Former Treasury Secretary Henry Paulson Says Russia Urged China to Dump Fannie, Freddie Bonds

Sure! That is called ‘his-story’ (Henry Paulson’s fairy tale).

See also:

Paulson Says He Was Prepared to Guarantee Lehman (BusinessWeek):

Jan. 29 (Bloomberg) — Former U.S. Treasury Secretary Henry Paulson says in his memoir that he was prepared to support a government backstop to prevent the bankruptcy of Lehman Brothers Holdings Inc. until he learned the firm’s assets were so mis- marked it would have guaranteed a loss to taxpayers.

As of  ‘now’ the US taxpayer has already lost everything, because of bailouts, stimulus packages, quantitative easing etc., which only benefited the banksters and the elite. It is just that the people don’t know it yet.

The US government and the Fed are bankrupting America!

As a side note:

If you are an investor and your investment starts to look really bad and is about to lose a lot of money, then you better sell it straightaway.

China is also about to lose a lot of money from holding US Treasuries, and it has now become very difficult to sell them without tremendous consequences, but the bailout/stimulus bubble will finally blow up. This will be the end of the dollar and the US as we know it.

Just think about the big dilemma the Chinese are in now, because of the irresponsible economic policies of the US.

I am not saying that China ‘always’ acted responsible. This is a created crisis. This is the Greatest Depression and it has only just begun.


henry-paulson
Henry Paulson, former U.S. treasury secretary, testifies at a House Oversight and Government Reform Committee hearing in Washington, D.C., on Jan. 27, 2010. (Bloomberg)

Jan. 29 (Bloomberg) — Russia urged China to dump its Fannie Mae and Freddie Mac bonds in 2008 in a bid to force a bailout of the largest U.S. mortgage-finance companies, former Treasury Secretary Henry Paulson said.

Paulson learned of the “disruptive scheme” while attending the Beijing Summer Olympics, according to his memoir, “On The Brink.”

The Russians made a “top-level approach” to the Chinese “that together they might sell big chunks of their GSE holdings to force the U.S. to use its emergency authorities to prop up these companies,” Paulson said, referring to the acronym for government sponsored entities. The Chinese declined, he said.

Russia’s five-day war with U.S. ally Georgia started on Aug. 8, the same day as the opening ceremonies of the Beijing Games. Prime Minister Vladimir Putin told U.S. President George W. Bush during those ceremonies that “war has started,” according to Dmitry Peskov, Putin’s spokesman.

“The report was deeply troubling — heavy selling could create a sudden loss of confidence in the GSEs and shake the capital markets,” Paulson wrote. “I waited till I was back home and in a secure environment to inform the president.”

Russia never approached China about dumping U.S. bonds, Peskov said today. “This is not the case,” he said by phone.

Russia sold all of its Fannie and Freddie debt in 2008, after holding $65.6 billion of the notes at the start of that year, according to central bank data. Fannie and Freddie were seized by regulators on Sept. 6, 2008, amid the worst U.S. housing slump since the Great Depression.

Read moreFormer Treasury Secretary Henry Paulson Says Russia Urged China to Dump Fannie, Freddie Bonds

America’s Impending Master Class Dictatorship!

This article is a MUST-READ!

This is not a conspiracy. This is politics and economics.

Wake up America! You will lose everything, if you do not act NOW.

Prepare yourself for a complete controlled meltdown. The greatest financial collapse in world history.

A hyperinflationary depression. THE Greatest Depression.

The Fed and the US government are destroying America!

(More information at the end of the following article.)


“The people no longer have elected representatives; they have elected traitors.”

stewart-dougherty

By Stewart Dougherty

Stewart Dougherty is a specialist in inferential analysis, the practice of identifying historic and contemporary patterns and then extrapolating their likely effects upon the future. Dougherty was educated at Tufts University (B.A., magna cum laude), and Harvard Business School (M.B.A. and an academic Fellow).

FOREWORD: At certain times, focusing on the big picture is important not just for investment success, but for personal welfare, and even survival. We believe such times are here. It is estimated that 98% of Americans have never held a gold coin in their hands. Yet 100% of Americans regularly handle Federal Reserve Notes. From a contrarian standpoint, the financial message from those two statistics is clear. Even so, gold is much more than money or an investment medium; it stands for liberty and throughout history has facilitated escape and ensured freedom. Never having touched a gold coin is the monetary equivalent to never having breathed fresh air, felt the warmth of sunshine, looked up at the stars or risen from the gutter. Fiat Federal Reserve Notes are becoming nothing more than sewage decomposing in the vast, toxic septic tank of predatory Washington politics, epic Federal Reserve arrogance and error, blatant Wall Street fraud and outright Master Class plunder. Below, we outline America’s troubling and compounding predicament, and urge you to think about how to protect yourself from its consequences, both financially and personally.

Thanks to the endless barrage of feel-good propaganda that daily assaults the American mind, best epitomized a few months ago by the “green shoots,” everything’s-coming-up-roses propaganda touted by Federal Reserve Chairman Bernanke, the citizens have no idea how disastrous the country’s fiscal, monetary and economic problems truly are. Nor do they perceive the rapidly increasing risk of a totalitarian nightmare descending upon the American Republic.

One stark and sobering way to frame the crisis is this: if the United States government were to nationalize (in other words, steal) every penny of private wealth accumulated by America’s citizens since the nation’s founding 235 years ago, the government would remain totally bankrupt.

