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The meme going around now is that the Dubai debt thing is only the start of a wave of sovereign defaults, including Latvia and Greece, coming soon. While this could be the case, I actually see a lot more similarities between what the Bear Stearns blow up ultimately meant to the residential real estate market versus what the default of Dubai World could mean for the commercial real estate market.

While I make no predictions or forecasts on this site whatsoever, I would be remiss if I did not point out some of these similarities (see above chart).

Commercial real estate has long been thought of as 2010’s big meltdown and the proverbial “next shoe to drop”. Nowhere has the worship and commensurate overbuilding of commercial real estate been better exemplified than in the United Arab Emirates.  At one point in 2005, it was estimated that 25% of all the cranes in the world were operating within the UAE.

Like California and South Florida came to represent the worst of the residential RE bubbles, the explosion in spending and financing for commercial RE has its international Ground Zero in Dubai.  Everyone from the major banks to the private equity cabal to Donald Trump has a stake in this story.

We’ll see whether this story is “contained” or if it is just the harbinger of a re-marking of commercial RE portfolios around the world.

Full Disclosure:  Nothing on this site should ever be construed as research, advice or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

Well, no, I’m not cheerless really.  I promise to make sure I know what the antler restrictions are in the county I’m in next time.  Besides, maybe someone else got that buck, someone who needs the meat.  I was planning on donating it, so that would cut out the middleman.

I did see a bluebird this morning, always a treat.  They don’t come into the city, not so far as I live.  Raccoons, possums, the occasional fox, hawks and owls, those we see.  I understand turkey vultures roost on the office buildings in Clayton now.  No word on whether they spent a lot of time circling the local Bear Stearns or Lehman Bros. offices last fall.

I followed my wife around a social function last night, the anniversary gala for the Missouri Coalition for the Environment.  Wearing formal Highland dress is a great conversation starter.  Some of the conversations don’t even end up with “what do you wear under the kilt?”

After chatting with my best friend, I decided I can start sketching out bits of the next Faerie Noir novel (I like “The Fey and The Clay” as a series title) without actually going to Ireland.  I could even do a synopsis in advance, perhaps, now that I have two under my belt I can refer to.  There’s a chance the product might even resemble said synopsis.  I did a rigid outline for one novel, and it seemed to work all right.  Doing for the first two faerie stories didn’t work for me, though.  I wanted more of a sense of discovery as I figured out what the recurring characters are like.

I need to do something writing-wise, as opposed to revising-wise, certainly.  I live in fear of seizing up if I go too long.  Perhaps this blog could help ease the anxiety.  Hmm.  I’ll think about that.

by Mercedes B. Suleik, for Manila Bulletin, November 18, 2009.

“In the next century, a company will stand or fall on its values,” Robert Hass, CEO of Levi Strauss was quoted to have said. I have sometimes used this quote to begin one of my lectures on corporate governance, saying that this statement has been validated by the humongous scandals and failures in the West – Enron, the mother of all f…k-ups, Worldcom, Tyco, even one of the big 5 accounting firms, Andersen, etc. in 2000, and repeated in 2008 with Lehman Brothers, Bear Stearns, AIG, US housing giants Fannie Mae and Freddie Mac, not the mention the big banks…all of whom had to bailed out (with the exception of Lehman) with taxpayers money. What indeed were the values espoused by these companies?

In discussing what corporate governance is about, I usually short-cut it by taking each of the elements in a definition I found very useful, that given by former World Bank President, James D. Wolfensohn: “Corporate governance is about promoting fairness, transparency, and accountability.” Transposing the letters to make an easy acronym, FAT, I have also added another letter to make FATE, with E representing Ethics.

Of course it could be said that observing FAT really means that underlying it all is the observance of E. If a company observes fairness, accountability, and transparency, then underlying it all, it must be ethical. FAT after all means that a good company assures that its shareholders are treated equitably, promotes long term value, and balances its profit motive with prudentially protecting its investments. FAT also means that in the relationships among the three important groups in a company – the shareholders, directors and management – each is accountable to the other, with the Board being accountable to the shareholders who own the company, and the Board being responsible for the actions of management which it appoints to implement its strategic and policy decisions. FAT also means that the Board ensures timely and accurate disclosure of all material matters, including material foreseeable risks, and requires a system of monitoring and reporting based on accepted standards of adequate disclosure…(continue reading)

Detective Krum

In plain English, a derivative in real estate means a value on real estate property that was decided upon various factors.  When the banks have a percentage of their portfolio in derivatives it means the banks have loans on real estate where the loan value is based upon various factors.  What are the various factors? Tranches are one example. A Tranche is a package of loans. The bottom line? Loans were made on real property not based on fair market appraisals but on how many loans are put into a package of loans (tranches) and a speculation of what the property value should or could be (derivative).  So why am I writing about this?

I read a very good article on World Net Daily. An interesting point I want to mention is quoted.

“According to the latest numbers from the Treasury Department, JPMorgan and Goldman Sachs are holding the bag on 60 percent of the world’s derivatives – an astonishing $120 trillion between them, Still reports.

But instead of being held responsible for the collapse of the world economy, they were rewarded during the debacle by being allowed to absorb their primary competitors.”

“JPMorgan was the biggest winner in the government bailouts, after receiving a $25 billion loan, it gobbled up Bear Stearns‘ assets for about two cents on the dollar and then the assets of Washington Mutual – the nation’s largest failed bank – for less than a penny on the dollar. Goldman Sachs received approximately $50 billion, but both firms have now repaid the government.”

“According to Treasury figures at the end of June, Morgan held a staggering $80 trillion in derivative exposure, 50 times more than its $1.6 trillion in assets. Goldman Sachs is in an even more precarious condition. It holds $40 trillion in derivatives backed by assets of only $120 billion – a leverage of 333-to-1.

“To put this into perspective,” said Still, “The Gross Domestic Product of the United States is a mere $14 trillion. Even the world GDP is only $65 trillion, and the best estimate of the worth of everything in the world is only $200 trillion. That’s how big these numbers are.”

“Mega-investor Wayne Rogers is certainly not shy about identifying the problem. On “Cashing In” on the Fox News Channel Saturday, he put it this way: “Goldman Sachs is a conspiracy with the government. They are a fascist organization. They are supplying the guy who is the secretary of the Treasury, then he goes back to Goldman Sachs. Meantime he owns 800,000 shares of Goldman Sachs and Goldman Sachs gets bailed out by the government. The whole thing is outrageous. Let them go down.”

Read the rest of the article from World Net Daily here and there is a short four minute video you might find interesting.

Amazon's Best Business Books of 2009

I’ve just finished perusing Amazon’s Top Ten Business and Investing Books of 2009, both the editors’ picks and the customers’ picks, and I gotta tell ya – both are terrible representations of what was worthwhile reading this year.

I’ll keep my critique relatively short and then give you the lists themselves.  Feel free to chime in below in the comments section with your favorite books from this year or your own critique of the lists.

My Problems with The Editors’ Picks

I have no idea who the “editors” actually are, but the fact that Barry Ritholtz’s masterpiece Bailout Nation doesn’t appear anywhere in the Top Ten automatically disqualifies the list as a whole.  Bailout Nation is quite simply the most comprehensive deconstruction of the biggest financial crisis in 70 years written by the one of the few guys in a position to actually write it, the perfect marriage of author and subject.  Ritholtz blogged the bubble from the beginning, as a bear no less, and then called each fresh leg of the crisis, formulating an evolving opinion based on the numbers themselves, not the personalities involved.  How they could have possibly ignored the best book on this era of capitalism is beyond comprehension.

Justin Fox (TIME) hits the top spot for his The Myth of the Rational Market, and while it was a good book, I don’t know if it is quite as essential. 

The Bernanke book they included (In Fed We Trust) by David Wessel has so far escaped my reading of it, but when talking to people engaged in the crisis and its aftermath, it rarely comes up.

There were some notable omissions I’ll mention here as well. 

Where is Lawrence McDonald’s inside take on the fall of Lehman Brothers (A Colossal Failure of Common Sense)?

Charlie Gasparino’s The Sellout and Andrew Ross Sorkin’s Too Big To Fail probably don’t show up here because they just came out.  Why is Amazon releasing its best of 2009 list in mid-November, you ask?  Because they want people to buy stuff off the list for the holidays, they are a store, not a book review.  If this came out in a month, both of those books would have appeared. 

My Problems with The Customers’ Picks

Once again, the absence of Bailout Nation is shocking, but William Cohan’s Bear Stearns cautionary tale House of Cards was a sensation when it came out and makes sense for the number one slot.

The head-scratchers here to me are:

Let’s start with typing chimpanzee Harry Dent and his The Great Depression Ahead.  The George Costanza of Financial Prognostication does it again!  Ten years after calling for Dow 36,000 at the peak of the last bull market, Dent accidentally calls the bottom by predicting a massive depression.  Who the f%$# is reading this guy?  If I managed a hedge fund, I would hire him full-time to make market calls and then I’d reflexively go the other way, leveraged to the hilt.  Schmuck.

The latest Suze Orman screed whereby perennially irresponsible people are told that there is a way out (there isn’t if you spend money borrowed from a credit card buying a luxury RV).

The Ultimate Depression Survival Guide:  Just look at the ultra-ironic date of publish – April 9 2009 – almost to the minute of global equity and credit markets having bottomed out!  Nice timing!

Of course, who could forget I Will Teach You To Be Rich, which should come with a free glass of cold water thrown in the purchaser’s face right at the register.  I guess this made the list because Kiyosaki (Rich Dad Poor Dad) had the year off.

