Monday, August 26, 2013

Underhanded Heart (Not A Mixed Metaphor) of Global Financial Catastrophe Exposed! (ArmsTwisted/Blackmailed Internationally - Thus The Secret Goldman Sachs/JP Morgan/Citi Payoff) Wag the Dog? (Syria Style)

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Women in Engineering Earn 25% Less Than Men

Not really a surprise is it? I always love to get the "new" news. But . . . back to the old news . . . no surprise here either . . . after all, why would the Bilderberg groupies have it any other way? (But why would they take the risk? El Greedo - and its pal - el Stupido - strike again (h/t to "The Big Chill"). And the populace doesn't complain . . . or hardly even notices for years.)

Geithner sent the above memo in 1997. (photo: Vice)
Geithner sent the above memo in 1997. (Photo: Vice)

Confidential Memo at the Heart of the Global Financial Crisis

By Greg Palast, Vice Magazine

24 August 13

hen a little birdie dropped the End Game memo through my window, its content was so explosive, so sick and plain evil, I just couldn't believe it.

The Memo confirmed every conspiracy freak's fantasy: that in the late 1990s, the top US Treasury officials secretly conspired with a small cabal of banker big-shots to rip apart financial regulation across the planet. When you see 26.3 percent unemployment in Spain, desperation and hunger in Greece, riots in Indonesia and Detroit in bankruptcy, go back to this End Game memo, the genesis of the blood and tears.
The Treasury official playing the bankers' secret End Game was Larry Summers. Today, Summers is Barack Obama's leading choice for Chairman of the US Federal Reserve, the world's central bank. If the confidential memo is authentic, then Summers shouldn't be serving on the Fed, he should be serving hard time in some dungeon reserved for the criminally insane of the finance world.
The memo is authentic.

I had to fly to Geneva to get confirmation and wangle a meeting with the Secretary General of the World Trade Organisation, Pascal Lamy. Lamy, the Generalissimo of Globalisation, told me,

"The WTO was not created as some dark cabal of multinationals secretly cooking plots against the people... We don't have cigar-smoking, rich, crazy bankers negotiating."
Then I showed him the memo.

It begins with Larry Summers' flunky, Timothy Geithner, reminding his boss to call the Bank bigshots to order their lobbyist armies to march:

"As we enter the end-game of the WTO financial services negotiations, I believe it would be a good idea for you to touch base with the CEOs…"
To avoid Summers having to call his office to get the phone numbers (which, under US law, would have to appear on public logs), Geithner listed the private lines of what were then the five most powerful CEOs on the planet. And here they are:
Goldman Sachs: John Corzine (212)902-8281

Merrill Lynch: David Kamanski (212)449-6868

Bank of America: David Coulter (415)622-2255

Citibank: John Reed (212)559-2732

Chase Manhattan: Walter Shipley (212)270-1380
Lamy was right: They don't smoke cigars. Go ahead and dial them. I did, and sure enough, got a cheery personal hello from Reed - cheery until I revealed I wasn't Larry Summers. (Note: The other numbers were swiftly disconnected. And Corzine can't be reached while he faces criminal charges.)

It's not the little cabal of confabs held by Summers and the banksters that's so troubling. The horror is in the purpose of the "end game" itself.

Let me explain:

The year was 1997. US Treasury Secretary Robert Rubin was pushing hard to de-regulate banks. That required, first, repeal of the Glass-Steagall Act to dismantle the barrier between commercial banks and investment banks. It was like replacing bank vaults with roulette wheels.

Second, the banks wanted the right to play a new high-risk game: "derivatives trading". JP Morgan alone would soon carry $88 trillion of these pseudo-securities on its books as "assets".

Deputy Treasury Secretary Summers (soon to replace Rubin as Secretary) body-blocked any attempt to control derivatives.

But what was the use of turning US banks into derivatives casinos if money would flee to nations with safer banking laws?

The answer conceived by the Big Bank Five: eliminate controls on banks in every nation on the planet - in one single move. It was as brilliant as it was insanely dangerous.

How could they pull off this mad caper? The bankers' and Summers' game was to use the Financial Services Agreement (or FSA), an abstruse and benign addendum to the international trade agreements policed by the World Trade Organisation.

Until the bankers began their play, the WTO agreements dealt simply with trade in goods - that is, my cars for your bananas. The new rules devised by Summers and the banks would force all nations to accept trade in "bads" - toxic assets like financial derivatives.

Until the bankers' re-draft of the FSA, each nation controlled and chartered the banks within their own borders. The new rules of the game would force every nation to open their markets to Citibank, JP Morgan and their derivatives "products".

And all 156 nations in the WTO would have to smash down their own Glass-Steagall divisions between commercial savings banks and the investment banks that gamble with derivatives.

The job of turning the FSA into the bankers' battering ram was given to Geithner, who was named Ambassador to the World Trade Organisation.

Bankers Go Bananas

Why in the world would any nation agree to let its banking system be boarded and seized by financial pirates like JP Morgan?

The answer, in the case of Ecuador, was bananas. Ecuador was truly a banana republic. The yellow fruit was that nation's life-and-death source of hard currency. If it refused to sign the new FSA, Ecuador could feed its bananas to the monkeys and go back into bankruptcy. Ecuador signed.

And so on - with every single nation bullied into signing.

Every nation but one, I should say. Brazil's new President, Inacio Lula da Silva, refused. In retaliation, Brazil was threatened with a virtual embargo of its products by the European Union's Trade Commissioner, one Peter Mandelson, according to another confidential memo I got my hands on. But Lula's refusenik stance paid off for Brazil which, alone among Western nations, survived and thrived during the 2007-9 bank crisis.

