When the tide goes out, you see who’s been swimming naked.
The issue in the U.S. is the massive fraud and the accompanying debt. The issue over here is personal debt and the inexorable loss of liberties.
Karl Denninger mentions [H/T Rossa] the Libertarian Party over there and that if they would take on the fraud as an issue, they’d break the 5% approval level. I don’t think so. In many people’s minds, the very word Libertarian, like libertine, creates fear. Then there is the way libertarians can’t combine as other parties where independent thought is suppressed – having one’s own mind militates against combining.
That’s why Say No to the Big Three might work because it’s a relatively simple thing most of us can agree on. Karl has this view of libertarianism:
Libertarians don’t believe in big government. We don’t believe in deficit spending. We don’t believe in wars we can’t pay for. We don’t believe in handouts, believing that de-consolidation of power is the better path, and that through de-consolidation we pass power back down to the States and The People. We, among all the political parties, want to return the Federal Government to the boundaries it is supposed to live within as defined by The Constitution.
Fine and over here, this minimization of the government, wanting the effing EU out of our lives and so on is a critical issue but also critical is the debt we’re in, the depressed economy and society and the wastage, not to mention disparity and how any administrator justifies a £100 000 plus salary is not just a mystery but a scam.
Just a few words on the fraud. You’ve seen this interview below before but I’ve transcribed a little of it to highlight just how criminal these people are. Yes, we all know about it but it’s still nice hearing it in these words:
We created money to make it easier for us to trade goods and to enhance our ability to get things we need to survive – to make life better for everyone. So, money isn’t an evil thing.
The issue is not the nature of money but how it’s used and regulated:
Money is actually a good thing. That’s why it’s all the more important for our government to take a key responsibility in protecting the value of our money so that it’s accepted everywhere in exchange for goods and services, so that we, the population, can create that … from the value we’ve created. I view money as a way to provide security and freedom and maybe as a woman … independence. It was never all about accumulating vast quantities.
What she needs to stress is that when government doesn’t do that, it’s more than just stopping a lot of crony capitalists ripping people off – it plays nicely into the hands of those who would remove money and replace it with some sort of centralized handout, as in the USSR, where 90% plus of wages were garnisheed and CCHQ decided who would get what.
When you take away people’s ability to store up what they themselves have earned with their labour, you are putting them into great jeopardy and creating a command and control structure. If a person can’t call on what most in the world will accept as currency, e.g. American dollars in Russia or gold elsewhere, then freedom to move and to survive is severely impaired … but you know all that.
She gets to where it all went wrong:
I make [my money] in the tongue-twisting products that brought the global economy to its knees, things like credit derivatives, collateralized debt obligations – things most Americans haven’t heard of but these are the things which got into our financial market and were abused and misused so the global economy now – some people say it’s had a heart attack and I say no, it’s more like appendicitis … what we’re doing right now is, rather than fixing the problem, is we’re prescribing some very potent, addictive pain-killers.
Taking her analogy further – do we do an appendectomy to snip out the actual problem or do we kill the whole body by draining it of its lifeblood, which is what many of the OWS and their real masters, the globalists, want to happen?
All of our policies are currently designed to give comfort to the financial system – sometimes unwarranted and undeserved comfort. Our democracy has been diluted by the effects of the actions that have been taken to get out of this crisis.
That’s correct but she doesn’t get the idea that this is an intended crisis and not just an exercise in mismanagement – there’s a lot of social engineering waiting upon the money system to collapse. I feel that libertarians should also be considering this aspect of it – that if we lose the market economy, no matter how the crims have muscled in and taken control, we have ultimately lost our freedoms. If you’d lived in Russia and had seen at first hand the results of that on the morale of the people, you’d never support the overthrow of the market economy. It’s the crims who need removing and the regulation of the big traders put in place – over some arbitrary figure which gives them influence on how the economy as a whole runs.
