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The principal missing piece in
the grand American mosaic of banking destruction, corrupt collusion,
fraudulent bonds, Wall Street control, suppressed regulators, compromised
ratings agencies is JUSTICE. Foreign entities are aghast as the
lack of prosecution, remedy, and removal from positions of power, as policy
continues to be set by the participants responsible for the structural
failure and prevalent fraud. Their actions are reaching climax levels. The
climax of the Wall Street strangehold is the confiscation of the TARP funds
to date. However, whatever has not been nationalized is subject to lawsuits.
The pattern of human behavior indicates that lawsuits can spawn additional
lawsuits, and quickly control is lost. It is open season on Citigroup, Bank
of America, and perhaps other lesser players. Two major lawsuits have
the potential to change the landscape. Curiously, neither receives
much publicity. Then again, the press seems somewhere between subservient and
compromised anyway. They have failed to shine many lights on much of any
developments until after the damage is done. Odd court cases, missing people,
factional politics, and border patrols seem more important on their agendas. Much
of the US media & press seem a graduation of National Inquirer
to television.
The USFed might be vulnerable. Could
it be that the US Federal Reserve will face a growing expanding escalating
lawsuit that finally is heard before the US Supreme Court? Give it a 50-50
chance, but this really needs a Vegas line. They are behaving and reacting
much like a crime syndicate. Stonewall tactics by the USFed on disclosed
disbursement of TARP funds continues, despite court challenges. The USFed
has begun to take on some curious similarities to a crime syndicate
central clearinghouse. It refuses to disclose which banks received bond
swaps, and refuses to reveal what assets it accepted as collateral. Before
long, RICO Laws against racketeering might be invoked. The word has been
mentioned in the press by one particular Congressman. Recall. The Racketeer
Influenced & Corrupt Organizations Act of 1970 has been a powerful legal
weapon to confiscate crime syndicate assets. The RICO Laws have been properly
used much more than abused.
FEDERAL RESERVE
CHALLENGED IN LAWSUIT
Bloomberg filed a lawsuit under
the Freedom of Information Act on November 7, requesting details from the
USFed on Congressional TARP fund confiscation. The Freedom of Information Act
obliges federal agencies to make government documents available to the press
and public. The USFed operates as a contractor agency, but possibly with as
much scrutiny permitted as Halliburton on basic fraud. The Bloomberg lawsuit
is Bloomberg LP vs Board of Governors of the Federal Reserve System,
08-CV-9595, US District Court, Southern District of New York (Manhattan).
Incredibly, with shock to many,
the USFed will continue to withhold internal memos as well as information
about trade secrets and commercial information. Are you kidding
me? TRADE SECRETS BY AN AGENCY HIRED TO MANAGE THE DOLLAR AND TREASURYS??? That
is quantum levels more preposterous than defying the USCongress when it
pursued accounting of the gold status owned by the nation. Anger has erupted
within the USCongress. The USFed appears to be hiding information so as to shield
its own corruption, as its public response cites ‘substantial
multiple harms’ being avoided. Harm to whom? Is this Nixon all over
again citing ‘Executive Privilege’ to conceal crimes and
misdemeanors? The USFed is scared and on the defensive. The Board usually
does not go into such detail about its position. Lee Levine is from the law
firm Levine Sullivan Koch & Schulz. He said, “This is uncharted
territory. The Freedom of Information Act was not built to anticipate this
situation. That is evident from the way the Fed tried to shoehorn their
argument into the trade secrets exemption.”
This case is worth watching, but
strangely receives very little attention. It could be a landmark case that
holds together the nation’s financial purse strings. My conjecture is
that the USFed is intent on hiding numerous transactions that hide the tracks
of deep Wall Street corruption in bond redemption, with powerful motive to
avert international lawsuits, and a pervasive desire to prevent grassroots
solutions since mortgage bond securities have very little legal standing in
legitimacy. WE ARE WATCHING THE DENOUEMENT OF THE BIGGEST BOND FRAUD IN
MODERN HISTORY.
USFed Chairman Ben Bernanke and
Treasury Secy Henry Paulson said in September they would meet demands for
transparency in a $700 billion bailout of the banking system. They lied. Both
the antagonists and the USFed might soon realize that a battle has been
waged, one against a crime syndicate.
