Posts Tagged Financial Crisis

Nomi Prins: Why The Financial & Political System Failed And Stability Matters

via: ZeroHedge
From: NomiPrins.com
By: Nomi Prins
October 28, 2014

too-big-to-fail

The recent spike in global political-financial volatility that was temporarily soothed by ECB covered bond buying reveals another crack in the six-year-old throw-money-at-the-banks strategies of politicians and central bankers. The premise of using banks as credit portals to transport public funds from the government to citizens is as inefficient as it is not happening. The power elite may exude belabored moans about slow growth and rising inequality in speeches and press releases, but they continue to find ways to provide liquidity, sustenance and comfort to financial institutions, not to populations.

The very fact – that without excessive artificial stimulation or the promise of it – more hell breaks loose – is one that government heads neither admit, nor appear to discuss. But the truth is that the global financial system has already failed. Big banks have been propped up, and their capital bases rejuvenated, by various means of external intervention, not their own business models.

Last week, the Federal Reserve released its latest 2015 stress test scenarios. They don’t even exceed the parameters of what actually took place during the 2008-2009-crisis period. This makes them, though statistically viable, completely irrelevant in an inevitable full-scale meltdown of greater magnitude. This Sunday, the ECB announced that 25 banks failed their tests, none of which were the biggest banks (that received the most help). These tests are the equivalent of SAT exams for which students provide the questions and answers, and a few get thrown under the bus for cheating to make it all look legit.

Regardless of the outcome of the next set of tests, it’s the very need for them that should be examined. If we had a more controllable, stable, accountable and transparent system (let alone one not in constant litigation and crime-committing mode) neither the pretense of well-thought-out stress tests making a difference in crisis preparation, nor the administering of them, would be necessary as a soothing tool. But we don’t. We have an unreformed (legally and morally) international banking system still laden with risk and losses, whose major players control more assets than ever before, with our help.

The biggest banks, and the US and European markets, are now floating on more than $7 trillion of Fed and ECB intervention with little to show for it on the ground and more to come. To put that into perspective – consider that the top 100 global hedge funds manage about $1.5 trillion in assets. The Fed’s book has ballooned to $4.5 trillion and the ECB’s book stands at $2.7 trillion – a figure ECB President, Mario Draghi considers too low. Thus, to sustain the illusion of international systemic health, the Fed and the ECB are each, as well as collectively, larger than the top 100 global hedge funds combined.

Providing ‘liquidity crack’ to the financial system has required heightened international government and central bank coordination to maintain an illusion of stability, but not true stability. The definition of instability is this epic support network. It is more dangerous than in past financial crises precisely because of its size and level of political backing.

During the Panic of 1907, President Teddy Roosevelt’s Treasury Secretary, Cortelyou announced the first US bank bailout in the country’s history. Though not a member of the government, financier J.P. Morgan was chosen by Roosevelt to deploy $25 million from the Treasury. He and a team of associates decided which banks would live or die with this federal money and some private (or customers’) capital thrown in.

The Federal Reserve was established in 1913 to back the private banking system in advance from requiring future such government injections of capital. After World War I, a Laissez Faire policy toward finance and speculation, but not alcohol, marked the 1920s. before the financial system crumbled under the weight of its own recklessness again. So on October 24, 1929, the Big Six bankers convened at the Morgan Bank at noon (for 20 minutes) to form a plan to ‘save’ the ailing markets by injecting their own (well, their customer’s) capital.  It didn’t work. What transpired instead was the Great Depression.

After the Crash of 1929, markets rallied, and then lost 90% of their value. Liquidity froze. Credit for the masses was as unavailable, as was real money. The combined will of President FDR and the key bankers of the day worked to bolster people’s confidence in the system that had crushed them – by reforming it, by making the biggest banks smaller, by separating bet-taking arms from those in which people could store, and borrow money from, safely. Political and financial leaderships collaboratively ushered in the reform measures of the Glass-Steagall Act.  As I note in my most recent book, All the Presidents’ Bankers, this Act was not merely a piece of legislation passed in spirited bi-partisan fashion, but it was also a means to stabilize a system for participants at the top, middle and bottom of it. Stability itself was the political and financial goal.

