COTTRELL’S U.S. REGULATORY SHAKE-UP PROPOSALS

CONGRESS WILL WASTE TIME ‘DEBATING’ GEITHNER’S CONVOLUTED MISH-MASH

Monday 18 May 2009 13:00

• The Subs/Books Update Panel on the Home Page was updated at 8:00pm UK time on 22nd May 2009 to provide comprehensive details of all issues of our intelligence services published during the first five months of 2009, including the latest issue of our Global Analyst (Volume 3, #2). Soviet Analyst, Volume 31, #1 is ‘on machine’ at our print works and will be delivered soon. It will contain proof that the Soviet Union remains in existence, or certainly did as late as March 2001, a decade after it was said to have vanished into the trashcan of history. No surprise, but nice to prove it.

• BOOKS: Edward Harle Limited has so far published FIVE intelligence titles: The Perestroika Deception, by Anatoliy Golitsyn; Red Cocaine, by Dr Joseph D. Douglass, Jr.; The European Union Collective, by Christopher Story; The New Underworld Order, by Christopher Story; and The Red Terror in Russia, by Sergei Melgounov. All titles are permanently in stock. We sell books DIRECT.

• Globalist hegemony ideology and practice are comprehensively debunked in the Editor’s study entitled The New Underworld Order, which can be ordered via the books section of this website. If you want to see what may well happen if the angle of decline steepens much further, you could do worse than also order a copy of The Red Terror in Russia, by the contemporary Russian eyewitness Sergei Melgounov, another Edward Harle Limited book available direct from this website. Also, the Editor’s study entitled The European Union Collective, which proves that the EU is a long-range strategic entrapment operation to reduce European countries to satrap status within a German empire using economic strategy for relentless economic warfare purposes, can be bought here.

• Please Make a Donation, if you feel able to do so, to help finance Christopher Story‘s ongoing global financial corruption investigations. Your assistance will be very sincerely appreciated and will make a real difference, hastening the OVERDUE resolution of the worst financial corruption and linked financial fallout in world history. Just press Make a Donation, which is live, and it takes you straight to our ultra-safe ordering system, which accepts Visa and MasterCard.

• The Editor’s $35,000 Wanta bail-out money has been stolen.

• See the second white panel for details of our latest distributed intelligence publications.

• ADVERTISEMENT: Details of the Internet Security Solution software offered by this service in conjunction with a donation are appended at the very foot of this report, below the legal data. See also the catalogue by clicking on World Reports Limited and scrolling down to the bottom.

By Christopher Story FRSA, Editor and Publisher, International Currency Review, World Reports Limited, London and New York. For earlier reports, press the ARCHIVE. Order your intelligence subscriptions and our ‘politically incorrect’ intelligence books online from this website.

THE SOLUTION TO THE CRISIS THAT HAS BEEN AVAILABLE ALL ALONG:
Operating the $ Refunding from London without US Government participation delivers:

(1) Massive ongoing windfall tax accruals to the BRITISH Treasury given that all funds resident in the United Kingdom jurisdiction for 24 hours are taxable by the Inland Revenue. This makes the UK Refunding proposal of extreme interest to Her Majesty’s Government and the UK Treasury.

((2) Massive ongoing windfall benefits to the UNITED STATES Treasury given that it will also receive a cascade of tax accruals from this independent private sector Refunding Program.

(3) The necessary refinancing of the UK and US banking systems ON THE BOOKS with no input from either Government and NO CORRESPONDING DEBT CREATED IN THE BACKGROUND.

(4) GOOD (i.e., on-balance sheet, taxed) money which will CHASE OUT THE BAD MONEY that the crass US Fraudulent Finance concoction will generate.

BARNEY FRANK’S COMMITTEE WILL BE WASTING ITS TIME
On 18th May 2009, The Financial Times reported that the US Congress will start the biggest regulatory overhaul of the US financial system in decades. The House of Representatives’ Financial Services Committee, chaired by Barney Frank, will hold hearings in early June into reforms outlined by Timothy Geithner, the US Treasury Secretary.

These proposals appear to lend new meaning to the word ‘convoluted’ and insofar as they reflect the duplicitous plans outlined by Geithner’s discredited predecessor, the corrupt Henry M. Paulson Jr., will be cumbersome and expensive: the precise opposite of the coherent proposals advanced by the US securities expert Michael C. Cottrell, B.A., M.S., which we published here last summer and on 18th September 2008 (as well as in International Currency Review).

HOUSE FINANCIAL SERVICES COMMITTEE SHOULD STUDY COTTRELL’S PROPOSALS INSTEAD
The American and British Legislatures have one thing in common. Faced with a choice between the correct course of action and its perverse and obtuse opposite, they invariably choose to select the perverse course. In this case, there is actually NO NEED for Barney Frank to hold hearings on the Geithner proposals. He should SCRAP these hearings and investigate Mr Cottrell’s straightforward outline plan instead. Then he wouldn’t waste his committee’s time, and taxpayers’ money, looking into Geithner’s convoluted and complex inventions, which, like everything else this US Treasury Secretary is playing at, won’t ‘fly’. (Nothing Geithner has come up with to date has ‘worked’).

And the reason for that is that they encapsulate the erroneous assumption that the defunct and fraudulent derivatives marketplace can be revalidated, as though there has never been a day of reckoning. It can’t: so far, roughly over $300 billion of deals have been recorded: at this rate, it will take Mr Geithner and his successors 210 years to revalidate the toxic (i.e. fraudulent) derivatives sector on the basis of the $683,341 billion of derivatives ‘assets’ outstanding at the end of June 2008. That was the notional value, as calculated by the Bank for International Settlements (BIS) and replicated by the International Monetary Fund in its April 2009 Global Financial Stability Report.

• FACT: The aggregated gross market value of outstanding contracts at the end of June 2008 according to the same sources was $20,353 billion.

Exactly how long it will take for the penny to drop in these confused official and legislative minds is anybody’s guess: but to assist Mr Frank in his investigations, we reproduce the Cottrell Plan that we last published here on 18th September 2008, below.

•FURTHER FACT: As anticipated in our report from the Spring Meetings of the IMF and the World Bank in April, the derivatives market shrank during the second half of 2008. This represented the first decline during the ten years since these data were first compiled.

The Bank for International Settlements (BIS) have just indicated that the notional amount of global over-the-counter derivatives contracts outstanding shrank from the estimated total cited above of $683,725 billion, as at the end of June 2008, to $592 trillion at the end of December 2008, just below the level of $595,341 billion reported by the BIS and the IMF for the end of December 2007.

REPORT OF 7TH MAY WILL BE UPDATED WHEN IT IS APPROPRIATE AND HELPFUL TO DO SO
There are various reasons why we aren’t YET updating the 7th May report. We will do so when it is considered helpful and appropriate. We will also, in due course, be able to answer a question that has been put to us: what is the ORIGIN of the financial resources that have been abused? This is now possible, following further research conducted by the Editor of this service.

THE EDITOR’S CORRUPTION FINDINGS IN THE MANHATTAN COURT: FORTHCOMING
In addition, the Editor spent some time during his recent stay in New York, extracting interesting documents from the United States District Court for the Southern District of New York, with special emphasis on WHICH huge banks are the most corrupt, judged by the number of cases involving them filed with the Court. It will be recalled that we have referred to certain institutions for some time by name as CRIMINAL ENTERPRISES, and that we have not been sued. This is because they cannot sue us as this statement is true. As you may imagine, these findings are ‘distressing’.

• Here is Michael C. Cottrell’s report as posted here on 18th September 2008, republished so as to assist Barney Frank and his Committee so they don’t waste their time and everyone else’s:

U.S. FINANCIAL MARKET REVAMP OF MARCH 2008 IS A FALSE PROSPECTUS BY THE TREASURY

ALTERNATIVE PLAN PRESENTED HEREWITH IS SIMPLER, TIMELY, CHEAPER AND EFFECTIVE

BUSH PRESIDENCY’S WORKING GROUP ‘REFORM PLAN’ EXPOSED AS A SELF-SERVING RUSE

BETTER PLAN BY MICHAEL C. COTTRELL, B.A., M.S. CAN BE UP AND RUNNING IN MONTHS

CONVOLUTED ‘PAULSON’ FABRICATION WOULD COST IMMENSE $ SUMS TO IMPLEMENT

TREASURY’S PROPOSALS REQUIRE SEVEN NEW AGENCIES, MR COTTRELL’S JUST ONE

THREE-STAGE ‘PAULSON’ PROPOSALS CALCULATED TO UNDERMINE MARKET PSYCHOLOGY

ALTERNATIVE PLAN SUPPLEMENTED BY A COMPREHENSIVE SECURITIES MARKET GLOSSARY

SIMPLE RULES-BASED MARKET STABILISATION PLAN BY MICHAEL C. COTTRELL, B.A., M.S.
In the first quarter of 2008, Michael C. Cottrell, B.A., M.S., President of Pennsylvania Investments , Inc., contacted the Editor of this service to brief him in detail on the dubious stratagems behind the disparate proposals that were finally unveiled at the end of last March by the President’s Working Group on Financial Markets, a.k.a. the ‘Paulson proposals’.

As a result of several conversations, Mr Cottrell, one of the foremost securities markets experts in the United States, prepared a critique of the US Treasury’s extraordinary ‘Plan’, which he was easily able to demonstrate is highly destablising, not least since its plainly confused recommendations undermine financial market confidence while demonstrably serving the interests of the criminalist kleptocracy at the expense of the genuine investment community. This analysis is presented here.

In short, the Working Group’s ‘blueprint’ is shown herewith to be a false prospectus.

Having discredited the Working Group’s proposals, which would call for the creation of no less than SEVEN expensive and mischievously overlapping new US regulatory bureaucracies and for the abolition of the essential rules-based securities market environment, which would be phased out over an imprecise but prolonged timeframe, Michael Cottrell presents his own effective and simple solution to the chaos brought about by years of officially condoned fraudulent finance.

This will require just ONE new US regulator, will call for the revalidation by Congress of the Glass-Steagall Act and for the decisive re-establishment of the essential rules-based system which the Securities and Exchange Commission (SEC) has neglected to enforce in recent years, and can be implemented in full within the space of just a few months, at most. Additionally, Mr Cottrell’s simple Plan will be infinitely cheaper to implement than the top-heavy Working Group proposals.

The Editor has incorporated Mr Cottrell’s proposal into this analysis; and the extensive Glossary, built around Michael C. Cottrell’s original framework, has been expanded so that all concerned can readily understand what has to be done. Michael C. Cottrell, B.A., M.S., can be contacted direct on: 814-455 9218 (voicemail), and at: pii-mcc@msn.com.

Mr Cottrell’s reform framework has been elaborated by the Editor to incorporate ideas for which he alone is responsible but which Mr Cottrell has graciously approved.

• Important Note: We can only report US law as it stands. We cannot make exceptions and neither can we speculate as to the prospective actions of authorities given, for instance, the admission by UBS that it broke the law, and the consequences of that admission for some US investors who may consider that they are eligible for Settlement payouts. Nor can we enter into ANY correspondence concerning that matter. The only issues that we will discuss arising from this post are Mr Cottrell’s practical and straightforward recommendations: and these issues should be raised with him direct.

EXECUTIVE SUMMARY
This paper describes, exposes and then systematically demolishes the credibility and relevance of the so-called ‘Paulson’ proposals, a.k.a. the mish-mash of convoluted notions brought forth by the President’s Working Group on Financial Markets at the end of March 2008.

In passing, it questions the basis upon which expectations of repayment by some US participants in ‘humanitarian’, Omega and other often unregistered, and therefore usually (in the United States) illegal, Ponzi schemes are predicated, shows why these schemes are illegal by comparing them to what the US securities and other relevant US legislation requires, and presents inexpensive and constructive proposals to replace ‘Paulson’s’ dog’s dinner – which, incidentally, would call for the establishment of no less than SEVEN expensive new US bureaucratic agencies, whereas the Plan, devised by the securities expert Michael C. Cottrell, M.S., which is advanced here, would require just ONE new agency instead. Further, Mr Cottrell’s scheme could be up and running within a few months, whereas the ‘Paulson’ dog’s dinner is phased over an indeterminate timeframe.

OFFICIAL PROPOSALS ARE MISCHIEVOUS
On investigating this matter, we were quite surprised at the ease with which the Working Group’s spurious obfuscation operation could be shown to be a glaringly false prospectus that has been jumbled together in order to disguise what can only be described as its underlying mischievous intent. For these proposals dishonestly seek to convey an impression of regulatory reform (in response to the chaos in the financial markets which has been brought about exclusively by the serial criminality of holders of high office) – whereas their actual purpose is to mask the objective of precluding meaningful reform in favour of cosmetic adjustments consistent with an even more permissive and crime-friendly environment than exists today.

Indeed a pattern of nefarious US official behaviour has become clear since the deregulation of the Savings and Loan Associations in 1982. It can be summarised as follows. Far from entertaining any clear intention of curbing excesses and seeking to contain financial sector crises and instability brought about by organised financial fraud condoned at the highest levels of American power, the participating US authorities typically allow the prevailing crisis of confidence and its real economic consequences to escalate until, as happened at the end of the 1980s with the messy ‘responses’ developed by Congress to the ‘hollowing out’ (enronisation) of the thrifts, the problems become so huge that radical departures are agreed upon ‘under duress’ which, in turn, provide the intended basis for a proliferation of fraudulent financial operations ‘by other means’.

FOLDING THE CRIMINALISTS’ CRISIS INTO A ‘UNIVERSAL SOLUTION’
This is exactly what these cynical ‘Paulson’ proposals are predicated to achieve. The underlying motive here is to ‘fold’ the contemporary financial and economic crisis into a ‘ universal solution’ which will, if this Treasury has its way, give the arch-planners of fraudulent finance practices, carte blanche to proliferate their scams and aberrations for many years to come.

Accordingly, the fraudulent prospectus disgorged by the President’s Working Group on Financial Markets needs to be consigned forthwith to the trash can. This report will help to achieve that.

As indicated, we present a simple, straightforward, constructive, inexpensive and quickly and easily implemented alternative Plan to replace it. Its author, Michael C. Cottrell, M.S., one of the United States’ foremost securities markets experts, argues that no further attention should be paid to the dishonest and discredited ‘Paulson’ proposals, which have in any case more or less run into the sand; and that the straightforward measures advocated below should be adopted, instead.

They would immediately inject the necessary discipline into the marketplace, precluding scope for securities scamming models to which the notorious American kleptocracy has become accustomed.

This paper is supplemented by an extensive Glossary of securities environment terms, for the benefit of the lay reader. The Editor has incorporated several appropriate new terms in the list.

SELF-SERVING PLAN TO ‘CLEAN UP’ MESS THE CRIMINALISTS THEMSELVES CREATED
Among the most distasteful characteristics of the world-class financial criminals exposed through our reports is their habit of advising the Rest of Us how the distasteful consequences of their own glaring criminality are to be overcome. The flip-side of the accomplished US financial criminalist is typically an unimpressive ‘angel of light’, who preaches the virtues of sound finance, in order to mask the fact of his endless reprobate financial misbehaviour.

Thus, having presided over and orchestrated the stealing of colossal sums of other people’s money, the US intelligence operative calling himself Henry M. Paulson Jr. [but see Memorandum below], as advertised, promulgated, in March 2008, a set of goofy and confused proposals for the ostensible ‘reorganisation’ of the way the US financial markets are regulated, which amounts to a pre-planned ‘new regulatory order’ – but the purpose of which, on investigation, turns out NOT to be improved financial sector discipline, but rather the cynical and surreptitious institutionalisation of market conditions that will facilitate replication of the abuses and fraudulent finance that have so far been exposed, but on a far broader scale, in the years to come.

A prerequisite for understanding what follows, and the prevailing financial days of reckoning and their origination generally, is to recognise the subversive reality of the ‘angels of light’ deception model. The financial sector traditionally clothes itself in a mantle of assumed righteousness, which is reinforced by generational layers of perception yielding a belief that financial institutions are, generally speaking, models of rectitude which cannot deviate from the strict codes of conduct that are presumed to surround them, and therefore from the Rule of Law.

BELATED, GRUDGING REALISATION THAT WHAT HAS BEEN REPORTED IS ACCURATE
Because this general lazy presumption is rarely, even today, called into question, it took, to our certain knowledge, certain British and American circles over two years to reach the staggered conclusion that what we have been reporting was accurate, both in general terms and more often than not, in terms of specifics as well.

By the same token, the underlying assumption that the exotic Treasury proposals developed by the President’s Working Group on Financial Markets, which will be demolished here, are of beneficial and enlightened intent, has no basis in reality, as will now be examined. On the contrary, as might have been expected, they represent ANOTHER pathetic scam, a deception, a diversion, a PLOY.

We will begin with a ‘straight’ summary of the ‘Paulson’ proposals, which will then be exposed as representing a false and deceitful prospectus.

THE FALSE PROSPECTUS AS ANNOUNCED
Following our exposures of financial fraud between June 2006 and the same month a year later, tensions rose to such a pitch behind the financial sector scenes that the US authorities felt the sudden need to be seen to be ‘doing something’ – an urge that resulted in the establishment of the President’s Working Group on Financial Markets.

But by ‘doing something’, the criminalists actually meant leveraging the financial crisis which has developed as a direct consequence of their criminality through the advocating of false ‘reforms’ under cover of which they intended to institutionalise a permissive US environment which would guarantee that their addiction to manufacturing liquidity out of thin air through untaxed high yield investment programs (out of bounds to ordinary mortals because outside the officially protected corruption zone, they are lethally risk Ponzi scams: see below), would be OK’d without recourse.

The phrase ‘Working Group’ is a designation used by Israeli intelligence to describe an operation inside the Israeli Government structures (viz., intelligence), with a focus on developing a modus operandi to achieve an instructed objective, according to Robert Littell [‘Vicious Circle’, Overlook Press, Peter Mayer Publishers, New York, 2006].

After ‘labouring’ for eight months, the Working Group brought forth a convoluted, fragmented and opaque ‘THREE-STAGE plan’ to ‘reform’ US regulation of the very financial institutions with which the now disgraced ruling kleptocracy has been collaborating to scam ordinary American citizens, mortgage ‘holders’, the US Government itself, and foreigners who fail to do their ‘due diligence’.

The overall effect of the regulatory fragmentation plan put forward in bad faith (as we demonstrate below) by the Working Group would be to place the control of all financial markets wholly under the power of the President of the United States – which, given the criminality of the present and recent incumbents, would be a recipe for the institutionalisation of fraudulent finance, the elimination of all remaining checks and balances, and consequently for a corrosive financial market environment leading to a financial meltdown in a few years’ time which would make the present crisis look like a pleasant afternoon by the seaside.

Before we go any further, we must summarise the Working Group’s proposals without commenting in any detail immediately on their implications:

STAGE ONE, AS PROMULGATED BY THE PRESIDENT’S WORKING GROUP:

• The President’s Working Group on Financial Markets would be expanded to add banking sector regulators not hitherto participating in its deliberations, in order to broaden the Working Group‘s supposed focus to incorporate the whole of the US financial sector, rather than just the financial markets as such (begging the question: what was the problem? Why the delay?).

• Lending by the Federal Reserve: Because non-bank financial institutions have, since December 2007 (thanks to the chaos brought about by fraudulent finance operations over which this ‘Paulson’ himself presided) had access to the US Federal Reserve, the Fed would be able to conduct on-site examinations of such borrowers and impose conditions on their operations.

• Establish a Mortgage Origination Commission to consist of six Board Members, taken mainly from Federal structures. The new entity would proceed to establish minimum licensing standards and testing criteria, and would gauge and grade the adequacy of each State’s mortgage control system. This would be accompanied by clarification of which Federal body is to enforce mortgage lending legislation (which, for some reason, the Working Group could not manage to do).

STAGE TWO, AS PROMULGATED BY THE PRESIDENT’S WORKING GROUP:

• Federal Oversight of State-Chartered Banks: It was reported that the US Treasury recommended a study to determine whether the Federal Reserve or the Federal Deposit Insurance Corporation (FDIC) should have oversight of State-chartered banks.

(Great! So we need a ‘study’. Why didn’t the Group perform that study, then? Why the ‘need’ for further delay while the ‘study’ is carried out?).

• Thrift Charter to be eliminated: The following banking sector regulator was categorised as ‘past its sell-by date’: The Office of Thrift Supervision. This entity, which oversees US Savings and Loan Associations (so-called ‘Thrift Institutions’) should be closed down and folded into the Office of the Comptroller of the Currency, which has oversight of National Banks. (No reason given).

• A new (optional) Federal Insurance Charter: The US Treasury proposed the creation of a Federal regulator to cover the insurance sector, which is extremely corrupt in the United States. The first step would be to ask Congress to create an Office of Insurance Oversight within the US Treasury, to focus on international issues and to advise the Treasury on insurance sector affairs. This would be the first step towards the creation of step two, namely the creation of a new Federal Insurance Charter. (Notice that everything is ‘spaced out’, laid-back, confused and overlapping).

• Revised payments and settlement arrangements: Under the eccentric proposals brought forward by ‘Paulson’, it was suggested that the Federal Reserve Board should be given oversight and rule-making authority over the payment and settlement systems for the processing of payments and the transfer of securities between financial institutions and their clients. (Hence, de facto regulation of the securities markets would devolve into the hands of the untrustworthy Fed).

• Futures and Securities markets: The US Treasury used this report to call for the merger of the Commodity Futures Trading Commission (the CFTC) and the Securities and Exchange Commission (the SEC), neither of which has been doing its job properly, given the sheer scale of the bribery and corruption behind the scenes, plus reports that the SEC has itself been engaged in trading on own account (see below).

In particular, the Treasury proposed that the Securities and Exchange Commission, which operates (or should operate) on the basis of precise rules and regulations backed by rigorous enforcement, should ‘preserve’ the modus operandi of the US Commodity Futures Trading Commission, which is that business should instead be conducted in accordance with stated ‘principles’.

In other words, the Treasury wanted to scrap the rules-based system (required under the 1933 and 1934 Securities Acts) and to replace it by a vague ‘principles- based’ system’, which would mean that enforcement would be almost impossible – because a régime of relativism would prevail and key terms would remain undefined.

Securities professionals are taught and intensively trained to operate exclusively on the basis of the SEC’s ‘rules-based’ system, which precludes any deviation whatsoever from the established rules (provided the regulations are enforced, which has not been the case for years because of corruption within the Securities and Exchange Commission itself).

STAGE THREE, AS PROMULGATED BY THE PRESIDENT’S WORKING GROUP:

A new US regulatory structure would be imposed over the longer term, under which US financial institutions would be asked to choose between one of three Federal Charters:

• Federally Insured Depository Institution:
This would be applicable to all lenders with Federal deposit insurance.

• Federal Insurance Institution:
Applicable to all insurers offering retail ‘products’ which entail some degree of Federal guarantee.

• Federal Financial Services Provider:
This charter would cover all other categories of financial services firms.

Under this regime, the following SEVEN NEW FEDERAL AGENCIES, each with its own hyper-expensive self-serving bureaucracy would ‘regulate’ US financial institutions:

• The Market Stability Regulator: Under this vague proposal, the Federal Reserve was to ‘look out’ for threats to the stability of the United States’ diverse financial system, whether they in fact originated with banks, insurance corporations, mortgage lenders, investment banks, hedge funds, or with any other type of financial institution.

The Federal Reserve could require corrective measures to be taken to address current risks or to curb future risk-taking, but these powers could only be exercised if overall financial stability was threatened. In other words, this entity would essentially achieve nothing at all, leaving the financial markets alone (until it was too late), thereby passively facilitating a progressive repetition of the near-catastrophe experienced since the mid-1980s, but on a far larger scale.

• Prudential Financial Regulatory Agency: This new entity would regulate US financial institutions buttressed by explicit Government guarantees associated with their operations, such as Federal deposit insurance. The new US agency would assume the rôles of the current Federal prudential regulators, including the Office of the US Comptroller of the Currency and the Treasury’s Office of Thrift Supervision. Yet another (subsidiary) regulator would focus on the hitherto unrestrained and unregulated off-off-budget Government-Sponsored Enterprises (GSEs) which, though established by the Federal Government, were placed (on creation) into the ‘private’ sector and have implicit Government backing, such as the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Bank System. See our report dated 26th December 2007 for insights into how Fannie Mae, for instance, has been used to perpetrate fraudulent financial transactions in the US mortgage sector [Archive].

• Conduct of Business Regulatory Agency: This new regulator would be charged with ‘consumer protection’ with respect to all categories of financial entities. The agency would watch disclosures and business practices, and would supervise the licensing of certain types of financial firm.

It would absorb many of the functions of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), and would undertake some responsibilities that are currently handled by the Fed, state insurance regulators, and the Federal Trade Commission.

• Federal Insurance Guarantee Corporation: This new agency would replace the Federal Deposit Insurance Corporation, charging premia to guarantee bank deposits and insurance payouts.

• Corporate Finance Regulator: This new entity would take over other functions of the Securities and Exchange Commission, such as the oversight of corporate disclosures, governance issues, accounting, and other matters.

In other words, SEVEN NEW BUREAUCRACIES would regulate everything and achieve nothing.

THE PURPOSE OF THE FALSE PROSPECTUS: OBFUSCATION
Confused? That’s precisely what is intended. As can be seen, this curious pot-pourri of convoluted arrangements matches the intentions of those who framed it (and who will not see it implemented, we feel sure). Those intentions can be summed up in the single word: OBFUSCATION.

For these proposals were developed during the immediate aftermath of the emergence of overt financial sector strains arising from the ongoing exposures of the open-ended financial fraud; and their purpose, from the outset, was not to enhance regulation and to make it ‘more efficient’, but rather to bring forward a novel framework under cover of ‘overdue reforms necessitated by the credit crunch and the financial crisis generally’, which could be exploited and leveraged to cover up, rather than to further expose, the serial financial criminality that blew up in the faces of the US kleptocracy as a consequence of the exposures of its endless criminality.

In other words, the President’s Working Group on Financial Markets appears to have been briefed in bad faith, its task being to develop a platform and framework of proposals which would serve the purpose of obfuscating financial criminality, while appearing to do the opposite. This was, in short, nothing less than a typical deception, intended to convey the dubious impression that ‘reform’ was (belatedly) being recommended, while in practice substituting the existing regulatory system which has not been properly enforced, with a vague, woolly régime framed so as to facilitate the very free-wheeling fraudulent finance and risk-taking that the proposals are supposed to deter.

Since, however, the proposals were brought forward by deception operatives whose speciality has all along been dialectical ying-yang behaviour, duplication and duplicity, the discovery that these proposals are a sham, comes as no surprise. Whether those who listened to ‘Paulson’ making this pitch on 2nd July 2008 at the Royal Institute of International Affairs (Chatham House) in London (the globalist UK think-tank which masquerades as a free-standing institution of the British nation state while constantly undermining it), understood this duplicity, seems improbable.

On that occasion, ‘Paulson’ presented a series of vague generalities for the consideration of the British ‘Great and the Good’ assembled to hear this pitch, such as that ‘the financial landscape has changed, and non-bank financial institutions play a significantly greater role’ than used to be the case. (When one of our special contacts attempted to make himself known to this ‘Paulson’ fellow, he vanished out of sight).

But the existing US regulatory régime has not ‘failed’ because it is no longer ‘fit for purpose’. It has ‘failed’ for three straightforward reasons:

(1) Some of the regulatory agencies, such as the Federal Reserve Board itself, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, are/have been corrupt.

(2) The corrupt regulators have accordingly failed to regulate, let alone to enforce their regulations.

(3) The focus of the corrupt regulators is to prolong the obfuscation operation, to verbalise their dereliction of duty through spinning for the benefit of the likes of The Wall Street Journal, and to seek to draw a veil over such issues as the SEC’s ‘legitimisation’ of naked shorts for a restricted group of participants, whereas a regulator should be completely impartial. The overall objective is self-preservation, protection of their own personal interests, and staying out of jail themselves.

• In respect of ‘naked shorts’, has the SEC conveniently forgotten the old securities market adage: ‘He who sells what isn’t his’n, Must put it back or go to prison’?

TERMS LEFT UNDEFINED UNDER THE INTENDED ‘PRINCIPLES-BASED’ REGIME
In place of the existing (albeit unenforced) regulatory régime, ‘Paulson’ proposed a system not of rules-based regulation, which could be enforced if the regulatory agencies themselves were not corrupt, but of ‘principles’-based regulation, which, by definition, would entail that there would be no rules to be enforced, terms are not defined, and that breaches of ‘principles’ are liable to be irrelevant because it would always be a nuanced matter of relatavist judgment whether principles were being flouted, or not. In otherwise, such a régime would not amount to a regulatory régime at all, but rather to a crooks’ charter and paradise. ALL OVER AGAIN.

If the existing US regulatory agencies were doing their jobs properly, they would be adequate for the purpose – and certainly far more adequate than the deliberately complexified, overlapping and obfuscatory framework suggested by the President’s Working Group on Financial Markets.

But while the Working Group may be redundant and has discredited itself, the financial market issues that it was supposed to have addressed, remain in existence and as intractable as before.

THE EXISTING U.S. REGULATORY FRAMEWORK
The existing US regulatory framework, for the record, consists of the following agencies:

• Federal Reserve System: Supposedly regulates the US monetary system and oversees bank holding companies. Historically lacked real assets apart from its contract to print the currency of the United States, which ought to be a function of the US Treasury,

• Securities and Exchange Commission (SEC): Established by the Congress in 1934 to regulate the securities markets in accordance with stated rules and under the 1933 and 1934 Securities Acts, to maintain ‘fair’ markets and to protect investors. The SEC also, as a primary element of its oversight powers, reviews corporate financial statements, is supposed to enforce the securities regulations, and provides guidance for the framing of accounting rules.

• Federal Deposit Insurance Corporation (FDIC): This regulator insures deposits lodged by bank customers against the failure of banks. The FDIC was created in 1933 to build and maintain public confidence and to encourage stability in the financial system by fostering sound banking practices.

• Office of the Comptroller of the Currency: This traditional arm of the US Treasury Department was established in 1863 to supervise and regulate National Banks and the Federal branches of foreign banks. Its purpose is to promote the safety and soundness of the banking system and to conduct on-site examinations of banks across the nation.

• Commodity Futures Trading Commission (CFTC): Established as a US agency in 1974, this entity is supposed to ensure the open and efficient operation of the US futures markets, which started out trading agricultural futures, and now trade sophisticated synthetics (derivatives).

• Office of Thrift Supervision: This agency issues and enforces regulations governing the United States’ Savings and Loan sector (Thrift Institutions). It is responsible for ensuring the safety and soundness of deposits with Thrift Institutions.

SHORT HISTORY OF U.S. FINANCIAL TRANSPARENCY

(A) 1890 to the 1920s:

Leading American financiers of the late 19th century, such as John J. Astor, Cornelius Vanderbilt, John D Rockefeller and J. P. Morgan (1), provided capital to finance the establishment of very large corporations and combines, also known as the trusts, which came to wield enormous power across entire industrial sectors. As a consequence, by the year 1890, the control of 5,000 corporations was held by about 300 such trusts operating all over the country. By 1900, the largest dozen of these combines were capitalised at over $1.0 billion (2) .

Accordingly, investment bankers became corporate directors – with Morgan, for instance, having board representation on 78 investment bank companies.

Therefore, when these large corporations needed injections of capital, the bankers who were sitting on their Boards claimed to represent the bondholders (3).

Disclosure of financial information was entirely voluntary, even though disclosure of predator practices could only be revealed via the balance sheet (4). The Sherman AntiTrust Act of 1890 was enacted in order to define and make the monopolistic activities of such trust companies illegal (5).

In 1914, the Clayton Anti-Trust Act sought to increase competition across the business sector by restricting predatory corporate activity such as acquiring other competing corporations and the practice of allowing interlocking corporate directorships (6).

And the Federal Trade Commission Act, passed in the same year, established a regulatory authority, acting as the ‘watchdog of competition’, to protect the American consumer from ‘unfair methods of competition’ (7). In other words, raw, unregulated capitalism was by now seen as being prone to abuse and in need, therefore, of official constraint.

(B) 1920s to 1941:

During this period, the number of investment companies that were formed in the United States steadily increased from six in the year 1921, to 46 in 1925 (8).

While most of these investment companies were subject in some measure to the ‘Blue-Sky’ [see Glossary] requirements, the State statutes and regulations appear not to have treated investment companies much differently from the general run of corporations and business trusts (9).

As previously, disclosure of financial information remained voluntary, even though the disclosure of predatory practices could only be conveniently disclosed through the balance sheet (10).

Between 1927 and 1929, these investment companies raised approximately $2,300,000,000 from the sale of new securities. Their assets increased from $550,000,000 in 1927 to almost $2,600,000,000 in 1929 (11). Distribution of the shares in these fixed trusts reached peak levels during 1930 and 1931, when $600,000,000 of their shares were sold, inducing the passage of various US statutes and the promulgation of regulations which brought the expansion of these fixed trusts to an end (12).

In 1933, North Carolina adopted a regulation (which in due course was adopted as Section 11 of the Investment Company Act of 1940) which prohibited the charging of any sales load on the switching of trust shares (13). As a consequence of the lessons learned the 1920s and early 1930s, including bitter experiences suffered by investors with ‘bucket shops’, the original and copycat Ponzi and Pyramid-selling schemes, and other forms of fraudulent finance that flourished in this free-for-all environment, the Congress passed the stringent Securities Acts of 1933 and 1934, followed by the Maloney Act of 1935; and in the banking sector, the Banking Act of 1933 and the Glass-Steagall Act of 1933 which restricted US banks to banking operations and precluded their participation in the securities markets. The Securities Acts were updated by the Securities Acts Amendments of 1970.

THE EXPENSIVE FALSE PROSPECTUS ANALYSED:

U.S. TREASURY’S 2008 REGULATORY ‘REFORM’ PROPOSALS (14), (15)

Astonishingly, in view of the obvious fact that these proposals would be bound to have an impact on fragile financial market confidence, the Working Group’s suggestions were phased, with short- medium- and long-term proposals set within an imprecise timeframe, interspersed with periods of reflection for ‘study’, and personnel being liable to be poached from old regulatory agencies that would remain alive in one phase, but not the next, and with every opportunity taken to ensure that the responsibilities of no less than SEVEN newly proposed, expensive agencies would overlap as much as possible, while existing agencies would languish in a state of limbo or uncertainty pending prospective abolition, or not, as might be decided in a later phase.

Self-evidently, this confused prospectus is a recipe for undermining confidence in the integrity of financial market regulation, and therefore in the integrity of the financial markets themselves, as well as maximising the potential for obfuscation, as will be seen:

(A) THE SHORT-TERM PROPOSALS:

The President’s Working Group on Financial Markets is/was intended, we read, to be composed of a Coordinator of Financial Regulatory Policy and to cover the entire American financial sector, as indicated above, not merely the financial markets.

It was thus to incorporate banking regulators not currently participating in the study group, and would need to broaden its financial focus to capture the whole of the financial sector.

Hence the Working Group was to facilitate inter-agency coordination and communication, with a view (ostensibly) to developing proposals to mitigate all systemic risks to the financial system, to enhance the integrity of the financial markets, to promote protection of consumers and investors, and to support the efficiency and competitiveness of the financial markets.

Since overall ‘competitiveness’ covers the stance of any given financial market environment by comparison with foreign counterparts, the Working Group would or will have had to consider the impact of any proposals it puts forward on the competitiveness of the market in question, with its equivalents abroad; and the moment that such considerations had to be considered, the knee-jerk response of the Working Group’s membership is liable to have been to opt for the most lenient and liberal ‘solution’ on the drawing board.

As for the proposed creation of a Federal Mortgage Origination Commission (MOC), this huge new bureaucracy would be headed by a Director appointed by the President of the United States for a four- or six-year term – which means that, in accordance with the standard corrupt US practice, the job would be likely to go to a presidential crony.

The six Board members would be supplied from the Federal Reserve, the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC), even though the last of these three agencies were to be abolished under the proposals, and the Federal Reserve itself remains vulnerable, under unpublished H.R. 2778 of the 110th Congress, to be abolished and merged within the US Treasury.

The other two Board Members would be supplied from the National Credit Union Association and the Conference of State Bank Supervisors.

The new Mortgage Origination Commission would develop minimum licensing standards, testing criteria and a system for grading the adequacy of each State’s financial regulatory arrangements. The drafting of regulations covering national mortgage lending legislation would, the Working Group apparently proposes, remain exclusively with the Federal Reserve, as provided for under the Truth in Lending Act.

Finally, the States should be given clear authority to enforce Federal mortgage legislation upon independent mortgage originators, that is to say, those mortgage originators considered to have been responsible for originating most of the so-called ‘sub-prime’ loans.

There was no reference to the practice of collectivising such mortgage loans, let alone with false documentation purporting to represent other mortgages but which lack any underlying asset at all, for the purpose of ‘securitisation’ and marketing to gullible investors at home and abroad who may not perform adequate (or any) due diligence.

For the short term, too, the Treasury’s blueprint put forward two considerations relating to the overall stability of the financial markets. Specifically:

(1) The prevailing temporary liquidity provisioning process, designed to alleviate threats to market stability (launched in December 2007 in the face of the crisis of confidence which overwhelmed the American authorities given the accumulated consequences of their incompetence, criminality and mismanagement of the US financial system), must ensure:

• That the process is calibrated and transparent (with no definition of terms here);

• That appropriate conditions are attached to the lending, (with no explanation of ‘appropriate’);

• That information flows to the Federal Reserve System via on-site examinations, and/or that other conditions or means can be imposed as determined by the Federal Reserve, with no recourse and without any indication here of what the Federal Reserve might have in mind.

(2) The President’s Working Group should consider broader regulatory issues related to discount window access for non-depository (i.e., investment banking) institutions. So, this Working Group has not yet undertaken such considerations? What, then, was it doing between August 2007 and March 2008, exactly?

(B) THE MEDIUM-TERM PROPOSALS:

Under this heading, the Treasury recommended, as summarised above:

• Elimination of ‘redundant’ banking regulators, without providing any rationale for such a drastic and reckless measure, and without having practical alternative proposals formulated or in place;

• Closing down the Office of Thrift Supervision, ditto;

• Folding the responsibilities of the Office of Thrift Supervision into the Office of the Comptroller of the Currency, again with no rationale for such action being provided.

Having shredded key existing regulatory institutions without replacing them (at this stage), the Treasury proposed that the next step should be that a leisurely ‘study’ should be undertaken, to establish whether the Federal Reserve or the Federal Deposit Insurance Corporation (the FDIC) should have oversight of the State-chartered banks.

This seems to us to be quite ridiculous, and asking for trouble. First, some existing regulators are abolished, without the Treasury at this stage having a clue what should take their place. Secondly, having abolished the regulators, the Treasury would then embark upon a ‘study’ to decide what to do next, as it says it is undecided (cannot make up its mind) whether the Fed or the FDIC should oversee the State-chartered banks – a confused recommendation akin to throwing all the furniture out of the window before deciding what, if anything, should replace it.

A moment’s reflection will convince even the most enthusiastic supporters of the corrupt US ‘Paulson’ Treasury that these proposals are, of put it mildly, mischievous.

Nobody who cares about US financial market stability can possibly take them seriously: indeed, the proposals , even as far as has so far been described here, are so mixed up and destabilising, that it is no exaggeration to ask whether they represent some kind of spoof.

Has some malevolent gremlin substituted this mischievous verbiage for what the Working Group actually submitted? Given the track record of ‘Paulson’s criminalist Treasury, that may not be as far-out a proposition as it may appear to be.

The third element of the intermediate recommendations brought forward by this muddled report departed from common sense by recommending that the Federal Reserve – which has achieved notoriety thanks to its two-tier policy of purporting to represent the Rule of Law while at the same time surreptitiously condoning and facilitating corrupt financial practices through exploitation of the unaudited and secretive Federal Inter Bank Settlement Fund – should acquire oversight and rule-making authority over payment and settlement systems that process payments and transfer securities between financial institutions and their clients.

This would be worse than placing the fox in charge of the chicken coop: it would ultimately lead to the liquidation of the chickens by guaranteeing the perpetuation of the fraudulent finance model that has been exposed by notorious recent developments. And again, no coherent rationale for this supposed ‘reform’ was presented with the recommendations.

Put another way, the report then recommended that the Federal Reserve should acquire oversight and, inconsistently, rule-making authority, over the payment and settlement systems that process payments and transfer securities between financial institutions and customers.

Since this all-embracing ‘reform’ would include ALL institutions, this would mean inter alia that the Federal Reserve would in practice acquire rule-making authority over securities broker-dealers. Hence, the rule-making authority to be abolished with the folding of the Securities and Exchange Commission (see below) would reappear under the aegis of the Federal Reserve, although we are not told what category of rules the Fed would promulgate. It can be taken as read that the rules to be promulgated by the Federal Reserve would bear no discernible relationship to the rules long since established (but lately, not enforced) by the Securities and Exchange Commission.

On top of this nonsense, the proposals recommended a further unresolved ‘solution’, calculated to maximise uncertainty – this time in the insurance sector. First, the Working Group floated the idea of creating a Federal regulator to oversee the insurance industry.

Then, after floating this suggestion, the Treasury wants to ‘ask Congress’ to create a new Office of Insurance Oversight (OIO) which would function from within the Treasury, meaning of course that the Treasury would control the insurance sector directly. Since the Treasury, like the US Federal Reserve, has demonstrated that it is thoroughly corrupt, this recommendation would simply enable the corrupt Treasury to capture and channel the well-known corruption that bedevils the insurance sector in the United States. The OIO would supposedly focus upon international insurance sector issues, while also providing the Treasury with ‘advice’ – a completely meaningless concept since the entity, resident within and therefore a part of the Treasury, would accordingly be advising itself.

[The probable hidden intention here would be to replicate the Federal Financing Bank (FFB), which is likewise an office (plus some filing cabinets) situated within the US Treasury but which for many years enjoyed off-budget status, thereby providing the Treasury with increased ‘wriggle-room’ for its usual ‘smoke-and-mirrors’ financial shenanigans. As matters stand today, the Federal Financing Bank is one of the basic mechanisms that enables the Secretary of the Treasury to manipulate the Government’s finances by exploiting the fact that is allowed by statute to have $15.0 billion of debt outstanding at any one time, so that by means of creative bookkeeping, up to $15.0 billion extra can be borrowed on those occasions when the Congress has deployed its residual ‘control’ over the spending of the Executive Branch by refusing to raise the Statutory Debt Limit, in exchange for some Federal Budget concession or other that it seeks to extract from the Executive Branch].

In short, and Office of Insurance Oversight inside the Treasury would simply be leveraged by the corrupt Treasury for its own purposes, and in furtherance of the dubious interests of the official perpetrators of fraudulent finance operations who have been cornered and are running for cover.

Even worse are the quite appalling proposals affecting the securities sector. The Working Group suggested, as mentioned above, that the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) should be merged – again, providing no rationale for such a radical shake-up. The actual purpose here would be to end the settlement reached by the Securities Acts of 1933 and 1934, which provided for the securities sector to be governed by the strict application of precisely defined rules – the settlement that ended the chaos arising out of the undisciplined free-for-all allowed in the 1920s, when bucket-shops ripped American investors off and investors enjoyed no protection from sharks other than that provided by the ‘Blue Sky’ above – in favour of standardising the so-called ‘principles-based’ approach employed by the ineffective Commodities Futures Trading Commission. Neither the SEC nor the CFTC have, in recent years, fulfilled their regulatory responsibilities, due to internal corruption; but scrapping the rules-based approach in favour of the CFTC’s permissive ‘principles-based’ approach would guarantee and perpetuate financial corruption perhaps for generations to come.

An indication of the deceptive nature of this recommendation can be gauged by the mealy-mouthed language employed to present this sorcery for public consumption. Specifically, the Working Group postulated that the Securities and Exchange Commission should seek to ‘preserve’ the CFTC’s principles-based approach, presupposing of course that the SEC should DROP its rules-based approach: but in order to mask this deception, THIS CENTRAL RUSE WAS LEFT UNSTATED.

‘Preserving’ the principles-based approach used by the ineffective CFTC would, self-evidently, be inconsistent with ‘preserving’ any rules-based approach – which is the point of this proposition.

What the Treasury is seeking to achieve here is to pass off a fraudulent reform as a key element of an improved regulatory system, when what would be perpetrated would be the de facto elimination of the existing framework which, if properly applied, would protect investors from fraud and make it impossible for fraudulent finance operations such as those that have been exposed, to exist, let alone to flourish. In other words, this recommendation represents a typically diversionary fraud by the ‘Paulson’ Treasury, consistent with the reputation it has earned for itself as an institution of the Federal Government in which no trust can currently be placed, not least because, on the basis of its recent behaviour, it cannot be relied upon to honour its obligations.

(C) THE LONG-TERM PROPOSALS:

Not content with the chaos that would be created as a consequence of this wrecking operation to date, the Working Group, true to its false prospectus, capped this truly shambolic mish-mash with a series of half-baked long-term proposals, the net effect of which would be to leave everything up in the air, thereby maximising scope for a 1920s-type free-for-all – and ensuring that the investment environment of future years would be consistent with the underlying intention of this dog’s dinner of spurious proposals – namely to facilitate the perpetuation of fraudulent finance, following the shocks administered to the criminalist kleptocacy by recent developments.

By staging its fitful proposals over a prolonged and imprecise timeframe, the US Treasury has of course already compromised the prospects for global financial stability, since no-one now knows what is coming next. The fact that proposals have been put forward in such a vague, disjointed and dissonant manner has itself added to the febrile atmosphere of uncertainty, although the Treasury doubtless hopes that the deceptions encased within these proposals will have passed its targeted audiences by – an example being the attendees at the Chatham House event in London addressed by ‘Paulson’ at the beginning of July. These people will have been easily impressed by anything that the Secretary of the Treasury might have told them – the purpose of such presentations being to build an unthinking ‘consensus’ (in London, especially) for the treacherous ‘reforms’ that the corrupt ‘Paulson’ Treasury is putting forward.

The so-called long-term proposals (with no timeframe mentioned) would involve, to begin with, a revolution in the status of all US financial institutions. All lenders equipped with Federal deposit insurance would be granted a brand new charter certifying them as a Federally insured depository institution. All insurers offering retail products involving some degree of Federal guarantee, would be chartered as a Federal insurance institution, under the direct regulatory control (see above) of the Treasury. Finally, all other types of financial institution would receive a charter signifying their status as a Federal services provider. Note the crucial use of the adjective ‘Federal’ here: what is intended is the usurpation or duplication by the Federal Government (it is not yet clear which) of ALL the regulatory functions currently exercised by the State Governments. Whether usurpation or duplication is intended, this proposition must have gone down like a lead balloon in State capitals.

Under the first of this final batch of dubious proposals, a so-called Market Stability Regulator, namely the Federal Reserve itself, or else an entity that is subservient to it (unclear), would be established, which, however, would hardly undertake any regulating of the financial markets at all. Instead, it would ‘look out for’ threats to the stability of the US financial system, whether they might originate with mortgage lenders, banks, insurance companies, investment banks, hedge funds or any other category of institution. The only environment in which the so-called new Market Stability Regulator would intervene would be when it had formed the subjective judgment that corrective action needed to be taken to address current risks, or that it is necessary to constrain further risk-taking. This proposal appears to have nothing to recommend it at all.

Establishing further expensive bureaucracies without any teeth is a pernicious practice equivalent to a fudge, and the impression given here is that the Working Group needed somehow to convey the impression that the permissive environment that it was subversively recommending would be watched closely for aberrations, whereas the underlying and thoroughly dishonest intention and consequences of these proposals will be to maximise potential for market abuses across the board.

The next piece of gross mischief would entail the establishment of a so-called Prudential Financial Regulatory Agency, with a brief to regulate financial institutions which have explicit Government guarantees associated with their business operations. Hence this new agency would regulate all institutions equipped with Federal deposit insurance. This agency would also take over the roles of the current Federal prudential regulators (for no discernible reason), such as the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

The agency should, the report argued, focus on the protection of consumers and ‘help’ to maintain confidence in the financial system (by unspecified means). The agency would operate on the basis currently applied to the regulation of the insured depository institutions – in which case, since this new agency would replicate existing practice, why do the existing regulatory arrangements need to be changed? – using the standard capital adequacy requirement techniques, imposing investment limits, circumscribing the scope of an institution’s activities, and directing on-site risk management supervision. The agency would be focused on institutions, rather than operating generically.

On top of all this, a separate new regulator was proposed, to focus on the powerful and wayward Government-Sponsored Enterprises (GSEs) which have been surreptitiously exploited to facilitate fraudulent finance operations, such as the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Bank System. As we discussed in our report dated 26th December 2007, corrupt mortgage lenders have been transferring the full risk and ownership of mortgages to these off-off-budget entities which were established by the Government but positioned immediately upon their foundation, into the private sector, so that they could be excluded from the scrutiny of the Federal Budget process.

The crisis surrounding Fannie Mae and Freddie Mac that blew up during the week ending 11th July 2008 – over seven months after we posted our report on the abuse of the foreclosure process on 26th December 2007 – illustrated the mischievous and destabilising nature of the Working Group’s proposals, because this dimension of the crisis ‘suddenly‘ ran out of control in July 2008, despite the fact that the President’s Working Group had intended to ‘deal with’ the Government-Sponsored Enterprises problem under its ‘long-term’ category, rather than as an immediate, burning issue of the greatest significance, as flagged by our report dated 26th December last year.

This miscalculation alone showed the Working Group to be extremely incompetent, in dereliction of its self-appointed duties, and quite incapable of handling the huge mess for which its own largely corrupt membership has been specifically responsible. Fancy treating the US GSEs as a long-term problem when several of the key GSEs have all along been at the very centre of the machinery of fraudulent finance that is in the process of being widely exposed, and which the Working Group was meant to be addressing! This was surely taking OBFUSCATION too far.

No rationalisation was presented for the proposal that a separate regulator should be established to ‘regulate’ these off-budget entities, other than the spurious one that implicit Federal backing is qualitatively differentiated from explicit Government backing. Presumably the woolly thinking here is that the legal status conferred by Federal Statute on the GSEs would be violated if the proposed Prudential Financial Regulatory Agency were to assume regulatory responsibility for the GSEs – which have hitherto, by the way, escaped all regulation and have thus provided fruitful ongoing scope for organised criminal and financial fraud operations.

The other agencies proposed by the Working Group simply would compound the confusion and the seemingly deliberate dispersion of responsibilities which this dog’s dinner of recommendations perpetrates. Specifically:

• A so-called Conduct of Business Regulatory Agency would cut across the ‘responsibilities’ of the mish-mash of other agencies, establishing the basis for endlessly unresolvable turf wars that lead nowhere. This bureaucracy would ‘observe’ disclosure information and business practices (with no indication of what it would do with these observations), and would also engage in the licensing of certain categories of business firms (so that its personnel would be tin gods).

It would supposedly absorb ‘many of’ the functions of the Securities and Exchange Commission, the Commodities Futures Trading Commission, the Federal Reserve System, of the State insurance regulators and even the Federal Trade Commission. The rationale of all this is left unclear.

However it would do so, according to the Working Group’s blueprint, after an undefined period of uncertainty and therefore turmoil – during which hiatus the usual pork-barrel lobbying operations would have been deployed at full throttle, with no-one knowing which way any of the cats would be liable to jump, and a state of officially contrived chaos having long since been generated.

By this stage, the divisions of regulatory responsibilities will have multiplied to such an extent that every agency would have burgeoning responsibilities overlapping with some or all of the others, so that nothing at all could ever be resolved – a remarkably classical Leninist formula for ensuring the definitive perpetuation of the collective will of a small clique at the centre. Lenin established two orders for his Party-State, under which all the institutions of the State were replicated by Party entities. This meant that a complainant making representations to the State structures would find that his case would be frustrated by the parallel Party structures, and vice versa. This is exactly the state of affairs, albeit a much more fragmented and complicated one, that the President’s Working Group has put forward. This blueprint would have the following overall consequences:

• It would complete the process of discrediting capitalism which the free-wheeling fraudulent finance operations perpetrated by the exposed criminalist operatives and institutions have successfully initiated to date; and:

• By ensuring the perpetual overlapping of responsibilities with their concomitant bureaucratic turf warfare, it would institutionalise and confirm absolute power and freedom of corrupt action for the central controlling élite, namely for a successor group of organised financial criminals who would build upon this new foundation of institutionalised US regulatory confusion, to create the conditions for the next global financial showdown, which would certainly be terminal.

Since, whether ideologues like it or not, the ultimate objective is the destruction of free enterprise and the abolition of all private property except for the privileged criminalised élite, that showdown would be terminal. It is not going to happen, but that is the long-range objective.

Two other expensive US agencies would, under the convoluted blueprint, be tacked on to the contrived ramshackle mess so far recommended. The proposed Federal Insurance Guarantee Corporation, which is to replace (for no apparent reason) the existing Federal Deposit Insurance Corporation (FDIC), would charge premiums to ‘guarantee’ bank deposits and insurance payouts.

No terms are defined here (as is the case throughout this false prospectus), so it is not clear why the FDIC cannot, if really necessary, have its existing statute amended so as to expand or modify its responsibilities in accordance with this proposal. What is wrong with the existing structure?
This unanswered question is applicable throughout.

Finally, the Working Group floated the batty idea of a Corporate Finance Regulator which would supersede the functions of the Securities and Exchange Commission (SEC), and would focus on corporate disclosures, corporate governance, accounting matters, and other issues. Presumably the idea here is that there should be a special agency which sticks its nose into the affairs of US corporations generally – a suggestion that may mask a cynical political objective to subject all US corporations to an officially sponsored espionage system which would be abused, if information gathered by this agency fell into the ‘wrong’ hands. If we assume, as we must, given recent past experience, that the underlying intentions here are malevolent and mischievous, the creation of such an agency would signal to anyone who is not sitting on his or her brains that an ever more socialist United States had essentially finished with capitalism altogether.

There is also an obvious sense that these convoluted ‘regulatory’ proposals have been brought forward in bad faith for yet another reason: their purpose includes the need to deflect criticism that ‘nothing is being done to stop this happening again’. Meanwhile, the socialist European Union has predictably responded with various trial balloons suggesting that the unprecedented display of financial scandal that has been partially exposed, can at long last be exploited as a rationale for the imposition of European-style socialist (Communist) regulation which, by its nature and intent, would smother risk-taking and close off innovation.

