million through the end of September 2008, even after taxpayers had been forced to hand AIG $85 billion to patch up his muf-ups. When asked in October why the company still retained Cassano at his $1 million-a-month rate despite his role in the probable downfall of Western civilization, CEO Martin Sullivan told Congress with a straight face that AIG wanted to retain the 20-year knowledge that Mr. Cassano had.(Cassano, who is apparently hiding out in his lavish town house near Harrods in London, could not be reached for comment.)
What sank AIG in the end was another credit downgrade. Cassano had written so many CDS deals that when the company was facing another downgrade to its credit rating last September, from AA to A, it needed to post billions in collateral — not only more cash than it had on its balance sheet but more cash than it could raise even if it sold off every single one of its liquid assets. Even so, management dithered for days, not believing the company was in serious trouble. AIG was a dried-up prune, sapped of any real value, and its top executives didn't even know it.On the weekend of September 13th, AIG's senior leaders were summoned to the offices of the New York Federal Reserve. Regulators from Dinallo's insurance office were there, as was Geithner, then chief of the New York Fed. Treasury Secretary Hank Paulson, who spent most of the weekend preoccupied with the collapse of Lehman Brothers, came in and out. Also present, for reasons that would emerge later, was Lloyd Blankfein, CEO of Goldman Sachs. The only relevant government office that wasn't represented was the regulator that should have been there all along: the OTS.We sat down with Paulson, Geithner and Dinallo,says a person present at the negotiations. I didn't see the OTS even once.On September 14th, according to another person present, Treasury officials presented Blankfein and other bankers in attendance with an absurd proposal: They basically asked them to spend a day and check to see if they could raise the money privately.The laughably short time span to complete the mammoth task made the answer a foregone conclusion. At the end of the day, the bankers came back and told the government officials, gee, we checked, but we can't raise that much. And the bailout was on.A short time later, it came out that AIG was planning to pay some $90 million in deferred compensation to former executives, and to accelerate the payout of $277 million in bonuses to others — a move the company insisted was necessary to retain key employees.When Congress balked, AIG canceled the $90 million in payments.Then, in January 2009, the company did it again. After all those years letting Cassano run wild, and after already getting caught paying out insane bonuses while on the public till, AIG decided to pay out another $450 million in bonuses. And to whom? To the 400 or so employees in Cassano's old unit, AIGFP, which is due to go out of business shortly! Yes, that's right, an average of $1.1 million in taxpayer-backed money apiece, to the very people who spent the past decade or so punching a hole in the fabric of the universe! We, uh, needed to keep these highly expert people in their seats,AIG spokeswoman Christina Pretto says to me in early February.But didn't these highly expert people' basically destroy your company? I ask.Pretto protests, says this isn't fair. The employees at AIGFP have already taken pay cuts, she says. Not retaining them would dilute the value of the company even further, make it harder to wrap up the unit's operations in an orderly fashion.The bonuses are a nice comic touch highlighting one of the more outrageous tangents of the bailout age, namely the fact that, even with the planet in flames, some members of the Wall Street class can't even get used to the tragedy of having to fly coach. These people need their trips to Baja, their spa treatments, their hand jobs, says an official involved in the AIG bailout, a serious look on his face, apparently not even half-kidding.They don't function well without them.
IV. THE POWER GRAB
So that's the first step in wall street's power grab: making up things like credit-default swaps and collateralized-debt obligations, financial products so complex and inscrutable that ordinary American dumb people — to say nothing of federal regulators and even the CEOs of major corporations like AIG — are too intimidated to even try to understand them. That, combined with wise political investments, enabled the nation's top bankers to effectively scrap any meaningful oversight of the financial industry. In 1997 and 1998, the years leading up to the passage of Phil Gramm's fateful act that gutted Glass-Steagall, the banking, brokerage and insurance industries spent $350 million on political contributions and lobbying. Gramm alone — then the chairman of the Senate Banking Committee — collected $2.6 million in only five years. The law passed 90-8 in the Senate, with the support of 38 Democrats, including some names that might surprise you: Joe Biden, John Kerry, Tom Daschle, Dick Durbin, even John Edwards.The act helped create the too-big-to-fail financial behemoths like Citigroup, AIG and Bank of America — and in turn helped those companies slowly crush their smaller competitors, leaving the major Wall Street firms with even more money and power to lobby for further deregulatory measures. We're moving to an oligopolistic situation,Kenneth Guenther, a top executive with the Independent Community Bankers of America, lamented after the Gramm measure was passed.The situation worsened in 2004, in an extraordinary move toward deregulation that never even got to a vote. At the time, the European Union was threatening to more strictly regulate the foreign operations of America's big investment banks if the U.S. didn't strengthen its own oversight. So the top five investment banks got together on April 28th of that year and — with the helpful assistance of then-Goldman Sachs chief and future Treasury Secretary Hank Paulson — made a pitch to George Bush's SEC chief at the time, William Donaldson, himself a former investment banker. The banks generously volunteered to submit to new rules restricting them from engaging in excessively risky activity. In exchange, they asked to be released from any lending restrictions. The discussion about the new rules lasted just 55 minutes, and there was not a single representative of a major media outlet there to record the fateful decision.Donaldson OK'd the proposal, and the new rules were enough to get the EU to drop its threat to regulate the five firms. The only catch was, neither Donaldson nor his successor, Christopher Cox, actually did any regulating of the banks. They named a commission of seven people to oversee the five companies, whose combined assets came to total more than $4trillion. But in the last year and a half of Cox's tenure, the group had no director and did not complete a single inspection. Great deal for the banks, which originally complained about being regulated by both Europe and the SEC, and ended up being regulated by no one.Once the capital requirements were gone, those top five banks went hog-wild, jumping ass-first into the then-raging housing bubble. One of those was Bear Stearns, which used its freedom to drown itself in bad mortgage loans. In the short period between the 2004 change and Bear's collapse, the firm's debt-to-equity ratio soared from 12-1 to an insane 33-1. Another culprit was Goldman Sachs, which also had the good fortune, around then, to see its CEO, a bald-headed Frankensteinian goon named Hank Paulson (who received an estimated $200 million tax deferral by joining the government), ascend to Treasury secretary.Freed from all capital restraints, sitting pretty with its man running the Treasury, Goldman jumped into the housing craze just like everyone else on Wall Street. Although it famously scored an $11 billion coup in 2007 when one of its trading units smartly shorted the housing market, the move didn't tell the whole story. In truth, Goldman still had a huge exposure come that fateful summer of 2008 — to none other than Joe Cassano.
Goldman Sachs, it turns out, was Cassano's biggest customer, with $20 billion of exposure in Cassano's CDS book. Which might explain why Goldman chief Lloyd Blankfein was in the room with ex-Goldmanite Hank Paulson that weekend of September 13th, when the federal government was supposedly bailing out AIG.When asked why Blankfein was there, one of the government officials who was in the meeting shrugs. One might say that it's because Goldman had so much exposure to AIGFP's portfolio, he says.You'll never prove that, but one might suppose.Market analyst Eric Salzman is more blunt. If AIG went down, he says, there was a good chance Goldman would not be able to collect. The AIG bailout, in effect, was Goldman bailing out Goldman.Eventually, Paulson went a step further, elevating another ex-Goldmanite named Edward Liddy to run AIG — a company whose bailout money would be coming, in part, from the newly created TARP program, administered by another Goldman banker named Neel Kashkari.
V. REPO MEN
There are plenty of people who have noticed, in recent years, that when they lost their homes to foreclosure or were forced into bankruptcy because of crippling credit-card debt, no one in the government was there to rescue them. But when Goldman Sachs —a company whose average employee still made more than $350,000 last year, even in the midst of a depression — was suddenly faced with the possibility of losing money on the unregulated insurance deals it bought for its insane housing bets, the government was there in an instant to patch the hole. That's the essence of the bailout: rich bankers bailing out rich bankers, using the taxpayers' credit card.The people who have spent their lives cloistered in this Wall Street community aren't much for sharing information with the great unwashed. Because all of this shit is complicated, because most of us mortals don't know what the hell LIBOR is or how a REIT works or how to use the word zero coupon bond in a sentence without sounding stupid — well, then, the people who do speak this idiotic language cannot under any circumstances be bothered to explain it to us and instead spend a lot of time rolling their eyes and asking us to trust them.That roll of the eyes is a key part of the psychology of Paulsonism. The state is now being asked not just to call off its regulators or give tax breaks or funnel a few contracts to connected companies; it is intervening directly in the economy, for the sole purpose of preserving the influence of the megafirms. In essence, Paulson used the bailout to transform the government into a giant bureaucracy of entitled assholedom, one that would socialize toxic risks but keep both the profits and the management of the bailed-out firms in private hands. Moreover, this whole process would be done in secret, away from the prying eyes of NASCAR dads, broke-ass liberals who read translations of French novels, subprime mortgage holders and other such financial losers.Some aspects of the bailout were secretive to the point of absurdity. In fact, if you look closely at just a few lines in the Federal Reserve's weekly public disclosures, you can literally see the moment where a big chunk of your money disappeared for good. The H4 report (called Factors Affecting Reserve Balances) summarizes the activities of the Fed each week. You can find it online, and it's pretty much the only thing the Fed ever tells the world about what it does. For the week ending February 18th, the number under the heading Repurchase Agreements on the table is zero. It's a significant number.Why? In the pre-crisis days, the Fed used to manage the money supply by periodically buying and selling securities on the open market through so-called Repurchase Agreements, or Repos. The Fed would typically dump $25 billion or so in cash onto the market every week, buying up Treasury bills, U.S. securities and even mortgage-backed securities from institutions like Goldman Sachs and J.P. Morgan, who would then repurchase them in a short period of time, usually one to seven days. This was the Fed's primary mechanism for controlling interest rates: Buying up securities gives banks more money to lend, which makes interest rates go down. Selling the securities back to the banks reduces the money available for lending, which makes interest rates go up.