According to the Federal Reserve’s most recent report on wealth, America’s private net worth was $53.4 trillion as of September, 2009. But at the same time, America’s debt and unfunded liabilities totaled at least $120,000,000,000,000.00 ($120 trillion), or 225% of the citizens’ net worth. Even if the government expropriated every dollar of private wealth in the nation, it would still have a deficit of $66,600,000,000,000.00 ($66.6 trillion), equal to $214,286.00 for every man, woman and child in America and roughly 500% of GDP. If the government does not directly seize the nation’s private wealth, then it will require $389,610 from each and every citizen to balance the country’s books. State, county and municipal debts and deficits are additional, already elephantine in many states (e.g., California, Illinois, New Jersey and New York) and growing at an alarming rate nationwide. In addition to the federal government, dozens of states are already bankrupt and sinking deeper into the morass every day.

The government continues to dig a deeper and deeper fiscal grave in which to bury its citizens. This year, the federal deficit will total at least $1,600,000,000,000.00 ($1.6 trillion), which represents overspending of $4,383,561,600.00 ($4.38 billion) per day. (The deficit during October and November, 2009, the first two months of Fiscal Year 2010, totaled $296,700,000,000.00 ($297 billion), or $4,863,934,000.00 ($4.9 billion) per day, a record.) Using the GAAP accounting method (which is what corporations are required to use because it presents a far more accurate and honest picture of a company’s finances than the cash accounting method primarily and misleadingly used by the U.S. government), the nation’s fiscal year 2009 deficit was roughly $9,000,000,000,000.00 ($9 trillion), or $24,700,000,000.00 ($24.7 billion) per day, as calculated by brilliant and well-respected economist John Williams. (www.shadowstats.com) Fiscal Year 2010’s cash- and GAAP-accounting deficits will likely be worse than 2009’s, given government bailout and new program spending that is on steroids and psychotic.

Putting Fiscal Year 2009’s $9,000,000,000,000.00 ($9 trillion) deficit another way, 17% of America’s private wealth, accumulated over a period of 235 years, was wiped out by just one year’s worth of government deficit spending insanity.

Given this, is it any surprise that Treasury Secretary Geithner has announced that the release of the nation’s FY 2009 supplemental GAAP financial statements has been delayed? Remember, this is the same Secretary Geithner who bullied people to cover up the sordid details of the AIG, or more accurately, the taxpayer-funded, multi-billion dollar, Santa Claus bailout and bonus bonanza for Goldman Sachs. Do you really think this government, characterized as it is by fiscal and monetary secrecy, lies, chicanery, cronyism and stonewalling, wants the people to know what is actually happening? Obviously, it does not, so it hides from the public the inexcusable facts.

Read moreAmerica’s Impending Master Class Dictatorship!

Ron Paul on FOX NEWS: Wall Street Bailout FRAUD

Criminals we can believe in!

The No.1 Trend Forecaster Gerald Celente: Financial Mafia Controlling US and Wall Street



Added: 19th Jan 2010


Added: 19th Jan 2010

See also:

Senator Jim Bunning: SEC Should Probe NY Fed Staff Over AIG (Bloomberg)

SEC hides AIG bailout documents until 2018; Federal Reserve Seeks to Protect US Bailout Secrets (Bloomberg/Reuters)

Timothy Geithner’s Fed Told AIG to Limit Swaps Disclosure (Bloomberg)

New York Fed’s Secret Choice to Pay for AIG Swaps Squandered Billions of Taxpayer Money (Bloomberg)

How Goldman Sachs Made Tens Of Billions From The Economic Collapse Of America In Four Easy Steps

Senator Jim Bunning Slams Fed Chairman Ben Bernanke (C-SPAN)

The No.1 Trend Forecaster Gerald Celente: Financial Mafia Controlling US and Wall Street

‘Fascism is coming to America’, says Gerald Celente


Added: 15th Jan 10

See also:

Survivor, America: ‘It’s Only Going to Get Worse,’ Gerald Celente Says

The No.1 Trend Forecaster Gerald Celente: The Terror And The Crash of 2010

Gerald Celente: ‘Their is no recovery; It’s a coverup. We are already in the Greatest Depression.’

If Nostradamus were alive today, he’d have a hard time keeping up with Gerald Celente.
– New York Post

When CNN wants to know about the Top Trends, we ask Gerald Celente.
– CNN Headline News

There’s not a better trend forecaster than Gerald Celente. The man knows what he’s talking about.
– CNBC

Those who take their predictions seriously … consider the Trends Research Institute.
– The Wall Street Journal

A network of 25 experts whose range of specialties would rival many university faculties.
– The Economist

The US Government Is Preparing For Collapse: Your Legal Right To Redeem Your Money Market Account Has Been Denied

Must-read! Don’t miss to take a close look at the members of the the Group of Thirty!


