KLEIN: "See if any of this sounds familiar:" (LOL) Bailour retro

[Mort Zuckerman]

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Subject: [SpinLyme] KLEIN: "See if any of this sounds familiar:" (LOL)
Bailout retro

Date: Nov 10, 2008 8:56 AM

[ARTICLE BELOW]


The Subprime Crisis was known about by mid-level French bankers
by at latest, March 2007:

http://www.newyorker.com/reporting/2008/10/20/081020fa_fact_stewart

You have to get the full text. It's not online free,
but this much is:

"In January, 2007, Kerviel began taking large short positions
on the German stock market, the DAX, betting that the American
sub-prime mortgage crisis would spill over into Europe and
drag down the major averages. By late March, his short
position had grown to billions of euros."


So, it was no shock, and we did not need the Shock Treatment
that we got from the Bushie Banksters.

A year earlier, Greenspan published that everyone knows
that the Iraq was was "largely about oil."


I am thinking that this extra year and a half gave the
banksters additional time to pass their money through
Bermuda to purchase foreign assets, like real estate,
gold and the like. It would look better if it was done
over the long term. Additionally, I believe The Surge
was a last resort and that now that Iraq is demanding
that the US leave, 100%, the banksters dumped on us.

The bailout was an admission of defeat in Iraq.

Thus, the poor Americans who voted for Bush are
being punished.

From a theological standpoint, what happened here,
with Bushie punishing the poor for voting for him and
believing in his lame-ass lying antics, is a lot like
what happens to people who sell their souls to the
Devil himself:

http://spiritlessons.com/Mary_K_Baxter_A_Divine_Revelation_of_Hell.htm#The_Horrors_of_Hell
"After this woman died, she went straight to hell. The demons brought
her
before Satan, where in anger she asked why the demons had control over
her, for
on earth she thought she controlled them. There they had done her
bidding. She
also asked Satan for the kingdom he had promised her...


You know, like what's going to happen to Republican
politicians who sold out our rights to the Bigs. They
knew they were doing something wrong but many of them
thought there would be something for *them* in the end,
when we got the New World Order (for the elite).

I know for sure because I live in Corrupticut, and
Corrupticut is all about cleansing the State of the
poor, black, and infirm. Think about it- the Bushies
and Kissinger live here. The task of building all the
national gulags had gone to Governor John Rowland and
http://www.actionlyme.org/BRAINLESS_BUREAUCRATS.htm
his chief slut, Kristine Ragaglia, who had intentions
http://www.actionlyme.org/RAGAGLIA_GRANDJURY_DETAILS.htm
of going to Washington... Johnny was "The Rising Star"
of the Republican Party, and was literally, good-back-
slapping buds with the Bush Brothers and Tommy Thompson.
http://www.actionlyme.org/HOTEL_HALLIBURTON.htm


”As Gov. John G. Rowland's co-chief of staff, Ellef spoke
of levitating trains, hydroponics gardening, ***building
prisons in old stone quarries*** and opening trade relations
with China. His plans after state service included
developing ***a string of juvenile detention facilities
across the country,*** a chain of home improvement stores
and a high-end garden center.”


BOTTOM LINE:
If Obama is going to be about accountability, the banksters
should not get another dime until we find out how the
French banker knew enough about the American subprime
crisis to bet on it in March of 2007.


KMDickson
http://www.actionlyme.org
===========================================


http://www.commondreams.org/view/2008/11/09-6
Published on Sunday, November 9, 2008 by Rolling Stone
The New Trough

The Wall Street bailout looks a lot like Iraq — a "free-fraud zone"
where
private contractors cash in on the mess they helped create

by Naomi Klein

Editor's note: The online version of this story has been amended to
reflect
developments since the publication of the print edition.

On October 13th, when the U.S. Treasury Department announced the team
of "seasoned
financial veterans" that will be handling the $700 billion bailout of
Wall
Street, one name jumped out: Reuben Jeffery III, who was initially
tapped to serve
as chief investment officer for the massive new program.

On the surface, Jeffery looks like a classic Bush appointment. Like
Treasury Secretary
Henry Paulson, he's an alum of Goldman Sachs, having worked on Wall
Street for
18 years. And as chairman of the Commodity Futures Trading Commission
from 2005
to 2007, he proudly advocated "flexibility" in regulation - a laissez-
faire
approach that failed to rein in the high-risk trading at the heart of
the meltdown.

