THE FINANCIAL MELTDOWN EXPLAINED !

But first *** A short explanation of how we got to where we are

Today's banking crisis is the THIRD trillion dollar plus

US-caused financial meltdown in the last twenty years.

Each one of these crises came into being through the same basic

mechanism...the fraudulent over-valuing of financial assets by

Wall Street - with a "wink and a nod" (and sometimes a lot more)

from the White House and Congress.

The fraudulently valued assets stimulate the economy, impart

the illusion of health and then, inevitably, the fraud goes

too far and the whole house of card comes painfully crashing

back to earth.

The three trillion dollar plus frauds were:

Fraud #1: The so-called "Savings and Loan Crisis" of the late 80s

Fraud #2: The so-called "Tech Bubble" of the late 90s

Fraud #3: The so-called "Credit Crisis" of today

*** How the scam works

The mechanism of these frauds is simplicity itself...

...Take a shaky financial asset and blow up its value

and then sell as much of it as you can.

In the "Savings and Loan Crisis," the instrument was junk bonds.

In the "Tech Bubble" it was Internet stocks.

In the "Credit Crisis" it was individual mortgages collected

into pools and then re-sold to investors.

In each case, normal, well established "bread and butter"

financial principles were consciously thrown away by Wall Street

with no hint of protest from federal regulators.

***The "Savings and Loan Crisis" dissected

Junk bonds caused the Saving and Loan crisis which

resulted in the US taking over the assets of hundreds of

banks and selling them back over time to the marketplace

at fire sale prices.  

Junk bonds, which caused the "Savings and Loan Crisis" were

shaky bonds that were pumped up by deliberate misrepresentation

and what I call "staged dealing."

Bonds get their value from two things: the amount of interest

they pay and how safe they are.

"Junk" bonds have to pay higher interest because they are less

safe. Therefore, until the "Savings and Loan Crisis,"  savings

and loan banks banks were not allowed by law to buy them and call

them assets.

Reagan/Bush changed all this and then a group of Wall Street

fraudsters used the new loophole to kick off an orgy of junk

bond creation and junk bond selling to banks and insurance

companies.

The crooks would deal the junk bonds back and forth

amongst themselves thereby establishing their "value"

and then they'd sell them to outsiders. The bonds

then became "assets" which could be borrowed against

and leveraged to buy even more bonds.

When the bonds failed, the banks failed and in stepped the

US government to "fix" the problem that it created at the cost

of at least one trillion dollars to US tax payers.

Deja vu, eh? 

***The "Tech Bubble" dissected

The instrument of fraud in the "Tech Bubble" was Internet

stocks, start ups in particular.

A stock gets its value from the underlying company's sales,

its growth and its overall prospects for the future.

Pre-tech bubble, companies used to have to prove themselves

by being in existence for several years before they could

be sold on major exchanges.  That standard was thrown away

during the tech bubble.

To pump of their values, the companies engaged in

"staged dealing" just like the junk bond crooks.

Company #1 would "sell" 20 million dollars in banner

ads to Company #2 which would in turn "sell" 20 million

in banner ads to Company #1. 

In fact, nobody sold anybody anything. Company #2 ran

ads for Company #1 and billed it for them. Company #1

ran ads for Company #2 and billed for an equal amount.

These should have been called media trades not sales, but

Wall Street was happy to claim them as legitimate cash sales

and then use the sales numbers to fraudulently value these

companies - many of them totally worthless - in the

hundreds of millions and sometimes even the billions.

***The "Credit Crisis" dissected

By now, you see how the scheme works.

It's not complicated at all.

You take near worthless pieces of paper (junk bonds, stock

of start up Internet companies, etc.) and declare them to

be good as gold.

Then you create as many junk bonds and Internet start up

stocks as you get and sell them as fast as you can.

In the case of our current crisis, the instrument of fraud

was so-called sub-prime mortgages.

Previously, sub-prime mortgages had very little trading value.

Only people in the sub-prime industry itself dealt in them and for

good reason. They're tricky to value and packed with financial

peril.

But Wall Street changed all that.

Wall Street said: "If we take LOTS of these mortgages and assemble

them into large pools and then slice and dice the pools in various

ways, we can sell the slices to banks and other investors as AAA

paper."

It sounds crazy, doesn't it?

If the underlying pieces of paper are garbage, how does assembling

a whole bunch of garbage into one place make it "better?"

It doesn't, of course, and this is a principle even a three year

old child can understand.

But greed and the need to pump up a shaky economy for propaganda

purposes are two very strong motivators.

Banks created these mortgage pools, sold them to each other,

and they by virtue of these "staged sales" declared them valuable.

Do you recognize the pattern now?

If you do, then you are now smarter than all the assembled j@ck@sses

who do financial reporting because they apparently can't - or

won't. 

This is the THIRD trillion-dollar plus fraud driven financial

meltdown in twenty years and apparently no one in the financial

news media can see how it happened.   

***But there's more...

Junk bonds were mass manufactured as fast as the crooks could

invent them. Ditto for Internet stocks.

But how did hundreds of billions of dollars worth of "toxic"

mortgages suddenly come into being?