When Henry Paulson publishes his long-awaited memoirs, the one section that will be of most interest to readers, will be the former Goldmanite and Secretary of the Treasury’s recollection of what, in his opinion, was the most unpredictable and dire consequence of letting Lehman fail (letting his former employer become the number one undisputed Fixed Income trading entity in the world was quite predictable… plus we doubt it will be a major topic of discussion in Hank’s book). We would venture to guess that the Reserve money market fund breaking the buck will be at the very top of the list, as the ensuing “run on the electronic bank” was precisely the 21st century equivalent of what happened to banks in physical form, during the early days of the Geat Depression. Had the lack of confidence in the system persisted for a few more hours, the entire financial world would have likely collapsed, as was so vividly recalled by Rep. Paul Kanjorski, once a barrage of electronic cash withdrawal requests depleted this primary spoke of the entire shadow economy. Ironically, money market funds are supposed to be the stalwart of safety and security among the plethora of global investment alternatives: one need only to look at their returns to see what the presumed composition of their investments is. A case in point, Fidelity’s $137 billion Cash Reserves fund has a return of 0.61% YTD, truly nothing to write home about, and a return that would have been easily beaten putting one’s money in Treasury Bonds. This is not surprising, as the primary purpose of money markets is to provide virtually instantaneous access to a portfolio of practically risk-free investment alternatives: a typical investor in a money market seeks minute investment risk, no volatility, and instantaneous liquidity, or redeemability. These are the three pillars upon which the entire $3.3 trillion money market industry is based.

Yet new regulations proposed by the administration, and specifically by the ever-incompetent Securities and Exchange Commission, seek to pull one of these three core pillars from the foundation of the entire money market industry, by changing the primary assumptions of the key Money Market Rule 2a-7. A key proposal in the overhaul of money market regulation suggests that money market fund managers will have the option tosuspend redemptions to allow for the orderly liquidation of fund assets. You read that right: this does not refer to the charter of procyclical, leveraged, risk-ridden, transsexual (allegedly) portfolio manager-infested hedge funds like SAC, Citadel, Glenview or even Bridgewater (which in light of ADIA’s latest batch of problems, may well be wishing this was in fact the case), but the heart of heretofore assumed safest and most liquid of investment options: Money Market funds, which account for nearly 40% of all investment company assets. The next time there is a market crash, and you try to withdraw what you thought was “absolutely” safe money, a back office person will get back to you saying, Sorry – your money is now frozen. Bank runs have become illegal. This is precisely the regulation now proposed by the administration. In essence, the entire US capital market is now a hedge fund, where even presumably the safest investment tranche can be locked out from within your control when the ubiquitous “extraordinary circumstances” arise. The second the game of constant offer-lifting ends, and money markets are exposed for the ponzi investment proxies they are, courtesy of their massive holdings of Treasury Bills, Reverse Repos, Commercial Paper, Agency Paper, CD, finance company MTNs and, of course, other money markets, and you decide to take your money out, well – sorry, you are out of luck. It’s the law.

A brief primer on money markets

A very succinct explanation of what money markets are was provided by none other than SEC’s Luis Aguilar on June 24, 2009, when he was presenting the case for making even the possibility of money market runs a thing of the past. To wit:

Money market funds were founded nearly 40 years ago. And, as is well known, one of the hallmarks of money market funds is their ability to maintain a stable net asset value – typically at a dollar per share.

In the time they have been around, money market funds have grown enormously – from $180 billion in 1983 (when Rule 2a-7 was first adopted), to $1.4 trillion at the end of 1998, to approximately $3.8 trillion at the end of 2008, just ten years later. The Release in front of us sets forth a number of informative statistics but a few that are of particular interest are the following: today, money market funds account for approximately 39% of all investment company assets; about 80% of all U.S. companies use money market funds in managing their cash balances; and about 20% of the cash balances of all U.S. households are held in money market funds. Clearly, money market funds have become part of the fabric by which families, and companies manage their financial affairs.

Read moreThe US Government Is Preparing For Collapse: Your Legal Right To Redeem Your Money Market Account Has Been Denied

New York Fed’s Secret Choice to Pay for AIG Swaps Squandered Billions of Taxpayer Money

Here is what Timmy, Benny and the boys did to sponsor Goldman Sachs, Deutsche Bank, Societe Generale and other banksters:

“…the New York Fed, led by President Timothy Geithner, took over negotiations with the banks from AIG, together with the Treasury Department and Chairman Ben S. Bernanke’s Federal Reserve.”

“After less than a week of private negotiations with the banks, the New York Fed instructed AIG to pay them par, or 100 cents on the dollar. The content of its deliberations has never been made public.”

WTF have they (Timmy, Benny and the boys) done?

Janet Tavakoli, founder of Chicago-based Tavakoli Structured Finance Inc., a financial consulting firm, says the government squandered billions in the AIG deal.

“There’s no way they should have paid at par,” she says. “AIG was basically bankrupt.”

Far more money was wasted in paying the banks for their swaps, says Donn Vickrey of financial research firm Gradient Analytics Inc. “In cases like this, the outcome is always along the lines of 50, 60 or 70 cents on the dollar,” Vickrey says.

Why have they done it?

One reason par was paid was because some counterparties insisted on being paid in full and the New York Fed did not want to negotiate separate deals, says a person close to the transaction. “Some of those banks needed 100 cents on the dollar or they risked failure,” Vickrey says.

For Timmy fans:
The Federal Reserve buys Fannie Mae bonds; Timothy Geithner is a liar
Treasury Secretary Geithner’s Closest Aides Reaped Millions Working for Banks, Hedge Funds


timmy-timothy-geithner
Timothy Geithner, U.S. treasury secretary, testifies at a House Appropriations Committee hearing in Washington, D.C.

Oct. 27 (Bloomberg) — In the months leading up to the September 2008 collapse of giant insurer American International Group Inc., Elias Habayeb and his colleagues worked nights and weekends negotiating with banks that had bought $62 billion of credit-default swaps from AIG, according to a person who has worked with Habayeb.

Habayeb, 37, was chief financial officer for the AIG division that oversaw AIG Financial Products, the unit that had sold the swaps to the banks. One of his goals was to persuade the banks to accept discounts of as much as 40 cents on the dollar, according to people familiar with the matter.