Through World War II, the Cold War, and Vietnam, and until the dissolution of the gold standard, the financial system remained fairly stable, with banks handling their own risks, which were separate from the funds of citizens. No capital injections or bailouts were required until the mid-1970s Penn Central debacle. But with the bailout floodgates reopened, big banks launched a frenzied drive for Middle East petro-dollar profits to use as capital for a hot new area of speculation, Third World loans.

By the 1980s, the Latin American Debt crisis resulted, and with it, the magnitude of federally backed bank bailouts based on Washington alliances, ballooned. When the 1994 Mexican Peso Crisis hit, bank losses were ‘handled’ by President Clinton’s Treasury Secretary (and former Goldman Sachs co-CEO) Robert Rubin and his Asst. Treasury Secretary, Larry Summers via congressionally approved aid.

Afterwards, the repeal of the Glass Steagall Act, the mega-merging of financial players, the explosion of the derivatives market, and the rise of global ‘competition’ amongst government supported gambling firms, lead to increased speculative complexity and instability, and the recent and ongoing 2008 financial crisis.

Continue Reading At: ZeroHedge.com

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America Secretly Recruited Thousands Of Nazis As Cold War “Assets”

via: ZeroHedge
by: Site Staff
October 27, 2014

Winston Churchill once said that “You can always count on Americans to do the right thing – after they’ve tried everything else.” By ‘everything else’ apparently he also meant hiring thousands of Nazis as Cold War spies and informants and, according to the NYT, “as recently as the 1990s, concealing the government’s ties to some still living in America.”

Because remember when merely associating with Nazi war criminals was enough to get you thrown out of polite society in perpetuity and likely thrown in a US prison, or worse? Well, when the one doing the association is that creature of utmost “fluidity” when it comes to matters of morality, the US government, apparently preaching moral superiority while invading and targeting for extermination world “dictators” whose only crime is being “evil” according to the US government’s pristine moral compass, then everything is forgiven. But before the truth is revealed there will be years of denying, misrepresenting the facts, and outright lying.

So here, according to the NYT, are the facts about Uncle Sam’s employment of Nazis for decades. “At the height of the Cold War in the 1950s, law enforcement and intelligence leaders like J. Edgar Hoover at the F.B.I. and Allen Dulles at the C.I.A. aggressively recruited onetime Nazis of all ranks as secret, anti-Soviet “assets,” declassified records show.”

And while Germans justified their actions during World War II by merely following orders, how did the US seek to validate its grotesque actions? Here is the NYT with the winning phrase of the day, if not year:

They believed the ex-Nazis’ intelligence value against the Russians outweighed what one official called “moral lapses” in their service to the Third Reich.

And there it is: moral lapses. When the market crashes, and the US economy’s long-deferred collapse is now a fact, prepare to hear much more about the so-called moral lapses of bankers, Federal Reserve officials, and tenured economist during the upcoming public tribunals.

But back to America’s double standard in purshing vs retaining Nazi criminals:

The agency hired one former SS officer as a spy in the 1950s, for instance, even after concluding he was probably guilty of “minor war crimes.”

And in 1994, a lawyer with the C.I.A. pressured prosecutors to drop an investigation into an ex-spy outside Boston implicated in the Nazis’ massacre of tens of thousands of Jews in Lithuania, according to a government official.

Evidence of the government’s links to Nazi spies began emerging publicly in the 1970s. But thousands of records from declassified files, Freedom of Information Act requests and other sources, together with interviews with scores of current and former government officials, show that the government’s recruitment of Nazis ran far deeper than previously known and that officials sought to conceal those ties for at least a half-century after the war.

In 1980, F.B.I. officials refused to tell even the Justice Department’s own Nazi hunters what they knew about 16 suspected Nazis living in the United States.

Continue Reading At ZeroHedge.com

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Mainstream Media Exposed

TheRedPillGuide
October 27, 2014

the-western-mainstream-media-at-work

“Modern means of communications – the power afforded by print, telephone, wireless and so forth, of rapidly putting through directive strategic or technical conceptions to a great number of cooperating centers, of getting quick replies and effective discussion – have opened up a new world of political processes. Ideas and phrases can now be given an effectiveness greater than the effectiveness of any personality and stronger than any sectional interest.”
– H.G. Wells

“All over the place, from the populace culture to the propaganda system, there is a constant pressure to make people feel that they are helpless, that they only role they can have is to ratify decision and consume.”
– Noam Chomsky

From the very moment the printing press came to be, the course of history was instantly altered.