If you look at the weekly H4 reports going back to the summer of 2007, you start to notice something alarming. At the start of the credit crunch, around August of that year, you see the Fed buying a few more Repos than usual — $33 billion or so. By November, as private-bank reserves were dwindling to alarmingly low levels, the Fed started injecting even more cash than usual into the economy: $48 billion. By late December, the number was up to $58 billion; by the following March, around the time of the Bear Stearns rescue, the Repo number had jumped to $77 billion. In the week of May 1st, 2008, the number was $115 billion — out of control now, according to one congressional aide. For the rest of 2008, the numbers remained similarly in the stratosphere, the Fed pumping as much as $125 billion of these short-term loans into the economy — until suddenly, at the start of this year, the number drops to nothing. Zero.The reason the number has dropped to nothing is that the Fed had simply stopped using relatively transparent devices like repurchase agreements to pump its money into the hands of private companies. By early 2009, a whole series of new government operations had been invented to inject cash into the economy, most all of them completely secretive and with names you've never heard of. There is the Term Auction Facility, the Term Securities Lending Facility, the Primary Dealer Credit Facility, the Commercial Paper Funding Facility and a monster called the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (boasting the chat-room horror-show acronym ABCPMMMFLF). For good measure, there's also something called a Money Market Investor Funding Facility, plus three facilities called Maiden Lane I, II and III to aid bailout recipients like Bear Stearns and AIG.While the rest of America, and most of Congress, have been bugging out about the $700 billion bailout program called TARP, all of these newly created organisms in the Federal Reserve zoo have quietly been pumping not billions but trillions of dollars into the hands of private companies (at least $3 trillion so far in loans, with as much as $5.7 trillion more in guarantees of private investments). Although this technically isn't taxpayer money, it still affects taxpayers directly, because the activities of the Fed impact the economy as a whole. And this new, secretive activity by the Fed completely eclipses the TARP program in terms of its influence on the economy.No one knows who's getting that money or exactly how much of it is disappearing through these new holes in the hull of America's credit rating. Moreover, no one can really be sure if these new institutions are even temporary at all — or whether they are being set up as permanent, state-aided crutches to Wall Street, designed to systematically suck bad investments off the ledgers of irresponsible lenders.They're supposed to be temporary,says Paul-Martin Foss, an aide to Rep. Ron Paul. But we keep getting notices every six months or so that they're being renewed. They just sort of quietly announce it.None other than disgraced senator Ted Stevens was the poor sap who made the unpleasant discovery that if Congress didn't like the Fed handing trillions of dollars to banks without any oversight, Congress could apparently go fuck itself — or so said the law. When Stevens asked the GAO about what authority Congress has to monitor the Fed, he got back a letter citing an obscure statute that nobody had ever heard of before: the Accounting and Auditing Act of 1950. The relevant section, 31 USC 714(b), dictated that congressional audits of the Federal Reserve may not include deliberations, decisions and actions on monetary policy matters.The exemption, as Foss notes, basically includes everything.According to the law, in other words, the Fed simply cannot be audited by Congress. Or by anyone else, for that matter.
VI. WINNERS AND LOSERS
Stevens isn't the only person in Congress to be given the finger by the Fed. In January, when Rep. Alan Grayson of Florida asked Federal Reserve vice chairman Donald Kohn where all the money went — only $1.2 trillion had vanished by then — Kohn gave Grayson a classic eye roll, saying he would be very hesitant to name names because it might discourage banks from taking the money.Has that ever happened? Grayson asked. Have people ever said, We will not take your $100 billion because people will find out about it? Well, we said we would not publish the names of the borrowers, so we have no test of that, Kohn answered, visibly annoyed with Grayson's meddling.Grayson pressed on, demanding to know on what terms the Fed was lending the money. Presumably it was buying assets and making loans, but no one knew how it was pricing those assets — in other words, no one knew what kind of deal it was striking on behalf of taxpayers. So when Grayson asked if the purchased assets were marked to market — a methodology that assigns a concrete value to assets, based on the market rate on the day they are traded — Kohn answered, mysteriously, The ones that have market values are marked to market.The implication was that the Fed was purchasing derivatives like credit swaps or other instruments that were basically impossible to value objectively — paying real money for God knows what.Well, how much of them don't have market values? asked Grayson.How much of them are worthless? None are worthless,Kohn snapped.Then why don't you mark them to market? Grayson demanded.Well, Kohn sighed, we are marking the ones to market that have market values.In essence, the Fed was telling Congress to lay off and let the experts handle things. It's like buying a car in a used-car lot without opening the hood, and saying, I think it's fine, says Dan Fuss, an analyst with the investment firm Loomis Sayles. The salesman says,Don't worry about it. Trust me.It'll probably get us out of the lot, but how much farther? None of us knows.When one considers the comparatively extensive system of congressional checks and balances that goes into the spending of every dollar in the budget via the normal appropriations process, what's happening in the Fed amounts to something truly revolutionary — a kind of shadow government with a budget many times the size of the normal federal outlay, administered dictatorially by one man, Fed chairman Ben Bernanke. We spend hours and hours and hours arguing over $10 million amendments on the floor of the Senate, but there has been no discussion about who has been receiving this $3 trillion,says Sen. Bernie Sanders.It is beyond comprehension.
Count Sanders among those who don't buy the argument that Wall Street firms shouldn't have to face being outed as recipients of public funds, that making this information public might cause investors to panic and dump their holdings in these firms. I guess if we made that public, they'd go on strike or something,he muses.And the Fed isn't the only arm of the bailout that has closed ranks. The Treasury, too, has maintained incredible secrecy surrounding its implementation even of the TARP program, which was mandated by Congress. To this date, no one knows exactly what criteria the Treasury Department used to determine which banks received bailout funds and which didn't — particularly the first $350 billion given out under Bush appointee Hank Paulson.The situation with the first TARP payments grew so absurd that when the Congressional Oversight Panel, charged with monitoring the bailout money, sent a query to Paulson asking how he decided whom to give money to, Treasury responded — and this isn't a joke — by directing the panel to a copy of the TARP application form on its website. Elizabeth Warren, the chair of the Congressional Oversight Panel, was struck nearly speechless by the response.Do you believe that?" she says incredulously. That's not what we had in mind.Another member of Congress, who asked not to be named, offers his own theory about the TARP process. I think basically if you knew Hank Paulson, you got the money,he says.This cozy arrangement created yet another opportunity for big banks to devour market share at the expense of smaller regional lenders. While all the bigwigs at Citi and Goldman and Bank of America who had Paulson on speed-dial got bailed out right away — remember that TARP was originally passed because money had to be lent right now, that day, that minute, to stave off emergency — many small banks are still waiting for help. Five months into the TARP program, some not only haven't received any funds, they haven't even gotten a call back about their applications.
There's definitely a feeling among community bankers that no one up there cares much if they make it or not,says Tanya Wheeless, president of the Arizona Bankers Association.Which, of course, is exactly the opposite of what should be happening, since small, regional banks are far less guilty of the kinds of predatory lending that sank the economy. They're not giving out subprime loans or easy credit, says Wheeless.At the community level, it's much more bread-and-butter banking.Nonetheless, the lion's share of the bailout money has gone to the larger, so-called systemically important banks. It's like Treasury is picking winners and losers,says one state banking official who asked not to be identified.This itself is a hugely important political development. In essence, the bailout accelerated the decline of regional community lenders by boosting the political power of their giant national competitors.