Among AIG’s bank counterparties were New York-based Goldman Sachs Group Inc. and Merrill Lynch & Co., Paris-based Societe Generale SA and Frankfurt-based Deutsche Bank AG.

By Sept. 16, 2008, AIG, once the world’s largest insurer, was running out of cash, and the U.S. government stepped in with a rescue plan. The Federal Reserve Bank of New York, the regional Fed office with special responsibility for Wall Street, opened an $85 billion credit line for New York-based AIG. That bought it 77.9 percent of AIG and effective control of the insurer.

The government’s commitment to AIG through credit facilities and investments would eventually add up to $182.3 billion.

Beginning late in the week of Nov. 3, the New York Fed, led by President Timothy Geithner, took over negotiations with the banks from AIG, together with the Treasury Department and Chairman Ben S. Bernanke’s Federal Reserve. Geithner’s team circulated a draft term sheet outlining how the New York Fed wanted to deal with the swaps — insurance-like contracts that backed soured collateralized-debt obligations.

Subprime Mortgages

CDOs are bundles of debt including subprime mortgages and corporate loans sold to investors by banks.

Part of a sentence in the document was crossed out. It contained a blank space that was intended to show the amount of the haircut the banks would take, according to people who saw the term sheet. After less than a week of private negotiations with the banks, the New York Fed instructed AIG to pay them par, or 100 cents on the dollar. The content of its deliberations has never been made public.

Read moreNew York Fed’s Secret Choice to Pay for AIG Swaps Squandered Billions of Taxpayer Money

Fall Of The Republic – The Presidency Of Barack H. Obama (The Full Movie HQ)

“When the people find they can vote themselves money, that will herald the end of the republic.”
– Benjamin Franklin


Added: 22. October 2009

Fall Of The Republic documents how an offshore corporate cartel is bankrupting the US economy by design. Leaders are now declaring that world government has arrived and that the dollar will be replaced by a new global currency.

President Obama has brazenly violated Article 1 Section 9 of the US Constitution by seating himself at the head of United Nations’ Security Council, thus becoming the first US president to chair the world body.

A scientific dictatorship is in its final stages of completion, and laws protecting basic human rights are being abolished worldwide; an iron curtain of high-tech tyranny is now descending over the planet.

A worldwide regime controlled by an unelected corporate elite is implementing a planetary carbon tax system that will dominate all human activity and establish a system of neo-feudal slavery.

Read moreFall Of The Republic – The Presidency Of Barack H. Obama (The Full Movie HQ)

The Goldman Sachs Bankster Casino – Where The Hell Is The Outrage?

The Obama administration is pure Wall Street, Federal Reserve, CFR and Trilateral Commission. There is no change. The banksters have free reign in America.

change-we-can-believe-in
Change we can believe in.

Related information:
The US Government: Bought and Paid For
Treasury Secretary Geithner’s Closest Aides Reaped Millions Working for Banks, Hedge Funds
Goldman Sachs Banksters Set to Pay Record £14 Billion in Bonuses
Government Watchdog: Treasury and Federal Reserve Knew Bailed-Out Banks Were Not Healthy, Lying to Americans
Goldman Sachs to be paid $1bn if CIT fails, while US taxpayers would lose $2.3bn
US: Utah approved a $27.3 million incentive package to keep Goldman Sachs, bringing the total amount to $47.3 million
Congresswoman Marcy Kaptur: There Has Been a Financial Coup D’Etat

Mike Shedlock:
“I am outraged that the Obama Administration promised change and did not deliver. “Yes We Can” was a lie. The reality is “It’s Business As Usual, Only Worse, With Higher Deficits”.”

“I am outraged there is not enough outrage over this.”

“Where the hell is the outrage?”


goldman-sachs-banknote

The number of articles and opinions on Goldman Sachs earnings, bonuses, and influence peddling over the past several days is quite stunning.

Many have pointed out the problems; few have expressed outrage over what is happening in general, not just at Goldman Sachs. Let’s take a look.

My take is at the end.

Letting The Dice Roll

Rolfe Winkler at Contingent Capital is writing Letting Goldman Roll The Dice.

Is Goldman really such an indispensable financial intermediary? One look at the firm’s revenue breakdown shows that it’s more casino than anything else, and some of the markets it makes still put the economy in danger.

(Click on image to enlarge.)
goldman-sachs-revenue

Goldman, in other words, generates most of its revenue trading its own money and earning vigorish on customer transactions. It’s a hybrid hedge fund and bookie, with an investment bank and asset management business thrown in for good measure.

With that in mind, one is left to wonder whether Goldman was really worth saving last year. What have taxpayers received for the $50 billion worth of cash and guarantees, for giving Goldman access to the Federal Reserve as its lender of last resort?

Saving Goldman was largely about saving the derivatives market, which is so big and unstable that the death of one counterparty could mean the death of all. With big commercial banks like JPMorgan Chase in deep, saving the derivatives business was as much about protecting depositors and maintaining the integrity of the payment system as it was derivatives themselves.

Read moreThe Goldman Sachs Bankster Casino – Where The Hell Is The Outrage?

Treasury Secretary Geithner’s Closest Aides Reaped Millions Working for Banks, Hedge Funds

Treasury Secretary Timothy Geithner was head of the Federal Reserve Bank of New York and is a member of the Council on Foreign Relations and the Trilateral Commission.