Why did the mortgage industry change its lending standards so

radically and so suddenly to make their creation possible?

And why did real estate lending regulators in all 50 states - 

because real estate lending is a STATE-level issue not a federal

- go along with it?

Here's where it gets very interesting...

The fact is state-level lending regulators were VERY concerned

about what was going on.  They have been for years.

And they not only expressed their concern clearly, they also

took SERIOUS concerted legal action to stop lenders from making

bad real estate loans to their citizens.

(Most of the sub-prime loans in the news so much today were

designed to screw the people who borrowed the money and can

rightly be called "predatory" loans.)

Guess who stopped the states from enforcing their own time-proven

real estate lending laws and thus created the raw material that

made the current "Credit Crisis" possible?

*** The trillion dollar plus question

If you're a US taxpayer, you're going to pay for this fraud

so you might as well know who did it to you.

His initials are GB.

You know him well.

But perhaps more interesting is the name of the person who

single-handedly rallied first state attorneys general and then

fellow governors to fight the creation of these loans and who

in the process became Public Enemy #1 to the Bush Administration...

His initials are ES.

If you follow "silly" US political scandals, you'll recognize

his name instantly when you hear it. 

And you will *finally* understand why he was quickly and

permanently assassinated politically earlier this year.

Had ES been allowed to "live," he would have been in position to

remind everyone every day of who made the current meltdown

possible.

Instead, he was silenced very effectively. Not with a bullet

in the back of the head, but the net effect was just the same.

So effective was his assassination that no one can even

mention his name in connection with today's crisis without

risking ridicule, or worse. 

Last note:

The crisis this fraud has created is *exponentially* bigger

than the S & L and Tech Bubble combined.

It's not going to be resolved by a quick "patch up" and will

likely have the same impact on the current generation that the

depression of the 1930s had on its parents, grandparents and

great grandparents.

On that cheerful note, here's the big story everyone missed

this year and now you'll finally know what REALLY happened

and why:

Mortaging America's future
for a quick buck

This video was originally posted in March of 2008

http://www.brasschecktv.com/page/291.html

It's one of the most amazing displays of journalistic incompetence and malpractice in recent memory.

The US news media failed to draw the obvious connection between the bizarre federal law enforcement investigation and leak campaign about the private life of New York Governor Spitzer and Spitzer's all out attack on the Bush administration for its collusion with predatory lenders.

While the international credit system grinds to a halt because of a superabundance of bad mortgage loans made in the US, the news media failed to cover the details of Spitzer's public charges against the White House.

Yet when salacious details were leaked about alleged details of Spitzer's private life, they took that information and made it the front page news for days. 

To the 9/11 fiasco, the Iraq War, the travesty of the federal response to Hurricane Katrina, and the shredding of the US Constitution, we can now add a deliberate and reckless undermining of the credit and banking system of the US to the list of Bush administration "accomplishments."

No external enemy, or group of external enemies, could have done as much harm to the nation as this group has in less than eight years. 

Hey, do you think it's a coincidence that a Bush was involved the lasttime the US banking industry fell into a black whole because of White House-facilitated fraud?

There's actually a lot of money to be made blowing up banks. Here's how Bush Sr. and his friends in the Mafia and CIA profited from it the last time:

Bush, the Mafia, the CIA and the Savings and Loan Scandal http://www.brasschecktv.com/page/411.html

Banking - Bush style

Regular Brasscheck TV viewers know that throughout its second term, the Bush administration actively interfered with states that attempted to enforce their own state lending laws. 

Bush & Co. used the Office of the Controller of the Currency to sue states like New York to stop them from going after predatory lenders. 

Bush Jr. is not the first Bush to get "hands on" involved in shaping the lending industry to his will. 

Many know that one of this brothers, Neil, was part of a spectacular Savings & Loan failure in the 1980s. 

What far fewer people are aware of is how deeply the CIA, organized crime and, George Bush Sr. were involved in the Savings & Loan disaster which caused US taxpayers and estimated trillion dollars plus.

The term of art for these kinds of operations is a "bust out." 

The scam works as follows: an organized crime group takes over a business, borrows as much as it can in the business' name, fails to pay vendors and then disappears with all the cash.

The Bush family and its associates in organized crime and the CIA have figured out how to run this scam on a multi-hundred billion dollar level using the entire US banking system as its playground. 

When you consider that Reagan was probably out of it from Day One of his term and that Bill Clinton is a close associate of George Bush Sr., the Bush crime syndicate has been influencing when not outright running the executive branch continuously since 1980, which, perhaps not so coincidentally, marks the earliest days of the credit bubble the economy is now having serious trouble digesting.  EXECUTIVE RESUME Real Time w/ Bill Maher | Naomi Klein and the Shock Doctrine http://www.youtube.com/watch?v=nipz1pEl71Q   Bill Maher and Paul Krugman "We Need Better Government" http://www.youtube.com/watch?v=nPYyYcelnyw

ALSO…

http://whitenoise.webnode.com/

Meanwhile...

"We are watching a poorly staged rendition of Wag the Dog , interpreted for the morbidly stupid and performed by the criminally insane." - Jules Carlysle