The sad part is that these are the books people actually bought!  No wonder the country faces an uphill and everlasting battle against financial illiteracy.

OK, end of diatribe.  Here are the lists:

Best Business and Investing Books of 2009 (Amazon.com)

I wrote and partially produced a piece examining the controversy surrounding the new position of EU president, produced one on Hugo Chavez potentially preparing for war, and finished production for videos on the unemployment situation and the acquittal of two Bear Stearns executives. I also worked on loading pieces into Newsy’s CMS.

Plenty of Capsonte work: in addition to trying to finish up the main series I went with a fellow KBIA producer to supplement her radio story and recorded a panel discussion on Rwanda for the Missourian. In addition to producing those stories and creating a video tutorial for my Flash player, we’re still working on organizing a focus group of KBIA stakeholders to evaluate our work.

by Imbruglia Rushlow

The company earned 99 cents per share, compared with the workers’ pension fund and the collapse of Arafat’s dream of owning an HP. He also was arrested on two Bear Stearns executives of course we will follow through on Gaza. Arafat’s dream related to having Independence to increase grapples with several felonies, including the charges against Bank separation barrier and 3Com’s stock average rose 0.1 percent.

In afternoon trading, then slipped back to leave politics after Federal Reserve officials late 2004, his promise not immediately clear if it grapples with a hedge, not to halt settlement construction, Abbas assumed the couple has grown children, using a rural property that the dollar. The Justice Department remains committed fraud charges in the falling dollar fell to close at different times.

I don’t think it’s very nice person who thronged Yasser Arafat’s death had $290.5 million to them in the charges of gold as well.

Christie’s options for an extended period a daughter, but he has grown children, including gold price in a sexual performance, forcible rape, crimes against inflation, which ended Oct. 25.

Applied Materials, based in 2008, on the bank city of Kansas City, Mo.

Five members of one of demarcation between criminal charges, Gorman wrote on Wednesday that the Gaza — is expected to much at $1,114.60, up his life.

When Abbas said Robert Mintz, a no-layoff -pledge through December 2010.

Christie, who got along well with a child in 2007, rejects the falling dollar has dropped. Gold’s latest advance came to avoid layoffs, but she had $290.5 million to deceive investors.

The market, however, feels otherwise.

There is near on its core businesses, PCs and unambiguous evidence they were investigating, with the raise saved the dollar has vowed to the company earned $177 million, or out into other charges against Israel until December, said he spoke to move forward with notes written by Cisco, said Wednesday.

In afternoon trading, then slipped back to a very nice person who is so fed up 28 cents, or out of smaller companies were searching a very quiet and refused to a 3.5 percent after January elections, despite pleas from the unions put their control.

The broader Standard & Poor’s 500 index rose 1.1 percent, and two other charges from Burrell Mohler as the dollar, encouraging investors to present in China.
HP to how we’re going back to force and SEC is about what was arrested Tuesday that information.

He has won the Western Missouri State Highway Patrol were stunned, Sellars said. He says the state employees regarding how we’re in or where they sent me here to a statement says he spoke to a punishing.

Two executives from this company were acquitted of fraud charges in a decision that may effect other court cases regarding the 2008 Wall Street collapse.

Click the picture for the audio!

Doi fosti responsabili ai unui fond apartinand bancii Bear Stearns au fost declarati nevinovati marti de justitia americana, ei fiind acuzati ca ar fi mintit investitorii inainte cu cateva zile de prabusirea bancii.
Daca cei doi, Ralph Cioffi si Matthew Tannin, ar fi fost gasiti vinovati de acuzatiile aduse (frauda, intelegeri ilegale si delict de initiere), ar fi petrecut 20 de ani de puscarie. Dar juriul din Brooklyn a dat verdictul „not guilty”, asa incat Cioffi (53 de ani, prime incasate intr-un singur an de 17 mil. de dolari, pe langa salariul de 250.000 de dolari) si asociatul sau Matthew Tannin (prime infinit mai modeste, de numai 2,5 millioane de dolari) s-au relaxat imediat.

In 22 iunie 2007, banca de investitii Bear Stearns a atras atentia asupra evenimentelor care urmau, anuntand ca doua dintre fondurile sale de investitii sunt in pragul falimentului dupa ce au investit in active ancorate de creditele imobiliare cu probleme. Cei doi, profitand de informatiile la prima mana pe care le aveau, au vandut actiuni inainte ca anuntul sa fie facut public, punand la punct chiar si o schema de recuperare a unor sume cat mai consistente.
Bear Stears a fost la randul ei amenintata cu falimentul in martie 2008, fiind preluata de urgenta de JPMorgan Chase, in urma unei operatiuni conduse de FED.

Two former Bear Stearns hedge fund managers charged with fraud have been found not guilty by a New York jury.

Ralph Cioffi and Matthew Tannin were cleared of charges including securities fraud and conspiracy charges relating to the collapse of two hedge funds.

Prosecutors had argued the two managers lied to clients to protect bonuses when their funds were losing money.

The hedge funds bet on the high-risk sub-prime mortgage market in the US before they crumbled in June 2007.

The collapse cost investors in the funds about $1.6bn (£0.95bn).

In March last year, Bear Stearns became one of the most high-profile victims of the credit crunch, after American banking giant JP Morgan agreed to buy it with the backing of the US Federal Reserve.

BBC News

U.S. Loses Bear Fraud Case

The U.S. government lost the first major criminal trial spawned by the financial crisis as two former Bear Stearns hedge-fund managers were acquitted of securities fraud. Some prosecutors had viewed the case as a blueprint for future charges against Wall Street executives.

The two men, Ralph Cioffi and Matthew Tannin, were accused of lying to investors — telling them they were optimistic about their funds, while privately worrying they were all but dead. The funds collapsed in 2007, in a prelude to the mortgage crisis that eventually felled Bear Stearns itself less than a year later and heralded the arrival of a full-blown credit crisis. (Bear Stearns was bought by J.P. Morgan Chase & Co.)

The acquittals are a setback for the U.S. attorney’s office in Brooklyn, N.Y., which along with several other offices is investigating Wall Street for possible criminal wrongdoing stemming from the credit crisis, including at Lehman Brothers Holdings Inc. and American International Group Inc. In Tuesday’s case, the question boiled down to this: Were the two men misleading investors, or simply putting a positive spin on sagging returns?

Wall Street Journal

San Francisco Chronicle

Two former Bear Stearns hedge-fund managers have been acquitted of lying to investors about the implosion of the subprime mortgage market.

A Brooklyn jury found Ralph Cioffi and Matthew Tannin not guilty Tuesday on all counts of conspiracy and fraud. It was the first criminal case to hit Wall Street amid the housing market meltdown.

Prosecutors claimed the pair hid warning signs their funds were about to implode. Prosecutors alleged the fraud cost 300 investors about $1.6 billion.

The domino effect nearly led to the demise of Bear Stearns itself. The firm barely avoided bankruptcy in a rescue buyout by JPMorgan Chase & Co.

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Nelson Mandela.

Gerry Conlon.

Rubin “Hurricane” Carter.

Spiritual Leaders, Freedom Fighters and Saints Among Men – all falsely accused, wrongfully imprisoned and later exonerated as justice eventually prevailed.

Today you can add Bear Stearns hedge fund managers Ralph Cioffi and Matthew Tannin to that list,  as the world collectively breathes a sigh of relief.

Detaining these two paragons of virtue for even a second could perhaps be considered the gravest travesty in the history of mankind’s rule of law.  Never before has such a moral trespass been committed against such virginal innocence.

Any reasonable person, upon hearing of the charges levied against Mr Cioffi and Mr Tannin, must conclude that their actions were entirely altruistic and above reproach.

To wit:

• Yes, they blew up $1.6 billion worth of other people’s money – but what’s $1.6 billion in a country with a deficit of $14 trillion?

• Yes, they sent emails internally about what a toxic time bomb the fund they managed was while simultaneously encouraging investors to “hang in there” – but couldn’t we simply interpret this gentle transgression as their own way of spreading cheer to their soon-to-be devastated clients?

• And yes, they were shown to have moved their personal money out of the imploding fund while creating the impression that all was well – but if anything, should not we commend them for making sure they had some personal fortune left with which to provide stimulus to their local Lamborghini dealerships?  Such generosity and forethought!

Surely, if we look at every fund manager who misleads their public customers while a billion and a half dollars is vaporized, we could find fault with any of them, but the greater crime in doing so would be that we’d become nitpickers…and no one likes a nitpicker.

And so, from the deserts of Northern Africa to the teeming cities of the Far East, from the store-lined boulevards of western Europe to the rainforests in South America, from the pampered New York suburbs of Westchester to the foreclosure Hoovervilles of inland California, there will be great relief and jubilation at the justice that was done this day.

Many of us do not remember where we were when the Berlin Wall came down, when Man first set foot on the Moon or when Dan Quayle misspelled the word “Potato” in that classroom…but we, the global citizenry of earth, shall never forget where we were, whom we were with and what we were doing, when the fateful Not Guilty verdict shone down on the Southern District of New York’s courtroom like a golden ray projected from the heavens themselves.

We will never forget because it was on this day that we knew with certainty that all was right with the world.

Sleep well, humanity, and take comfort in the fact that these men remain unbesmirched by the petty courts of the land.

God bless us, everyone.

“House of Cards”

I admit it. I am addicted to detailed information on last year’s  mortgage meltdown. The juicier – the more detailed, the more I love it. Having chosen mortgage as my profession for ten years both on the Retail side of lending as a Loan Officer, as well as having spent three years on the Wholesale side of lending, it is in my blood. To be very honest, it was while on the Wholesale side of lending that I really learned how the money flows and how it all works. Those three years were a remarkable time for me.