Can you say Supreme
Court?
Could a test come of
the national sovereignty versus crime syndicates?
If the case reaches the highest
court, it will likely be stuck on its front steps.
IMPLICATIONS TO STABILITY AND SECURITY
OF MONEY ITSELF INVITES A HUGE HIDDEN GOLD MOTIVE. A CANCER IS GROWING UNDER
THE USDOLLAR AND USTREASURY BONDS, WHOSE ALTERNATIVE IS CLEARLY GOLD.
GOLDMAN SACHS: THE
NEW CORLEONE FAMILY
Anyone who has missed
that the profound influence by Goldman Sachs leadership at the Dept Treasury
has contributed to the destruction of both the USEconomy and US banking
system is simply asleep since 1992. JPMorgan is the other principal player.
Neither will likely ever be prosecuted, since they ARE the USGovt on all
matters and dealings financial. The entire Enron sequence of lawsuits proved
JPMorgan will never be pinned down and prosecuted or successfully sued. Accounts
of the third World Trade Center building on 11 Sept 2001, where Enron records
were kept in JPMorgan offices, read like a bad James Bond movie with a Warren
Commission cloak. Treasury Secy Paulson has pulled off a successful Coup
d’Etat to usurp power, by means of assumed prestige, claimed expertise,
naked intimidation, and clever contract language. His defiant yet slippery
Kashkari has been pointman for the stonewall effort.
Permit a sidetrack
here. USFed Chairman Bernanke has been so busy playing with his alphabet
soup, that he forgot to drop any helicopter money at all to the Main Streets
of America. We were told that was his main job description. At least that was
his sales pitch to obtain the job. Instead, he drains funds from the private
mainstream banking system in order to pour those funds into Wall Street
firms. The press networks constantly repeat that Bernanke is flooding the
system with liquidity. Yet he is only flooding Wall Street balance sheets and
enabling executive bailouts. Back to Goldman. Sorry, one more thing. Is it
necessary to be a Goldman Sachs veteran to obtain a US Administration Cabinet
post, or to be head of a Canadian central bank? One must wonder. Has anything
gone right in the USEconomy or US financial system at the conclusion of a presidential
term with Goldman Sachs men in cabinet posts? RECENT HISTORY SAYS NO. Shut up
and quit digressing!
Assistant Treasury Secy Neel
Kashkari seems to me no different from Sonny Corleone in the Godfather
family, but mine is a suspicious eye. Does anybody notice that the name
Kashkari is close to Kash & Karry? His testimony last week as Asst
Treasury Secy resembled a slippery snake oil salesman. He actually had the
audacity to claim that the lack of US financial market collapse was proof
that they wisely administered the funds. THEY WENT 85% TO EXECUTIVE BONUSES
TO FED RESERVE BANKERS!!! In fact, the lack of market collapse is proof that
the $125 billion was NOT desperately needed for banks to avert a disaster. Kashkari
is careful in his words. For instance, he claimed that his office has no
contractual agreements with big banks to limit lending and horde cash. All
pressures have been stated verbally only!
Hank Paulson is treated with kid
gloves by the media networks. He is really the wrong messenger for the entire
Wall Street mortgage related bailout. Paulson was one of the five executives
who went to the Securities & Exchange Commission in 2004 to plead for
permission to lever upward the Wall Street firm businesses even more, like to
30:1 or 40:1 ratios. Without any question, he was an architect in the crisis.
AS PRESTIGE WEARS OFF ON GOLDMAN
SACHS, GOLD WILL FILL A VACUUM. There are reasons why the Goldman Sachs gold
short position in Tokyo has dwindled to nearly zero in the last two years. Goldman
is secretly going long gold, in my view, just like they went short
the mortgage bonds just a couple years ago. THE WALL STREET ELITE MIGHT SOON TURN ON A DIME AND GO LONG GOLD,
WHEN THEY PULL THE SWITCH AND IGNITE REFLATION IN ORDER TO PREVENT A SYSTEMIC
COLLAPSE.