Which, when you think about it, is insane: What had brought us to the brink of collapse in the first place was this relentless instinct for building ever-larger megacompanies, passing deregulatory measures to gradually feed all the little fish in the sea to an ever-shrinking pool of Bigger Fish. To fix this problem, the government should have slowly liquidated these monster, too-big-to-fail firms and broken them down to smaller, more manageable companies. Instead, federal regulators closed ranks and used an almost completely secret bailout process to double down on the same faulty, merger-happy thinking that got us here in the first place, creating a constellation of megafirms under government control that are even bigger, more unwieldy and more crammed to the gills with systemic risk.In essence, Paulson and his cronies turned the federal government into one gigantic, half-opaque holding company, one whose balance sheet includes the world's most appallingly large and risky hedge fund, a controlling stake in a dying insurance giant, huge investments in a group of teetering megabanks, and shares here and there in various auto-finance companies, student loans, and other failing businesses. Like AIG, this new federal holding company is a firm that has no mechanism for auditing itself and is run by leaders who have very little grasp of the daily operations of its disparate subsidiary operations.
In other words, it's AIG's rip-roaringly shitty business model writ almost inconceivably massive — to echo Geithner, a huge, complex global company attached to a very complicated investment bank/hedge fund that's been allowed to build up without adult supervision. How much of what kinds of crap is actually on our balance sheet, and what did we pay for it? When exactly will the rent come due, when will the money run out? Does anyone know what the hell is going on? And on the linear spectrum of capitalism to socialism, where exactly are we now? Is there a dictionary word that even describes what we are now? It would be funny, if it weren't such a nightmare.
VII. YOU DON'T GET IT
The real question from here is whether the Obama administration is going to move to bring the financial system back to a place where sanity is restored and the general public can have a say in things or whether the new financial bureaucracy will remain obscure, secretive and hopelessly complex. It might not bode well that Geithner, Obama's Treasury secretary, is one of the architects of the Paulson bailouts; as chief of the New York Fed, he helped orchestrate the Goldman-friendly AIG bailout and the secretive Maiden Lane facilities used to funnel funds to the dying company. Neither did it look good when Geithner — himself a protégé of notorious Goldman alum John Thain, the Merrill Lynch chief who paid out billions in bonuses after the state spent billions bailing out his firm — picked a former Goldman lobbyist named Mark Patterson to be his top aide.In fact, most of Geithner's early moves reek strongly of Paulsonism. He has continually talked about partnering with private investors to create a so-called bad bank that would systemically relieve private lenders of bad assets — the kind of massive, opaque, quasi-private bureaucratic nightmare that Paulson specialized in. Geithner even refloated a Paulson proposal to use TALF, one of the Fed's new facilities, to essentially lend cheap money to hedge funds to invest in troubled banks while practically guaranteeing them enormous profits.God knows exactly what this does for the taxpayer, but hedge-fund managers sure love the idea. This is exactly what the financial system needs, said Andrew Feldstein, CEO of Blue Mountain Capital and one of the Morgan Mafia. Strangely, there aren't many people who don't run hedge funds who have expressed anything like that kind of enthusiasm for Geithner's ideas.As complex as all the finances are, the politics aren't hard to follow. By creating an urgent crisis that can only be solved by those fluent in a language too complex for ordinary people to understand, the Wall Street crowd has turned the vast majority of Americans into non-participants in their own political future. There is a reason it used to be a crime in the Confederate states to teach a slave to read: Literacy is power. In the age of the CDS and CDO, most of us are financial illiterates. By making an already too-complex economy even more complex, Wall Street has used the crisis to effect a historic, revolutionary change in our political system — transforming a democracy into a two-tiered state, one with plugged-in financial bureaucrats above and clueless customers below.
The most galling thing about this financial crisis is that so many Wall Street types think they actually deserve not only their huge bonuses and lavish lifestyles but the awesome political power their own mistakes have left them in possession of. When challenged, they talk about how hard they work, the 90-hour weeks, the stress, the failed marriages, the hemorrhoids and gallstones they all get before they hit 40.But wait a minute, you say to them. No one ever asked you to stay up all night eight days a week trying to get filthy rich shorting what's left of the American auto industry or selling $600 billion in toxic, irredeemable mortgages to ex-strippers on work release and Taco Bell clerks. Actually, come to think of it, why are we even giving taxpayer money to you people? Why are we not throwing your ass in jail instead? But before you even finish saying that, they're rolling their eyes, because You Don't Get It. These people were never about anything except turning money into money, in order to get more money; valueswise they're on par with crack addicts, or obsessive sexual deviants who burgle homes to steal panties. Yet these are the people in whose hands our entire political future now rests.Good luck with that, America. And enjoy tax season.[From Issue 1075 — April 2, 2009]ROLLINGSTONE.
REVELATION 17:12-13
12 And the ten horns (NATIONS) which thou sawest are ten kings, which have received no kingdom as yet; but receive power as kings one hour with the beast.
13 These have one mind, and shall give their power and strength unto the beast.
REVELATION 6:1-2
1 And I saw when the Lamb opened one of the seals, and I heard, as it were the noise of thunder, one of the four beasts saying, Come and see.
2 And I saw, and behold a white horse:(PEACE) and he that sat on him had a bow;(EU DICTATOR) and a crown was given unto him:(PRESIDENT OF THE EU) and he went forth conquering, and to conquer.(MILITARY GENIUS)
REVELATION 13:1-10
1 And I stood upon the sand of the sea, and saw a beast rise up out of the sea, having seven heads and ten horns, and upon his horns ten crowns, and upon his heads the name of blasphemy.(THE EU AND ITS DICTATOR IS GODLESS)
2 And the beast which I saw was like unto a leopard, and his feet were as the feet of a bear, and his mouth as the mouth of a lion: and the dragon gave him his power, and his seat, and great authority.(DICTATOR COMES FROM NEW AGE OR OCCULT)
3 And I saw one of his heads as it were wounded to death;(MURDERERD) and his deadly wound was healed:(COMES BACK TO LIFE) and all the world wondered after the beast.(THE WORLD THINKS ITS GOD IN THE FLESH, MESSIAH TO ISRAEL)
4 And they worshipped the dragon (SATAN) which gave power unto the beast:(JEWISH EU DICTATOR) and they worshipped the beast, saying, Who is like unto the beast? who is able to make war with him?(FALSE RESURRECTION,SATAN BRINGS HIM TO LIFE)
5 And there was given unto him a mouth speaking great things and blasphemies; and power was given unto him to continue forty and two months.(GIVEN WORLD CONTROL FOR 3 1/2YRS)
6 And he opened his mouth in blasphemy against God,(HES A GOD HATER) to blaspheme his name, and his tabernacle, and them that dwell in heaven.(HES A LIBERAL OR DEMOCRAT,WILL PUT ANYTHING ABOUT GOD DOWN)
7 And it was given unto him to make war with the saints,(BEHEAD THEM) and to overcome them: and power was given him over all kindreds, and tongues, and nations.(WORLD DOMINATION)
8 And all that dwell upon the earth shall worship him, whose names are not written in the book of life of the Lamb slain from the foundation of the world.(WORLD DICTATOR)
9 If any man have an ear, let him hear.
10 He that leadeth into captivity shall go into captivity: he that killeth with the sword must be killed with the sword. Here is the patience and the faith of the saints.(SAVED CHRISTIANS AND JEWS DIE FOR THEIR FAITH AT THIS TIME,NOW WE ARE SAVED BY GRACE BUT DURING THE 7 YEARS OF HELL ON EARTH, PEOPLE WILL BE PUT TO DEATH (BEHEADINGS) FOR THEIR BELIEF IN GOD (JESUS) OR THE BIBLE.
THE WEEK OF DANIEL 9:27 WE KNOW ITS 7 YRS
Heres the scripture 1 week = 7 yrs Genesis 29:27-29
27 Fulfil her week, and we will give thee this also for the service which thou shalt serve with me yet seven other years.
28 And Jacob did so, and fulfilled her week: and he gave him Rachel his daughter to wife also.
29 And Laban gave to Rachel his daughter Bilhah his handmaid to be her maid.
DANIEL 9:26-27
26 And after threescore and two weeks shall Messiah be cut off, but not for himself: and the people of the prince that shall come (ROMANS IN AD 70) shall destroy the city and the sanctuary;(ROMANS DESTROYED THE 2ND TEMPLE) and the end thereof shall be with a flood, and unto the end of the war desolations are determined.
27 And he( EU ROMAN, JEWISH DICTATOR) shall confirm the covenant with many for one week:( 7 YEARS) and in the midst of the week he shall cause the sacrifice and the oblation to cease,( 3 1/2 YRS) and for the overspreading of abominations he shall make it desolate, even until the consummation, and that determined shall be poured upon the desolate.
WORLD GOVERNMENT
DANIEL 7:23-25
23 Thus he said, The fourth beast shall be the fourth kingdom upon earth, which shall be diverse from all kingdoms, and shall devour the whole earth, and shall tread it down, and break it in pieces.
24 And the ten horns out of this kingdom are ten kings that shall arise: and another shall rise after them; and he shall be diverse from the first, and he shall subdue three kings.