China signed - but got its pound of flesh in return. It opened its banking sector a crack in return for access and control of the US auto parts and other markets. (Swiftly, two million US jobs shifted to China.)

The new FSA pulled the lid off the Pandora's box of worldwide derivatives trade. Among the notorious transactions legalised: Goldman Sachs (where Treasury Secretary Rubin had been co-chairman) worked a secret euro-derivatives swap with Greece which, ultimately, destroyed that nation. Ecuador, its own banking sector de-regulated and demolished, exploded into riots. Argentina had to sell off its oil companies (to the Spanish) and water systems (to Enron) while its teachers hunted for food in garbage cans. Then, Bankers Gone Wild in the Eurozone dove head-first into derivatives pools without knowing how to swim - and the continent is now being sold off in tiny, cheap pieces to Germany.

Of course, it was not just threats that sold the FSA, but temptation as well. After all, every evil starts with one bite of an apple offered by a snake. The apple: the gleaming piles of lucre hidden in the FSA for local elites. The snake was named Larry.

Does all this evil and pain flow from a single memo? Of course not: the evil was The Game itself, as played by the banker clique. The memo only revealed their game-plan for checkmate.

And the memo reveals a lot about Summers and Obama.

While billions of sorry souls are still hurting from worldwide banker-made disaster, Rubin and Summers didn't do too badly.
Rubin's deregulation of banks had permitted the creation of a financial monstrosity called "Citigroup". Within weeks of leaving office, Rubin was named director, then Chairman of Citigroup - which went bankrupt while managing to pay Rubin a total of $126 million.

Then Rubin took on another post: as key campaign benefactor to a young State Senator, Barack Obama. Only days after his election as President, Obama, at Rubin's insistence, gave Summers the odd post of US "Economics Tsar" and made Geithner his Tsarina (that is, Secretary of Treasury). In 2010, Summers gave up his royalist robes to return to "consulting" for Citibank and other creatures of bank deregulation whose payments have raised Summers' net worth by $31 million since the "end-game" memo.

That Obama would, at Robert Rubin's demand, now choose Summers to run the Federal Reserve Board means that, unfortunately, we are far from the end of the game.


# James Marcus 2013-08-24 09:44

Even These Cabalists . . . are 'subservients'; like Bush, Obama and other Politicians...o nly Marching to The Beat, of The Real Bosses (ALL these guys, easily expendable, replaceable puppy dogs; doing what They are told)

# modernjacobin 2013-08-24 08:40

Let's take a look at Larry's comments on women in science and see how they offer light into our present predicament. Here they are in all their pretentious, elitist, neoliberal glory:

"So my best guess, to provoke you, of what's behind all of this is that the largest phenomenon, by far, is the general clash between people's legitimate family desires and employers' current desire for high power and high intensity, that in the special case of science and engineering, there are issues of intrinsic aptitude, and particularly of the variability of aptitude, and that those considerations are reinforced by what are in fact lesser factors involving socialization and continuing discrimination.
And hence, to provoke Larry, his cabal of bratty boys from overrated and overpriced universities possesses a remarkably intrinsic IN-aptitude and variability thereof (ranging from incompetent to highly incompetent) whe n it comes to the regulation of micro- and macroeconomic issues, thereby offering the public overwhelming evidence why the male sex should not be trusted or hired in any matters of domestic or international import.

Or to put it less pretentiously, y'all have the MERDE-as touch: everything you touch turns to shite. So kindly stick to your personal online gambling, oops stock trading. (Love ya, Larry!)

# pappajohn 2013-08-24 07:13

If any of this is true - and you know it all is - then how can anyone say that either US political party has the common good at its core? Both sides are wholly owned subsidiaries of the global financial cabal.

Remember, Summers and Rubin were CLINTON appointees. They all came back to power in 2009 with Obama, but really only replaced Republicans with who were their Wall Street pals. The goals and objectives have been the same since 1981 and before...

(Oh, Jimmy Carter, where are you?? That's right, he was an accident, and was sent packing asap.)

Hillary in 2016: Keep the game afloat!!

# wantrealdemocracy 2013-08-24 07:17

OK. Here is another piece of the filthy pie served to you by the government of the United States. You realize, I hope, that our democracy is dead. Your voice has no effect on your 'representative '. So, what now? Gossip with a friend on your smart phone? Go shopping? Or get angry and figure out a way to fight back?

Almost seems like Greg is overreacting doesn't it?


Except for the following hot stories:

“Wag the Dog” – The Sequel Set in Syria

Who Killed Benazir Bhutto?

Study Finds Wealth Gives Rise to a Sense of Entitlement and Narcissistic Behaviors

"Military Intervention In Syria" US Training "Rebels" Since 2011 And The Complete Grand Plan - The March 2012 Leak


TONY said...

The Syria story takes the palm. Responding to the murder of Syrians by chemicals by bombing more Syrians. #Obusha.

Cirze said...

Couldn't agree more, T.

And did you see the New York Times lead story today?

Top News

Confident Syria Used Chemicals, U.S. Mulls Action


An Obama aide's statement that Syria's promise to allow United Nations inspectors access to the site of a possible chemical attack was "too late" appeared to move the United States closer to potential military action.

Notice how they're confident - they just "know" it's true?

Must be the Judy Miller division of the New York Times!

Somewhere the spirit of Ahmed Chalabi lurks . . . .

Love you,