Jim Rogers: Obama administration run by people who caused the latest financial problems

…who intentionally caused the latest financial problems.

Do you still trust the government?:
The Federal Reserve buys Fannie Mae bonds; Timothy Geithner is a liar
The US Government: Bought and Paid For
Congresswoman Marcy Kaptur: There Has Been a Financial Coup D’Etat
– Former Assistant Secretary of the Treasury Paul Craig Roberts On The U.S. Leadership:
“They Are Criminals” – The Potential Here Is Far Worse Than The Great Depression

Change you can believe in!

And now…


geithner-cfr

Oct. 14 (Bloomberg) — Some of Treasury Secretary Timothy Geithner’s closest aides, none of whom faced Senate confirmation, earned millions of dollars a year working for Goldman Sachs Group Inc., Citigroup Inc. and other Wall Street firms, according to financial disclosure forms.

The advisers include Gene Sperling, who last year took in $887,727 from Goldman Sachs and $158,000 for speeches mostly to financial companies, including the firm run by accused Ponzi scheme mastermind R. Allen Stanford. Another top aide, Lee Sachs, reported more than $3 million in salary and partnership income from Mariner Investment Group, a New York hedge fund.

As part of Geithner’s kitchen cabinet, Sperling and Sachs wield influence behind the scenes at the Treasury Department, where they help oversee the $700 billion banking rescue and craft executive pay rules and the revamp of financial regulations. Yet they haven’t faced the public scrutiny given to Senate-confirmed appointees, nor are they compelled to testify in Congress to defend or explain the Treasury’s policies.

“These people are incredibly smart, they’re incredibly talented and they bring knowledge,” said Bill Brown, a visiting professor at Duke University School of Law and former managing director at Morgan Stanley. “The risk is they will further exacerbate the problem of our regulators identifying with Wall Street.”

While it isn’t unusual for Treasury officials to come from the financial industry, President Barack Obama has been critical of Wall Street, blaming its high-risk, high-pay culture for helping cause the financial-market meltdown.

‘Reckless Behavior’

Speaking to financial executives last month, Obama said: “We will not go back to the days of reckless behavior and unchecked excess that was at the heart of this crisis, where too many were motivated only by the appetite for quick kills and bloated bonuses.”

At the same time, the president has promised to change Washington by keeping lobbyists for special interests at a distance and by making decisions in the open. (See: The US Government: Bought and Paid For)

Sperling and Sachs are each paid $162,900 at the Treasury. Along with four others, they hold the title of counselor to Geithner. Sachs, 46, withdrew earlier this year from consideration to be the Treasury’s top domestic finance official, a job that would have required Senate confirmation.

Geithner’s predecessor, Henry Paulson, brought on a coterie of non-confirmed advisers from Goldman Sachs at the end of his term. Paulson, who had been the firm’s chief executive officer, defended the arrangement as necessary to quickly bring in top talent when the financial system was on the verge of collapse.

Read moreTreasury Secretary Geithner’s Closest Aides Reaped Millions Working for Banks, Hedge Funds

Government Watchdog: Treasury and Federal Reserve Knew Bailed-Out Banks Were Not Healthy, Lying to Americans

If people trust the US government and the Federal Reserve, then they are doomed and they deserve it, because they haven’t done they research.

Why would you trust somebody that has been caught lying and stealing almost all of the time?

Why would you trust somebody that has brought down the value of the US dollar to 5 cents compared to 1913, when the Federal Reserve banksters took over?

Why would you trust somebody that has stolen essentially 95% of your money?

Why would you trust somebody that threatens with an economic meltdown if you would take a look into their books?


Senior Officials Had Financial Concerns About Nine Bank Instiutions Receiving TARP Funds

banksters-and-money
The chief watchdog for the government’s $700 billion bailout program says federal officials were trying to contain the worst financial crisis in decades last year with the Troubled Asset Relief Program, but they had concerns about the bank institutions’ financial health. (ABC News Photo Illustration)


The Treasury Department and the Federal Reserve lied to the American public last fall when they said that the first nine banks to receive government bailout funds were healthy, a government watchdog states in a new report released today.

Neil Barofsky, the special inspector general for the Troubled Asset Relief Program (SIGTARP), says that despite multiple statements on Oct. 14 of last year that these nine banks were healthy and only receiving government funds for the good of the country’s economy, federal officials knew otherwise.

“Contemporaneous reports and officials’ statements to SIGTARP during this audit indicate that there were concerns about the health of several of the nine institutions at that time and, as detailed in this report, that their overall selection was far more a result of the officials’ belief in their importance to a system that was viewed as being vulnerable to collapse than concerns about their individual health and viability,” Barofsky says.

Last October, the government was in the midst of trying to contain the worst financial crisis in decades. On Sept. 7, 2008, mortgage giants Fannie Mae and Freddie Mac were placed under conservatorship. On Sept. 15, the massive investment bank Lehman Brothers filed for bankruptcy. The next day, insurance giant AIG needed an $85 billion government loan to avoid collapse.

On Oct. 13, after Congress had passed the $700 billion financial bailout program earlier that month, Treasury provided capital injections for nine institutions that together held over $11 trillion in assets: Bank of America, Citigroup, Wells Fargo, JP Morgan Chase, Goldman Sachs, Morgan Stanley, Merrill Lynch, State Street and the Bank of New York Mellon. As of June 2008, these nine banks accounted for around 75 percent of all assets held by U.S. banks.