CITIGROUP LAWSUIT
Citigroup is in hot water in
three key ways: general urgent need for bailout, revealed motive for timing
of bailout, and a potentially damaging lawsuit. The legend of
Robert Rubin is being shattered and ruined. This man has no basis for any
claim of elite or icon status. His career as a legendary currency trader was
followed by a ministry post that saw a path of vanished gold during a failed
Strong Dollar Policy and a tech telecom stock bust, then followed by a ruined
Citigroup from risk gone wild after pursued deregulation. It seems unbridled
competition without regulation breeds destruction among the kids without
babysitters. The broad strokes of the big hastily crafted $322 billion
bailout deal for Citigroup has many components, most steeped in
corporate failure, deep insolvency, and unabashed desperation.
The entire rescue package seems
a drop in the bucket, compared to the $2300 billion in assets on the
Citigroup balance sheets, much of which are soured. Friedman Billings Ramsey estimated independently that Citi needed $160B in
fresh capital to turn solvent. This deal is patchwork, hastily cobbled
and arbitrarily applied, that leaves them still insolvent. This is pure life
support. Future rescue will obviously be needed. The secret motive for
protecting the credit markets from a Citigroup total bust and liquidation was
their heavy involvement in credit derivatives. They are the second biggest
player. Explosions in credit derivatives would result in a sequence of
Hiroshima bombs, one triggering another, all much bigger than Lehman
Brothers, probably extending to the basement chambers of JPMorgan and Bank of
America. In a sense, an argument can be made that Citigroup blackmailed the
USGovt and Dept Treasury with its passively placed bombs under CDS labels.
JUST WHY WASN’T CITIGROUP
LED TO THE SLAUGHTERHOUSE OF BANKRUPTCY AND THE VATS OF LIQUIDATION? First,
some truly wealthy insider Wall Street superstars would possibly face ruin or
deep embarrassment. Second, their mortgage bond and related leveraged
security portfolio would cause a problem 10x bigger than Lehman Brothers. Third,
their credit derivatives book would set off several Hiroshima bombs, with
uncertain outcome of spread darkness. Fourth, their failure would very likely
ignite fires, explosions, meltdowns, bank failures, and ripple effects that
could possibly bring down the entire banking system in the United States. Fifth, a Citigroup bankruptcy would likely pull back the curtains and reveal
the deep corruption and massive fraud endemic to US banking. Enough on why,
and back to the story leading to an important lawsuit.
A federal lawsuit
has been filed against Citigroup for an alleged complex cover-up of toxic
securities that resulted in huge losses, and thus severe shareholder losses. THIS
CASE SEEMS TO HAVE TEETH AT A TIME WHEN THE PUBLIC WANTS BLOOD, WHICH MIGHT
LEAD TO SEVERAL OTHER MAJOR LAWSUITS AGAINST WALL STREET FIRMS. Named in the
lawsuit were Director Rubin, ex-CEO Chuck Prince, Vice Chairman Lewis Kaden,
along with the current and previous CFOs. In all, over $120 billion in
shareholder value was wiped out. Rubin himself cleared $30.6 million, Prince
$26.5 million, in stock sales. A Ponzi scheme is claimed, wherein Citi
purchased repackaged unmarketable leveraged mortgage securities known as
Collateralized Debt Obligations, but hid their toxic exposure off the balance
sheet in shell corporations. Rubin and other named executives sold $150
million of personal shares at a time when they allegedly benefited from
undisclosed inside information.
THIS LAWSUIT HAS THE POTENTIAL
TO ATTACK THE LEGITIMACY OF HIDDEN BALANCE SHEETS. Such hidden assets falsify
the corporate valuation itself, a gigantic affront to any claim of a fair
market, let alone a free market. Off balance sheets have become executive
playgrounds at best, and the scene of the fraud crime at worst. An
investigation filed by law firm Kirby McInerney cleared the path for the
lawsuit, which has taken the new form of a blanket investor lawsuit. Look for
a mushroom effect of lawsuits soon to occur, encouraged by successful ground
breaking ones. Wall Street firms are extremely vulnerable to lawsuits,
damages, and remedy, like restitution repurchase of fraud-ridden bonds. Look
for the system to be flooded with class action lawsuits in 2009. Wall
Street firms, what is left of them, might be forced to buyback much of their
toxic bond waste. This could become a motive for nationalization of
mortgages!!!
IF WALL STREET FIRMS COME UNDER SEIGE,
THEY MIGHT LOSE THEIR GRIP ON THE GOLD SUPPRESSION AT A TIME WHEN THE COMEX
GOLD IS ALREADY UNDER SEIGE.