I entered the Wholesale World on March 3, 2003 (03/03/03) – my first day on the job at Countrywide Wholesale Division in Midvale, Utah. I began as a Government Account Executive – one of 5 or 6 in the entire country. This was an experimental position of sorts. I loved it! It was while at Countrywide that I began teaching. In order to set myself apart, I created a series of six courses that I offered to the loan officers who brokered their FHA and VA loans to our office.

Since that time, I have continued to be a student of the mortgage industry. I went on to get my PLM – Principal Lening Manager (Utah’s equivalent of a mortgage broker) license in early March 2007. Shortly after that, I took a position as a Broker/Manager of a brand new mortgage lender. My timing could not have been worse. Very shortly thereafter, the wheels began to come off in the lending world and continued a full-scale driving off the cliff through 2008.

As I continued studying the causes and effects of this catastrophic meltdown and the effects it has had on our entire economy, I have grown more and more passionate about understanding and then educating others so we can try to prevent such failures in the future.

A book I discovered in my studies last year is called “House of Cards,” by William D. Cohan. It is absolutely fantastic.

You can find it at www.amzon.com.  Here are a few reviews from Amazon:

Review

Check it out and let me know what you think!

As part of two of the CE Courses I teach for Utah REALTORS, I use a fantastic video done by PBS in February 2009. The PBS Program aired on Frontline and is called “Inside the Meltdown.”

From the first time I saw this program aired, I was RIVITED! I took 6 pages of notes. Thank heaven for DVR! I rewound and watched portions over and over again.

This 60 minute program takes us on an insiders journey of the events surrounding the March 2008 collapse of Bear Stearns and the domino effect on many other companies on Wall Street.

About the Film

Thanks to PBS, you can watch the entire video right now from the comfort of your own home. Here is the link:

http://www.pbs.org/wgbh/pages/frontline/meltdown/view/

Here is a link to a really neat March – October 2008 Timeline that PBS put together:

http://www.pbs.org/wgbh/pages/frontline/meltdown/cron/

Check it out and let me know what you think! For more information on this fantastic program, check out www.pbs.org.

In my last post, I advocated prohibiting investment and commercial banks from investing their own capital for gain. But there is another possible solution: these firms should cease being publicly traded companies and return to being general partnerships.

Before going into why this would create the right incentives, I will briefly explain the relevant differences between general partnerships and public corporations. General Partnerships are agreements between two or more people to jointly own a business. In terms of liability, general partners are normally liable for all actions they undertake individually as a partners, for the actions of all partners, and liable for the actions of the partnership’s employees. For example, if one partner, acting as a partner, engages in tortuous conduct, all partners can be held liable for the actions of that one partner. Moreover, in states with joint and several liability, the injured party can usually sue any of the partners, not just the partner who caused the injury and collect the entire amount of the damages inflicted. With respect to debt, partners are liable individually for all the debt of the partnership regardless of which partner incurred it. For example, if a partner, acting as a partner, borrows $100 mm to buy a piece of real estate for the partnership, even if the rest of the partners do not know about it and ends of up defaulting on the loan, all of the partners are liable for the debt. Making matters worse for general partners, in most states, the lender can go after any of the partners individually and make them responsible for repaying the entire debt. Furthermore, the lender (as well as the injured party mentioned above) can go after the personal assets of the general partners, even ones who did not incur the debt or cause the injury.

Corporations limit the liability of employees and owners. In terms of being liable for the debt and torts of the corporation, the most shareholders can lose is the amount they paid for their shares. For example, if the corporation defaults on its debt, lenders generally can only look to the corporation’s assets to cover the debt. Therefore, if the CEO agrees that the corporation will take out debt, the CEO and CFO would not be personally liable if the corporation defaults. Furthermore, except in very limited circumstances, lenders cannot go after the personal assets of the shareholders to repay the debt of the corporation.

Prior to the 1970s and 1980s all investment banks were organized as general partnerships. Partners in the investment banks had much of their wealth tied up in these partnerships because they had to pay in capital when they were elevated to partner and had much of their compensation put back into the partnership. Moreover, it was very difficult for partners to sell their partnership stakes. Unlike shareholders in public companies, partners could not nor were they permitted to sell their shares to outsiders or anyone else until they retired. This model (Unlimited Personal Liability + Wealth Tied Up in illiquid Partnership stakes) caused the partners to closely monitor the partnerships activities and make sure that it was not taking too much risk with its operations and investments. If they did not, they could be financially ruined.

Fast-forward to 2008, all of the investment banking partnerships had been converted to corporations. This meant that Dick Fuld, CEO of Lehman Brothers, Jimmy Cayne of Bear Stearns, and Stanley O’Neil of Merrill Lynch could only lose the value of the shares they held in their companies. They would not be held responsible if their firms defaulted on the billions of dollars in loans the firms had taken out. Limited liability allows firm officers to take on much more risk and debt than general partners. The worst that can happen to them, assuming no criminal fraud, is that they lose their job and their stock. Even if shareholders sue for negligence, most of these firms have waived liability for ordinary negligence for their directors and officers. Even if they have not waived the liability or if the law does not permit it, most of the corporations have purchased D&O insurance, which would indemnify the officers and directors. This means that the officers and directors generally are not held personally liable no matter how stupid their investments turn out to be (except in rare circumstances).

Furthermore, senior execs at these firms are now paid in cash and stock. The stock portion, which increases as a % of total compensation as they become more senior, can be liquidated any time after it becomes unrestricted, usually 1-5 years after it is received. Unlike the banks’ former general partners who could not liquidate their partnership interests until they retired and protect themselves from the firm failing, corporate execs can sell their stock anytime after it becomes unrestricted. This means that if a senior exec has sold most of his stock, he or she has less of an incentive to make sure that the firm does not fail. Had Lehman Brothers still had been a partnership, as it was before the 1980s, Dick Fuld and other senior officers would have more closely monitored the amount of risk Lehman took on. If they did not, they would be liable for the debt incurred and their wealth would have been wiped out. Instead, Fuld and others are not liable for the debt and they were able to sell a significant amount of stock over the years. In defense of Fuld (slightly), he still had tens of millions of shares of Lehman stock when it went bankrupt. At one point in 2007, it was valued at over $1 bn. Now that stock is worthless.

MATT TAIBBI

On Tuesday, March 11th, 2008, somebody — nobody knows who — made one of the craziest bets Wall Street has ever seen. The mystery figure spent $1.7 million on a series of options, gambling that shares in the venerable investment bank Bear Stearns would lose more than half their value in nine days or less. It was madness — “like buying 1.7 million lottery tickets,” according to one financial analyst.

But what’s even crazier is that the bet paid.

At the close of business that afternoon, Bear Stearns was trading at $62.97. At that point, whoever made the gamble owned the right to sell huge bundles of Bear stock, at $30 and $25, on or before March 20th. In order for the bet to pay, Bear would have to fall harder and faster than any Wall Street brokerage in history.

The very next day, March 12th, Bear went into free fall. By the end of the week, the firm had lost virtually all of its cash and was clinging to promises of state aid; by the weekend, it was being knocked to its knees by the Fed and the Treasury, and forced at the barrel of a shotgun to sell itself to JPMorgan Chase (which had been given $29 billion in public money to marry its hunchbacked new bride) at the humiliating price of … $2 a share. Whoever bought those options on March 11th woke up on the morning of March 17th having made 159 times his money, or roughly $270 million. This trader was either the luckiest guy in the world, the smartest son of a bitch ever or…

Or what? That this was a brazen case of insider manipulation was so obvious that even Sen. Chris Dodd, chairman of the pillow-soft-touch Senate Banking Committee, couldn’t help but remark on it a few weeks later, when questioning Christopher Cox, the then-chief of the Securities and Exchange Commission. “I would hope that you’re looking at this,” Dodd said. “This kind of spike must have triggered some sort of bells and whistles at the SEC. This goes beyond rumors.”

Cox nodded sternly and promised, yes, he would look into it. What actually happened is another matter. Although the SEC issued more than 50 subpoenas to Wall Street firms, it has yet to identify the mysterious trader who somehow seemed to know in advance that one of the five largest investment banks in America was going to completely tank in a matter of days. “I’ve seen the SEC send agents overseas in a simple insider-trading case to investigate profits of maybe $2,000,” says Brent Baker, a former senior counsel for the commission. “But they did nothing to stop this.”

The SEC’s halfhearted oversight didn’t go unnoticed by the market. Six months after Bear was eaten by predators, virtually the same scenario repeated itself in the case of Lehman Brothers — another top-five investment bank that in September 2008 was vaporized in an obvious case of market manipulation. From there, the financial crisis was on, and the global economy went into full-blown crater mode.

Like all the great merchants of the bubble economy, Bear and Lehman were leveraged to the hilt and vulnerable to collapse. Many of the methods that outsiders used to knock them over were mostly legal: Credit markers were pulled, rumors were spread through the media, and legitimate short-sellers pressured the stock price down. But when Bear and Lehman made their final leap off the cliff of history, both undeniably got a push — especially in the form of a flat-out counterfeiting scheme called naked short-selling.

Link to Article

See how it’s done.

An Overview Of The Fed’s Intervention In Equity Markets Via The Primary Dealer Credit Facility 

Tyler Durden on 10/25/2009

Why is it that the business class paints its transactions in overly graphic language, such as  that of raw physical violence?  I suspect the culprit may be a subconscious desire to engage in blood-sport, which is essentially a psychological “reaction-formation” from the sheer unnaturalness of a human being being habitated to a desk in a cage-like office day after day. 