They’ve added to the risk in the system by providing leverage and by providing opacity. So a lot of bad guys pulled a lot of shenanigans which increased risk and increased people’s ability to borrow in a hidden way so that there was a lot of debt in the sytem which was invisible and banks themselves were often running invisible hedge funds and CDOs – knowingly selling things which were overrated and overpriced.
We’re getting close to illegality and criminality here.
Instead of slowing down or cutting back, investment banks, in 2007 sped up! Many of these weren’t just bad deals, they were phony securitizations for no other purpose than to hide losses.
She was asked who invented this term credit derivatives. She didn’t know but thought about it and said:
JP Morgan was in the forefront of pushing credit derivatives technology. It was a way of transferring risk … and in all candour, banks created it because they wanted to get loan risk off their balance sheets but they had prices on their balance sheets which didn’t make sense. So they thought if they could persuade Basel and the Fed that they could create this pocket of zero risk, then they don’t have to pay much for that protection and we can transfer the price of these misplaced loans off our balance sheets. That’s how it started.
She then got into tranches where someone would take a first tranch and another takes a second and basically, what it means is that people in the market place were taking on risk for a certain payout. The last people to come to it are the banks who take zero risk – super-senior tranches. So the whole idea was that people out there in the market took risk but the banks or other big players didn’t.
So, since the 90s, the whole financial system was turned completely around for the ultimate benefit of the banks.
When we had sound lending at banks, packaging mortgages was a good idea because the bank knew its clients [and the risk involved with them]. People would put 20% down for a housing loan, their total debt was no more than 36% of their income – that was prudent lending.
The big five got in and said, “We’ll package up these mortgages now” … so lenders were encouraged by the lack of scrutiny and by the fees which could be charged. so effectively, people were buying homes on no money down, with bridging loans on top and the rest you know.
These were trojan horse loans where the people rode into bankruptcy.
The lenders were well aware of this. The obvious question is who allowed this to happen and where are these people now? The interviewer asked if there was a culprit out there.
This is a bipartisan problem. There’s been a lot of crony capitalism. We have a financial oligarchy and these people practically have Tim Geithner on speed-dial and I was hopeful that when someone like Obama came in, that there would be meaningful change …
They obviously never learnt from Blair.
… if anything, the situation has gotten worse. This is bipartisan. George Bush elevated Roland Arnall, head of Ameriquest, that had been involved in alleged mortgage fraud, massive, sued by every state in the union, and he was elevated to Ambassador to the Netherlands. The Netherlands didn’t even like it. And this was approved by Congress. So what we have is people who are not serving the interests of the American people but serving the financial sector.
Paul Volker was talking in Toronto and he said: “Well people rely a lot on models and this is a mathematical error.”
This was not a model issue – this was a management issue. We had people who knew or should have known they were selling things that were value-destroying securitizations for [toxic] mortgages overrated by complicit ratings agencies.
I said at the time, in Chicago, many times, this deal should not close, this deal has more red flags than I’ve ever seen. This deal has [such] capacity for fraud – it’s going to crumble. And I gave warning after warning about that.
This was no model – it was just a lot of outright liars and we have not held people accountable for this – we’ve been bailing them out.
She spoke of her working for these companies when people knew one another and if a rogue was identified, people would simply say: “I don’t know him.” She mentioned one Warren Buffet told her about and that was in 2002 and she added that it’s not like any of this was new in the current day – it’s that it exploded and the government failed to regulate. Of course, you and I could tell her exactly why it failed to regulate.
She says there was a regulator – the Securities and Exchange Commission but we know it was riddled itself with the people it was meant to regulate. She counters that by saying Warren Buffet wrote of his bad experience in his newsletter  and on his website. Does no one read Warren Buffet?
Tim Geithner has been part of the problem and not the solution. He’s closely connected to Wall Street, Jamie Dymon is on the board of the Federal Reserve, Hank Paulson was the Treasury Secretary and chairman of GS at the time [all this was happening]. Thomas Paine said history has shown we cannot trust interested men.