25 And he shall speak great words against the most High, and shall wear out the saints of the most High, and think to change times and laws: and they shall be given into his hand until a time and times and the dividing of time.
DANIEL 12:4,1
4 But thou, O Daniel, shut up the words, and seal the book, even to the time of the end: many shall run to and fro, and knowledge shall be increased.
1 And at that time shall Michael stand up, the great prince which standeth for the children of thy people: and there shall be a time of trouble, such as never was since there was a nation even to that same time: and at that time thy people shall be delivered, every one that shall be found written in the book.
REVELATION 13:1-3,7,8,12,16-18
1 And I stood upon the sand of the sea, and saw a beast rise up out of the sea, having seven heads and ten horns, and upon his horns ten crowns, and upon his heads the name of blasphemy.
2 And the beast which I saw was like unto a leopard, and his feet were as the feet of a bear, and his mouth as the mouth of a lion: and the dragon gave him his power, and his seat, and great authority.
3 And I saw one of his heads as it were wounded to death; and his deadly wound was healed: and all the world wondered after the beast.
7 And it was given unto him to make war with the saints, and to overcome them: and power was given him over all kindreds, and tongues, and nations.
8 And all that dwell upon the earth shall worship him, whose names are not written in the book of life of the Lamb slain from the foundation of the world.
12 And he exerciseth all the power of the first beast before him, and causeth the earth and them which dwell therein to worship the first beast, whose deadly wound was healed.
16 And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:
17 And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.
18 Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six.
REVELATION 17:3,7,9-10,12,18
3 So he carried me away in the spirit into the wilderness: and I saw a woman sit upon a scarlet coloured beast, full of names of blasphemy, having seven heads and ten horns.
7 And the angel said unto me, Wherefore didst thou marvel? I will tell thee the mystery of the woman, and of the beast that carrieth her, which hath the seven heads and ten horns.
9 And here is the mind which hath wisdom. The seven heads are seven mountains, on which the woman sitteth.
10 And there are seven kings: five are fallen, and one is, and the other is not yet come; and when he cometh, he must continue a short space.
12 And the ten horns which thou sawest are ten kings, which have received no kingdom as yet; but receive power as kings one hour with the beast.
18 And the woman which thou sawest is that great city, which reigneth over the kings of the earth.
CHARLIE ROSE FEDERAL RESERVE
http://www.charlierose.com/view/interview/9221
http://www.charlierose.com/view/interview/1908
http://www.charlierose.com/view/interview/2729
http://www.charlierose.com/view/interview/8995
RICHARD HAAS ON CHARLIE
http://www.charlierose.com/guest/view/975
BENJAMIN NETANYAHU ON CHARLIE
http://www.charlierose.com/guest/view/1452
http://www.charlierose.com/topic/current_affairs?keyword=Benjamin+Netanyahu
SHIMON PERES ON CHARLIE
http://www.charlierose.com/guest/view/144
YOSSI BEILIN
http://www.charlierose.com/guest/view/1527
EHUD BARACK ON CHARLIE
http://www.charlierose.com/guest/view/1169
JERUSALEM
http://www.charlierose.com/topic/current_affairs?keyword=Jerusalem
ARIEL SHARON
http://www.charlierose.com/topic/current_affairs?keyword=Ariel+Sharon
PEACE PROCESS
http://www.charlierose.com/topic/current_affairs?keyword=peace+process
JOSE MARIA AZNAR
http://www.charlierose.com/guest/view/1795
EUROPEAN UNION
http://www.charlierose.com/search/?text=European+Union
http://www.charlierose.com/search/?text=NATO
http://www.charlierose.com/guest/view/1125
http://www.charlierose.com/search/?text=France
UNITED NATIONS
http://www.charlierose.com/search/?text=United+Nations
GERMANY
http://www.charlierose.com/search/?text=Germany
HENRY PAULSON ON CHARLIE
http://www.charlierose.com/guest/view/1495
BARACK OBAMA ON CHARLIE
http://www.charlierose.com/guest/view/233
RAHM EMANUAL
http://www.charlierose.com/guest/view/71
HENRY KISSINGER ON CHARLIE
http://www.charlierose.com/guest/view/48
JIMMY CARTER
http://www.charlierose.com/guest/view/143
PETER MANDELSON
http://www.charlierose.com/guest/view/3211
TONY BLAIR
http://www.charlierose.com/guest/view/6463
http://www.charlierose.com/search/?text=Tony+Blair
THE EURO
http://www.charlierose.com/search/?text=Euro
MARTIN WOLF
http://www.charlierose.com/view/interview/10058
MAHMOOD AHMADINEJAD
http://www.charlierose.com/view/interview/8707
CONDI RICE
http://www.charlierose.com/view/interview/10154
ISRAEL
http://www.charlierose.com/topic/current_affairs?keyword=Israel
PALESTNE
http://www.charlierose.com/topic/current_affairs?keyword=Palestine
MIDEAST
http://www.charlierose.com/topic/current_affairs?keyword=Middle+East
ARAFAT
http://www.charlierose.com/topic/current_affairs?keyword=Yasser+Arafat
HAMAS
http://www.charlierose.com/topic/current_affairs?keyword=Hamas
ZBIGNIEW BRZESINSKI
http://www.charlierose.com/guest/view/119
THE OBAMA DECEPTION
http://www.youtube.com/watch?v=eAaQNACwaLw
The Big Takeover ROLLINGSTONE The global economic crisis isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution MATT TAIBBI Posted Mar 19, 2009 12:49 PM
It's over — we're officially, royally fucked. no empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline — a corporation that got rich insuring the concrete and steel of American industry in the country's heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire.The latest bailout came as AIG admitted to having just posted the largest quarterly loss in American corporate history — some $61.7 billion. In the final three months of last year, the company lost more than $27 million every hour. That's $465,000 a minute, a yearly income for a median American household every six seconds, roughly $7,750 a second. And all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG's 2008 losses).So it's time to admit it: We're fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we're still in denial — we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream. When Geithner announced the new $30 billion bailout, the party line was that poor AIG was just a victim of a lot of shitty luck — bad year for business, you know, what with the financial crisis and all. Edward Liddy, the company's CEO, actually compared it to catching a cold: The marketplace is a pretty crummy place to be right now, he said. When the world catches pneumonia, we get it too.In a pathetic attempt at name-dropping, he even whined that AIG was being consumed by the same issues that are driving house prices down and 401K statements down and Warren Buffet's investment portfolio down.
Liddy made AIG sound like an orphan begging in a soup line, hungry and sick from being left out in someone else's financial weather. He conveniently forgot to mention that AIG had spent more than a decade systematically scheming to evade U.S. and international regulators, or that one of the causes of its pneumonia was making colossal, world-sinking $500 billion bets with money it didn't have, in a toxic and completely unregulated derivatives market.Nor did anyone mention that when AIG finally got up from its seat at the Wall Street casino, broke and busted in the afterdawn light, it owed money all over town — and that a huge chunk of your taxpayer dollars in this particular bailout scam will be going to pay off the other high rollers at its table. Or that this was a casino unique among all casinos, one where middle-class taxpayers cover the bets of billionaires.People are pissed off about this financial crisis, and about this bailout, but they're not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'état. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.The crisis was the coup de grâce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve — our partners in the government,as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron — a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.
I. PATIENT ZERO
The best way to understand the financial crisis is to understand the meltdown at AIG. AIG is what happens when short, bald managers of otherwise boring financial bureaucracies start seeing Brad Pitt in the mirror. This is a company that built a giant fortune across more than a century by betting on safety-conscious policyholders — people who wear seat belts and build houses on high ground — and then blew it all in a year or two by turning their entire balance sheet over to a guy who acted like making huge bets with other people's money would make his dick bigger.That guy — the Patient Zero of the global economic meltdown — was one Joseph Cassano, the head of a tiny, 400-person unit within the company called AIG Financial Products, or AIGFP. Cassano, a pudgy, balding Brooklyn College grad with beady eyes and way too much forehead, cut his teeth in the Eighties working for Mike Milken, the granddaddy of modern Wall Street debt alchemists. Milken, who pioneered the creative use of junk bonds, relied on messianic genius and a whole array of insider schemes to evade detection while wreaking financial disaster. Cassano, by contrast, was just a greedy little turd with a knack for selective accounting who ran his scam right out in the open, thanks to Washington's deregulation of the Wall Street casino.It's all about the regulatory environment,says a government source involved with the AIG bailout. These guys look for holes in the system, for ways they can do trades without government interference. Whatever is unregulated, all the action is going to pile into that.The mess Cassano created had its roots in an investment boom fueled in part by a relatively new type of financial instrument called a collateralized-debt obligation. A CDO is like a box full of diced-up assets. They can be anything: mortgages, corporate loans, aircraft loans, credit-card loans, even other CDOs. So as X mortgage holder pays his bill, and Y corporate debtor pays his bill, and Z credit-card debtor pays his bill, money flows into the box.