For example, Tony Robinson, chief spokesman for the Socialist Group in the Soviet-style European Parliament, said on 3rd July 2008, quite correctly, that the capitalist system had disgraced itself and must now face much stricter regulation. Since we must agree that the capitalist system has indeed disgraced itself as a consequence of the hijacking of the American official structures by organised criminal cadres, it is hard to argue against what Mr Robinson had to say:

‘There is a groundswell of opinion building up for action at a European level. Our group wants a ban on all investment funds speculating on food. We support a proper functioning market, but what we have seen in this crisis is a most distasteful morality where decisions are driven by greed. Hedge funds have used debt to take over companies and strip out their assets. This must stop’.

Leaving aside the ideological hang-ups and ignorance of the market system embedded in these comments, it is a fact that although proposals for a pan-European regulator have not yet been crystallised into a draft EU Directive, the European Parliament has been ‘debating’ three separate proposals to crack down on private equity, hedge funds, and banking sector bonuses.

(Actually, no debate ever takes place inside the European Parliament: rather, the Members (MEPs) address the podium just as they do in the covert Soviet system. Indeed, the European Parliament chamber precisely replicates the Soviet model. In order to complete the transformation, all that would be necessary would be to replace the esoteric European flag above the podium with the familiar bust of Lenin and a nice red star plus a hammer and sickle, and we would all be back to square one. The Editor witnessed this reality in Brussels with his own eyes several weeks ago).

Should such an outcome materialise over time, as intended, the process would have been given decisive added momentum by the pillaging and fraudulent finance that have been exposed since June 2006. This would be a supposedly ‘unintended consequence’ of the organised criminality.

RESULT: EXTREME LACK OF REGULATION ENFORCEMENT
That the proposals put forward by the President’s Working Group are damaging and would have grim consequences has been well attested by people who know what they are talking about.

For instance no less than THREE former Chairmen of the Securities and Exchange Commission, David Ruder, Arthur Levitt and William Donaldson, have condemned these proposals outright, although the language they have used to date has been inappropriately circumspect.

Their general view is that a Treasury initiative to adopt the ‘principles-based’ regulatory approach applied by the Commodity Futures Trading Commission would be ‘a mistake’ (16) . David Ruder, an SEC Chairman under President Reagan, has commented that:

‘It’s not at all useful for the Securities and Exchange Commission to function on the basis of ‘a prudential-based attitude’ in which regulators solve problems by discussing them informally with market participants and asking them to change… we have an enforcement approach’ (17).

For his part, the former SEC Chairman, Arthur Levitt, a Bloomberg Board Member, has commented:

‘That proposal does more violence to protecting America’s investors from the standpoint of transparency as anything in the Paulson proposal’ (18) – referring specifically to substitution of a ‘principles-based’ approach for the tried and tested (until wantonly unenforced) rules-based approach which the existing securities market legislation requires of the SEC.

As matters stand the SEC is, however, considering the easing of its rules to allow foreign stock exchanges and brokerages to sell securities direct to US investors, under supposed surveillance by overseas regulators (such as the British Financial Services Agency) ‘who have rules that are similar to those in the United States’ (19).

In other words, even as we speak, the Securities and Exchange Commission is thinking of watering down its currently poorly enforced rules-based system to allow various foreign stock exchanges and brokerages to deal directly with US investors, rather than going through US intermediaries – so that there would be no control over the volume of dodgy financial ‘products’ that could soon be sold back into the United States, given that non-institution US investors would not necessarily be subjected to any surveillance at all. This might very well be hazardous in the future.

As for the immense problems surrounding derivatives – leveraged, securitised, hypothecated products yielding accruals that are not denominated in real US dollars, but rather exclusively as digitised entries generated electronically in just nanoseconds on bank statements – the Working Group’s proposals sidestepped them altogether: a sure indication that the real purpose of these proposals has never been to ‘solve’ any of the intractable problems created by the invasion of the capitalised system by organised crime, but rather that their purpose is precisely to obfuscate what has been happening so as to draw a veil over the criminal activities that have led to this crisis.

The irresponsible securitisation of ‘sub-prime’ loans and the hoodlum practice of mixing them up with fraudulent paper backed by no assets at all, were not even addressed.

THE ‘PROGRAMS’, OMEGA PONZI SCAMS, ETC.
Exotic investment schemes marketed by scamsters promising sky-high returns into which many Americans entered and ploughed their savings a number of years ago, and which have not paid out, may have purported to be exempt from registration under the Securities Acts of 1933 et seq. [see Glossary below] and in terms of State securities registration requirements.

Such unregistered schemes, unless narrowly they are exempt from registration in conformity with relevant stringent statutory restrictions (such as being confined, for instance, to no more than 35 subscribers nationwide), are all illegal and violate the National Association of Securities Dealers (NASD) and SEC regulations, and were/are also further illegal as they may not have been registered with the relevant State Securities Commission.

When considering such participations, such US investors, in conformity with the Prudent Man Rule under the 1933 Act [see Glossary] should, in performing their Due Diligence, have been in receipt, and should have reviewed, the necessary registration and prospectus documents meeting the requirements of the NASD, the SEC and State Regulators.

In cases where the issuer was a bank, the participants have undoubtedly been victimised. In all other instances, they will have acted on the basis of fraudulent documents which made them co-conspirators. The issuers were and remain engaged in Ponzi schemes, as we have several times reported [see Glossary and Appendix] and are all co-conspirators and open to prosecution under R.I.C.O. and other relevant US legislation, including multiple anti-money-laundering legislation.

Furthermore, it is likely that some American participants will have signed Non-Disclosure forms or agreements, a fatal error which will have meant that they can have no recourse to US authorities for relief from being scammed, not least because in having participated in any of these schemes and signing such forms, they became co-conspirators themselves, as indicated.

They cannot therefore seek protection from the relevant regulators, and neither can they disclose their participations, especially where money-laundering will likely have been intended, since this presupposes tax evasion: and under the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982, US taxpayers are required to report all sources of income, wherever it was earned anywhere in the world. It follows that all receipts by US taxpayers since the passage of this Act which have not been reported to the Internal Revenue Service are taxable, which means that all US taxpayer holdings in offshore accounts that are not declared for tax are vulnerable to payment of the tax and penalties. Imprisonment is also dished out to tax evaders in the United States with abandon.

But the participants in these programs have received nothing and have so far forfeited 100% of their investments. Having signed Non-Disclosure documents purporting to protect the program organisers or distributors from the consequences in the United States of their criminality, and the participants from the consequences inter alia of prospective tax evasion and of co-conspiring in a felonious transaction, some participants have been left dangling and are at the mercy of ruthless MK-ULTRA-style perception manipulators who have been managing their expectations for years.

Under the regular securities laws of the United States, investors and participants have to show source of funds. How can they take receipt of the proceeds of these ‘program’ and Omega-type Ponzi schemes without exposing themselves to US authorities, in many cases with prospectively grievous consequences?

These participants need to ask themselves: are the websites that may have been managing their expectations for years disclosing both sides of the equation, or have they simply been expressing justified anger and frustration at the brazen evil of the high-level, well-connected perpetrators of these scamming programs, thus deceiving their intended readerships by failing to look at the other side of the issue, namely the possibility that the scamsters may have compromised the investors?

They also need to consider whether it is likely that the hitherto ‘protected’ perpetrators of these scams have, all along, also been relying upon their knowledge that their victims may be impotent because they may be engaged in prospective tax evasion, as a rationale for the integrity of the Greenspan-Bush Sr. ‘Never-Pay’ model. In this connection, it is axiomatic that crooks always seek to compromise their victims, thereby ensuring, for instance, that they cannot testify against them.

In the case of the Swiss banks that marketed such participations, their first priority is understood to have been to obtain the targeted investor’s signature on the coveted Non-Disclosure document. Then the participant was typically asked to prove his or her funds. Thirdly, the participant may have been requested to travel to Europe, or to courier funds to the bank’s European address, where their account would have been be opened. In cases where very large amounts were put up, the bank’s aircraft was actually dispatched to collect the participant and his funds..

Participants in these schemes may be caught, if any of these unfortunate conditions apply to their circumstances. Co-conspiracy is a function of motive. If the motive was to receive inordinately high yields and/or to evade taxes in breach of the Prudent Man Rule, TEFRA and/or Internal Revenue Service regulations, it is not at all clear on what basis expectations of repayment of principal with interest may be predicated. The fact that the perpetrators (‘principals’) of these scams are indeed despicable, ruthless snakes is no comfort for the participants because the perpetrators may have taken care to ensure that those whom they have scammed are co-conspirators as well as victims.

Even more disconcertingly, the professional perpetrators of these fraudulent finance operations were fully aware of what they were doing from the outset, and may have deliberately ensured, in these cases, that their participants became co-conspirators and would therefore become impotent to recover their funds, which the perpetrators always intended to steal.

Their evil intentions will have been based upon extensive experience of the psychological reality that victims of financial Ponzi and Pyramid scams often collapse into a state of permanent denial, unable to move beyond the mental barrier that they have lost everything. This attitude is typically associated with embarrassment at the fact that the victim has been scammed, a state of mind akin to the humiliation of being mugged or the victim of common theft.

What has been achieved to date as a direct consequence of these exposures, though, is that life has been made extremely uncomfortable for the professional and official sector perpetrators of all categories of fraudulent finance, and will most certainly become more uncomfortable day by day – as official enforcement procedures, which grind slowly but surely, bring more and more decisive pressure to bear on these snakes. Despite everything that has had to be said above, this may still provide some minimal degree of comfort, no doubt, for the victimised participants; but it may not alleviate their problems or their suffering.

What we can say with confidence is that the prevailing sense of pessimism in the United States is misplaced. Perceptions are often slow to catch up with reality. We are being bombarded with data which has almost no bearing on the current environment, which can be summed up as follows: the crooks are on the run, are being hounded day and night, have nowhere to turn, did not anticipate what was about to hit them, and have been caught completely unprepared for the onslaught.

S.E.C. ‘CORRUPTLY ENGAGED IN OWN ACCOUNT TRADING’
And here is another exposure: the Securities and Exchange Commission – still the chief securities market regulator, no less – is itself apparently corrupt. For instance, it has failed to enforce its own regulations, and has only (it appears) been galvanised into action very recently, in response to the cacophony generated inter alia by our reports. No-one has been impressed by Mr Cox’s statements recently, because the failure of the SEC to do its job properly has become widely known.

The SEC irresponsibly dismantled their own enforcement division, and to make matters very much worse, have been engaged in trading, or allowing insiders to trade, for their own account.

For what purpose? The likelihood must be that SEC personnel have been trading for their own personal enrichment, taking their cue from the Black House: the nefarious principle being that if the President of the United States and his most senior colleagues are content to exploit public office for self-enrichment purposes, then what is to stop lesser officials doing the same?

The fact that the Securities and Exchange Commission, which exists for the purpose of regulation only, has reportedly branched out into participating in exotic money-making programmes instead of concentrating on its job of regulating the securities sector, provides us with a further indication of the extreme decadence of the US financial system which can hardly hope to recover unless such grotesque abuses are eliminated.

COUNTER-PROPOSALS FOR CLEANING UP THE MESS
It is perfectly clear to anyone who is not sitting on their brains that the so-called ‘Paulson’ Treasury proposals, a.k.a. the mish-mash of half-baked notions served up by the President’s Working Group on Financial Markets, is not fit for purpose and should be relegated to the dustbin of history with immediate effect. It is further clear that these messy proposals have actually exacerbated the crisis by introducing new dimensions of uncertainty surrounding future US Government policies, thereby further undermining confidence in an environment so febrile that the entire edifice of fiat money cards has been teetering on the verge of collapse anyway.

Given the perverse effects of these proposals on financial market confidence, we can legitimately go further, and accuse the Working Group of irresponsible behaviour which is tantamount to the financial criminality which the proposals are intended to obfuscate.

To place consideration of the problems surrounding the Government-Sponsored Enterprises in the ‘long-term reform category’ when, within months of our report on the subject last December, this central dimension of the overall crisis blew up in the Working Group’s faces, surely provides all who ‘need to know’ with sufficient evidence of the Working Group’s incompetence, let alone its clearly mischievous intent, to warrant the Working Group being closed down forthwith – before it does any more damage, like the proverbial elephant in the china shop.

Michael C. Cottrell, M.S., the securities markets expert, has therefore prepared the following basic recommendations, which should be substituted for the cack-handed and extremely damaging false prospectus promulgated last March by the disreputable President’s Working Group on Financial Markets, fronted by this ‘Paulson’ fellow.

MR COTTRELL’S COUNTER-PROPOSALS ARE AS FOLLOWS:

(A) Comprehensive funding of the necessary enforcement structures, which must remain intact. The organisations most suited for this function remain the Securities and Exchange Commission and the Federal Trade Commission. Before summarising Mr Cottrell’s proposals, here are some examples of what has happened when these regulators fail to do their jobs properly, or at all:

(1) The Securities and Exchange Commission (SEC): This entity must enforce its regulations with vigour, in the context of the further reforms that Mr Cottrell recommends, below:

The Chairman of the Senate Banking Committee, Christopher Dodd, and Senator Jack Reed, have asked the Government Accountability Office (formerly the Government Accounting Office, GAO) to investigate why sanctions imposed by the SEC plunged by 51%, to $1.6 billion, in the regulator’s most recent fiscal year. According to the SEC’s Annual Reports, it opened 15% fewer probes during the same period, than in the preceding fiscal year (20).

For instance, the Securities and Exchange Commission failed to enforce its regulations in the case of American Business Financial Services, Inc. (ABFS), located in Philadelphia, PA, which operated from 1988 until it declared bankruptcy in January 2005.

This case is revealing in the context being considered here.

ABFS financed its operations by selling its notes to the general public, by means of newspaper advertisements and mass mailings, which promised high interest yields. The notes it sold carried no collateral and were not insured, so that they were worthless when ABFS declared bankruptcy (21). More than 22,000 individual investors lost a total of approximately $750 million. The bankruptcy trustee has filed suit against Bear Stearns & Co., J. P. MorganChase & Co., Morgan Stanley and Crédit Suisse, to recover monies lost when these investment banks allegedly allowed or enabled ABFS to overstate the value of assets on its books (22).

ABFS extended loans to borrowers burdened with poor credit, worth more than $6.0 billion in the aggregate, which were then packaged for marketing purposes, but which essentially represented securitised pools of sub-prime loans. ABFS also secured cash from individual investors by selling the investors uncollateralised notes via public offerings (23).

The investment banks converted the sub-prime loans and uncollateralised notes into ‘interest only strips’, or ‘residuals’ which represented ‘the right to receive future cash flows from securitised loans’ (24). ABFS assigned to these securities a value much higher than their actual worth because the falsification of these values made ABFS look more financially sound than was in fact the case.

Specifically, ABFS booked more than $500 million in ‘fictitious assets’ when the investment banks allowed ABFS to underestimate early repayments of the ‘sub-prime’ loans. ABFS assumed its had a 23% prepayment rate when, in reality, Crédit Suisse had questioned the percentage as being too low. In fact, repayment rates were running at between 30% and 35% of total such ‘assets’ (25) .

Wall Street investment banks finally stopped securitising AFBS sub-prime loans when one investment bank received a letter dated 15th May 2003, addressed to the Federal Bureau of Investigation (FBI) and the SEC asking: ‘Who is protecting these (AFBS) investors?’

Notwithstanding this state of affairs, the Securities and Exchange Commission did not launch an investigation into the behaviour of ABFS until 2004, when ABFS asked for SEC approval to enable it to make another public offering (26). In this, as in so many other instances, the US Securities and Exchange Commission simply failed to enforce its own regulations.

We have summarised these regulations in our reports since 2006, in case this fact had escaped the SEC’s notice. It hasn’t escaped the notice of the financial community generally, so we are entitled to ask why the Securities and Exchange Commission appears to have been an exception.

The SEC regulations of specific relevance to these issues that NEED TO BE ENFORCED include the following [see also the usual Annex at the end of this report].

These details have been published here for at least 18++ months, so as to emphasis the chronic necessity of substituting the Rule of Law for the Law of the Jungle:

• NASD Rule 3120, et al.
• NASD Rule 2330, et al
• NASD Conduct Rules 2110 and 3040
• NASD Conduct Rules 2110 and IM-2110-1
• NASD Conduct Rules 2110 and SEC Rule 15c3-1
• NASD Conduct Rules 2110 and 3110
• SEC Rules 17a-3 and 17a-4
• NASD Conduct Rules 2110 and Procedural Rule 8210
• NASD Conduct Rules 2110 and 2330 and IM-2330
• NASD Conduct Rules 2110 and IM-2110-5
• NASD Systems and Programme Rules 6950 through 6957

(2) Federal Trade Commission: This Government structure has authority to investigate fraudulent transactions in all markets.

According to a plea bargain agreement announced on 8th April 2008, a former Board Member at the New York Mercantile Exchange pleaded guilty to two felony counts relating to illegal natural gas trading. Mr Steven Karvellas, aged 48, made trades and then waited to watch how they turned out before assigning the trades either to his own account or to his client’s account – an abuse referred to as ‘trading ahead of the customer’, which is a violation of the SEC’s Fair Dealing With Customer rules. Karvellas was a floor Exchange Board Member of the publicly traded Nymex Holdings, Inc., and indeed headed up its compliance review committee when the illegal trades took place (27).

Under the supervision of the Commodity Futures Trading Commission (CFTC), floor brokers such as Mr Karvellas can operate both as broker for customers and trade for own account operations. This practice is referred to as the ‘dual trader’ mode, with the floor broker under an obligation to act at all times in the customer’s best interest, a responsibility that entails an obligation upon the broker to seek the best possible prices for the customer 28 .

Ironically (perhaps not, since we are of course dealing with the familiar double-mindedness here), in a letter addressed in 2002 to Nymex Holdings members as part of his campaign for re-election to the Board, Mr Karvellas opined that ‘the shocking collapse of Enron indicates that our Exchange does wear a white hat in the financial world. We illustrate how markets should operate, honestly and with openness and transparency that gains the public’s trust’ (29).

In January 2008, a Grand Jury subpoenaed a five-year-old trading ticket related to this investigation and to Mr Steven Karvellas, who pleaded guilty to tampering with physical evidence by ordering a subordinate to destroy the subpoenaed trading ticket (30).

Nymex, which has been or is currently being acquired by the Chicago Mercantile Exchange (CME, Inc.), and other floor exchanges, have been financially hurt by the emergence of electronic trading, and have attempted to reduce costs and to speed up the ‘open-outcry’ process [see Glossary] (31).

But floor trading remains vulnerable to manipulation: for instance, in 2005, 15 traders at the New York Stock Exchange (NYSE) were indicted on charges of cheating investors. Although many of these traders actually won their criminal cases, the Exchange realised that it had to ‘do something’, and upgraded its surveillance systems at a cost of about $20 million (32).

These examples, which could be replicated here ad nauseam, illustrate the absolute necessity for a regulatory régime that is underpinned by enforcement, which must be implemented without fear or favour at all times – so that everyone participating in the financial markets is aware of the severe consequences of any breach of the rules and regulations.

Talk of operating on the basis of relatavist ‘principles’ is not only irresponsible and unprofessional: it encourages the misplaced belief among the easily swayed and the corrupt, that the ‘way forward’ need not include enforcement as conceived in the 1930s, so that everyone can feel comfortable and at ease – a recipe for the proliferation of fraudulent finance on an open-ended basis.

Moreover it is crystal clear that the dishonesty, hesitation and the sheer confusion surrounding the ‘Paulson’ proposals have severely exacerbated a fragile situation and the crisis of confidence which the criminal incompetents in charge of US financial affairs have never intended, on the basis of the massive evidence of their ongoing corruption, should be addressed in an orderly fashion, since their agenda has all along diverged from the public interest.

Almost as though it had suddenly woken up from a long slumber, the SEC was reported to have launched a probe on 13th July 2008 into the manipulation of stock prices through the spreading of false rumours, focusing on compliance controls which are supposed to be applied by traders and investment houses. This initiative appeared to mimic a similar attempt by the UK Financial Services Authority FSA) in London, to crack down on rumour-mongering and short-selling in the UK market following the plunge in the shares of HBOS (Halifax Bank of Scotland) last March.

The FSA was unsuccessful in its search, suggesting that the SEC’s response represents a belated cosmetic attempt to be seen to be ‘doing something’, since the SEC must certainly be aware of the FSA’s failed investigation. However nothing that the US regulator does now, with the benefit of any hindsight and with the fraudulent prospects implied by the Treasury’s proposals hanging over its head, can make up for its past failure to enforce its own regulations – as a consequence of which fraudulent securities operations/scams have assumed colossal and, as we have been observing, catastrophic proportions, in recent years.

The SEC’s failure and dereliction of duty is no reason for abandoning the enforcement approach in favour of a contrived, weak ‘principles-based’ approach. On the contrary, what remains essential is proper and rigorous enforcement of appropriate regulations.

(B) Mr Cottrell insists that the following structure and disciplines should be created and imposed:

Office of Inspector General for Financial Markets Compliance (OFMC):
A new regulatory entity with the function described by its title should be established by Statute, who would be required to report directly to the Chairman and ranking Member(s) of the following US Congressional Committees, who would be considered to be their superiors (Bosses):

• The US Senate Financial Services Committee.

• The US House of Representatives’ Financial Services Committee.

All management and field personnel employed by the Office of the Inspector General for Financial Markets would need to be fully trained and qualified compliance officers. Specifically:

• They must be field-tested and recognised as licensed compliance officers, and they must all be licensed under the following régimes:

(1) Financial Industry Regulatory Authority (created in July 2007 through consolidation of the NASD (National Association of Securities Dealers) and the NYSE (the New York Stock Exchange) member regulation régimes [see also: Glossary]) with respect to the following examinations:

• Series 24 [General Securities Principal];
• Series 27 [Financial and Operations Principal];
• Series 4 [Registered Options Principal];
• Series 51 [Municipal Fund Securities Principal]; and:
• Series 53 [Municipal Securities Principal].

(2) They must be licensed members of NYSE Member firms.

(3) They must be licensed as US Treasury compliance officers.

Nothing short of the deployment of management and field personnel qualified to these demanding industry standards will suffice. Because this is so, it is self-evident that the half-baked, confused and deliberately fragmentary proposals put forward by the President’s Working Group, which are intended to OBFUSCATE the situation and to lodge total power in the hands of the Presidency by default, with no checks and balances at all, represent a fraudulent prospectus, which should be consigned to oblivion forthwith. NO FURTHER CONSIDERATION SHOULD BE GIVEN TO THEM.

(C ) Michael Cottrell further demands (recommends is much too weak a word here) that The Glass-Steagall Act of 1933 must be re-enacted in order to re-establish once and for all the very stringent regulatory requirements enshrined in the 1933 and 1934 Securities Acts.

In the same context, and in parallel, the divisive Gramm-Leach-Bliley Act – written by lobbyists for the banking sector – must be repealed.

(D) Regulation of Credit and Debt Derivatives:
An essential further reform will be the development of overdue new securities regulations specifically focused on the creation, use and risk limitation of structured instrument vehicles (credit and debt derivatives). These new regulations would be enforced by the Securities and Exchange Commission (and the Federal Trade Commission, as appropriate), and of course subject to compliance oversight by the trained personnel of the newly established Office of the Inspector General for Financial Markets Compliance [see above].

(E) Finally, the revitalised regulatory regime for all US financial markets will be seen to be entirely rules-based, with all ‘legacy’ ‘principles-based’ thinking and language expunged from the system, which must be backed up by rigorous enforcement applied impartially and across the board.

SEC, FTA AND OFMC management and field personnel would be well remunerated, but at the same time subject to specified and appropriately severe sanctions in cases of official corruption within these structures. One reason why the regulations have not been properly enforced, or applied at all, in recent years is that the existing agencies, and/or certain personnel within them, have been corrupted. Fish rot from the head.

CONCLUSION
This far simpler regulatory régime requires a minimum of new legislation, building upon existing regulatory structures and experience, with the introduction of precisely ONE new US agency (the OFMC), compared with SEVEN new burdensome, confusing, bureaucratic, intentionally overlapping, obfuscatory agencies as proposed by the Working Group on Financial Markets (33).

Therefore, these straightforward reforms, instead of being spurious and deliberately opaque and spread out over an indeterminate timeframe, exacerbated by the carrying out of vague ‘studies’ as specified in the ‘Paulson’ proposals, could be implemented within a very limited timeframe at an early stage of the next Presidency. Establishing ONE new agency instead of SEVEN should, of itself, provide a powerful incentive for adopting Mr Cottrell’s straightforward proposals and for rejecting the hugely expensive and mischievous dog’s dinner put forward by the Working Group.

Such an initiative would do more to restore confidence in the battered US financial markets than innumerable further confused announcements by the ‘Paulson’ Treasury and other intermeddlers, and would place the incoming Administration on a sound financial market footing, without which everything it touches will disintegrate as has happened under the criminalised Bush II Presidency.

In short, these are straightforward, practical reforms which can be legislated for and implemented quickly. They can also be publicised with advantage ahead of their implementation, so that the US and world financial markets are made appropriately aware of the smack of firm, sound and decisive governance, with all that this approach will imply for the restoration of confidence in the battered financial markets in the United States and worldwide. (34).

Notes and References:

1. Howard Abadinsky, ‘Organized Crime’, 6th Edition, Belmont,
Wadsworth Thompson learning, 2000, pages 49-58

2. Gary Giroux, Ph. D., ‘A Short History of Accounting and Business’, available at: http://acct.tamu.edu/giroux/financial.html (Internet), page 1.

3. Giroux, op. cit., page 1.

4. Giroux, op. cit., page 2.

5. Michael C. Cottrell, M.S., ‘Elite Power & Capital Markets’ thesis submitted in partial fulfillment of the requirements for Master of Science, Mercyhurst College, 2001, page 33.

6. Cottrell, op. cit., page 33.

7. Cottrell, op. cit., page 33.

8. John H Hollands, Acting Director, Investment Company Division, Securities and Exchange Commission (SEC), ‘Government Regulation of The Distribution of Investment Company Shares’, dated 8th October 1941, page 2.

9. Hollands, op. cit., page 2.

10. Hollands, op. cit., page 2.

11. Hollands, op. cit., page 2.

12. Hollands, op. cit., page 2.

13. Hollands, op. cit., page 2.

14. ‘Treasury’s Summary of Regulatory Proposal’, The New York Times Company, 29th March 2008, available at: http://www.nytimes.com (Internet).

15. Kara Scannell and Michael R Crittenden, ‘Treasury’s Blueprint: the View from Washington’,
The Wall Street Journal, 31st March 2008, Section A, page 15.

16. Jesse Westbrook, ‘SEC Overhaul Bid by Bush Condemned by SEC Chairman (Update 1)’, New York, Bloomberg, L.P., 8th April 2008, available at: http://www.bloomberg.com (Internet), page 1.

17. Westbrook, op. cit.,, page 1.

18. Westbrook, op. cit., page 2.

19. Westbrook, op. cit., page 2.

20. Westbrook, op. cit., page 1.

21. Steve Strecklow, ‘Subprime Lender’s Failure Sparks Lawsuit Against Wall Street Banks’,
The Wall Street Journal, 9th April 2008, Section A, page 1.

22. Strecklow, op. cit., page A1.

23. Strecklow, op. cit., page A14.

24. Strecklow, op. cit., page A14.

25. Strecklow, op. cit., page A14.

26. Strecklow, op. cit., page A14.

27. Aaron Lucchetti and Gregory Meyer, ‘Dual Traders Under Fire’, The Wall Street Journal,
9th April 2008, Section C, page 1.

28. Lucchetti and Meyer, op. cit., page C18.

29. Lucchetti and Meyer, op. cit., page C1.

30. Lucchetti and Meyer, op. cit., page C18.

31. Lucchetti and Meyer, op. cit., page C18.

32. Lucchetti and Meyer, op. cit., page C18.

33. The seven new agencies recommended by the President’s Working Group on Financial Markets, which of course obfuscate the regulatory environment out to infinity, with intent, are: Mortgage Origination Commission; Market Stability Regulator; Prudential Financial Regulatory Agency; Government-Sponsored Enterprises Regulator; Conduct of Business Regulatory Agency; Federal Insurance Guarantee Corporation; and: Corporate Finance Regulator.

34. The one dimension of Mr Cottrell’s practical reforms that will require an appropriate lead-time concerns the recruitment of the necessary trained and licensed management and field compliance personnel for the new Office of the Inspector General for Financial Markets Compliance (OFMC).

In addition to the need to remunerate such expert personnel sufficiently well not least in order to minimise the temptation to succumb to bribery (which has bedeviled enforcement of late), financial compensation must reflect the expertise of recruited staff and the exceptional importance of their responsibilities. At the same time, it will not be necessary to recruit a large compliance staff. A tight ship is recommended, given that a modest staff can be motivated to higher levels of achievement, especially since the recommended ethos would be one of sober determination to stamp out market abuses and corruption generally. Despite the ravages inflicted by the permissive financial market environment in recent years, it is believed that the pool of such qualified experts who are keen to enforce the Rule of Law in the United States remains of sizeable proportions.

GLOSSARY OF U.S. FINANCIAL MARKET DEFINITIONS

References only entries specifically germane to the market issues purportedly addressed by the President’s Working Group on Financial Markets, and relevant to Mr Cottrell’s alternative proposal:

• Annunzio-Wylie Anti-Money Laundering Act of 1992:
This legislation enlarged the definition of ‘financial transaction’, and made money-transmitting, without reporting, a crime. Source: Howard Abadinsky, ‘Organized Crime’, 6th Edition, Belmont: Wadsworth/ Thompson Learning, Inc., 2000, page 411.

• Anti-Drug Abuse Act of 1988:
This law detailed undercover operations involving money-laundering. Source: John Madinger and Sydney A. Zalopany, ‘Money Laundering: A Guide for Criminal Investigators’, New York: CRC Press, LLC, 1999, page 43.

• Anti-Trust Laws:
US Federal legislation designed to prevent monopolies, cartelisation and restraint of trade. Landmark statutes include:
(1): Sherman Anti-Trust Act of 1890, which prohibited actions or contracts tending to create a monopoly and initiated an era of trust-busting;
(2): Clayton Anti-Trust Act of 1914, passed as an amendment to the Sherman Act, which dealt with local price discrimination, interlocking directorates, holding company activities and restraint of trade; and:
(3): Federal Trade Commission Act of 1914, which created the Federal Trade Commission (FTC), with the power to conduct investigations and the power to issue orders preventing unfair practices in interstate commerce. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Ed., Happauge: Barron’s Educational Series, 2006, s.v. ‘Antitrust Laws’.

•Bailout Bill:
See Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA).

• Bank Holding Company Act of 1956:
This act brought, for the first time, holding companies under the banking regulations, and provided that the holding company was subject to the same regulation and examinations as member banks. A Holding Company is a company that exercises control over another via voting shares. Organisation as a holding company allows a banking firm to engage in other non-deposit taking activities, such as discount brokerage operations, securities underwriting, and general public or industrial leasing.
Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA 13th February 2002; Munn, ‘Encyclopedia of Banking and Finance’, page 84; Fitch, Dictionary of Banking Terms, page 225. See: Financial Holding Company.

• Bank Holding Company Act Amendments of 1970:
This legislation expanded the Bank Holding Company Act of 1956 by legislating for a new Holding Company that controls only one bank, and limiting the permissible activities of these entities to those ‘closely related to banking’. The effect of these amendments was to permit one-bank holding companies, such as Bank of New York Company, Inc., to become conglomerates with subsidiaries in non-banking fields without regulation. Sources: Mr Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, op. cit., thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, Administration of Justice Department, Mercyhurst College, Erie, PA, on 13th February 2002; Munn, ‘Encyclopedia of Banking and Finance’, page 87; Thomas A. Eder, Thompson Desktop Financial Directory, Volume 3, Skokie: Thompson Financial Publishing, Inc., 1993, page 252. See: Financial Holding Company.

• Banking Act of 1935:
This legislation implemented changes to the Federal Reserve Board, prohibiting any banker from serving on the Board of Directors, or being an officer or employee, of more than two institutions. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; Munn, ‘Encyclopedia of Banking and Finance’, page 89. See: Financial Holding Company.

• Bank Secrecy Act of 1970:
This legislation, the formal title of which is the Currency and Foreign Transactions Reporting Act of 1970, extended to the Secretary of the US Treasury great flexibility in respect of official definitions of ‘monetary instruments’, which could now all of a sudden include ‘coins and currency of a foreign country, travelers’ checks, bearer negotiable instruments, bearer investment securities, stock on which title is passed on delivery’. The ostensible intention of this law was to deter criminal activity in order to assist criminal investigations by requiring all financial institutions to report large cash transactions and the transportation of such instruments initially exceeding $5,000, (now, amounts that in excess of $10,000). Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; See also Munn, ‘Encyclopedia of Banking and Finance’, p.109; John Madinger, Sydney A. Zalopany, ‘Money Laundering: A Guide for Criminal Investigators’, New York, CRC Press, LLC, 1999, page 43.

• Basel-II:
The Bank for International Settlements (BIS), located in Basel, Switzerland, has established and provides the Secretariat for the Basel Committee on Banking Supervision, which consists of senior representatives of bank supervisory authorities and central banks from Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, Netherlands, Spain, Sweden, Switzerland, the United Kingdom and the United States. Basel-II is the comprehensive updated and agreed version of ‘International Convergence of Capital Management and Capital Standards’ revising the 1988, 1996 and 2005 texts to secure an international standard on revisions to supervisory regulations governing the capital adequacy of internationally active banks. Source. and for further information: Basel Committee on Banking Supervision, ‘International Convergence of Capital Measurement and Capital Standards’, Basel, Press & Communications, 2004, available at: http://www.bis.org (Internet).

• Bucket Shop:
An illegal brokerage firm which accepts orders from customers but does not execute them right away, as Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) regulations require. Bucket shop brokers confirm the price that the customer asked for, but in fact make the trade at a time considered to be advantageous to the broker, whose profit is the difference between the two prices. Sometimes bucket shops neglect to fill the customer’s order and just pocket the money. Main source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Bucket Shop’.

• Clayton Anti-Trust Act of 1914:
This law was passed in order to increase competition in business, by restricting the corporate activity of acquiring other competing corporations or the practice of interlocking directorships. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; additionally: Jack C Plano and Milton Greenberg, ‘The American Political Dictionary’, 4th Edition, Hinsdale, The Dryden Press, 1976, page 328. See: Anti-Trust Laws.

• Clear:
(a): In banking: Collection of funds on which a cheque (check) is drawn, and payment of these funds to the holder of the check.
(b): In the securities sector: Comparison of the details of a transaction between brokers prior to settlement; final exchange of securities for cash on delivery. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Clear’.

• Commodity Futures Trading Commission (CTFC):
An independent agency created by Congress in 1974 which is responsible for regulating the US commodity futures and options markets. The CFTC is responsible for ensuring the integrity of the commodity futures and options markets everywhere, and for protecting market participants against manipulation, abusive trade practices, and fraudulent operations. Primary source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘CFTC’.

• Commodity Futures Contract:
A Futures Contract that is tied to the price movements of a particular commodity. This arrangement enables contract buyers to purchase a specific amount of a listed commodity at a specified price on a particular date in the future. The price of the contract in question is determined using the ‘open outcry’ system on the floor of a US commodity exchange such as the Chicago Board of Trade or the Commodity Exchange in New York. Commodity Futures Contracts are typically based upon (a) meats (cattle and pork bellies); (b) grains (corn, oats, soybeans and wheat); (c) key metals (gold, silver and platinum); and energy products (heating oil, natural gas, and crude oil). Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Commodity Futures Contract’.

• Commercial Bank:
A State or National Bank owned by stockholders that accepts demand deposits, makes commercial and industrial loans, and performs other banking services for the public. The phrase Full Service Bank covers banks that, as is the case with many commercial banks, supply trust services, foreign exchange, trade financing and international banking services. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Ed., Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Comm. Bank’.

• Compliance Department:
A department typically established by brokers and all US organised stock exchanges to oversee market activity and make sure that trading and other activities comply (in the United States) with Securities and Exchange Commission (SEC) and specific Exchange regulations. A company that does not adhere to the rules can be delisted. And a trader or brokerage firm that violates the rules can be barred from trading. Main source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Compliance Department’.

• Compliance Examination:
Periodic bank examination by a Federal regulatory agency to ensure compliance with consumer protection regulations, such as the Community Reinvestment Act, the Equal Credit Opportunity Act and the Truth in Lending Act. Financial institutions are required by law to issue reports at regular intervals – for example, an annual statement of their mortgage lending in the lender’s market area. Compliance examinations are intended to uncover any hidden violations of consumer protection regulations so that remedial action can be taken. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Ed., Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Compliance Examination’.

•Consumer Credit Protection Act of 1968: See: Truth in Lending Act.

• Criminalism: A new word invented by the Editor of this service, meaning the perpetration and exploitation of organised criminal operations in the interests of political strategy and/or one or more secret agendas; noun, ‘criminalist’, an operative or other cadre who engages in criminalist activities and assumes that he is protected and can therefore continue such activities beyond and above the reach of the Rule of Law. The Editor first used this word in the context of Soviet criminal operations, as exposed in Soviet Analyst, and has since extended it to cover the American variant.

• Currency and Foreign Transactions Reporting Act of 1970: See: Bank Secrecy Act.

• Debenture:
A certificate or bond acknowledging a debt on which fixed interest is being paid. Source: Oxford Senior Dictionary, Oxford University Press, 1984.

• Depository Institutional Deregulation and Monetary Control Act of 1980:
This law gave the Federal Reserve Board tighter control over monetary policy. It also required the Fed to assign examiners to examine foreign operations of State member banks, and prohibited the Fed from rejecting any application from a one-bank holding company on the basis of a stock loan, unless that applicant’s financial arrangements were deemed to be unsatisfactory. The applications were to be judged on a case-by-case basis. The Act further proclaimed that collateral was no longer required to support Federal Reserve notes held in the vaults of the Federal Reserve banks, and that the kinds of eligible collateral for Federal Reserve notes were expanded to include those of foreign governments and/or agency or any other ‘asset’ purchasable by Federal Reserve Banks. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; Munn, ‘Encyclopedia of Banking and Finance’, pages 252 and 253.

• Derivative Instrument (Derivative):
A contract the value of which is determined from publicly traded securities, interest rates, currency exchange rates, or market indices. Derivative Contracts are often ostensibly used for the purpose of ‘protecting’ assets against changes in value. Types of derivatives include the following:

(1): Over-the-counter derivative ‘products’, such as currency swaps and interest rate swaps, which are privately negotiated bilateral agreements, transacted OFF the organised US exchanges. In the currency markets, forward delivery contracts allow traders to lock in current prices when buying and selling baskets of currencies for future delivery.

(2): Derivative securities: Bond-like securities created when pools of loans and mortgages are packaged and sold to investors. In the hands of knowledgeable users, derivative contracts have many applications in the floating interest environment, such as managing currency and interest rate risk, or locking financing costs in by swapping floating rate debt for fixed-rate debt.

Derivatives gained public notoriety in the 1990s when a number of corporations and municipalities embarked upon the use of derivatives for speculative purposes (known as ‘taking a view on the market’), and suffered large losses when interest rates moved against them. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Derivative’.

• Disclosure:
Release by listed companies of all information, both positive and negative, that might bear on an investment decision, as required by the Securities and Exchange Commission (SEC) and the stock exchanges. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Compliance Examination’.

• Edge Act:
Passed in December 1919, the Edge Act, under the heading ‘Banking Corporations Authorized to Do Foreign Banking Business’, permitted the establishment of foreign banking corporations that aided in the financing of foreign trade. This allowed US banks to establish branches in foreign countries to accommodate American corporations engaged in foreign trade transactions. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, his thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science (M.S.), The Administration of Justice Department, Mercyhurst College, 13th February 2002; Munn, ‘Encyclopedia of Banking and Finance’, page 289.

• Equal Credit Opportunity Act of 1974:
Monitored by the Federal Trade Commission (FTA), this legislation seeks to ensure that all US consumers are given an equal chance to obtain credit. The Act prohibits discrimination in the granting of credit on the basis of race, colour, religion, national origin, sex, marital status, age, receipt of income from any public assistance scheme, and good faith exercise of any rights under consumer protection legislation. The US Department of Justice may file a lawsuit under the Act where a pattern or practice of discrimination appears to exist. For further information, see: http://www.usdoj.gov/crt/housing/housing_ecoa.htm (Internet).

• Emergency Banking Relief Act:
Passed on 9th March 1933, this Act was triggered following the national liquidity crisis that followed the stock market crash of 29th October 1929 and the extended ‘bank holiday’ of the 4th-12th March 1933. The bank holiday closed all banks nation-wide for one week by order of President Franklin D Roosevelt, to control the wave of banking failures and to restore confidence in the United States’ battered banking system. This legislation permitted banks to issue new stock, with the new stock exempt from subjecting the holder to be liable for the bank’s previously issued stock. The Act also authorised the issuance of US Federal Reserve Bank notes that were redeemable in lawful money in the United States, as 100% obligations of the Federal Government. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, Administration of Justice Department, at Mercyhurst College, Erie, PA, 13th February 2002; Moore, ‘The Federal Reserve System’, pages 81-82; Fitch, ‘Dictionary of Banking Terms’, pages 46 and 83.

• Enronisation: A new word coined by the Editor of this service, meaning ‘hollowing out’. Verb: ‘to enronise’; noun: ‘enronist’, a financial criminal who ‘hollows out’ a targeted entity. The essence of the destruction of Enron was that executives and directors formed private partnerships and stole or diverted financial assets or proceeds from the corporation into offshore bank accounts of the partnerships. These diverted monies were then systematically leveraged and hypothecated into high-yield investment and other programs which wound up being far more profitable than Enron itself. Such illegitimate financial arrangements proliferated, so that the original enterprise, Enron, was ‘hollowed out’, while the illicit partnerships prospered, with 100% of the proceeds being held undeclared and untaxed offshore. ‘Enronisation’ strategies are applied not only to companies, but also to whole countries (e.g., Ireland, Zimbabwe, Iceland, probably also Spain (forthcoming)).

• Federal Reserve Act of 1913:
The purpose of this legislation, according to the precise language of the Act, was ‘to provide for the establishment of US Federal Reserve Banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States and for other purposes’. The Act established two basic structures:
(1): A central body known as the Federal Reserve Board; and:
(2): Not more than 12 Reserve banks located throughout the country. The Federal Reserve Board is comprised of seven members appointed by the President of the United States and confirmed by the US Senate for 14-year terms. Sources: Mr Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, his thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, Administration of Justice Department, Mercyhurst College, Erie, PA, on 13th February 2002 Carl H. Moore, The Federal Reserve System, Jefferson: McFarland & Company, Inc., 1990, page 7; Fitch, Dictionary of Banking Terms, page 46.

• Federal Trade Commission Act of 1914:
This legislation established the Federal Trade Commission as the ‘watchdog of competition’, and as a comprehensive regulatory authority empowered to protect the consumer against ‘unfair methods of competition’. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, the thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science (M.S.), for The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; See also: Munn, ‘Encyclopedia of Banking and Finance’, page 383. See: Anti-Trust Laws.

• Financial Future:
A Futures Contract based upon (relating to) a financial instrument. Such contracts usually move under the influence of interest rates: as interest rates rise, contracts fall in value; as rates decline, contracts gain in value. Examples include: Treasury Bills, Treasury Notes, GNMA Pass-Throughs, foreign currencies, and Certificates of Deposit (CDs). Main source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Ed., Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Financial Future’.

• Financial Guarantee:
A non-cancellable indemnity bond guaranteeing the timely payment of principal and interest due on securities by the maturity date. If the issuer defaults, the insurer will pay out a fixed sum of money to holders of the securities. Financial guarantees are further written by banks which are allowed to operate in the insurance business by the Garn-St Germain Act of 1982, which prohibited banks from entering the insurance business. Insurance companies selling bond insurance must be monoline underwriters, a status which precludes their direct ownership by property and casualty insurance corporations. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Financial Guarantee’

• Financial Holding Company: The Bank Holding Company Act of 1956 prohibited any affiliations between banks and insurance companies (referred to as ‘firewall restrictions’). A Bank Holding Company qualifies as a Financial Holding Company if:
(1): Its banking subsidiaries are ‘well capitalised’ and ‘well managed’; and:
(2): It files with the Federal Reserve Board a certification to such effect and a declaration that it elects to become a Financial Holding Company.

Securities firms and insurance companies must undergo a two-stage process: first, they must qualify as Bank Holding companies under the 1956 Act; and secondly they must then qualify as Financial Holding Companies. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Financial Holding Company’.

• Financial Industry Regulatory Authority (FINRA): FINRA was brought into existence in July 2007 through consolidation of the National Association of Securities Dealers (NASD) and NYSE Member Regulation. It is the largest US non-governmental regulator and covers all securities firms doing business in the United States. FINRA oversees nearly 5,000 brokerage firms, about 172,000 branch offices and more than 676,000 registered securities representatives. Source: Financial Regulatory Authority, corporate information ‘About FINRA’: copyright 2008 FINRA; this document is available from: http://www.finra.org (Internet).

• Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA):
Enacted on 9th August 1989, this legislation addressed the crisis affecting the Savings and Loan Associations (‘thrifts’) after the sector had been ‘enronised’ by the criminalist kleptocracy headed by George H. W. Bush Sr. Also known as the Bailout Bill, this legislation revamped the regulatory, insurance and financing structures, establishing the Office of Thrift Supervision. It created:

(1): The Resolution Trust Corporation (RTC) which, operating under the management of the Federal Deposit Insurance Corporation (FDIC), was charged with closing or merging institutions which had become insolvent and would be becoming insolvent in the future;

(2): The Resolution Funding Corporation (a.k.a. REFCORP), which was charged with borrowing from private capital markets to fund the RTC’s operations to manage the remaining assets and liabilities that had been taken over/assumed by the Federal Savings and Loan Insurance Corporation (FSLIC), a Government-Sponsored Enterprise (GSE), prior to 1989;

(3): The Savings Association Insurance Fund (SAIF), which was to replace the FSLIC as the insurer of ‘thrift’ deposits and would henceforth be administered by the FDIC separately from its bank deposit insurance programme, which then became the Bank Insurance Fund (BIF); and:

(4): The Federal Housing Finance Board (FHFB), which was charged with overseeing the Federal Home Loan Banks.

• The Resolution Trust Corporation was authorised to accept additional insolvent institutions up to June 1995, after which date responsibilities for the handling of newly failed institutions was shifted to SAIF. This typically convoluted mishmash of arrangements successfully (up to a point) masked and obfuscated the reality, which was that the Savings and Loans Associations (S & Ls) had been systematically scammed and ‘enronised’ by the organised kleptocracy, this being the model for the kleptocracy’s subsequent systematic attacks on the US financial bedrock.

• The overall strategy here was to allow the scandal to escalate to the point where Congressional action became mandatory, whereupon Congress was pressurised to establish institutions that the insiders could then exploit – in this case, to buy up vast portfolios of land and assets for cents on the US dollar, which were then used as collateral for borrowings that were in turn leveraged and hypothecated into high-yield trading programmes for the benefit of the corrupt insider community.

Source for technical information (not the commentary):
John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIERRA)’.

• Financial Institutions Regulatory Act of 1978 prohibits management interlocks by banks operating in the same Metropolitan Statistical Area (MSA). However it exempts the smaller banks, and permits interlocks of up to 49% of a bank’s management officers. See also entry: Interlocking Directorates. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Interlocking Directorates’.

• Financial Operations Officer, of a Securities firm: The financial Operations Officer of a securities firm is equally responsible with the Registered Principal [see Principal, of a Securities firm], for the firm’s financial reports to the SEC and the NASD, for the accurate record-keeping of the firm’s Net Capital Account, and for all trades and customer accounts and correspondence, advertising, and sale literature issued by the company. The Financial Operations Officer must also pass the Series 27 (Financial and Operations Principal) as well as the Series 7 (General Securities Representative) Examinations conducted by the NASD; and must further pass written procedures and oral interview prior to assuming this position with the firm. Source: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, the thesis he submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA, on 13th February 2002; NASD, ‘National Association of Securities Dealers, Inc.: Manual’, April 1998, page 3171; NASD, ‘NASD Compliance Check List’.

• Financial Services Modernization Act (FSMA) of 1999, also known as the Gramm-Leach-Bliley Act: This Act repealed parts of the Glass-Steagall Act of 1933 and the Bank Holding Company Act of 1956. It permits commercial banks, merchant banks, securities firms and insurers to affiliate through the structure called the Financial Holding Company. Under the Act, Nationally (Federally) Chartered Banks are permitted to engage in most financial activities through Direct Subsidiaries. The FSMA permitted Financial Holding Companies to:
1: Lend;
2: Exchange;
3: Transfer;
4: Invest for others;
5: Safeguard money or securities (custodial services);
6: Engage in insurance activities, including insuring and acting as principal, agent, or broker for all types of insurance (including health), and providing financial advice (including the provision of financial advice to investment companies);
7: Issue or sell instruments representing interests in pools of assets that are permissible for a bank to hold indirectly;
8: Underwrite, deal in, or make a market in securities with no limitation as to revenue;
9: Engage in activities outside the United States;
10: Be seized of the following (text is verbatim here): ‘The Federal Reserve Board has determined to be usual in connection with the transaction of banking or other financial operations abroad’.
Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. under: ‘Financial Services Modernization Act’.

• FinCEN [Financial Crimes Enforcement Network] is a bureau of the US Treasury which collects and analyses information about financial transactions in order to combat money laundering, the financing of terrorism, and other financial crimes and fraudulent finance. In line with the double-mindedness which characterises the kakocracy, almost all the senior criminalist figures identified in our reports have themselves been engaged in financing terrorism on a colossal scale.

Created in 1990, FinCEN seeks to realise the potential of critical information-sharing among law enforcement agencies and its other partners in the regulatory and financial communities. While the Financial Crimes Enforcement Network’s task is to safeguard the US financial system from abuses associated with financial crime, including the financing of terrorism, money laundering and other illicit activities, it does nothing the curb the excesses of the criminalists holding high office, who assume that the privileges and power of their offices, together with their prolific use of the ‘Black Arts’ of bribery and blackmail, protect them from the consequences of their actions.

While, therefore, FinCEN’s publicity presupposes that it thinks it is doing a good job, the record inter alia of our reports suggests the reverse. FinCEN was established by order of the Treasury Secretary (Treasury Order Numbered 105-08) on 25th April 1990. In May 1994, its responsibilities were broadened to include regulatory responsibilities, and the US Treasury’s Office of Financial Enforcement (OFE) was merged with FinCEN in October 1994. On 26th September 2002, after the passage of Title III of the USA Patriot Act, Treasury Order Numbered 180-01 [1] made FinCEN an official bureau within the Department of the Treasury.

Under Section 314(a) of the USA Patriot Act of 2001, Federal law enforcement agencies, through FinCEN, are empowered to reach out to more than 45,000 points of contact at over 27,000 financial institutions to locate bank accounts and transactions by persons that may be involved in terrorist financing and/or money laundering. This cooperative partnership between the financial community and law enforcement allows disparate items of information to be identified, centralised, and rapidly evaluated. FinCEN has its headquarters in Vienna, VA. See: www.fincen.gov [Internet].

• Full Disclosure: Public information requirements established by the Securities Act of 1933, the Securities Act of 1934, and the major US stock exchanges. Source: John Downes and Jordan Elliot Goodman, see their ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Full Disclosure’.

• Garn-St Germain Depository Institutions Act of 1982: This Federal law was enacted in 1982, and authorised banks and savings institutions to offer a new type of account, known as the Money Market Deposit Account, which is a transaction account with no interest rate ceiling, to compete more effectively with money market mutual funds. The legislation also gave the Savings and Loan Associations the authority to extend commercial loans; and it gave Federal regulatory agencies the authority to approve, for the first time, interstate acquisitions of failed institutions and also savings institutions. Thus, the Act effectively created the environment for the subsequent enronisation of the Savings and Loan Associations, providing inter alia that:

(1): Savings and Loan Associations were authorised to extend commercial, corporate, business or agricultural loans up to 10% of assets after 1st January 1984;

(2): The deposit interest differential, allowing Savings and Loans and Savings Banks to offer rates on interest-bearing deposit accounts that were 0.25 of 1% higher than commercial banks, was lifted, as of January 1984;

(3): The Act authorised a new capital assistance program, the Net Worth Certificate Program, under which the US Federal Savings and Loan Insurance Corporation and the Federal Deposit Insurance Corporation would be able to purchase novel capital instruments called Net Worth Certificates from savings institutions with net worth-to-assets ratios of under 3%, and would subsequently redeem the certificates as they regained financial health;

(4): The Act permitted Savings and Loan Associations to offer checking accounts (demand deposit accounts) to individuals and business checking accounts to customers who had other accounts;

(5): Savings and Loans were authorised to increase their consumer lending from 20% to 30% of assets, and to expand their dealer lending and floor-plan loan financing;

(6): The Act raised the ceiling on direct investments by savings institutions in nonresidential real estate from 20% to 40% of assets, and also allowed investment of 10% of assets in education loans for any educational purpose, and up to 100% of assets in state and municipal bonds;

(7): The Act pre-empted State restrictions on enforcement by lenders of due-on-sale clauses in most mortgages for a three-year period ending on 15th October 1985, and further authorised State chartered lenders to offer the same kind of alternative mortgage deals that nationally chartered financial institutions were allowed to offer (opening the door to what became the ‘sub-prime’ crisis;

(8): The Act authorised the Comptroller of the Currency to charter Bankers’ Banks, or depository institutions owned by other banks;

(9): It made State chartered industrial banks eligible for Federal deposit insurance; and:

(10): It raised the legal lending limit for National Banks from 10% to 15% of their capital and surplus.

Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Garn-St. Germain Depository Institutions Act’. See also: Financial Guarantee; Savings and Loan Deregulation.