In announcing the initial $125 billion provided to these banks, former Treasury Secretary Hank Paulson on Oct. 14 said,These are healthy institutions, and they have taken this step for the good of the U.S. economy. As these healthy institutions increase their capital base, they will be able to increase their funding to U.S. consumers and businesses.”

That same day, the Treasury Department, the Federal Reserve and the FDIC also released a joint statement reiterating that “these healthy institutions are taking these steps to strengthen their own positions and to enhance the overall performance of the US economy.”

Read moreGovernment Watchdog: Treasury and Federal Reserve Knew Bailed-Out Banks Were Not Healthy, Lying to Americans

Paul Craig Roberts: The Economy is a Lie, too

Ben Bernanke IS RIGHT, ‘the recession is over.’

It is now the ‘Greatest Depression’.


Paul Craig Roberts was Assistant Secretary of the Treasury during President Reagan’s first term. He was Associate Editor of the Wall Street Journal. He has held numerous academic appointments, including the William E. Simon Chair, Center for Strategic and International Studies, Georgetown University, and Senior Research Fellow, Hoover Institution, Stanford University.

paul-craig-roberts
Paul Craig Roberts

Americans cannot get any truth out of their government about anything, the economy included. Americans are being driven into the ground economically, with one million school children now homeless, while Federal Reserve chairman Ben Bernanke announces that the recession is over.

economic crisis   The Economy is a Lie, too
Switzerland World Economic Forum Davos
At the urging of Larry Summers and Goldman Sachs’ CEO Henry Paulson, the Securities and Exchange Commission and the Bush administration went along with removing restrictions on debt leverage.

The spin that masquerades as news is becoming more delusional. Consumer spending is 70% of the US economy. It is the driving force, and it has been shut down. Except for the super rich, there has been no growth in consumer incomes in the 21st century. Statistician John Williams of shadowstats.com reports that real household income has never recovered its pre-2001 peak.

The US economy has been kept going by substituting growth in consumer debt for growth in consumer income. Federal Reserve chairman Alan Greenspan encouraged consumer debt with low interest rates. The low interest rates pushed up home prices, enabling Americans to refinance their homes and spend the equity. Credit cards were maxed out in expectations of rising real estate and equity values to pay the accumulated debt. The binge was halted when the real estate and equity bubbles burst.

As consumers no longer can expand their indebtedness and their incomes are not rising, there is no basis for a growing consumer economy. Indeed, statistics indicate that consumers are paying down debt in their efforts to survive financially. In an economy in which the consumer is the driving force, that is bad news.

The banks, now investment banks thanks to greed-driven deregulation that repealed the learned lessons of the past, were even more reckless than consumers and took speculative leverage to new heights. At the urging of Larry Summers and Goldman Sachs’ CEO Henry Paulson, the Securities and Exchange Commission and the Bush administration went along with removing restrictions on debt leverage.

When the bubble burst, the extraordinary leverage threatened the financial system with collapse. The US Treasury and the Federal Reserve stepped forward with no one knows how many trillions of dollars to “save the financial system,” which, of course, meant to save the greed-driven financial institutions that had caused the economic crisis that dispossessed ordinary Americans of half of their life savings.

The consumer has been chastened, but not the banks. Refreshed with the TARP $700 billion and the Federal Reserve’s expanded balance sheet, banks are again behaving like hedge funds. Leveraged speculation is producing another bubble with the current stock market rally, which is not a sign of economic recovery but is the final savaging of Americans’ wealth by a few investment banks and their Washington friends. Goldman Sachs, rolling in profits, announced six figure bonuses to employees.

The rest of America is suffering terribly.

The unemployment rate, as reported, is a fiction and has been since the Clinton administration. The unemployment rate does not include jobless Americans who have been unemployed for more than a year and have given up on finding work. The reported 10% unemployment rate is understated by the millions of Americans who are suffering long-term unemployment and are no longer counted as unemployed. As each month passes, unemployed Americans drop off the unemployment role due to nothing except the passing of time.

The inflation rate, especially “core inflation,” is another fiction. “Core inflation” does not include food and energy, two of Americans’ biggest budget items. The Consumer Price Index (CPI) assumes, ever since the Boskin Commission during the Clinton administration, that if prices of items go up consumers substitute cheaper items. This is certainly the case, but this way of measuring inflation means that the CPI is no longer comparable to past years, because the basket of goods in the index is variable.

The Boskin Commission’s CPI, by lowering the measured rate of inflation, raises the real GDP growth rate. The result of the statistical manipulation is an understated inflation rate, thus eroding the real value of Social Security income, and an overstated growth rate. Statistical manipulation cloaks a declining standard of living.

In bygone days of American prosperity, American incomes rose with productivity. It was the real growth in American incomes that propelled the US economy.

In today’s America, the only incomes that rise are in the financial sector that risks the country’s future on excessive leverage and in the corporate world that substitutes foreign for American labor. Under the compensation rules and emphasis on shareholder earnings that hold sway in the US today, corporate executives maximize earnings and their compensation by minimizing the employment of Americans.

Try to find some acknowledgement of this in the “mainstream media,” or among economists, who suck up to the offshoring corporations for grants.

The worst part of the decline is yet to come. Bank failures and home foreclosures are yet to peak. The commercial real estate bust is yet to hit. The dollar crisis is building.

When it hits, interest rates will rise dramatically as the US struggles to finance its massive budget and trade deficits while the rest of the world tries to escape a depreciating dollar.