MADOFF LAWSUITS NEXT?
The largest Ponzi Scheme fraud
case ever to be prosecuted in the United States has just been announced and
prosecuted. Bernard Madoff Investor Securities is charged in a $50 billion
fraud case by the Securities & Exchange Commission. He is the former
chairman of the Nasdaq stock market, which enabled him to attract huge
investment funds and to fend off wide scrutiny on his methods. His BMIS firm
had partners with Goldman Sachs and Merrill Lynch. Watch that duo go
Scott-free! He faces up to 20 years in a federal prison, and up to a trifling
$5 million fine, 10 thousand times less than his fraud.
The Ponzi Scheme snared numerous
influential well-heeled groups, both charity organizations and foreign
investors, including some extremely wealthy people. It appears that at least
$15 billion of wealth, most concentrated in southern Florida and New York City, has vanished. Complications come from the fact that much income tax was
paid by investors when the gains were total illusions. Numerous complaints
had been filed against Madoff in the past, but the SEC took no action. Madoff
apparently conducted his own trades, managed his own books, and permitted no
independent audits. Renewed criticism has come to the SEC, for once more
being asleep at the desk. Isn’t that what the elite pay the SEC to do? Recall
that when a mid-level SEC officer a couple years ago attempted to run an
investigation against John Mack of Morgan Stanley, he was fired almost
immediately by the SEC. The SEC has forgotten its investigation role,
ever since ex-Wall Street heads have been in control of the commission. That
is like hiring ex-Mafia dons to run a police force.
The Madoff case pushes the door
open even wider for more lawsuits against the elite corners of
Wall Street. The floodgates are not far from being pushed open. GOLD SHOULD
BENEFIT FROM BOTH TARNISHED IMAGE OF THE US$ KNIGHTS OF THE SQUARE TABLE, AND
GRADUAL LOST FOREIGN SUPPORT FOR A CRIMINAL CULTURE IN THE US FINANCIAL DISTRICT. In time, numerous sacrificial lambs will be offered up, some of
surprising identity and lofty status.
BLOOD TRANSFUSIONS TO
A FINANCIAL CADAVER
For a concise disturbing insightful
interview, see the iTulip article entitled “Major US Banks Worse
Than Japan’s Zombies” (CLICK HERE) as the anonymous
industry insider Dr Banker is interviewed. The guest claims the massive
blood infusions have failed to revive the defunct banking system. “The
transfusions usually take two to six months, and typically six months or so
after the crisis is over, are gradually withdrawn over a period of several
months to return total money in the system to pre-crisis levels. My theory
is, and I admit not everyone will agree with it, is this: the patient
is dead… They can keep the intravenous tube hooked up to a pint
bottle or a 100-gallon drum of blood, but it does not matter if the blood
is not circulating through the patient, so he can take it in… Note
that many smaller banks that do not operate as part of the Fed system are
working just fine… The reason: Credit Default Swaps. It is now well
understood that CDS are at the root of today’s financial crisis... CDSwaps
certainly killed [the patient] but removing them is no cure.” Dr
Banker went on to explain how in the last ten years, Credit Default Swaps
alone have sustained the US banking system. Their liquidation would require
the writedown losses of between $5 and $10 trillion. See the transfusions in
the chart below. Bank loans are not forthcoming. The banking system is
defunct. So hundreds of billion$ have been pumped into major US banks, yet they remain comatose. Is their condition dictated by the Paulson gang or
victimized by mortal wounds?
The entire AIG takeover by the
Dept Treasury with USFed loans was intended to place the acidic AIG losses
from Credit Default Swap contracts under the watchful guidance and management
of JPMorgan. They wanted CDSwaps out of public view. The AIG blowups now
do their damage under the USGovt roof, at federal expense, with much reduced
publicity, thus preserving this incredibly queer USDollar rally. AIG has
to date received $205 billion in three tranches, without any enforceable
demand to cut waste and luxury for executives, who ruined the company. Expect
about 40 to 50 more tranches, and at least $2 trillion more in seemingly
endless AIG bailout backstops in the next few years. Maybe AIG will face
some lawsuits soon.