• Glass-Steagall Act of 1933:
Legislation passed by Congress which:

(1): Authorised deposit insurance;

(2): Prohibited commercial banks from owning full-service brokerages (Securities Houses of Broker/Dealers);

(3): Prohibited banks from undertaking investment banking activities, for instance underwriting corporate securities or municipal revenue bonds;

(4): Was framed to insulate bank depositors from the risk involved when a bank deals in securities, in order to prevent banks from collapsing.

The Glass-Steagall Act was disabled by the Financial Services Modernization Act (a.k.a. the Gramm-Leach-Bliley Act, a.k.a. the Financial Services Modernisation Act). Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Glass-Steagall Act’.

• Gramm-Leach-Bliley Act of 1999:
See: Financial Services Modernization Act; Glass-Steagall Act of 1933.

• Guarantee: This entails the acceptance of responsibility for payment of a debt or for performance of some obligation if the person (entity) primarily liable fails to perform. The guarantor acquires a Contingent liability – namely, a potential liability that is not going to be recognised in accounts until the outcome becomes probable in the opinion of the company’s accountant. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Guarantee’.

• Guaranteed Bond: A Bond that is characterised by the fact that the principal and interest are guaranteed by a firm other than the issuer. Both guaranteed stock and guaranteed bonds become, in effect, debenture (unsecured) bonds of the guarantor. Source: John Downes and Jordan Elliot Goodman, see: ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Guaranteed Bond’.

• High-Yield Investment Program:
A sophisticated scam perpetrated in many instances by corrupt elements of US intelligence and associates, masterminded inter alia by the arch-criminalist George H. W. Bush Sr. and his corrupt co-conspirator, Dr Alan Greenspan, the former Chairman of the Federal Reserve Board. Due to overuse of this term by the corrupt operators, it has become more or less synonymous with the generic term ‘fraudulent finance’, and with Ponzi and Pyramid Schemes (known as ‘pyramid-selling schemes’ in Britain). Experts are divided as to whether most High-Yield Investment Programs are Ponzi schemes, or not. Our own investigations suggest that colossal sums of stolen and duplicated funds (as explained in the Wantagate reports) were also used in these schemes, with stolen money being employed as purported back-up for promised and actual initial payouts. However these were never intended to occur beyond the first and perhaps the second layers, as the fraudulent finance techniques were used to entice retail investors into parting permanently with their funds, often after signing illegal Non-Disclosure Agreements.

High-yield investment programs were/are able to collect large amounts of money for the criminalist operators because initial payoffs to first and second round participants (financed from the stolen money in the case of the giga-scams presided over inter alia by the aforementioned master crooks) gave the scams momentum by spreading news of the sizeable initial payments by word of mouth – a situation that prevails as long as new participants can be found and/or old participants are foolish enough to leave their money in the schemes in the hope of gaining high rolled-up interest on their initial investments. Participants are usually attracted by some form of an appeal to emotion or faith that the program will help them to achieve rapid financial freedom. High-Yield Investment Programs may also mirror pyramid-selling schemes by offering current investors incentive commissions, for instance, 9% of investment by the participant on top of promised accruals, to recruit new investors.

Notorious documented High-Yield Investment Programs include:
(1): OSGold, founded as an e-gold ‘imitation’ in 2001 by David Reed, It folded in 2002. According to a lawsuit filed in US District Court in 2005, operators of OSGold may have made off with $230 million.

(2): The second largest documented High-Yield Investment Program was PIPS (People In Profit System), or Pure Investors. Started by Bryan Marsden in 2004, this scheme spanned more than 20 countries. PIPS was investigated by Bank Negara Malaysia in 2005, resulting in Marsden and his wife being charged in a Malaysian Court with some 97 counts of money laundering more than 77 Malaysian ringgit, equivalent to $20 million [New Straits Times, 11th October 2006]. Yet even after these charges were brought, many of Marsden’s followers continued to support him and to believe that they would be seeing their money in future. A similar rationalisation and denial syndrome can be observed in many other High-Yield Investment Program contexts.

(3): Indicted operators or schemes under investigation:
12DailyPro Autosurf (United States: Securities and Exchange Commission); Ginsystem, Inc. (Singapore: Commercial Affairs Department of Singapore); IT4US (United States); PlexPlay (Norway: HegnarOnline, in Norwegian); Solidinvestment (United States).

The foregoing provides merely a preliminary outline of the background to these scams, concerning which a considerable literature now exists. Promoting or perpetuating Ponzi schemes is a criminal offence punishable by jail terms or fines in most countries. The fact that the High-Yield Investment Program monitoring websites publicise disclaimers to the effect that the sites ‘do not promote the programs advertised’ on their websites, does not absolve the operators from criminal liability.

A disturbing feature of this environment is that a large number of High-Yield Investment Program participants persist in participating in further schemes long after they have already lost money in schemes that have either folded, or in respect of which the operator has disappeared. The fact that most of the publicised schemes are openly labelled scams on the relevant Internet monitor boards, even though their operators are themselves criminally liable, suggests that many participants are well aware of the risks they are running, know that the schemes are fraudulent, but choose to put money in them anyway, like addicted gamblers.

Former officials and members of the US armed forces may have been taken in by indications that the operators were officially connected or even that the scams in which they have participated were legitimate because of such alleged connections, including intelligence backgrounds.

The perpetrators play on the understandable anger felt by those who have been scammed, even though they were originally enticed by the US perpetrators into becoming prospectively felonious participants themselves, a condition which leads psychologically to the state of denial that in turn supposedly provides the perpetrators with the protection that they require.

However the operators, sitting on their stolen funds, may well fear the ultimate outcome, should manipulation of the expectations of the scammed investors cease to remain perversely ‘credible’, or those manipulative counterintelligence Psy-Ops initiatives are closed down.

• Hypothecation:
Originally a pledge of property as collateral for indebtedness without transfer of possession to the party extending the loan. This arrangement is common in the case of mortgages. The borrower retains legal ownership of the property but provides the lender with a lien over the property until the debt is paid off. Rehypothecation occurs when a broker pledges hypothecated client-owned securities in a margin account to secure a bank loan.

The fraudulent finance buried inside the ‘sub-prime’ mortgage nexus of scandals was explained in our report dated 26th December 2007 [www.worldreports.org: Archive]. As described in that report, the ‘homeowner’ has been scammed, either he or she has been coerced into signing several top copies of the same document, enabling the lending bank to claim ownership even though the bank has sold the mortgage on the basis of another top copy, for instance, to one of the co-conspiring Government-Sponsored Enterprises; or because the bank has alienated its ownership of the loan to the GSE in question, or has packaged the mortgage with other loans, as well as with worthless securities underpinned by no real asset, and has sold such packages on to parties (usually abroad) which have not performed due diligence.

In our report of 26th December 2007, we advised ALL US ‘homeowners’ facing foreclosure to let the Court know that the underlying contract has been requested from the bank. In most instances, the bank will be unable to supply it, because it has sold on the mortgage to the GSE, having therefore already passed on the risk. People facing foreclosure who ask for the contract can usually expect to be pleasantly surprised at the outcome of their cases.

• Internal Revenue Service (IRS):
The IRS is part of the US Treasury Department, and was officially created by Act of Congress on 1st July 1962. The IRS is responsible for administering and enforcing the Internal Revenue Code (IRC), as established under US Congressional authority, passed in 1913, to levy taxes on the income of individuals and corporations.

In 1939, the IRC was codified from the separate Internal Revenue laws. The IRS Code was further overhauled in 1954, with substantive new provisions being added concerning depreciation, the double taxation of dividends, research and experimental expenditures, carryback on operating losses, tax on ‘unreasonable’ accumulations of surplus, preferred stock bail-outs, and collapsible corporations and partnerships.

Of the enormous changes to the IRC implemented since 1954, the most important for the context we are dealing with here was the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 which, inter alia, required US taxpayers to report all sources of income, wherever it was earned anywhere in the world. It follows that all receipts received by American taxpayers since the passage of this Act which have not been reported to the Internal Revenue Service are taxable, which means that all US taxpayer holdings in offshore accounts that have not been declared for tax are liable for tax and penalties. Main source: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, for The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; see also: Munn, ‘Encyclopedia of Banking and Finance’, page 589.

• Interlocking Directorates:
These reference commercial banks or savings institutions which have individuals on their Boards of Directors who further serve on the Board or Boards of one or more unaffiliated competitor(s) operating in the same marketplace. The US Financial Institutions Regulatory Act of 1978 prohibits management interlocks by banks operating in the same Metropolitan Statistical Area (MSA). But it exempts smaller banks, and also permits interlocks of up to 49% of a bank’s management officers. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Interlocking Directorates’.

• International Banking Act of 1978:
This legislation essentially places American branches and agencies of foreign banks under the supervision of US bank regulators. The provisions included: authorising the Comptroller of the Currency to license and supervise a foreign bank; authorising Federal bank agencies to examine US offices of any foreign bank; subjecting any foreign bank branch or holding company to the Bank Holding Company Act, just like any US bank holding company; and imposing reserve requirements and Federal deposit insurance coverage for foreign banks to the same extent as the US member banks. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, for The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; see: Munn, ‘Encyclopedia of Banking and Finance’, page 563.

• International Banking Act of 1987:
Created a Federal regulatory structure similar to the Federal Reserve to examine the assets and liabilities of foreign banks on-site, and to ensure similar licensing and regulation of non-banking activities of foreign banks. It also required the Federal Reserve to maintain the same competitive equity requirements for foreign banks as for US member banks. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; Munn, ‘Encyclopedia of Banking and Finance’, page 563.

• Investment Banking:
The sale and distribution of a new offering of securities, carried out by a financial intermediary (an investment banker), who purchases securities from the issuer as principal, and assumes the risk of distributing securities to investors. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, the 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Investment Banking’.

• Investment Company Act of 1940:
This Act requires that all companies which offer securities or investment advice to the public must register with the Securities and Exchange Commission. For instance, any advisory corporation that offers investment advice (not straight reporting, but advice) must register with the SEC. For those who may be interested, this explains why this service does not offer advice and will not respond to the frequent requests for financial investment advice that we routinely receive. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, for The Administration of Justice Department, Mercyhurst College, 13th February 2002; Munn, ‘Encyclopedia of Banking and Finance’, page 589.

• Kakocracy: Rule by the worst elements of society exclusively in their own interests and with cynical and permanent disregard for the interests of anyone else.

• Kleptocracy: The ascendancy of a rapacious, thieving class of co-conspiratorial bandits protected by public office that is bent on maximising the open-ended potential of their office and power for personal enrichment and for the furtherance of clandestine agendas divorced from the interests of the people and the constituencies they are supposed to serve. This term is used in these reports even though kleptomania is strictly defined in the Oxford Senior Dictionary as ‘an uncontrollable tendency to steal things, with no desire to use or profit by them’.

The definition is interesting, because it reveals an element of madness that is clearly inherent in the behaviour of the criminalist snakes identified in these reports. This madness can be observed in the rapacious behaviour, for instance, of the arch-criminalist DVD godfather, George Bush Sr., whose avarice for other people’s money notoriously knows no bounds, despite his age, indicating that he chooses to remain unaware of his own mortality: a characteristic of greed which can only be described as symptomatic of mental derangement.

• Leverage, Financial and Investment:

(1): Financial Leverage: Debt in relation to equity in a firm’s capital structure (such as long-term debt, preferred stock, and shareholders’ equity. Financial leverage is measured by the debt-to-equity ratio: the more long-term debt there is, the greater the financial leverage.

(2): Investment leverage: A means of enhancing return or value without increasing investment: for instance, by buying securities on margin with borrowed money. Extra leverage may be achievable if the leveraged security is convertible into common stock.

(3): Note: Option contracts provide leverage, with NO borrowings, offering the prospect of high return for little or no investment.

Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Leverage’.

• Maloney Act of 1938: An amendment to the Securities Act of 1933 which created the US National Association of Securities Dealers (NASD). The legislation promoted the organisation of member securities dealers as a Self-Regulating Organizations (SRO) under the supervision of the Securities and Exchange Commission (SEC) to institutionalise a code of ethics in the securities industry and its enforcement nationwide. NASD members are known as Broker/Dealers, since they represent both clients that buy and/or sell securities, and themselves, as a principal, when they are engaged in underwriting and/or selling a stock or bond issue directly to the public. The NASD is the only firm operating under the Maloney Act. See: NASD: National Association of Securities Dealers. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; NASD, ‘National Association of Securities Dealers, Inc.: Manual, April 1998, page 3171.

• Margin Accounts: See Mark to [The] Market and: Margin Requirements

• Margin Requirements:
The minimum amount that a client must deposit in the form of cash or eligible securities in a Margin Account, as is spelled out under Regulation T of the Federal Reserve Board. Regulation T requires a minimum of $2,000 or 50% of the purchase price of eligible securities bought on margin or 50% of the proceeds of short sales. Also referred to as the Initial Margin. Primary source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Margin Requirement’.

• Margin Security:
This is a security that may be bought or sold in a Margin Account. Regulation T of the Federal Reserve Board defines margin securities as:

(1): Any registered security (a listed security or a security having unlisted trading privileges);

(2): Any OTC margin stock or OTC margin bond, which are defined as any unlisted security that the Federal Reserve Board (FRB) periodically identifies as having the investor interest, marketability, disclosure and solid financial position of a listed security;

(3): Any OTC security designated as qualified for trading in the National Market System under a plan approved by the Securities and Exchange Commission;

(4): Any mutual fund or unit investment trust registered under the Investment company Act of 1940. Other securities that are not exempt securities must be transacted in cash. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Margin Security’.

• Mark to [The] Market:
Adjustment of the valuation of a security or portfolio to reflect current (prevailing) market values. For instance, Margin Accounts are marked to market in order to ensure compliance with financial maintenance requirements. (In UK parlance, the definite article is dropped). Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Mark To The Market’.

• Money laundering:
Passing illegally acquired funds or taxable funds on which no tax has been paid inter alia with the intent to evade tax and to hide the funds from relevant national authorities. American legislation addressing money-laundering includes:

(1): The Bank Secrecy Act of 1970;
(2): The Money Laundering Control Act of 1986;
(3): The anti-Drug Abuse Act of 1988;
(4): The Annunzio-Wylie Money Laundering Act of 1992;
(5): The Money Laundering Suppression Act of 1944; and:
(6): The Terrorism Prevention Act of 1996.

The Money Laundering Control Act of 1986 made money laundering a Federal crime corresponding to the previously passed Organized Crime Control Act of 1970. See separate entries in Glossary.
Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; Munn, Encyclopedia of Banking & Finance, page 109; also: John Madinger and Sydney A. Zalopany, ‘Money Laundering: A Guide for Criminal Investigators’, New York, CEC Press, LLC, 1999, page 43; Howard Abadinsky, ‘Organized Crime’, 6th Edition, Belmont: Wadsworth/Thompson Learning, Inc., 2000, page 411; FINCEN, ‘The Global Fight Against Money Laundering’, Financial Crimes Enforcement Network (FINCEN, 1999, available from: http:// www.occ.treas.gov/launder (Internet).

• Money Laundering Control Act of 1986:
This legislation made money laundering a Federal crime corresponding to the previously passed Organized Crime Control Act of 1970. See: Money laundering.

• Money Laundering Suppression Act of 1994: Legislation which required that ‘any person who owns or controls a money services business’ must register with the Secretary of the Treasury. Source: FINCEN, ‘The Global Fight Against Money Laundering’, Financial Crimes Enforcement Network (FINCEN, 1999, available from: http:// www.occ.treas.gov/launder (Internet).

• Municipal Securities Rulemaking Board (MRSB): See Self-Regulatory Organization (SRO).

• NASD: National Association of Securities Dealers:
A non-profit organisation that was formed under the joint sponsorship of the Investment Bankers’ Conference and the US Securities and Exchange Commission (SEC) in order to comply with the requirements of the Maloney Act. NASD Members include virtually all investment banking houses and firms dealing in the Over-the-Counter Market.

Operating under the supervision of the SEC, the basic purposes of the NASD are to:
(1): Standardise practices in the field;
(2): Establish high moral and ethical standards in the securities trading business;
(3): Provide a representative body to consult with the Government and investors on matters of common interest;
(4): Establish and enforce fair and equitable rules of securities trading;
(5): Establish a disciplinary body capable of enforcing the above provisions.

The NASD requires members to maintain ‘quick assets’ in excess of current liabilities at all times.

Within the NASD, a special Investment Companies Department concerns itself with the problems of investment companies and has the responsibility of reviewing companies’ sales literature in that segment of the securities industry.

Michael C. Cottrell, M.S., has described the NASD’s contemporary responsibilities as including the following (to be read in conjunction of the foregoing information):

(1): Nationwide inspections of member firms;
(2): Provision of centralised computerised surveillance of the trading of NASD Automated Quotations, of its sister company NASDAQ;
(3): Enforcement of Securities and Exchange Commission rules and regulations, as well as of its own rules for members;
(4): To review underwriting arrangements for securities offered to the public;
(5): To perform and monitor qualification examinations of personnel of members; and:
(6): To coordinate and cooperate with the SEC, the States and with other Federal agencies.

The responsibilities of the SEC do NOT include trading on own account [see text], a gross abuse of which it has been and continues to be accused. This abuse is inconsistent with its responsibilities as a regulator and is considered by experts to be a scandalous development. See also: Financial Industry Regulator Authority (FINRA). Sources: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘NASD’; Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; Munn, ‘Encyclopedia of Banking & Finance’, page 696.

• National Market System: See: Securities and Exchange Commission (SEC).

• Non-Disclosure agreement:
An illegal document which, if signed by a participant to a transaction, precludes any recourse to official regulators for protection after the participant has predictably been scammed, and likewise precludes any legal recourse.

• Office of the Comptroller of the Currency (OCC):
This is the chief regulator of US National Banks. The Comptroller of the Currency is appointed by the President of the United States for a five-year term, with Senate confirmation. The OCC, the supervisory agency covering nationally chartered banks, is the oldest US Federal regulator of financial institutions. The Comptroller of the Currency also serves as one of the three Directors of the Federal Deposit Insurance Corporation. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Ed., Happauge: Barron’s Educational Series, 1997, c.v. ‘Comptroller of the Currency’.

• Office of Thrift Supervision (OTS):
This US Federal agency was established under the Financial Institutions Reform, recovery and Enforcement Act of 1989 to examine and supervise Savings and Loan Associations (‘thrifts’) and Federal Savings Banks. It replaced the Federal Home Loan Bank Board as the primary regulator of State chartered and Federally chartered savings institutions. It is a bureau within the US Treasury Department. The Director and Chief Operating Officer (CEO) of OTS is appointed by the President of the United States with Senate confirmation, and is also one of five directors of the Federal Deposit Insurance Corporation (FDIC). The fact that the OTS is structured within the US Department of the Treasury parallels the position with the Office of the Comptroller of the Currency. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Office of Thrift Supervision’.

• ‘Open outcry’:
A non-electronic method of communication between professionals on a stock or futures exchange involving shouting and the use of hand signals to transfer information primarily about buy and sell orders. The component of the trading floor where this takes place is often called the pit. The best-known ‘open outcry’ markets in the United States remain the New York Mercantile Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade, the Chicago Board Options Exchange, and the Minneapolis Grain Exchange. In the United Kingdom, the London Metal Exchange (LME) still makes use of the ‘open outcry’ method. Many traders prefer the ‘open outcry’ system on the basis that physical contact in the pit allows traders to speculate as to the motives or intentions of buyer/seller, so that positions can be adjusted accordingly.

• Organized Crime Control Act of 1970:
See Money Laundering Control Act of 1986; and Money laundering.

• Over-the-Counter:
(1): Of a security: A security that is not listed and traded on an organised exchange;
(2): Of a market: A market in which securities transactions are conducted through a telephone and computer network connecting dealers in stocks and bonds, rather than, as classically, on the floor of an exchange. Over-the-counter stocks are traditionally those of smaller companies that do not meet the listing requirements of the New York Stock Exchange or the American Stock Exchange.

In recent years, however, many companies that qualify for listing have chosen to remain with Over-the-Counter trading, because they consider that the system of multiple trading by many dealers is preferable to the centralised trading approach of the New York Stock Exchange, where all trading in a stock has to go through the Exchange specialist in that stock. The rules for Over-the-Counter stock trading are written and enforced largely by the US National Association of Securities Dealers (NASD), which is self-regulating (see NASD).

Prices of Over-the-Counter stocks are published in daily newspapers, with the National Market System stocks listed separately from the rest of the Over-the-Counter market. Over-the-Counter markets incorporate markets in both Government and municipal bonds. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Over-the-Counter (OTC)’.

• Pass-Throughs:
Pass-Through Securities: Pools of fixed-income securities that are backed by a package of assets. A servicing intermediary collects monthly payments from issuers and, after deducting a fee, remits or passes them through to the holders of the pass-through security. This device is also known as a ‘pass-through certificate’ or a ‘pay-through security’. The most common type of pass-through is a mortgage-backed certificate, whereby ‘homeowners’’ payments pass from the original lending bank through a Government agency or investment bank to the investors (per the supposed model).

• Ponzi Scheme:
A scam designed to entrap the unwary investor, as described in the following analyses published on this website [see Archive) and in International Currency Review:
(1): ‘Treasongate Update: Omega ‘Ponzi Game’ scams, 13th January 2007;
(2): ‘Treasongate Background: Intel Ponzi Scams’, 22nd January 2007.

So-called ‘lending programs’, a.k.a. High-Yield Investment Programs operating along Ponzi or Pyramid Scheme lines promoted clandestinely inter alia by corrupt elements of the criminalist US intelligence community (including the CIA’s OMEGA OPS scams) will comply with none of these stringent regulations and requirements, and are accordingly, by definition, ALL ILLEGAL IN THE UNITED STATES. This may well be the basis upon which non-payment of these accounts has been predicated. The question therefore arises: why have these illegal schemes been so widespread, having given rise to a colossal constituency of the American ‘broken hearted’, who have been scammed in one way or another but who have been clinging to the hope, like Rip van Winkel, that they, their family trusts or their restless associations of ‘the scammed’, will finally be paid out one sunny day far out into the future?

The generic answer to this question is that the cynical, criminalised fraudster élite, headed by the crooks controlling and inside the intelligence community, have taken precautions to instal their own corrupt operatives within and in control of certain enforcement institutions, including the SEC.

Enron and the Federal Deposit Insurance Corporation (FDIC) have been used to proliferate and perpetuate these illegal securities scams: indeed, it is from operations such as the CIA’s nefarious Enron scamming system, that the derivatives overhang and crisis have mainly arisen.

As a consequence, blind US official (Federal and State) eyes have been turned to what has been going on, the securities regulations have not been enforced with respect to such illegal Ponzi frauds, and the old system whereby anyone involved with trading securities was blackballed for life if caught engaged in irregular activities, has been moribund since the 1970s.

When an uncorrupt SEC Commissioner tried, quite recently, to enforce the regulations, he was removed from his post on some typically trumped-up pretext or other. In other words, the wolves are and have been in charge of the chicken coops.

So key enforcers are, as matters stand, co-conspirators in the despicable, hitherto (but since the Wantagate and the subsequent exposures, no longer) proliferating intelligence community-driven Ponzi Game operations that have devastated an unknown number of American families – with the proceeds channelled through corrupt participating banks into offshore accounts. See Appendix to this report for the narrative of the original Ponzi fraud.

• Principal:
(1): The person with highest authority in a business, or a person for whom another acts as an agent.
(2): A capital sum as distinguished from the interest on it.
(3): See also: Principal, of a Securities firm.
Source: Oxford Senior Dictionary, Oxford University Press, 1984.

• Principal, of a Securities firm:
An NASD member firm is directed by a Registered Principal, who can be the sole proprietor, an officer, a partner, a manager of an office of Supervisory Jurisdiction, and/or a Director of the firm.

The Registered Principal is answerable for all actions taken on behalf of the firm, and all trades submitted by the firm, and all actions of its registered representatives, subject to the rules and regulations of the NASD, SEC and the State of registration. The Registered Principal must pass the Series 24 (General Securities Principal) and also the Series 7 (General Securities Representative) Examinations conducted by the NASD, and must pass the written procedures and oral interview before assuming this position for the firm. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, the thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, Administration of Justice Department, Mercyhurst College, Erie, PA, on 13th February 2002; NASD, ‘National Association of Securities Dealers, Inc.: Manual’, April 1998, page 3171; NASD, NASD Compliance Check List, Gaithersburg: NASD MediaSource, 1992.

• Principle:
A basic truth or a general law or doctrine used as a basis of reasoning or a guide to action or behaviour; a fundamental truth or doctrine, as of law; a comprehensive rule or doctrine which furnishes a basis or origin for others; a settle of action, procedure or legal determination. Also defined as: a truth so clear that it cannot be proved or contradicted unless by a proposition which is still clearer. Sources: Oxford Senior Dictionary, Oxford University Press, 1984.; Henry Campbell Black, M.A., ‘Black’s Law Dictionary’, Revised 4th Edition, St Paul, West Publishing Company, 1968, s.v., ‘Principle’.

• Prudent Man Rule:
This is the fundamental American principle that is applicable in respect of professional money management, originally asserted by Judge Samuel Putnum in 1830 as follows:

‘Those with responsibility to invest money for others should act with prudence, discretion, intelligence, and regard for the safety of capital as well as income’ [1830 Massachusetts Court decision: Harvard College v. Armory]. The Prudent Man Rule directs trustees ‘to observe how men of prudence, discretion and intelligence manage their own affairs, not in regard to speculation, but in regard to the management and disposition of their funds, considering the probable income as well as the probable safety of the capital to be invested’. Investments in risky Ponzi and Pyramid Schemes and in ‘programs’ such as those referenced, typically breach the Prudent Man Rule.

• Public Offering Price: See: ‘Underwrite’ below.

• Pyramid Scheme or scam: See: Ponzi Scheme.

• Registered Principal: See: Principal, of a Securities firm.

• Registered Representative, of a Securities firm:
This officer is licensed and authorised to purchase and/or sell stocks, bonds, options, limited partnerships, tax shelters, mutual funds, and variable annuities on behalf of a customer or the firm.

The Registered Representative must have qualified by passing the Series 7 (General Securities Representative) Examination and must be registered with the firm as an authorised representative. Additionally, all licensed representatives must have passed the NASD Series 63 (Uniform State Law) AntiFraud Examination, and must register with each State the firm intends to operate in.

Source: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; NASD, ‘National Association of Securities Dealers, Inc.: Manual’, April 1998, page 3201; NASD, ‘NASD Compliance Check List’.

• Risk:
Uncertainty as to whether an asset will earn an expected rate of return, or whether a loss may occur: Various categories of risk apply in the securities market environment:

(1): Delivery risk: The possibility that the buyer or seller of an instrument or foreign exchange may be unable to meet obligations at maturity.

(2): Liquidity risk: The possibility that a bank may have insufficient cash or short-term marketable assets to meet the needs of depositors and borrowers.

(3): Settlement risk: The possibility that the failure of a major bank, or its inability to honour payment commitments in a wire transfer network, could have a domino effect on other institutions, causing similar failures elsewhere. In the United Kingdom, this is usually referred to as ‘systemic risk’.

Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, s.v. ‘Risk’.

• Risk Free Asset:
A non-callable, default-free bond such as a short-term Government security. While such an asset is not risk-free in terms of inflation, it is (given that the Government can always print money) risk-free in a dollar sense. Source: Jerry M. Rosenberg, ‘The Essential Dictionary of Investing & Finance’, New York, Barnes & Noble, Inc., 2004, s.v. ‘Risk Free Asset’.

• Rule of Law, A (indefinite article):
The way this may be defined in the present context is to begin with the word ‘Rule’. A ‘Rule’ is an established standard, guide or regulation, especially a regulation set up by an official authority. It prescribes or directs action or forbearance. The term also covers a regulation made by a Court of Justice or a public office with reference to the conduct of business therein. Hence, ‘A Rule of Law’ encompasses a legal principle, or a body of legal principles, of general application, sanctioned by the recognition of authorities, and usually expressed in the form of a maxim or logical proposition. The word ‘Rule’ is used because in doubtful or unforeseen circumstances it is a guide or norm for the decision of those concerned (Toullier, tit. Prel. No. 17).

Source: Henry Campbell Black, M.A., ‘Black’s Law Dictionary’, Revised 4th Edition, St Paul, West Publishing Company, 1968, s.v. ‘Rule of Law’.

• Rule of Law, The (definite article): Note that the foregoing diverges from ‘The Rule of Law’. The common interpretation of The Rule of Law is that ‘the Law rules’ or is paramount: in other words that everyone in society, including the Government, operates within the ordered framework of the Law, precluding arbitrary behaviour. It is important to distinguish between the indefinite and the definite article here, because ‘Rule of Law’ has a different meaning, depending on which is used.

• Savings and Loan Deregulation:
The Garn-St Germain Act of 1982 cut Savings and Loan Associations loose from the tight girdle of ‘old-fashioned’, ‘restrictive’ Federal legislation, opening the door wide to the ransacking and enronisation of the ‘thrift’ banking sector, which in turn laid the groundwork for the subsequent giga-financial scandals that are now being exposed. President Reagan unveiled this legislation at a Rose Garden presentation and signing ceremony on 15th October 1982, before an audience of 200 people. Billed as a major piece of deregulation legislation, this law represented nothing less than the US criminal kleptocracy’s charter to ransack and pillage the middle and working classes. For 50 years, American families had relied on Savings and Loan Associations to finance their homes; but Reagan now pronounced that ‘outmoded regulations left over from the 1930s Great Depression’ had been preventing thrift institutions from competing in the complex, sophisticated financial marketplace of the free-wheeling 1980s.

When signing the bill with a flourish, Reagan pronounced: ‘All in all, I think we’ve hit the jackpot’.

But those who ‘hit the jackpot’ turned out, predictably, to be the organised criminal kleptocracy that had infiltrated official structures, could immediately mobilise criminal funds to buy their way into thrift institutions, and were embedded inside the corrupted US intelligence community. A new breed of swashbuckling Savings and Loan executive sprang up on cue, like weeds, out of the rich soil fertilised at the October 1982 Rose Garden ceremony.

Among their leaders was the notorious Neil Bush, then-Vice President George H. W. Bush’s son, who became a Director of Silverado Savings and Loan, of Denver, CO, and Andrew Cuomo, the son of New York Governor Mario Cuomo, who tried to buy Financial Security Savings of Delray Beach, Florida. The former Governor of Illinois, Dan Walker, bought First American Savings of Oak Brook, Illinois. Within 18 months of the Rose Garden signing, Edwin Gray, Chairman of the Federal Home Loan Bank Board (FHLBB) was provided with a grim, classified report and video, which revealed a swathe of abandoned, half-finished condominium units financed by Empire Savings and Loan of Mesquite, Texas: this was when the FHLBB was made aware of the fact that organised criminal cadres had immediately taken advantage of the deregulation of the Savings and Loans, and that an open-ended financial implosion was under way as a consequence. The enronisation of the US thrift industry was an ‘inside job’ from the outset. Source: ‘Inside Job: The Looting of America’s Savings and Loans’, Stephen Pizzo, Mary Fricker and Paul Muolo, McGraw-Hill Publishing Company, New York, 1989, ISBN 0-07-050230-7.

• Securities Act of 1933: This Act, which followed the 1929 crash and the Great Depression, was framed in accordance with the interstate commerce clause of the US Constitution, and requires that any offer for sale of securities using the means and instrumentalities of interstate commerce must be registered under the terms of the 1933 Act. Prior to the 1933 Act, the public regulation of securities in the United States had been governed mainly by State laws (commonly referred to as the ‘Blue Sky’ laws). With passage of the 1933 Act, the patchwork of existing State securities laws was left in place, to supplement the Federal legislation. A crucial dimension of the law is that the 1933 Act makes it illegal to commit fraud in conjunction with the offer or sale of securities.

Exemptions to the registration process under the Act are extremely tightly prescribed.

Hence, except for extremely narrowly defined offerings (for instance, to groups of no more than 35 investors), securities offered or sold to the general public in the United States must be registered by the filing of a registration statement with the Securities and Exchange Commission.

The prospectus for the offering is generally filed in conjunction with the registration statement. The SEC itself prescribes the relevant forms on which an issuer’s securities must be registered, and these forms call, inter alia, for:

(1): A description of the issuer’s properties and business;
(2): A description of the securities to be offered for sale;
(3): Information about the management of the issuer;
(4): Information about the securities (if other than common stock); and:
(5): Financial statements certified by independent accountants.

It is illegal for an issuer to lie or to omit material facts from a registration statement or prospectus. Secondary market transactions may take place without registration. Under Rule 144A, resales of restricted securities between ‘Qualified Institutional Buyers’ (QIBs) are exempted, thus creating a secondary market in restricted securities among the largest Wall Street houses.

• Securities Acts Amendments of 1975: See: Securities and Exchange Commission (SEC).

• Securities and Exchange Commission (SEC): A Federal agency created under the Securities Exchange Act of 1934, to administer the following legislation:
(1): The Securities Exchange Act of 1934;
(2): The Securities Act of 1933;
(3): The Public Utility Holding Company Act of 1935;
(4): The Trust Indenture Act of 1939;
(5): The Investment Advisor Act of 1940; and:
(6): The Securities Acts Amendments of 1975, which ratified free market determination of brokers’ commissions and gave the SEC authority to oversee the development of a National Market System.

The SEC has five Commissioners, appointed by the President of the United States on a rotating basis for five-year terms. The statutes administered by the SEC are designed to:
(1): Promote full disclosure;
(2): Protect the investing public against malpractice in the securities markets;
(3): Require all issues of securities offered in interstate commerce or through the mails, to be registered with the SEC;
(4): Supervise all national securities exchanges and associations;
(5): Supervise investment companies, investment counselors and advisers, Over-the-Counter brokers and dealers, and virtually all other individuals and firms operating in the investment field.

Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘SEC‘.

• Securities Exchange Act of 1934: This legislation, which governs the US securities markets, was enacted on 6th June 1934. The Act:
(1): Outlawed misrepresentation and manipulation, and other abusive practices in respect of the issuance and marketing of securities.
(2): Created the Securities and Exchange Commission to enforce the Securities Acts 1933 and 1934.
The primary stipulations of the 1934 Securities Act are as follows:
(1): Registration of all securities listed on stock exchanges, and periodic disclosures by issuers of financial status and changes in condition.
(2): Regular disclosure of holdings and transactions of ‘INSIDERS’ (officers and directors of a corporation and those who control at least 10% of equity securities).
(3): Solicitation of proxies enabling shareholders to vote for or against policy proposals.
(4): Registration with the SEC of stock exchanges and brokers and dealers to ensure their adherence to SEC rules through self-regulation.
(5): Surveillance by the SEC of trading practices on stock exchanges and Over-the-Counter (OTC) markets, to minimise the possibility of insolvency among brokers and dealers.
(6): Regulation of Margin Requirements for securities purchased on credit. These requirements are set by the Federal Reserve Board.
(7): The provision of subpoena power for use by the SEC in investigations of possible violations and in enforcement actions.

Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Securities Exchange Act 1934’.

• Self-Regulatory Organization (SRO):
These are Federal organisations established to enforce fair, ethical and efficient practices in the securities and commodities futures industries. The practices are referred to as ‘industry rules’ to distinguish them from regulatory agencies such as the Securities and Exchange Commission (SEC) or the Federal Reserve Board. SROs include:
(1): All the national securities and commodities exchanges; and:
(2): The National Association of Securities Dealers (NASD), representing:
• All firms operating in the Over-the-Counter market; and:
• The Municipal Securities Rulemaking Board (MSRB), established under the US Securities Acts Amendments of 1975 to regulate brokers, dealers and banks dealing in municipal securities. The NASD enforces the rules promulgated by the MSRB with bank regulatory agencies. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘SRO’.

• Settlement:
(1): Of Securities: The conclusion of a securities transaction in which a broker/dealer pays for securities bought for a customer or delivers securities sold, being paid from the buyer’s broker.
(a): Regular Way Delivery and Settlement is completed on the third full business day following the date of the transaction for stocks (called the Settlement Date).
(b): Government Bonds, and Options, are settled on the next business day.
(2): Of Futures/Options: Represents the final price, established by Exchange Rule, for prices prevailing during the closing period and upon which Futures Contracts are Marked to The Market. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Settlement’.

• Sherman AntiTrust Act:
Passed in July 1890, this legislation described in general terms, without the benefit of definitions, activities that were viewed as monopolistic and were therefore illegal. Many of the definitions had already been determined by case law involving court actions by employers combating the activities of trade unions. The Act forbade ‘every contract, combination… or conspiracy in the restraint of trade or commerce’. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, for The Administration of Justice Department, Mercyhurst College, Erie, PA 13th February 2002; Jack C. Plano and Milton Greenberg, ‘The American Political Dictionary’, 4th Edition, Hinsdale, the Dryden Press, 1976, page 328.

• Story’s First Law:
‘All organisations are run for the benefit of those running the organisation’.

• Story’s Second Law:
‘The interests of the supplier and the consumer diverge’.

• Story’s Third Law: ‘Sooner or later, all operations and covers are blown’.

• Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA):
Federal legislation which reversed some earlier tax reductions, established a 10% withholding tax applicable to dividends, repealed accelerated appreciation deductions and provided that American taxpayers must report all sources of income, wherever it was earned anywhere in the world.

It follows that all receipts received by US taxpayers since the passage of this Act which have not been reported to the Internal Revenue Service (IRS) are taxable, which means that all US taxpayer holdings in offshore accounts that have not been declared for tax are liable for US tax and also for penalties. It also means that ‘program’ participants expecting their funds eventually to be paid into offshore accounts may not only be in denial about the fact that they have been scammed, but may have also allowed themselves to become co-conspirators in tax evasion with the perpetrators of the scams themselves. It is standard criminalist practice to procure that targeted victims are enticed into compromising themselves by the perpetrators.

• Terrorism Prevention Act of 1996:
This legislation added terrorism-related crimes as predicates for money-laundering. Madinger and Sydney A. Zalopany, ‘Money Laundering: A Guide for Criminal Investigators’, New York: CRC Press, LLC, 1999, page 43.

• Transparency:
(1): In Financial Reporting: Ease of understanding, made possible by FULL, CLEAR and TIMELY disclosure of relevant information.
(2): In Securities Transactions, price transparency means access to information concerning the depth of the market that would enable detection of fraud or manipulation. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Transparency’.

• Trust Indenture Act of 1939:
This legislation supplemented the Securities Act of 1933, requiring the appointment of a suitably independent and qualified trustee to act for the benefit of the holders of securities. The legislation specified certain substantive provisions for such a trust indenture that must be entered into by the issuer and the trustee. The law is administered by the Securities and Exchange Commission (SEC).

• Truth in Lending Act:
Federal legislation which established disclosure rules that lenders must observe in dealings with borrowers. The Act stipulates that consumers must be told annual percentage rates, potential total cost, and any special loan terms. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Consumer Protection Act of 1968’.

• Truth in Lending Act (TILA) of 1968:
This legislation is designed to protect consumers involved in all kinds of credit transactions, including (and especially) mortgages. It is contained in Title 1 of the Consumer Credit Protection Act as amended. The purpose of the legislation is to promote the informed use of consumer credit by requiring disclosures about its terms, and gives consumers the right to cancel certain credit transactions that may involve a lien on the consumer’s principal home. It regulates certain credit card practices, and provides a mechanism for the fair and timely resolution of credit disputes. The law requires the uniform and standardised disclosure of costs and charges so that consumers can shop around (thereby promoting competition). The legislation further prohibits certain practices associated with credit secured on a consumer’s principal dwelling. The lender must disclose to the borrower the annual percentage rate charged (APR), which must reflect the cost of the credit to the consumer. The legislation proved ineffective in curbing the abuses which were highlighted as a consequence of the corruption exposures, because many mortgage lenders failed to comply with the Act’s disclosure provisions, and were not prosecuted or penalised accordingly.

• Underwrite:
To assume the risk of buying a NEW ISSUE of securities from an issuing corporation or Government entity and reselling the securities to the public, either directly or through dealers. The underwriter makes a profit on the difference between the price paid to the issuer and the Public Offering Price, called the Underwriting Spread. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Underwrite’.

• Underwriting Spread: See ‘Underwrite’ above.

• Vault Cash Act of 1959:
This legislation modified the reserve requirements of Federal Reserve member banks to allow the banks to count their vault cash, in excess of specified percentages of their deposits, as part of their required reserves. This was one of innumerable retrograde modifications since the Second World War which have facilitated covert financial operations, to the detriment of global financial stability and integrity. Source: Munn, ‘Encyclopedia of Banking & Finance’, page 589.

APPENDIX:

THE ORIGINAL PONZI SCHEME EXPLAINED:

Charles Ponzi, an immigrant from Italy to Boston, MA, made millions of dollars for a brief period, by exploiting his shrewd observation that while national currencies were fluctuating wildly in 1920, just after the end of the First World War, the Universal Postal Union (UPU) issued coupons which were always worth a given amount of postage stamps.

In those days, European refugees were flocking to the United States, Canada and Brazil; and often, their only contact with their families and friends back home was an occasional letter, enclosing a few dollars. The Universal Postal Union arranged to move the millions of postwar letters, business documents and messages across national borders by issuing Postal Reply Coupons.

You bought a Postal Reply Coupon in your country of residence, and enclosed it with your letter. Your mother, once she had received the letter, exchanged the Postal Reply Coupon for stamps at her local post office.

Charles Ponzi told friends in Boston: ‘Everybody’s heard of the Postal Union. They print coupons like these I’m holding here: Postal Reply Coupons. You can send a letter home, or anywhere in the world, with these coupons. And you can trade this coupon for a stamp in any country. I send my mother coupons with every letter that I write home’.

‘Now, in cooperation with certain large businesses in our city, I am making a fortune on the Postal Reply Coupon. Stocks are too risky. Forget it. And bonds, what are they paying these days? Maybe six percent? Savings accounts at Tremont Trust, they’ll give you four and a half cents on the dollar. Give them $100 and they’ll give you back $104.50. I can beat that into the ground’, Ponzi insisted, beating his cane against the floor. ‘My investors get 50 cents on the dollar. Place a hundred dollars with my Securities Exchange Company, and you take out $150. Put that $150 in, you’ll get back $225. That’s right, in six months, you can more than double your money’.

How could he pay 50%, when banks couldn’t even manage to pay 5%? ‘Exchange rates’, Mr Ponzi explained. ‘Every morning I go down and check to see how the lira is doing against the US dollar. Usually you get five lire for a dollar. This morning I checked, and with the war just ended, it takes 20 lire to the dollar’. While currency rates were bouncing around like popcorn, Mr Ponzi explained, the Postal Reply Coupon always bought one stamp. Here’s what I do’.

‘I send my cousin in Parma, Italy, $1.0. He exchanges the dollar for lire. With the 20 lire ( or 2,000 centesimi), he can buy 66 Postal Reply Coupons (worth 30 centesimi each, the cost of a letter-sized stamp in Italy). Back in the United States, each of the coupons buys one stamp, at face value five cents. I redeem all 66 coupons for $3.30 worth of stamps. The magic happens in the exchange rate. In America, my dollar buys 20 Postal Coupons. But if I exchange the dollar for Italian lire, and buy the coupons in Italy, then return and buy the stamps in America, I get $3.30 worth of stamps for that same $1.0. My profit margin is 230%’.

‘Yeah, but $3.30 worth of stamps is still stamps’, complained an attentive listener.

‘I know’, said Ponzi. ‘So I sell the stamps at a 10% discount through my contacts with the larger firms downtown in our city. Deducting the discount, I’ve got $3.0 cash now, from the $1.0 that I started out with. Now, let’s say, I got that dollar from you. I will pay you back your dollar, plus 50 cents of interest. Since I just sold $3.0 worth of stamps, I have a dollar and 50 cents for myself. I’m going to spend a third of that on my offices and processing overheads, and a third on commissions and bonuses to my sales people; and then, ladies and gentlemen, I’m going to pocket the other third and take my wife for a stroll’.

THE ORIGINAL FALSE PROSPECTUS IS SOON ABANDONED, AND REPLACED BY… ZILCH
This was the essence of the original Ponzi scheme. Note that in this description, Ponzi starts out by exploiting the fluctuations of exchange rates, and the lack of arbitrage; and note that, by the end of the explanation, he is simply NOW offering 50% interest, which he pays out to claimants out of the additional funds he has received from other investors who are likewise anticipating a 50% return on their investments, within a short space of time.

The germ of the idea was derived from the foreign exchange market; but once Ponzi has realised that people will pour their money his way if they are promised a 50% return, he can abandon his elaborate explanation (his ‘prospectus’) of the exploitation of exchange rate fluctuations and the tedious task of shipping, receiving, handling and exchanging Postal Reply Coupons, which gave him the ‘easy money’ idea in the first place.

In other words, his sales pitch is no more than a now redundant, expendable illustration – a false prospectus which disguises the fact that he is really promoting a pyramid selling operation. For he has realised that all his investors care about is receiving 50% on their money. How this is to be achieved does not normally concern them.

ALL THEY WANT IS A HUGE RETURN ON THEIR MONEY.

By December 1920, Charles Ponzi was matching old money with ever larger amounts of new money. In May 1921 alone, almost $500,000 of new money poured into the Securities Exchange Company – as 1,500 or more new customers, lured by the 50% yield offered through advertisements, sought their share of the huge profits they thought would be forthcoming at minimal risk. The office now bulged with fat stacks of dollar bills.

THE FLOOR STARTS TO GIVE WAY BENEATH HIM
But problems started to arise when Joseph Daniels filed a lawsuit alleging that he had helped to found the Securities Exchange Company (SEC) with a loan of $230 worth of furniture plus $200 in cash. Daniels had indeed provided the beaten-up desks that had been offloaded in the dusty office, and had let Mr Ponzi have $200 to spark interest in the Postal Coupons. It wasn’t just a loan, Daniels maintained, now that Ponzi was drowning in cash. ‘We were partners. I put up capital and property’. On 2nd July, Mr Ponzi was handed a demand for $1.0 million.

The Boston Post telephoned, and Mr Ponzi told the reporter that he had indeed bought furniture from Mr Daniels, but that he had never received any money for investment from him.

But when the newly installed banking commissioner for Massachusetts, Joseph Allen, read the newspaper, he wondered: ‘Where did Ponzi come from? Who are his associates? How is he managing to double people’s money?’

Allen asked Ponzi to pop round to his office, for an interview. The Securities Exchange Company did not describe itself as a bank, nor did it offer any banking services.

Therefore, in the absence of a complaint – and none had yet arrived – the Commissioner had no jurisdiction to examine Charles Ponzi’s business. At the interview, Ponzi explained the curiosities surrounding Postal Coupons, pointed out that money chased money, collected his black hat and coat, doffed his hat, and bid Mr Allen goodbye.

But Richard Grozier, city editor at The Boston Post, had always thought that Charles Ponzi’s scheme was fraudulent; and to initiate what he fancied would be the inevitable coming débacle, he elicited a comment from one of Boston’s leading citizens, Clarence Barron, the owner of Dow Jones & Co and The Wall Street Journal.

At the end of July 1920, The Boston Post carried a front page story entitled: ‘Clarence Barron questions the motive behind Ponzi’s scheme’.

Theoretically, Barron admitted, you could indeed turn a profit on the UPU coupons. But that was the only truth buried within the operation. You could never earn more than a few thousand dollars, not just because of the trouble involved in offloading the stamps and tracking the various conversions driving the process, but because there simply were not enough coupons available.

France, Romania and Spain had just abandoned the scheme, a few months earlier. A cursory check with the UPU showed that they only had a few hundred thousand dollars’ worth of coupons left in circulation – nowhere near the $10 million or $15 million Mr Ponzi claimed to be trading. So where was Ponzi getting his coupons from? Furthermore, the US Postal Service had announced, on 2nd July 1920, that Postal Reply Coupons would no longer be redeemable in lots larger than ten. So how was Ponzi converting his coupons into stamps?

Finally, Barron asked, if Ponzi is doubling everyone else’s money, why does he keep his own funds in regional banks? The Boston Post knew that Ponzi kept millions of dollars on deposit at seven or eight New England banks, and that the accounts were ballooning. How could a man who was paying 100% interest every 90 days, put up with drawing just 4% on his holdings? Barron concluded:

‘Right under the eyes of our Government, Mr Ponzi has been paying out US money to one line, with deposits taken from a succeeding line’ (another bank).

All of a sudden, all the doors which had flown back on their hinges at the sight of Mr Ponzi, were slamming tight shut. The Massachusetts District Attorney ordered Ponzi to cease and desist. His customers demanded their money back, and Ponzi was eventually jailed for Federal mail fraud, then deported. He wound up destitute in a poor house in South America (1).

Reference:
(1). ‘How Charles Ponzi pulled it off: Making a fine art out of a pyramid fraud’, International Currency Review, Volume 27, Number 3, December 2001, pages 51-52.

ANNEXE:

REITERATION OF THE STATUTES, SECURITIES REGULATIONS AND LEGAL PRINCIPLES OF WHICH THE CRIMINALISTS, THEIR ASSOCIATES AND RELEVANT BANKSTERS ARE IN BREACH:

LEGAL TUTORIAL: The Steps of Common Fraud:

Step 1: Fraud in the Inducement: “… is intended to and which does cause one to execute an instrument, or make an agreement… The misrepresentation involved does not mislead one as the paper he signs but rather misleads as to the true facts of a situation, and the false impression it causes is a basis of a decision to sign or render a judgment” Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Fraud’.

Step 2: Fraud in Fact by Deceit (Obfuscation and Denial) and Theft:

• “ACTUAL FRAUD. Deceit. Concealing something or making a false representation with an evil intent [scanter] when it causes injury to another…”. Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Fraud’.

• “THE TORT OF FRAUDULENT DECEIT… The elements of actionable deceit are: A false representation of a material fact made with knowledge of its falsity, or recklessly, or without reasonable grounds for believing its truth, and with intent to induce reliance thereon, on which plaintiff justifiably relies on his injury…”. Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Deceit’.

Step 3: Theft by Deception and Fraudulent Conveyance:

THEFT BY DECEPTION:

• “FRAUDULENT CONCEALMENT… The hiding or suppression of a material fact or circumstance which the party is legally or morally bound to disclose…”.

• “The test of whether failure to disclose material facts constitutes fraud is the existence of a duty, legal or equitable, arising from the relation of the parties: failure to disclose a material fact with intent to mislead or defraud under such circumstances being equivalent to an actual ‘fraudulent concealment’…”.

• To suspend running of limitations, it means the employment of artifice, planned to prevent inquiry or escape investigation and mislead or hinder acquirement of information disclosing a right of action, and acts relied on must be of an affirmative character and fraudulent…”.

Source: Black, Henry Campbell, M.A., Black’s Law Dictionary’, Revised 4th Edition, St Paul: West Publishing Company, 1968, s.v. ‘Fraudulent Concealment’.

FRAUDULENT CONVEYANCE:

• ‘FRAUDULENT CONVEYANCE… A conveyance or transfer of property, the object of which is to defraud a creditor, or hinder or delay him, or to put such property beyond his reach…”.

• “Conveyance made with intent to avoid some duty or debt due by or incumbent or person (entity) making transfer…”.

Source: Black, Henry Campbell, M.A., ‘Black’s Law Dictionary, Revised 4th Edition, St Paul: West Publishing Company, 1968, s.v. ‘Fraudulent Conveyance’.

U.S. SECURITIES REGULATIONS OF WHICH KEY INSTITUTIONS HAVE BEEN SHOWN TO BE IN BREACH:

• NASD Rule 3120, et al.
• NASD Rule 2330, et al
• NASD Conduct Rules 2110 and 3040
• NASD Conduct Rules 2110 and IM-2110-1
• NASD Conduct Rules 2110 and SEC Rule 15c3-1
• NASD Conduct Rules 2110 and 3110
• SEC Rules 17a-3 and 17a-4
• NASD Conduct Rules 2110 and Procedural Rule 8210
• NASD Conduct Rules 2110 and 2330 and IM-2330
• NASD Conduct Rules 2110 and IM-2110-5
• NASD Systems and Programme Rules 6950 through 6957
• 97-13 Bank Secrecy Act, Recordkeeping Rule for funds transfers and transmittals of funds, et al.

U.S. LAWS ROUTINELY BREACHED BY THE CRIMINAL OPERATIVES AND BANKSTERS:

• Annunzio-Wylie Anti-Money Laundering Act
• Anti-Drug Abuse Act
• Applicable international money laundering restrictions
• Bank Secrecy Act
• Conspiracy to commit and cover up murder.
• Crimes, General Provisions, Accessory After the Fact [Title 18, USC]
• Currency and Foreign Transactions Reporting Act
• Economic Espionage Act
• Hobbs Act
• Imparting or Conveying False Information [Title 18, USC]
• Maloney Act
• Misprision of Felony [Title 18, USC] (1)
• Money-Laundering Control Act
• Money-Laundering Suppression Act
• Organized Crime Control Act of 1970
• Perpetration of repeated egregious felonies by State and Federal public employees and their Departments and agencies, which are co-responsible with the said employees for ONGOING illegal and criminal actions, to sustain fraudulent operations and crimes in order to cover up criminalist activities and High Crimes and Misdemeanours by present and former holders of high office under the United States
• Provisions pertaining to private business transactions being protected under both private and criminal penalties [H.R. 3723]
• Provisions prohibiting the bribing of foreign officials [F.I.S.A.]
• Racketeer Influenced and Corrupt Organizations Act [R.I.C.O.]
• Securities Act 1933
• Securities Act 1934
• Terrorism Prevention Act
• Treason legislation, especially in time of war.

• Please be advised that the Editor of International Currency Review cannot enter into email or other correspondence related to this or to any of the earlier reports.

We are a private intelligence publishing house and have no connections to any outside parties including intelligence agencies. The word ‘intelligence’ on this website and in all our marketing material is used for marketing/sales purposes only and has no other connotations whatsoever: see ‘About Us’ on the red panels under the Notes on the Editor, Christopher Story FRSA, who has been solely and exclusively engaged as an investigative journalist, Editor, Author and private financial and current affairs Publisher since 1963 and is not and never has been an agent for a foreign power, suggestions to the contrary being actionable for libel in the English Court.