Since the spring of this year, the value of the US dollar has collapsed against every currency except those pegged to it. The Swiss franc has risen 14% against the dollar. Every hard currency from the Canadian dollar to the Euro and UK pound has risen at least 13 % against the US dollar since April 2009. The Japanese yen is not far behind, and the Brazilian real has risen 25% against the almighty US dollar. Even the Russian ruble has risen 13% against the US dollar.

What sort of recovery is it when the safest investment is to bet against the US dollar?

Read morePaul Craig Roberts: The Economy is a Lie, too

US: Hyperinflation Nation

Hyperinflation Nation starring Peter Schiff, Ron Paul, Jim Rogers, Marc Faber, Tom Woods, Gerald Celente, and others.

Prepare now before the US dollar is worthless.

Part 1 :

Read moreUS: Hyperinflation Nation

Hank Paulson admits to threatening Bank of America’s Ken Lewis

financial-terrorist-henry-paulson
Hank Paulson admitted to threatening Bank of America CEO Ken Lewis when Lewis threatened to pull the plug on the Merrill Lynch merger last fall.
Photo: AP

Former Treasury Secretary Henry Paulson made no bones about it: He did threaten Bank of America CEO Ken Lewis when Lewis threatened to pull the plug on the Merrill Lynch merger last fall.

“I further explained to him that, under such circumstances, the Federal Reserve could exercise its authority to remove management and the board of Bank of America,” Paulson told the House Oversight and Government Reform Committee on Thursday. “By referring to the Federal Reserve’s supervisory powers, I intended to deliver a strong message.”

That admission pretty much blew away the committee’s top Republican, Rep. Darrell Issa of California.

“The inappropriate behavior of government officials did not start or end with the threat to fire Ken Lewis and Bank of America’s board of directors,” Issa said. “It is a threat to the foundations of our free society when government officials, acting in the midst of a crisis, use dire predictions of imminent disaster to justify their encroachment on our individual liberty and the rule of law.”

Related articles:
Paulson Admits Pressuring Bank of America (ABC News)
Paulson admits bank merger threat (BBC News)

By MARTIN KADY II
7/17/09 4:21 AM EDT

Source: Politico

On the Edge with Max Keiser (07/17/09): ‘Obama is a bum’

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Read moreOn the Edge with Max Keiser (07/17/09): ‘Obama is a bum’

Max Keiser on France 24: Goldman Sachs Are Scum (07/16/09)

A must see!


Max Keiser:
“They are literally stealing a hundred million dollars a day. Goldman Sachs is stealing every day on the floor of the exchange. They should be in the Hague, they should be taken on financial terrorism charges. They should all be thrown in jail”

On the Edge with Max Keiser (07/03/09)

Special guest, Paul Craig Roberts.

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Read moreOn the Edge with Max Keiser (07/03/09)

On the Edge with Max Keiser and Catherine Austin Fitts, former Assistant Secretary of Housing (06/26/09)

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Read moreOn the Edge with Max Keiser and Catherine Austin Fitts, former Assistant Secretary of Housing (06/26/09)

ON THE EDGE with Max Keiser: The Worst Is Yet to Come (05/22/09)

This bear market rally is short lived. The Greatest Depression is here.

This is a MUST-SEE.


Insiders are dumping their stocks at an alarming rate.

Related article:
“The Worst Is Yet to Come”: “If the consumer isn’t petrified, he or she is a damn fool.”

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Source: YouTube

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Source: YouTube

US government forced Bank of America to buy Merrill and conceal rescue facts

Pressure from Fed and Treasury chiefs to complete purchase of Merrill Lynch despite ‘staggering’ losses


Merrill Lynch Chairman and CEO John Thain, left, shakes hands with Bank of America Chairman and CEO Ken Lewis, at a news conference last autumn. The deal between the banks has proved controversial Photo: AP

Ken Lewis’s position at the helm of Bank of America looked increasingly uncertain on Thursday after it emerged he stopped short of pulling out of the deal to buy loss-making Merrill Lynch after Treasury Secretary Hank Paulson threatened to oust him and his entire board.

Mr Lewis BoA’s chairman and chief executive, also knowingly hid the state of Merrill Lynch’s “staggering” losses from shareholders at the behest of former Treasury Secretary Paulson and Federal Reserve chairman Ben Bernanke.

The revelations were contained in a batch of BoA board minutes and testimony from Mr Lewis and Mr Paulson sent by New York Attorney General Andrew Cuomo to the Securities and Exchange Commission and Congressional leaders Chris Dodd and Barney Frank.


Bank of America chief ‘told to buy Merrill or face sack’

Bank boss claims US treasury told him to seal $50bn deal and keep quiet about brokerage’s huge losses

The US government threatened to eject the entire board of Bank of America if the firm pulled out of a $50bn (£34bn) takeover of troubled Merrill Lynch in December, according to new documents set to inflame a bitter shareholder dispute at America’s wealthiest bank.

In potentially explosive testimony to regulators, Bank of America’s chief executive, Ken Lewis, has claimed the US treasury ordered him to press ahead with a buyout of Merrill and to keep quiet about the Wall Street brokerage’s mounting losses.

Full article here: The Guardian


Mr Cuomo, who released details of the exchanges yesterday, has been investigating BoA after Merrill paid $3.6bn (£2.45bn) of bonuses to its staff just days before the acquisition was completed on January 1.

He believes he has uncovered “facts that raise questions about the transparency” of the Treasury’s $700bn bank bail-out programme “as well as about corporate governance and disclosure practices at Bank of America.”