HERE IS THE KEY QUESTION, ASKED
AND ANSWERED MANY TIMES BY ROB KIRBY. If AIG blew up, why didn’t
JPMorgan? If Citigroup blew up, why didn’t JPMorgan? They had
tremendous overlap in book of business. Whatever happened to Citi’s
mortgage book and CDSwap book would have happened to JPMorgan 3x bigger,
louder, and more damaging. The answer is that JPMorgan is a crime syndicate
bank, a toxic chemical factory, free from the obstacles and nuisance of
accounting. They are the USFed alter ego. They manage the ‘Garbage
Can’ and engage in special project amusements like Enron with total
impunity.
THE PLIGHT OF STATES
The whole is made from the sum
of its parts. The states suffering the worst economic and fiscal damage seem
to be California, Michigan, Ohio, Florida, and Nevada. On a percentage basis,
New York and Arizona face the worst fiscal deficit gaps, over 20% of budget,
but California’s is the largest in size. The National Conference of
State Legislatures estimates that the 50 states face $97 billion in
shortfalls over the next 18 to 24 months. They cannot expect little from the
USGovt, which has been negligent so far. MAYBE SOME STATES CAN INITIATE
SOME LAWSUITS AGAINST THE USGOVT FOR NEGLIGENCE AND PREOCCUPATION WITH
WAR!!! My eye is trained on California, which has motive to attempt to
print money. They stand in gray area with IOUs issued for the second time. They
once were usable as legal tender on a limited basis. A WIDER MOVE TO PRINT
GOLDEN STATE DOLLARS COULD PLACE THE USDOLLAR OVER A PSYCHOLOGICAL SINKHOLE.
DOLLAR DEATH RALLY
COMES TO END
The USDollar has rallied for
three months, based upon a massive liquidation of trades that have as their
basis a short in USTreasury Bonds, and based upon massive payouts to Credit
Default Swaps for failed corporate and mortgage bonds. Talk about a bizarre
platform. The top of the USDollar rally was called in my November Hat
Trick Letter. Other foreign currencies are sure to take wicked blows and
endure downward spirals, but the USDollar rally is largely done. The next
blows will come from the march toward 0% in the Fed Funds rate. This is the
badge of shame for USFed Chairman Bernanke to wear. He has had 16 months to
work his magic, to lower interest rates, to flood the system with phony
money. All he has done has been to flood Wall Street firms with money, and
starve Main Street and its many resident banks. He has secretly run the
agenda of his masters, TO ENABLE THE CONSOLIDATION OF FEDERAL RESERVE BANKS. They
are brimming with reserves, lending next to nothing, and are preparing grand
acquisitions of assets intentionally pulled down in price.
NEXT IS THE DISINTEGRATION OF
THE USECONOMY, a process already begun. The financial sector was never
supposed to lead any economy, but rather serve it toward capital formation
and functional lubrication. The complete and total thunderous crash of the
financial engineering monstrosity and risk pricing models has set the
USDollar up for collapse. The only thing that would breathe new
Frankenstein life into it would be another major failure of a New York financial firm. The
current rally this autumn was a fakeout.
The fundamentals of the USDollar
are mired in failure. The banking system is insolvent. The households in America with mortgages are 18% insolvent. The jobs wagon just rolled over a cliff, as one
million monthly job losses are likely by summertime. The car industry is in
ruins, and the retail chains face major shutdowns. The eradication of the
United Auto Workers union is the agenda, which if not permitted, will result
in untold job losses throughout the biggest vertically integrated factory and
financial network in the nation. Newspapers and websites are seeing their ad
revenues slowly vanish, sure to lead to job cuts. Major universities and
colleges are forced to find a way to continue without the benefit of rising
endowments, thereby forcing job cuts and construction pullbacks. The hidden
risk is the gigantic sinkhole of insurance firms, which endure liquidation,
thus exposing thousands of companies to shutdowns.
The USTreasury Bill bubble is
soon to lose its luster, tarnished by chronic near 0% offered yields. Its
supply requirements will lead to exhaustion. The investment community will
seek an alternative in gold, especially when all cylinders will be fired up
to produce inflation. The policy makers are inching toward the inevitable
decision to nationalize mortgages. By summertime, a panic will
enter the picture, which will motivate a movement into GOLD for safe haven. The
COMEX gold fireworks should light up the skies long before July
Fourth.
Jim Willie CB
Home : Golden
Jackass website
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