ADVERTISEMENT: INTERNET SECURITY SOLUTION

NON-U.S. INTERNET SECURITY SOLUTION CD AVAILABLE: FAR BETTER THAN NORTON ETC
It has now been established that the National Security Agency (NSA) works with/controls Microsoft, Norton, McAfee, and others, in pursuit of the Pentagon’s vast BIG BROTHER objective, directed from the ‘highest’ levels (not the levels usually referred to) which seek to have every computer in the world talk direct to the Pentagon or to NSA’s master computers.

This should come as no real surprise since the cynical spooks even assert this ‘in-your-face’ by advertising ‘INTEL INSIDE’, which says exactly what it means. More specifically, NSA have made great strides in this direction by having a back door built into Microsoft VISTA. Certain computers, especially those labelled with the logo of the ‘fully collaborating’ firm Hewlett Packard, have hard-core setups which facilitate the remote monitoring and controlling of personal computers by NSA, Fort Meade. We now understand that if you are using VISTA* you MUST NOT enable ‘file and printer sharing’ under any circumstances. If you say ‘YES’, so to speak, to ‘file and printer sharing’, your computer becomes a slave at once to NSA’s master computers. DO NOT ENABLE SHARING.

Unfortunately, this abomination is so far advanced that this may not be the only precaution that needs to be taken. As long as Microsoft continues its extensive cooperation with NSA and the NSC (National Security Council), the spying system which assists the criminalised structures, and thus hitherto the Bush-Clinton ‘Box Gang’ and its connections, with their fraudulent finance operations, NSA may be able to steal data from your computer. The colossal scourge of data theft is associated with this state of affairs: data stolen usually include Credit Card data, which the kleptocracy regards as almost as good as real estate for hypothecation purposes. Even so, you can make life very much more problematical for these utterly odious people by NOT USING U.S.-sourced so-called Internet Security and anti-virus software. Having been attacked and abused so often, we offer a solution.

We use a proprietary FOREIGN Internet Security program which devours every PC Trojan, worm, scam, porn attack and virus that the National Security Agency (NSA) throws at us. We are offering this program (CD) to our clients and friends, at a premium. The program comes with our very strong recommendation, but at the same time, if you buy from us, you will be helping us finance ongoing exposures of the DVD’s World Revolution and the financial corruption that has been financing it.

The familiar US proprietary Internet Security programs are by-products of US counterintelligence, and are intended NOT to solve your Internet security problems, but to spy on you and to report what you write about, to centralised US electronic facilities set up for the purpose. You can now BREAK FREE from this syndrome while at the same time helping us to MAINTAIN THE VERY HEAVY PRESSURE UPON THE CRIMINALISTS WE HAVE BEEN EXPOSING, by ordering this highest quality FOREIGN (i.e., non-US) INTERNET SECURITY SOLUTION that we have started advertising on this website. This offer has been developed in response to attacks we have suffered from the NSA nerds who appear to have a collective mental age of about five years, judging by their output.

• To access details about the INTERNET SECURITY SOLUTION, just press THE LIVE LINK YOU HAVE JUST READ, or else press SERIALS in the red panel below. This opens up our mini-catalogue of printed intelligence publications. Scroll right down to the foot of that section, where you will see details of this service. When you buy this special product, you will also, as we clearly state above, be paying a special premium by way of a donation to help us finance these exposures.

The premium contains a donation for our exposure work and also covers our recommendation based on the Editor’s own experience that this INTERNET SECURITY SOLUTION will make your Internet life much easier. Some versions have a ‘Preview before downloading’ feature.

*VISTA: Virtual Instant Surveillance Tactical Application.

WHEELS COMING OFF WHITE HOUSE CORRUPTION ENGINE

PERVERSE OPERATION TO ‘REIGNITE’ FRAUDULENT FINANCE IS FALLING APART

Tuesday 24 March 2009 03:00

THE LATEST MISGUIDED, WRONG-HEADED GEITHNER PLAN

• MICROCHIP STUCK ON THE EDITOR’S LEG BY NSA MANIACS AT NIGHT IN A U.S. HOTEL

• EARLIER INSTANCES OF ILLEGAL U.S. ATTEMPTS TO TRACK THE EDITOR OF THIS SERVICE

NO TAKERS FOR ‘GEITHNERS’

‘A HORRIBLE, HORRIBLE FEELING THIS IS GOING TO END BADLY’

TALF SUPPOSEDLY ‘TO REIGNITE THE SECURITIZATION MARKETS’: RIGHT

HUGE THEFT OR ‘REASSIGNMENT’ OF FUNDS TOOK PLACE ON 17TH MARCH

THE $4.0 TRILLION THAT ‘SUDDENLY’ APPEARED AT THE U.S. TREASURY

THE PRIMARY MOTIVE UNDERLYING THE RECKLESS BAILOUTS

REPORT THAT PAPERS WERE SERVED ON DR BEN BERNANKE

A.I.G. FOUNDER FRANK WISNER SR.: LIAISON TO THE NAZI GEHLEN ORGANISATION

THE CIA BACKGROUND OF FRANK WISNER JR., A.I.G. VICE CHAIRMAN

U.S. SEEKS CONTROL OF INTERNATIONAL CRIME, TERRORISM AND DRUG TRAFFICKING

A CRIMINAL GOVERNMENT OPERATING ON DURKHEIM PRINCIPLES

BUSH-CLINTON-CIA DRUG-TRAFFICKING LINKS TO STANFORD OPERATION

REASON FOR REFUSAL TO IMPLICATE OTHERS: DEATH THREATS TO FAMILY MEMBERS

OTHER PONZI SCHEMES ON BRINK OF BEING EXPOSED: ‘PONZIMONIUM’

MADOFF ACCOUNTANT FRIEHLING ARRESTED: SECURITIES FRAUD

DOUBLE STANDARD FOR MUNICIPAL ISSUERS

SLOW AND PAINFUL PROGRESS IN ‘TAKING DOWN’ THE OCTOPUS

STANFORD OPERATIONS AND THE OCTOPUS

STANFORD ‘TOOK OVER’ FROM NORIEGA AGAINST WHOM LEHDER TESTIFIED

EFFICIENT TEUTONIC ORGANISER OF THE MEDELLIN CARTEL FOR BUSH/CIA

CATALOGUE OF VIOLENCE UNLEASHED BY LEHDER

LEHDER EXFILTRATED TO GERMANY UNDER CORRUPT 2000 ELECTION PAYOFF DEAL

STANFORD LINKS TO FUND RUN BY BIDEN FAMILY MEMBERS

OTHER BIDEN BACKGROUND SCANDALS

BIDEN ATTEMPT TO SET US UP/USE THIS SERVICE

CHINESE REPORTED TO HAVE OBTAINED LIEN ON FEDERAL RESERVE

KISSINGER AND BAKER RETURN FROM MOSCOW ‘WITH GORBACHEV’

SECRET MEETING BETWEEN OBAMA, BIDEN AND GORBACHEV

BRITISH-AMERICAN RELATIONS AT AN ALL-TIME LOW

BELATED WHITE HOUSE SECOND THOUGHTS GIVEN THE IMMINENT MEETING WITH QUEEN

FACE-TO-FACE EXCHANGE BETWEEN PRESIDENT OBAMA AND THE QUEEN

POSTSCRIPT; WHITE HOUSE SCURRIES TO MEND THE RIFT

• MADOFF ‘VICTIMS’ LIST: Two reports were posted on 6th February 2009 containing the entire list of customers of Bernard L. Madoff Securities, Inc.. Because the list is so huge, we divided it into two segments: Clients A-N; and clients O-Z, plus a Miscellaneous Section. See: Archive. Our list is the easiest to load and clearest of the lists that have been reproduced privately on the Internet.

• We have just published: International Currency Review Volume 34, #2 on Systemic Fraudulent Finance and The Legalisation of Financial Corruption. Also just published are issues of our titles Economic Intelligence Review, London Currency Report, Interest Rate Service and Arab-Asian Affairs. For further details, please check the second white panel on the Home Page.

• Globalist hegemony ideology and practice is comprehensively debunked in the Editor’s study entitled The New Underworld Order, which can be ordered via the books section of this website. If you want to see what may well happen if the angle of decline steepens much further, you could do worse than also order a copy of The Red Terror in Russia, by the contemporary Russian eyewitness Sergei Melgounov, another Edward Harle Limited book available direct from this website.

• ADVERTISEMENT: Details of the Internet Security Solution software offered by this service in conjunction with a donation are appended at the very foot of this report, below the legal data. See also the catalogue by clicking on World Reports Limited and scrolling down to the bottom.

By Christopher Story FRSA, Editor and Publisher, International Currency Review and associated intelligence publications and information services. See this site for details and ordering facility.

• CORRESPONDENCE TO THE EDITOR: We routinely, automatically DELETE all emails which OMIT any element of the requested coordinates. We are not prepared to deal with anonymous spooks and other cowards who are too scared to provide their coordinates, for identification.

• The CONTACT US facility is found in the red box throughout this combined website.

NEW REPORT STARTS HERE:

THE LATEST MISGUIDED, WRONG-HEADED GEITHNER PLAN
It is very difficult to find words to describe the desperation, stupidity and folly of the latest Geithner wheeze. This proposal for private sector investors to collaborate with the Government to relieve the banks, as The New York Times put it on 23rd March 2009, ‘of assets tied to loans and mortgage-linked securities of unknown value’, with the Government reportedly ready to lend nearly 95% of the funds for any such investment, is beyond reckless and irresponsible: it is laughable.

It reeks of an utterly perverse and desperate, A REALLY DESPERATE, perverse throw by the Obama Administration to revalidate and revalue trades within the moribund derivatives sector, which has crashed and in which no-one not in need of brain surgery has been at all interested in since the worthlessness of these Fraudulent Finance assets were exposed.

The extraordinary weakness and idiocy of this wheeze – which must rank as the most eccentric and demented proposition ever to have been marketed by the corrupt US Treasury – was impregnated within the feeble remarks of Christina D. Romer, the Chief Economist at the White House, who said in an interview on ‘Fox News Sunday’ [22nd March 2009]:

‘What we’re talking about now are private firms [i.e. the hedge funds and sovereign wealth funds, mainly – Ed.] that are kind of doing us a favor [i.e., digging us out of the hole that we’ve dug for ourselves – Ed.], right, coming into this market to help us buy these toxic assets [note that she agreed that they are worthless, by using the word TOXIC: what a superb marketing ploy!] off banks’ balance sheets…. They are the firms that are the good guys here’, she added, in order to head off the obvious objection that on the basis of recent experience, participants might be vulnerable to a massive retroactive tax, or a Congressional hearing, or both of the above.

The White House spokeswoman wasn’t asked why, if the banks’ (fraudulent Ponzi) ‘assets’ were so ‘toxic’, ANYONE would want to buy ANY of them, EVER, given that by definition worthless assets aren’t tradeable – let alone borrow money from the Government (creating further background Government debt) for the purpose, even with the official loans reaching almost 95% of value.

• BUT WHAT VALUE? Even the few cents in the dollar suggested, is almost a non-starter.

Uh, as The New York Times pointed out:

‘Still, a big stumbling block remained: how to place a value on mortgage-related assets that have not been traded for months’,

Right.

The only reason that Pimco, Black-Rock and other such entities might participate in this demented scheme would be in the forlorn hope that it might succeed in revalidating and revaluing their vast portfolios of DUD derivatives ‘assets’ that they can’t shift. Not a valid or responsible reason for a money manager to trash his fiduciary responsibilities by investing in ‘assets’ that the White House Chief Economist has herself publicly labelled TOXIC.

MICROCHIP STUCK ON THE EDITOR’S LEG BY NSA MANIACS AT NIGHT IN A U.S. HOTEL
The Editor flew to Chicago on 16th March 2009, took care of some business in the city, and later caught an Amtrak train to another destination, for some further meetings.

At 4:00am in the morning of 18th March 2009, the Editor awoke in his hotel room and felt an itch on the back of his lower right leg. On feeling the area, he became aware that a piece of plastic had been stuck onto his inner leg without his knowledge.

The Editor had been surprised to be given a large suite at the hotel in question. On 23rd March, an expert analyst informed him that the plastic was not simply placed in the bed on the off-chance that it would adhere to the back of the Editor’s right leg, but that it was actually applied to the Editor very early in the morning while he was sleeping. This assessment comes from experts with such background that when asked whether the resulting Tattoo on the Editor’s leg (see below) may be permanent, they were unable to answer the question, and subsidiary questions, on the telephone: meaning that they could not do so without breaching national security.

The plastic peeled off and on turning on the light, the Editor found that he was holding a printed circuit microchip embedded in a piece of transparent plastic measuring about one inch square. On holding the plastic up to the light, the embedded printed circuits, with various arrows, were very clearly visible. There is a lesion on the Editor’s inner right leg where the chip was applied.

• The printed circuit contained a DIAMOND shape, which is a TARGET symbol.

It also contained three ‘shoes’ associated with arrows, which are indications of a GPS operation to track the Editor’s exact movements so that at the appropriate time he can be shot dead on demand. Three shapes in the form of flayed skins were also evident, as was a miniaturised grid, indicating, we understand, the whereabouts of the Editor physically. After being peeled off the Editor’s lower right leg, a lesion remained at the place where the printed circuit/chip had been located.

The Editor reported this via intermediaries to several US operatives, who quickly responded that they had no knowledge of any such evil device being placed upon the Editor’s person: in fact this message emerged almost in unison. The Editor was not satisfied with this and reported the issue to a close friend with ‘connections’, who was able to unravel the truth of the matter.

This is that, in addition to being a tracking device to facilitate assassination, the printed circuit also creates a TATTOO, which then operates just like the printed circuit itself when it has peeled off.

Furthermore, the friend pointed out that these people are trained to say precisely the opposite of the truth when exposed. The proposition that the US operatives had put forward was that the GPS printed circuit had been applied to the Editor’s inner right leg by British MI6 operatives for his own protection, presumably on the American Airlines plane: a contradiction in terms given what the US operatives in question know about the Editor of this service.

What is certain that if this was a British operation, the plastic printed circuit would not carry a target (assassination) symbol (DIAMOND), indicating how ridiculous such US denials and lies are.

EARLIER INSTANCES OF U.S. ATTEMPTS TO TRACK THE EDITOR OF THIS SERVICE
Nor is this the first time that mentally retarded, murderous NSA parasites (which is what many of them are: they produce NOTHING) have applied these craven tactics to the Editor. On the first such occasion, after the Editor had conducted certain interviews in May 2003 in North America, he found a bean-shaped object among his effects while he was visiting the seaside in the British Isles.

Fearing that it might explode, he climbed up a rock adjacent to the beach and placed the plastic bean-shaped transmitter inside a hole in the rock, and wedged a loose piece of rock into the hole. Returning out of rank curiosity two days later to see whether the ‘bean’ was still there, he carefully removed the wedge, only to find that the object had completely vanished. A bird or other creature could not possibly have removed it from deep inside the cliff face.

The second occasion that a chip was placed with the Editor, occurred after the Editor had paid a second visit to the office of the NSA operative William Hmailton, of PROMIS fame. On the first such occasion, everything was sweetness and light, the receptionist was warm and cosy and the Editor was treated with courtesy. On the second occasion, the previously pleasant Hamilton receptionist was distant and surly. The Editor was kept waiting in the reception area for 25 minutes, and was then ushered into a conference room by Mr Hamilton. First mistake: the Editor removed his jacket.

Almost immediately, a man in jeans knocked on the door and asked if he could ‘continue’ working at a computer console that was located in the corner of the room.

The Editor thought it very odd that a single computer was stuffed into the corner of the Boardroom. Hamilton said ‘OK’, and minutes later ‘suggested’ that it would be a good idea ‘if we move next door. Leave your briefcase and jacket here: we’ll look after them’. Second mistake. Manifestly, the fellow in jeans was acting a role: if the Boardroom had been set aside for the meeting with the Editor of this service, the computer nerd wouldn’t have been given access.

‘Next door’ turned out to be a completely empty office suite. In at least one room, however, the Editor noticed a large number of large carboard boxes stacked all over the floor. After clicking his heels for ten minutes, the unpleasant receptionist brought in a tray with a glass and an opened bottle of Pepsi. Third mistake. NEVER DRINK FROM AN OPENED BOTTLE IN SUCH COMPANY.

• Please now refer to the Gospel of Mark, Chapter 16, verse 18.

The Editor later travelled to another location and during dinner in a diner with a former contact, he described what had happened. The contact asked to look at the Editor’s jacket. The microchip was stuck to the inner side of the right-hand part of the jacket. It was quickly consigned to the candle burning on the dining table.

On each of these occasions, the operatives concerned behaved in an unfriendly manner towards a visitor from the United Kingdom which is still supposed to be the United States’ closest and most reliable ally. On all three occasions, we deduce that the concern within the warring and confused US intelligence community, which is being brought low by the collapse of its Fraudulent Finance schemes arising from these exposures, has been to compromise the Editor in order to attempt to close down these ongoing arms-length investigations, which have made immense progress since the Editor first became involved in this investigative reporting six years ago.

It’s all about COVERING UP FINANCIAL CRIMINALITY. It’s nothing to do with US NATIONAL SECURITY. The investigations are focused exclusively on the betrayal of the American people and the Rest of the World by a bunch of arrogant thieves and amoral US operatives who believe that they can do what they like, including stealing from widows (‘devouring widows’ houses’), depriving their Ponzi victims of all hope of recompense, and treating the rest of humanity with malice.

Unfortunately for the terrified perpetrators, this horrendous episode of US officially-sponsored financial terrorism is unravelling faster than these mental defectives and crooks can stitch their model back together again. The angle of deterioration is steepening by the day, and the more they try to patch up the broken system based on Fraudulent Finance, the worse the mess they create.

NO TAKERS FOR ‘GEITHNERS’
We have just published International Currency Review, Volume 34, #2, which contains an analysis of the Paulson TARP operation, with charts, and shows that the entire purpose of that operation was to refinance, not the US dollar system and the economy, but rather Carlyle, Carlyle Capital, George H.W. Bush Sr., James A Baker III and other Bush-Clinton insiders.

The issue was mailed worldwide on Wednesday 18th March. In addition, we have produced and distributed a four-page leaflet containing the three main TARP charts, showing precisely how the corrupt Paulson financing operation was intended to operate. Copies of this leaflet have been hand-delivered in sensitive places in Virginia and inside the Beltway for the past several weeks.

We have also just published several other financial services, all of which contain a chart showing that the quite incredible Geithrner TALF (Term Asset Backed Securities Loan Facility) Fraudulent Finance circular financing operation is designed with the same sick objective in mind, and that the trumpeted Obama ‘Stimulus Program’ is nothing more nor less than a reckless fraud: cover for the rehabilitation of the Fraudulent Finance derivatives orgy which is in fact nevertheless collapsing from the roof into the basement, as we predicted.

And the reason for this is that the exposures have been SO SUCCESSFUL that NO-ONE trusts what the US Treasury and White House, let alone the State Department, choose to concoct, which ‘as we speak’ entails a new scheme every few days, as the pressure of events sucks everything into its own vortex and nixes whatever new wheeze Geithner, Rahm Emanuel, Mrs Clinton, Vice President Biden and Barack Obama come up with. The objective is to re-ignite the now moribund derivatives sector that has been dealt a mortal blow by the exposures and that everyone in the business now realises is dead in the water, since the simple message that NO RECOURSE assets are by definition without value, has finally sunk in where it matters.

Witness what the big hedge fund manager Dan Loeb had to say about NO RECOURSE derivative assets on page C8 of The Wall Street Journal dated 16th March. Writing to investors in his Third Point Offshore Fund, Mr Loeb could not have been more specific:

‘One area we are decidedly NOT interested in is the ‘opportunity’ to purchase structured debt… with non-recourse leveraging from the US Government’.

‘One of our guiding principles is that we do not use financial alchemy (leverage) to turn mediocre returns into gold’. He’s buying gold instead.

‘A HORRIBLE, HORRIBLE FEELING THIS IS GOING TO END BADLY’
Also on 16th March, the Washington Post, running after red herrings as always, published an article which contained certain revealing observations by ‘people in the know’, but which (as usual) were designed to terrify Congress into leniency.

The article addressed the diversionary but nevertheless extremely disturbing (especially for the Obama Government which is supposed to be ‘on the side of the people)) issue of the AIG bonuses: a theme replicated, by the way, in London, where similar outrage has been expressed at bonuses being paid out to large UK banks and other participants in Fraudulent Finance Ponzi operations.

Lloyds Bank called us up to snoop around recently to see whether the Editor would be willing to part with collateral, for no good reason! Likewise, Coutts Bank is snooping around a colleague of the Editor’s who owns a half interest in certain development land, for the same purpose:

• GRABBING COLLATERAL, for use in a reignited derivatives ORGY, which won’t ignite.

The Washington Post item, entitled ‘Rage at AIG Swells as Bonuses Go Out’, contained this:

‘Company officials contend that the uproar is scaring away the very employees who understand AIG Financial Products’ complex trades and who are attempting to dismantle the AIG division before it further endangers the world economy’. HOW INTERESTING!

In other words, as others have pointed out, it is said to be ‘appropriate’ for the corrupt Fraudulent Finance technician foxes who orchestrated the corrupt orgy in the first place, to remain in charge of the hen house: otherwise the hen house will collapse.

”It’s going to BLOW UP’, said a senior Financial Products Manager, who spoke on condition of anonymity because he was not authorised to speak for the company. ‘I have a horrible, horrible feeling that this is going to end badly”. The same message was then immediately delivered to the Congress, which subsequently decided that the ‘way forward’, for their own ‘CYA’ purposes, was to tax the obscene bonuses by 90%, an unprecedented misapplication of the Congressional power to use the tax weapon, which will have devastating consequences for many bonus recipients who may already have spent or otherwise deployed the funds (probably offshore) in question.

TALF SUPPOSEDLY ‘TO REIGNITE THE SECURITIZATION MARKETS’: RIGHT
For further corroboration that of the accuracy of our analysis that the entire purpose of these mad financial manouvres is to ‘revalidate’ derivative assets that have no value, one only needed to read The Wall Street Journal’s blurb by Peter Eavis published on page C10 of that newspaper on the 12th March 2009, from which the following excerpts will suffice:

‘The TALF aims to reignite the securitization markets and increase the availability of consumer loans by encouraging investors to buy asset-backed bonds using borrowed money’, a mad formula which could only have been developed by financial sorcerers and witchcraft specialists.

First of all, the so-called assets to be used are not real assets at all but are fictitious constructs offering NO RECOURSE, as is precisely exposed with diagrams in International Currency Review Volume 34, #2, and further publicised by means of the four-page ICR leaflet which is being hand-distributed in appropriate US places ‘as we speak’, and which contains the three colour diagrams which illustrate the official Fraudulent Finance scams for any confused operative to see.

Secondly, to encourage cheap BORROWING for the purpose of such TRASH is not just amoral, but also shows that the Obama Administration is engaged in a defiant operation to proliferate its own brand of Financial Terrorism, since as usual the proceeds of these fictitious trades will be stashed untaxed in offshore bank accounts, while the Treasury accumulates debt in the background on a scale with no historical precedent, aggregating some $450 billion of debt per month between this month and the end of September 2009, on the basis of the Obama Federal Budget data WHICH ARE ALREADY OUT OF DATE: according to the Congressional Budget Office report published on 20th March, which stated that the Obama Administration’s agenda will gtenerate annual budget deficits of $1.0 trillion over the next ten years, over $2.3 trillion of debt-creating deficit will be incurred in excess of the Budget presentations, which were barely a month old: a display of utterly reckless irresponsibility that has appalled the Rest of the World and will lead to a hyperinflation.

• Indeed, there is rejoicing in Washington, we are told, that prices ARE RISING. Believe us, if they are rising amid the worst slump for a century, you can be very certain that they will be soaring in 18 months’ time, and probably much earlier than that.

The Wall Street Journal analysis elaborated:

‘Yet even though the (TALF) program offers as much as 20-to-1 leverage at generous interest rates, investors have pushed for concessions during the consultation process. And the Fed has agreed to some changes’. Note that TALF has not yet got off the ground: because no-one wants it.

‘One thorny issue: what to do when an asset-backed security purchased with TALF loans is subsequently found to be ineligible under the program. It is a valid concern, given the poor loan collateral shovelled into asset-backed securities during the credit boom’.

‘The original agreement said that when collateral is discovered to be ineligible, investors would have to pay back their loans or find eligible collateral’.

‘But investors felt this meant TALF loans weren’t truly non-recourse: meaning the lender can only claim the collateral it holds, and the borrower’s potential losses are capped. The new agreement should ensure the loans really are non-recourse’.

Have you understood the perverse stupidity of this convoluted upside-down reasoning? It goes: we need to be sure that the ‘assets’ really are non-recourse. Which is precisely what the biggest hedge fund moguls object to: vide Dan Loeb’s observations above.

So you see, there is not an icicle’s chance in Hades (which is where these crooks are headed) of the Obama regime’s substitute for sound finance, which he signed up to on his European tour last year, achieving the intended results.

On the contrary, choices made by the new team of Financial and Economic Terrorists (by their own legislated definition) in the White House, the US Treasury, the State Department, the George Bush Center for Intelligence (Terrorism), the Office of Naval Intelligence (ONI) and all the other nests of open-ended, reckless criminality such as the Office of the Vice President, who presides over the National Security Agency (NSA), have guaranteed a hyperinflation of unprecedented severity.

The Editor has noticed no alleviation of inflationary pressures in New York this March: quite the contrary. A breakfast in a diner that cost $3.50 four years ago now costs $12.50. Deflation?

HUGE THEFT OR ‘REASSIGNMENT’ OF FUNDS TOOK PLACE ON 17TH MARCH
On arrival in the United States, the Editor was almost immediately informed that a very large theft or ‘diversion’ or ‘reallocation’ of giga-funds, KNOWN ABOUT IN ADVANCE, was said to be scheduled to take place on 17th March 2009. At the end of that day, the Editor learned that Chinese interests had been paid a large sum IN CASH, not in Treasuries, to which they had objected.

Thus the ‘reallocation’, or part of it, about which we were warned in ‘real-time’, financed a payoff to the Chinese, in accordance with the pattern that has now become apparent. When a really large debtor gets nasty, the people in charge ‘find a way’ to make the necessary payment, in order, like drunks falling out of the pub, to sidestep an even ‘worse’ outcome.

Examples of this syndrome include a vast sum of money that was conveyed to the Vatican during the visit of the German Pope to America in April last year; payments made to the Mormon Church; payments to the Knights of Malta; and payments (or a payment) to the Knights Templar.

Now we have an instalment paid out to the Chinese, who are indeed owed colssal sums arising from transactions in the late 1930s and the recent expiry of the 70-year period after which the Chinese are required to be paid.

• The sums are so enormous that it will take the United States TWO GENERATIONS to pay what is owed. Let us consider why this payment (may have) finally ‘happened’.

Earlier in March, Chinese representatives of the Peking Government appeared at the World Court and demanded payment of monies owed following the recent expiry of the 70 years arising from the old Morgenthau ‘box deal’ of the late 1930s. The Chinese were reported to us by several sources to have obtained, in the week of 6th March, a lien on the Fed, which ‘works for’ the US Treasury.

On 12th March, against the background of ‘tensions’ between China and the United States over a staged confrontation at sea, the Chinese Foreign Minister, Yang Jiechi, paid a sudden visit to the White House. Mr Yang was also scheduled to meet Mr Barack Obama’s National Security Adviser, former Marine Corps General James Jones. On 11th March, Mr Yang had met Mrs Hillary (who is now relabelled ‘Rodham’, for Rodomski) Clinton, who pontificated that the United States and China needed to reduce tensions and to avoid a repeat of a weekend confrontation between American and Chinese vessels in the South China Sea.

However the ‘confrontation at sea’ represented a proxy ‘tension’ hotspot conjured up for the sole purpose of masking the ACTUAL source of tension between the two countries: namely the ongoing illegal and criminal behaviour of the US official financial fraudsters, and the Chinese intention of exercising their lien on the Federal Reserve, reportedly obtained from the World Court.

If exercised, this would have led to the immediate seizure by the Chinese authorities of all US assets within their jurisdiction, in Hong Kong, Singapore and elsewhere, and thus to a dramatic open-ended, publicised escalation of international tensions, which are explicitly and exclusively a consequence of the hijacking of the US power centres by organised criminal elements as exposed for several years now in these reports.

Any such development would also have collapsed what remains of international economic and financial confidence, would have dealt the final blow to what remains of the self-appointed elite’s deception called ‘globalism’ and would have catapulted the world much closer to World War: where we would appear to be headed anyway, thanks to the crass behaviour of the US authorities. Indeed, if they go on like this, World War III will be their sole recourse.

So, to ‘get round the Chinese problem’, funds had to be ‘reallocated’, like, ‘immediately’. A small part of the funds were found, we understand, by taking them from two projects:

(1) The two British aircraft carriers that were to have been constructed and ‘owned’ by The Queen, and probably also the two further aircraft carriers that were to have been made available to the European Union Collective; and:

(2) The Bush-era ‘missile shield’ project for Eastern Europe, much to the fury of Poland, which greatly distrusts the Russians and thought that this protective mechanism would go ahead.

These projects, representing Bush-era quid pro quos, have been ditched by the Obama clique in order to help pay off the Chinese parties, in order to achieve a belated stay of execution of the Chinese lien against the Federal Reserve, according to sources ‘special’ to this service.

And nor is this the first such ‘reallocation’ to have taken place under Obama’s watch.

THE $4.0 TRILLION THAT ‘SUDDENLY’ APPEARED AT THE U.S. TREASURY
Before he was reportedly arrested and placed in a 30-day cell recently, arch-fraudster Dr Alan Greenspan was stated to us by primary sources to have ‘stolen’ or diverted $3.0 trillion of funds, originally perhaps sourced from The Philippines. These funds, we understand, were ‘restored’ (like The Queen’s $52 billion ‘guarantees’, immediately after we had publicised that theft).

On or about Wednesday 18th March 2009, $4.0 trillion ‘suddenly’ appeared at the US Treasury, a fact reported to us by several sources and later confirmed. Of this total, $1.0 trillion was directed to the Federal Reserve, to finance the INCREDIBLE scheme to revalue worthless derivatives assets that was trailed by The New York Times on Saturday 21st March 2009 and subsequently announced by the spinning top named Timothy Geithner, US Treasury Secretary the following week (see below).

Although this is hypothesis, it is a fact that the US authorities operate THREE currency printing plants abroad, one of which is located in The Philippines, a deeply corrupt country where such operations can be hidden, no problem. It is understood that, in the past, Greenspoon presided over the printing of a large volume of currency there, which had NOT BEEN REGISTERED with the US Treasury. Under the new legislation, anything goes, so it would have been possible for the US authorities to have simply registered this currency, and then credited it to the Treasury’s books, before passing $1.0 trillion of it to the Federal Reserve.

The remaining $3.0 trillion was earmarked for payment to a US Paymaster on or about 23rd March.

Which leaves the matter of Greenspan’s further DETENTION up in the air. WHY was it decided, at the meeting held on 9th March, finally to shove Dr A. Greenspoon into a 30-day holding cell (again, according to special sources)? Uh, if the information is correct, NOT because of official outrage at the fact that George Bush Sr.’s very own corrupt trader had stolen colossal amounts of funds, so much as that the stolen or ‘diverted’ funds were being remitted directly to the corrupt apparatus serving the George Bush Sr. Crime Nexus: whereas certain current Financial Terrorists want the stolen funds in question to pass through/into their own and their cronies’ untaxed offshore bank accounts, instead of going direct into accounts within the Bush Sr. segment of the Octopus.

Hence, this is all about trying to prevent the TOTAL EXPOSURE of the PONZI MODEL, which applies right across the board and is the entire and sole explanation for the global crisis. We pointed this out as long ago as the first quarter of 2007, you may recall.

REPORT THAT PAPERS WERE SERVED ON DR BEN BERNANKE
We were advised during the week ending 6th March, and subsequently, that the Chairman of the Federal Reserve, Dr Ben Bernanke, had been served in person with indictment papers, in late February or early March. There have also been unconfirmed reports that the arch-criminal Mr Hank M. Paulson Jr., one of whose doubles was believed to have been shot dead between Christmas and New Year of 2007, is cruising for a bruising and may be indicted and arrested.

It is impossible to verify such ‘information’, so we simply report what has surfaced, with the caution that the self-appointed geomasonic elite are past-masters of the art of the duplicitous cover-up.

What they cannot handle is damage control when the roof and walls are caving in, and they find that they cannot steal enough supports quickly enough to prop up the metaphorically imploding money tower. They had no problem at all blowing up the Twin Towers and incinerating 3,000 people in the process: that was ‘not a problem’. But propping up the Fraudulent Finance edifice?

• They haven’t a clue. WORSE: They have perversely disregarded what they are supposed to be doing, in accordance with the Group of Seven-approved Refunding Programme, agreed upon in 2007 and 2008: allowing private sector-based trading operations to take place ON THE BOOKS, FULLY TAXED AND WITH MAXIMUM TRANSPARENCY, as reiterated in these reports. This is what these US financial engineers SHOULD be doing. Instead of which, they prefer financial sorcery and witchcraft. They will MOST CERTAINLY pay dearly for their wilful perversity.

• FACT: Private sector on-the-books trading would reliquefy the banks within weeks, or less, all above board, fully transparent and disclosed, and yes: TAXED. No more corrupt, clandestine, off-balance sheet Fraudulent Finance: but the banks survive AND PROSPER.

• FACT: The public sector cannot generate TAX ACCRUALS. It can ONLY generate DEBT, AND MORE DEBT, AND MORE DEBT. The private sector generates TAX ACCRUALS, which enable the Treasury to REDUCE ITS DEBT and thus the burden on taxpayers and future generations.

• FACT: It follows that the Obama Administration is perversely betraying the American people by DOING THE EXACT OPPOSITE OF WHAT IT KNOWS IT SHOULD BE DOING.

• This is TREASON.

• Don’t try to tell us that the US Treasury and the Federal Reserve don’t know that this is true and correct. They have BRAINS in both institutions: they can work it out for themselves: they don’t need to read about what they should be doing on this website. However MILLIONS of people around the world DO READ THIS WEBSITE, and they KNOW that this simple logic is ACCURATE.

Sooner, rather than later, the Obama White House and the Treasury will be FORCED to recognise that they should have done what the G-7 asked them to do, starting in 2007.

If they had paid attention, they would not have got themselves, through GREED and pride, into the horrendous, terminal mess they now face.

THE PRIMARY MOTIVE UNDERLYING THE RECKLESS BAILOUTS
The media focus on A.I.G., a huge laundry originally created under Frank Gardiner Wisner (born on 23rd June 1909; died on 29th October 1965) has failed to identify the most pressing factor that has been driving the reckless Fed money-spraying behaviour, which will generate hyperinflationary pressures the ‘early green shoots’ of which are already apparent. It is this:

• Placing compromised entities such as AIG (or General Motors) into bankruptcy would involve the appointment of a TRUSTEE. Under US bankruptcy arrangements, a Bankruptcy Trustee has almost unlimited powers to investigate every facet of what has been going on. One obvious focus of the Trustee’s investigations would be the 728++ AIG offshore ‘subsidiaries’, of which we have published a small sample in an earlier report [Archive].

• Many of these subsidiaries have names such as ‘Baker’ This and ‘Baker’ That; and one wouldn’t want the spotlight thrown onto James A. Baker III, would one?

So rather than implicate themselves further, the perpetrators are instead cynically mortgaging the futures of the next several generations of Americans by engaging in a reckless orgy of desperate Fraudulent Finance and creating colossal official debt in the background, which guarantees that the ‘enforcement arm’ of the World Revolution (the United States military) will in just a few years be unable to project its dangerous power around the world (a good thing) and that the Pax Americana, like the Anglo-American ‘special relationship’ (see below) has been destroyed.

All this is being done for one primary reason: to try to minimise the devastating consequences for the perpetrators of the ongoing exposures and the unravelling of the Fraudulent Finance orgy that has brought the whole world (deliberately?) to the brink of avoidable catastrophe.

A.I.G. FOUNDER FRANK WISNER SR.: LIAISON TO THE NAZI GEHLEN ORGANISATION
Frank Gardiner Wisner was a key figure linking the penetration of the US intelligence structures by Nazis to the present millennial crisis of the World Revolution. After being transferred from the US Navy Censor’s Office, Frank Wisner Sr. was transferred to the Office of Strategic Services (OSS), predecessor of the Central Intelligence Agency, and served in Turkey and Romania. His agents penetrated the Romanian Communist Party and the headquarters of the Soviet Army in Bucharest, whence he discovered that the Soviet Union intended to ‘annex’ the whole of Eastern Europe.

In March 1945, Wisner was transferred to Wiesbaden, Germany, where he served as OSS liaison to the Gehlen Organisation. General Reinhard Gehlen, referenced in some detail in the Editor’s book The New Underworld Order, was the brutal Nazi repression chieftain in the German-occupied areas of the Soviet Union, responsible for untold atrocities.

The Editor’s book explains, drawing from open information, that Gehlen, over time, managed to persuade the gullible Americans that Stalin, having supposedly absorbed Eastern Europe, was poised several years after the end of the Second World War, to overrun Western Europe with 210 divisions. Soviet Divisions are smaller than Western military divisions, but even so, at that time only one and a half of Stalin’s divisions which the strategic deceiver Gehlen represented were standing by to invade Western Europe, were mechanised.

• FACT: The rest were sill horse-drawn, in World War I mode!

With the postwar US State Department penetrated by agents of influence working for the German cause, the de-Nazification process was placed into reverse without President Truman’s approval, and very large numbers of Nazi scientists who had been working on Heinrich Himmler’s mind and personality control abominations and other hideous activities, were transferred by proprietary CIA transport aircraft under ‘Operation Paperclip’ and later programmes, to the United States with their families, with a sizeable contingent of Abwehr officers whose slates had abruptly been wiped clean.

This vote-face occurred after General Reinhard Gehlen had falsified information about Soviet intentions fed to the Americans, and had re-recruited many of his former operatives to operate clandestinely under cover of the Iron Curtain environment which focused the West’s attention exclusively on ‘containing the Soviet Union’, leaving Gehlen and his organization and associates free to pursue the Nazi long-range strategy that had been developed at the German Geopolitical Centre in Madrid, established in 1942 by the Nazi intelligentsia and the Abwehr, which had always recognized that Hitler was expendable.

These operatives perceived that the defeat of Hitler could be turned almost immediately to their advantage because the West would be likely to jump to the false conclusion that the death of Hitler would be synonymous with the permanent destruction of Nazism – a perception which proved to be accurate. In the new environment, and having effectively penetrated the CIA by the late 1940s, the Nazi cadres were free to pursue their long-range strategy without let or hindrance, especially since the East German State, while clothed in Communist garb, was actually a de facto continuation of the Nazi régime, with the East German STASI secret police operating precisely along Gestapo lines.

Information obtainable at Arlington National Cemetery reveals that Frank Wisner Sr. committed suicide in 1965 using one of his three sons’ shotguns, and was buried in the Cemetery as a naval commander, his wartime rank. The reason for Frank Wisner Sr.’s suicide has never been explained, but the official ‘line’ includes the following assertions, posted on a certain US intelligence website which ‘facilitates’ the rewriting of history:

• Wisner Sr. was recruited in 1947 by Dean Acheson to join the US State Department’s Office of Occupied Territories. When, a year later, the CIA invented a covert operations cadre, the Office of Policy Coordination (OPC), Frank Wisner Sr. was placed in charge.

The OPC’s secret Cold War charter included ‘propaganda, economic warfare, subversion against hostile states, including assistance to underground resistance groups, and support of indigenous anti-Communist elements in threatened countries of the world’.

• Wisner was responsible for establishing Operation Mockingbird, the purpose of which was to influence the foreign AND DOMESTIC media. This ongoing programme remains an extreme menace domestically, to this day, embracing approximately 60 websites, for instance, which routinely punch out deliberately confusing diversionary lies and disinformation – with the main orientation in the prevailing chaotic context being that its primary purpose these days is to obfuscate the rampant Fraudulent Finance operations that the US intelligence community has developed and exploited in order to finance its status as the arrogant, uncontrolled ‘State within the State’.

A key further purpose of Operation Mockingbird in its contemporary manifestation is to throw sand in the eyes of the 320,000+ scammed Ponzi victims who have been robbed blind by these official criminals and their underworld collaborators, in order primarily to prevent them from reaching for the weapons in their attics simultaneously.

Its overarching purpose is to generate as much confusion as possible, so that the reality that the entire Fraudulent Finance crisis is one gargantuan Ponzi Fraud is constantly obfuscated. Prior to the exposures, its main purpose domestically was to keep the 320,000 scammed Ponzi victims living in la-la land, entertained by the false gods Atonn, and Atonn with his Hatonn, and a-dreaming MK-Ultra-type dreams with space ships replacing moving stairways in accordance with mental taste.

• In 1952, Wisner was appointed head of the CIA’s Directorate of Plans, with Richard Helms as his operational chief, and control of 75% of the CIA’s formal budget. He was instrumental in bringing about the fall of Mohammed Mossaddegh, an Iranian Jew, in Tehran, and Jacobo Arbentz Gusmán, also of Jewish extraction, in Guatemala.

• When the FBI Director, Mr J. Edgar Hoover, became ‘jealous’ of the CIA’s unfettered power, he investigated the past histories of the OPC operatives, establishing that many of them had been active in left-wing politics in the 1930s. The information was provided to Joseph McCarthy, briefed to run an operation to discredit Communism. Hoover made sure that McCarthy was given details of an affair that Wisner had conducted with Princess Caradja in Romania during the war. Hoover also claimed that the Princess was a Communist agent.

• Crucially, Wisner worked closely with the British traitor Kim Philby, the British agent who was eventually unmasked as a Soviet spy but is believed by this service to have worked for the Nazis.

• The official ‘line’ concludes that Wisner was mentally destabilised by the Soviet crushing of the Hungarian Revolution – a piece of imaginative make-believe that we consider to be laughable.

However what is not laughable is that he then underwent psychoanalysis and was subjected to electroshock therapy. After treatment and apparent recovery, Allen Dulles, CIA Director of Central Intelligence, a long-term Abwehr agent, appointed Frank Wisner to be chief of the London Station. However he was judged to be still suffering from mental illness, was recalled to Washington, and agreed to retired from the Agency.

THE CIA BACKGROUND OF FRANK WISNER JR., A.I.G. VICE CHAIRMAN
Frank G. Wisner, eldest son of Frank Wisner Sr., born in 1938, very conveniently announced his intention to retire from the position of Vice Chairman, External Affairs, for American International Group (AIG) on 13th February 2009, when the heat in the kitchen became too hot. He had joined AIG in 1997, and was a Director of AIG from that year until 2003.

Here is a list of Frank G. Wisner Jr.’s ‘accomplishments’, apart from the senior AIG positions that this veteran and prominent CIA operative has held:

• US Agency for International Development, Vietnam, 1964-68.
• GAP in record from 1968 to 1979.
• US Ambassador to Zambia,, 1979-82.
• US Ambassador to Egypt, 1986-91.
• Senior US Deputy Assistant Secretary for African Affairs, US State Department, 1982-86.
• US Ambassador to the Philippines, 1991-92.
• US Under Secretary of State for International Security Affairs, 1992-93.
• Under Secretary for Policy, US Department of Defense, 1993-94.
• US Ambassador to India, 1994-97.
• Member of the Board of ENRON, 1997-99.
• Member of the Board of EOG Resources, 1997-
• Partnership for a Secure America Advisory Board Member.
• Trustee, Rockefeller Brothers Fund.
• Director, US-India Business Council.
• Member, Council on Foreign Relations (CFR).

Wisner Jr.’s domestic political affiliations illustrate our central point that it is neither here nor there which of the two wings of ‘The Party’ wins elections, as the Intelligence Power (the ‘State within the State’) always wins. He is named as having been associated with:

• Bill Bradley for President;
• Friends of Dick Lugar;
• Friends of Hillary;
• George W. Bush for President;
• Gore 2000;
• Hillary Clinton for President;
• John Kerry for President.

Politically, therefore, this man is whatever the male equivalent of a prostitute happens to be: totally devoid of principles and with infinitely ‘variable’ loyalties, and therefore ethics – a view confirmed by Vijay Prashad, then Assistant Professor of International Studies at Trinity College, Hartford, CT, in 1997. The Assistant Professor wrote:

‘When Wisner was US Ambassador to the Philippines (1991-92), Enron was engaged in negotiations to manage the two Subic Bay power plants. When Mr Wisner left Manila in July 1992, Enron won the contract and started managing the plants in January 1993. During Wisner’s long tenure in India, he fought long and hard to secure various deals for Enron’, and only left India when it appeared that Enron’s prospects in India, thanks to bribery and corruption, were secure.

Enron, of course, could hire whichever CIA operative it liked to do its dirty work, given that CIA operatives all believe they are protected from the consequences of their endless crimes by the crooks’ charter known as the National Security Act (et seq.), 1947. Thus, for instance, Vijay Prashad also pointed out that, to gain access to a lucrative contract to rebuild the Shuaiba power plant in Kuwait after it had been conveniently destroyed in Bush Sr.’s war, Enron hired James A. Baker III as consultant, ‘who travelled to Kuwait to negotiate for Enron’, a CIA scamming operation which, like BCCI before it, was later stripped bare, its cash and borrowings used for illicit off-balance sheet, untaxed, clandestine leveraging and hypothecation Fraudulent Finance to generate ‘new money’ for the overall Ponzi Programme and to help finance the corrupt CIA ‘State within the State’, and then left to wither as a corpse.

One imagines that the prospect for this 70-year old of winding up contemplating cockroaches in the Metropolitan Correctional Center along with Madoff while awaiting trial for his part in the scamming operations perpetrated by A.I.G., should it finally collapse, was less than enticing: hence his exit.

We will now address some broader related issues before reverting to current themes.

U.S. SEEKS CONTROL OF INTERNATIONAL CRIME, TERRORISM AND DRUG TRAFFICKING
On 8th November 2005, The Jewish Institute for National Security Affairs [JINSA], which is located in Washington, DC, published a press release about a panel it had sponsored on ‘Terrorism in Latin America’, in which it reported that the event had been opened by the hardline ‘conservative’ US Republican, Congressman Dan Burton, who had made the following statement: and we quote:

‘US national security interests in South America include control of international crime, terrorism, and drug trafficking’.

Congressman Daniel Burton did NOT say:

‘US national security interests in South America include DEFEAT of international crime, terrorism, and drug trafficking’. OR:

‘US national security interests in South America include ERADICATION of international crime, terrorism, and drug trafficking’. OR:

‘US national security interests in South America include REDUCTION of international crime, terrorism, and drug trafficking’. OR:

‘US national security interests in South America include SUPPRESSION of international crime, terrorism, and drug trafficking’.

NO. What Congressman Burton said, DELIBERATELY AND SPECIFICALLY, as reported in the JINSA Press Release (page one) was:

‘US national security interests in South America include CONTROL of international crime, terrorism, and drug trafficking’.

In other words, the Congressman spoke the truth. Yes, it is indeed United States policy to:

• CONTROL international crime (i.e. to RUN international criminal operations).

• CONTROL terrorism (i.e. to orchestrate international terrorism on an open-ended basis).

• CONTROL drug-trafficking worldwide.

You will already have observed, no doubt, that although Congressman Dan Burton was addressing a REGIONAL conference (on terrorism in Latin America) he did not in fact qualify his remarks so that they referenced just Latin America alone. NO. What he did was to emphasise that it is in the United States’ national interest to ‘CONTROL’ international crime, terrorism and drug-trafficking.

• Not REGIONAL crime, terrorism and drug-trafficking, but GLOBAL ditto.

Just consider precisely what this means. In summary, what the Congressman said was that the entire complex of US Government assets and power is geared to achieving CONTROL over these heinous activities, that is to say SPONSORING, DEVELOPING AND EXERCISING HEGEMONY OVER THESE CRIMINAL OPERATIONS. When did the American people authorise THAT?

And Congressman Burton helps us all to understand that it is ‘in the US national interest’ that the United States’ Government IS a criminal enterprise.

This being the case, we should not be surprised at any of the abominations involving despicable operatives in high places that have been referenced in these reports since we had to start posting them. After all, IT IS IN THE U.S. NATIONAL INTEREST that these abominations should take place!

A CRIMINAL GOVERNMENT OPERATING ON DURKHEIM PRINCIPLES
Welcome back to the DURKHEIM PARADIGM: the model used by these Fraudulent Finance types.

Emile Durkheim (1856-1917), postulated and promulgated that the ‘natural’ norm for humankind was criminality, and that the absence of criminal behaviour was by definition aberrant. Note that in so doing, Durkheim not only specifically contradicted the glorious hope and truth of Jesus Christ, but also the core teachings of his own Torah. According to Durkheim, the Rule of Law and adherence to it are disoriented, perverse, eccentric and somewhat pathetic.

Notice any relationship to the arrogant criminal high-level behaviour spelled out in these reports?

BUSH-CLINTON-CIA DRUG-TRAFFICKING LINKS TO STANFORD OPERATION
Next, you may by now have had a chance to read through the full text of the Complaint filed by the Securities and Exchange Commission on 16th February against R. Allen Stanford, James M. Davis, Laura Pendergest-Holt, Stanford International Bank Limited, Stanford Group Company and Stanford Capital Management LLC posted by this service on 12th March 2009.

This Bush-Clinton money laundry operation developed from the Tupelo and Memphis laundry used by the Clinton gang, and subsequently by the Bush gangsters when they were running ‘Black’ drug deliveries into Miami and Mena, Arkansas. The Chief Investment Officer for Stanford, 35-year-old Laura Pendergest-Holt, who was also head of ‘transfer operations’, was arrested on 25th February and taken to a location near Houston described to us by a Houston-based source as ‘super-secret’. Word from the source, based on ‘inside’ information, was that she was ‘singing like a canary’, and would be arraigned before a Federal Court on 27th February 2009. However, like ‘Sir’ Allen Stanford himself, this woman has in fact refused to cooperate with the special (not regular) FBI investigating team, and with the United States District Court for the Northern District of Texas, Dallas Division.

According to our sources, the ‘transfer operations’ involving colossal sums of money were those designated in the S.E.C. Complaint as ‘Tier 3 Investments’. You can read how Stanford represented these investments by perusing the complete text of the Complaint [see Archive].

So what we have is another Bush-Clinton money laundry and criminal finance distribution operation handling drug proceeds (‘Black Ops’), in the process of being closed down. And it will have been observed that 70-year-old Bernard L. Madoff pleaded guilty to all 11 counts against him, refusing to acknowledge that his operation was part of a much broader conspiracy (as was the case, given that Madoff was ‘recruited’ we understand, by the Bush Spider [‘Die Spinne’]).

As a result, Madoff, who will be sentenced in June, faces serving;

• 20 years for Securities Fraud (Count One);
• 5 years for Investment Adviser Fraud (Count Two);
• 20 years for Mail Fraud (Count Three);
• 5 years for Wire Fraud (Count Four);
• 20 years for international money laundering to promote specified unlawful activity (Count Five);
• 20 years for international money laundering to conceal and disguise the proceeds of specified unlawful activity (Count Six);
• 10 years for Money Laundering (Count Seven);
• 5 years for False Statements (Count Eight);
• 5 years for perjury (Count Nine);
• 20 years for making a false filing with the SEC (Count Ten); and:
• 20 years for theft from an employee benefit plan (Count Eleven).

REASON FOR REFUSAL TO IMPLICATE OTHERS: DEATH THREATS TO FAMILY MEMBERS
Obviously, in Madoff’s case, the prospect of him dying in prison could not be higher. In the case of Pendergest-Holt, however, she would possibly expect to be freed by her 65th birthday if she had been prepared to implicate others (which she is reported to have done when ‘singing like a canary’ but this is inconsistent with the reported fact that she is ‘not cooperating’).

Assuming that she is not, we have (a) Mr Madoff who would have nothing to lose (ostensibly) by cooperating, since his outcome would not be affected; and (b) Pendergest-Holt who could improve her prospects some, by cooperating. So why aren’t these people (including Stanford who, it will be recalled, was picked up in Virginia, intelligence community country, after his Credit Card had been refused by a firm he approached to fly him privately to Antigua), cooperating with authorities?

There can be only one obvious explanation for this common factor: they have all been threatened: if you ‘shop’ other components of the Octopus, we’ll murder your family members.

OTHER PONZI SCHEMES ON BRINK OF BEING EXPOSED: ‘PONZIMONIUM’
On 20th March, Bart Chilton, a Commissioner for the US Commodities Futures Trading Commission, said that ‘rampant Ponzimonium’ was being uncovered by the authorities all over the place. And as previously reported here, it is believed that at least TEN large European Ponzi schemes are ‘waiting to unravel’ ‘as we speak’. Some are believed to be larger than the Madoff frauds.

MADOFF ACCOUNTANT FRIEHLING ARRESTED: SECURITIES FRAUD
On 18th March 2009, David G. Friehling. Madoff’s accountant, who operated from a small storefront office in the New York City suburb of New City in Rockland County, was arrested and charged with securities fraud and with aiding and abetting the investment adviser fraud perpetrated by Bernard L. Madoff. A related civil case was filed against him and his firm, Friehling and Horowitz, by the Securities and Exchange Commission.

Friehling was accused by United States Attorneys Lisa A Baroni and Marc Litt, in a filing before United States Magistrate Judge Theodore M. Katz, Southern District of New York, of deceiving investors by creating false and fraudulent certified financial statements for Bernard L. Madoff Investment Securities LLC and its predecessor corporation, and causing those certified financial statements to be filed with the US Securities and Exchange Commission (Securities Fraud: Count One). Count Two accused Friehling of Investment Adviser Fraud; Counts Three to Six dealt with False Filings with the Securities and Exchange Commission.

Special FBI Agent Keith D. Kelly stated in his sealed complaint, of which the Editor obtained a copy from the United States Court for the Southern District of New York on 20th March 2009, that David G. Friehling’s audit workpapers did not include documentation showing that Friehling had:

• (a) Conducted independent verification of his client’s assets;
• (b) Reviewed material sources old Madoff revenue, including commissions;
• (c) Examined a bank account through which billions of dollars of Madoff’s clients’ funds flowed;
• (d) Verified liabilities related to Madoff client accounts; or:
• (e) Verified the purchase and custody of securities by Bernard L. Madoff Investment Securities LLC and its predecessor, Bernard L. Madoff Investment Securities.