The key idea behind a CDO is that there will always be at least some money in the box, regardless of how dicey the individual assets inside it are. No matter how you look at a single unemployed ex-con trying to pay the note on a six-bedroom house, he looks like a bad investment. But dump his loan in a box with a smorgasbord of auto loans, credit-card debt, corporate bonds and other crap, and you can be reasonably sure that somebody is going to pay up. Say $100 is supposed to come into the box every month. Even in an apocalypse, when $90 in payments might default, you'll still get $10. What the inventors of the CDO did is divide up the box into groups of investors and put that $10 into its own level, or tranche. They then convinced ratings agencies like Moody's and S&P to give that top tranche the highest AAA rating — meaning it has close to zero credit risk.Suddenly, thanks to this financial seal of approval, banks had a way to turn their shittiest mortgages and other financial waste into investment-grade paper and sell them to institutional investors like pensions and insurance companies, which were forced by regulators to keep their portfolios as safe as possible. Because CDOs offered higher rates of return than truly safe products like Treasury bills, it was a win-win: Banks made a fortune selling CDOs, and big investors made much more holding them.The problem was, none of this was based on reality. The banks knew they were selling crap, says a London-based trader from one of the bailed-out companies. To get AAA ratings, the CDOs relied not on their actual underlying assets but on crazy mathematical formulas that the banks cooked up to make the investments look safer than they really were. They had some back room somewhere where a bunch of Indian guys who'd been doing nothing but math for God knows how many years would come up with some kind of model saying that this or that combination of debtors would only default once every 10,000 years,says one young trader who sold CDOs for a major investment bank.It was nuts.Now that even the crappiest mortgages could be sold to conservative investors, the CDOs spurred a massive explosion of irresponsible and predatory lending. In fact, there was such a crush to underwrite CDOs that it became hard to find enough subprime mortgages — read: enough unemployed meth dealers willing to buy million-dollar homes for no money down — to fill them all. As banks and investors of all kinds took on more and more in CDOs and similar instruments, they needed some way to hedge their massive bets — some kind of insurance policy, in case the housing bubble burst and all that debt went south at the same time. This was particularly true for investment banks, many of which got stuck holding or warehousing CDOs when they wrote more than they could sell. And that's were Joe Cassano came in.
Known for his boldness and arrogance, Cassano took over as chief of AIGFP in 2001. He was the favorite of Maurice Hank Greenberg, the head of AIG, who admired the younger man's hard-driving ways, even if neither he nor his successors fully understood exactly what it was that Cassano did. According to a source familiar with AIG's internal operations, Cassano basically told senior management, You know insurance, I know investments, so you do what you do, and I'll do what I do — leave me alone. Given a free hand within the company, Cassano set out from his offices in London to sell a lucrative form of insurance to all those investors holding lots of CDOs. His tool of choice was another new financial instrument known as a credit-default swap, or CDS.The CDS was popularized by J.P. Morgan, in particular by a group of young, creative bankers who would later become known as the Morgan Mafia,as many of them would go on to assume influential positions in the finance world. In 1994, in between booze and games of tennis at a resort in Boca Raton, Florida, the Morgan gang plotted a way to help boost the bank's returns. One of their goals was to find a way to lend more money, while working around regulations that required them to keep a set amount of cash in reserve to back those loans. What they came up with was an early version of the credit-default swap.In its simplest form, a CDS is just a bet on an outcome. Say Bank A writes a million-dollar mortgage to the Pope for a town house in the West Village. Bank A wants to hedge its mortgage risk in case the Pope can't make his monthly payments, so it buys CDS protection from Bank B, wherein it agrees to pay Bank B a premium of $1,000 a month for five years. In return, Bank B agrees to pay Bank A the full million-dollar value of the Pope's mortgage if he defaults. In theory, Bank A is covered if the Pope goes on a meth binge and loses his job.When Morgan presented their plans for credit swaps to regulators in the late Nineties, they argued that if they bought CDS protection for enough of the investments in their portfolio, they had effectively moved the risk off their books. Therefore, they argued, they should be allowed to lend more, without keeping more cash in reserve. A whole host of regulators — from the Federal Reserve to the Office of the Comptroller of the Currency — accepted the argument, and Morgan was allowed to put more money on the street.
What Cassano did was to transform the credit swaps that Morgan popularized into the world's largest bet on the housing boom. In theory, at least, there's nothing wrong with buying a CDS to insure your investments. Investors paid a premium to AIGFP, and in return the company promised to pick up the tab if the mortgage-backed CDOs went bust. But as Cassano went on a selling spree, the deals he made differed from traditional insurance in several significant ways. First, the party selling CDS protection didn't have to post any money upfront. When a $100 corporate bond is sold, for example, someone has to show 100 actual dollars. But when you sell a $100 CDS guarantee, you don't have to show a dime. So Cassano could sell investment banks billions in guarantees without having any single asset to back it up.Secondly, Cassano was selling so-called naked CDS deals. In a naked CDS, neither party actually holds the underlying loan. In other words, Bank B not only sells CDS protection to Bank A for its mortgage on the Pope — it turns around and sells protection to Bank C for the very same mortgage. This could go on ad nauseam: You could have Banks D through Z also betting on Bank A's mortgage. Unlike traditional insurance, Cassano was offering investors an opportunity to bet that someone else's house would burn down, or take out a term life policy on the guy with AIDS down the street. It was no different from gambling, the Wall Street version of a bunch of frat brothers betting on Jay Feely to make a field goal. Cassano was taking book for every bank that bet short on the housing market, but he didn't have the cash to pay off if the kick went wide.In a span of only seven years, Cassano sold some $500 billion worth of CDS protection, with at least $64 billion of that tied to the subprime mortgage market. AIG didn't have even a fraction of that amount of cash on hand to cover its bets, but neither did it expect it would ever need any reserves. So long as defaults on the underlying securities remained a highly unlikely proposition, AIG was essentially collecting huge and steadily climbing premiums by selling insurance for the disaster it thought would never come.Initially, at least, the revenues were enormous: AIGFP's returns went from $737 million in 1999 to $3.2 billion in 2005. Over the past seven years, the subsidiary's 400 employees were paid a total of $3.5 billion; Cassano himself pocketed at least $280 million in compensation. Everyone made their money — and then it all went to shit.
II. THE REGULATORS
Cassano's outrageous gamble wouldn't have been possible had he not had the good fortune to take over AIGFP just as Sen. Phil Gramm — a grinning, laissez-faire ideologue from Texas — had finished engineering the most dramatic deregulation of the financial industry since Emperor Hien Tsung invented paper money in 806 A.D. For years, Washington had kept a watchful eye on the nation's banks. Ever since the Great Depression, commercial banks — those that kept money on deposit for individuals and businesses — had not been allowed to double as investment banks, which raise money by issuing and selling securities. The Glass-Steagall Act, passed during the Depression, also prevented banks of any kind from getting into the insurance business.But in the late Nineties, a few years before Cassano took over AIGFP, all that changed. The Democrats, tired of getting slaughtered in the fundraising arena by Republicans, decided to throw off their old reliance on unions and interest groups and become more business-friendly.Wall Street responded by flooding Washington with money, buying allies in both parties. In the 10-year period beginning in 1998, financial companies spent $1.7 billion on federal campaign contributions and another $3.4 billion on lobbyists. They quickly got what they paid for. In 1999, Gramm co-sponsored a bill that repealed key aspects of the Glass-Steagall Act, smoothing the way for the creation of financial megafirms like Citigroup. The move did away with the built-in protections afforded by smaller banks. In the old days, a local banker knew the people whose loans were on his balance sheet: He wasn't going to give a million-dollar mortgage to a homeless meth addict, since he would have to keep that loan on his books. But a giant merged bank might write that loan and then sell it off to some fool in China, and who cared? The very next year, Gramm compounded the problem by writing a sweeping new law called the Commodity Futures Modernization Act that made it impossible to regulate credit swaps as either gambling or securities. Commercial banks — which, thanks to Gramm, were now competing directly with investment banks for customers — were driven to buy credit swaps to loosen capital in search of higher yields. By ruling that credit-default swaps were not gaming and not a security, the way was cleared for the growth of the market,said Eric Dinallo, head of the New York State Insurance Department.