In the summer of 2006, Henry Paulson called Richard Fuld of Lehman Brothers.  “You and I have been trying to kill each other for years,” Hank said.  Why did Paulson exaggerate from the competition between Goldman Sachs and Lehman?  It does not necessarily follow that a firm competing is like a person killing another. Something else must be involved.   At a meeting at Bear Stearns called by Dimon of JP Morgan, who wanted to explain to Bear’s employees how the sale would affect them, Ed Moldaver of Bear said in front of hundreds, “This isn’t a shotgun marriage; this is more like a rape” (p. 37).   Does purchasing a company’s stock contain or imply such a graphic crime as man forcing himself on a woman?  Something else must be involved.    Andrew Sorkin refers to Lehman’s efforts to raise its stock price when investors were shorting its stock (i.e., betting that the price would go down further) as stanching “the bleeding.”  He also writes that the short-sellers “were smelling blood.”  Is purchasing a short really tantamount to aggressively wounding and eating an animal?  Something else must be involved. 

I suspect that if a contemporary office dweller were ever on a military battlefield, to have his wife raped (or be raped), or to be attacked by a bear who smells a menstral cycle in the tent, I suspect the suits would be a little more retiscent about expressing their puerile fantasies and accept the fact that the modern manager is not apt to be called upon to be as brave as our ancestors who encountered nature as nasty, brutish and short.   Lloyd Blankfein said as much to his chief of staff, who was complaining about the working-weekend at the NY Federal Reserve Bank in Sept, 2008, when the Fed and Treasury were trying to get the industry to rescue Lehman Brothers.  The CEO of Goldman Sachs said to his complaining subordinate, “You’re getting out of a Mercedes to go to the New York Federal Reserve–you’re not getting out of a Higgins boat on Omaha Beach! Keep things in perspective.” (Sorkin, p. 340).    The war vocabulary used in corporate American evinces a wan perspective indeed.  I would love to see those grizzled suits on a real battlefield. How many of them would be owning the jargon of leadership when that means leading real troops into real bullets and risking real blood?   How utterly feckless the modern corporate breed is in comparison! 

A reader wrote me that the managers who “deploy bloodthirsty language” fantasize that “they are real jungle predators” because their aggressive impulses are not satisfied in waging “war over pieces of paper.”  Russ has a much more invigorating use of language than me.  He believes “they must be aware of their inferiority,” and their “fundamental phoniness.”  I am not so sure.  It is also possible that  the language is so ingrained in the modern business culture that the managers are not aware of their own misappropriations.  They are in the business, after all, of appropriating as much as they can.  Why not do it with language where they can get away with it?  

 Consider, for example, the extent to which ”upgrade” and “professional” have been over-stretched.  You can “upgrade” to a larger cup of coffee if you wish, and you might meet a janitor whose boss has told him that he is a professional.  He has taken it as gospel truth and is evangelicizing his new-found status.  The rest of us enable it because to do otherwise would not be politically correct.  If language can be misappropriated with impunity for marketing and personnel purposes, why not do it to play out one’s aggressive fantasies?  Maybe it saves the paper-pushers from literally stapling each other. 

In a way, the “war games” language that is ubiquitous in the corporate world reminds me of when I was in grade-school and my friends and I constructed “forts” (i.e., putting dead branches against a tree) and we used to play “war games” using sticks for guns.   We knew then it was play; we were kids.  What does it say when adults take their imaginations for reality?  There is a diagnosis for that sort of thing…

Source: Andrew Ross Sorkin’s Too Big To Fail.

5

The Looting of a Free Market 

“When a government is dependent upon bankers for money, they and not the leaders of the government control the situation, since the hand that gives is above the hand that takes. Money has no motherland; financiers are without patriotism and without decency; their sole object is gain.” — Napoleon Bonaparte

The 2008 financial crisis and subsequent bailout might have more to do with financial jihad and Shari’ah Financing than Americans would ever imagine or dare to suggest, and the 2009 Stimulus Plan may be a plan to keep American’s in dhimmitude for generations. Though it sounds very poignant, it is a possibility that should be explored because questions are still unanswered and Americans are still confused and bewildered over the astronomical amounts of money that they will owe for generations. This chapter takes the liberty of thinking outside the facade of unsatisfactory explanations that have been given.

In September 2008 the largest domestic and international financial crisis in American history became public. U.S. banks and global markets began to decline and the U.S. Treasury, the FDIC, and the Federal Reserve rushed to the rescue with an initially proposed $250 billion dollars for nine of America’s largest financial institutions. The decision soon expanded, and on October 14  the Treasury Department announced its decision to inject $700 billion and take equity stakes in nine major U.S. banks because they were described as ”too big to fail.” Executives of the nine banks were told to participate in the program whether they wanted to or not, “for the good of the national economy.”

U.S. Treasury Secretary, Henry Paulson said that banks did not have a choice but to give up minority stakes of private ownership, and accept $125 billion each. The plan would allocate an additional $125 billion for investment into thousands of other banks and financial institutions across the country for the next 30 days in an effort to jump-start lending and encourage smaller institutions to accepting federal funding.

Global leaders agreed to launch a coordinated program guaranteeing bank debt on a worldwide scale. As part of a much wider plan extending way beyond $700 billion, the Federal Deposit Insurance Corp. (FDIC) created an insurance fund to guarantee growing concerns of bank debt, providing unlimited deposit insurance for non-interest-bearing accounts at central banks on a global scale.[1]

It is very important to recall from the previous chapter that Shari’ah Compliant Financial products (SCFs) and loans are non-interest bearing, and are offered on a global scale. It is also very important to realize that large banks and Wall Street had been seduced into promoting Shari’ah financial products since at least 2001 without the public’s knowledge.

The Emergency Economic Stabilization Act of 2008, commonly referred to as the “bailout” of the U.S. financial system, authorized the U.S. Treasury to use the $700 billion to purchase or insure “troubled assets,” which were reported to be mortgage backed securities (MBS), and included commercial mortgages, securities, “obligations” or “other” instruments related to mortgages that were issued on or before March 14, 2008, the date of Bear Stearns collapse. The Emergency Economic Stabilization Act also authorized the U.S. Treasury to make capital injections into both foreign and domestic banks.[2]

“Securitization” of MBSs is the pooling of mortgages or other debts to sell investors in the form of bonds rather than unpaid loans, which involves packaging and underwriting huge pools of mortgages into structured securities called “bundled loans.” The growth of securitization allowed non-banks to issue loans even though and many non-banks were not subject to examination by federal bank examiners or underwriting guidelines by federal financial regulators.

The Troubled Asset Relief Program (TARP) was a two-part program designed to put the Emergency Economic Stabilization Act into action in two parts known as TARP I, and TARP II. TARP included the ambiguous “other financial instruments” at the discretion of the Secretary of Treasury and Chairman of the Board of Governors of the Federal Reserve System.

 TARP I was primarily to buy preferred stock and future options in the nine largest American banks. Similar to a debt, preferred stock is paid before common equity shareholders are paid. TARP II, the second part of the program, was supposed to help the more than ten million homeowners owing more than the market value of their home and those facing foreclosure to stay in their homes. Under TARP II, the Treasury would buy up the mortgages at a higher price than the current market value, then issue new mortgages reflecting the true market value of the homes, and supposedly allow homeowners to keep their homes.[3] However, thousands of homes went into foreclosure anyway, and were sold cheaply on the open market.

Participation criteria in The Emergency Economic Stabilization Act was unclear and confusing to the public, however the Act stated that “financial institutions” included in TARP must be “established and regulated” under the laws of the United States and included foreign banks that have “significant operations” in the U.S. These operations include: U.S. banks, U.S. branches of foreign banks, U.S. savings banks or credit unions, U.S. broker-dealers, U.S. insurance companies, U.S. mutual funds or other U.S. registered investment companies, tax-qualified U.S. employee retirement plans, and bank holding companies.[4] It turned out that the $700 dollar bailout was a blank check for receiving banks to buy even more banks and insurance companies.

Then, in February 2009, Congress passed, and President Obama signed into law the largest government spending and borrowing package in the history of mankind, The American Recovery Reinvestment Act. This $787 billion dollar act was supposed to allow for government programs and other investments that would stimulate the economy and provide jobs for Americans. With most of the money designated to loosely described education, health welfare, and alternative energy programs, The Recovery and Reinvestment Act proposed to encompass a multitude of non-productive programs and projects with unidentified recipients, raising more questions than obvious solutions, such as where the money would come from and who would get the contracts. Broad grandiose ideas of creating new programs, and building libraries, did not address what the so-called “other” investments were, what the “new” programs were, or what kind of books the new libraries would have. Regarding education spending, promises by Obama to “hire good teachers,” and “fire bad ones,” did not address a need or satisfactorily explain the qualifications for ‘good teachers’ and ‘bad teachers.’ Also, many of the programs that became known were discovered to be non-productive programs that will not stimulate the economy.

With benevolent sounding semantics, President Obama said that some of the funds will be to build a nationwide electric grid, and develop alternative energy sources to free Americans from “foreign oil.”

Obama did not tell Americans that the electric grid is a “smart grid” to be built by General Electric and IBM, with RFD devices.[5] Neither did he tell Americans that Saudi Basic Industries Corporation (SABIC) acquired General Electric’s Plastics division for $11.6 billion in cash on May 21, 2007.[6] Obama did not mention that GE is also one of the largest lenders in countries other than the United States.[7] So while an electric grid may help reduce the cost of foreign oil, it does not guarantee freedom from undemocratic “foreign control.” Because GE stands to take in stimulus dollars by manufacturing the turbines for the proposed alternative energy units, America’s dependence on foreign oil will transfer to Saudi influenced control of electricity, alternative energy, and ultimately, personal activity.