The FBI Agent stated that Friehling did not request back-up documents or make enquiries required for any auditing procedure that is compliant with accepted standards, and failed to take any steps, between 1994 and 2008, to test internal controls over key areas such as redemptions by Madoff’s enterprises of clients’ funds, the payment of invoices for corporate expenses, or the purchase of securities by Madoff for its clients. (It has been separately confirmed that Madoff did not purchase a single security for at least 13 years).

The American Institute of Certified Public Accountants (AICPA) requires that accountants who are members and who perform audits must undergo a peer review process, which includes a review of audit work papers. The FBI Special Agent elaborated that ‘each year, from at least 1994 through and including 2008, while he was certifying to the SEC that he was performing annual audits of Bernard L. Madoff Investment Securities in conformity with [the required standards], David G. Friehling, the Defendant, represented to the AICPA that he did not perform any audits, thereby avoiding the peer review process’.

This contradiction, extremely damaging for Friehling, highlights the PRACTICAL CONSEQUENCES of Fraudulent Finance upon discovery of the frauds in question. What is happening generally is that similar contradictions are being exposed every day, clashing with the Rule of Law in an endless series of ‘train wrecks’, which will continue for years.

Agent Kelly added:
‘In each… Report accompanying Bernard L. Madoff Investment Securities’ financial statements, Friehling… falsely stated that “we conducted our audit in accordance with auditing standards generally accepted in the United States of America”, when in fact he had not. Friehling also falsely stated that the audit “include[d] examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements”, when in fact, no such examination ever took place.

The acting Director of the SEC’s New York office informed The New York Times (20th March 2009) that Friehling ”essentially sold his license to Madoff for more than 17 years while Madoff’s Ponzi scheme went undetected”.

Further, under US law (Title 17, Code of the Federal Regulations, Section 240.17a-5(f) (3), the accountant must be independent in accordance with the provisions of Title 17, Code of Federal Regulations, Section 210.2-01 (b) & (c). Under that provision, an accountant’s independence is impaired when an accountant, or an accountant’s immediate family member, has ‘brokerage or similar accounts maintained with a broker-dealer that is an audit client if… the value of assets in the accounts exceeds the amount that is subject to a Securities Investment Protection Corporation [SIPC] advance, for those accounts, under Section 9 of SIPA (16 U.S.C. paragraph 78fff-3)…. Under Title 15, United States Code, Section 78fff-3(a), advances from SIPC are limited to a maximum of $500,000 to each customer’.

At the end of each year, between at least as far back as 1995 and 2007, an account owned by Friehling or his wife held equity balances in excess of $500,000. If convicted on all six Counts, David Friehling faces 105 years in prison. In Part 1 of our list of Madoff ‘victims’, posted on 6th February 2009 [Archive], the following Friehling accounts are displayed:

DAVID FREIHLING FRIEHLING AND HOROWITZ FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FRIEHLING & HOROWITZ CPA PC FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FRIEHLING & HOROWITZ CPAS FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FRIEHLING & HOROWITZ CPAS FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FRIEHLING AND HOROWITZ FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW YORK, NY 10956
DAVID FRIEHLING FOUR HIGH TOR R0AD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05403
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956H5703
DAVID FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID G FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID G FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOUR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956 05703
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956
DAVID G FRIEHLING CPA FOUR HIGH TOR ROAD NEW CITY, NY 10956

DOUBLE STANDARD FOR MUNICIPAL ISSUERS
The Securities and Exchange Commission under Mary Schapiro, its new chief, is now of course trying to rectify its own battered reputation for laxity. Given its reportedly laid-back attitude for years while these abuses were both routine and accumulating, it cannot now afford to allow a single exposed instance of breach of the Securities Acts and regulations to be overlooked.

• Yet at the same time, municipal issuers are reported to be among the worst offenders in terms of lax filing behaviour in conformity with their statutory obligations.

According to research published in The New York Times on 22nd March 2009, even though US hospitals, cities and states that borrow money are required by their bond covenants to make the required filings, nondisclosure among the community of nearly 65,000 US municipal issuers is commonplace. DPC Data, based at Fort Lee, New Jersey, which collects information on municipal securities transactions, says that 50% of such issuers are more than a year late with their filings with the SEC, while 25% are said to be chronically delinquent, by three years or more.

Apparently legislation on the Statute Book dating from the 1970s restricts the SEC’s powers to investigate municipal issuers that fail to make the required disclosures. The SEC can spring into action only if fraud is suspected. This means that when fraud does take place in this $2.7 trillion marketplace, but is not suspected, the perpetrators ‘walk away’. The small print enables the SEC to take action against brokerage firms that underwrite municipal bonds if the brokers ‘allow’ an issuer to sell debt securities without being up to date with filings for the most recent five years. However such interventions are described as ‘unusual’, code for: it never happens.

Industry insiders therefore confirm that noncompliance with filing requirements in this sector attracts zero penalty. Peter J. Schmitt, Chief Executive of DPC Data, said that failure to enforce disclosure rules in the municipal securities market ‘has created a no-penalty environment that leaves investors defenceless against questionable practices by dealers’.

One proposal now before Congress is that the Municipal Securities Rule-Making Board, a self-regulating agency established by Congress in 1975 to devise rules by brokerage firms and banks that sell and trade in municipal bonds, should be merged with the SEC, which already ‘oversees’ its operations: to no apparent effect.

All in all, this represents another vast US marketplace in which parties appear to have been playing fast and loose with the rules, so that investors may have been paying over the odds for distressed bonds without being aware that the debt issuers were under stress, let alone that fraud was going undetected: another instance of double standards: one standard for the likes of David G. Friehling, and another for a hospital board in Cincinnati, Ohio.

SLOW AND PAINFUL PROGRESS IN ‘TAKING DOWN’ THE OCTOPUS
As the SEC Stanford Complaint [Archive: 12th March] makes clear, the Stanford leg of the Octopus was destabilized as a direct consequence of the Madoff implosion, which followed the ‘lockdown’ on 10th-12th September 2009 of the $14.0 trillion of real funds, including the $6.2 trillion of LOAN money belonging mainly to the British Head of State and made available to finance the Group of Seven-Approved on-the-books Dollar System Refunding operation described in previous reports.

Madoff was battling with a reported $7.0 billion of redemption requests from October 2008 onwards, after ‘spare’ liquidity had completely dried up, except for drug money flows, completely, following the ‘lockdown’. Likewise, the SEC’s Stanford Complaint document revealed that ‘in recent weeks… an increasing amount of liquidation activity’ had been monitored, plus ‘attempts to wire money out of its investment portfolio’. The Commission had received information ‘indicating that in just the last two weeks, SIB has sought to remove over $178 million from its accounts’.

Accordingly, the sequence of events is clear: ‘lockdown’ of the real-money $14.0 trillion, triggered on our advice as a consequence of the rampant ongoing abuses of these funds perpetrated by the US authorities and the corrupt US money center banks participating in the US Treasury’s Custodial Account network; the consequent drying up of interbank market liquidity, drug money flows being insufficient to keep the vast carousel going; exposure and implosion of the Madoff Ponzi networks; leading directly to the exposure and implosion of the Stanford Fraudulent Finance operations.

Although it is true that Ponzi Scheme collapses such as these are considered by the biggest and most ruthless ‘players’ to represent mere collateral damage while ‘life moves on’, the reality is that these developments represent material gains in the process of ‘taking down’ the Octopus, which has so many tentacles that it may well take more than a generation for the beast to be slaughtered. But just remember the state of affairs two years ago: back then, the US criminalist classes thought there would and could never be any effective opposition. Recent events and have compelled some of the less arrogant of these creatures to accept that they were wrong.

Which makes it all the more extraordinary that, notwithstanding such developments, the stealing and diversion of funds has continued on an even larger scale, according to reports received during the first quarter of 2009, under Obama than under the discredited predecessor régime – even though some observers think that Mr Obama is not in charge of events.

STANFORD OPERATIONS AND THE OCTOPUS
Whether Obama is or not, a photograph of Mr Obama and Stanford published by Wayne Madsen’s service on 19th February, and public domain intelligence to the effect that Stanford’s island base of Antigua has featured prominently as a center of operations for the Israeli-Russian mafiya, make it clear (a) that President Obama knew about Stanford before he came to office and (b) that Stanford’s activities, in which many governments have taken an interest for years, were unsavoury. Stanford, who has been exposed as a long-time associate of the Bush Crime Family, has his Houston offices, Madsen reported, ‘directly across Westheimer Road in the part of the Galleria complex where the Carlyle Group offices are located. Coincidence? Not with the Bush criminal cartel’.

• On 18th March it was reported that Madsen was arrested while he was meeting a source with knowledge of Stanford’s connections, but both were later released.

According to ABC TV, in 2008 Mexican authorities seized one of Stanford’s private jets as part of an investigation into the Gulf Cartel by both the Mexican authorities and the FBI. Inside the cabin of the Gulfstream jet, police found cheques connected to drug cartel recipients. On 1st January 2009, the one-man-band accountant based in Antigua who had provided Stanford with ‘auditing’ and related services, died mysteriously just one day after the expiry of his contract with Stanford.

STANFORD ‘TOOK OVER’ FROM NORIEGA AGAINST WHOM LEHDER TESTIFIED
As previously reported, R. Allen Stanford ‘took over’ from Noriega, after Bush Sr. had double-crossed the Panamanian operative; and indeed, drug-running connections to Stanford are widely accessible in the public domain. Which brings in the covert DVD operative, Carlos Lehder Rivas, born in the United States of a Colombian mother and a German father.

Carlos Lehder began his life of crime as a low-level drug dealer in Michigan, and after doing time in jail for a drug-related car theft, Lehder ‘decided’ to seek his fortune in Colombia, according to the open ‘legend’. In reality, he was targeted and then recruited by or on behalf of the German ‘Black’ counterintelligence agency which is the heir of the Nazi Abwehr, Deutsche Verteidigungs Dienst (DVD), based in Dachau, near Munich, almost certainly with the knowledge or on the instructions of George H. W. Bush Sr., the top Godfather implementing long-range DVD criminalism strategy in the Americas. As we have repeatedly mentioned, the headquarters building of the Central Intelligence Agency is named the George Bush Center for Intelligence, a simple fact which itself confirms the pinpoint accuracy of Congressman Dan Burton’s revealing admission above.

Lehder was so well-placed that when housed in a two-cell unit at the US Penitentiary in Marion, IL, he was given a telephone, which he used to contact aides to the then-Vice President George H. W. Bush, who had been in charge of the CIA during the early years of the Medellín Cartel. The Editor’s book The New Underworld Order develops intelligence to reveal that the Colombian drug cartels were in fact established with the close assistance of the CIA and that foreign operations inside the CIA (which turned out to be German and Soviet) were instrumental in their evolution.

EFFICIENT TEUTONIC ORGANISER OF THE MEDELLIN CARTEL FOR BUSH/CIA
According to a report in the Pittsburgh Post-Gazette published in May 1996, Carlos Lehder Rivas used an efficient, high-tech approach to cocaine smuggling that facilitated the bulk shipment of the drug in mass volume. Using a remote landing strip, Norman Cay, in The Bahamas, which Lehder had secured by bribing Bahamian officials and scaring off inhabitants.

Lehder arranged for jets loaded with bulk cocaine to land at Norman Cay, where the drug would be loaded onto similar aircraft and dispatched into northern Florida, Georgia and the Carolinas. These unexpected destinations made evasion easier because the authorities were only then watching the United States’ southern borders.

Following this ‘success’, Lehder talked other drug lords into forming a cooperative based in the northwestern industrial city of Medellín. At the peak of the Medellín Cartel’s power, a jet loaded with up to 300kg of cocaine would fly into the small Bahamian airstrip every hour of every day, 24/7. The similarity with the operation using the Mena, AK, airport facility has not been lost on observers.

CATALOGUE OF VIOLENCE UNLEASHED BY LEHDER
Gross, unfettered, demonic violence, typical of the German Nazi mentality, accompanied all of the Medellín Cartel’s operations.

A US Federal detention order for Lehder drawn up in 1987 stated that Lehder and other Medellín Cartel operatives were responsible for assassinating the Colombian Justice Minister in 1984; for the 1985 armed attack on Colombia’s Supreme Court building that killed eleven justices and 84 other people; for assassinating two Colombian newspaper editors and 26 other journalists; for shooting the Colombian Ambassador to Hungary in 1987; and for a long list of murders of police officers, informants and government officials. Lehder also threatened to kill one Colombian Federal Judge a week if he was caught, prompting US officials to place narcotics agents, their families and other officials on worldwide alert after Lehder was finally arrested.

Yet when, following three years of US pressure on Colombia to adhere to an extradition treaty and turn Carlos Lehder Rivas over, he was finally extradited, Lehder was given kid-gloves treatment from the outset. For ‘public consumption’, the reason for this approach was that the Government wanted Sr. Lehder to testify against General Noriega, who had interfered with the George Bush Sr.-related drug operations in the region (i.e. Bush had double-crossed Noriega, as he always does, not the other way round).

In reality, Lehder’s evidence, as previously reported, was useless: and Mr Robert Merkle, the US Attorney at Tampa, Florida, at the time, who had prepared a Noriega indictment, believed that he had more than enough evidence against Noriega for any input from Lehder to be superfluous.

In the event, Carlos Lehder testified that he had had no direct contact with Noriega, although he acknowledged that the Medellín Cartel had paid millions of dollars to the Panamanian President. For much of his testimony against Noriega, Carlos Lehder Rivas in fact indulged in rambling tirades about US imperialism. This is routine among not only the ‘former’ Soviet apparatus, but among Nazi operatives, to this day. Anyone who doubts this fact should study the hatred tirades by Argentine Nazis against the United Kingdom, as part of the ongoing DVD-manipulated campaign by Argentina (which has failed) to acquire sovereignty over the Falkland Islands.

• In 1982, the Argentine junta was given the ‘green light’ by the secret German ‘Black’ penetration agent, George H. W. Bush Sr., then Vice President of the United States and in charge, therefore, of the National Security Council, to invade the Falklands.

LEHDER EXFILTRATED TO GERMANY UNDER CORRUPT 2000 ELECTION PAYOFF DEAL
When the time came for the 2000 US Presidential election to be stolen, ready money was needed to pay off the Democratic National Committee (which received a $32 million payoff) plus the judicial, law enforcement and legal parties whose cooperation suddenly became necessary and who were to be paid $8 million: whereupon Lehder was tapped in jail for the necessary $40 million in bribes.

The deal was that the top representative of the Bush Crime Family who required the ready cash (because of course the Bush Crime Family could not be expected to part with a single rotten cent of their own ill-gotten gains) would arrange for Lehder’s immediate exfiltration to GERMANY in exchange for Carlos Lehder Rivas extracting $40 million from a bank account on demand.

STANFORD LINKS TO FUND RUN BY BIDEN FAMILY MEMBERS
Recalling again that the Stanford tentacle of the Bush-Clinton-CIA money laundering and financial distribution network ‘took over from’ Noriega’s drug-trafficking operations, the revealing article entitled ‘Stanford has links to a fund run by the Bidens’ published in The Wall Street Journal on Tuesday, 24th February 2009, was clearly of more than incidental interest. The report stated:

‘A fund of hedge funds run by two members of Vice President Joe Biden’s family was marketed exclusively by companies controlled by financier R. Allen Stanford, who is facing Securities and Exchange Commission accusations of engaging in an $8.0 billion fraud’.

‘The $50 million fund was jointly branded between the Bidens’ Global Advisors and a Stanford Financial Group entity and was referred to as the Paradigm Stanford Capital Management Core Alternative Fund’. ‘Paradigm’ is a high-level Masonic key-word. Stanford-related firms marketed the fund to investors. Paradigm Global Investors is owned through a holding corporation by the Vice President’s son Hunter, and Joe Biden’s brother James, the newspaper stated.

Paradigm’s Attorney, Mr X. LoPresti, told The Wall Street Journal that ‘the fund has offered to turn over the $2.7 million investment it received from Mr Stanford’s firm in 2007 to a Court-appointed receiver in the SEC’s civil fraud case involving Mr Stanford’.

Crucially, Mr LoPresti told the newspaper that the Stanford entities put up the $2.7 million in seed money and marketed the (Paradigm) fund to investors. SEC records show that the fund, which was launched in June 2007, had 104 investors as of November 10, 2008, with assets of $49.8 million. Paradigm, based in New York, manages assets worth about $270 million.

Paradigm is/was mentioned on the website of a Stanford entity called Stanford Trust Company, as one of that firm’s ‘investment management strategies’.

Attorney LoPresti confirmed that under an agreement, the Stanford group was entitled to share in a proportion of the fund’s management and performance fees.

When the Bidens bought Paradigm in 2006, the purchase was accompanied by bitter litigation. A knowledgeable source separately references the sale of the MBNA Credit Card operation to the CIA’s very own Bank of America, the proceeds of which deal provided lubrication.

It will have been observed that if Stanford, a Fraudulent Finance operation, was marketing the Biden-owned Paradigm fund to investors, the owners and managers of the Paradigm entity, viz. members of Vice President Joe Biden’s family, may have been co-conspirators in the marketing of fraudulent securities to Americans in various US States. Wire Fraud. 20 years.

OTHER BIDEN BACKGROUND SCANDALS
Separately, Joe Biden had to agree finally to pay for the hire of a jet plane, after ignoring repeated requests for payment from the owners of the aircraft. This particular Biden scandal was exposed by an accountant (CPA), whom Biden still reportedly owes $15,000. A distinguished lady known to the Editor for many years now, worked on Mr Joe Biden’s Presidential campaign financial disclosure engagement. The source tells us:

‘I busted it for him and got everything right. He stiffed me for over $15,000 worth of work. He refused to pay once he dropped out of the race. I undertook similar Capitol Hill campaign financial disclosure work for Bob Dole, Pat Buchanan and a Democratic Candidate for Ambassador to New Zealand. All those folks paid me even though they either lost the election or else did not get the appointment. That type of work is very demanding and very tedious because your efforts are scrutinized by Congress. Biden did not care’.

BIDEN ATTEMPT TO SET US UP/USE THIS SERVICE
As previously reported, the Editor exercised his discretionary right NOT to publish certain details that were proffered to us over the weekend of 7th-8th March 2009 – at the instigation, it transpired, of Vice President Joe Biden and certain gentlemen of Italian extraction.

Specifically, Michael C. Cottrell, B.A., M.S., received an insistent request for him to ‘ask’ the Editor to publish certain information which would have had the effect of shifting the blame for ongoing financial misappropriations and thefts squarely onto the previous (Bush) Administration, thereby redirecting the focus of attention away from the ongoing sabotage of overdue settlement payments perpetrated under the Obama-Biden Administration itself.

The only element of the information, which had been made available to the Editor IN WRITING, that was used, was the request from US sources for us to amend our earlier reference to ‘about $50 billion of funds belonging to The Queen’ having been stolen in the context of the withdrawal on 29th January 2009 of the $14 trillion in cash including the $6.2 trillion of LOAN funds, to read ‘$52 billion of ‘guarantees’ signed by the Queen (no funds stolen)’.

A guarantee with The Queen’s signature could arguably be said to be by far the most valuable prospective collateral in the world: so the stealing of these guarantees worth $52 billion face value seems to us to be even more serious than the stealing of $52 billion of monies belonging to the British Sovereign. We were subsequently informed that the ’52 billion of guarantees’ signed by the Queen had by some miraculous process been ‘restored’.

In other words, if I break into your house and steal all your family’s silver with a view to pledging it as collateral at a bank for a loan, but I get caught in flagrante and so send the stolen silver back, I have made restitution and remain a free man. We don’t think so. A theft took place, more than fully justifying The Queen’s belated decision to withdraw the LOAN funds, which had been languishing ever since they were made available via the Bank of England to the Bank of New York Mellon on 19th-20th June 2007 for the purpose of financing the Group of Seven-approved transparent, on-the-books, fully taxable Dollar System Refunding Programme, which would reliquefy the money center banks ON THE BOOKS not only AT NO COST TO THE U.S. TREASURY, but also to the huge advantage of the Treasury, which would receive an open-ended cascade of tax payments.

Interestingly, by way of ‘blowback’ from this development, it was reported to the Editor at 5:00pm on Sunday 22nd March that President Obama had told associates words to the effect that ‘I don’t care whether it’s the fault of my Administration or the previous Administration [that the numerous overdue settlement payments have been held up]. It’s got to be done’.

This outburst was either staged (very possible) or else reflects a blazing row that appears to have taken place between President Barack Obama and Vice President, Joe Biden, who has completely discredited himself by actually authorising an operation to try to persuade us to publish certain information that would have assisted him inter alia at his then imminent appearance on behalf of the US Government at the World Court. Although this institution is anathema to Washington, the US Government cannot avoid dealing with it, as other countries use the Court to press their claims against a pariah country called the United States.

And indeed, during the same period, Vice President Biden was reported to have appeared at the World Court, where he was refused a hearing. Had the information that we were pressed to publish actually appeared on our website, we are told that the outcome might have been different.

The attempted Biden set-up involved us publishing a series of detailed known facts concerning the misappropriation (on 18th January 2009, immediately ahead of the Inauguration) of the CMKX $12.8 billion, which would have explicitly implicated George W. Bush Jr., George H. W. Bush Sr., Dr Alan Greenspan, and the Carlyle Group in the theft of the CMKX funds. Since certain elements of the proffered information could not be verified and the pressure to publish this was not only traced to the Office of the Vice President but we were expressly informed that Mr Joseph Biden wanted the information published, we declined to agree to this quite extraordinary request – a refusal which caused consternation and much anger all round.

Further, the Editor decided that the exceptional pressure that had been exerted upon Mr Cottrell, asking him essentially to ‘order’ the Editor to publish this material, constituted not only the exertion of unfair pressure on Mr Cottrell himself, but a gross infringement of the Editor’s right to decide precisely what and when he will publish: a view with which Mr Michael Cottrell, who had been most uncomfortable with the request, immediately agreed. In fact both parties simultaneously concurred that since neither was satisfied with the information, let alone the motives behind the request, the material could not be published without further clarification (which was not forthcoming).

At all events, it is understood that this refusal by the Editor caused much annoyance all over the place: and the reason soon became clear. Mr Biden’s reported foray to the World Court flopped, because whatever he was asking for (believed to entail blaming the previous Administration for the Obama Administration’s failure to date, to perform) simply wasn’t believed. Had we published what was proffered to us, the outcome might have been different.

• In a separate instance of the US propensity to try to entrap the Editor of this service, information has recently appeared elsewhere concerning the Clinton theft of $500 million from Bank Crozier in Grenada, in the 1990s – a theft that we have referred to in International Currency Review, based upon our own long-term investigative research. It was being falsely alleged that this theft ‘must have’ occurred some time in 2003, which is not true. The purpose of this falsified information and provocation, devised by ‘Die Spinne’, was to inveigle the Editor into ‘correcting’ this false report, which the Spider hoped might have certain ‘repercussions’, given the operative currently serving as American Secretary of State.

However if we were to try to correct the lies, deliberately cynical diversionary distortions and other ‘reinterpretations’ of what we know to be true, that litter US websites, we would be fully engaged in that futile process and we would get no publishing work done at all.

CHINESE REPORTED TO HAVE OBTAINED LIEN ON FEDERAL RESERVE
By contrast, the Chinese Government, as noted above, went to the World Court in early March and obtained a lien on the Federal Reserve, we were informed. This was reportedly forthcoming after the Chinese parties had concluded that the Obama Administration had no more intention than its corrupt predecessor to meet its old financial obligations towards the Chinese, which relate to US undertakings made in the late 1930s for a 70-year period which has expired.

In this connection, the US authorities had originally assumed that the cap placed on the price of gold would limit their liabilities to the Chinese parties for all time: but because the Bretton Woods monetary system collapsed in the early 1970s, and even more to the point because the United States has been hijacked by ruthless organised criminal gangs whose only interest has been self-enrichment, funding the ‘State within the State’ and thus the World Revolution for three decades now, the price of gold has long since broken loose, while in terms of gold the dollar’s value has of course accordingly declined – so that it will, we are now told, take several generations for the US authorities to recompense the Chinese without resorting to war.

This horrendous strand of the crisis is overlain by the multiple other evil strands about which the ‘mainstream media’ have remained culpably silent.

For instance, the stealing of Her Majesty’s gold on 29th-30th March 2007, which we alone reported and for which we were excoriated by people in the United States who had no idea what they were talking about, appears to have been linked to an arrogant attempt by Bush-related operatives to provide the wherewithal for the Chinese Settlement. It may be the case (although no-one has told us this) that the publicity we were able to give to this matter, put paid to that criminal operation – which ended when the gold was restored, we believe, by around the same time (June 2007) that The Queen’s LOAN funds were made available for the Dollar System Refunding Programme.

Had the corrupt Paulson Treasury not immediately moved to exploit the Queen’s LOAN funds, along with the other sovereign cash funds making up the $14.0 trillion referenced in our reports, but had rather allowed the planned private sector refunding activity to proceed, the United States would have acquired sufficient accruals by now not only to have been able to meet its obligations to the Chinese, at least in part, but to implement sound financial policies across the board.

• However since Paulson is a professional criminal financier, his priorities lay elsewhere.

As a consequence, the collapse of the derivatives Fraudulent Finance Ponzi networks triggered inter alia by our exposures has occurred in sync with the colossal crisis surrounding the Chinese payments: a concatenation of events which could not possibly be worse, and which appears tailor-made to lead to World War. Given what President Obama is reported to have proclaimed (above), it is appropriate, absent contradictory information, to give the President the credit for understanding the extreme gravity of the world’s crisis, even though President Barack Obama has presided over very serious criminal events which may or may not have been perpetrated with his knowledge: our inclination is still to give the President the benefit of the doubt: when dealing with such secret but earth-shattering matters, it is impossible for outside observers, whether ‘connected’ or not, to know more than a fraction of the truth.

The following information is therefore reported as received:

• 12th March 2009: Armed with the lien from the World Court, the Chinese Foreign Minister, Yang Jiechi, appeared in the Oval Office amid the cover story about tensions between American and Chinese ships in the South China Sea.

• 17th-18th March: Chinese reported to us to have received the first instalment payable by the United States as referenced above.

• 19th March: Unconfirmed rumour that, on the contrary, the Chinese Government had exercised its lien against the Federal Reserve. On our checking this out, the rumour was dismissed out of hand by knowledgeable sources.

• 20th March: Unconfirmed rumours of arrests in Washington, DC. The Editor is advised by several sources that $3 trillion ‘arrived’ at the Treasury. This is later amended to $4.0 trillion.

• 21st March: It is reported to the Editor that five officers at the Federal Reserve were arrested (see above) after having attempted to divert or steal $200 billion. Other sources said that two officials were arrested: but on 22nd March, separate sources confirm that the number of officials arrested was five.

• 22nd March: At around 5:00pm New York time, it is reported to us that the Chinese parties were paid $13 trillion by the US Government between Wednesday 18th and Friday 20th March 2009. The source provides confirmation of President Obama’s remarks, summarised above; and it is further reported that at least one Obama official was arrested on 20th March, indicating that suspicions of treachery within the Obama Administration are justified.

• 22nd March: About 20 minutes later, the following completely conflicting ‘information’ is made available to us:

• First, the Obama Treasury offered to pay the Chinese parties in Treasuries, an offer which the Chinese turned down flat.

• Secondly, President Obama or his officials then told the Chinese: in that case, we’ll pay you in cash (as suggested by the earlier report above).

• Thirdly, the Chinese said: ‘No way. Pay us in gold’.

• In the fourth place, the President or his officials responded:
‘There is no way we are going to pay you in gold’.

• Fifth: The Chinese responded: ‘We will only take gold’
(Unspoken: You fools are preparing your own hyperinflation and at the same time you are trying to sell trash Treasuries which no-one in the world wants to buy. Your currency is going to hell due to your own stupidity and to your successive attempts to avoid facing reality: and you want to pay us in Treasuries or cash? We have no confidence in either. We must be paid in gold).

• Sixth: President Obama or his officials responded: ‘No way. Take us to court. You’ll lose’. Which is probably true, since, if any of the foregoing sequence is accurate, the US Government had already offered to pay the Chinese in US Treasury instruments or cash.

The outcome of all this could have been that the Chinese finally accepted cash, as was implied by the original report. It should also be borne in mind either that the scenery has since changed, or that some of the so-called information is false, or that all of the information is false, or all of the above. However the foregoing provides a snapshot showing what may have been going on behind the scenes, beyond what the Editor knows because of the direct attempt to influence us to publish certain information, as detailed here and previously.

Certainly, if that information had been published, the consequences would have been severe. It may transpire that it needs to be published, given that Vice President Biden did not achieve his objectives on that occasion. The information implicating the Bush Crime Family in the CMKX theft is extremely damaging and may need to be publicised outside the Biden context.

KISSINGER AND BAKER RETURN FROM MOSCOW ‘WITH GORBACHEV’
On 19th March, Bloomberg reported that President Obama had despatched Dr Henry (‘call me Henny’) Kissinger, the odious triple or quadruple+ DVD agent with the guttural German accent, and the Bush Crime Family’s #1 fixer, James A. Baker II, to Moscow to ‘talk to the Russians’. Following their meeting with President Medvedev and GRU-‘Prime Minister’ Vladimir Vladimirovich Putin in Moscow, Kissinger and Baker returned to Washington DC; and our sources believe that they were accompanied by Mikhail Gorbachev, the former Chief of the CPSU’s Administrative Department under Yuri Andropov (Lieberman), whose real name is Korbach or Orbach.

• FACTS: The Administrative Department was the most powerful slot in the entire Soviet CPSU structure. Gorbachev occupied that slot as early as the beginning of the 1980s. This consummate Leninist deceiver has never changed his spots. He occupies a large suite of offices inside the Kremlin. The sudden arrival of the top Soviet in the Oval Office (see immediately below) after being brought to Washington by Kissinger and Baker, must be viewed as an ominous development.

SECRET MEETING BETWEEN OBAMA, BIDEN AND GORBACHEV
On Friday 20th March, a secret meeting took place in the White House between Mikhail Gorbachev, Presidnet Obama and Vice President Biden.

BRITISH-AMERICAN RELATIONS AT AN ALL-TIME LOW
It has been reported that US-British relations are at their lowest level ever, a state of affairs that is supported by the insulting treatment meted out to this Editor in having a printed circuit or ‘chip’ stuck onto his right leg by an NSA or other US operative while he was sleeping in a hotel during his visit to the United States as described above.

On 11th March, it was reported that Sir Gus O’Donnell, the Head of the British Civil Service (an aimiable man whom the Editor has met) had protested that he had been finding it ‘unbelievably difficult’ to get hold of any Obama Administration personnel. Very senior British officials were complaining that they cannot get beyond the Administration’s mindless answering machines, and that attempts to coordinate the so-called G-20 ‘pre-summit’ summit meeting, held ludicrously in humble Lower Beeding, Horsham, in West Sussex, proved particularly aggravating in this respect.

• An anonymous German delegate to that meeting complained in Paris Match magazine that the event was “a madhouse”, adding “You don’t choose some place in the middle of nowhere for a summit of such importance’ – the point being of course that the importance of both the pre-summit summit and of the G-20 summit itself has been downgraded by the British: the actual conference in early April is not being convened in the Queen Elizabeth Conference Centre opposite Westminster Abbey and the Houses of Parliament, where it should be held, but miles away in Docklands – a clear signal that the whole idea of elevating the G-20 onto a pedestal to smother the G-7 in order to bury the G-7-Approved private sector Dollar Refinancing Programme is felt in London to be a ‘mistake’.

The top British civil servant said in public that when he tries to make contact with key members of the Obama Treasury Department, ‘there is nobody there’.

The phones ring and nobody answers. ‘You cannot believe how difficult it is’, Sir Gus O’Donnell told participants at a recent civil service conference. The reports of this fracas that we have seen did not provide any explanation for this perverse US official behaviour – which was, and is, that the British authorities do not go along with all this Obama-Geithner madness and are incensed at the repeated insults and thefts committed against the British Sovereign by the White House, reported in these presentations. Of course this is never mentioned as the underlying cause of the tension.

Although we do not credit the British Treasury with having pursued sensible policies under the Labour Government, at least there is no whiff (that we can detect anyway) of corruption there – in sharp contrast to the position in the United States, where the Treasury’s reputation sank into the sewer under the corrupt Henry M. Paulson, and is liable, under Geithner, to sink below it.

The real source of the UK-US tension, namely the cowboy finance operations of the US authorities, was ‘disguised’ for public consumption by the ‘substitute’ cover stories about Obama removing the bust of Sir Winston Churchill from the Oval Office, and the farcical gift of 25 DUD DVDs by Obama to Gordon Brown – an intellectual who reads voraciously and certainly, like this Editor, has no time at all for videos. In addition, some bumped-up American apparatchik told British officials that Britain isn’t ‘special’ to the United States, which is quite true. The Brits feel the same way, in reverse, after having had to live with the strench of the corruption machine wafting from Washington and Wall Street and the feckless refusal of US law enforcement (hitherto) to enforce the Rule of Law.

• FACT: To make matters worse, and to illustrate the crudeness of these people, the DVDs are no use in Britain, where different technical standards apply, so presumably they’ve been thrown away.

In any case, given recent experiences and the multitude of US abominations recorded in these reports, it is our own view that the so-called ‘special’ relationship was destroyed by the Bush II Administration; and that even though Britain itself has a criminal government, too, the United Kingdom should distance itself from a cnation run by a terrorist ‘State within the State’ which no-one in the United States has the guts, apparently, to try to bring under control.

If Congress were doing its job properly, it would demand to know why the CIA (proxy for the huge number of US intelligence agencies of which the CIA is the best known) is in the drug business.

Put another way, it would be asking WHY the United States’ national security interests ‘include the CONTROL of international crime, terrorism and drug trafficking’. President Obama should be asking these questions, too – instead of which he is complacently permitting the ‘State within the State’ to remain unreformed, running the Government, and dictating the President’s priorities.

More to the point, it is the self-financing requirements of the ‘State within the State’ that are the root cause of the Obama Administration’s short-sighted and probably fatal rejection of the ONLY solution to the entire crisis: private sector on-the-books trading that is fully transparent and taxed, generating massive ongoing windfall tax REVENUES to the Treasury, and zero cost to the taxpayer. Because the corrupt ‘State within the State’ fears that it would lose its usurped power to control the Executive Branch if it were to cease to be self-financing via its proprietary Fraudulent Finance Ponzi operations, its drug-trafficking and all the other corrupt practices in which it indulges, it has seen to it that the new Administration has chosen the route to financial and economic perdition.

• In other words, the ‘State within the State’ has placed its own corrupt interests ahead of those of the American people, as usual.

BELATED WHITE HOUSE SECOND THOUGHTS, GIVEN THE IMMINENT MEETING WITH QUEEN
The damage to US-British relations has been done, and attitudes in Britain are hardening not only against the disliked European Union Collective (the remodelled Soviet Union in the making, and a monstrosity so corrupt that even its own Court of Auditors has refused to sign off on the European Commission’s accounts for the 14th year in a row), but likewise against the United States, which is perceived to have triggered this crisis.

• The fact that the City of London is among the most corrupt sinks of speculative iniquity on earth is not yet properly understood, although recent controversies over obscene self-enrichment and bonus arrangements are causing scales to fall from many eyes.

On 15th March 2009, The Sunday Telegraph carried a prominent article entitled ‘Obama’s bungling aides ‘are told to get a grip’’, implying that somewhere deep inside the recesses of the collective mentality within Washington DC power circles, a soupcon of anxiety about kicking Americas’s most (misguidedly) loyal ally in the teeth, was proving somewhat counterproductive.

Specifically, the article said that ‘Barack Obama’s aides have privately admitted that presidential errors during his first 50 days in power have contributed to a sharp fall in Obama’s popularity with voters and pundits alike. His staff are being warned to get a firmer grip now that he has passed the 50-day mark, and prevent a repeat of the mistakes that marred the past seven weeks’.

Natürlich, the newspaper made NO MENTION of the catastrophic error that matters – the only one that matters – namely the fact that instead of ‘going financially straight’, Barack Obama has instead allowed his advisers to choose and pursue the crooked path of dud, leveraged, debt-accumulating Fraudulent Finance based on NOTHING, which will saddle the Treasury with vast accumulations of background official debt and will jeopardize the futures of several generations of Americans in the process. The only way that will be avoided is via the hyperinflation that the model presupposes.

FACE-TO-FACE EXCHANGE BETWEEN PRESIDENT OBAMA AND THE QUEEN
The British newspaper focused on the WRONG ISSUES, but this fascination with the trivial aspects of diplomacy did reveal how nervous the Obama White House appeared to be over the President’s meeting with the Queen (IF he turns up), giving rise to the following predicted exchange:

Her Majesty: Good morning, Mr President, how very nice to meet you.

President Obama: It’s a pleasure to be here, Your Majesty.

HMQ: Mr President, I was concerned to hear about a small matter of $52 billion of my guarantees that apparently went missing recently.

PO: I understand that these were restored, M’am.

HMQ: Yes, but why were the guarantees diverted or stolen in the first place? Were any of my guarantees used for purposes for which they were not intended?

PO: I don’t know M’am. I imagine not.

HMQ: Mr President, you are aware, are you not, that after my LOAN funds within a total amount of $6.2 trillion languished within your banking system within the Treasury Custodial Account network at several money center banks for 19 months, to no avail, I was compelled, on 29th January 2009, to order the withdrawal of these funds, which were made available via the Bank of England on 19th-20th June 2007 to finance the Group of Seven-Approved Dollar System Refunding Programme by means of transparent private market trading transactions?

PO: I am, M’am.

HMQ: Mr President, are you aware of the REASON that I had to order these funds to be withdrawn?

PO: Not entirely, Your Majesty. Please explain.

HMQ: Mr President, when you toured European countries last year, you signed documents in which, I understand, you pledged to release all the blocked or hijacked funds and to proceed, if I am not mistaken, with the G-7-Approved private sector Refunding Programme. I had been led to believe that, in the light of your undertakings, you would indeed honour your commitments.

PO: My advisers decided that I should adopt alternative strategies, I am afraid.

HMQ: But Mr President, a signed commitment is a signed commitment, you know! Furthermore, my own expert advisers inform me that the ‘alternative strategies’ that your officials have adopted are designed to revalidate and revalue fundamentally worthless false derivative ‘assets’ while at the same time accumulating vast new mountains of real debt with which generations of Americans will be burdened in the future – a state of affairs which could have been entirely avoided if you had implemented the Group of Seven-Approved Dollar System private sector Refunding Programme for which I provided the necessary funds on LOAN, and which you undertook to do last year.

PO: Unfortunately, M’am, I was advised that our banks would not be prepared to cooperate in the proposed G-7-Approved private sector Refunding Programme.

HMQ: But Mr President, you carry the privilege of being the most powerful human being on earth! You have the power to insist upon the implementation of what was agreed by the world’s leading financial powers in 2007 and 2008! In addition, I made available a very large sum of money pro bono publico on a LOAN basis to finance this project, which I told the Group of Seven powers in 2007 was necessary ‘for the sake of the whole of humanity’. Moreover the Group of Seven-Approved private sector Refunding Plan would have cost the US Treasury NOTHING, while showering it with windfall tax revenues for a long time to come! What on earth persuaded you to disregard this very simple and straightforward solution to your problems, which are OUR problems, too?

PO: Uh, I hear what you say, M’am. It looks as though the various patchwork schemes developed by Timothy Geithner are going nowhere anyway. I’ll reconsider the situation.

HMQ: Ah, but Mr President, as you know my LOAN funds were withdrawn on 29th January after it had become clear that your Administration was not about to honour its undertakings in this regard. I am advised that there is now a proposal that the G-7-Approved Refunding Programme should be run out of London. Very conveniently, there is a provision in British tax law whereby funds that are resident within the British jurisdiction for 24 hours, are taxable.

My Government finds it most attractive that windfall tax accruals should arise from such ongoing, transparent on-the-books trading activity. Of course, since the Refunding Programme will remain an American private sector operation, your Treasury will likewise receive immense ongoing accruals from tax. So, by running the transparent private sector Refunding Programme from London, we will be able to help you, after all. Don’t you think the daffodils in my garden are gorgeous this year?

PO (looking out of the Palace window at the magnificent display of British daffodils): Yes, Your Majesty, they are gorgeous. Don’t you think so, Michelle?

POSTSCRIPT; WHITE HOUSE SCURRIES TO MEND THE RIFT
In a quite extraordinary demarche, The Sunday Telegraph reported on 15th March that ‘a White House official last week passed details to The Sunday Telegraph of Mr Obama’s desire to avoid a repeat of such errors as the inept handling of Gordon Brown’s recent visit to Washington’, in which the White House – furious at the withdrawal of the $14.0 trillion cash, and at the exposure of the $52 billion of ‘stolen’ guarantees – went out of its way to ensure that nobody from the Executive Branch attended Congress to hear the British prime Minister praise the collective of financial scamsters to the skies, while curtailing the press conference with Mr Brown to the point of extreme rudeness.

‘The concession came as allies of President Obama have begun breaking cover to question his performance and leadership on the economic meltdown and diplomacy’.

In other words, certain people on the ‘inside’ are ALREADY wondering whether the ship that they embarked upon was already starting to sink even before it set sail.

The British newspaper continued:

‘Mr Obama has now told his staff to learn from the errors made during Mr Brown’s visit and to ensure that protocol is observed when he meets The Queen later this month’.

‘A source close to Mr Obama’s top team telephoned this newspaper last week’ (and got through, unlike what happens when Sir Gus O’Donnell calls the US Treasury) to say that top White House officials now regard it as a ‘mistake’ to have returned the bust of Sir Winston Churchill that the (British) Government lent George W. Bush… and then to have sent the Prime Minister home with a gift of 25 DVDs after his visit to Washington’.

For ‘mistake’, read ‘calculated insult’.

‘Clearly it was a mistake, and they want people to know that they know that’, the source said. No apology, of course. ‘There is a collective desire to learn from the experience. They didn’t have their eye on the ball… they all know they’ve got to do better’.

NO THEY DON’T! They are NOT aborting the TALF system, which is designed to revalidate worthless false ‘assets. They are NOT aborting Fraudulent Finance; they have NOT abandoned the Fraudulent Finance Ponzi model, despite elements of law enforcement arresting exposed Ponzi practitioners like Madoff and Stanford. President Obama has NOT ordered the ‘State within the State’ to GET OUT OF DRUG-TRAFFICKING. Does he regard drug-trafficking as acceptable?

The ‘mistakes’ that the White House was desperately trying to alleviate were the insults meted out to the British because the new Administration was piqued that it was being held to Obama’s signed undertakings, because the $14.0 trillion cash was withdrawn altogether from access, because the stealing of $52 billion of The Queen’s guarantees had been exposed, and doubtless also because the earlier (2007) theft of The Queen’s gold, probably in order to finance the United States’ colossal overdue debts to the Chinese, had been aborted (after we publicised it).

‘The source said: ‘The point was made about the protocol, people need to be absolutely sure they are on top of everything to do with meeting The Queen and make sure that everyone knows what is expected. The Queen won’t be getting any DVDs’.

By the way, if any sceptics remain out there, the Editor holds in his hand a sworn document dated 9th March 2009, containing the information referenced earlier that the Editor declined to publish, which also contained the information about the $52 billion of The Queen’s guarantees, which we DID publish. It follows of course that, this confirmation in turn confirms that the $6.2 trillion LOAN information that we have referenced repeatedly, is accurate (not that it has ever been disputed by anyone at all). This is what the sworn document dated 9th March 2009 stated verbatim:

‘I, Michael C. Cottrell, B.A., M.S., do hereby swear and affirm the following:

• That on Friday, March 6, 2009, between approximately 8:19pm EST and 8.20pm EST, I received a telephone call [requesting me to inform Mr Story that]

… a clarification was “necessary” regarding “the $50 billion of The Queen’s money allegedly stolen prior to repatriation” [in the report dated Thursday 5 March 2009 02:00]

… [This] should be changed to “$52 billion of guarantees by The Queen”’ [no cash stolen].

As will be clearly understood by anyone taking care not to sit on his or her brains, this of course basically CONFIRMS EVERYTHING. We choose not to identify the name of the official party who telephoned Mr Cottrell with this request; but this is what the document states. In black and white.

LIST OF U.S. STATUTES, SECURITIES REGULATIONS AND LEGAL PRINCIPLES OF WHICH THE CRIMINALISTS, ASSOCIATES AND ALL THE MAIN FINANCIAL INSTITUTIONS REMAIN IN BREACH:

LEGAL TUTORIAL: The Steps of Common Fraud:

Step 1: Fraud in the Inducement: “… is intended to and which does cause one to execute an instrument, or make an agreement… The misrepresentation involved does not mislead one as the paper he signs but rather misleads as to the true facts of a situation, and the false impression it causes is a basis of a decision to sign or render a judgment”. Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Fraud’.

Step 2: Fraud in Fact by Deceit (Obfuscation and Denial) and Theft:

• “ACTUAL FRAUD. Deceit. Concealing something or making a false representation with an evil intent [scanter] when it causes injury to another…”. Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Fraud’.

• “THE TORT OF FRAUDULENT DECEIT… The elements of actionable deceit are: A false representation of a material fact made with knowledge of its falsity, or recklessly, or without reasonable grounds for believing its truth, and with intent to induce reliance thereon, on which plaintiff justifiably relies on his injury…”. Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Deceit’.

Step 3: Theft by Deception and Fraudulent Conveyance:

THEFT BY DECEPTION:

• “FRAUDULENT CONCEALMENT… The hiding or suppression of a material fact or circumstance which the party is legally or morally bound to disclose…”.

• “The test of whether failure to disclose material facts constitutes fraud is the existence of a duty, legal or equitable, arising from the relation of the parties: failure to disclose a material fact with intent to mislead or defraud under such circumstances being equivalent to an actual ‘fraudulent concealment’…”.

• To suspend running of limitations, it means the employment of artifice, planned to prevent inquiry or escape investigation and mislead or hinder acquirement of information disclosing a right of action, and acts relied on must be of an affirmative character and fraudulent…”.

Source: Black, Henry Campbell, M.A., ‘Black’s Law Dictionary’, Revised 4th Edition, St Paul: West Publishing Company, 1968, s.v. ‘Fraudulent Concealment’.

FRAUDULENT CONVEYANCE:

• “FRAUDULENT CONVEYANCE… A conveyance or transfer of property, the object of which is to defraud a creditor, or hinder or delay him, or to put such property beyond his reach…”.

• “Conveyance made with intent to avoid some duty or debt due by or incumbent or person (entity) making transfer…”.

Source: Black, Henry Campbell, M.A., ‘Black’s Law Dictionary’, Revised 4th Edition, St Paul: West Publishing Company, 1968, s.v. ‘Fraudulent Conveyance’.

U.S. SECURITIES REGULATIONS OF WHICH INSTITUTIONS
HAVE BEEN SHOWN TO BE IN BREACH [SEE REPORTS]:

• NASD Rule 3120, et al.
• NASD Rule 2330, et al
• NASD Conduct Rules 2110 and 3040
• NASD Conduct Rules 2110 and IM-2110-1
• NASD Conduct Rules 2110 and SEC Rule 15c3-1
• NASD Conduct Rules 2110 and 3110
• SEC Rules 17a-3 and 17a-4
• NASD Conduct Rules 2110 and Procedural Rule 8210
• NASD Conduct Rules 2110 and 2330 and IM-2330
• NASD Conduct Rules 2110 and IM-2110-5
• NASD Systems and Programme Rules 6950 through 6957
• 97-13 Bank Secrecy Act, Recordkeeping Rule for funds transfers and transmittals of funds, et al.

U.S. LAWS ROUTINELY BREACHED BY THE CRIMINAL OPERATIVES AND INSTITUTIONS:

• Annunzio-Wylie Anti-Money Laundering Act
• Anti-Drug Abuse Act
• Applicable international money laundering restrictions
• Bank Secrecy Act
• Conspiracy to commit and cover up murder.
• Crimes, General Provisions, Accessory After the Fact [Title 18, USC]
• Currency and Foreign Transactions Reporting Act
• Economic Espionage Act
• Hobbs Act
• Imparting or Conveying False Information [Title 18, USC]
• Maloney Act
• Misprision of Felony [Title 18, USC] (1)
• Money-Laundering Control Act
• Money-Laundering Suppression Act
• Organized Crime Control Act of 1970
• Perpetration of repeated egregious felonies by State and Federal public employees and their Departments and agencies, which are co-responsible with the said employees for ONGOING illegal and criminal actions, to sustain fraudulent operations and crimes in order to cover up criminalist activities and High Crimes and Misdemeanours by present and former holders of high office under the United States
• Provisions pertaining to private business transactions being protected under both private and criminal penalties [H.R. 3723]
• Provisions prohibiting the bribing of foreign officials [F.I.S.A.]
• Racketeer Influenced and Corrupt Organizations Act [R.I.C.O.]
• Securities Act 1933
• Securities Act 1934
• Terrorism Prevention Act
• Treason legislation, especially in time of war.

• Please be advised that the Editor of International Currency Review and associated intelligence services cannot enter into email correspondence related to this or to any of the earlier reports.

We are a private intelligence publishing house and have no connections to any outside parties including intelligence agencies. The word ‘intelligence’ on this website and in all our marketing material is used for marketing/sales purposes only and has no other connotations whatsoever: see ‘About Us’ on the red panels under the Notes on the Editor, Christopher Story FRSA, who has been solely and exclusively engaged as an investigative journalist, Editor, Author and private financial and current affairs Publisher since 1963 and is not and never has been an agent for a foreign power, suggestions to the contrary being actionable for libel in the English Court.

ADVERTISEMENT: INTERNET SECURITY SOLUTION

NON-U.S. INTERNET SECURITY SOLUTION CD AVAILABLE: FAR BETTER THAN NORTON ETC
It has now been established that the National Security Agency (NSA) works with/controls Microsoft, Norton, McAfee, and others, in pursuit of the Pentagon’s vast BIG BROTHER objective, directed from the ‘highest’ levels (not the levels usually referred to) which seek to have every computer in the world talk direct to the Pentagon or to NSA’s master computers.

This should come as no real surprise since the cynical spooks even assert this ‘in-your-face’ by advertising ‘INTEL INSIDE’, which says exactly what it means. More specifically, NSA have made great strides in this direction by having a back door built into Microsoft VISTA. Certain computers, especially those labelled with the logo of the ‘fully collaborating’ firm Hewlett Packard, have hard-core setups which facilitate the remote monitoring and controlling of personal computers by NSA, Fort Meade. We now understand that if you are using VISTA* you MUST NOT enable ‘file and printer sharing’ under any circumstances. If you say ‘YES’, so to speak, to ‘file and printer sharing’, your computer becomes a slave at once to NSA’s master computers. DO NOT ENABLE SHARING.

Unfortunately, this abomination is so far advanced that this may not be the only precaution that needs to be taken. As long as Microsoft continues its extensive cooperation with NSA and the NSC (National Security Council), the spying system which assists the criminalised structures, and thus hitherto the Bush-Clinton ‘Box Gang’ and its connections, with their fraudulent finance operations, NSA may be able to steal data from your computer. The colossal scourge of data theft is associated with this state of affairs: data stolen usually include Credit Card data, which the kleptocracy regards as almost as good as real estate for hypothecation purposes. Even so, you can make life very much more problematical for these utterly odious people by NOT USING U.S.-sourced so-called Internet Security and anti-virus software. Having been attacked and abused so often, we offer a solution.

We use a proprietary FOREIGN Internet Security program which devours every PC Trojan, worm, scam, porn attack and virus that the National Security Agency (NSA) throws at us. We are offering this program (CD) to our clients and friends, at a premium. The program comes with our very strong recommendation, but at the same time, if you buy from us, you will be helping us finance ongoing exposures of the DVD’s World Revolution and the financial corruption that has been financing it.

The familiar US proprietary Internet Security programs are by-products of US counterintelligence, and are intended NOT to solve your Internet security problems, but to spy on you and to report what you write about, to centralised US electronic facilities set up for the purpose. You can now BREAK FREE from this syndrome while at the same time helping us to MAINTAIN THE VERY HEAVY PRESSURE UPON THE CRIMINALISTS WE HAVE BEEN EXPOSING, by ordering this highest quality FOREIGN (i.e., non-US) INTERNET SECURITY SOLUTION that we have started advertising on this website. This offer has been developed in response to attacks we have suffered from the NSA nerds who appear to have a collective mental age of about five years, judging by their output.

• To access details about the INTERNET SECURITY SOLUTION, just press THE LIVE LINK YOU HAVE JUST READ, or else press SERIALS in the red panel below. This opens up our mini-catalogue of printed intelligence publications. Scroll right down to the foot of that section, where you will see details of this service. When you buy this special product, you will also, as we clearly state above, be paying a special premium by way of a donation to help us finance these exposures.

The premium contains a donation for our exposure work and also covers our recommendation based on the Editor’s own experience that this INTERNET SECURITY SOLUTION will make your Internet life much easier. Some versions have a ‘Preview before downloading’ feature.

*VISTA: Virtual Instant Surveillance Tactical Application.

SETTLEMENTS AND REFUNDING: OR DOLLAR COLLAPSES

FORENSIC ANALYSIS OF DEVELOPMENTS SINCE THE U.S. ELECTION

Monday 5 January 2009 00:01

• The US dollar requires refunding as a matter of the most extreme urgency.

The G-7-Approved Private Sector on-the-books Capital Markets Refinancing Programme, which was criminally blocked against the interests of the American people and the entire world by the self-serving thieves headed by the Bushes, Paulson, Cheney, the Clintons, Greenspan, Bernanke et al from June 2006 onwards, is the ONLY means whereby this can be achieved.

It CANNOT be done from WITHIN the US Federal Government structures, as the Government ONLY CREATES DEBT. The Private Capital Markets Refinancing Programme agreed upon by the Group of Seven financial powers CREATES REVENUE and ONGOING U.S. TREASURY TAX RECEIPTS.

Government and White House structures, being PUBLIC SECTOR, cannot do this.