Investors have already expressed serious concern that BoA did not attempt to pull out of the merger with Merrill, given the investment bank racked up losses of $15.84bn in the fourth quarter of 2008. The loss required BoA to take on an extra $20bn of Treasury funding as well as an $118bn loan-loss guarantee.

The documents paint all three men in a bad light. Mr Lewis, though initially keen to pull out of the Merrill deal after revealing the extent of what he calls the “staggering amount of deterioration in its finances,” claimed he caved in after being threatened by Mr Paulson on December 21, ten days before the sale was due to complete.

“That makes it simple. Let’s deescalate,” Mr Lewis told Mr Paulson, with reference to his original plan to invoke a material adverse clause (MAC) to get out of the Merrill deal.

Mr Paulson later testified to Mr Cuomo that he only threatened Mr Lewis “at the request of Chairman Bernanke.”

Read moreUS government forced Bank of America to buy Merrill and conceal rescue facts

The Obama Deception

See also: Ron Paul: Obama Foreign Policy Identical To Bush


1:51:21 – 12.03.2009
Source: Google Video

Bush administration overpaid banks tens of billions of dollars in bailout, watchdog says


Elizabeth Warren , chair of the Congressional Oversight Panel for the Troubled Asset Relief Program (TARP), right, testifies on Capitol Hill in Washington, Thursday, Feb. 5, 2009, before the Senate Banking Committee as Gene L. Dodaro , acting Comptroller General for the United States Government Accountability Office (GAO), left, and TARP Special Inspector General Neil Barofsky, center, listen. (AP Photo/Susan Walsh)

WASHINGTON – The Bush administration overpaid tens of billions of dollars for stocks and other assets in its massive bailout last year of Wall Street banks and financial institutions, a new study by a government watchdog says.

The Congressional Oversight Panel, in a report released Friday, said last year’s overpayments amounted to a taxpayer-financed $78 billion subsidy of the firms.

The findings added to the frustrations of lawmakers already wary of the $700 billion rescue plan, known as the Troubled Asset Relief Program. Congress approved the plan last fall, but members of both parties criticized spending decisions by the Bush administration and former Treasury Secretary Henry Paulson.

Financially ailing insurance giant American International Group, deemed by the Treasury Department to be too big to be allowed to fail, received $40 billion from the Treasury for assets valued at $14.8 billion, the oversight panel found.

Read moreBush administration overpaid banks tens of billions of dollars in bailout, watchdog says

Volcker, Warren and Stiglitz Slam Government Approach to Crisis

Former fed chair Paul Volcker, TARP bailout overseer Elizabeth Warren and Nobel economist Joseph Stiglitz all slammed the government’s approach to the economic crisis today:

  • Volcker accuses Obama’s National Economic Council Director – and consummate financial insider – Lawrence Summers for slowing down the effort to organize a panel of outside advisers on the crisis
  • Warren has discovered that Paulson overpaid by $78 billion dollars for toxic assets purchased from financial institutions
  • And Stiglitz writes:

    “Perhaps the entire strategy is flawed? Perhaps what is needed is a fundamental rethinking. The Paulson-Bernanke-Geithner strategy was … based on a failure to grasp some of the fundamental changes in our financial sector since the Great Depression, and even in the last two decades.

Will Bernanke, Summers and the other people who got us into this mess keep on steering the ship over the waterfall? Or will the powers-that-be start to listen to those telling where we are, and start steering away before it is too late?

Thursday, February 5, 2009

Source: George Washington’s Blog

China Central Bank Attacks Paulson’s ‘Gangster Logic’

China overtook Japan as America’s biggest foreign creditor in September and as of October held 652.9 billion dollars in US Treasury bonds.

So it is China who is financing the unsustainable, debt amassing lifestyle of the US by buying US Treasuries. It is China who keeps the USS Titanic afloat. Whereas Bernanke and Paulson are doing everything in their might to destroy the dollar and the US.

When it will become obvious that the Fed has created massive inflation by creating trillions of dollars out of thin air China will sell its US Treasuries and exit the dollar, which will in turn accelerate the crisis.

Bernanke and Paulson will probably blame China then again for sinking the USS Titanic, after they hit intentionally and with full force the iceberg … with China only trying to make the best of a bad job.


Jan. 16 (Bloomberg) — A Chinese central bank official attacked reported comments by U.S. Treasury Secretary Henry Paulson that China’s high savings rate helped trigger the global credit crisis.

“This view is extremely ridiculous and irresponsible and it’s ‘gangster logic,'” Zhang Jianhua, the bank’s research head, said. His comments were in an interview with the state-run Xinhua News Agency, posted on a government Web site today.

Commentaries by China’s state media this month had already accused Paulson and Federal Reserve Chairman Ben S. Bernanke of playing a “blame game” over the cause of the crisis.

Friction between the two nations includes a U.S. complaint to the World Trade Organization last month that China uses prohibited subsidies to boost exports. The U.S. also regards China’s currency, the yuan, as undervalued and a factor in global trade imbalances.

Massive savings accumulations in countries such as China helped to trigger the crisis by squeezing interest rates and pushing investors toward riskier assets, the Financial Times reported Jan. 2, quoting Paulson.

Zhang countered that U.S. policies that aggravated imbalances in that nation’s economy, which was excessively dependent on consumer spending, were a key cause. He also cited failures in corporate governance and risk management at investment banks.

Read moreChina Central Bank Attacks Paulson’s ‘Gangster Logic’