Bankers watching bankers, regulators who don't believe in regulating -
that's
all standard fare for the Bush crew. What's most striking about
Jeffery's
résumé, however, is an item omitted when his new job was announced: He
served as
executive director of Paul Bremer's infamous Coalition Provisional
Authority
in Baghdad, during the early days of the Iraq War. Part of his job was
to hire civilian
staff, which made him an integral part of the partisan machine that
filled the Green
Zone with Young Republicans, investment bankers and Dick Cheney
interns. Qualifications
weren't a big issue back then, because the staff's main function was
to
hand over stacks of taxpayer money to private contractors, who were
the ones actually
running the occupation. It was this nonstop cash conveyor belt that
earned the Green
Zone a reputation, in the words of one CPA official, as "a free-fraud
zone."
During Senate hearings last year, when Jeffery was asked what he had
learned from
his experience at the CPA, he said he thought that contracts should be
handed out
with more "speed and flexibility" - the same philosophy he cited back
when he was in charge of regulating Wall Street traders.

The Bush Administration has since reversed the Jeffery appointment,
perhaps thinking
better of giving a CPA alum such a central role in the Wall Street
bailout. Still
the original impulse underscores the many worrying parallels between
the administration's
approach to the financial crisis and its approach to the Iraq War.
Under cover of
an emergency, Treasury is rapidly turning into an economic Green Zone,
overrun with
private companies collecting lucrative contracts. Fittingly, one of
the first to
line up at the new trough was none other than the law firm of
Bracewell & Giuliani
- yes, that Giuliani. The firm's chairman, Patrick Oxford, could
scarcely conceal
his glee over the prospect of cashing in on the bailout. "This one,"
he
told reporters, "is very, very big." At least four times bigger, in
fact,
than the post-9/11 homeland-security bubble, from which Giuliani and
his various
outfits have profited so extravagantly. Even bigger, potentially, than
the price
tag for the Iraq War itself.

In Iraq, the contractors were tasked with reconstructing the country
from the mess
made by U.S. missiles. After years of corruption born of no-bid
contracts and paltry
oversight, many Iraqis are still waiting for the lights to come back
on. Today,
a new team of contractors is lining up to reconstruct the U.S. economy
- reconstruct
it from the mess made by the very banks, brokers and law firms that
are now applying
for contracts. And it's not at all clear that America can survive
their assistance.

See if any of this sounds familiar: As soon as the bailout was
announced, it became
clear that Treasury officials would hire outsiders to perform their
jobs for them
- at a profit. Private companies wanting to help manage the bailout
were given just
two days to apply for massive, multiyear contracts. Since it was such
a mad rush
- after all, the entire economy was about to implode - there was no
time for an
open bidding process. Nor was there time to draft rigorous rules to
make sure that
those applying don't have serious conflicts of interest. Instead,
applicants
were asked to disclose their conflicts and to explain - and this is
not a joke -
their "philosophy in fulfilling your duty to the Treasury and the U.S.
taxpayer
in light of your proprietary interests and those of other clients." In
other
words, an open invitation to bullshit about how much they love their
country and
how they can be trusted to regulate themselves.

The first major contract to be awarded in the bailout was for legal
advice - and
the choice Treasury made was Halliburton-esque in its audacity. Six
law firms were
invited to bid, but four declined, either because they didn't want the
contract
or because they had too many conflicts of interest. Rep. Barney Frank,
chairman
of the House Financial Services Committee, said the fact that so many
law firms
chose not to bid "shows that the guidelines are sufficiently
rigorous."

Or it may just show that the bidder who won the contract - Simpson
Thacher &
Bartlett - takes a more relaxed approach to conflicts than its
colleagues. The law
firm is a Wall Street heavy hitter, having brokered some of the
biggest bank mergers
in recent years. It also provided legal support to companies trading
mortgage-backed
securities - the "financial weapons of mass destruction," as Warren
Buffett
called them, that detonated the banking industry. More to the point,
it was hired
to provide legal services to the Treasury in its negotiations to spend
$250 billion
of the bailout money purchasing equity in America's banks. The first
stage of
the plan involves buying stakes in nine of the country's top banks.
Incredibly,
Simpson Thacher has represented seven of the nine: JPMorgan, Bank of
New York Mellon,
Bank of America, Citigroup, Morgan Stanley, Goldman Sachs and Merrill
Lynch.