The crisis that developed from June 2006 onwards is a SPECIFIC CONSEQUENCE of the corrupt decision by President George W. Bush Jr., Henry M. Paulson, Vice President Cheney, Dr Bernard Bernanke, George Bush Sr, Dr Alan Greenspan, and others, to perpetuate the depraved deficit-financing and fraudulent finance/self-enrichment carousel CREATING EVER MORE DEBT that was then hidden off-balance-sheet, rather than proceeding with the REVENUE-PRODUCING SOLUTION using fully taxed on-the-books private sector capital markets transactions that has been ON THE TABLE since 2005/2006 and which is THE ONLY WAY FORWARD FOR AMERICA AND THE WORLD.

Due to the unchecked criminal, perverse behaviour of the highest-level operatives listed above and exposed by this service, the prospect of the weight of derivative junk crashing through the ceiling into the basement and demolishing several of the largest institutions in the world, is no longer academic. If this happens, there will be a global collapse into uncontrollable chaos.

If the incoming Obama Government deviates in ANY respect from the G-7-Approved on-the-books Private Sector Capital Markets US dollar refunding formula, THE U.S. DOLLAR WILL COLLAPSE and THE AMERICAN REPUBLIC WILL NOT SURVIVE. That is the stark reality: the bottom line.

• Be warned. Our predictions, from September 2006 onwards, have been ACCURATE.

• THIS REPORT HAS BEEN UPDATED TO 8TH JANUARY, 2.00PM UK TIME…

• Mr Barack Obama has been using words like ‘oversight’, ‘transparency, and ‘full accountability’, which are NOT words that sink happily into the ears of the giga-crooks whose time is up. On 8th January, he appointed a Chief Performance Officer, Nancy Killefer, formerly of the IRS Oversight Committee and a Treasury performance evaluation expert.

• MADOFF: $1.7 BILLION IN CASH AND LIQUID ASSETS FOUND BY IRVING J. PICARD: The Trustee appointed by the Securities Investor Protection Corporation (SIPC) has uncovered not only the cash sum of $830 million reported below, but also a further $850 million in liquid assets, according to The Times, London, of 8th January 2009. Judge Ronald Ellis has to decide whether Mr Madoff’s activities, including the distribution by himself and his wife of valuables, called heirlooms by the Defendant’s lawyer, Ira Sorkin, when reporting to the Court on 7th January, warrant the revocation of Madoff’s bail terms. Court documents we hold, seem pretty clear on this point.

• OUT OF THE FRYING PAN AND HOVERING IN MID-AIR BEFORE FALLING INTO THE FIRE?

• THE ELITE POWER CONTINUUM’S NEW-OLD CONTROLLING TEAM

• THE PLAN: TO PURPORT TO IMPLEMENT THE G-7-APPROVED REFINANCING SCHEME WHILE IN PRACTICE CONTINUING CORRUPT ‘BUSINESS AS USUAL’: WHEN THE EDITOR SAID THIS ON THE TRANSATLANTIC PHONE, FORT MEADE PULLED THE CONNECTION, MEANING: IT’S TRUE.

• FOR THESE PEOPLE, DEBT IS AN ASSET CONTAINING CASHFLOW THAT CAN BE STOLEN

• ROCKEFELLERS, FACING DISASTER, FORCING BUSH CROOKS TO COMPLY?

• WHY THERE IS NO WAY OUT FOR THE FRAUDULENT FINANCE CADRES

• THE DEBT-ORIENTED ‘NEW ECONOMIC TEAM’ IMPOSED ON OBAMA

• LEON PANETTA FOR DCI? ARE THESE DESPERADOS MENTALLY CHALLENGED? [NEW]

• THE INITIALLY DELICATE POSITION OF BARACK OBAMA

• INCOMING PRESIDENT IS IN A STRONGER POSITION THAN PEOPLE MAY THINK

• PROMINENT RECENT ‘NEUTRALISATIONS’: SEE ‘IN MEMORIAM BELOW

• ‘FEEDER’ PONZI FINANCIER MURDERED TO COVER UP ALPHA CONNECTION?

• PRESIDENTIAL PARDONS WON’T SOLVE THEIR PROBLEM

• THE SECONDARY ‘FEEDER’ FUNDS WERE SEPARATE PONZI FRAUDS

• PERTINENT QUESTIONS FOR THE BENEFIT OF ‘THE INTERESTED’

• LONDON ‘SAFETY LOCK BOX’ RAIDS REMOVED THE COLLATERAL

• MADOFF PONZI CAROUSEL THEN BECAME A PRIMARY SOURCE OF FUNDS

• FIVE-HOUR EMERGENCY MEETING BETWEEN MRS CLINTON AND GEITHNER

• NEW YORK FED AND S.E.C INVOLVED IN THE MASTER SCANDALS

• BIG BANKS REFUSING CLIENTS ACCESS TO THEIR OWN FUNDS (= THEFT)

• OUTLINE INFORMATION ABOUT CAROUSEL TRANSACTIONS

• ‘RETAIL’ INVESTORS’ FUNDS STOLEN TO FINANCE CAROUSEL PONZI FRAUDS

• OTHER HIDEOUS DIMENSIONS OF THE POISON OF THE OCTOPUS

• ‘MAINSTREAM’ AND COURTS CONCERNED, FOR NOW AT LEAST, ONLY WITH THE MONEY ‘IN’

• FACT: NONE OF THIS MONEY HAS VANISHED. IT HAS ALL BEEN STOLEN…

• STANDARD ‘BCCI PROCEDURE’: COLLAPSE THE ‘MONEY MACHINE’, RAKE OUT THE MONEY

• POSSIBLE ISRAELI TIT-FOR-TAT FOR THE BUSH-TRIGGERED MADOFF TAKEDOWN

• STOKING UP ANTI-SEMITISM: A CYNICAL ‘ADDED BONUS’ FOR THE REVOLUTION

• DOUBLE-MINDEDNESS AND THE DOUBLE-CROSS TRADITION

• ‘MADOFF TAKEDOWN’ RELEASED TRILLIONS TO BE STOLEN WITH EASE

• GLOBALIST STRATEGISTS DESTABILISED BY SUCCESSIVE EXPLOSIONS

• UNPRECEDENTED ADMISSION BY THE IMF MANAGING DIRECTOR THAT ELITE IS TO BLAME

• BANKS HOARDING MONEY IN CASE DTC GUARANTEES ARE CALLED

• CORRUPT ‘BUSINESS AS USUAL’ PLANS IN DISARRAY

• SUCCESSIVE WAVES OF DEFAULTS OUT TO 2012-2014

• THE STRENGTHENING OF BARACK OBAMA’S POSITION

• THE FATE OF DELUDED HOLD-OUTS AGAINST THE SETTLEMENTS

• SHOUTING MATCH OVER PAYOUTS TO U.S.-BASED RECIPIENTS

• UGLY SITUATIONS FACING KEY PLAYERS

• DECISION TO APPLY THE ‘BCCI/ICELAND/ENRON TREATMENT’ TO MADOFF

• BELATED OPERATION TO DISCREDIT PRESIDENT SARKOZY

• WHAT PRESIDENT BUSH JR. WAS REALLY UP TO IN BAGHDAD: TRYING TO STEAL MONEY

• NO DENIAL OF THE MORGAN STANLEY TERRORISM FINANCING CENTER

• AL-QAEDA WILL HAVE TO BE CLOSED DOWN: BY BARACK HUSSEIN OBAMA

• FOLLOWING OUR MULTIPLE EXPOSURES, DVD NOW SAID TO BE ‘BITTERLY DIVIDED’

• DVD’S BRUSSELS BLACKMAIL UNIT AIMED AT EUROPEAN COMMISSIONERS: DG1-X

• THE MADOFF HYDROGEN BOMB EXPLODES

• MADOFF RECRUITED BY, AND ‘WORKED FOR’, BUSH/CIA PONZI CRIME APPARAT

• ‘MADOFF TAKEDOWN’: A VAST SMOKESCREEN ‘PROTECTING’ THE GIGA-CROOKS

• MADOFF ‘CHANGES THE SUBJECT’, WHILE LAW ENFORCEMENT SITS ON ITS HANDS

• THE PRIMARY ORIGINAL DOCUMENTS FROM THE MADOFF COURT FILES

• MADOFF BANK ACCOUNTS WITH JP MORGAN CHASE AND BANK OF NEW YORK MELLON

• MORE BANK OF NEW YORK MELLON BANK ACCOUNTS COME TO LIGHT

• EXPERT ADVANCE WARNINGS ‘DISREGARDED BY THE S.E.C.’

• HEAVILY PROMOTED STAR WITNESS FAILS TO APPEAR: WAS HE THREATENED?

• PARALLEL INTERVENTION OF THE SECURITIES INVESTOR PROTECTION CORPORATION

• IF YOU THINK YOU’RE A VICTIM, THE FBI WOULD LIKE TO HEAR FROM YOU

• INTERIM LIST OF ‘MONEY IN’ LOSERS ARISING FROM THE COLLAPSING
OF THE MADOFF COMPONENT OF THE GLOBAL PONZI MONEY MACHINE

• FORMER PRESIDENT CLINTON FORCED TO REVEAL HIS ‘DONORS’

• PARTIAL LIST OF CLINTON FOUNDATION ‘DONORS’

• CONCLUSION: U.S. DOLLAR REFUNDING MUST PROCEED AS DEMANDED BY THE G-7

• THE ORIGINAL PONZI SCHEME EXPLAINED: AGAIN, IN CASE YOU MISSED IT EARLIER

• LIST OF U.S. STATUTES, SECURITIES REGULATIONS AND LEGAL PRINCIPLES WHICH THE CRIMINALISTS, ASSOCIATES AND ALL THE MAIN FINANCIAL INSTITUTIONS HAVE FLOUTED

• THE COPYRIGHT OF THIS ARTICLE IS OWNED BY WORLD REPORTS LIMITED: ALL RIGHTS ARE RESERVED. ELECTRONIC REPRODUCTION OF PART OR ALL OF THIS TEXT PROHIBITED.

• WE HAVE RECENTLY ISSUED AN INVOICE FOR $27.3 MILLION AGAINST AN INFRINGER OF OUR COPYRIGHT WORKS IN CALIFORNIA, WITH FULL DETAILS FURNISHED TO THE SECRETARY OF STATE OF CALIFORNIA, WHICH IS HYPERSENSITIVE ABOUT COPYRIGHT BREACHES.

• THE USUAL CROP OF FABRICATIONS ABOUT THE EDITOR OF THIS SERVICE HAS STARTED UP, WITH ONE GROSS LIBEL ASSERTING THAT THE EDITOR ‘WORKS FOR’ A CERTAIN POWER. SUCH LIES ARE ATTRIBUTABLE TO (1) IGNORANCE AND (2) MALICE. THIS OPERATION IS 100% INDEPENDENT, ALWAYS HAS BEEN, ALWAYS WILL BE, AND FUNCTIONS ARMS’-LENGTH FROM ALL OUTSIDE INTERESTS. SEE THE STATEMENT IN PLAIN ENGLISH AT THE FOOT OF REPORT.

• ANONYMOUS SOURCES OF ‘INFORMATION’ AND ‘DEBATE’: By definition, all anonymous US sources of so-called ‘information’ are spooks and other cowards who are too scared to reveal their identities, for fear not least of being held accountable for their convoluted fabrications. Therefore, anyone who attaches significance or relevance to ANYTHING that any of these anonymous, self-contradictory sources purport to be revealing, does so at his or her own peril. One can of course freely choose to be misled by the various US controlled disinformation, diversion and obfuscation sources, if one wishes to avert one’s gaze from the obvious: namely that the kleptocracy is running these Psy-Ops diversionary operations in order to provide themselves with cover for their odious crimes, and to keep the Ponzi victims hoping, like Rip van Winkel, that they haven’t been ripped off. And since the anonymous spooks and cowards hide behind anonymity, any denial of this apparent truth from them will, like all pronouncements aimed at misleading the ‘scammed’, lack credibility.

Obviously, some of these anonymous sources who cannot be held accountable for any of their lies and fabrications, may take objection to what we may publish. However that is their problem: since they do not reveal their identities, no communication with these operatives is ever possible or at any stage desirable, because in any ‘debate’, a level playing field is necessary: a ‘debate’ between a real person and anonymous spooks and cowards would not take place on a level playing field.

The cover of these anonymous spookies has been well and truly blown. When this happens, the knee-jerk response is to resort to defamation. However defamation of a real person by anonymous spooks lacks all credibility too, and simply reveals the pinpoint accuracy of the assessment.

In any case, as has been stated at the foot of most of our reports for years, we cannot enter into correspondence as a consequence of these reports. Many of those who may attempt to enter into correspondence with us are not subscribing to our published services and have no intention of doing so. This service was originally developed to be of assistance to our subscribers, and that is its main purpose. The Editor’s job is to manage and produce the publications listed on our catalog, accessible via this website. The production of these reports is a secondary exercise. Therefore, if you don’t subscribe, we are not available to be of further assistance. The Editor does, however, try to respond to kind and helpful emails expressing positive support, provided that all coordinates are clearly shown in the Contact Us fields so provided. Again, the Editor has been quite amazed at the kindness shown in response to our Christmas posting dated 26th December 2008.

That experience confirms the Editor’s personal experience that Americans are often the kindest and most generous people in the world. Their problem is that their Government is run by organised geomasonic crime. Amid great fury, a tectonic change is in progress which few yet understand.

For a comprehensive debunking and takedown of the geomasonic New World Order, please place an order for the Editor’s book The New Underworld Order, available from this combined website.

• NEW: CALENDAR OF OFFICIAL REGULATORY AND ENFORCEMENT FAILURES: SEE BELOW

• NEW: IN MEMORIAM: LIST OF RELATED/REPORTED SUDDEN DEATHS (‘SUICIDINGS’)

By Christopher Story FRSA, Editor and Publisher, International Currency Review and associated intelligence publications and information services. See this site for details and ordering facility.

• CORRESPONDENCE TO THE EDITOR: We routinely, automatically DELETE all emails which OMIT any element of the requested coordinates. We are not prepared to deal with anonymous spooks and other cowards who are too scared to provide their coordinates, for identification.

Just as material posted on the Internet by ANONYMOUS sources lacks credibility, so that therefore its content should prudently be dismissed as irrelevant, so are emails addressed for our attention from ANONYMOUS senders considered impertinent and unworthy of attention. Secondly, offensive emails ventilating some gripe or other, are normally deleted unread by our system. On a pleasing note, we received a VERY LARGE positive ‘e-mailbag’ following the 26th December 2008 Christmas report, which the Editor found very touching, kind, unexpected and generous*. Thank you! Contrary to expectations, opposition was extremely feeble, confined even to lecturing the Editor on which Bible he should be reading! When you stand up to them, THEY FALL BACK TO THE GROUND.

* Interestingly, all these generous emails (and phone calls) emanated from the United States and Canada. There was NOT ONE SINGLE SUCH RESPONSE from the United Kingdom. NOT ONE.

Advertisement:
NON-U.S. INTERNET SECURITY SOLUTION CD AVAILABLE: FAR BETTER THAN NORTON ETC
It has now been established that the National Security Agency (NSA) works with/controls Microsoft, Norton, McAfee, and others, in pursuit of the Pentagon’s vast BIG BROTHER objective, directed from the ‘highest’ levels (not the levels usually referred to) which seek to have every computer in the world talk direct to the Pentagon or to NSA’s master computers.

This should come as no real surprise since the cynical spooks even assert this ‘in-your-face’ by advertising ‘INTEL INSIDE’, which says exactly what it means. More specifically, NSA have made great strides in this direction by having a back door built into Microsoft VISTA. Certain computers, especially those labelled with the logo of the ‘fully collaborating’ firm Hewlett Packard, have hard-core setups which facilitate the remote monitoring and controlling of personal computers by NSA, Fort Meade. We now understand that if you are using VISTA* you MUST NOT enable ‘file and printer sharing’ under any circumstances. If you say ‘YES’, so to speak, to ‘file and printer sharing’, your computer becomes a slave at once to NSA’s master computers. DO NOT ENABLE SHARING.

Unfortunately, this abomination is so far advanced that this may not be the only precaution that needs to be taken. As long as Microsoft continues its extensive cooperation with NSA and the NSC (National Security Council), the spying system that assists the criminalised structures, and thus hitherto the Bush-Clinton ‘Box Gang’ and its connections, with their fraudulent finance operations, NSA may be able to steal data from your computer. The colossal scourge of data theft is associated with this state of affairs: data stolen usually include Credit Card data, which the kleptocracy regards as almost as good as real estate for hypothecation purposes. Even so, you can make life very much more problematical for these utterly odious people by NOT USING U.S.-sourced so-called Internet Security and anti-virus software. Having been attacked and abused so often, we offer a solution.

We use a proprietary FOREIGN Internet Security program that devours every PC Trojan, worm, scam, porn attack and virus that the National Security Agency (NSA) throws at us. We are offering this program (CD) to our clients and friends, at a premium. The program comes with our very strong recommendation, but at the same time, if you buy from us, you will be helping us finance ongoing exposures of the DVD’s World Revolution and the financial corruption that has been financing it.

The familiar US proprietary Internet Security programs are by-products of US counterintelligence, and are intended NOT to solve your Internet security problems, but to spy on you and to report what you write about, to centralised US electronic facilities set up for the purpose. You can now BREAK FREE from this syndrome while at the same time helping us to MAINTAIN THE VERY HEAVY PRESSURE UPON THE CRIMINALISTS WE HAVE BEEN EXPOSING, by ordering this highest quality FOREIGN (i.e., non-US) INTERNET SECURITY SOLUTION that we have started advertising on this website. This offer has been developed in response to attacks we have suffered from the NSA nerds who appear to have a collective mental age of about five years, judging by their output.

• To access details about the INTERNET SECURITY SOLUTION, just press THE LIVE LINK YOU HAVE JUST READ, or else press SERIALS in the red panel below. This opens up our mini-catalogue of printed intelligence publications. Scroll right down to the foot of that section, where you will see details of this service. When you buy this special product, you will also, as we clearly state above, be paying a special premium by way of a donation to help us finance these exposures.

The premium contains a donation for our exposure work and also covers our recommendation based on the Editor’s own experience that this INTERNET SECURITY SOLUTION will make your Internet life much easier. Some versions have a ‘Preview before downloading’ feature.

*VISTA: Virtual Instant Surveillance Tactical Application.

• INTERNATIONAL CURRENCY REVIEW, Volume 33, #s 3 & 4, all 972 pages of it, is making waves all over the world. It contains a blow-by-blow deconstruction of this crisis via the Wantagate plus our further analyses: and everything published therein is now well and truly ON THE GLOBAL PUBLIC RECORD. Accordingly the whole world owns a detailed, damning account of the serial criminality of the Bush-Cheney-Clinton ‘Box Gang’ et al., which CANNOT BE EXPUNGED.

• INTERNATIONAL CURRENCY REVIEW, Volume 34, Number 1, consisting of some 400 pages, WAS DISTRIBUTED BY FAST MAIL TO SUBSCRIBERS WORLDWIDE ON 29TH NOVEMBER 2008…

• It tracks the fallout from our exposures of the criminality from mid-April 2008 to 6th October 2008, when this issue of ICR had to go to press. The Glossary that is published with The Cottrell Plan has been separated out and placed at the end of the issue, for long-term ease-of-reference purposes.

• If you wish to obtain a copy and you are not a regular subscriber, please order International Currency Review via our electronic payment system by pressing SUBSCRIBE. This will give a full-price order sequence. Then press CONTACT US and state that you wish to order ICR 34, #1. The single-issue price has to be at a premium to the regular price, charged at $200.00 per copy. Note:
Please ensure that you send a CONTACT US email to the Publisher at the same time as you press SUBSCRIBE, so that we KNOW to send you ONLY ICR 34, #1 and to charge you ONLY $200.

• The CONTACT US facility is found in the red box throughout this combined website.

• BOOKS: Edward Harle Limited has so far published FIVE intelligence titles: The Perestroika Deception, by Anatoliy Golitsyn; Red Cocaine, by Dr Joseph D. Douglass, Jr.; The European Union Collective, by Christopher Story; The New Underworld Order, by Christopher Story; and The Red Terror in Russia, by Sergei Melgounov. All titles are permanently in stock. We sell books DIRECT.

• Please Make a Donation to help finance Christopher Story‘s ongoing global financial corruption investigations, which have turned the whole world upside down and have exposed the corruption which was intended to enable the geocriminalist syndicate to seize the wealth of the entire world. These people have finally been more or less completely stopped in their tracks as a consequence of these exposures. Your assistance will be sincerely appreciated and will make a real difference, hastening the OVERDUE resolution of the worst financial corruption and linked financial fallout in world history. The Editor’s $35,000 Wanta bail-out money was not repaid and so has been stolen. It will be collected in due course and the thief will be appropriately dealt with, having so far taken no steps at all to repay the Editor’s loan funds, which should have been remitted on 11th June 2007.

• See the second white panel for details of our latest distributed intelligence publications.

• MICHAEL C. COTTRELL’S PROPOSALS FOR THE REFORM OF THE U.S FINANCIAL SYSTEM, AND HIS DEBUNKING OF THE IMPRACTICABLE AND EXPENSIVE ‘PAULSON’ PROPOSALS, PLUS OUR EXTENSIVE GLOSSARY, POSTED ON 22ND JULY AND REPOSTED ON 12TH SEPTEMBER, WERE AGAIN ‘SNIPPED’ BY THE NSA’S MENTAL DEFECTIVES. THE REPORT WAS REPOSTED ON 18TH SEPTEMBER 2008. THE REPORT HAS BEEN EXTREMELY WELL RECEIVED WORLDWIDE.

• PRINT EDITIONS OF THE COTTRELL PLAN: Economic Intelligence Review, Volume 11, #s 9 & 10, published in July-August, was devoted almost entirely to The Cottrell Plan and to the extensive Glossary of financial market and related definitions, which explains where so many people have gone wrong. International Currency Review, Volume 34, #1, also contains The Cottrell Plan and the Glossary, placed at the end of this 400-page issue for long-term easy reference.

• Subscriptions by serious observers and analysts to our services may be placed via this website.

• NEW REPORT STARTS HERE:

OUT OF THE FRYING PAN AND HOVERING IN MID-AIR BEFORE FALLING INTO THE FIRE?
In reports posted since the US general Election, we have noted that while, given the imminent end at long last of the evil George Bush II Administration, it can be said that we have jumped out of the frying pan, it has hitherto been too early to conclude that we have yet fallen headlong into the fire. Our stance therefore has so far postulated that we were hanging in-mid-air, pending the arrival of further data, which would make the answer to this riddle more apparent.

Closer now to the installation of the new American régime, we have the following evidence, already publicised here, to suggest that President-elect Obama has not been a pushover for the Forces of Darkness that have apparently hijacked his incoming Administration.

We’ll repeat this evidence first:

• When Mr Obama visited the White House for the first time following the election with his wife, the Bush team tried to bribe him. He rejected this typically brazen, arrogant and crude Bushite attempt to compromise him, according to our special sources. The fact that Obama told the President where to get off is a known PLUS for the incoming President of the United States.

• We also know that when he was briefed by the FBI in Chicago immediately following the election, Mr Obama ‘blew up’ when it was made apparent to him that, under a long-planned CIA contingency arrangement in case he won the election (i.e., if the CIA Forces of Clintonesque Darkness could not rig the outcome to their satisfaction), the framework for his Administration had been decided for him by the mainly Jewish operatives who stand to lose most if corrupt ‘business as usual’ were to be thwarted with the installation of the new régime. Previously we reported that Mr Obama’s first briefing was from the CIA, but since the FBI is subordinate to the organised criminal ‘State within the State’ known as the CIA, that is a nuance that makes little difference. In subsequent days, he also received detailed briefings direct from the CIA.

• It is further known that President-elect Obama lost no opportunity to make it very clear that the Settlements process must be completed (the country recipients WERE paid, effective Friday 19th December 2008, in cash, the Treasury having guaranteed the payments from 18th December). Our information is that he has demanded settlement on several occasions. It is clear that resistance to his demands by the organised criminalists has been only partially successful to date.

• As further reported by this service, when impediments to settlement orchestrated by Gordon Brown became known, President-elect Barack Obama sent an emissary to speak directly with the corrupted British Prime Minister, who is an intelligence officer like his corrupt predecessor, to demand that he cease and desist, on pain of being arrested.

In June 2008, we reported that Gordon Brown’s treachery and dishonesty was exposed when he secretly flew to Belfast, having already said goodbye to President Bush II and his wife in front of the TV cameras on the steps of Number 10 Downing Street. In Belfast, he rejoined President Bush Jr. and his wife, and engaged in certain banking transactions in collaboration with Bush II himself. This was exposed after we posted the following paragraph in our report dated 18th June 2008, which was followed up and found to be accurate:

WHY DID BROWN FLY TO NORTHERN IRELAND HAVING EARLIER
SAID GOODBYE TO THE BUSHES ON THE STEPS OF DOWNING STREET?
We will now pose the following question. WHY was it ‘necessary’ for Brown, who had seen George Bush in the morning of Monday 16th June, to rush up to Northern Ireland so as to be in a position to be standing on the tarmac at Belfast airport, to ‘greet’ the President and Laura when they arrived in Northern Ireland? After all, he had just said goodbye to President Bush. Perish the thought that the purpose of his presence there might have been to open bank accounts. Perish the thought.

• President-elect Obama is known to have been ‘working with’ President Nicolas Sarkozy, who obtained the ‘mandate to pay’ from President George W. Bush at Camp David in October 2008 as previously reported by this service, to procure the Settlements without further ado.

• The ‘Daley people’ and other ‘forces’ out of Chicago want to be paid, too, you understand (do you?) and have, as predicted ages ago, taken the law into their own hands, which is why gunshots are heard in trading rooms, bankers and intermediaries are found sitting at their desks after having suffered heart attacks or with their wrists slashed, and numerous other unspecific ‘neutralisations’ are and have been taking place with increasing ‘Black’ intensity as the hijacking of the whole world by the most ruthless gang of intelligence criminals mysteriously still walking today stretches way beyond the globally critical stage.

THE ELITE POWER CONTINUUM’S NEW-OLD CONTROLLING TEAM
Within this overall context, however, it is a reality that the illicit trading team which is to operate seamlessly from the Obama White House – a team that the ‘Black’ operations intelligence criminals working for and with several domestic and foreign intelligence-linked counterparties put together ahead of Obama’s election victory and foisted on him the moment the election outcome had been confirmed – consists of finance operatives linked to past gross financial abominations, under the preceding two US Administrations.

• This ‘retread’ team intends to continue the illicit trading activity under President Obama’s nose from the White House throughout the new President’s term or terms office, but is facing severe impediments behind the scenes which cannot be reported on at this time.

The primary members of this latest manifestation of the Elite Power Continuum are Rahm Emanuel (a Kissinger operative, member of the Israel Defense Force, i.e. one would suspect him to be an Israeli Military Intelligence Officer), Hillary Rodomski Clinton, Joseph Biden, Tom Daschle (Citibank stooge, mentored by Robert Rubin), Bill Richardson* (ex-Kissinger Associates), Eric Holder (he who arranged the pardoning of Marc Rich, a.k.a. the very long-range DVD operative Hans Brand), General James L Jones (yet another Kissinger associate), Lawrence Summers (mentored by Robert Rubin, guardian of Clinton’s (frozen) accounts), Timothy Geithner (ex-Kissinger Associates), Paul Volcker (Rockefeller family representative yet Chairman of a Rothschild Wolfensohn firm), David Axelrod (a political consultant whose past clients include Senators H. Clinton, John Edwards and Christopher Dodd, Stalin’s grandson), and Susan Rice, ex-Clinton’s National Security Council.

* On 4th January 2009, Bill Richardson, Governor of New Mexico, withdrew his name from the list of candidates for confirmation, citing ‘a pending investigation into a company that has done business with his State’ (code for an imminently breaking corruption scandal). We speculate that Hillary was behind this rapid ‘exit’. What does Mr Richardson know, for instance, about Rocky Flats and the espionage of the Chinese operative Wen Ho Li at Los Alamos, we wonder? Just asking…

The notorious names among these operatives should be arrested forthwith and extradited to the United Kingdom to face charges of financing international terrorism, of economic terrorism, and of stealing from The Queen, and enriching themselves as a consequence inter alia of profiting from the theft of her gold on 29th-30th March 2007, which was exclusively reported, in the first instance, by this service. Protests from various quarters that ‘there is no-one willing to arrest these people’, ignore the fact that by publicising such information, the pressure on these soulless operatives is ratcheted up all the time. After all, the daily lives of all the familiar highest-level criminalists have been rendered intolerable and miserable as a consequence of what has had to be posted to date – entirely as a consequence of the perverse decisions that these people have made so as to be able to continue their terrorism financing operations. That has been their choice: they made their own filthy bed, and they must lie in it.

• Almost everyone in this cauldron has been compromised to some degree or another.

• THE PLAN: TO PURPORT TO IMPLEMENT THE G-7-APPROVED REFINANCING SCHEME WHILE IN PRACTICE CONTINUING CORRUPT ‘BUSINESS AS USUAL’: WHEN THE EDITOR SAID THIS ON THE TRANSATLANTIC PHONE, FORT MEADE PULLED THE CONNECTION, MEANING: IT’S TRUE.

Notwithstanding everything that has happened since Treasury Secretary Paul O’Neill was fired by President Bush Jr., after O’Neill had asked him to release the diverted funds, and since we started to publicise the hijacking of the $4.5 trillion, and our subsequent detailed website exposures of the historically unprecedented corruption, the Intelligence Power has put in place an Economic Team, listed below, FOR THE SPECIFIC OBJECTIVE OF CONTINUING WITH THE FRAUDULENT OFF-BALANCE SHEET FINANCING OPERATIONS SEAMLESSLY THROUGHOUT THE OBAMA YEARS, from within the White House as though there has been no discontinuity and no opposition to this corruption had ever surfaced, and the Rest of the World knew nothing about it.

FOR THESE PEOPLE, DEBT IS AN ASSET CONTAINING CASHFLOW THAT CAN BE STOLEN
Beyond the standard criminal finance purpose, the mentality behind this intention (which is being thwarted) assumes that salvation is to be found through the issuance of yet more debt. For these people, who have overstayed their welcome, debt is ‘an asset’ in a sense not usually understood: for the practical factor here is that DEBT PRESUPPOSES A CASHFLOW WHICH CAN BE STOLEN.

Cashflow exists within debt ‘assets’: so these criminal finance operatives are predisposed towards the United States accumulating ever more debt, out to infinity – choosing to overlook the reality that another year or less of this behaviour will destroy the US dollar completely.

• For the dollar to be destroyed, all that is necessary is for one or two big financial powers to refuse to pay or charge for their oil in dollars: and such a development is IMMINENT. The parallel collapse of one or more huge US institutions would destroy the entire world financial economy.

The US dollar external Ponzi operation that ‘worked’ for a century, notoriously depended upon the willingness of foreigners to hold dollars. It is crystal clear to this financial sector observer who has nearly four decades’ experience that if the new US Obama Treasury does not proceed with the G-7-Approved Refinancing Programme exactly as conceived, WITHOUT AMENDMENT – namely, that it is to be a PRIVATE SECTOR CAPITAL MARKETS OPERATION, not a Government operation that is susceptible to ‘insider’ corruption run surreptitiously out of the White House and the Treasury, key financial powers will DROP THE U.S. DOLLAR. The argument that ‘there is no alternative’ cannot be relied upon in the situation that will be unfolding in the first quarter of this year.

As the Rest of the World will KNOW at some stage soon (during the first quarter of 2009) whether the new Treasury is to implement the G-7-Approved Refinancing Plan WITHOUT AMENDMENT, any FAILURE OR FURTHER FOOT-DRAGGING on the part of the new Obama Treasury to adhere to the Private Sector Capital Markets Refinancing and US Dollar Refunding Programme as was specifically approved by the Group of Seven (G-7) powers and re-approved at the G-7 Conference in northern Germany in June 2007 when The Queen called for its implementation ‘for the sake of the whole of humanity’, could lead to the unhesitating abandonment of the US dollar as the currency in which payment is demanded and made for exported oil, irrespective of all other considerations.

BECAUSE:

• Foreigners will take fright at the prospect of another eight years of a pariah US Government intent upon ADDING TO the overhang of obligations that is threatening to fall through the roof, through all the building’s floors and into the basement, with catastrophic consequences.

The new Obama Economic Team, whether foisted upon the incoming President or not, is DEBT-oriented: which is a recipe for catastrophic and terminal failure. The G-7-Approved Private Sector Refinancing Programme, which GENERATES ON-THE-BOOKS ACCRUALS THAT ARE TAXED AT 35% yielding massive ongoing real money accruals to the US Treasury, CREATES NEW REVENUE AND THEREFORE POSITIVE, TRANSPARENT AND TANGIBLE CASHFLOW that is available both for paying down debt and for urgent infrastructure rebuilding and massive domestic projects: funds that, because of on-the-books transparency, cannot be diverted, stolen, exploited or ransacked by ruthless, wayward finance operatives holding high office within the US official structures.

• It is the ONLY way forward, and everyone, from Barack Obama downwards, and at the highest levels of the leading financial powers, knows it.

ROCKEFELLERS, FACING DISASTER, FORCING BUSH CROOKS TO COMPLY?
As will be seen when we come to the deliberate imploding (by the Bush apparat) of the Madoff Ponzi Scheme Carousel, the two institutions employed by Madoff and his broker-dealership are JPMorgan Chase and The Bank of New York Mellon – the two US exotic financial enterprises which have accumulated colossal inverted overhanging pyramids of derivatives junk liabilities: indeed, JPMorgan Chase, which harbours the Terrorism Financing Center that we have exposed on this website, is where this immense assembly of fraudulent finance Ponzi Scheme scams began.

• IS’NT THAT INTERESTING?

Now, we are advised by ‘deep’ sources that the Rockefellers have ‘got the upper hand’ against the Bush Crime Family apparat. But this is ‘back to front’ in the following respect:

The practical reality is that the Rockefeller interests are in extreme danger of being crushed and reduced to pulp should the accumulated weight of the derivatives liabilities that is sitting on the roof crash through successive floors into the basement: and this will happen, as the Rockefellers know very well, if the G-7-Approved Refinancing Programme creating real, on-the-books taxable revenues that cannot be hijacked, diverted or stolen by criminal operatives inside the American structures, is sidestepped, as the New Economic Team was (INCREDIBLY) set up to procure.

Hence, the Rockefeller interests (believed to be backed here by the Rothschilds as well) have been left with no option but to insist that the G-7-Approved Refinancing Programme is finally kick-started in the private sector, and NOT via the White House and the Treasury, as the debt-oriented high-level fraudulent finance engineers had intended.

WHY THERE IS NO WAY OUT FOR THE FRAUDULENT FINANCE CADRES
More broadly, the US fraudulent finance sector is now facing the reality of collapse because by spreading the risk so widely, they have in fact generated an environment of open warfare both within the affected financial institutions, between the participants, between financial institutions, between investors and implicated US legal firms, in fact prospectively between every benighted participant in this US-instigated global panorama of financial fraud.

• Why did they spread the risk so broadly?

• Answer: Because it was assumed that if anyone tried to STOP the carousel (as has occurred), the outcome would be a financial nuclear explosion.

On this false premise, they therefore assumed, like professional Ponzi artists and losing gamblers in a casino, that their fraudulent finance carousel could continue sine die and that their formula for manufacturing false wealth out of nothing could never be challenged or brought down.

How wrong these ‘Useful Idiots’ were. HOW STUPID AND ARROGANT, TOO.

Because what they now face is financial annihilation and obliteration whichever way the crisis goes:

• ANNIHILATION when, against the background of the G-7-Approved Private Sector Capital Markets Refinancing Programme, derivatives outstanding are priced, say, at 1 cent on the dollar:

or:

• OBLITERATION if the entire inverted pyramid of derivatives liabilities collapses, destroying the likes of JPMorgan Chase and The Bank of New York Mellon in the process – and of course the Rockefellers AND THE BUSH-CLINTON FINANCIAL CRIME apparatus with them.

In other words, THERE IS NO WAY OUT FOR THE FINANCIAL CRIMINAL CADRES. They are caught and cannot get out with the money they thought they had made.

• But there IS a way out for the Rest of Us – via the G-7-Approved Refinancing Programme.

THE DEBT-ORIENTED ‘NEW ECONOMIC TEAM’ IMPOSED ON OBAMA
Meanwhile the emergence of the new ‘retread’ Economic Team, for the purpose of continuing debt financing and fraudulent finance as usual, explains why the outgoing US Treasury Secretary, that devil Mr Paulson, was walking around with a self-satisfied smirk on his face. He knew that when he leaves office, it will be illicit, corrupt ‘business as usual’ – run out of the White House, with him, of course, as a corrupt participant. OR SO HE IMAGINED.

The team members, specifically assembled to continue the illicit financial trading operations out of the White House, Treasury and State Department under Mr Obama’s nose, are as follows (1):

• Timothy Geithner, US Treasury Secretary: President and CEO of the Federal Reserve Bank of New York, former Director of Policy Development for the International Monetary Fund, Member of the Group of Thirty (G-30), formerly employed at Kissinger Associates, mentored by Lawrence Summers and by Robert Rubin, and a Bilderberg, Council on Foreign Relations and Trilateral Commission member/participant. [Trilateral Commission is another long-range German front].

• Paul Volcker, to be head of a new Economic Recovery Advisory Board: Former Chairman of the Federal Reserve Board under Presidents Carter and Reagan, the former President of the Federal Reserve Bank of New York, Chairman of a Rothschild Wolfensohn Company, Member of the Group of Thirty (G-30), longtime Rockefeller Family associate, and a Bilderberg and Council on Foreign Relations member, and North American Chairman of the Trilateral Commission. Volcker, as was previously reported, is also a Trustee, which may be assumed to be liable to influence his thinking.

• Rahm Emanuel, White House Chief of Staff: This man is a member of the Israel Defence Force (IDF), i.e. of a foreign military establishment, from which we deduce that he is the Israeli equivalent of a Soviet Military Intelligence (GRU) officer. Why don’t they just install the head of the ongoing Soviet GRU as White House Chief of Staff, and be done with it? A hardline Zionist and a Kissinger protégé, former Congressman and a member of the Board of Directors of Freddie Mac, he also spent two years as an investment banker for Wasserstein Perella [see this report]. He was a key member of Clinton’s finance campaign committee and was implicated in the cover-up of the murder of Vincent Foster. His father was a member of the Israeli Irgun terrorist group, which blew up the King David Hotel inflicting a large number of British military deaths in the process.

• Lawrence Summers, to head the National Economic Council: Summers was US Treasury Secretary during the Clinton Administration, former World Bank Chief Economist, former President of Harvard University (where rising operatives are sent for indoctrination), Board Member of the Brookings Institute, protégé of David Rockefeller, mentored by Robert Rubin, and also a Bilderberg, Council on Foreign Relations and Trilateral Commission member/participant..

• David Axelrod, Senior Adviser: A political consultant whose past clients include Senators Hillary Clinton, John Edwards and Representative Christopher Dodd (Stalin’s grandson).

• Hillary Clinton, Secretary of State: Originally a clandestine CIA asset who was used to infiltrate the Yale University anti-war movement, Watergate hearings participant, CIA operative, senior partner in the Little Rock, Arkansas Rose Law Firm, key figure in the Mena drug trafficking scandal, alleged architect of the Waco disaster, implicated in many deaths including the cover-up of the murder of Vincent Foster: world-class criminal operative and a Bilderberg, Council on Foreign Relations and Trilateral Commission member/participant. Likely to order liquidation of the Editor of this service.

• Joseph Biden, Vice President: Senator since 1972, Member of the Senate Judiciary Committee, Chairman of the US Senate Committee on Foreign Relations, staunch Zionist sympathiser who told Rabbi Mark S. Golub of Shalom TV: ‘I am a Zionist. You don’t have to be a Jew to be a Zionist’, and a Bilderberg, Council on Foreign Relations and Trilateral Commission member/participant.

• Bill Richardson: Former US Congressman, Chairman of the Democratic National Convention in 2004, former employee of Kissinger Associates, US Ambassador to the United Nations, Governor of New Mexico, Energy Secretary, key operative involved in the Monica Lewinsky Israeli intelligence honey-trap spying cover-up with Bilderberg luminary Vernon Jordan, and a Bilderberg and Council on Foreign Relations member/participant. THIS CANDIDATE HAS WITHDRAWN: SEE ABOVE.

• Robert Gates, Defense Secretary: The former Director of Central Intelligence (CIA), and Defense Secretary under President George W. Bush, knee-deep in the Iran-Contra scandal and its financial ramifications, named in a 1999 class action lawsuit pertaining to the criminal Mena drug trafficking operation, Co-Chairman of a Council on Foreign Relations Task Force with Zbigniew Brzezinski, and a Bilderberg and Council on Foreign Relations participant.

• Tom Daschle, Health Secretary: Former Senate Majority leader, Clinton lackey, mentored by Robert Rubin and a Bilderberg and Council on Foreign Relations member/participant.

• Eric Holder, Attorney General: heavily involved in procuring the Presidential Pardon for Marc Rich (the long-range Deutsche Verteidigungs Dienst (DVD) operative Hans Brand), Deputy Attorney General under Janet Reno, and facilitated the pardoning of 16 Puerto Rican FALN terrorists.

• Janet Napolitano, Director of the Department of Homeland Security: Governor of Arizona, US Attorney during the Clinton Administration, instrumental in the Oklahoma City Bombing cover-up (which inter alia covered up the destruction of the German Nazi files kept in the Murrah Building) after she had declared ‘We’ll pursue every bit of evidence and every lead’, soft on immigration, described as ‘another Janet Reno’, and a Council on Foreign Relations Member.

• General James L. Jones, National Security Advisor: Former NATO Supreme Allied Commander, Special Envoy for Middle East Security, on the Board of Directors of Chevron and Boeing, NATO Commander, Member of Brent Scowcroft’s Institute for International Affairs along with Zbigbiew Brzezinski, Bobby Ray Inman, Dr Henry Kissinger, and the former DCI (CIA), John Deutch.

• Susan Rice, US Ambassador to the United Nations: Rhodes Scholar, campaign foreign policy advisor to John Kerry and Michael Dukakis when Presidential candidates, member of President Clinton’s National security Council, Assistant Secretary of State for Africa, alumnus of the Brookings Institution (funded by the Rockefellers and the Ford Foundation), member of the Aspen Strategy Group teeming with insiders such as the odious drug operative Richard Armitage, Brent Scowcroft and Madeleine Albright, and a member of the Council on Foreign Relations.

On a much more satisfactory tack, Mr Obama has selected:

• Mary Schapiro, to be Head of the severely discredited US Securities and Exchange Commission (SEC): Ms Schapiro has been Chief Executive of the Financial Industry Regulatory Authority (FINRA) and was Head of the Commodity Futures Trading Commission (CFTC) during the Clinton era, where she ran a very tight ship. This is an inspired choice, as this lady’s reputation stands high; and as The Times, London, stated correctly on 19th December, she has a ‘deep understanding of both financial futures and the commodities markets’.

Given the imperative for the Wall Street Rule Book to be rewritten, as Michael C. Cottrell, M.S. has argued, this appointment is significant, indicating that Mr Obama is ‘not to be messed with’.

• Peter Orszag, to be Director of the Office of Management and Budget (OMB): Ordinarily, this appointee’s brief is to continue the falsification of the US Federal Budget numbers out to infinity. However Mr Orszag has been Director of the Congressional Budget Office, which enjoys a sound reputation, whereas the OMB has for decades been engaged in creative accounting, smoke and mirrors obfuscation, and the falsification of the US Federal Budget and background debt data. On the face of it, therefore, the appointment of Mr Orszag is an inspired ‘pick’ which, we understand, was entirely Mr Obama’s own: and a clever move this is, too: because if, finally, an honest Director is installed at the OMB, it suddenly becomes much harder for the numbers to be fiddled.

Very significantly, when presenting Mr Orszag to the press and the public on 25th November, Mr Obama predicted a ‘page-by-page, line-by-line budget review to root out unnecessary spending’. And, with his Electoral College landslide victory amply confirmed, Mr Obama proclaimed that he possesses ‘a mandate to move the country in a NEW DIRECTION, and NOT TO CONTINUE the same old practices that have gotten us into the fix we’re in…. As soon as the recovery is well under way, we need to set up a long-term plan to reduce the structural deficit and to make sure that we are not leaving a mountain of debt for the next generation’.

• This sounds pretty much like an Obama endorsement of the G-7-Approved Private Sector Capital Markets Refinancing Programme, which is, and HAS ALWAYS BEEN, the ONLY solution on the table, because only the private sector creates revenue: the Government ONLY CREATES DEBT.

• Separately John Podesta, head of the Obama Transition Team, and former White House Chief of Staff, was implicated in the Vincent Foster murder along with Emanuel and Mrs Hillary Clinton. At the time of this analysis, there was no indication that Podesta would see ‘life after Inauguration’.

• Leon Panetta, former Chief of Staff to criminalist President Clinton, was reported on 5th January to have been selected as Director of Central Intelligence (CIA). THIS IS VERY BAD NEWS. Panetta was involved in all the relevant ‘bad stuff’ under Clinton, and his ‘selection’ (imposition?) suggests a rearguard action by the recalcitrant criminalists to CONTINUE ‘running the money’ through the CIA if, as expected, the intention to continue doing so seamlessly through the White House, the State Department and the Treasury, is closed off (due to factors we can’t go into). If this suspicion is in any way close to the mark, it needs to be understood that THIS WON’T FLY EITHER. The situation is precisely as stated in the opening paragraphs of this report, above the bullet points.

Panetta is very familiar with the secret Halliburton scamming operations buried inside the CIA and the Pentagon which we helped to expose in the summer. He is very fully aware of the faulty Saudi Arabian artillery weapon which killed US troops undergoing training, and he knows all about those toasters costing less than $20 at hardware stores which Halliburton sold for nearly $1,900 a piece. He is Cheney’s evil twin. A HILLARY CLINTON PICK AND IT STINKS.

The US criminalists THINK THEY CAN CONTINUE WITH THEIR FRAUDULENT FINANCE. But time and global patience has run out. Should they remain under this mischievous illusion for long after the Inauguration, they will be BURIED, along with Morgan Stanley, The Bank of New York Mellon, Deutsche Bank and the other corrupt institutons. Such an outcome may be imminent.

• These fools MUST BE STOPPED. THEY ARE OPERATING ACCORDING TO OLD, REDUNDANT CRITERIA. Their model is a train wreck. They cannot continue this fraudulent finance. They think they CAN continue this fraudulent finance off-balance sheet. It is the job of Gold Badges et al to make them understand that the model has not only passed its sell-by date: it’s a grenade that will ignite a financial and economic holocaust with no parallel, affecting the whole of humanity. Clinton is a deeply evil influence inside the Obama camp and is evidently calling the shots. However, this madness CANNOT OVERCOME THE ELEPHANT IDENTIFIED AT THE TOP OF THIS REPORT, and neither can it overcome key factors that cannot be discussed right now. These developments all reflect warfare behind the scenes and cannot be taken as ‘set in concrete’ quite yet.

• There are more shoes to fall (i.e. airborne shoes to be thrown).

• WE UNDERSTAND, HOWEVER, THAT, ALL OF A SUDDEN, THE PENNY HAS DROPPED… Namely, that a calamity will follow any imminent failure to complete the Settlements and the Refunding of the US Dollar by means of the G-7-Approved Refinancing Programme using transparent Capital Markets Operations on-the-books, yielding REVENUE, rather than continuing with such transactions off the books, yielding DEBT which is what Government participation in the Refinancing Programme can only generate. The prospect of a catastrophic series of events is of extreme global concern….

THE INITIALLY DELICATE POSITION OF BARACK OBAMA
Because this pre-assembled, debt-focused incoming Obama Economic Team was put in place and apparently foisted on President-Elect Obama (whether with his consent or not is unknown), anger among the CIA-backed Internet Blogocracy was switched after the US Election away from outgoing President George W. Bush to Mr Barack Obama, who was even being referred to in late December as ‘more evil than Bush’ – an amazing transformation, given the fact that Obama had not yet shown his mettle except as analysed above (none of the febrile ‘rumours’ about what he is supposed to have agreed to, had any substance as they were typically proffered by unaccountable ANONYMOUS sources and even if that were not the case, could never be verified): nor can ANY President-Elect promulgate Executive Orders, as has been suggested elsewhere, in a quite astonishing display of ignorance! But then, the sources for this nonsense are ANONYMOUS and thus unaccountable.

The likelihood is that Obama was suddenly the focus of vituperative CIA-fanned attacks precisely because, as indicated here, the Elite Power Continuum served by the Intelligence Power, which controls the US Government, intended to pretend that there has been no discontinuity – and to continue centrally-directed, surreptitious corrupt financial operations out of the new White House under Mr Obama’s nose, as though nothing had happened. Given CIA compartmentalisation, the Blogocracy cannot be expected to be aware that this scheme has already been torpedoed.

It also stands to reason that attempts may be made to blackmail the incoming President.

• However we have two points to stress in this connection:

(1) EVERY SINGLE MEMBER of this crew on the stage and off the stage, even operatives below the radar, is being prospectively blackmailed at all times. There is a ‘Black’ file on 100% of those who are chosen to walk onto the stage. So the fact that Mr Obama is almost certainly being blackmailed by the evil Intelligence Power is essentially a NEUTRAL issue. He has displayed evidence that he can be very tough, and his wife, who should know, has specifically stated that he is and will be ‘a hard task-master’. Therefore, in our opinion this man shows the character and ability to rise above this unavoidable hazard. The way to deal with the threat of any blackmail (which can of course be predicated on lies), even when baseless, is to recall that the blackmailer is invariably in a weaker position than the blackmailee, not least because if he uses his ‘weapon’, he then exhausts all his ammunition and thereafter becomes powerless. Therefore, the best course for Mr Obama, should he have concluded that he may unjustly be a blackmail target, would appear to be to steel himself to ignore any such pressure, and to bear in mind the following foreign example: which is not to be construed as having any implications whatsoever, but solely to make the point that the blackmailer is WEAKER than his target (especially, as in Mr Obama’s case, when the prospective blackmail may be based upon the odious transgressions of lies and false witness):

(2) Vladimir Vladimirovich Putin has been called a ‘vampire’ by his wife, no less. This probably refers to Vladimir Putin’s involvement in certain satanic activities, which would be fully consistent with his background as a Soviet Military Intelligence (GRU) operative, as well as his KGB background. (GRU officers are also KGB officers: KGB officers are not necessarily GRU officers).

Mr Putin was further deliberately photographed within the past year kissing the bared tummy of a small child. What was that all about? Here is the answer: Putin, like José Manuel Barroso, President of the European Commission, and certain others we could name, is a paedophile, a fact which has clearly been held in reserve by those forces inside the structures who believe they can or could blackmail him. By staging this ‘kissing operation’, Mr Putin ‘blew’ their chances. While the revolting image revealed the truth about Putin’s depravity, it also simultaneously destroyed the blackmailing power threat held over his head. Putin shrewdly calculated that by staging the kissing session, he could neutralise the blackmailers and would ‘get away with it’: which he has.

INCOMING PRESIDENT IS IN A STRONGER POSITION THAN PEOPLE MAY THINK
In summary, if President-elect is liable have false witness deployed against him by these odious operatives, that is not necessarily the end of the world for the incoming President. And the other side of the coin can be summarised as follows:

• Given that all the other characters on the stage will be serving at the President’s pleasure, he will be in a position to dispense with their services should they step out of line. In this connection, Mrs Hillary Clinton has already stepped out of line, according to The Guardian of 24th December 2008, which reported that:

‘The former first lady has wasted no time as she begins building up her team in preparation for taking over as America’s most senior diplomat from Condoleeza Rice’ in January 2009. ‘Sources in Washington suggested Mrs Clinton had embarked on an “empire-building” exercise as she seeks an expanded rôle within Mr Obama’s Administration’.

‘She wants a bigger budget and an expanded role for the State Department, not just in foreign affairs, but in dealing with global economic issues in the current financial crisis’ –

… code for she wants to continue ‘running the money’ as hitherto.

The Guardian further reported that ‘Mrs Clinton has told Mr Obama she wants to appoint high-profile special envoys. Her husband Bill has been suggested as a possible envoy to deal with Pakistan and India –

… code for positioning, reaffirming, revitalising and procuring the implementation (in part, by her CIA husband) of conduits for ongoing illicit financial transactions, and probably also for activation of that $2.0 trillion which at one stage ‘vanished’ into the bowels of the UBS office in India.

Other operatives (all of Jewish extraction, like herself) reportedly being considered by Mrs Clinton as she attempts to build up her State empire prematurely before she had even vacated her Senate seat or been confirmed (which she cannot be until she had vacated her Senate seat), include the well known globalist operative Richard Holbrook, Martin Indyk (a former US Ambassador to Israel), Jacob Lew (Clinton era head of the President’s Office of Management and Budget, and thus deeply involved in the falsification of budgetological numbers), and Mr James Steinberg, a former Deputy National Security Adviser to President Clinton.

Clearly, Mrs Clinton’s strategy is to inflate herself to the max ahead of Mr Obama’s Inauguration so that, as she imagines, he will find her impossible to oppose, or difficult to move: her calculations may also include the knowledge that President Obama would not be able to move her in the early years, not for 18 months, at least: during which time the extension of the illicit, fraudulent trading arrangements would have become embedded within the White House, so that the new President would be ‘unable’ to intervene.

PROMINENT RECENT ‘NEUTRALISATIONS’: IN MEMORIAM: LIST OF RELATED AND REPORTED
SUDDEN DEATHS (‘SUICIDINGS’) GROWING RAPIDLY: 5TH JANUARY 2009 WAS A ‘BAD DAY’
Before going any further, it is unfortunately necessary to review the various appalling publicised, mainly financial sector, ‘neutralisations’ that have taken place recently, as the struggle to procure the Settlements has intensified, in order to carry our investigation forward:

• Paulo Sergio Silva, aged 36, a trader for the brokerage arm of the Brazilian banking congolmerate Itau, was reported to have ‘shot himself in the chest’ during an afternoon trading session of the Sao Paulo commodities and futures exchange last November, stopping trading for 15 minutes.