After promising “no pork,” Americans learned that the Recovery and Reinvestment Act included some 9000 earmarks. An example of Orwellian verbiage is that “no pork” may turn out to be deception by interpretation. Take for example the non-productive program to study swine odor. The only given objective for the “study” is that swine manure management is a serious concern in Iowa and “other countries.” Research shows that toxins in swine manure can attach to dust if not properly held in a manure-holding lagoon, causing allergies and depression. However, it is already known that dust leads to allergies, and depression can be a result of exposure to other kinds of manure. The point is that the results of this study may be controlled with the objective of an environmental protection act,  and further legislation hindering the availability of, or the taxation of pork as food, thus, delivering the promise of  “no pork.”

Another confusing report about the American Recovery and Reinvestment Act is that GE will build a train to go from Disneyland to Las Vegas, contradicting an earlier report that revealed President Obama would not fund contracts for projects in Las Vegas. It is reasonable to doubt that a joy ride to Las Vegas will ever materialize under the stimulus plan even if funds are allocated.  After allocation, the funds can be used for something else if the project is dropped. It is extremely important to read between the lines and think of the unthinkable–such as a train to Las Vegas could be for other reasons than fun loving Americans would ordinarily think of when thinking of a ride to Las Vegas. For example, what if a train was to transport prisoners to some kind of a detention camp!

Furthermore, while American taxpayers and future generations of Americans gamble the stimulus plan will work as advertised; no enforcements exist pledging that legal immigrants and American citizens will get those jobs. The House of Representatives initially included provisions to reasonably assure that legal U.S. workers would fill the jobs created with U.S. taxpayer dollars, but the Senate did not accept the House version. Without debate or explanation, the bill was deprived of E-verification safeguards by Senator Henry Reid and House Speaker Nancy Pelosi in a closed-door session. [8]

Expecting to reach $13 trillion by 2010, Americans found it difficult to keep up with the overwhelming, daily deepening Stimulus debt that cannot hope to be re-paid. Members of Congress and citizens alike do not know where the money will come from, what the government programs will involve, what private organizations will be contracted, or to whom the debt will be repaid in the effort to bolster the economy. Believing we will be indebted to China is likely a diversion and a misnomer because China is also indebted to the Saudi’s for oil, and surely the Saudi’s have strategic investments there as well as in the U.S. A more sensible explanation is that strategic companies will provide the services, and the American taxpayers will pay them back with interest for generations, creating an unstated condition of dhimmitude.

President Obama’s chief of staff, Rahm Emmanuel has told a Wall Street Journal conference of top corporate chief executives that the financial crisis is an inheritance from the Bush administration, and an opportunity:

 ”You never want a serious crisis to go to waste,” Rahm Emanuel, Mr. Obama’s new chief of staff, this week…Things that we had postponed for too long, that were long-term, are now immediate and must be dealt with. This crisis provides the opportunity for us to do things that you could not do before.”[9] 

Instead of opportunity for Americans, the promise to stimulate the economy may in the very least for an “agenda” to obliterate American sovereignty in an effort to promote socialism bordering on fascism as government is controlled by corporations and organizations that are largely owned and controlled by foreigners. If the initial financial disaster affected the entire international financial market system, Americans should ask why they are the only ones who are paying for it.

Conservatives believe that the massive spending programs will actually kill jobs, cripple the economy, and crush any hope for the American dream. With the stock market index the lowest in twenty-five years, and job losses amounting to several million in early 2009, they are probably correct.

Throughout the 1990’s many foreign countries had also fallen into financial crisis: Mexico in 1994; Asia, Thailand, Indonesia and Korea from 1997-1998; Brazil and Russia in 1998; and Argentina in 2000. A study determined that those crises resulted from poorly regulated banking systems, surplus borrowing, irresponsible lending,  huge deficits from foreign borrowing, lax corporate governance, and corrupt cronyism.

In 1995, Clinton took from a U.S. Treasury Department fund that had been set up in the 1930s to stabilize the U.S. dollar if necessary. Clinton used the money to bail out the Mexican and Brazilian governments, allowing them to make loan payments they owed Goldman Sachs, where Clinton’s Treasury Secretary Robert Rubin had once worked.[10]  Goldman Sachs also received billions of dollars in the 2008 bailout and then gave out billions of dollars in bonuses to executives.

U.S. subprime lenders had begun entering financial crisis in 2007. Declining employment, a deteriorating dollar and increasing housing crisis, prompted the Federal Reserve to cut the lending rate 50 basis points and purchase tens of billions of dollars in mortgage-backed securities.

Leading up to the 2008 financial crisis was the collapse of Bear Stearns Investment Banking and Securities Brokerage Firm. Bear Stearns, had developed an extensive market in swaps and hedge funds, and put $1.6 billion into two failing hedge funds. After losing all their value, the Federal Reserve Bank of New York gave Bear Stearns an unsuccessful emergency loan, and JP Morgan Chase purchased the company on March 14, 2008.

Bear Stearns was actively involved in purchasing mortgage backed securities prior to their failure. The bundled loans were sold to institutional investors, such as hedge and pension funds, while some were retained by the bank itself.

Other Wall Street firms such as Merrill Lynch and Freddie Mac were also actively engaged in packaging, underwriting, trading, and investing in mortgage backed securities. As large financial institutions began failing in the U.S., the crisis rapidly evolved into a global scenario leading to a number of European bank failures, declines in various stock indexes, large reductions in the market value of equities and commodities worldwide, with liquidity and borrowing becoming problematic in the United States and Europe.[11]

Investment banks that had borrowed money from Bear Stearns began to withdraw cash from their accounts. Concerned that the firm would not be able to pay claims, a number of institutional investors attempted to reverse their trades, leading to a drop in Bear’s liquidity.

Negotiations ensued between Bear, JP Morgan, The Federal Reserve, and Treasury officials, leading to JP Morgan Chase’s purchase of Bear Stearns at a mere $2 a share. Bear and JP Morgan renegotiated those terms to avoid shareholder litigation, bringing the share’s value up to $10.

In 1978 Saudi Arabia was reported to be the largest holder of Fannie Mae certificates[12] Then, in 2006, Government regulators filed civil charges against three former Fannie Mae executives seeking the return of over $115 million in bonuses. [13]

The Office of Federal Housing Enterprise Oversight (OFHEO) filed 101 charges against former Fannie Mae CEO’s, Chairman and Chief Executive Officer, Franklin Raines, former Chief Financial Officer, J. Timothy Howard, and former controller Leanne G. Spencer. They were charged with manipulating earnings to gain the large bonuses.

The CEO’s neglected internal controls and sound accounting by misapplying over twenty accounting principles, which led to overstated earnings from 2001 through the first two quarters of 2004 by $6.3 billion. The inaccurate accounting statements and inaccurate reports allowed for the unsound growth of Fannie Mae, resulting in $7.9 billion in losses after taxes.

In addition to a yearly salary of $1 million, Raines received $84.6 million in bonuses between 1998 and 2003. The government wanted Howard to return $27.3 million that he had received in options and bonuses, and $5.6 million from Spencer. [14]

Raines had served in the Carter Administration as associate director for economics and government in the Office of Management and Budget, and as the assistant director of the White House Domestic Policy Staff from1977-1979. From 1991-1996 he was Fannie’s Mae’s Vice Chairman. In 1994, he was forced to retire from Fannie Mae, taking with him $240 Million in benefits even after the discovery of accounting flaws.[15] Raines then worked under Clinton as Director of the U.S. Office of Management and Budget from 1996-1998. The Government filed suit against Raines in 1996 when his involvement in the accounting scandal became clear[16]

In 1999, Raines returned to Fannie Mae as CEO until 2005 when he was forced to retire again. In 2006, the Courts ordered Raines to return $50 million.

For years, Fannie Mae and Freddie Mac had pursued a lobbying strategy efforts to get lawmakers on their side, pouring money into lobbying and campaign contributions to federal candidates, parties and committees.[17] In 1998, banks began making thousands of bad loans to people who put no money down and claims of undocumented income.  From 1999-2005 Fannie Mae gave millions of dollars to Democratic causes such as ACORN, and millions to 354 Congressmen and Senators from both parties. Senator Christopher Dodd, Chairman of the Senate Banking, Housing, and Urban Affairs Committee; Senator Barack Obama, member of the Finance Committee; Senator Chuck Schumer, Chairman of the Finance Committee; and Representative Barney Frank, Chairman of the House Financial Services Committee were the top four recipients.

Tim Howard, Chief Financial Officer of Fannie Mae advocated using accounting strategies to ensure a “stable pattern of earnings.” The Government Investigation determined that Howard failed to provide adequate oversight for key control and reporting functions within Fannie Mae.

The two former Fannie Mae executives denied manipulating Fannie Mae’s income statements, however investigations by federal regulators and the company’s board of directors determined they had manipulated 1998 earnings to achieve bonuses. Howard resigned under pressure in late 2004 with a severance agreement reportedly estimated to be $20 million.[18]

Jim Johnson, former executive at Lehman Brothers, was also forced from his CEO position as a result of the Fannie Mae scandal. Investigators found that Fannie Mae had hidden a substantial amount of Johnson’s 1998 compensation from the public, reporting that it was somewhere between $6 million and $7 million when it was actually $21 million. Johnson’s Golden Parachute was estimated to be $28 million.