The blanket exemption meant that Joe Cassano could now sell as many CDS contracts as he wanted, building up as huge a position as he wanted, without anyone in government saying a word. You have to remember, investment banks aren't in the business of making huge directional bets,says the government source involved in the AIG bailout. When investment banks write CDS deals, they hedge them. But insurance companies don't have to hedge. And that's what AIG did. They just bet massively long on the housing market,says the source.Billions and billions.In the biggest joke of all, Cassano's wheeling and dealing was regulated by the Office of Thrift Supervision, an agency that would prove to be defiantly uninterested in keeping watch over his operations. How a behemoth like AIG came to be regulated by the little-known and relatively small OTS is yet another triumph of the deregulatory instinct. Under another law passed in 1999, certain kinds of holding companies could choose the OTS as their regulator, provided they owned one or more thrifts (better known as savings-and-loans). Because the OTS was viewed as more compliant than the Fed or the Securities and Exchange Commission, companies rushed to reclassify themselves as thrifts. In 1999, AIG purchased a thrift in Delaware and managed to get approval for OTS regulation of its entire operation.Making matters even more hilarious, AIGFP — a London-based subsidiary of an American insurance company — ought to have been regulated by one of Europe's more stringent regulators, like Britain's Financial Services Authority. But the OTS managed to convince the Europeans that it had the muscle to regulate these giant companies. By 2007, the EU had conferred legitimacy to OTS supervision of three mammoth firms — GE, AIG and Ameriprise.That same year, as the subprime crisis was exploding, the Government Accountability Office criticized the OTS, noting a disparity between the size of the agency and the diverse firms it oversees. Among other things, the GAO report noted that the entire OTS had only one insurance specialist on staff — and this despite the fact that it was the primary regulator for the world's largest insurer! There's this notion that the regulators couldn't do anything to stop AIG, says a government official who was present during the bailout. That's bull----. What you have to understand is that these regulators have ultimate power. They can send you a letter and say, You don't exist anymore, and that's basically that. They don't even really need due process. The OTS could have said, We're going to pull your charter; we're going to pull your license; we're going to sue you. And getting sued by your primary regulator is the kiss of death.
When AIG finally blew up, the OTS regulator ostensibly in charge of overseeing the insurance giant — a guy named C.K. Lee — basically admitted that he had blown it. His mistake, Lee said, was that he believed all those credit swaps in Cassano's portfolio were fairly benign products. Why? Because the company told him so. The judgment the company was making was that there was no big credit risk, he explained. (Lee now works as Midwest region director of the OTS; the agency declined to make him available for an interview.)In early March, after the latest bailout of AIG, Treasury Secretary Timothy Geithner took what seemed to be a thinly veiled shot at the OTS, calling AIG a huge, complex global insurance company attached to a very complicated investment bank/hedge fund that was allowed to build up without any adult supervision.But even without that adult supervision,AIG might have been OK had it not been for a complete lack of internal controls. For six months before its meltdown, according to insiders, the company had been searching for a full-time chief financial officer and a chief risk-assessment officer, but never got around to hiring either. That meant that the 18th-largest company in the world had no one checking to make sure its balance sheet was safe and no one keeping track of how much cash and assets the firm had on hand. The situation was so bad that when outside consultants were called in a few weeks before the bailout, senior executives were unable to answer even the most basic questions about their company — like, for instance, how much exposure the firm had to the residential-mortgage market.
III. THE CRASH
Ironically, when reality finally caught up to Cassano, it wasn't because the housing market crapped but because of AIG itself. Before 2005, the company's debt was rated triple-A, meaning he didn't need to post much cash to sell CDS protection: The solid creditworthiness of AIG's name was guarantee enough. But the company's crummy accounting practices eventually caused its credit rating to be downgraded, triggering clauses in the CDS contracts that forced Cassano to post substantially more collateral to back his deals.By the fall of 2007, it was evident that AIGFP's portfolio had turned poisonous, but like every good Wall Street huckster, Cassano schemed to keep his insane, Earth-swallowing gamble hidden from public view. That August, balls bulging, he announced to investors on a conference call that it is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing $1 in any of those transactions. As he spoke, his CDS portfolio was racking up $352 million in losses. When the growing credit crunch prompted senior AIG executives to re-examine its liabilities, a company accountant named Joseph St. Denis became gravely concerned about the CDS deals and their potential for mass destruction. Cassano responded by personally forcing the poor sap out of the firm, telling him he was deliberately excluded from the financial review for fear that he might pollute the process.The following February, when AIG posted $11.5 billion in annual losses, it announced the resignation of Cassano as head of AIGFP, saying an auditor had found a material weakness in the CDS portfolio. But amazingly, the company not only allowed Cassano to keep $34 million in bonuses, it kept him on as a consultant for $1 million a month. In fact, Cassano remained on the payroll and kept collecting his monthly million through the end of September 2008, even after taxpayers had been forced to hand AIG $85 billion to patch up his muf-ups. When asked in October why the company still retained Cassano at his $1 million-a-month rate despite his role in the probable downfall of Western civilization, CEO Martin Sullivan told Congress with a straight face that AIG wanted to retain the 20-year knowledge that Mr. Cassano had.(Cassano, who is apparently hiding out in his lavish town house near Harrods in London, could not be reached for comment.)
What sank AIG in the end was another credit downgrade. Cassano had written so many CDS deals that when the company was facing another downgrade to its credit rating last September, from AA to A, it needed to post billions in collateral — not only more cash than it had on its balance sheet but more cash than it could raise even if it sold off every single one of its liquid assets. Even so, management dithered for days, not believing the company was in serious trouble. AIG was a dried-up prune, sapped of any real value, and its top executives didn't even know it.On the weekend of September 13th, AIG's senior leaders were summoned to the offices of the New York Federal Reserve. Regulators from Dinallo's insurance office were there, as was Geithner, then chief of the New York Fed. Treasury Secretary Hank Paulson, who spent most of the weekend preoccupied with the collapse of Lehman Brothers, came in and out. Also present, for reasons that would emerge later, was Lloyd Blankfein, CEO of Goldman Sachs. The only relevant government office that wasn't represented was the regulator that should have been there all along: the OTS.We sat down with Paulson, Geithner and Dinallo,says a person present at the negotiations. I didn't see the OTS even once.On September 14th, according to another person present, Treasury officials presented Blankfein and other bankers in attendance with an absurd proposal: They basically asked them to spend a day and check to see if they could raise the money privately.The laughably short time span to complete the mammoth task made the answer a foregone conclusion. At the end of the day, the bankers came back and told the government officials, gee, we checked, but we can't raise that much. And the bailout was on.A short time later, it came out that AIG was planning to pay some $90 million in deferred compensation to former executives, and to accelerate the payout of $277 million in bonuses to others — a move the company insisted was necessary to retain key employees.When Congress balked, AIG canceled the $90 million in payments.Then, in January 2009, the company did it again. After all those years letting Cassano run wild, and after already getting caught paying out insane bonuses while on the public till, AIG decided to pay out another $450 million in bonuses. And to whom? To the 400 or so employees in Cassano's old unit, AIGFP, which is due to go out of business shortly! Yes, that's right, an average of $1.1 million in taxpayer-backed money apiece, to the very people who spent the past decade or so punching a hole in the fabric of the universe! We, uh, needed to keep these highly expert people in their seats,AIG spokeswoman Christina Pretto says to me in early February.But didn't these highly expert people' basically destroy your company? I ask.Pretto protests, says this isn't fair. The employees at AIGFP have already taken pay cuts, she says. Not retaining them would dilute the value of the company even further, make it harder to wrap up the unit's operations in an orderly fashion.The bonuses are a nice comic touch highlighting one of the more outrageous tangents of the bailout age, namely the fact that, even with the planet in flames, some members of the Wall Street class can't even get used to the tragedy of having to fly coach. These people need their trips to Baja, their spa treatments, their hand jobs, says an official involved in the AIG bailout, a serious look on his face, apparently not even half-kidding.They don't function well without them.