• Kirk Stephenson, who helped start Luqman Arnold’s investment company Olivant Ltd., committed suicide, a British coroner’s court decided in December 2008. Stephenson, 47, jumped in front of a train on 25th September 2008, at the railway station in Taplow, near Maidenhead, located 28 miles west of London. The train was travelling at 100 miles an hour.

• Alex Widmer, Chief Executive of Bank Julius Baer, Zürich, aged 52, was reported by Reuters on 5th December to have ‘committed suicide’. Two unnamed ‘independent’ sources were cited by the Swiss News website 20Minuten to have stated that the death was a suicide.

Swiss police refused to comment on the death. A bank spokesman, however, was careful to point out for public consumption that there was no link between Widmer’s death and the group’s current [sic] activities, but declined to give further details on the cause of Widmer’s death, saying it was a ‘private matter’. The operative word here was ‘current’, implying that Widmer had been involved in questionable activities in the past: and indeed, further enquiries by this service confirmed that this interpretation is correct. Market sources have advised the Editor of this service that ‘the top Julius Baer banker was killed and we know why’: other sources have stated unequivocally to us that this was a murder, associated with the elaborate cover-up, retribution and ‘neutralisation’ operations that are taking place in the context of the Settlements crisis.

• Gavin Macdonald, aged 47, a top mergers and acquisitions banker, was reported on Monday 8th December 2008 to have died ‘from a heart attack’ at the London offices of Morgan Stanley in Canary Wharf. However he died on the preceding Friday night, so that his death was not in fact announced for at least 56 hours. Macdonald was Global Head of Mergers and Acquisitions for the institution. In view of the fact that he died ‘on Friday night’, there was plenty of lime for a ‘massaged line’ to have been developed to ‘explain’ his sudden death, which was attributed to ‘overwork’. Promptly on the Monday, Morgan Stanley’s CEO, John Mack, led tributes to the dead banker.

Mr Mack heads the institution within which a special suite devoted to the financing of terrorism, which we now refer to as the Terrorism Financing Center, is located. When the Provost Marshal attempted, with Department of Defense Internal Affairs assistance, to enter this room in October 2007, he was barred from entry on the orders of Vice President Cheney, to whom, ludicrously, he reported. You will have noted that THERE HAS BEEN NO DENIAL OF THIS INFORMATION – for the familiar reason, that the intelligence, which came from the actual ensuing investigation, is true.
Macdonald would of course have been aware of the existence of the Terrorism Financing Center, and may well have been considered a prospective threat to the ongoing cover-up operations. Mr Mack’s oleaginous tributes to Gavin Macdonald need to be considered in the foregoing context.

•Christen Schnor, aged 49, a Danish-born senior executive with HSBC bank, was discovered on Wednesday afternoon 17th December hanging by a belt, naked, in the wardrobe of his £500-a-night suite at the Jumeriah Carlton Tower Hotel, Cadogan Place, in Knightsbridge, London, having also rented a £390-a-day apartment for his wife and two children in Lower Sloane Street, in the same upper-class area. Schnor worked at HSBC’s Canary Wharf office. This death resembles that of Amschel Rothschild who was discovered hanging in a high-class hotel in Paris on 11th July 1996.

• Non-banking death: Michael Connell, an IT expert said to have been directly implicated in the rigging of George W. Bush Jr.’s 2000 and 2004 elections (since the Republicans cannot ‘win’ US elections without rigging them these days, as previously explained, due to deliberately arranged demographic factors) was killed on 19th December when his single-engine private plane crashed three miles short of Akron airport. Mr Connell was reported to have told a close associate that he was afraid that George Bush and Vice President Cheney would “throw [him] under a bus”.

It had earlier been verified that Carl Rove had threatened Connell and his wife, Heather (sounds familiar?). Mr Connell had flown to a small airport outside Washington DC on 18th December 2008 for a meeting. On 31st October, Mr Connell had appeared before a Federal Judge in Ohio after being subpoenaed in a Federal lawsuit investigating the rigging of the 2004 election under Karl Rove’s direction. The Judge ordered Mr Connell to testify under oath at a deposition on 3rd November 2008, the day before the election.

The White House is reported to have become extremely concerned that Mr Connell planned to divulge details of his secret illegal work for the White House. Heather Connell owns GovTech Solutions. Both GovTech and an IT firm called SmartTech of Chattanooga, TN, have been implicated in the rigging of the 2000 and 2004 elections and a White House email scandal.

In 2005, the US operative Andy Stephenson was poisoned with a substance capable of mimicking pancreatic cancer, after travelling the United States tirelessly exposing the wholesale falsification of election results using doctored software and rigged electronic voting machines, thus making a mockery of George W. Bush’s puffed-up boasting about ‘spreading democracy’ in the Middle East and elsewhere. Further exposure of this sub-scandal would be very liable to broaden and become engulfed in the colossal fraudulent finance unravelling that is taking place, which the criminalists are trying desperately to cover up, without success.

• René-Thierry Magon de la Villehuchet, 65, founding partner and CEO of Access International Advisors, was found dead with his wrists slashed on the morning of Tuesday 23rd December 2008, in his office at 509 Madison Avenue, New York. The French financier, an aristocratic society fund manager with a chateau in Brittany, was found at 7.50am with no pulse, in his office a couple of blocks from the Rockefeller Center. A spokeswoman for the New York medical examiner was careful to insist many hours later that it had not yet established the cause of death.

In other such cases, ‘sources’ have been in the habit of insisting that the death was a ‘suicide’.

The French financier employed a sizeable army of royally-connected ‘Alpine advisers’ to trawl the casinos, ski slopes and yacht clubs of Europe in frantic search of wealthy investors for investment in his fund, which in turn fed the demand for ‘replacement money’ for the Bernard L. Madoff Ponzi investment operations [see below]. M. de la Villehuchet’s connections and his own aristocratic pedigree enabled him to tap into a rich seam of intermediaries who helped to secure funds on behalf of Access, for onward placement with Madoff.

His ‘advisors’ included Philippe Junot, first husband of Princess Caroline of Monaco, and Crown Prince Michael of Yugoslavia, described as an ‘investor relations executive’. Families said to have invested with the French financier included the Rothschilds, other European grandees, and heirs to the L’Oréal cosmetics fortune, especially 86-year-old Liliane Bettencourt, daughter of the L’Oréal SA founder, Eugene Schueller, who is reported to have invested part of her fortune estimated at $22.9 billion with Bernard L. Madoff through the dead French financier. The 86-year-old holds a 30% shareholding in L’Oréal SA, which is the world’s largest manufacturer and purveyor of cosmetics.

In a letter dated 12th December 2008 to clients, Access International Advisors stated that funds, including its LUXALPHA SICAV-American Selection, were invested solely with Bernard L. Madoff’s investment firm. Data compiled by Bloomberg indicated that it had $1.4 billion in assets as at 17th November 2008. Reporting M. de la Villehuchet’s death on 24th December, The Daily Telegraph cited an anonymous source as stating that it was ‘highly likely’ that the French financier committed suicide, while a French newspaper report stated that he killed himself.

• Adolf Merckle, a German industrialist and billionaire, aged 74, was found on 5th January 2009 near railway tracks in southern Germany. The BBC reported on 6th January that Merckle had lost about 400 million Euros after wrong-way bets on Volkswagen shares. Herr Merckle’s business interests included Phoenix Pharmahandel, a drugs wholesaler with annual sales of about 21 billion Euros, Ratiopharm, a generic drugs company with annual sales estimated at 1.8 billion Euros, Heidelberg Cement, a cement firm with annual sales of 11+ billion Euros, the Kaessbohrer ski-slope equipment firm with sales of 183 million Euros, and VEM, a conglomerate of three engine manufacturers, with sales of 280 million Euros. The total turnover of the deceased’s conglomerate in 2008 was 30 billion Euros. The businesses employ about 71,000 people. Herr Merckle’s holding company had been in talks with banks to secure credit after it ran up high levels of debt.

In a statement, the family commented that ‘the distress to his firms caused by the financial crisis and the related uncertainties of recent weeks, along with helplessness of being unable to act, broke [him] and he ended his life’.

“News of Adolf Merckle’s death left me deeply shaken”, Baden-Wuerttemberg’s Prime Minister, Guenther Oettinger, said. The State had “lost a great entrepreneur”. In November 2008, the State Government signalled it would not assist Merckle after he sought a bailout. Herr Merckle had hired the insolvency lawyer Eberhard Braun and had threatened to initiate bankruptcy proceedings for VEM unless lenders provided him with restructuring capital, according to reports in December.

• WE DO NOT CONCUR WITH THE ABOVE: Merckle almost certainly ‘knew too much’ and appears to have been a victim of the DVD split identified by this service. It is inconceivable that a successful businessman as proficient as Merckle would have entered into one or more wrong-way bets with funds needed for his multiple enterprises. This ‘line’, publicised for public consumption, does not impress, and neither does it compute. Since the DVD and the Bushes HAVE LOST, we are looking at doors being slammed shut, and the slamming doors will be making quite a racket.

• The subtle point to be understood here is that until perhaps 5th January, the Bush Crime/DVD nexus thought they had ‘won’, which was an illusion AND HAS SINCE BEEN CONFIRMED TO THEM to be an illusion. Furthermore, they COULD NEVER ‘WIN’ without also destroying the Rockefellers through inter alia the collapse of JPMorgan Chase (a Germany-oriented bank, and the seat of the Terrorism Financial Center), which means that the Clintons (as the former President is of course a Rockefeller) could not in fact allow the Bushes to get away with their game. Therefore, ALL OF A SUDDEN, and all the more so in the light of certain developments, the Clintons will support the Settlements: which they cannot avoid in view of the reality set out at the top of this report.

• Steve Good, Chairman and Chief Executive of Sheldon Good & Co., a leading US real estate auction firm, was found with a gunshot to the head in his red Jaguar on Monday 5th January (the same day as Herr Merckle threw himself in front of a train near his Blaubeuren home in southern Germany). No suicide note was found with the body, suggesting thsi was yet another execution. Mr Good, who was Chairman of the US Realtors’ Commercial Alliance Committee, had a long-standing business relationship with Donald Trump, according to several reports dated 7th January 2009.

‘FEEDER’ PONZI FINANCIER MURDERED TO COVER UP ALPHA CONNECTION?
Concerning the case of M. de la Villehuchet, who was found at his desk with both wrists slashed, and a boxcutter and a bottle of sleeping tablets on the floor, we also beg to differ with the authors of the ‘received version’ promulgated so very smoothly for public consumption. This man, too, was almost certainly murdered, given his ALPHA involvement.

The La Tribune website stated that the financier ‘could not cope with the pressure following the outbreak of the scandal’, which is an understatement: he was desperately seeking replacement funds to satisfy his devastated aristocratic clients, implying in true Ponzi style, of course, that if such funds could by any remote chance have been procured, he would have disbursed them to refund the clients who had been severely affected or wiped out – leaving the problem of how to handle the new investors until further dupes had been inveigled to invest: but of course, raising any funds at all against the prevailing background, exacerbated by the globally publicised Madoff scandal itself, had by now become impossible.

So, yes, the financier was desperate. But one of the clues to the likelihood that he was murdered lies in the name of one of his funds, LUXALPHA SICAV-American Selection. Here’s why.

• The money invested in Madoff’s operations (THE MONEY ‘IN’) has not been LOST: It has been STOLEN – by associates of the George Bush-Clinton Crime Nexus. In order to understand this, several additional facts must be added here:

(1) It has been confirmed to us that Bernard L. Madoff was recruited into the global George H. W. Bush- controlled money-leveraging and laundering operations around 2005-2006: just when the $4.5 trillion sent over by the People’s Bank of China ostensibly to finance Leo Wanta’s payment became available for the highest-level financial fraudsters to play with. What a coincidence!

(2) It has been separately confirmed to us that Bernard L. Madoff had extensive insider dealer assistance for his Ponzi operations. He could not have operated without such assistance. The immense extent of this collaboration SHOULD emerge as the SEC’s investigations proceed:

• However this depends on the extent to which the SEC, SIPC etc investigations have already been ‘sown up’; and as indicated below, the initial impression gained is NOT ENCOURAGING.

(3) The Madoff operations formed a key component of the global financial corruption carousel presided over by the Bush-Clinton criminal high-level intelligence community gangsters.

René-Thierry Magon de la Villehuchet may have been murdered on the instructions of ‘Black Ops’ elements in order to prevent him exposing in detail the labyrinthine connections linking the Bush-Clinton Crime Nexus to the DELIBERATE takedown of Bernard L. Madoff and to the fact that the Madoff operations represented the Master Ponzi Scheme presiding over an army of subsidiary Ponzi Schemes. However the ‘neutralisation’ of de la Villehuchet cannot, obviously, prevent the inevitable connections being made between the Master Ponzi Scheme, the secondary ‘feeder’ Ponzi Schemes, and the overarching Bush-Clinton-CIA global fraudulent finance abominations being exposed in gory detail, as successive arms of the Octopus unravel and the extent of the biggest financial scandal in world history, and ALPHA’s role in it, is progressively unmasked.

• If those at the helm of this operation imagine that their intelligence connections will protect them in perpetuity, they may have a nasty shock coming to them, even though there may be evidence of a possible ‘insider’ operation to ‘contain’ the fallout from the ‘Madoff takedown’ [see below]. If our suspicions on this score prove to be correct, we would still consider the outlook for these highest-level US criminalists as grim, because the explosion is so huge that even with any ‘accommodating’ associates, they cannot realistically hope to prevent the audit trail from reaching their front doors.

• Also to be borne in mind is the fact that the SEC’s own-account operations, which are absolutely unconscionable for a Regulator, may be liable at any time to be exposed in detail, with the prospect of severe consequences for Mr Cox and others: so the SEC itself would appear to have a vested interest in ensuring that whatever emerges from the myriad complex investigations and the legal processes, is appropriately ‘sanitised’. Again, our view would be that it is FAR TOO LATE FOR ANY SUCH COVER-UP OPERATIONS TO BE WHOLLY ‘SUCCESSFUL’.

PRESIDENTIAL PARDONS WON’T SOLVE THEIR PROBLEM
Following the issuance of a handful of Presidential Pardons before Christmas, President Bush II is expected to ‘do a Clinton’ and promulgate an extended list of Presidential Pardons on 19th January 2009 just before he ceases to be the most disgraced President of the United States in the always disturbed history of the Republic. Observers expect a bumper crop of blanket pardons, including one for himself, which explains why Vice President Richard Cheney, of MK-Ultra notoriety, has been bragging on TV about how he authorised torture (satisfying his innate sadism).

But as mentioned in an earlier report, these people are financiers of international terrorism as defined in their own repressive domestic legislation and in the copycat anti-terrorism legislation promulgated in the European Union context and in the United Kingdom.

Their financial thievery and scamming operations against her Majesty The Queen, the sovereign of America’s supposedly ‘closest ally’, entitles them to be arrested, held in custody, indicted, tried and sentenced to the maximum period of detention, like the many thousands of bankers scooped in the autumn of 2007 and extradited to the United Kingdom and other European countries on charges of economic terrorism, as previously reported.

These former bankers received 25 years’ incarceration for their criminal activities, and many of the lawyers who rushed across the Atlantic to bail them out were likewise arrested as co-conspirators and accessories to the fact of these terrorism financing crimes, receiving similar treatment (as also reported on this website and of course never denied by anyone).

It follows, therefore, that this expected issuance of corrupt Presidential Pardons en masse will not get these criminals off the hook. They may rely upon the fact that their routine corruption has in turn corrupted leaders of European countries such as Chancellor Angela Merkel, who has been receiving bribes from George Bush Sr. in exchange for ‘protecting’ ‘his’ stolen and corrupt funds, or their fellow intelligence operative Gordon Brown, who has been exposed as corrupt, as we have revealed. But the fact remains that, at any stage in the future, any or all of these criminal financiers of global terrorism could be picked up the moment they step into the relevant jurisdictions.

THE SECONDARY ‘FEEDER’ FUNDS WERE SEPARATE PONZI FRAUDS
Stephen Harbeck, Chief Executive of the Securities Investor Protection Corporation (SIPC) who is the senior receiver of Madoff’s now defunct Ponzi-brokerage business, said on the 27th December 2008 that investigators were dealing with a ‘highly complex hybrid fraud’, elaborating that each of the individual investment accounts feeding the Madoff operations could be its own self-contained Ponzi fraud: and this is certainly the impression gained from de la Villehuchet’s desperate attempts to ‘replace’ the funds belonging to his portfolio of previously wealthy European investors.

Speaking on the steps of the US Bankruptcy Court for the Southern District of New York, Stephen Harbeck added: ‘We will trace funds wherever the trail goes’, implying that extensive use had been made of offshore tax havens.

A report in The Guardian on 28th December said that ‘forensic accountants examining Mr Madoff’s [multiple sets of] books believed he had regularly sent large sums of money to offshore accounts in the Caribbean area and Europe. ‘There are accounts at New York Mellon Bank that we have been looking at that appear to have sent and received money from offshore locations’.

Bank of New York Mellon is one of the exotic financial enterprises identified in our reports in 2007 which mishandled the $6.2 trillion of loan funds made available by Her Majesty The Queen and by Prince Al-Aweed al-Talal of Saudi Arabia. As this element of the scandal unfolds, the prospects of the highest-level criminals emerging unscathed is expected to diminish at an accelerating pace.

On 23rd December, US Bankruptcy Judge Burton Lifland ruled that Madoff investors could receive no more than $100,000 in cash compensation, no matter how much they lost – a development that will have come as a severe blow to investors such as Mr Walter Noel (Fairfield Greenwich Group), whose operations ostensibly lost $7.5 billion, while the women’s wear magnate and Madoff mentor Carl Shapiro is reported to have lost $545 million of his personal fortune [see our alphabetical list of ‘victims’ in respect ONLY of the money ‘IN’, below]. Judge Lifland invited all Madoff investors to attend a meeting at the US Bankruptcy Court on 18th February 2009.

PERTINENT QUESTIONS FOR THE BENEFIT OF ‘THE INTERESTED’
At this stage we ask the following questions concerning the financing of terrorism, and economic terrorism, which those whom Lenin called ‘the interested’ will certainly understand:

• What did and do the Clintons, Robert Rubin, Dr Alan Greenspan, Timothy Geithner, Dr Benjamin Bernanke, George W. Bush Jr., Henry M. Paulson, and Vice-President Richard Cheney have to do with Miapollo Investments Limited, Hong Kong, Apollo Management LLP, Eva Teleki, Leo Wanta, Olga Sarantopoulos, Golub Capital, Wasserstein Perella, Timothy Geithner (protégé of the guttural triple agent Dr Henry Kissinger), George H. W. Bush Sr., and Alpha [ALPHA] Bank in Greece: always bearing in mind who set up Miapollo Investments, Inc. and Apollo Management LLP for Bush Sr.?

• For what purpose did M. Jean-Paul Levitte, the former French Ambassador to Washington (now President Sarkozy’s closest intelligence and finance adviser), introduce a Mr Leon Black (not to be confused with a Mr Blue) to Crédit Lyonnais executives in Paris?

What can be stated at this stage is that the above-mentioned ‘worked with’ Mrs Hillary Clinton on the thieving of relevant accounts along with the Bushes, and that all are implicated with the ALPHA fraudulent finance and terrorism financing operation, which is still functioning. These fraudulent finance and terrorism financing operations were and continue to be committed in countries other than the United States, especially the United Kingdom, – so that all these people and their banking and intermediary associates, are specifically implicated in the financing of terrorism abroad. Under the Patriot Act USA et seq, financing terrorism abroad is a violation of the US legislation, qualifying the perpetrators to be arrested and incarcerated sine die, which is what ALL these double-minded perpetrators deserve and will, we believe, ultimately experience.

LONDON ‘SAFETY LOCK BOX’ RAIDS REMOVED THE COLLATERAL
When 300 armed Metrololitan Police surrounded and raided the three ‘Safety Lock Box’ centres located in Mayfair, Hampstead and Edgeware, London, on 2nd June 2008 under the command of Assistant Metropolitan Police Commissioner John Yates, stolen, illicit and other collateral assets being used for fraudulent finance hypothecation purposes were placed wholly out of reach of the criminalist cadres and the corrupt banking strata concerned.

As we reported at the time and have reported subsequently, the British police raids marked a decisive development, arising out of intelligence gleaned inter alia from bankers arrested and extradited to the United Kingdom in the autumn of 2007. It is unprecedented in our experience for such an enormous squad of armed police to attend such raids in Britain, indicating quite clearly to anyone not sitting on their brains that this was an operation of unprecedented importance and significance, involving facing down the most ruthless gangsters on earth. And this judgment has indeed turned out to be accurate.

MADOFF PONZI CAROUSEL THEN BECAME A PRIMARY SOURCE OF FUNDS
Because once the contents of the ‘Safety Lock Boxes’ had been placed out of reach (they remain under heavily armed guard, we understand), a central source of illicit creative fraudulent financing (of terrorism) had suddenly been closed down.

That left the Bernard L. Madoff complex of fraudulent Ponzi financing operations, and its colossal portfolio of feeder Ponzi self-contained fraudulent finance carousels as the primary source for the continuing flow of corrupt funds needed to keep the overall carousel going, with the exception of the Alpha operation (and probably several others, including the Omega operations). In summary, with the London ‘vaults’ shut down, the Bernard L. Madoff complex became the primary open source of funds (with the exception, as noted of the Alpha operation et al).

FIVE-HOUR EMERGENCY MEETING BETWEEN MRS CLINTON AND GEITHNER
When margin calls arising from the implosion that occurred in mid-September, when the $14.0 trillion of LOAN money held within the Treasury custodial accounts was placed into ‘lockdown’ (on Friday 12th September 2008) following measures taken on 6th September 2008 and subsequently in Britain, the Madoff-linked feeder funds and thus Mr Madoff’s own operations collapsed under their own weight. On 20th September 2008, the Editor received the ‘triple gunshot voicemail’. On 22nd September, Senator Hillary Clinton met Timothy Geithner, President of the Federal Reserve Bank of New York, for at least five hours, issuing a bromise statement afterwards implying that she had in fact been discussing ‘economic reform’ with Mr Timothy Geithner – whereas in reality this was an emergency meeting to discuss how on earth to prevent the exposure of the fraudulent finance operations in which both were and are implicated up to their necks – in light of the developments since 6th and 12th September, and the volume of margin calls that were ensuing.

NEW YORK FED AND S.E.C INVOLVED IN THE MASTER SCANDALS
Among the relevant sources of exotic fraudulent finance caught up in the consequent maelstrom were funds submitted by the Federal Reserve Bank of New York under Timothy Geithner to the Bank of New York Mellon and funds associated with the Securities and Exchange Commission’s own in-house proprietary trading account, mentioned in an earlier report.

• For the New York Fed and the SEC themselves to have been involved in these operations represents a colossal pair of parallel scandals which should trigger indictments of the primary characters involved at both institutions – starting with Christopher Cox and Timothy Geithner.

When the Federal Reserve opened up the swap doors, they were taking in quasi-fungible assets (Treasury guarantees) and exchanging them for Euros which could then be deployed within the Swiss exotic trading operations. This revolutionary nexus of fraudulent finance, of economic and ‘financial terrorism’ offensives, is so huge that it cannot be explained in depth at this stage.

However we can summarise some of the stages of this immense fraudulent finance operation – winding up with the resulting dubious derivative fake ‘assets’ outstanding being ‘guaranteed’ by the Depositary Trust Clearing (DTC) Corporation, owned by the largest clearing banks, which has boasted that it has handled transactions ‘worth’ $1.8 quintillion, and has ‘guaranteed’ up to $700 trillion of derivatives contracts outstanding (taking account of double-counting).

BIG BANKS REFUSING CLIENTS ACCESS TO THEIR OWN FUNDS (= THEFT)
It is reported to us by respected and responsible market sources that one very large British bank, one very large German bank and one very large Swiss bank, in particular, are among institutions which have formed the habit in recent weeks of illegally refusing to release funds when instructed to do so by clients holding accounts with these institutions.

A case involving the UK institution resulted in the removal of a senior bank officer (also a diplomat) from the institution on Monday 29th December 2008, after the funds had been transferred from the bank’s Far East office to London, to fund a certain transaction.

• These banks are hoarding funds not least because they may expect to be called upon to fund guarantees entered into on their behalf by the Depositary Trust Clearing (DTC) Corporation, as an ever-increasing volume of related transactions ‘goes sour’. This factor is exacerbating the impact of the banks’ own corrupt off-balance sheet financial transactions on the real economy, and is the primary cause of the banks’ ‘lending strike’.

For the designers, perpetrators, intermediaries and traders involved in this biggest of all financial scamming operations NEVER THOUGHT THAT THE CAROUSEL WOULD RUN INTO TROUBLE, just as Charles Ponzi assumed that his classic scamming operation following the First World War could be continued ad infinitum. All concerned had and retained a vested interest in the continuation of this corrupt money machine, which has come unwound and will continue unravelling, contrary to their naïve and greedy expectations.

OUTLINE INFORMATION ABOUT CAROUSEL TRANSACTIONS
If we consider the Securities and Exchange Commission’s corrupt own-account transactions and supposedly borrowed (but now shown, post-Madoff, to have been STOLEN) funds, as our starting-point source of funds in an illustrative flow-chart, various stages can be described as follows:

• Leveraging of the sourced funds 3:1 in the United States.

• Transfer of the proceeds to the Swiss-based corrupt and exotic financing factory and issuance of bonds by the likes of Lehman Brothers, AIG, Bank of New York Mellon, Citibank and Morgan Stanley (funding for the bonds obtained from the Switzerland ‘money factory’ and direct out of the SEC’s own-account operations) at an 18% purchase price, for onward selling with a 30% mark-up, yielding an absolutely colossal 48% overall spread.

• Funds sent to Spanish institutions, especially Sr. Botin’s corrupt Banco Santander (which bought inter alia Alliance and Leicester and Abbey National in the UK), and probably onwards to corrupt institutions in the Southern Cone of Latin America, where Bush people have been congregating.

• Onward selling of the bonds, with a 30% backhander to the Bushes and 70% to other participants, including and especially the Bernard L. Madoff operations:

Since Madoff’s entities issued their own client confirmations and statements, Mr Madoff was able to juggle and obfuscate them with false accounting – a fact of real life that would appear to have been recognised ahead of the Madoff collapse, by Kingate Global Management, one of the ‘feeder Ponzi funds’ and one of the largest such subsidiary funds which had attracted some $2.75-$3.50 billion for investment in and ‘management by’ Madoff Investment Securities, Inc, despite having warned its investors that the Madoff brokerages ‘could abscond with those assets’.

In its fund prospectus, Kingate had warned that ‘there was always the risk that the assets with the investment adviser could be misappropriated. In addition, information supplied by the investment adviser may be inaccurate or even fraudulent. The co-managers [viz., Kingate and Tremont: see the alphabetical list below] are entitled to rely on such information (provided they do so in good faith) and are not required to undertake any due diligence to confirm the accuracy thereof’.

• This approach allowed Madoff to falsify the confirmations and statements issued to his clients. The Madoff Ponzi Carousel diverged from the ENRON operation in that ENRON employed a huge transnational firm of accountants, whereas Madoff used part-time accountants.

In parallel with, complementary to, and derived from such ongoing ‘money machine’ transactions, corrupt US Treasury and Citibank terrorism financing operations operate in outline as follows:

• Collateralized Debt Obligations (Mortgage Debt Securities etc) derived from Carlyle, AIG, Bush fraudulent finance and other linked sources are taken into the US Treasury/Citibank financing sub-machine to fund the master rotating derivatives underwriting machine – with the resulting new Collateralized Derivative Operations (CDOs) being delivered e.g. into the back-room operation of the complicit Bank of England (run, in 2007 at any rate, by a Carl Daniels, out of Birmingham but probably also linked to the US Embassy in London).

• Bank of England issues loans against the CDOs which are fed back to Carlyle, AIG and the Bush-Clinton Fraudulent Finance Empire and Carousel.

And the resulting outstanding derivatives obligations are all ‘guaranteed’ by the bank-owned private corporation calling itself the Depositary Trust Clearing Corporation, WHICH IS WHY BIG BANKS HAVE PROBLEMS, AND MAY COLLAPSE IF THE NEW ADMINISTRATION MESSES UP.

‘RETAIL’ INVESTORS’ FUNDS STOLEN TO FINANCE CAROUSEL PONZI FRAUDS
The ‘package people’, like the Madoff investors, have all been ripped off, too: but most of them can’t reconcile themselves to this reality. Earlier this year, President Bush Jr. (43) was quoted as having uttered evil words which, in translation, meant that these people can shout and scream to their dying day, and they will never receive a single cent. Many of these unfortunate victims have died without coming to terms with the fact that they have been scammed by these very self-same high-level self-appointed corrupt élite financial terrorists and fraudulent finance criminals that are being exposed by this service, as the biggest financial criminal crisis in world history unravels.

They cannot enforce anything inter alia because of ‘non-disclosure’ documents that they may have signed, the nebulous identities of the parties with whom they entered into their transactions, and the fact that, wittingly or otherwise, they breached the old Prudent Man Rule, which is not a legal matter but an issue of prudence which would weigh against them in any court proceedings which cannot be brought because the Ponzi frauds were structured so that no-one could ever be held accountable. That’s what we meant by the ‘Never-Pay Syndrome’ – invented by George H. W. Bush Sr., the physical embodiment of Lucifer on earth, and the technician with whom he has fallen out, Dr Alan Greenspan, whom the Bushite CIA dogs have recently punished by pulling down the House of Madoff and making off with the trillions and trillions of dollars’ worth of proceeds (money ‘OUT’).

Meanwhile, to keep the middle-class US investor victims from reaching in unison for their guns in their attacks, an elaborate, cynical Psy-Ops operation has been mounted by CIA counterintelligence cadres through controlled outlets and their possibly unwitting disciples for years, to keep all these victims expecting resolution at the end of the rainbow.

But their money has long since been STOLEN, and incorporated into the vast revolutionary self-enrichment Ponzi money machine for the odious Luciferian globalist elite – even as members of this discredited class are at each others’ throats now that their immense system of Ponzi scams is sagging or crumbling, and as the Bush Crime Family and associates make haste to shovel as much illicit money down to the Southern Cone as can be achieved within the very short space of time left for these people before they reap the consequences of their unspeakably cruel, selfish, ruthless, criminal and reprobate behaviour.

The above should not be construed as meaning that ‘the ransacked’ have no eventual remedy: but their condition is unfortunately probably as parlous as the victims of the Madoff Ponzi takedown.

• Whoever denies this is de facto assisting the CIA’s evil ‘Psy-Ops’ operation against the victims.

OTHER HIDEOUS DIMENSIONS OF THE POISON OF THE OCTOPUS
Of course that dimension is only one segment among a myriad past and ongoing scams, many of which are focused on ripping off officially sponsored programs at a Federal, State, county and city level via the courts, schools, parks and Environmental Protection Agency (EPA)-related projects, foundations, charities, cemeteries, hospitals, welfare agencies, nursing and home health care operations, you name it. These scams involve inter alia the use of ‘Asset-Backed Securities Trust Pools’ (2006-HES) and ‘Mortgage Pass-Through Certificates’ (Series 20006-HES).

Details of such scamming have been dug up by investigators into horrendous ongoing property-related scams in Arizona linked to NAMED high-level criminalists, and separately began to emerge during a recent Cook County foreclosure, in which the Judge ordered the bank and the victim into the hallway to ‘work out a settlement’: evidently the Judge didn’t want the relevant information to be revealed in Court, probably because his name was on the list and he himself was implicated.

Literally thousands of companies are associated with this scamming operation, using Mortgage Electronic Registration Systems, Inc. (MERS) as the transfer vehicle. In essence, these criminals, consisting of attorneys, judges, bankers and others, are simply transferring properties without the owners’ knowledge, prior to foreclosure, with most of the accounts in question found to be held with Fidelity Investments, we have been informed. The stolen property then becomes available as collateral for further fraudulent finance operations.

‘MAINSTREAM’ AND COURTS CONCERNED, FOR NOW AT LEAST, ONLY WITH THE MONEY ‘IN’
Concerning the Madoff dimension, in the foregoing survey, it will have been noted that while an estimated $50 billion is said to have been ‘lost’ as a consequence of the collapse of the Madoff operations, untold trillions of dollars came out the other end.

To elaborate: the US and global ‘mainstream’ media, as well as the United States District Court for the Southern District of New York, and the Bankruptcy Court, are ostensibly (to begin with, at any rate) concerned with the estimated ‘losses’ of $50 billion which have been widely publicised, based on the many documents filed with the Court (of which the Editor, by visiting the Court, obtained a complete set extant up to 21st December 2008, during his pre-Christmas visit to New York).

But that’s just the money ‘IN’.

NONE OF THIS MONEY HAS VANISHED. IT HAS ALL BEEN STOLEN.

What about the money ‘OUT’?

This, of course, as revealed above, is of a far larger order of magnitude, given the following:

• Leveraging operations doubtless conducted by Bernard L. Madoff’s office itself, perhaps at 3: 1, within the United States.

• Leveraging operations consistent with the illicit fraudulent finance operations that are typically conducted by the Bush-Clinton fraudsters, up to 40:1 which will have been conducted through Madoff’s London office, with counterparties in Britain. Switzerland, Spain, Austria, France, etc.

By means of the usual high-yield investment program leveraging and hypothecation operations, the base $50 billion will long since have been converted into trillions of dollars; and it is confirmed that the proceeds were transferred in large part via Israel to the Southern Cone of Latin America (Paraguay, Argentina, Uruguay, Brazil), where significant numbers of Bush-linked operatives and associates are reported to us to be congregating.

Significant proceeds will also have been transferred to Russia and/or converted into untraceable, portable precious gems like raw diamonds, held in Rotterdam or in London lock boxes such as those at Coutts Bank, used as the money-laundering institution for the Blair-Bush Deutsche Bank-Vatican Bank financing operation brokered by Bernie Ecclestone and laundered through Coutts Bank, which is The Queen’s Bank, acting as the clearing house and providing the operation with false ‘legitimacy’ behind Her Majesty’s back.

As we have seen, far from Madoff‘s operations having been ‘stand-alone’ from the gigantic Bush-Clinton-CIA orchestrated fraudulent finance giga-scandal that is unfolding, therefore, they formed a prominent and integral part of the overall global fraudulent finance Ponzi scamming machine.

Furthermore, the methodology employed to STEAL ALL THE MONEY (THE TRILLIONS, NOT JUST THE BILLIONS), was the standard procedure used by the US criminal intelligence community in all previous such instances – namely, to implode the operation.

STANDARD ‘BCCI PROCEDURE’: COLLAPSE THE ‘MONEY MACHINE’, RAKE OUT THE MONEY
That’s what they did with BCCI, walking away with over $9.0 billion clear. That’s the same model as was applied in the cases of ENRON and Iceland. And that’s what Bush Sr. ordered in the Bernard L. Madoff case. By imploding Madoff, the crooks GET TO WALK AWAY WITH THE LOT.

• That’s the crucial reality that everyone is MISSING. THE MONEY HAS ALL BEEN STOLEN.

No doubt the timing of the Madoff takedown was influenced by the consequences of the implosive events of September 2008, which will have triggered the thought in the minds of the top criminalist strategists that it was now time to apply the ‘BCCI treatment’, i.e. to close down Madoff altogether, let all the subsidiary Ponzi schemes and their investors flounder, make off with the ‘money OUT’ in toto, and (in Bush’s mind) deliver a body blow to the Jewish community and Israel at the same time.

POSSIBLE ISRAELI TIT-FOR-TAT FOR THE BUSH-TRIGGERED MADOFF TAKEDOWN
IN RETALIATION for this Bush-sponsored ‘BCCI/ENRON treatment’ of the Madoff Ponzi carousel, the Israelis have leaked supposedly devastating money-laundering and bribery information showing how Mossad and other Israeli parties reportedly transfer money from the Israeli Government direct into active US Congressional campaign accounts (illegal foreign donations), with funds also being wired directly from Israeli Government bank accounts into active personal accounts of Members of Congress. The sources publicising this information reportedly received electronic files showing bank account numbers, bank routing numbers and account numbers for NAMED Members of the the US House of Representatives, the US Senate, and even elected officials in various States.

The incoming data allegedly showed routing numbers of the receiving banks revealing that certain Members of the US Congress and of the US Senate have bank accounts in places like Barbados, Liechtenstein, Switzerland, the Turks and Caicos Islands, the Cayman Islands and London.

Electronic file data sent over to source from Israel was said to reveal names of leading US law firms and dubious front corporations all over the United States. However, significantly, ABSOLUTELY NO CONCRETE DETAIL, SUCH AS ACTUAL BANK ACCOUNT DATA, had been published by the 4th January 2009, the initial outline surfacing via a non- anonymous website on New Year’s Eve.

Whether this data ‘firms up’ into hard information or not, the context in which it should be viewed at this stage is that it could represent a direct Israeli tit-for-tat ‘Psy-Ops’ operation in response to the body blow inflicted upon Jewish interests as a consequence of the Bush-Clinton-triggered Madoff takedown. We are well into the ‘Samson’ period now: the gloves are off everywhere.

Even if the data is not confirmed, it surfaced specifically in the context of the Madoff ‘takedown’, albeit clothed by the leak source as motivated by disgust at the onslaught against the Palestinians, of whom more than have been reported were stated to have died. The source added: ‘I intend to publish this information, including names, dates and account numbers, on the web’.

• By 4th January, an estimated 260,000 Palestinians lacked water and roughly the same number lacked electricity. Some 80% of the population relies on food aid, requiring 400 food trucks a day into the Gaza Strip. Only 100 trucks are being allowed in, according to the BBC.

STOKING UP ANTI-SEMITISM: A CYNICAL ‘ADDED BONUS’ FOR THE REVOLUTION
Now, on the back of this, Mr Bush Sr. and his fellow Nazis (notwithstanding that the Bushes are German Jews, originally) will have relished the prospect of destroying large numbers of competing Jewish foundations, investors, competitors, and other entities and enterprises – reducing Palm Beach, which was infiltrated and basically taken over by Americans of Jewish extraction from the 1960s onwards, to a state of near-hysteria, given that Jewish sources with whom we are in contact state that many Jewish investors there have been ‘wiped out’. We received a report (see below) of Jewish people in Palm Beach having been reduced to selling their Christmas/holiday presents in desperate hand-to-mouth attempts to raise liquidity.

• In an interesting by-product of this development, certain Jewish foundations that have been wiped out or rendered useless in the New York area, had been financing revolutionary agitprop operations promoting homosexual marriage and the usual array of leftish Gramsci-tradition cultural revolutionary abominations designed to destroy what remains of Christian standards and culture, a key objective of angry, deluded Babylonian revolutionary Jews: the takedown of these people has put a stop to these activities in some instances.

As a clear consequence of the revelations from the Madoff scandal so far, latent anti-Semitism (as anticipated by this service) has predictably intensified. On 20th December 2008, Agence France-Presse reported from New York that ‘anti-Jewish commentary is inundating the Internet following Bernard L. Madoff’s arrest on charges of masterminding one of the biggest Wall Street frauds in history’ [sic] – indicating of course that the media will continue focusing on the Madoff dimension, as intended, while the much bigger perpetrators behind Madoff consolidate their getaway with the ‘money OUT’ as described in outline here.

The Anti-Defamation League (ADL) reported that there had been “an outpouring of ant-Semitic comments on mainstream and extremist websites”. The French agency cited an ADL statement that ‘site users have posted comments ranging from deeply offensive stereotypical statements about Jews and money – with suggestions that only Jews could perpetrate a fraud on such a scale – to conspiracy theories about Jews stealing money to benefit Israel’,

Abraham Foxman, National Director of ADL, elaborated:

‘Jews are always a convenient scapegoat in times of crisis, but the Madoff scandal and the fact that so many of the defrauded investors are Jewish has created a perfect storm for the anti-Semites. Nowadays, the first place Jew-haters will go is to the Internet, where they can give voice to their hateful ideas without fear of repercussions’.

Among entries reported to be featured in the electronic files referencing financial transfers from Israeli Government bank accounts to bank accounts in the United States is a series of entries showing transactions between Loh’ama Psichologit to the Anti-Defamation League in New York City. A Google search for Loh’ama Psichologit shows it to be the Literature and Propaganda segment of the Israeli intelligence organisation Mossad.

The Editor has a friend who is Education Director of a Jewish School and Synagogue in a certain US State. In discussion about the misbehaviour of certain people of Jewish extraction some years ago, the Editor pointed out that these people seemed intent on repeating the mistakes of the past and on stoking the latent fires of anti-Semitism. The Editor recalls his friend’s exact response:

‘Yes and these people cause our community immense concern all the time’.

Our unsolicited advice to Mr Foxman is that he should direct severe criticism publicly, or behind the scenes if he prefers, to his own community, and should issue grave warnings to these people about the prospective consequences of Jews being identified as perpetrators of financial frauds in the prevailing climate. The fact that almost all the identified victims of the Madoff scandal that have been identified to date are Jewish, misses the point – which is that no distinction is liable to be made in the minds of those criticising the Jewish community, between victims and perpetrators.

Likewise, in ‘a very worst-case scenario’ that history again repeats itself, no distinction whatsoever will typically be made between those Jews perceived to be villains, and righteous Jews. That is the danger on which Mr Foxman and his friends should be concentrating.

In case some people are still mystified as to why there is warfare among the Jews, may we remind you of the Editor’s old story about the nice lady who took pity on him when he was employed briefly with the merchant bank S. Japhet & Co., St Swithin’s Lane, in the City of London, in 1959. It was the time of the Eichmann trial. The middle-aged Jewish lady used to sit with your young correspondent occasionally in the canteen. To the Editor’s naïve question: ‘What’s this all about? Eichmann’s Jewish!’ the lady replied: ‘Didn’t you know? A Jew’s greatest enemy is another Jew?’

DOUBLE-MINDEDNESS AND THE DOUBLE-CROSS TRADITION
In addition, one must remain aware at all times, as this giga-criminal finance scandal continues to unfold, of the ‘double-mindedness dimension’ characteristic of all key operatives. These people are ALL double-minded, in direct contravention of Jesus Christ’s warning on this central issue:

• ‘The light of the body is the eye: if therefore thine eye be single,
thy whole body shall be full of light’.

‘But if thine eye be evil, thy whole body shall be full of darkness.
If therefore the light that is in thee be darkness, how great is that darkness!’
Matthew, Chapter 6, verses 22-23.

‘The light of the body is the eye: therefore when thine eye is single, thy whole body also is full of light; but when thine eye is evil, thy body also is full of darkness’.

‘Take heed therefore that the light which is in thee be not darkness’.
Luke, Chapter 11, verses 34-35.

One of the layers of deep meaning here is that double-mindedness is wholly evil and represents, therefore, TOTAL darkness. It is often noted that the criminals we identify can be quite pleasant to meet (albeit there is always a spooky dimension to all of them). But their fake ‘niceness’ masks the fact that their orientation is in fact the opposite. They pose as ‘reasonable’, ‘decent’ people, but their eye is evil: they are Dark Actors Playing Games. Furthermore, they employ the duplicitous dialectical method at all times. Hence, in summary, they routinely:

• Say one thing and do the opposite;

• Double-cross their collaborators and associates;

• Renege on all their undertakings; and:

• Relish application of the standard duplicitous intelligence community ‘bait and switch’
technique to entrap their targets.

Now George W. Bush Sr. ROUTINELY DOUBLE-CROSSES EVERYONE WITH WHOM HE DEALS, and there are NO exceptions to this rule. The same applies to his duplicitous son. So do not be in any way amazed, sceptical or scandalised that Bush Sr. and his criminalist intelligence associates will have specifically pulled the rug from beneath their collaborator, Bernard L. Madoff.

‘MADOFF TAKEDOWN’ RELEASED TRILLIONS TO BE STOLEN WITH EASE
On the contrary, this operation has released trillions of dollars (probably running into the hundreds of trillions) into the hands of the criminalist operatives directed by the Bush-Clinton-CIA Octopus, while at the same time destroying a large part of the Jewish community and delivering a bodyblow to Israel in the process. After all, Bush Sr., of German Jewish extraction, consorts with the Arabs.

Therefore so far as the ‘German’ element of the Octopus is concerned, the Madoff takedown has been a superbly ‘successful’ operation – releasing immense resources ‘free’ into its hands, while undermining Jewish elements in the process. Don’t forget, either, that each arm of the Octopus is permanently entwined with other arms, locked in struggles to the death – with every component of the Octopus at various times or simultaneously at loggerheads with or fighting other arms, or all of the arms. After all, Satan is the author of all lies and confusion, which is the stinking River Styx of death in which these world-class criminals operate.

• That they will all drown in its foul waters is a certainty.

GLOBALIST STRATEGISTS DESTABILISED BY SUCCESSIVE EXPLOSIONS
So, despite occasional confusing appearances to the contrary, the global financial showdown that we predicted is now blowing up in the faces of almost all the primary Illuminati cadres and figures, with linked secondary explosions going off at intervals at an ever increasing pace – leaving the criminalist participants, for the most part, staggering around shouting and snapping at each other incoherently. Even so, there are still some of their caste, equipped with fewer brain cells than their comrades-in-crime, who would appear to have not yet understood that there has been a decisive discontinuity, thanks to the relentless exposures, and that the criminal finance community have been rumbled, and are being progressively brought to their knees.

Their Dirkeim Paradigm – after Emile Durkheim [1858-1917], who postulated that criminal behaviour is humanity’s norm and that ethical conduct is anomalous – has been turned on its head, so that the criminalists are now increasingly seen to be the anomie, with the Rule of Law, however degraded and corrupt, starting to reassert its primacy in the United States, at least in patches.

This development, to which this service has contributed, has come as a nasty shock to those criminalists who have grasped the outline of what has happened, because they had been in the ascendancy and in control for 25 years, and truly believed that their Criminal Republic had been successfully established and could never be challenged, let alone dislodged.

They thought that their fake wealth factory, based on hypothecating often stolen or diverted assets up to 40:1 (in London, for instance), would continue for ever. And they imagined that no-one would or could ever stand up to them, given their long-term success in compromising, through blackmail and/or bribery, almost everyone on their darkened stage.

Instead of which the successive bombs that have gone off and continue to explode ‘unexpectedly’ in their faces (and will continue to do so for many years ahead) have disfigured their self-righteous images of false rectitude, so that the whole world can now see these double-minded, two-faced rats for what they are: the greedy, decadent scum of the earth who have had their filthy day, and large numbers of whom face (or are already serving) extended periods of imprisonment, with 25 years apparently the norm. Others have suffered ‘neutralisation’ – the currently fashionable euphemism for being bumped off.

UNPRECEDENTED ADMISSION BY THE IMF MANAGING DIRECTOR THAT ELITE IS TO BLAME
It is against this background that one of the most prominent members of the contemporary self-appointing élite, Dominique Strauss-Kahn, Managing Director of the International Monetary Fund, has actually become the first of their number to acknowledge publicly that an attempt really has been made by this self-same arrogant, globalist Elite Power Continuum, to steal the wealth of the whole of humanity for themselves.

Specifically, the Fund’s Managing Director warned in a speech given in Madrid on 16th December 2008 that ‘social unrest may happen in many countries – including advanced economies… Violent protests could break out in countries worldwide if the financial system is not restructured to benefit everyone rather than a small élite’.

In a BBC interview on 21st December, M. Strauss-Kahn said ‘we are in the biggest crisis we have experienced for 60 or 70 years’, and indicated that the IMF forecasts due in January 2009 would be even bleaker still. However as the Managing Director of the Fund knows that the underlying cause of the crisis is unfettered fraudulent finance, stealing and criminality, he is also well aware that no forecast that Fund’s experts may issue in the foreseeable future will capture the horrors in store – given that, in the face, for instance, of all our exposures, the US criminalists have CONTINUED with their fraudulent finance operations, long after they have been exposed in general terms, resisting implementation of the G-7-Approved Refinancing Programme, which will implement capital markets transactions on-the-books to refinance the banks and to endow the US Treasury with a stream of windfall tax receipts on an ongoing basis.

The intention, up to the end of 2008 at any rate, was to apply the G-7-Approved Refinancing Programme but to run it through the White House – where, of course, it would be corrupted and would immediately revert to corrupt debt-generating fiat money ‘business as usual’. As indicated above, this intention has been thwarted.

Never before has a member of that self-appointed élite openly warned that its own behaviour was risking a global upheaval: indeed, never before has a member of that élite even acknowledged that it exists as an organised force for evil. Those of us who have done our due diligence know this to be the case; but it is unprecedented for a superior member of the caste to agree with us. French journalists inform us that the highly intelligent IMF Chief is known for his clear thinking and for his commendable verbal precision and directness. One may deduce, therefore, that this observation represented a blunt warning to the few high-level criminalists who were still seeking to resist the inevitable as late as the Christmas week, that their behaviour cannot be tolerated any longer.

M. Strauss-Kahn’s remarks echoed those of another ‘insider’, Senator Christopher Dodd, Stalin’s grandson, who, commenting on the banks hoarding money, told The New York Times in October that ‘if it turns out that they are hoarding, you’ll have a revolution on your hands. People will be so livid and furious that their tax money is going to line their pockets instead of doing the right thing’.

‘There will be hell to pay’.

It would appear that even high-ups among the self-appointing globalist élite have realised that the most prominent criminalist operatives within the folds of the Octopus have overstepped the mark – threatening the collapse of the entire financial system, having chosen throughout the build-up to the present defining moment, to assume that certain banks faced liquidity problems, rather than a SOLVENCY crisis (of their own making, but a solvency crisis nonetheless).

It is unprecedented for representatives of the Illuminati-associated structures to issue warnings against their own fellow perpetrators.

BANKS HOARDING MONEY IN CASE DTC GUARANTEES ARE CALLED
Meanwhile, as the fragile world financial economy hovers on the brink of catastrophe with, as Senator Dodd has correctly gauged, the banks hoarding the funds that have been doled out by governments, the main issue early in January 2009 was: why are they doing this?

• The correct answer to this question is broader than the popular generic assumption that the banks are hoarding cash in order to avoid bankruptcy.

The reality was that the big complicit institutions have been hoarding fungible cash-cash to post against the vast derivatives exposures (see above) (on the working assumption that it cannot be that the guarantees will all have to be applied at once), in accordance inter alia with their stringent obligations under Basel-II. In the United States, the two institutions in the deepest trouble in this respect are Citibank and JP MorganChase.

These institutions have not only hoarded the cash dished out to them by the Treasury under the corrupt Henry M. Paulson Jr., which means that Mr Paulson has been bribing them to refrain from disgorging the Settlements funds, but have also, as repeatedly reported by this service, duly held onto and illegally presided over the exploitation of the $14 trillion on-the-books LOAN money made available to them for the sole purpose of financing the Settlements by Her Majesty The Queen, Prince Al-Aweed Al-Talal, and the Chinese parties.

These LOAN funds were made available by these highest-level parties in 2007 so as to finance the Settlements and thereby to provide the on-the-books resources to start the aforementioned G-7-Approved Refinancing Programme of capital markets transactions which will liquefy the banks on-the-books, while providing the Treasury with an ongoing cascade of tax receipts at 35% per annum out into the future – all ON THE BOOKS, as opposed to the prevailing Durkheim Octopus ‘system’ of debt-oriented legalised corruption which has resulted in the proliferation of unfunny money out to infinity stashed untaxed in offshore accounts for self-enrichment purposes and the financing of ‘Black Ops’ adventures and abominations.

• The LOAN funds, held from mid-September onwards in ‘lock-down’ so that they could not be used for ANY purpose other than to finance the Settlements, were lodged within the custodial group within the JPMorganChase US Treasury suspense account with Citibank.

When the $14 trillion LOAN funds were placed into lockdown effective 12th September 2008, they were at once subject to a stronger category of control than is implied by the word ‘frozen’, which we can certainly assert metaphorically to mean that tampering with one cent of such funds would be tantamount to an act of war.

As soon, then, as the said LOAN funds were placed into ‘lockdown’, the stock market and related sectors imploded and threatened to collapse. It then immediately transpired, given this collapse of the stock market during the week ending 19th September 2008, that the $14 trillion of LOAN funds had been illegally deployed to prop up the illicit US interbank carousel and to provide the base for leveraging and hypothecation operations – facilitating corrupt exotic ‘business as usual’, which was ‘why’ the Settlements had been delayed for a good 15 months beyond the approximate stage that the LOAN funds were first made available to replace the funds that had earlier been diverted, stolen and/or encumbered, including the $4.5 trillion that was provided by the People’s Bank of China in May 2006 referenced in our earlier reports.

The ‘lockdown’ of the LOAN funds, buttressed by the backwash from the London ‘Safety Lock Box’ raids on 2nd June 2008, has driven all subsequent events, forcing the US criminalists to the wall (where they risk being shot) and lighting the fuse for the series of bomb explosions, which will be prolonged and will continue for many years.

Unsurprisingly, it was on Saturday 20th September 2008, within days of the 12th September 2008 ‘lockdown’ of the $14 trillion, that the Editor of this service received the ‘triple gunshot voicemail’ reported earlier. It can now be revealed that the message conveyed by this macabre voicemail was this: ‘We will kill you for what you have done’.

CORRUPT ‘BUSINESS AS USUAL’ PLANS IN DISARRAY
However the outcome has so far been encouragingly different. In the first place, Robert Rubin, the Clintons’ Citibank-based financial ‘minder’ (guardian of the Clintons’ ill-gotten gains, including illicit profits derived from the exploitation of Her Majesty The Queen’s gold which was diverted during the ‘unscheduled’ British banking ‘black hole’ shutdown on 29th-30th March 2007) – was ordered to ‘get your … out of Citibank immediately’, in mid-December.

When we followed this intelligence up, we were advised that Rubin’s presence within this criminal enterprise being no longer required, he had been faced with no choice but to hasten for the exit. However as the ALPHA operation (and possibly other CIA covert criminal financing operations) are still running, one can take it as read that this hands-on fraudulent finance specialist is still up to his neck in related activities.

On 4th December 2008, The New York Post reported the progress of an investigation of the rôles of Mr Robert Rubin and the former Citibank CEO Chuck Prince in what the newspaper called ‘a Ponzi-style scheme that’s now choking world banking’, implying that some ‘mainstream’ journalists have belatedly been following this website after all. The report gave outline details of a Federal lawsuit by Citigroup investors represented by the law firm Kirby McInerney, which had produced a 500-page report alleging what the paper described as ‘a complex cover-up of toxic securities that spread across the globe, wiping out trillions of dollars in their destructive paths’.