Information, and more importantly ideas, now had the capability to change the breath of the land. This did not go unnoticed by those in power.

Shaping conscious thought – reality – now was possible in ways previous generations could only dream of.

Soon thereafter, propaganda would become an even more effective tool when used in conjunction with the printing press, and its latest extension – mass media.

This is why now, in our time, the CIA has had its tentacles embedded deeply within the mainstream media structure. But this is not a recent event. Since at least the 1950s or so, the CIA had people working on their payroll influencing the American public:

Why is that of importance? Because a press that is run by a separate entity such as the CIA, or a press that has to seek approval due to censorship before publishing stories is not a free press. Censorship is antithetical to the truth. This lack of truth by all mainstream networks should eviscerate any credibility they might have with the population.

An incisive quote by H.G. Wells when he wrote for the New York Times best encapsulates the ramifications of modern media:

“Modern means of communications – the power afforded by print, telephone, wireless and so forth, of rapidly putting through directive strategic or technical conceptions to a great number of cooperating centers, of getting quick replies and effective discussion – have opened up a new world of political processes. Ideas and phrases can now be given an effectiveness greater than the effectiveness of any personality and stronger than any sectional interest.”[1]

Like the kings and rulers of time past, this piercing effectiveness that communications can bring has was quickly put to use by rulers/globalists of our era.

“Like Hitler, who sought to bring individuals alienated by the Industrial Revolution and Depression into a hive-like German Volk, or united people, the globalists who control America’s mass media have attempted to bring citizens into one common worldview by the unremitting dissemination of homogenous news and information. Networks and cable channels routinely accept reports from “pool reporters, which results in many channels presenting the same version of the news.”[2]

The aforementioned statement by author and renown researcher Jim Marrs gravitates to the core of the matter succinctly.

An evolution of social control has taken place via a variety of modalities, spearheaded mainly by modern communications such as the television, the Internet, and to a lesser extent books and magazine et al. This control grid – and its endless propaganda – has locked a large portion of humanity in lockstep with the plans of the ruling powers.

This is a prime example why people must educate themselves and spend the time needed to not only learn how to think critically, but also sift through information carefully – much of it designed to distract you – in order to figure out what is pertinent and what is outright garbage. Being able to do accomplish this will mean the different between knowing the truth or living a lie.

One facet that has simplified this information lockdown has been the monopolization of Corporations that control the media. With only six media giants running the show and exercising unprecedented control, it does not take a genius to see that such a monopoly in information distribution clearly facilitates the shaping of our world.

In a society in which people do not bother to question anything, scripted stories become the daily dish du jour.

Some people seem to be waking up, based on how many people are detaching from networks such as CNBC, who recently had its viewership decline to 8-year lows.

A lot work remains to be done however. The propaganda is relentless, and the mind control and techniques employed by mass media have been ongoing for quite some time.

Only by continuously educating ourselves will we be able to figure out the lies told by the mainstream media such as when the Associated Press was caught lying about water fluoridation or when the media was caught lying [again] about supplements. Keep in mind these are only but a smidgen of the vast and elaborate falsehoods put forth by mainstream.

To finalize:

“One of our best-kept secrets is the degree to which a handful of huge corporations control the flow of information in the United States. Whether it is television, radio, newspapers, magazines, books, or the Internet, a few giant conglomerates are determining what we see, hear, and read. And the situation is likely to become much worse as a result of radical deregulation efforts by the Bush administration and some horrendous court decisions,” warned Congressman Bernie Sanders, adding, “This is an issue that Congress can no longer ignore.”[3]

Such an ominous warning should be taken to heart, because our very livelihoods – and those of future generations – depend on it.

What steps will YOU take to educate yourself and others?

The choice is yours.

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Sources:

[1] Propaganda, by Edward Bernays.  Pg. 40
[2] The Rise Of The Fourth Reich, by Jim Marrs. Pg. 353
[3] Ibid. Pg. 365

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