IV. THE POWER GRAB
So that's the first step in wall street's power grab: making up things like credit-default swaps and collateralized-debt obligations, financial products so complex and inscrutable that ordinary American dumb people — to say nothing of federal regulators and even the CEOs of major corporations like AIG — are too intimidated to even try to understand them. That, combined with wise political investments, enabled the nation's top bankers to effectively scrap any meaningful oversight of the financial industry. In 1997 and 1998, the years leading up to the passage of Phil Gramm's fateful act that gutted Glass-Steagall, the banking, brokerage and insurance industries spent $350 million on political contributions and lobbying. Gramm alone — then the chairman of the Senate Banking Committee — collected $2.6 million in only five years. The law passed 90-8 in the Senate, with the support of 38 Democrats, including some names that might surprise you: Joe Biden, John Kerry, Tom Daschle, Dick Durbin, even John Edwards.The act helped create the too-big-to-fail financial behemoths like Citigroup, AIG and Bank of America — and in turn helped those companies slowly crush their smaller competitors, leaving the major Wall Street firms with even more money and power to lobby for further deregulatory measures. We're moving to an oligopolistic situation,Kenneth Guenther, a top executive with the Independent Community Bankers of America, lamented after the Gramm measure was passed.The situation worsened in 2004, in an extraordinary move toward deregulation that never even got to a vote. At the time, the European Union was threatening to more strictly regulate the foreign operations of America's big investment banks if the U.S. didn't strengthen its own oversight. So the top five investment banks got together on April 28th of that year and — with the helpful assistance of then-Goldman Sachs chief and future Treasury Secretary Hank Paulson — made a pitch to George Bush's SEC chief at the time, William Donaldson, himself a former investment banker. The banks generously volunteered to submit to new rules restricting them from engaging in excessively risky activity. In exchange, they asked to be released from any lending restrictions. The discussion about the new rules lasted just 55 minutes, and there was not a single representative of a major media outlet there to record the fateful decision.Donaldson OK'd the proposal, and the new rules were enough to get the EU to drop its threat to regulate the five firms. The only catch was, neither Donaldson nor his successor, Christopher Cox, actually did any regulating of the banks. They named a commission of seven people to oversee the five companies, whose combined assets came to total more than $4trillion. But in the last year and a half of Cox's tenure, the group had no director and did not complete a single inspection. Great deal for the banks, which originally complained about being regulated by both Europe and the SEC, and ended up being regulated by no one.Once the capital requirements were gone, those top five banks went hog-wild, jumping ass-first into the then-raging housing bubble. One of those was Bear Stearns, which used its freedom to drown itself in bad mortgage loans. In the short period between the 2004 change and Bear's collapse, the firm's debt-to-equity ratio soared from 12-1 to an insane 33-1. Another culprit was Goldman Sachs, which also had the good fortune, around then, to see its CEO, a bald-headed Frankensteinian goon named Hank Paulson (who received an estimated $200 million tax deferral by joining the government), ascend to Treasury secretary.Freed from all capital restraints, sitting pretty with its man running the Treasury, Goldman jumped into the housing craze just like everyone else on Wall Street. Although it famously scored an $11 billion coup in 2007 when one of its trading units smartly shorted the housing market, the move didn't tell the whole story. In truth, Goldman still had a huge exposure come that fateful summer of 2008 — to none other than Joe Cassano.
Goldman Sachs, it turns out, was Cassano's biggest customer, with $20 billion of exposure in Cassano's CDS book. Which might explain why Goldman chief Lloyd Blankfein was in the room with ex-Goldmanite Hank Paulson that weekend of September 13th, when the federal government was supposedly bailing out AIG.When asked why Blankfein was there, one of the government officials who was in the meeting shrugs. One might say that it's because Goldman had so much exposure to AIGFP's portfolio, he says.You'll never prove that, but one might suppose.Market analyst Eric Salzman is more blunt. If AIG went down, he says, there was a good chance Goldman would not be able to collect. The AIG bailout, in effect, was Goldman bailing out Goldman.Eventually, Paulson went a step further, elevating another ex-Goldmanite named Edward Liddy to run AIG — a company whose bailout money would be coming, in part, from the newly created TARP program, administered by another Goldman banker named Neel Kashkari.
V. REPO MEN
There are plenty of people who have noticed, in recent years, that when they lost their homes to foreclosure or were forced into bankruptcy because of crippling credit-card debt, no one in the government was there to rescue them. But when Goldman Sachs —a company whose average employee still made more than $350,000 last year, even in the midst of a depression — was suddenly faced with the possibility of losing money on the unregulated insurance deals it bought for its insane housing bets, the government was there in an instant to patch the hole. That's the essence of the bailout: rich bankers bailing out rich bankers, using the taxpayers' credit card.The people who have spent their lives cloistered in this Wall Street community aren't much for sharing information with the great unwashed. Because all of this shit is complicated, because most of us mortals don't know what the hell LIBOR is or how a REIT works or how to use the word zero coupon bond in a sentence without sounding stupid — well, then, the people who do speak this idiotic language cannot under any circumstances be bothered to explain it to us and instead spend a lot of time rolling their eyes and asking us to trust them.That roll of the eyes is a key part of the psychology of Paulsonism. The state is now being asked not just to call off its regulators or give tax breaks or funnel a few contracts to connected companies; it is intervening directly in the economy, for the sole purpose of preserving the influence of the megafirms. In essence, Paulson used the bailout to transform the government into a giant bureaucracy of entitled assholedom, one that would socialize toxic risks but keep both the profits and the management of the bailed-out firms in private hands. Moreover, this whole process would be done in secret, away from the prying eyes of NASCAR dads, broke-ass liberals who read translations of French novels, subprime mortgage holders and other such financial losers.Some aspects of the bailout were secretive to the point of absurdity. In fact, if you look closely at just a few lines in the Federal Reserve's weekly public disclosures, you can literally see the moment where a big chunk of your money disappeared for good. The H4 report (called Factors Affecting Reserve Balances) summarizes the activities of the Fed each week. You can find it online, and it's pretty much the only thing the Fed ever tells the world about what it does. For the week ending February 18th, the number under the heading Repurchase Agreements on the table is zero. It's a significant number.Why? In the pre-crisis days, the Fed used to manage the money supply by periodically buying and selling securities on the open market through so-called Repurchase Agreements, or Repos. The Fed would typically dump $25 billion or so in cash onto the market every week, buying up Treasury bills, U.S. securities and even mortgage-backed securities from institutions like Goldman Sachs and J.P. Morgan, who would then repurchase them in a short period of time, usually one to seven days. This was the Fed's primary mechanism for controlling interest rates: Buying up securities gives banks more money to lend, which makes interest rates go down. Selling the securities back to the banks reduces the money available for lending, which makes interest rates go up.
If you look at the weekly H4 reports going back to the summer of 2007, you start to notice something alarming. At the start of the credit crunch, around August of that year, you see the Fed buying a few more Repos than usual — $33 billion or so. By November, as private-bank reserves were dwindling to alarmingly low levels, the Fed started injecting even more cash than usual into the economy: $48 billion. By late December, the number was up to $58 billion; by the following March, around the time of the Bear Stearns rescue, the Repo number had jumped to $77 billion. In the week of May 1st, 2008, the number was $115 billion — out of control now, according to one congressional aide. For the rest of 2008, the numbers remained similarly in the stratosphere, the Fed pumping as much as $125 billion of these short-term loans into the economy — until suddenly, at the start of this year, the number drops to nothing. Zero.The reason the number has dropped to nothing is that the Fed had simply stopped using relatively transparent devices like repurchase agreements to pump its money into the hands of private companies. By early 2009, a whole series of new government operations had been invented to inject cash into the economy, most all of them completely secretive and with names you've never heard of. There is the Term Auction Facility, the Term Securities Lending Facility, the Primary Dealer Credit Facility, the Commercial Paper Funding Facility and a monster called the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (boasting the chat-room horror-show acronym ABCPMMMFLF). For good measure, there's also something called a Money Market Investor Funding Facility, plus three facilities called Maiden Lane I, II and III to aid bailout recipients like Bear Stearns and AIG.While the rest of America, and most of Congress, have been bugging out about the $700 billion bailout program called TARP, all of these newly created organisms in the Federal Reserve zoo have quietly been pumping not billions but trillions of dollars into the hands of private companies (at least $3 trillion so far in loans, with as much as $5.7 trillion more in guarantees of private investments). Although this technically isn't taxpayer money, it still affects taxpayers directly, because the activities of the Fed impact the economy as a whole. And this new, secretive activity by the Fed completely eclipses the TARP program in terms of its influence on the economy.No one knows who's getting that money or exactly how much of it is disappearing through these new holes in the hull of America's credit rating. Moreover, no one can really be sure if these new institutions are even temporary at all — or whether they are being set up as permanent, state-aided crutches to Wall Street, designed to systematically suck bad investments off the ledgers of irresponsible lenders.They're supposed to be temporary,says Paul-Martin Foss, an aide to Rep. Ron Paul. But we keep getting notices every six months or so that they're being renewed. They just sort of quietly announce it.None other than disgraced senator Ted Stevens was the poor sap who made the unpleasant discovery that if Congress didn't like the Fed handing trillions of dollars to banks without any oversight, Congress could apparently go fuck itself — or so said the law. When Stevens asked the GAO about what authority Congress has to monitor the Fed, he got back a letter citing an obscure statute that nobody had ever heard of before: the Accounting and Auditing Act of 1950. The relevant section, 31 USC 714(b), dictated that congressional audits of the Federal Reserve may not include deliberations, decisions and actions on monetary policy matters.The exemption, as Foss notes, basically includes everything.According to the law, in other words, the Fed simply cannot be audited by Congress. Or by anyone else, for that matter.