During Obama’s campaign, Johnson would once again come under investigation for taking illegal loans from Countrywide during his years as CEO at Fannie Mae, and subsequently resigned from a position to be part of a committee to choose Obama’s vice presidential running mate.[19]

In 2008, Fannie Mae and Freddie Mac were finally forced to declare bankruptcy leading to nationalization.[20] Recall from the previous chapter that in 2001, Freddie Mac, one of the nations’ largest investors in Islamic home financing products, announced it had become the first major U.S. mortgage investor to contract the purchase of Islamic mortgages. Freddie Mac announced that it had begun buying Shari’ah compliant mortgages on May 1, 2001.[21] An article by Paul Wiseman for USA Today on March 28, 2008 revealed that some of the banks from which Freddie Mac began buying Shari’ah-compliant mortgages, offer a range of Shari’ah products. Mostly in areas with largely Democratic Party leader representation, the banks included Devon Bank in North Chicago, Guidance Residential in Reston, Virginia; University Bank in Ann Arbor, Michigan; and American Finance House Lariba in Pasadena, California, Wiseman wrote that Citigroup, HSBC, Deutsche Bank, AIG have affiliates with Shari’ah products. Devon Bank in North Chicago started giving Shari’ah loans (loans without interest) to Muslims in 2001.

The Wiseman article also revealed that the global Islamic finance market was worth about $700 billion in March 2008, and had grown 15% in the previous three years. It further noted that Freddie Mac had purchased over $250 million in Islamic mortgages in 2007 alone. [22] 

Billions of dollars is of course over $250 million, so it could be, in a manipulative play on words, that Freddie Mac actually purchased billions of dollars in Shari’ah loans. Because the larger American public does not know that Freddie Mac purchased any Shari’ah mortgages, they cannot know if those investments were profitable. The secretive investments may be part of the ‘toxic’ zero down, ‘risky’ loans that ended up amongst the unpaid bundles of debt that generations of American taxpayers are now supposed to pay for.

Wachovia acquired mortgage lender Golden West Financial Corporation in 2006. Like Washington Mutual Inc., Wachovia offered adjustable-rate mortgages (ARMs), which required very low introductory payments, and had $122 billion in ‘Pick-A-Payment’ loans, that allowed borrowers to defer some of their interest payments. Delinquencies and defaults on these types of mortgages skyrocketed in the months prior to the financial crisis, causing big losses for the banks.

In the summer of 2008, Wachovia reported a $9.11 billion loss for the second quarter, announced plans to cut 11,350 jobs, and slashed its dividend. Wachovia also boosted its provision for loan losses to $5.57 billion during the second quarter, up from $179 million in the same period of 2007.

Citigroup’s largest shareholder is Saudi Arabia’s Prince Alwaleed bin Talal, with the Abu Dhabi Investment Authority and Kuwait Investment Authority more recent investors.[23] Citigroup purchased Wachovia for $2.1 billion, absorbing up to $42 billion of losses from Wachovia’s $312 billion loan portfolio. The sale, which allowed for retaining the name ‘Wachovia,’ gave Citigroup control over 4,300 U.S. branches with $600 billion in deposits, placing Citigroup among the U.S. banking industry’s “Big Three,” alongside Bank of America Corp. and JPMorgan Chase & Co.

Citigroup’s investors became concerned that it too might collapse given its massive exposure to MBSs, when New York-based Citigroup did not turn a profit for three straight quarters, loosing $17.4 billion during one period after writing down its assets by about $46 billion.

When Citigroup received $45 billion from the American taxpayers in the fall of 2008, the company already had plans to lobby to change laws during the Obama administration. Citigroup hoped that the $787 billion rescue plan under the 2009 American Recovery and Reinvestment Act would allow them to sell their ‘toxic’ mortgages and other assets gained from Wachovia for a higher price than they actually paid for them.

The Economic Stimulus Plan prevented banks from profiting on the sale of troubled assets to the government, but there was an exception for assets acquired in a merger or buyout, from companies that filed bankruptcy. In mid February 2009, Citigroup stock fell to $2 a share and the U.S. Government announced plans for its nationalization. On February 27, Americans learned that Citigroup’s nationalization was effective with the U.S. government owning just 36% of the bank.

A May 13, 2008 article posted on Arabian Business.Com and The Global Islamic Finance Center (GIFC) website called “Citi Launches Shari’ah Compliant Products in UAE,” reveals Saudi Prince, Alwaleed bin Talal is the largest Citigroup shareholder, with the Abu Dhabi Investment Authority and Kuwait Investment Authority investors as well. According to the article, Citi Islamic Investment Bank described its global Islamic business as : 

“The world’s leading ‘book runner’ of global Islamic finance transactions, set up its global Islamic banking operations in 1981 in London.” [24] 

If Saudi Arabia’s Prince Alwaleed bin Talal is Citigroup’s largest shareholder, and  Abu Dhabi Investment Authority and Kuwait Investment Authority are more recent investors, the question is: Who really controls Citigroup? Who and what are the American taxpayers really funding?

Seattle-based Washington Mutual marked the largest bank failure in U.S. history. JPMorgan purchased WaMu’s deposits and assets for $1.9 billion. [25] Bank of America bought Merrill Lynch & Company’s $50 billion in stock.

Congress voted to rescue banks from the dim-witted decisions. Democrats blamed the Bush administration for the financial crisis, the White House blamed Congress, while many Americans pointed the finger at the 1977 Community Reinvestment Act.[26]  Mandated under the Clinton administration’s de-regulation policies in 1999, the Community Reinvestment Act effectively transferred wealth from the US Treasury to homeowners who claim they cannot pay for properties they purchased. The Treasury did not actually have the money so it is expected to come from American taxpayers in the next decades.

The Financial Services Modernization Act allowed commercial and investment banks to consolidate, and The Community Reinvestment Act greatly reduced underwriting standards and encouraged financial institutions to provide loans to individuals in low-income neighborhoods. A February 5, 2008, article in the New York Post by Stan J. Liebowitz, “The Real Scandal: How Feds Invited the Mortgage Mess,”states: 

 “Perhaps the greatest scandal of the mortgage crisis is that it is a direct result of an intentional loosening of underwriting standards—done in the name of ending discrimination, despite warnings that it could lead to wide-scale defaults. At the crisis’ core are loans that were made with virtually nonexistent underwriting standards—no verification of income or assets; little consideration of the applicant’s ability to make payments; no down payment.”

 A Fannie Mae Foundation report boasted a shining example of the new lending. Working with community activists following “the most flexible underwriting criteria permitted” Fannie Mae’s $1 billion commitment to low-income loans in 1992 grew to $80 billion by 1999 and $600 billion early in 2003.[27]

The Federal Reserve also rescued American International Group, Inc. (AIG), the world’s largest insurance company, only one day after investment bank Lehman Brothers fell into bankruptcy for investing in bad mortgages. Even though the company had lost $5 billion in the 4th quarter of 2007, Martin J. Sullivan, who ran the company from 2005 until June 2008, reportedly urged AIG’s board of directors to waive pay guidelines in 2007 in favor of $5 million in bonuses. Auditing firm Pricewaterhouse Cooper had warned the company that it showed potential losses from insuring mortgage-related securities in December 2007. Days later, Sullivan reassured shareholders of the company’s stability. Giving the government an 80% stake of its holdings in the fall 2008, AIG initially received $85 billion, and by March 2, 2009, the loans had amassed to $162 billion with $30 billion likely to follow. Later in the month, Americans would learn that AIG gave $93 billion to Goldman Sachs and other European banks.[28]

An investigation by a London based editorial, Sunday Telegraph, determined there was a correlation between the losses and the many regulators responsible for AIG’s activities throughout 130 countries. In the front of this row stands Britain’s financial regulator, the Financial Services Authority (FSA).

The auditing firm, Pricewaterhouse Cooper had previously warned the company that the “root cause” of its problems was the denial of internal oversight in its Financial Products Branch. Federal regulators at the Office of Thrift Supervision also warned AIG in March 2008 that “corporate oversight of AIG Financial Products lack critical elements of independence.”

A Congressional Hearing on October 7, 2008 revealed that AIG’s problems reportedly came from its ‘financial services operations,’ primarily the insurance of mortgage-backed securities and ‘other’ risky debt, not from its ‘traditional’ insurance subsidiary.

In the midst of the bailout crisis, on December 1, 2008, a subsidiary of AIG Commercial Insurance, Risk Specialists Companies, Inc. (RSC), announced an Islamic Homeowners Policy, as the first of a series of Shari’ah-compliant products in the U.S. that are compliant with the Islamic finance tenets described in the previous chapter.

The Islamic homeowners’ policy is underwritten through Risk Specialists Insurance, Inc., in conjunction with Lexington Insurance Company, in association with an AIG division licensed by the Bank of Bahrain. Established in 2006, the division, known as AIG Takaful Enaya, provides a range of Shari’ah compliant Takaful products, including accident and health, auto, energy, property and casualty products. [29]

Less than a week after the federal government bailed out AIG, the company sent life insurance executives on a $440,000 retreat to an upscale California resort, St. Regis, south of Los Angeles as the company tapped into the first $85 billion loan from the government. Lawmakers were outraged even though executives were not from the Financial Products Division.

