Derivatives Black Market, Banker Corruption and Government Coverup:
The derivatives black market, banker corruption and government complicity combined to cause the world financial meltdown. If you’ve been following this four part series you understand the history. It started with deregulation of the derivatives market. The market exploded in size to be worth trillions of dollars. That’s larger than the entire U.S. industrial economy. As it grew it transformed into a black market protected by corrupt government from any regulations. Derivatives dealers were gambling with investor’s money. When they won they became billionaires. When they lost they had their corrupt, bought and paid for politicians declare them too big to fail and bail them out with billions of the public’s money. These corrupt investment bankers skimmed much of the bailout money off the top to reward themselves with outrageous bonuses. There was no shame in this corrupt sick society.
It was Bush’s Fault:
So we all understand what caused the financial meltdown. We’ve all heard Obama declare “it was Bush’s fault”. He inherited this mess from Bush. Not exactly, as we’ve now seen it was the other way around. It was Bush who inherited this can of worms from previous Democratic administrations. So what about Obama? Is he also innocent? Was he also blindsided by the sudden collapse of the financial market. Was he oblivious to the derivatives black market? The answer is no. Our “Liar in Chief” was totally aware of this market and helped to perpetuate the scam. Read on for the proof.
Obama following Clinton, 31 appointees from the Clinton administration:
As you remember from our history lesson, Bill Clinton played the most significant role in preventing regulation of the derivatives market. His administration actually passed a law prohibiting government regulation of the derivatives market. This is the only time in history that Congress passed a law to prevent passing a law. One finds it astounding that as Obama was distancing himself from the financial collapse he proceeded to build his new administration composed of 31 appointees from the former Clinton administration. It doesn’t sound like he was distancing himself from the evil ways of the Clinton administration. It sounds like he plans to follow in the footsteps of Clinton and continue the scam.
Top level cabinet economic position appointments from the Clinton administration included:
These key economic positions were criticized, on grounds that they had been prominently involved in creating many of the conditions that led to the Financial crisis of 2007–2008, so “failure was being rewarded”.
Lawrence Summers, Director of the National Economic Council (was Secretary of the Treasury under Clinton). Summers was a leading advocate of the derivatives deregulation, together with Alan Greenspan and Robert Rubin. During Summers transition to Secretary of the Treasury under Clinton, the act that kept commercial banks out of Wall Street, the Glass–Steagall Act, was repealed.
Rubin (Clinton appointed him in 1993 as assistant to the president for economic policy and as director of the newly created National Economic Council).
Greenspan (Chairman of the U.S. Federal Reserve during the Clinton administration) virtually single handedly squashed Brooksley Born’s warnings of the dangers of the derivatives market, and the impending financial disaster that was looming. Famous quotes: “The Federal Reserve Board is Above the Law; “We Can Always Print Money” To Pay Debts”; Greenspan brushed aside the substance of Born’s warnings with the simple assertion that “the degree of supervision of regulation of the over-the-counter derivatives market is quite adequate to maintain a degree of stability in the system”. I don’t guess Mr. Greenspan was ever man enough to apologize to Brooksley Born for ridiculing her and ruining her career as head the CFTC (Commodities Futures Trading Commission). She was right all along and if Greenspan and the rest of the corrupt Democratic party had listened to her the world financial collapse probably would have been avoided.
Timothy F. Geithner, Secretary of the Treasury (He was Under Secretary of the Treasury for International Affairs under Treasury Secretaries Robert Rubin and Lawrence Summers during the Clinton administration). Following that he was President of the Federal Reserve Bank of New York). Geithner’s position in the Obama administration included a large role in directing the Federal Government’s spending on the late-2000s financial crisis, including allocation of $350 billion of funds from the Troubled Asset Relief Program. Based upon his cozy relationship with the banking industry, developed during his previous position, he knew exactly where to distribute the payback to the rich Obama backers. Geithner’s appointment was criticized for his failure to pay $34,000 in income taxes. This would seem to be a slap in the face to the taxpaying general public. Not a problem for Obama, his supporters don’t pay taxes.
- In May 2007, Geithner worked to reduce the capital required to run a bank. This led to wild speculation in the derivatives market, gambling with depositor’s money with huge leverage and little collateral.
The above “gang of 4” were appointed to key positions in the Obama administration. In addition to their government positions they also had held key senior positions in public banks and financial institutions which they would ultimately dole out hundreds of billions of dollars to. So Obama carried on right where Clinton had left off.
Obama to the rescue with his “Financial Reform” bill:
So much for history, at least we have finally identified the greed and corruption that brought the world economy down and done something about it. We’ve all heard Obama on national television proudly announcing how, through his great leadership, he has taken charge and passed extensive legislation to bring the financial community under control. Obama proudly proclaims “Never again will the American taxpayers be asked to pay for bailouts of corrupt bankers”.
Sounds great, but is it really true. Has Obama the great really slayed the dragon? No, our “Liar in Chief” continues to perpetuate the scam. What he has really done is use the financial crisis as an excuse to allow his Communist regime to take over another industry. He piled on mountains of regulation under the guise of fixing the problem. In reality what he did was pile on regulations that had no purpose other than to allow big government to take charge of the financial industry. He regulated everything except the big banks and financial institutions that engaged in “Derivatives” trading. As we all know now, everyone except evidently Obama, the collapse of the derivative market caused the financial collapse. Under Obama’s much ballyhooed financial reform bill, 98% of the derivatives trading, the black market, still remains untouched. This wasn’t by accident; it is a continuation of the Democratic protectionist policy begun under the Clinton administration. Obama isn’t about to tangle with the rich bankers money tree. He needs their support to get re-elected and continue his subversion of the American free enterprise system into a Communist state with Obama as supreme ruler (King).
March, 2008: Derivatives the new ‘ticking bomb’ Buffett and Gross warn: $516 trillion bubble is a disaster waiting to happen
According to the Journal, executive pay is set to break a record high for the second consecutive year. The top 35 financial firms are on pace to hand out $144 billion in compensation and benefits this year, a four percent increase from 2009. Banking executives were rewarded handsomely for their greed and corruption. Its business as usual at these high flying firms, whereas it will take many years for the damage to the economy to heal and millions of workers to get back to work.
“It’s hard for me to believe there were no crimes”, Paul Krugman interview. “Given the scale of [the financial crisis], given how many corners were being cut, some people must have violated laws. I think people should be in jail.”
The Best Way to Rob a Bank is to Own One” A book by William K. Black
A new book has been published that tries to explain the history of the financial crisis and how most of the underlying structures and key players behind it have emerged relatively unscathed. It’s called All the Devils Are Here: The Hidden History of the Financial Crisis.
There’s still a lot of fear among the general public. In spite of our great leaders reassuring words that he has “fixed’ the problem. Was Obama being honest, or was he lying through his teeth as usual? Answer: At J.P. Morgan Chase (JPM), May 2012, news of a $4.2 billion loss related to derivatives spooked investors and triggered calls for greater regulatory oversight and congressional inquiries. The loss now is expected to slash second-quarter earnings at the bank by another 30% to 65 cents a share. Stock holders and teachers retirement funds will take big hit. But the corrupt greedy bankers that continue to gamble with the public’s money will again reward themselves with billions of dollars in bonuses. It’s business as usual at the big banks. He didn’t get the nickname “Liar in Chief” without reason.