According to its contract, Simpson Thacher has agreed not to represent
any of the
banks "against the U.S." when they negotiate with Treasury for the
equity
money. However, the firm has retained the right to represent banks
when they apply
for other parts of the $700 billion bailout not covered by its
contract. (It has
promised to erect a "firewall" to stem the flow of "confidential
information" to those clients.) The firm will also continue to work
for the
banks on a range of other lucrative deals - and that's where the
problem lies.
Take Lee Meyerson, Simpson Thacher's lead lawyer on the bailout
negotiations,
who is specifically named in the contract as "essential" to the
project.
As the company's hotshot attorney, Meyerson has personally represented
three
of the nine banks that were bailed out in the first round, in addition
to many others
that will surely apply for cash injections. One of the bailed-out
banks is Bank
of New York Mellon, whose $29 billion merger Meyerson helped
negotiate. Mergers
like that can bill in the millions. Is Simpson Thacher able to put
aside its loyalties
to its biggest clients and negotiate deals for the taxpayer that could
exact real
costs from those very clients?

It might be possible to set aside concerns about divided loyalties if
it were clear
that Simpson Thacher is helping Treasury to wrangle the best deals
possible for
U.S. taxpayers. But the firm's first test - the deal to give $125
billion to
the nine big banks to ease the "credit crunch" that is crippling the
economy
- wasn't exactly reassuring. Secretary Paulson promised that the banks
won't
just "hoard" the money - they will quickly "deploy it" through
the economy in the form of badly needed loans. There is just one
hitch: Neither
Paulson nor Simpson Thacher got that "deploy" part in writing - nor
did
they put in place any mechanism to require the banks to spend their
taxpayer billions.
Apparently, the part about lending the money to homeowners and small
businesses
was sort of implied.

"There is no obligation for banks to lend the money one way or the
other,"
Jennifer Zuccarelli, a Treasury spokeswoman, tells Rolling Stone. "But
the
banks have the understanding" that the money is intended for loans.
"We're
not looking to control their operations."

Unfortunately, many of the banks appear to have no intention of
wasting the money
on loans. "At least for the next quarter, it's just going to be a
cushion,"
said John Thain, the chief executive of Merrill Lynch. Gary
Crittenden, chief financial
officer of Citigroup, had an even better idea: He hinted that his
company would
use its share of the cash - $25 billion - to buy up competitors and
swell even bigger.
The handout, he told analysts, "does present the possibility of taking
advantage
of opportunities that might otherwise be closed to us."

And the folks at Morgan Stanley? They're planning to pay themselves
$10.7 billion
this year, much of it in bonuses - almost exactly the amount they are
receiving
in the first phase of the bailout. "You can imagine the devilish grins
on the
faces of Morgan Stanley employees," writes Bloomberg columnist
Jonathan Weil.
"Not only did we, the taxpayers, save their company...we funded their
2008
bonus pool."

It didn't have to be this way. Five days before Paulson struck his
deal with
the banks, British Prime Minister Gordon Brown negotiated a similar
bailout - only
he extracted meaningful guarantees for taxpayers: voting rights at the
banks, seats
on their boards, 12 percent in annual dividend payments to the
government, a suspension
of dividend payments to shareholders, restrictions on executive
bonuses, and a legal
requirement that the banks lend money to homeowners and small
businesses.

In sharp contrast, this is what U.S. taxpayers received: no
controlling interest,
no voting rights, no seats on the bank boards and just five percent in
dividend
payouts to the government, while shareholders continue to collect
billions in dividends
every quarter. What's more, golden parachutes and bonuses already
promised by
the banks will still be paid out to executives - all before taxpayers
are paid back.

No wonder it took just one hour for Paulson to convince all nine CEOs
to accept
his offer - less than seven minutes per bank. Not even the firms' own
lawyers
could have drafted a sweeter deal.

The day after it met with the nation's top banks, Treasury announced
that it
had selected the firm that would receive the juiciest contract of all:
that of "master
custodian." The winning company will be to the bailout what
Halliburton is
to the military: the contractor of contractors. It will purchase toxic
debts from
Wall Street, service them and auction them off in the future - a so-
called "end-to-end
process." The contract is for a minimum of three years.