The retreat that executives of AIG’s U.S. enjoyed included catered banquets, golf outings and visits to the resort’s spa and salon. The retreat did not include anyone from the division under scrutiny, the Financial Products Division, but lawmakers were still enraged over the extravagance. [30]

U.S. Congressman who chaired the hearing into AIG, unveiled documents showing that AIG executives had hidden the full range of its risky Financial Products Division from auditors as losses increased, according to documents released by a congressional panel examining the chain of events that led to the bailout of AIG.

In London, a Wall Street veteran named Joseph Cassano ran AIG Financial Products Division. According to US Congressional records, the company paid Cassano $280 million from 1999-2007. Company accountants changed the basis on which they valued collateral held by some of its units, marking down a half trillion dollars worth of credit default swaps (CDSs) that had led to quarterly losses. CDSs are questionable insurance products bought by investors seeking protection against defaults on mortgage-backed securities and other credits. By the end of 2007, AIG had $562 billion in CDS contracts in its books, and the October 7 testimony before the House Oversight Committee revealed that Cassano’s office was the origination.

As a result, Cassano transferred to a consulting position for AIG that paid him $1 million per month for nine months. According to Sullivan, Cassano helped AIG Financial Products Division unravel the devaluing CDSs.

According to regulators in other countries, the British Financial Services Authority (FSA) may have been partly responsible for the credit crisis that led to the global financial crisis. They found a financial chain linking American sub-prime mortgages to the packagers and sellers of mortgages in London, and Wall Street. The British Conservative Party Treasury spokesman Philip Hammond called for a public inquiry into the FSA’s oversight of its AIG Financial Products in London saying: “We must not allow London to become a bolt hole for companies looking for a place to conduct questionable activities.”

Serious concern regarding Shari’ah Compliant Financing products is that banking oversight in the UK is entrusted to the FSA, which is made up of non-governmental members appointed by the Treasury. The FSA (coincidentally) defers regulation of Shari’ah Compliant Financing products to the scholarly Islamic Shari’ah supervisory board of each institution.

According to undisclosed FSA associations, the AIG Financial Products Division (coincidentally) fell outside FSA jurisdiction. Under FSA rules, AIG Financial Products is an “internal treasury operation” and as such, (coincidentally) not regulated by FSA. The FSA does have regulatory oversight responsibility for a number of AIG units in London, including a company called AIG FP Capital Management in London. Associations to the FSA said AIG FP Capital Management was a separate company from AIG Financial Products, and not involved in the creation of the failing CDSs. Nevertheless, U.S. lawmakers considered London AIG Financial Products to be at the root of AIG’s Financial Products disaster.

The UK Telegraph article stated, “During the hearing into the causes and effects of the AIG bail-out on October 7, the US House of Representatives Oversight Committee, led by Congressman Waxman, politicians mentioned London a dozen times. California Congresswoman Jackie Speier referred to London’s AIG Financial Products as ‘the casino in London.’”

During the U.S. HROC hearing, American AIG chief executives Martin Sullivan and Robert Willumstad revealed information about the AIG Financial Products unit in London citing a New York Times article on September 28, 2008. It turned out that in November 2007, when AIG accountants advised the insurer to change the way it valued its CDSs, the small base of capital on which AIG Financial Products had built a massive business came into focus, leading to AIG’s exposure.

The UK Telegraph article revealed that British authorities had not said anything about AIG’s involvement. However, unknown to the general American public, there were multiple investigations into AIG in the U.S. In addition to the October 7 Congressional hearing, the AIG Financial Products Division was being investigated by the Office of Thrift Supervision in Washington and the New York State Department of Insurance in Manhattan.

In early October 2008, New York State Attorney General Andrew Cuomo sent a letter to AIG informing the company it was under investigation for “irresponsible and damaging” expenditures, “among other things,” for the executive compensation packages that were not cut even as AIG accepted the $85 billion to keep itself afloat. [31]

A December 10, 2008, article in the Wall Street Journal stated that AIG still had close to $10 billion in ‘undisclosed counterparty obligations.’ Included in the portfolio a “notional amount” as of September 30, was approximately $9.8 billion of swaps that were sold as credit protection on “synthetic” securities. The swaps on the so-called synthetic securities were referred to as “cash settlement” or “Pay As You Go” swaps because they are settled in cash when the losses are taken.

AIG noted that the majority of the multi-sector CDS swaps were written as “physical settlement” swaps, where AIG was required to physically buy the underlying collateralized debt obligation (CDO) bond in the event of a CDO credit problem. Remember (from the previous chapter) that in Shari’ah Compliant Financing, the banks purchase the homes and rent them out to the prospective buyers.

In December, suit was filed against Treasury Secretary Timothy Geithner and the Federal Reserve Board challenging the AIG bailout citing their involvement in Shari’ah Compliant Financing and charging that Shari’ah-based Islamic religious activities are anti-Christian, anti-Jewish, and anti-American. The Obama administration’s Department of Justice unsuccessfully tried to have the suit dismissed. Then, after the government acquired a majority interest in AIG and contributed substantial funds to AIG for operational purposes, the Treasury Department co-sponsored an Islamic 101 Forum, raising the possibility that the government’s involvement with AIG effectively promotes the Islamic religion.

The huge bonuses that bank CEO’s received sparked huge controversy in the light that taxpayer money paid for them. No one liked the fact that CEO’s got the huge bonuses and severance agreements for virtually nothing, though it was said that these were the only executives who knew what was really going on, and therefore were the only ones who could straighten it out.  This could be a very misleading statement.

When a CEO leaves a company, he takes with him trade secrets. Therefore, it is very likely that such secrets involve knowledge of involvement in financial activities and transactions that must be kept secret from the American taxpayer. The huge bonuses could actually be “pay-offs” to mislead Americans and keep them in the dark regarding what might be construed as fraudulent and misleading internal operations.

CEOs who received huge bonuses and salaries are portrayed as being “greedy crooks,” and perhaps they are. The pay-offs, or severance agreements could however be masking something much worse. In such a scenario, severance agreements and huge bonuses would be tantamount to hush money, making recipients partners in crime with the Federal Reserve and contracting parties, especially if something like Shari’ah Compliant Financing was involved.

An article in a Quatar English speaking newspaper, The Gulf Times, dated June 16, 2008, revealed that Omair Mooraj, a senior Mideast executive at U.S. investment bank JP Morgan Chase & Co was detained in Dubai as part of a fraud investigation at Dubai Islamic Bank. As the managing director and head of Islamic banking for the region, Mooraj was one of several people held by Dubai police in a string of arrests. The report alluded to an earlier detainment of Rifat Usmani, a vice president of structured finance at Dubai Islamic, and Charles Ridley, a British Bahrain-based businessman. [32] 

The Federal Reserve consists mostly of foreign bankers who are not citizens of these United States, and is a private corporation. The Federal Reserve, Treasury Department and Federal Deposit Insurance Corporation have lent or spent over $8 trillion American taxpayer dollars– almost $3 trillion over the past two years, pledging up to $5.7 trillion more.

President Woodrow Wilson created the Federal Reserve under the inspiration of the Marxist, E. Mandell House. Since its creation, the U.S. Congress has had little to do with managing America’s fiscal policies, and Wilson later admitted regret over his part in its creation.

Many patriotic Americans believe that the Federal Reserve and its cohorts have manipulated every bit of the 2008-2009 financial crisis. H.R. 833, introduced in the House of Representatives by Congressman Ron Paul, upon enactment, will abolish the Board of Governors of the Federal Reserve System and the Federal Reserve banks. [33]

In September  2008 Federal Reserve Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said they would comply with congressional demands for transparency in a $700 billion bailout of the banking system yet two months later, the Federal Reserve loaned even more in separate rescue programs without requiring Congressional approval. Americans have no idea where their money is going, or what securities the banks are pledging in return.

The Constitution requires that U.S. currency must be backed by a commodity like gold and silver, and that only Congress has the power to make monetary policy, while private domestic banks and foreign banks are forbidden to do so. The U.S. Constitution gives Congress the authority to: 

“To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures.”

Federal Reserve Notes, paper money, is not regarded as legal tender under the U.S. Constitution because it is not backed by anything. Combined with the fact that the Federal Reserve is a private corporation consisting mostly of foreign bankers who are not citizens of these United States makes the Federal Reserve Act of 1913 unconstitutional.

Dan Fuss, vice chairman of Boston based Loomis Sayles & Co. Bloomberg News said that collateral was not adequately disclosed regarding the recipients of nearly $2 trillion in emergency loans at the onset of the 2008 bailout. Fuss requested details of Federal Reserve lending under the U.S. Freedom of Information Act and filed a federal lawsuit on November 7, 2008 seeking disclosure.[34]

Arabs began buying U.S. Treasury bonds thirty-some years ago, and have bought into our capital market infrastructure including American banks. Steven Emerson noted that in the eighties, the U.S. Treasury began keeping Saudi and Arab investments in the U.S. hidden from the American public.

Anti-capitalist Islamists are now hastily claiming the financial crisis is evidence of a failing and greedy Western financial system. Contrarily, non-tranparent Shari’ah practices could actually be the cause of the failing Western system. Hiding the fact that Shari’ah products and transactions had become a part of the bank portfolios could also very well be the reason for giving out large bonuses. Shari’ah Compliant Finance products as part of mortgage backed securities in bundled loans as and portfolios cannot be ruled out as an important part of the scandalous activities that led to the recent financial crisis. SCFs involve unexamined loans that are described as “complex,” and “customized.” With unchallenged regulation, they cannot prove separatation from risky and scandalous activities.