The interviewer said – but Hank Paulson really understands what’s going on so that’s why you appoint him. She answered that:
He really understands? Oh really? We should question how these people came to be so revered, so different to other financial professionals.
This wasn’t an innocent mistake, it wasn’t a math error, it wasn’t a black swan – it was a Black Bart – bloodless robbery and getting away with it.
Let’s take the case of Bob Reuben. Bob Reuben was the Treasury Secretary under Bill Clinton. One of Clinton’s last acts in office was to eliminate a restriction and it used to be you couldn’t lobby your old department for five years – Clinton got rid of that so when Enron was about to go under, [December 2001], Bob Reuben was at that time working for Citygroup, a big creditor of Enron – he called the Treasury and asked an official to put pressure on the ratings agencies not to downgrade Enron.
What he did was not illegal because Bill Clinton had raised that restriction. Goldman keeps saying we have so much integrity, we’re the best and brightest.
For a start, that [call to the Treasury] was inappropriate. Fortunately the Treasury didn’t listen to that. A lot of people [in the SEC] are political appointments.
Fast forward. Probably the better move would have been to put Citygroup in receivership. Instead of that, we used public money to bail out Citygroup’s creditors – how did that happen?
We began TARP and who began that? Hank Paulson. Bob Reuben was a former co-chair of GS. You won’t find that in Wikipedia. Bob Reuben went to Citygroup which got TARP money – twice. Not only that but its balance sheets for 300 billion were guaranteed by the U.S. taxpayer. Then in February came an opaque bailout most U.S. citizens don’t even know happened because our investment was in preferred shares. We, the public, agreed to convert that to common shares at a price which was favourable to … Citygroup.
Now she gets to the punchline:
Bob Reuben, when asked about this, said he didn’t know anything about CDOs. He had a reputation for being the risk wizard. Well look, if you’re in finance and you haven’t been aware of the fastest growing structured financial product in the past few years and you are sitting on the board of Citygroup …
OK, so it goes on, you knew all this, it’s water under the bridge and yet it’s not. These bstds are still there – the CFR was also mentioned by the interviewer and this wasn’t even a conspiracy programme. Now, we come back to the analogy of the appendix being removed. It is not necessary to collapse the whole free market and remove money as a means of exchange just because a bunch of crims are in power in Washington and all major centres across the western world. We must resist the OWS types just as much as we must arrest all these crims and arraign them for trial.
There has to be a mechanism for this but the globalists have long memories – they remember the Committee of Public Safety and it’s excesses in revolutionary France. In fact, once might be forgiven for thinking that the reason we’re being goaded at this moment [see many of Julia’s and LR’s posts] is to push us over the line to the point where we’ll take matters into our own hands – the rule of the mob. And rising to the top of the mob will come precisely the wrong people.
Sure they’ll go to Bohemian Grove in July and arrest the lot of them. Sure they’ll march into New York and arrest the whole crew but they won’t stop there. Then it becomes critical what the ideology of these men [and women] would be and odds on there are groups who have people placed for that. Have you heard of “leading beyond authority”?
So the rise of the mob is one channel they’re well prepared for. They go to ground, wait for the Geithners and Reubenses to all be executed and then come up once the smoke clears and start all over again.
Because the Geithners and Reubenses are only the front men. The real power does not reveal itself – the old money. I’ve been saying since 2006 that if you can do a James Bond, if Vesper can give you the telephone number, then we’ll get somewhere. Other than that, how shall we reach these bstds? Why does our research finish with the Rothschilds and not look at the people behind them. They weren’t always investment bankers – what were they before that?
We can go back to Venice and look at the people who disappeared without trace, with all their millions. Why are they impossible to track down? Have we the cojones to try? I mean, we’re taking on the real PTB here.
Or do you think that it’s all a fantasy and everything will come good by itself?