Seventy firms applied for the gig; the winner was Bank of New York
Mellon. Describing
the scope of the megacontract, bank president Gerald Hassell said,
"It's
the ultimate outsourcing - because the Federal Reserve and the
Treasury do not have
the mechanics to run the entire program, and we're essentially the
general contractor
across the entire program. It's going to cross our entire company."

This raises an interesting point: Has the Treasury partially
nationalized the private
banks, as we have been told? Or is it the other way around? Is it
Treasury that
has been partially privatized by Wall Street, its massive rescue plan
now entirely
in the hands of a private bank it is directly subsidizing?

Shortly after receiving the contract, Hassell told investors that his
institution
is now well-positioned to profit from the market meltdown. "There's a
lot
of new business that's going on even in this chaotic marketplace," he
said,
"and so some of those things have been very positive to us." Just how
positive, we don't know, because Treasury has blacked out the 10 lines
of the
"master custodian" contract that reveal how much Bank of New York
Mellon
will be paid. Though Treasury says it will release the information
eventually, the
secrecy goes beyond anything the Bush administration attempted in
Iraq. Even Halliburton's
dodgy contracts came with price tags attached.


Still, when the terms of the contract do become public, they may turn
out to be
surprisingly modest. Goldman Sachs has apparently offered to fulfill
at least one
bailout contract for free. Altruism may not be their only motivation.
The real money
at stake in the bailout lies not in payment for the work but in how
the work is
done. Think about it: If you're the one selling your debts to the
government,
wouldn't you also want to help decide which debts are eligible and how
much
they're worth? "The financial firms with assets to sell are in many
instances
the same firms the Treasury will rely on to value and manage the
assets it is buying,"
The New York Times observed. "That is an invitation for these firms to
set
the price too high or to indulge in other mischief at the taxpayers'
expense."

Bank of New York Mellon has a bad record for mischief. It is embroiled
in a $22.5
billion money-laundering lawsuit in Moscow and has been forced to pay
out a $14
million settlement in a related case. Though the bank's "master
custodian"
contract with Treasury prohibits unethical conduct, the arrangement
seems rife with
opportunities for abuse. According to its most recent earnings report,
Bank of New
York Mellon holds $1.2 billion in subprime mortgage securities. That
means that
in addition to the $3 billion it will receive as part of the equity
program, it
will also be eligible to apply for taxpayer money from the program it
is being paid
to administer. Neither the bank nor Treasury would comment on this
direct conflict
of interest.

On the same day that he allocated the first $125 billion to the banks,
Secretary
Paulson announced the largest federal budget deficit in U.S. history.
Buried in
his statement was a preview of the next phase of the financial
disaster. The deficit
numbers, he declared, reinforce the need to "pursue policies that
promote economic
growth and fiscal responsibility, and address entitlement reform." He
was referring
to Americans who feel entitled to receive Social Security in their old
age and Medicaid
when they are sick. Those programs, Paulson implied, might not be able
to survive
the budget crisis he is currently creating for the next
administration.

This is why the stakes of the bailout are so high: Unless we get a
good deal, there
will be nothing left over after the banks are done feeding to pay for
the meager
services now provided in exchange for taxation, let alone for the more
ambitious
initiatives promised on the campaign trail. The spiraling cost of
saving Wall Street
from its bad bets is already being used as an excuse for why we can't
solve
our many other crises, from health care to climate change.

There is a better way to fix a broken financial system. Treasury's
plan to buy
up the toxic debts never made sense and should be immediately scrapped
- a move
that would also handily get rid of most of the crony contractors. As
for purchasing
equity in banks, the next round of deals - and there will be more -
has to start
from the premise that the banks are bankrupt and will therefore accept
whatever
terms we choose to impose, including real regulatory oversight. The
possibilities
of what could be done if a chunk of the banking system were genuinely
under public
control - from a moratorium on home foreclosures to mandatory
investment in green
community redevelopment - are limitless.

Because here is what George Bush and Henry Paulson are hoping we won't
figure
out: When a society no longer has enough money to pay for its most
pressing needs,
there are worse things than discovering you own the banks.
© 2008 Rolling Stone

Naomi Klein is the author of The Shock Doctrine: The Rise of Disaster
Capitalism,
now out in paperback. To read all her latest writing visit www.naomiklein.org


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