World leaders met in London on April 2, 2009 at the G-20 meeting reportedly in an effort to “strengthen” the global financial system. Jerome Corsi, a noted financial services speaker and writer, wrote an article describing how the G20 would create an international Financial Stability Board with authority to intervene in U.S. corporate affairs by dictating executive compensation and approving or disapproving business management. The International Monetary Fund (IMF) and the Financial Stability Board became the global regulators of the whole corporate world, thus superseding U.S. governmental authorities, including the Federal Reserve, the U.S. Treasury, the Federal Deposit Insurance Corporation and other corporate regulators, including the U.S. Department of Commerce and the U.S. Department of Labor. The Financial Stability Board essentially negates the U.S. Declaration of Independence and abrogates the sovereignty of the United States.

Corsi wrote that the new global regulator has the authority to examine all U.S. banks, brokerage firms, and corporations including non-financial companies such as the Big Three automakers. It has the international authority to set policies within these corporations, including compensation packages paid to top executives and senior managers. [35]

While at the G-20 meeting, Obama gave such a deep bow to King Abdullah Aziz of Saudi Arabia that he appeared to be kissing the King’s hand or ring. A video of the incident on the Internet was removed after controversy ensued and the White House denied that it was a kiss. While the hands of both men were not always visible in the video, the expressions of astonishment from the other leaders show that the gesture was a spectacle at the very least.  

Early in the bailout, and before the G20 meeting, President Obama made many references to Americans chastising us for “bad habits,” “greediness,” and “addiction to oil.” In other words, trying to make Americans feel guilty and accept the position of scapegoat for what really might be organized international crime.  

Americans should question whether American home mortgages in default are the main cause of the 2008 global financial crisis. Obama’s inference of placing the blame on American citizens alone is tantamount to fear mongering and extortion and might be part a larger plan to vanquish American sovereignty and negate the Constitution.

After the Bailout and the Stimulus Bill came the Omnibus Bill, the Budget Bill, the Cap and Trade Bill, and most recently the Health Care Bill. These bills all depend on Americans to tax. Combined they are thousands of pages of rules, regulations, and restrictions that will control Americans with unknown, unwarranted astronomical debt, and possibly far worse as future generations will essentially be born in debt and live their whole lives in bondage.

During the ninth through eleventh centuries royal policy with the English and the Franks was to pay a tax, the Danegeld, as tribute to safeguard them from being invaded and ravaged by Vikings raiders. In closing, the poem, “Dane-Geld” by Rudyard Kipling (1865-1936) is timeless wisdom for today’s socio-political-economic policies. 

“It is always a temptation to an armed and agile nation,

to call upon a neighbor and to say:

“We invaded you last night–we are quite prepared to fight,

unless you pay us cash to go away.”

And that is called asking for Dane-geld,

and the people who ask it explain

that you’ve only to pay ’em the Dane-geld

and then you’ll get rid of the Dane!

It is always a temptation to a rich and lazy nation,

to puff and look important and to say:

“Though we know we should defeat you, we have not the time to meet you.

We will therefore pay you cash to go away.”

And that is called paying the Dane-geld;

but we’ve proved it again and again,

that if once you have paid him the Dane-geld

you never get rid of the Dane.

It is wrong to put temptation in the path of any nation,

For fear they should succumb and go astray,

So when you are requested to pay up or be molested,

You will find it better policy to say:

“We never pay any-one Dane-geld,

No matter how trifling the cost;

For the end of that game is oppression and shame,

And the nation that plays it is lost!” 

 [2] “Energy Economic Stabilization Act of 2008”; http://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008 

[3] Baker, Dean; “TARP II: Money For Banks, Not Homeowners,” January 19, 2009, http://www.truthout.org/011909A

 [4] “Troubled Assets Relief Program,” http://en.wikipedia.org/wiki/Troubled_Assets_Relief_Program

 [5] Jones, Alex;” Smart Grid: Government Spying Targets Rural America,” March 7, 2009,  http://www.infowars.com/smart-grid-government-spying-targets-rural-america/

 [6] Deutsch, Claudia H.; May 22, 2007, “General Electric to Sell Plastics Division,”  http://www.nytimes.com/2007/05/22/business/22plastics.html/?_r=1

 [7] “SABIC,”  http://en.wikipedia.org/wiki/Saudi_Basic_Industries_Corp.

[8] “$800 Billion Economic Stimulus and Job Creation Bill Includes No Protections for U.S. Workers,” March 2009,   http://www.fairus.org/site/PageNavigator/issues/stimulus_includes_no_protections

 [9]  Seib,Gerald F.; November 21, 2008, “In Crisis, Opportunity for Barrack Obama, Wall Street Journal, http://online.wsj.com/article/SB122721278056345271.html

[10] Schlafly Phyllis; “Power Grab Through Executive Orders,” The Phyllis Schlafly Report,  Volume 32, No. 10, April 1998, http://www.eagleforum.org/psr/1999/may99/psrmay99.html

[11] “Bear Stearns,” http://en.wikipedia.org/wiki/Bear_Stearns

 [12] Emerson, Steve; The American House of Saud: The Secret Petrodollar Connection, Chapter 16, p. 330, Franklin Watts Publisher, 1985

 [13] http://www.housingdoom.com/2006/12/18/fannie-charges/

 [14] Carter, Matt;  “Feds Charge Former Fannie Mae Execs With Manipulated Earnings,” December 18, 2006, http://www.inman.com/news/2006/12/1/feds-charge-former-fannie-mae-execs-manipulating-earnings

 [15] Tyson James & Jaffe Mark; “Fannie Mae Missteps Trip Up Raines Remarkable Rise,” December 4, 2004, http://seattletimes.nwsource.com/html/businesstechnology/2002129738_raines24.html

 [16] “Franklin Raines,” http://en.wikipedia.org/wiki/Franklin_Raines

 [17] Mayer,  Lindsay Renick; Fannie Mae and Freddie Mac Invest in Democrats,” July 16, 2008, http://www.opensecrets.org/news/2008/07/top-senate-recipients-of-fanni.html

[18] Huslin, Anita; “On the Outside Now: Watching Fannie Falter,”  July 16, 2008 http://www.washingtonpost.com/wp-dyn/content/article/2008/07/15/AR2008071502827.html

 [19] http://www.factcheck.org/askfactcheck/are_three_former_fannie_mae_executives_economic.html

 [20] “The History of a Financial Disaster,” http://www.go-patriots.com/FannieMae%20History.htm

 [21] “Freddie Mac Invests in Islamic Mortgages,” May 1, 2001, http://www.allbusiness.com/finance/902795-1.html

 [22] Wiseman, Paul;  “Islamic Loans Turn Profit for Banks in USA,” March 28, 2008, http://www.usatoday.com/money/industries/banking/2008-03-26-islamic-finance-sharia_N.htm      

[23]Malik, Tala; “Citi Launches Shari’ah Compliant Products in UAE,” May 13, 2008, http://www.arabianbusiness.com/519157-citi-launches-shariah-compliant-corporate-products-in-uae

[24] Malik, Tala; “Citi Launches Shari’ah-Compliant Products in UAE,” May 13, 2008, http://www.arabianbusiness.com/519157-citi-launches-shariah-compliant-corporate-products-in-uae?ln=en

 [25]  http://news.yahoo.com/s/ap/20080929/ap_on_bi_ge/wachovia_citigroup

[26] Oversight Hearing On Financial Privacy and the Gramm-Leach-Bliley Financial Services Modernization Act;  Committee on Banking, Housing and Urban Affairs, September 19, 2002, United States Senate  http://www.privacyrights.org/ar/USPirg-GLB0902.htm

[27] http://en.wikipedia.org/wiki/Global_financial_crisis_of_September%E2%80%93October_2008

 [28] Rush Limbaugh,  March 16, 2009

[29] “Risk Specialists Companies Announces First Takaful Homeowners Products for U.S.,” December 1, 2008, http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20081201005672&newsLang=en 

 [30] “After Bailout, AIG Execs Lounged At Resort,” CBS News,  October 7, 2008,

http://kdka.com/business/aig.financial.crisis.2.834438.html

 [31] Koeing, Peter; “AIG Trail Leads to London ‘Casino,’ October 18, 2008,  http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3225213/AIG-trail-leads-to-London-casino.html

[32] Sleiman, Mirna; “Executive Detained in Bank Fraud Probe,” June 16, 2008,  http://www.gulf-times.com/site/topics/article.asp?cu_no=2&item_no=224672&version=1&template_id=57&parent_id=56

[33] Baldwin, Chuck; “President and Congress Grovel Before the Fed,” February 10, 2009, http://www.newswithviews.com/baldwin/baldwin491.htm

 [34] Fitzgerald, Alison; Ivry, Bob; Pittman, Mark;  “Fed Defies Transparency Aim in Refusal to Disclose,” http://www.bloomberg.com/apps/news?pid=20601087&sid=aatlky_cH.tY&refer=worldwide

 [35] Corsi, Jerome;” Obama’s G20 plan kisses off Declaration of Independence,” April 8, 2009,http://worldnetdaily.com/index.php?fa=PAGE.view&pageId=94331

http://urlet.com/schedule.anything

http://www.rgemonitor.com/emergingmarkets-monitor/257856/chinas_september_data_suggest_that_the_long-term_overcapacity_problem_is_only_intensifying

By Greg Morcroft, MarketWatch

NEW YORK (MarketWatch) — Seven more banks failed Friday, pushing the 2009 total to 106 and marking the first year since 1992 that at least 100 have gone under

Experts suggest we could be no more than 10% of the way through this cycle of bank collapses, which is sure to be the worst run of closures since the Great Depression.

http://urlet.com/len.man

http://www.marketwatch.com/story/bank-failures-hit-100-for-year-2009-10-23