VI. WINNERS AND LOSERS
Stevens isn't the only person in Congress to be given the finger by the Fed. In January, when Rep. Alan Grayson of Florida asked Federal Reserve vice chairman Donald Kohn where all the money went — only $1.2 trillion had vanished by then — Kohn gave Grayson a classic eye roll, saying he would be very hesitant to name names because it might discourage banks from taking the money.Has that ever happened? Grayson asked. Have people ever said, We will not take your $100 billion because people will find out about it? Well, we said we would not publish the names of the borrowers, so we have no test of that, Kohn answered, visibly annoyed with Grayson's meddling.Grayson pressed on, demanding to know on what terms the Fed was lending the money. Presumably it was buying assets and making loans, but no one knew how it was pricing those assets — in other words, no one knew what kind of deal it was striking on behalf of taxpayers. So when Grayson asked if the purchased assets were marked to market — a methodology that assigns a concrete value to assets, based on the market rate on the day they are traded — Kohn answered, mysteriously, The ones that have market values are marked to market.The implication was that the Fed was purchasing derivatives like credit swaps or other instruments that were basically impossible to value objectively — paying real money for God knows what.Well, how much of them don't have market values? asked Grayson.How much of them are worthless? None are worthless,Kohn snapped.Then why don't you mark them to market? Grayson demanded.Well, Kohn sighed, we are marking the ones to market that have market values.In essence, the Fed was telling Congress to lay off and let the experts handle things. It's like buying a car in a used-car lot without opening the hood, and saying, I think it's fine, says Dan Fuss, an analyst with the investment firm Loomis Sayles. The salesman says,Don't worry about it. Trust me.It'll probably get us out of the lot, but how much farther? None of us knows.When one considers the comparatively extensive system of congressional checks and balances that goes into the spending of every dollar in the budget via the normal appropriations process, what's happening in the Fed amounts to something truly revolutionary — a kind of shadow government with a budget many times the size of the normal federal outlay, administered dictatorially by one man, Fed chairman Ben Bernanke. We spend hours and hours and hours arguing over $10 million amendments on the floor of the Senate, but there has been no discussion about who has been receiving this $3 trillion,says Sen. Bernie Sanders.It is beyond comprehension.
Count Sanders among those who don't buy the argument that Wall Street firms shouldn't have to face being outed as recipients of public funds, that making this information public might cause investors to panic and dump their holdings in these firms. I guess if we made that public, they'd go on strike or something,he muses.And the Fed isn't the only arm of the bailout that has closed ranks. The Treasury, too, has maintained incredible secrecy surrounding its implementation even of the TARP program, which was mandated by Congress. To this date, no one knows exactly what criteria the Treasury Department used to determine which banks received bailout funds and which didn't — particularly the first $350 billion given out under Bush appointee Hank Paulson.The situation with the first TARP payments grew so absurd that when the Congressional Oversight Panel, charged with monitoring the bailout money, sent a query to Paulson asking how he decided whom to give money to, Treasury responded — and this isn't a joke — by directing the panel to a copy of the TARP application form on its website. Elizabeth Warren, the chair of the Congressional Oversight Panel, was struck nearly speechless by the response.Do you believe that?" she says incredulously. That's not what we had in mind.Another member of Congress, who asked not to be named, offers his own theory about the TARP process. I think basically if you knew Hank Paulson, you got the money,he says.This cozy arrangement created yet another opportunity for big banks to devour market share at the expense of smaller regional lenders. While all the bigwigs at Citi and Goldman and Bank of America who had Paulson on speed-dial got bailed out right away — remember that TARP was originally passed because money had to be lent right now, that day, that minute, to stave off emergency — many small banks are still waiting for help. Five months into the TARP program, some not only haven't received any funds, they haven't even gotten a call back about their applications.
There's definitely a feeling among community bankers that no one up there cares much if they make it or not,says Tanya Wheeless, president of the Arizona Bankers Association.Which, of course, is exactly the opposite of what should be happening, since small, regional banks are far less guilty of the kinds of predatory lending that sank the economy. They're not giving out subprime loans or easy credit, says Wheeless.At the community level, it's much more bread-and-butter banking.Nonetheless, the lion's share of the bailout money has gone to the larger, so-called systemically important banks. It's like Treasury is picking winners and losers,says one state banking official who asked not to be identified.This itself is a hugely important political development. In essence, the bailout accelerated the decline of regional community lenders by boosting the political power of their giant national competitors.
Which, when you think about it, is insane: What had brought us to the brink of collapse in the first place was this relentless instinct for building ever-larger megacompanies, passing deregulatory measures to gradually feed all the little fish in the sea to an ever-shrinking pool of Bigger Fish. To fix this problem, the government should have slowly liquidated these monster, too-big-to-fail firms and broken them down to smaller, more manageable companies. Instead, federal regulators closed ranks and used an almost completely secret bailout process to double down on the same faulty, merger-happy thinking that got us here in the first place, creating a constellation of megafirms under government control that are even bigger, more unwieldy and more crammed to the gills with systemic risk.In essence, Paulson and his cronies turned the federal government into one gigantic, half-opaque holding company, one whose balance sheet includes the world's most appallingly large and risky hedge fund, a controlling stake in a dying insurance giant, huge investments in a group of teetering megabanks, and shares here and there in various auto-finance companies, student loans, and other failing businesses. Like AIG, this new federal holding company is a firm that has no mechanism for auditing itself and is run by leaders who have very little grasp of the daily operations of its disparate subsidiary operations.
In other words, it's AIG's rip-roaringly shitty business model writ almost inconceivably massive — to echo Geithner, a huge, complex global company attached to a very complicated investment bank/hedge fund that's been allowed to build up without adult supervision. How much of what kinds of crap is actually on our balance sheet, and what did we pay for it? When exactly will the rent come due, when will the money run out? Does anyone know what the hell is going on? And on the linear spectrum of capitalism to socialism, where exactly are we now? Is there a dictionary word that even describes what we are now? It would be funny, if it weren't such a nightmare.
VII. YOU DON'T GET IT
The real question from here is whether the Obama administration is going to move to bring the financial system back to a place where sanity is restored and the general public can have a say in things or whether the new financial bureaucracy will remain obscure, secretive and hopelessly complex. It might not bode well that Geithner, Obama's Treasury secretary, is one of the architects of the Paulson bailouts; as chief of the New York Fed, he helped orchestrate the Goldman-friendly AIG bailout and the secretive Maiden Lane facilities used to funnel funds to the dying company. Neither did it look good when Geithner — himself a protégé of notorious Goldman alum John Thain, the Merrill Lynch chief who paid out billions in bonuses after the state spent billions bailing out his firm — picked a former Goldman lobbyist named Mark Patterson to be his top aide.In fact, most of Geithner's early moves reek strongly of Paulsonism. He has continually talked about partnering with private investors to create a so-called bad bank that would systemically relieve private lenders of bad assets — the kind of massive, opaque, quasi-private bureaucratic nightmare that Paulson specialized in. Geithner even refloated a Paulson proposal to use TALF, one of the Fed's new facilities, to essentially lend cheap money to hedge funds to invest in troubled banks while practically guaranteeing them enormous profits.God knows exactly what this does for the taxpayer, but hedge-fund managers sure love the idea. This is exactly what the financial system needs, said Andrew Feldstein, CEO of Blue Mountain Capital and one of the Morgan Mafia. Strangely, there aren't many people who don't run hedge funds who have expressed anything like that kind of enthusiasm for Geithner's ideas.As complex as all the finances are, the politics aren't hard to follow. By creating an urgent crisis that can only be solved by those fluent in a language too complex for ordinary people to understand, the Wall Street crowd has turned the vast majority of Americans into non-participants in their own political future. There is a reason it used to be a crime in the Confederate states to teach a slave to read: Literacy is power. In the age of the CDS and CDO, most of us are financial illiterates. By making an already too-complex economy even more complex, Wall Street has used the crisis to effect a historic, revolutionary change in our political system — transforming a democracy into a two-tiered state, one with plugged-in financial bureaucrats above and clueless customers below.
The most galling thing about this financial crisis is that so many Wall Street types think they actually deserve not only their huge bonuses and lavish lifestyles but the awesome political power their own mistakes have left them in possession of. When challenged, they talk about how hard they work, the 90-hour weeks, the stress, the failed marriages, the hemorrhoids and gallstones they all get before they hit 40.But wait a minute, you say to them. No one ever asked you to stay up all night eight days a week trying to get filthy rich shorting what's left of the American auto industry or selling $600 billion in toxic, irredeemable mortgages to ex-strippers on work release and Taco Bell clerks. Actually, come to think of it, why are we even giving taxpayer money to you people? Why are we not throwing your ass in jail instead? But before you even finish saying that, they're rolling their eyes, because You Don't Get It. These people were never about anything except turning money into money, in order to get more money; valueswise they're on par with crack addicts, or obsessive sexual deviants who burgle homes to steal panties. Yet these are the people in whose hands our entire political future now rests.Good luck with that, America. And enjoy tax season.[From Issue 1075 — April 2, 2009]ROLLINGSTONE.
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