Investor plaintiffs in the suit have accused Citigroup management of ‘overseeing the repackaging of unmarketable Collateralized Debt Obligations (CDOs) that no-one wanted – and then reselling them to Citibank and hiding the poisonous exposure off the books in shell entities’.

The lawsuit stated that ‘when the bottom fell out of the shaky assets, Citigroup’s stock values collapsed, wiping out more than $122 billion of shareholder value’, but that Rubin and other top insiders cashed out for themselves via ‘suspicious’ share sales ‘calculated to maximize the personal benefits from undisclosed inside information’.

The investigation conducted by Kirby McInerney was applied to amend and add new details to a blanket investor lawsuit filed against Citigroup following the exposures by this service in the fall of 2007. Consequent upon our exposure of the recycling of the standard ‘Bernie Cornfeld’-style Ponzi scheme technique, the amended lawsuit called ‘the actions of Citi leaders “a quasi-Ponzi scheme” to hide troubles – and keep Citi stock afloat while insiders unloaded about three million shares’ between 1st January 2004 and 22nd February 2008 for huge profits.

The Complaint named Citigroup, Rubin, Mr Prince, Vice Chairman Lewis Kaden, ex-Chief financial Officer Sallie Krawcheck and her successor, Gary Crittenden. The suit specifically stated that Rubin cleared $30.6 million on his stock sales, while Prince cleared $26.5 million, former Chief Operating Officer Robert Druskin grabbed nearly $32 million and the former Global Wealth Management unit chief, Todd Thomson, enriched himself by $25.7 million.

• The significance of this case is that it adds to the pressure on the criminal enterprise on top of all the other pressures, including the ever-present possibility (at the time of posting) that the LOAN funds provided inter alia by Her Majesty the Queen might be called at any time.

SUCCESSIVE WAVES OF DEFAULTS OUT TO 2012-2014
The bombs set off by the events of last September are exploding all over the place, and they will continue exploding for the next four or five years as components of the nexus of financial fraud peak in succession (the so-called ‘sub-prime’ element being only the first of the megaton nukes to have exploded to date). Still to explode between 2009 and 2012/2013/2014 into a chasm of defaults, are other manifestations of the legalisation of financial corruption, such as Credit Default Swaps (CDSs) and all forms of securitised fake ‘assets’, Alternate A ‘assets’, and ‘Adjustables’.

In non-technical language, the Credit Default Swap overhang matures and peaks in 2009, while the derivatives ‘originated’ on the basis of other residential assets, commercial property, credit cards and auto loans will ‘peak’ in disorderly sequence between 2009 and 2012-14. This means that even when remedial circumstances such as the actual implementation of the on-the-books G-7-Approved Refinancing Programme do come on-stream, high-yield residual financial sector nukes will still be exploding ‘unexpectedly’, taking the ‘mainstream’ media by surprise, as usual. There is nothing to be done now about this state of affairs.

THE STRENGTHENING OF BARACK OBAMA’S POSITION
Ever since he was briefed by the FBI in Chigaco on the day following his election victory, President-Elect Barack Obama, who ‘blew up’ himself when the duplicity of associates was revealed to him on that and subsequent occasions and who soon came to understand that his prerogative to appoint whom he liked to serve in his Administration had been somewhat pre-empted for him by the prior construction of a shell Administration for the Elite Power Continuum for him to accept on a ‘take-it-or-leave-it’ basis, Mr Barack Obama has demanded finalisation of the Settlements.

And as noted, he has himself been responsible for two of the most critical appointments – to the leadership of the Securities and Exchange Commission and the Office of Management and Budget.

THE FATE OF DELUDED HOLD-OUTS AGAINST THE SETTLEMENTS
As his position strengthened with the waning of the CIA’s sterile rearguard Bush-Cheney Internet campaign to discredit Barack Obama, and the Electoral College outcome on 11th December proved favourable to the President-Elect as expected, the President-Elect’s insistence on completion of the Settlements, to the fury of the Bush criminalists, has driven events at a hectic pace.

On Friday 18th December, Mr Obama warned that some 100 key people – including Attorneys whose firms must distribute the Settlement funds to the 1,000-odd Trustees for onward remittance – who have been protected hitherto, would cease to enjoy all immunity from the consequences of their complicity in financial crimes with effect from Monday 22nd December: indicative of the fact that if they were to impede the Settlements (as always, on the orders of Bush Sr.), they would be arrested, like the scores of bankers in Europe who have been arrested in successive waves over the past several weeks, and since the fall of 2007. On 18th December we received a report, for instance, to the effect that a further 12 ‘sleepers’ impeding the Settlements had been cuffed.

On 16th December 2008, it was reported/confirmed that five key Trustees in Europe had been arrested; and it is believed that these people were ‘taken down’ for prolonged periods.

• In addition, a not inconsiderable number of ‘sleepers’ and others taking orders from the imploding George Bush Sr. apparat have, in recent weeks been ‘neutralised’ – this being the currently fashionable euphemism for ‘liquidated’.

On 23rd December (5.35pm) the Editor was advised that a significant number of bankers and others had been ‘arrested’, taken away, ‘neutralised’ (liquidated) on the preceding day, in line with similar operations on the two preceding days and earlier. On 26th December 2008, it was confirmed to us that President Sarkozy, on behalf of all the European Union’s ‘Member States’, had issued ‘a final ultimatum’ to the criminalist US authorities for the Settlements payouts to be finalised by the end of the year (when Sarkozy’s six-month rotating EU Presidency came to an end), although as President of France, his ‘mandate to pay’ extracted from President George W. Bush at Camp David would not be affected (as the White House may have assumed). It was also confirmed to us from the United States that, despite everything that has happened, President George W. Bush STILL thought he was in charge of the Settlements process, given that the familiar blocking games played by the Bushes all along continued seamlessly following Sarkozy’ acquiring his ‘mandate to pay’.

On 28th December 2008, in a repetition of the familiar sterile obfuscating delay antics, a Trustee reported several instances of Trustees failing to turn up at banks for payouts, as has often been reported all along (one of the standard sabotage techniques) and that ‘they are working furiously to get everyone in place’, with ‘feelings really frayed right now’ – not that they have not been frayed ever since this service became involved with this crisis.

But for such a source to mention ‘frayed feelings’, giving the standard habit of understatement, reflected the extreme fractiousness of the situation, which has led to many sudden deaths, with more in the pipeline, according to our information. However, so successful has the Bush-Cheney disinformation, diversion, expectations-manipulating ‘Psy-Ops’ apparatus been throughout this coordinated operation to scam every target imaginable, that none of this unspecific ‘information’ can ever be relied upon: it is foolhardy for people to do so. Such ‘information’ can only become reliable when backed up by indpendent sources, as in the case of the jailed bankers in the UK.

The authorities under the incoming Administration would have the option of foreclosing on both Citibank and JPMorganChase in the event (as appeared to be the case immediately ahead of the Christmas holidays) of their continued intransigence, after partial completion of the Settlements in favour of ‘the countries’ on Thursday 18th December, which was the date when the US Treasury guaranteed value and the country recipients were said to have been ‘paid out’.

SHOUTING MATCH OVER PAYOUTS TO U.S.-BASED RECIPIENTS
But when it came to paying out the US-based recipients, the Editor gathered that a blazing row, or ‘shouting match’ developed, involving recalcitrant American refusals to disgorge tranches of the LOAN funds to US recipients. This row may have focused inter alia on the illegality of Citibank and other institutions even contemplating further misapplication of elements of the $14 trillion in ‘lockdown’ which could NOT be touched except for Settlements disbursement purposes.

According to our sources, the explosive international slanging and shouting match started on Friday 19th December 2008, when the US tranches of the Settlements were stalled, and was still continuing on Saturday 20th December, immediately ahead of the Editor’s return to London from New York on Sunday 21st December.

In the second place, the bailout providing loans worth $17.4 billion to Detroit automakers reflected NOT the desperate plight of the US motor manufacturers, but rather alleged EXTREME FEAR in the White House and the Treasury that if General Motors and Chrysler were to be placed into Chapter 11 bankruptcy, the consequent investigations would expose the fact that these household names’ balance sheets are stuffed with fraudulent securitised derivative assets, and that their accounts had been falsified for years since such dubious assets had been treated for accounting purposes as though they are ‘real’ assets – which is not the case, as they are worthless, although the system of legalised corruption dictates otherwise.

UGLY SITUATIONS FACING KEY PLAYERS
Any Trustee appointed under Chapter 11 procedures would be bound to report such information, which would set off colossal further aftershocks throughout the financial system, coming on top of the Madoff takedown which will continue setting off landmines way out into the future, despite any evidence of ‘insider’ attempts to contain the fallout – not least within the offices of the Securities and Exchange Commission, which allowed these corrupt practices to flourish (even as the SEC has been participating in the fraudulent finance trading operations on own account), in the context of the Gramm-Leach-Bliley Act of 1999 and the associated weakening of the stringent US securities legislation of 1933 and 1934, which, however, still applies and should have been enforced.

The fact that the Deposit Trust Clearing Corporation (DTCC) has been ‘guaranteeing’ these false securitised ‘derivatives’ assets, and has even boasted about clearing $1.8 quintillion of such junk as noted above, does NOT ‘guarantee’ the ‘value’ of such assets, given that they are intrinsically worthless: it simply confirms that the legalisation of US financial corruption has comprehensively failed to disguise the real-world reality that such false ‘assets’ are both illegitimate AND worthless, even though the legitimisation of corruption prescribes the opposite.

DECISION TO APPLY THE ‘BCCI/ICELAND/ENRON TREATMENT’ TO MADOFF
In the third place (but perhaps slightly in the wrong order), on Thursday 11th December, which we believe is about when the carousel finally ran out of fresh ‘IN’ resources altogether – as the events of mid-September had led to the drying-up of the secondary market, thus precluding the tapping of the secondary and tertiary markets for prop-up funds – all of the leading corrupted financial players suddenly discovered, in sync, that the cupboard was bare. Faced with this prospect, the Bush Sr. Crime and CIA criminal enterprise apparat is believed to have decided to apply the ‘BCCI treatment’ to the Madoff Ponzi scamming machine and its subsidiary Ponzi operations – just as it had earlier pulled the plug on ENRON and, more recently, Iceland, a conveniently located fraudulent finance platform established/exploited by Bushite associates (e.g. Khaled Aziz, Hospice Trust, etc).

The routine practice appears to be that as soon as one of these Ponzi fraudulent finance carousels reaches a tipping point, the criminal finance engineers deliberately allow the fake money machine to implode, rakes all the cash out for itself, and leaves all the deluded investors and (in this case) the subsidiary Ponzi investor funnels dangling, like the ‘package people’.

One consequence of this development was that lame-duck President George W. (Dog) Bush Jr. was reported to have asked his lawyers whether he could continue to stall on the Settlements (so that he could wind up stealing some more money) and what would the likely consequences be for him personally if he did so. Our sources informed us that his corrupt lawyers responded words to the effect: ‘Well, you’ve got away with it so far, so what’s the problem?’

By responding corruptly in this manner, the President’s co-conspiratorial Attorneys revealed how far behind the curve and how compartmentalised they have remained, since the reality is that Bush II has NOT ‘got away with it’ and is manifestly defeated and stretched flat out on the rack, despite theatrical appearances to the contrary. The Bushes may THINK that they have raked out all the money and have ‘won’, but as explained above, they are liable to lose the lot.

In any case, since President Sarkozy obtained his ‘mandate to pay’, the outgoing President Bush has not been in control of events, even though it is clear from this episode and from his behaviour generally that he thought he was still in charge. Maybe it all depends on his daily intake.

BELATED OPERATION TO DISCREDIT PRESIDENT SARKOZY
Meanwhile an operation was noted in December 2008 apparently to destabilise President Nicolas Sarkozy and to place him under a cloud, focused on the huge Clearstream corruption and money-laundering scandal that has grown a new leg – with inter alia the revelation, extracted from widely available Clearstream historical spreadsheets, that Sarkozy holds or held two secret accounts in false names, Paul de Nagy and Stéphane Bosca. We were suspicious of this sudden eruption, given that the ‘intelligence’ proffered and pilfered for international public consumption was extracted from documentation that has been circulating for several years; so it represented nothing new.

But specifically, it was reported on 18th December 2008 that Sarkozy might soon be facing renewed charges that he was at the receiving end of corrupt foreign funds through the Luxembourg-based Clearstream entity. President Sarkozy’s father’s full name was M. Nicolas Paul Stéphane Sarkösy de Nagy-Bosca. The Clearstream money-laundering scandal connects directly with American political and ‘Black Ops’ financing operations through Bank of Credit and Commerce International (BCCI), Banco Ambrosiano (the Vatican: see the preceding report), Bahrain International Bank (associated with the deceased – as of 26th December 2001 – Osama Bin Laden), and Bank Menatep, the KGB entity previously headed by the disgraced and then imprisoned covert Soviet KGB operative and oligarch and former minor Gorbachëv-era Minister, Mikhail Khodorkovsky.

The Clearstream data of which this service has been aware for several years contain accurate information, indicating that allegations by the Sarkozy entourage that the spreadsheets that have been in circulation for the past several years are forgeries, are false. M. Sarkozy was reported in February 2007 and earlier to have received corrupt funds from Zug-based Marc Rich, a.k.a. Hans Brand, the long-range DVD operative and corrupt financier who was notoriously ‘pardoned’ by President Clinton during his last hours in office (see above). The man who is now President of France was also alleged in 2007 to have received funds from Russian-Israeli mafiya accounts of Bank Menatep. However the ‘surfacing’ of this OLD intelligence is obviously suspect.

WHAT PRESIDENT BUSH JR. WAS REALLY UP TO IN BAGHDAD: TRYING TO STEAL MONEY
On Saturday 13th December, Bush Jr. appeared in Baghdad where, on 16th December 2008, he narrowly escaped being hit on the head by what have become the most famous footwear items in history – thrown by Muntadhar al-Zaidi, the courageous Iraqi TV journalist working for al-Baghdadia satellite TV station, who followed and reported on the US Apache helicopters’ trails of death and destruction, and has been a relentless exposer of the gross, Nazi-style abominations and atrocities committed by the US forces in Iraq. Throwing one’s shoe at a person is the ultimate insult in the Arab world and also anywhere in Europe from Austria eastwards.

The first airborne shoe was accompanied by the following pertinent imprecation:

‘This is the farewell kiss, you dog’.

At least, that is what was widely reported. Less widely reported was what the journalist shouted to accompany the arrival of the second airborne shoe:

‘This is from the widows, the orphans and those who were killed in Iraq’.

As the Iraqi and Arab satellite stations broadcast this expression of pent-up fury and outrage at the brutality of the invading and occupying US forces, and of the CIA’s cadres with their hideous ‘Black’ abominations from Abu Ghraib onwards, regional TV stations and media websites were inundated with messages of adulation. The Guardian summarised the content of these messages thus:

‘Bush is a mass murderer and a war criminal who sneaked into Baghdad. He killed a million Iraqis. He burned the country down’.

Ostensibly, ‘the Dog’ was in Baghdad to sign off on the negotiated troop withdrawal arrangements, this being presumably Bush II’s final Iraq-related act as the most despised US President in history. But in actual fact, what Mr Bush was really more interested in, was stealing money.

• Two impeccable sources informed us on 16th December 2008 that he attempted to steal a large sum while in Iraq, only to be informed that the funds had been placed beyond his reach, under the protection of the World Court.

So the workings of the devious mind of this cunning little criminal dog-snake had been anticipated in advance, given that it would have been known that he was to make a flying visit to Baghdad over the weekend of 13th-14th December 2008 (even though the visit was ‘secret’). Mr Bush’s failure to steal money from the Central Bank of Iraq or indeed from any other component of the Iraqi financial infrastructure may account for the man’s ‘crushed’ appearance during subsequent TV broadcasts.

NO DENIAL OF THE MORGAN STANLEY TERRORISM FINANCING CENTER
While all this was developing, our report exposing the office suite within Morgan Stanley known from the relevant investigation in 2007 to be the Terrorism Financing Center specialising in the financing of the projection by the corrupt revolutionary United States of secret ‘Black Ops’ global terrorism operations headed by the US-created hydra called Al-Qaeda, had already been in the public domain for OVER THREE WEEKS. This exposure, which stemmed from our knowledge that the Provost Marshal was refused entry to this office suite with his accompanying personnel when he attended Morgan Stanley’s premises in October 2007, and from the findings of the subsequent official but unreported investigation, prompted the following response:

• NO RESPONSE AT ALL:
From any of the CIA-controlled disinformation or confusion-mongering websites, which obviously, being CIA-backed outlets, could not ‘touch it’, with one exception. It was suggested by an observer that the breaking of this information was worthy of a Pullitzer Prize (although simple Brits don’t really understand what on earth that is). The comment was accompanied by the add-on that ‘it had better be true, or one wouldn’t want to be in Story’s shoes’. Well, Story remains, at least as of the time of writing, in the new shoes that he bought in order to be properly dressed for his fourth daughter’s candle-lit wedding in our 11th century parish church on 13th December 2008.

• NO REFUTATION WHATSOEVER from any Fourth or Fifth estate source. Manifestly, if the report were untrue (which is not the case!), it would have been necessary at some stage to discredit it. But this has not happened, because the report is true, as you would expect.

Now it is a fact that this information, which had been known for over a year by our sources, who had previously been precluded from revealing it to us, was made available for a very good reason. Even though, as indicated above, the report has so far been confined to this website, that doesn’t matter because of the website’s immense global coverage. The reality is that this information is out in the public domain, so that governments worldwide have picked it up and know the truth of the matter (if it had been withheld from them by their penetrated intelligence services).

AL-QAEDA WILL HAVE TO BE CLOSED DOWN: BY BARACK HUSSEIN OBAMA
It can therefore only be a matter of time before Al-Qaeda is wound up.

• And who do you suppose has been positioned to achieve just that outcome?

• Why, Barack Hussein Obama, of course. Let us explain, in case this is not clear.

Treating the 25 years of the Reagan-Bush-Clinton ascendancy as the Thesis (Clinton has all along ‘worked for’ Bush Sr., but carries the opposite (dialectical) political label), we are now presented with the purported Antithesis under President Barack Obama.

• Although the Elite Power Continuum remains in place, the team members have been switched.

The socialist-internationalist British Prime Minister Gordon Brown pronounced on 14th December that Al-Qaeda was planning 20 separate terrorist attacks on civilian targets in the United Kingdom. However being also a blackmailable intelligence officer, Mr Brown knows perfectly well, or should know, that Al-Qaeda has been financed inter alia via the Morgan Stanley-based Terrorism Financing Center (our name for the abominable suite within that corrupt financial enterprise in Midtown New York City). It therefore follows that Brown may be a duplicitous deceiver who knows the truth but hasn’t got the guts to expose it, because he is being blackmailed, or is just plain ignorant due to compartmentalisation or because his handlers have been instructed to leave him in ignorance – which might be the sort of behaviour to be expected from the current Germanophile head of MI6.

As a result of the London ‘safety lock box’ raids conducted by 300 armed Metropolitan Police officers on 2nd June 2008, details of certain secret offshore bank accounts with Henry Ansbacher, British Virgin Islands, a preferred DVD money-laundering and bribery payment recipient bank, were discovered. This fact places a questionmark over the futures of certain key UK figures.

Another possible explanation for Brown’s remarks would be that they represented a feeble attempt to discredit our report: evidently, Mr Story’s exposure of the Morgan Stanley Terrorism Financing Center ‘cannot be true, because why would Morgan Stanley be interested in mounting 20 attacks against America’s supposedly closest ally’?

Anyone who thinks like this hasn’t begun to grasp:

(a) That the so-called ‘Special Relationship’ has been degraded and corroded by the wayward and relentlessly evil operations of the DVD segment of the US Intelligence Power; and:

(b) That the deviousness of the evil DOUBLE-MINDEDNESS of these people is infinite: they have NO WAY of combating the truth other than with more lies. IF YOU HAVEN’T UNDERSTOOD THE DOUBLE-MINDEDNESS DIMENSION BY NOW, YOU’LL NEVER UNDERSTAND ANYTHING.

Anyway, our revelation of the existence of the Morgan Stanley Terrorism Financing Center also represented yet another HORRIBLE BOMB EXPLOSION in the faces of the recalcitrant criminalist revolutionary perpetrators, since, by definition, it signalled not only that Al-Qaeda would have to be wound up, but, even more to the point in our context, that:

• The United States’ reprobate and wholly inexcusable covert ‘Black Ops’ financing of terrorism worldwide through Morgan Stanley and possibly other criminalist US institutions, will have to be wound up, as well. This follows because now that this report has of course remained unchallenged, the US Government has come under pressure, and will remain under intensified pressure, from governments, other observers and this service, to close down these revolutionary abominations, and to make haste in doing so. The ‘discontinuity’ afforded by the arrival of a properly elected and validated (by the US Electoral College) new Administration (albeit the controlled Antithesis to the preceding Thesis), especially a man of Mr Obama’s ethnic background, provides the deliberately prearranged DIALECTICAL opportunity to achieve this desirable outcome.

We can leave our disgust and justifiable fury at the hideous behaviour of the revolutionary US Government and its ruthless Intelligence Power as a promoter and projecter of terrorism, to later.

FOLLOWING OUR MULTIPLE EXPOSURES, DVD NOW SAID TO BE ‘BITTERLY DIVIDED’
Recalling that the Intelligence Power controls the US Government, not the other way round, it can be seen that the Bush-directed neocon (Trotskyite/DVD) intelligence community’s ‘Faction A’ which has been surreptitiously promoting the World Revolution and causing mayhem around the world, is being superseded by an ‘opposing’ faction, which will now set about dismantling the worst features of the run-away revolutionary madness sponsored by Faction A.

The genies that the outgoing team’s evil people have let out of the bottle include the DELIBERATE ongoing CIA-originated radicalisation and mindless indoctrination of Pakistani youth, so that a huge swathe of that country, like Afghanistan, is in the hands of armed gangs, as is the case for the same underlying reason in large areas of Africa.

Given that the routinely treacherous British Foreign Office has a team in Rawalpindi which recruits Pakistani immigrants to the United Kingdom (each agent is said to be required to fulfil his quota of 15 Pakistani immigrants per working day, on a bonus basis), it is self-evident that elements of the British Government structures, by importing Pakistanis into Britain en masse, are actively engaged in working with the (DVD) enemy to destabilise the United Kingdom which they are supposed to be serving. This is among many such grotesque revolutionary aberrations that have come to light through recent forensic research by analysts whose brains have not yet been ‘washed’.

Such operations were originally masterminded by the Bush-linked DVD-servicing component of the corrupted US Intelligence Power, but have now all reached the ‘maximum chaos’ level and are in growing jeopardy, as we understand that, following our exposures (specifically), the Dachau-based DVD, related to Bush Sr.’s hellish activities, is now bitterly divided.

More and more of the DVD’s filthy operations are being exposed, including the transfer of little girls along with drugs and nuclear components by submarine, for unloading at a northern German port (where little girls have been photographed by clandestine operatives, being disgorged from one of the submarines in question).

DVD’S BRUSSELS BLACKMAIL UNIT AIMED AT EUROPEAN COMMISSIONERS: DG1-X
We now report a further dimension of DVD’s operations, which hopefully will accentuate additional splits in the ranks of German intelligence. The Brussels-located component of this shadowy ‘Black’ Nazi strategic deception continuum agency, labelled DG1-X, is hereby exposed. DG1-X specialises solely in compromising European Commissioners, which it divides into the following categories:

• European Commissioners susceptible to paedophile compromise for blackmail purposes; Subsidiary question: Do they prefer little boys or little girls? Refer back to our exposé of the President of the European Commission, José Manuel Barroso, in the DVD exposure report published in October 2008.

• European Commissioners susceptible to the standard honey-trap operation for blackmail purposes (provision of women).

• European Commissioners susceptible to the standard bribery/financial compromise operation for blackmail purposes (money-trap operations).

As we all know, other agencies ‘do this stuff’, as you will have read elsewhere recently on this website; and not all of them are ‘Black’. But the significance of this DVD unit is that it operates in Brussels specifically to target European Commissioners, who of course are away from home when they are stuck in the distinctly gloomy Belgian capital.

• The reason for the existence of DG1-X in Brussels is that the modelling of the European Union as a COLLECTIVE, in order to obscure the underlying intention for it to be controlled by Germany and to represent, ultimately, ‘Greater Germany’, as per the blueprint originally specified in ‘Europäische Wirtschaftsgemeinschaft’ [1942, Berlin], necessitated the incorporation of an add-on mechanism for ensuring that European Commissioners could always be relied upon to do Germany’s bidding. DG1-X probably targets other EU personnel as well as Commissioners.

• FACT: When the Editor recited this information of late on the transatlantic telephone line, the connection was immediately severed. This always indicates that what is being said is accurate (routinely showing what fools the eavesdroppers are).

THE MADOFF HYDROGEN BOMB EXPLODES
The next nuclear explosion to disfigure the faces of the Workers of Darkness was the subsidiary Octopus Master Ponzi Scheme run by Bernard L. Madoff, who was arrested at about 8.30 am in his Manhattan apartment on 64th Street on 11th December 2008. In an extensive report dated the 20th December and entitled ‘Madoff Scheme Kept Rippling Outward, Crossing Borders’, The New York Times ploughed methodically through the office press cuttings file, characterising Madoff’s self-confessed giga-scam as ‘the first Global Ponzi Scheme in history’ – which is of course NOT TRUE, since George H. W. Bush Sr.’s Octopus operations represent a whole universe of exported Ponzi schemes. But the article, which covered more than two huge full pages in the newspaper, and was only concerned with the money ‘IN’ (see above), did an excellent job assembling details of Madoff’s domestic and international connections, which were almost 100% Jewish.

As we have seen, Bernard L Madoff was recruited by George W. Bush Sr. to run ‘his’ money. After the $14 trillion was placed into ‘lockdown’ during the week ending on 17th September 2008 (see above), Madoff’s firm started to encounter massive redemption demands.

Bearing in mind that the funds, once transferred abroad, for instance to London, could then be leveraged 40:1, the pressure faced by Madoff related not just to originally invested funds, but impinged upon much larger sums of money which could not be accessed because they had been routinely transferred out to offshore tax havens and to Israel and then onwards inter alia to the Southern Cone of Latin America – Paraguay, Uruguay, Argentina and Brazil – where many of the key dogs and rats are now congregating, to satisfy Bush Sr., who demanded his payoff and pound of flesh at the Jews’ expense. The Madoff takedown, in short, represented another George Bush Sr. operation to claw back the immense sums he lost at an earlier stage of the crisis for which he is responsible, inter alia via naked shorts, as reported by this service.

It can be seen, too, that the destruction of Madoff was a George Bush Sr. ‘BCCI/ENRON takedown-type’ operation designed effectively to take down Israel itself – Mr Bush Sr.’s revenge against Alan Greenspan, his former technician, with whom, as our exposures gathered momentum, he had fallen out (new information). As noted, every cited victim of the Madoff implosion is Jewish.

The United States Court proceedings deal, and are likely to continue addressing, just the money originally invested (the money ‘IN’) – not the money leveraged off the base funds, which amounts to trillions and which would appear, according to our own special sources (not secondary Internet sources) to have been channeled extensively THROUGH Israel, as has been stated, en route to South America, for the benefit of the Bushrats congregating there.

In other words, the Bushrats are not only fighting each other and their double-crossed Jewish associates inside the sack, but have essentially burned the sack (their boats) as well. The colossal transfers to Israel for onward transmission to the Southern Cone, were monitored in real time.

MADOFF RECRUITED BY, AND ‘WORKED FOR’, BUSH/CIA PONZI CRIME APPARAT
Madoff’s operations could not have been possible without, and were assisted by, insider traders associated with the Octopus operations linked to the Bush-Clinton Crime nexus. The New York Times’ article showed clearly how the scam operated, with a key mechanism being Mr Madoff’s success in hitching other, subsidiary Ponzi Scheme investment scamming operations – such as Ascot Partners (led by J Ezra Merkin), Fairfield Greenwich Group (headed by Walter M. Noel and Jeffrey Tucker, who has said that the firm worked with Madoff for 20 years), Tremont Group, and Maxam Capital Management, which enjoyed steady annual profits averaging 8%-12% and which directed a constant stream of new investors into Madoff’s clutches.

Since we now know that Madoff ‘worked for’ Bush Sr. in his later years, the leveraged proceeds from the inflowing funds that were multiplied and consistently maximised, were in the main kept abroad, while the entities and individuals listed below were paid from new incoming funds placed by new investors or by existing investors who increased their investments, with the actual Ponzi scheme related essentially to the principal monies invested, only. So gargantuan was the greed associated with this operation, that the externally generated funds were retained offshore (they could hardly be repatriated without attracting attention and without courting mandatory IRS tax evasion investigations), while the ‘IN’ money was repaid, or returns on it were paid, from new ‘IN’ money. The ‘OUT’ money was effectively an entirely separate operation.

Of course the ‘returns’ paid to investors did not reflect actual investment outturns, but rather rigged numbers falsified to enable the ‘managers’ to deliver the Ponzi-style returns expected.

In other words, there were two parallel master operations: the use of the base funds for external (40:1) leveraging, hypothecation, high-yield investment programmes and the like, with the created proceeds stashed offshore, as usual, untaxed and off-balance sheet; and the Ponzi scheme and its subsidiary Ponzi Schemes revealed in the existing Court documents, whereby earlier investors were repaid and interest was paid with funds provided by later investors. The hidden operation, concerning which Mr Madoff was reported by his elder son to be ‘cryptic’, was the Bush-related sink-hole. The Court documents imply that Madoff ‘kept several sets of books’.

We speculate that Madoff succumbed to recruitment by George Bush Sr. because he calculated that the massive hypothecated fiat money accruals generated by participating in the Bush-related off-balance sheet transnational fraudulent finance operations could be tapped so as to perpetuate his ‘on-the-books’ Ponzi Scheme activities, which he had been running long before George Bush Sr. operatives recruited him. However when Bush Sr. suddenly (we are informed) made demands consistent with a Bush ‘BCCI/ENRON takedown’ decision to ransack Madoff’s operations, to rake out all the money, to destroy his Jewish participants and inflict massive harm on the State of Israel, this means of supporting the increasingly vulnerable Ponzi Scheme ceased to be available.

Separately, we have repeatedly pointed out in these reports that all get-rich-quick ‘humanitarian’ and ‘prosperity’ programs which may have enticed participants to ignore the Prudent Man Rule with promises of mouth-watering returns, represented traps for the unwary. The original Charles Ponzi story has been posted several times with these reports, and is reposted below (3).

‘MADOFF TAKEDOWN’: A VAST SMOKESCREEN ‘PROTECTING’ THE GIGA-CROOKS
Before considering some of the Court documents associated with the Madoff ‘takedown’ operation, the matter must be placed firmly in the much broader context of the Bush-Clinton-CIA/DVD Criminal Cadres’ ruthless ransacking operations to steal as much of other people’s coveted possessions and wealth by reprobate means as possible, in order to sustain the criminalist community’s status as arbiters of both the future of humanity and of the mad World Revolution to reorder human affairs in accordance with their own sick preferences. And when we examine the clues left by the Madoff implosion operation, it becomes perfectly clear that this is an integral component of the offensive against humanity directed by the most ruthless network of gangsters to have been sicked up by the human race. The clues are quite specific, too.

According to our Palm Beach correspondent, desperate Jewish householders have been trying to sell their Christmas/holiday presents to raise cash, as their liquidity has been reduced effectively to zero. Others have been despeartely engaged in short-selling of their homes, only to find that the bankers they deal with, don’t want to know. Many people in Palm Beach, our informant says, have been literally ‘wiped out’. And the perpetrators of this ‘takedown’ have STOLEN both the money ‘IN’ and as indicated above, the much more prolific money ‘OUT’, in accordance with THE STANDARD PATTERN employed by the giga-crooks since at least the ‘classic’ CIA takedown of BCCI.

Other instances of the application of this technique, involving the hollowing-out of the target, to be followed by the deliberate, preplanned triggering of its collapse after all the ‘free money’ has been raked out, can indeed be seen to include ENRON, Iceland, even Ireland (if you look closely at the structure of that country’s balance-of-payments), and now the Madoff enterprises.

Looking at ‘Madoff’ in this broader perspective, we can see with ease that Bernard L. Madoff is just the shill: there is always a shill. He ‘had it good’ for years: now it’s his turn to take the full rap. If he winds up in jail for the rest of his life, what is that to the big criminals behind the curtain? If several people get killed, as happened with the takedown of Enron, what is that to the giga-crooks? If the people of Iceland starve and shiver in the cold, who cares, given that the country’s entire financial system has long since been ransacked and hollowed out?

In addition, the Madoff Ponzi system ‘implosion’, which was directly linked to the consequences of the London ‘Safety Lock Box’ raids on 2nd June 2008 and the placement of the $14.0 trillion into what we have described as ‘lockdown’ on 12th September 2008, as sources of replacement funds effectively dried up from mid-September onwards (the London-based stolen and illicit collateral having been neutralised), serves the following purposes in the interests of the giga-crooks:

• A diversionary purpose: Everyone is looking directly at the Madoff case, becoming entangled and confused by the spaghetti junction of confusing sub-cases, litigation, Court documents, SEC, FINRA and SIPC investigations: which is JUST WHAT THE GIGA-U.S. CROOKS WANT. After all, they have got away with the BIG MONEY, they have hollowed out the Master Ponzi Scheme and all its subsidiary Ponzi operations, and they urgently need the benefit of the cover so helpfully now provided by the MADOFF SMOKESCREEN, for two reasons:

(1) To ensure that no-one looks BEYOND the Court documents to grasp what has happened.

(2) To ensure that no-one looks into the criminal finance operations these people have been up to inside Citibank. In this connection, we interrupt this sequence with a reference to some comments attributed to Sir Win Bischoff, the Chairman of Citigroup, during a New Year’s Day broadcast on the BBC’s domestic Radio 4 Today Programme.

Asked the usual knee-jerk BBC question: ‘Who is really to blame for the crisis?’ (this question is asked repeatedly because none of these journalists can get it into their heads that this is 100% about ORGANISED FINANCIAL FRAUD AND NOTHING ELSE), Sir Win responded as follows:

‘My view is that they [bankers] are partly to blame. There are people who feel remorse about this: there’s no doubt about it. Do they all? I don’t know…. It is very important for banks not to deny that they carry some of the can, whether that’s 50 cents on the dollar, that is their responsibility, or 60 or 40’. Now remember that Sir Win is CHAIRMAN OF THIS HUGE BANK. WHAT DOES THIS IMPLY?

• A possible insider control purpose: When we examine the Court papers (the earliest filed Court documents were assembled from the US Court by the Editor), we discover that CONTROL OF THE EXPOSURES MAY BE CONTAINED ‘within the system’. There are several clues to this possibility:

(A) Court Document #2 [Securities and Exchange Commission COMPLAINT vs: Bernard L. Madoff and Bernard L. Madoff Investment Securities LLC, Defendants: Reference: 08 Civ. 10791 (LLS): Appointment of Receiver, Lee Richards, of Richards Kibbe & Orbe LLP ‘over all the assets and accounts of defendant Bernard L. Madoff Investment Securities LLC (“BMIS”) outside of the United States, to take control forthwith over BMIS’s dealings and transactions with any non-United States entity or counterparty, with full access to BMIS’s books and records necessary or useful to him in the exercise of his powers over BMIS’s foreign business or transactions’ signed by United States District Judge Louis L. Stanton at 6.42pm on 12th December 2008: plus:

Court Document #3: Securities and Exchange Commission ORDER vs: Bernard L. Madoff and Bernard L. Madoff Investment Securities LLC, Defendants: Reference: 08 Civ. 10791 (LLS) ECF Case: Order to show cause, Temporary Restraining Order and Order Freezing Assets and Granting Other Relief; Order consented to by defendants and therefore signed off by United States District Judge Louis L. Stanton at 4:51pm on 13th December 2008.

Court Document #2 appoints LEE RICHARDS, of Richards Knibbe & Orbe LLP, as ‘receiver over all the assets and accounts of the defendant Bernard L. Madoff Investment Securities LLC (“BMIS”) outside of the United States’, while Court Document #3 appoints LEE RICHARDS, of Richards Knibbe & Orbe LLP ‘as receiver for the Defendants’ assets, including, without limitation, Madoff Securities International Ltd. (“Madoff International”) and Madoff Ltd.’: the Defendants being Bernard L. Madoff and Bernard L. Madoff Securities LLC.

LEE S. RICHARDS III is a founding partner of Richards Knibbe & Orbe LLP. His stated specialities, according to the firm’s website, are ‘white collar criminal defense, securities enforcement defense, regulatory proceedings, internal investigations and complex litigations’.

‘He has extensive trial experience and he regularly represents investment banks, hedge funds, public companies, investment advisers, corporate officers and directors, and other professionals in investigations and proceedings by the DOJ, SEC, FINRA, and other governmental entities and SROs. He also represents companies and senior executives in commercial litigations, class action and derivative cases, and arbitrations relating to a variety of disputes’.

Under the lead-in ‘Some notable representations include’, Mr Richards’ website lists the following:

‘Representation of several major New York investment banks in a variety of DOJ, SEC and FINRA investigations…

… including the representation of one of the major investment banks which advised ENRON’.

From this information it can be stated without fear of contradiction that Mr Lee Richards III is very knowledgeable in respect of how Enron- and Madoff-type Ponzi operations are structured.

(b) Under the Securities Investor Protection Act of 1970 (SIPA, 15 U.S.C. Sec 78aaa et seq.), the SEC and also the Securities Investor Protection Corporation requested (Civ. 08-10791) the US Court on 15th December 2008 to name Irving H. Picard [SEE BELOW] as Trustee, with the firm of Baker and Hostetler LLP appointed Counsel for the Trustee. This development will be referenced in greater detail when we examine the Court documents below, where we point out that:

Baker and Hostetler LLP has been established for 90 years with offices in Cincinnati, Cleveland, Columbus, Cosa Mesa, Denver, HOUSTON, Los Angeles, New York, Orlando, Washington DC, Brazil and Mexico. Having been ordered to be appointed Trustee under SIPA via the SEC and Securities Investor Protection Corporation, Irving J. Picard proceeded to JOIN the New York office of Baker & Hostetler LLP, per the firm’s Press Release, dated 22nd December 2008, headed: ‘Court-Appointed Trustee In Madoff Fraud Investigation Joins Baker Hostetler in New York’.

• WE REPEAT: Irving J. Picard was appointed Trustee, BAKER and Hostetler LLP were appointed Counsel to the Trustee: whereupon Irving J. Picard joins the firm of Counsel. IMAGINE!

On 3rd January 2009, The Times, London, reported that Martin Rosenman, President of Stuyvesant Fuel Service, a private New York-based fuel company, is suing Irving J. Picard, for the return of $10 million. The context of this suit revolves around that fact that Mr Picard’s first action was to obtain the Bankruptcy Court’s authority to transfer $28.1 million from the $200-$300 million said to be left in Madoff’s bank account(s), to cover the costs of the liquidation. But Mr Rosenman argued on 2nd January that Mr Picard had no right to these funds, pointing out that he (Mr Rosenman) transferred $10 million to Madoff just six days ahead of Mr Madoff’s arrest.

Specifically, Mr Rosenman argued that he spoke to Bernard L. Madoff on 3rd December 2008 about investing, and on 5th December he received details of an account into which the cash should be transferred. On 9th December, Martin Rosenman was informed by BMIS that Bernard L. Madoff had sold short $10 million in US Treasury bills on his behalf. Claiming that he had not authorised such a transfer, Mr Rosenman stated that he could find no record of any such transaction.

The lawsuit claims: ‘BMIS never transacted a trade of US Treasury bills on Rosenman’s behalf’. Mr Howard Kleinhendler, a partner in the firm of Wachtel & Masyr, representing Mr Rosenman, said that he suspected that at the time that Mr Rosenman invested his funds, Madoff knew that he was close to being exposed and caught, and was collecting cash in order to make a final distribution among family and friends. in addition to revealing Mr Picard’s action, this is just an example of the incredible legal tangle that is now building.

• 6th January 2009 Update: Irving J. Picard was reported by Bloomberg on 5th January to have identified $830 million in liquid assets in bank accounts associated with BMIS. Stephen Harbeck told the Congressional Committee that these assets ‘may be’ subject to recovery for clients of Madoff’s firm, according to Bloomberg, without explaining the use here of imprecise language.

In a separate Bloomberg report, the Assistant US Attorney, Marc Litt, whose signature appears on the Court documents obtained by the Editor of this service, was stated to have asked the Federal Judge to imprison Mr Madoff, as he awaits trial, arguing that Mr Madoff’s $10 million bail (and, one would presume, his properties pledged to the US Government) should now be revoked and the funds forfeited because he transferred $1.0 million of valuables, in violation of the asset freeze order. The report stated that Madoff disposed of five items, including ‘very valuable jewelry’, Mr Litt informed the Magistrate Judge, Ronald Ellis, on 5th January in the Manhattan Federal Court.

Some of the items were mailed by Madoff and his wife Ruth to third parties. Mr Litt stated that the transfer started on 29th December 2008, representing a ‘changed circumstance’, specified under Federal law, precipitating the necessity to alter the terms of Mr Madoff’s bail, since the transfer violated the freezing of his assets agreed to as confirmed in the Court papers we have examined.

Marc Litt explained that ‘the case against the defendant is strong, and it’s getting stronger’. The transfer represented ‘an obstruction of justice’.

(3) An examination by the Editor of the time-sequence of events which led to Bernard L. Madoff’s arrest reveals an extremely tight timeframe within which the ‘Madoff takedown operation’ was accomplished, suggesting at the very least that Attorneys, typists and other personnel would have to have worked all night on the necessary documentation.

Now knowledgeable US sources inform the Editor that this is not unusual. Nevertheless, the whole process looks TOO PAT TO HAVE BEEN SPONTANEOUS. Consider the following sequence, extracted from the Securities Fraud Count document submitted to the Court on 11th December by the FBI Special Agent, Thodore Cacioppi:

• First week of December 2008: Bernard L. Madoff informed ‘Senior Employee No. 2’ (one of his sons) that there had been requests from clients for approximately $7 billion in redemptions.

• About 9th December 2007: Madoff informed ‘Senior Employee No.1’ (one of his sons) that he wanted to pay bonuses to employees in December, rather than February (as was usual).

• On 10th December 2008, the ‘Senior Employees’ ‘visited Madoff at the offices of Bernard L. Madoff Investment Securities LLC to discuss the situation further… At that time, Madoff informed the Senior Employees that he had recently made profits through business operations, and that now was a good time to distribute…’.

‘When the Senior Employees challenged his explanation, Mr Madoff said that he did not want to talk to them at the office, and arranged a meeting at Mr Madoff’s apartment in Manhattan. According to Senior Employee No. 2, Madoff stated in substance, that ‘”he wasn’t sure he would be able to hold it together” if they continued to discuss the matter at the office’.

• ‘Confession’ of Madoff to his two sons on 10th December: ‘His investment advisory business was a fraud… he was “finished”… it was “basically a giant Ponzi scheme”… the business was insolvent, and [that] it had been for years… the losses from this fraud [were] at least $50 billion’

• On 11th December, the FBI Special Agent with another FBI agent entered Madoff’s Manhattan apartment after presenting themselves, and at Madoff’s invitation. ‘He acknowledged knowing why we were there. After I [the FBI Special Agent] stated “we’re here to find out if there’s an innocent explanation”, Madoff stated, “There is no innocent explanation”‘.

The FBI Special Agent’s Charge document was dated the same day, 11th December 2008, and was signed off by The Hon. Douglas F. Eaton, United States Magistrate Judge for the Southern District of New York. Now the Editor is prepared to acknowledge that the US ‘system’ is capable of great efficiency: but given the complexity of the documents that the Editor was able to obtain direct from the Court during his pre-Christmas visit to New York, and even conceding that the documents may in some instances have been elaborated from boiler-plate templates, the whole process seems to the Editor of this service to have been MUCH TOO PAT AND COMPACT TO BE REASSURING.

That, in turn, supports the analysis that the ‘Madoff takedown’ falls into the BCCI, Enron, Iceland imposion category, the model procedure being that when the time comes for all the accessible cash to be raked out, the carcase of the target is DELIBERATELY COLLAPSED, to facilitate this.

• Depending on the circumstances, this may have to be done in a frightful hurry.

In this connection, we can also observe that Madoff told his sons that he had just $200-$300 million of cash left. THE REST OF THE FUNDS HAD BEEN MISAPPROPRIATED AND STOLEN. Hence he left the ‘collapsing operation’ until the remaining several hundred million was ‘available’ for the illegal distribution that he was contemplating: a step too far for his sons, who, if they had agreed to such a distribution, would have laid themselves open to immediate arrest, along with their father. Whether they will be arrested later, remains to be seen, and depends on how much they knew.

Finally, the relevance of the foregoing open information concerning the SEC-appointed Trustee and the SIPC-appointed Trustee who immediately joins the firm of Counsel, should be reviewed.

MADOFF ‘CHANGES THE SUBJECT’, WHILE LAW ENFORCEMENT SITS ON ITS HANDS
In summary, Madoff ‘changes the subject’: No-one is supposed to be looking inside Citibank, no-one is supposed to be going on about the Settlements, no-one is supposed to be talking about the stolen/diverted $14.0 trillion of LOAN MONEY THAT BELONGS TO THE QUEEN, TO PRINCE AL-AWEED AND THE CHINESE PARTIES, no-one is supposed to care a hoot about the plight of the 320,000 long-suffering pillaged ‘package’ victims, and no-one is supposed to be in charge of his or her brains any longer, because ‘IT ALL DEPENDS ON THE OUTCOME OF MADOFF’.

• A lovely, open-ended laywer-enriching spaghetti junction of intertwined litigation operating at cross-purposes with no conceivable resolution because the innumerable decisions will all come to rely on each other, or will be impeded by the innumerable ongoing investigations which will take years to resolve, if any can ever be resolved. The perfect contrived cover for the giga-crooks.

MEANWHILE:

• THE GIGA-CRIMINALS HAVE STOLEN THE BIG MONEY. BUSH SR. HAS PROBABLY BY NOW GOT HIS TRILLIONS ‘BACK’, even though they were of course STOLEN IN THE FIRST PLACE.

• You are perfectly entitled to ask yet again, but with much greater determination than ever:

EXACTLY WHAT HAS U.S. LAW ENFORCEMENT BEEN DOING ALL THIS TIME, WHILE WE AND OTHERS, AT GREAT RISK TO OUR OWN PERSONAL SAFETY, HAVE BEEN EXPOSING THIS BOTTOMLESS AND REEKING CESSPIT OF OPEN-ENDED U.S.-PRIMED FINANCIAL CRIMINALITY?

• Law enforcement, Gold Badges and others need to get off their butts, instead of feathering their own nests like the rest of these people, and MI6/Interpol need to redouble their own operations in order to ensure that the requirements of the owners of the LOAN funds are fulfilled. Further failure to deliver, will CERTAINLY condemn the world to an absolutely horrendous future: IN 2009.

• Our forecasts have been accurate to date: SO START PAYING PROPER ATTENTION and earn some respect, instead of displaying your individual and collective feebleness and impotence.

• It is INSUFFERABLE for you people to be allowing these criminal operatives to get away with their crimes, if this is what is happening, and to obfuscate the audit trails with the connivance of deeply-placed Accessories to the Fact of this massive operation to hijack the whole world.

• Nor can it be tolerated that the criminalist cadres may indeed be relying upon the potential for the Madoff events to OBFUSCATE matters to their advantage, and to impede the Settlements and the grossly overdue implementation of the G-7-Approved on-the-books Capital Markets revenue-producing and tax-generating SOLUTION TO THE WHOLE WORLD’S FINANCIAL PROBLEMS which the US-based Washington area operatives have deliberately and malevolently SABOTAGED.

• So get off your butts and belatedly start DOING YOUR JOB.

• Or, as we asked earlier, are you ALL co-conspirators? THAT’S THE IMPRESSION YOU GIVE.

• WE ALL WANT RESULTS, NOT LIES, BLUFFS, DIVERSIONS AND SUBTERFUGES.

THE PRIMARY ORIGINAL DOCUMENTS FROM THE MADOFF COURT FILES
Addressing exclusively the money ‘IN’ dimension, the Editor has obtained the complete file (Case Numbers: 08 MAG 2735, AND 08 Civ. 10791), as of 21st December, held at the United States District Court for the Southern District of New York on the Madoff case (4), which represents the biggest explosion since our exposure of the Morgan Stanley Terrorism Financing Center, from which we report as follows, bearing in mind the context outlined above:

• Madoff’s ‘agreed bail package’ specified on the Appearance Bond dated 11th December 2008 bound Madoff to pay the United States $10.0 million (personal recognizance bond) secured by the Defendant’s Manhattan Apartment (valued at approximately $7.0 million) and to be co-signed by four financially responsible persons including his wife; and limited his travel to the Southern and Eastern Districts of New York and Connecticut, requiring him to surrender his travel documents. The Appearance Bond was signed by Bernard L. Madoff and by his wife, Ruth Madoff, and Peter Madoff, as surety.

• On 17th December 2008 a Court Agreement to Forfeit Property was signed by Bernard Madoff and Ruth Madoff. The property forfeited pending the outcome of the case consists of the Manhattan apartment on 64th Street,, Madoff’s Palm Beach residence, and his third US residence in Montauk, on the northeast fork of Long Island.

• The Complaint filed on 11th December 2008 by FBI Special Agent Theodore Cacioppi, in which Bernard L. Madoff is accused of violation of 15 U.S.C. sections 78j(b), 78ff; 17 C.F.R. section 240, 10b-5, contains inter alia the following:

COUNT ONE [Securities fraud]
1. … Bernard L. MADOFF, the defendant, unlawfully, willfully and knowingly, by the use of the means and instrumentalities of interstate commerce and of the mails, directly and indirectly, in connection with the purchase and sale of securities, would and did use and employ [sundry] manipulative and deceptive devices and contrivances in violation of Title 17, Code of Federal Regulations, Section 240.10b-5, by:

(a) employing devices, schemes, and artifices to defraud;

(b) making [many] untrue statements of material facts and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, and:

(c) engaging in acts, practices, and courses of business which operated and would operate as a fraud and deceit upon persons, to wit, MADOFF deceived investors by operating a securities business in which he traded and lost investor money, and then paid certain investors purported returns on investment with the principal received from other, different investors, which resulted in losses of approximately billions of dollars. (…)

3. I have reviewed the publicly available website of a securities broker dealer named Bernard L. Madoff Investment Securities LLC, from which I have learned the following:

(a) BERNARD L. MADOFF, defendant, is founder of Bernard L. Madoff Investment Securities LLC;

(b) Bernard L. Madoff Investment Securities LLC is a securities broker dealer with its principal office in New York, New York;

(c) Bernard L. Madoff Investment Securities LLC “is a leading international market maker. The firm has been providing quality executions for broker-dealers, banks and financial institutions since its inception in 1960”;

(d) “[w]ith more than $700 million in firm capital, Madoff currently ranks among the top 1% of US Securities firms;

(e) BERNARD L. MADOFF, the defendant, is a former Chairman of the Board of Directors of the NASDAQ stock market; and:

(f) “Clients know that Bernard Madoff has a personal interest in maintaining an unblemished record of value, fair-dealing, and high ethical standards that has always been the firm’s hallmark”.

4. I have interviewed two senior employees of Bernard L. Madoff Investment Securities LLC (“Senior Employee No. 1”, and “Senior Employee No. 2”, collectively the “Senior Employees”).

The Senior Employees informed me, in substance, of the following:

(a). The Senior Employees are employed by Bernard L. Madoff Investment Securities LLC, in a proprietary trading and market making capacity. According to the Senior Employees, BERNARD L. MADOFF, the defendant, conducts certain investment advisory business for clients that is separate from the firm’s proprietary trading and market making activities.

According to the Senior Employees, MADOFF ran his investment adviser business from a separate floor in the New York offices of Bernard L. Madoff Investment Securities LLC. According to Senior Employee No. 1, MADOFF kept the financial statements for the firm under lock and key, and stated that MADOFF was “cryptic” about the firm’s investment advisory business.

(b). In or about the first week of December 2008, BERNARD L. MADOFF, the defendant, told Senior Employee No. 2 that there had been requests from [various] clients for approximately $7.0 billion in redemptions, that he was struggling to obtain the liquidity necessary to meet these obligations, but that he thought that he would be able to do so.

According to the Senior Employees, they had previously understood that the investment advisory business had assets under management on the order of between approximately $8 and $15 billion. According to a Form ADV filled by MADOFF on behalf of Bernard L. Madoff Investment Securities LLC with the SEC on or about January 7, 2008, MADOFF’s investment advisory business served between 11 and 25 clients and had a total of about $17.1 billion in assets under management.

(c). On or about December 9, 2008, MADOFF informed Senior Employee No. 1 that he wanted to pay bonuses to employees of the firm in December, which was earlier than the employee bonuses are usually paid. According to the Senior Employees, bonuses traditionally have been paid in February of each year. On or about December 10, 2008, the Senior Employees visited MADOFF at the offices of Bernard L. Madoff Investment Securities LLC so as to discuss the situation further, particularly because MADOFF had appeared to the Senior Employees to have been under great stress in the prior weeks. At that time, Mr MADOFF informed the Senior Employees that he had recently made profits through business operations, and that now was a good time to distribute them. When the Senior Employees challenged his explanation, MADOFF said he did not want to talk to them at the office, and arranged a meeting at MADOFF’s apartment in Manhattan.

According to Senior Employee No. 2, MADOFF stated, in substance, that he “wasn’t sure he would be able to hold it together” if they continued to discuss the issue at the office.

(d). At MADOFF’s Manhattan apartment, MADOFF informed the Senior Employees, in substance, that his investment advisory business was a fraud. MADOFF stated that he was “finished”, that he [now] had “absolutely nothing”, that “it’s all just one big lie”, and that it was “basically a Ponzi scheme”. The Senior Employees understood MADOFF to be saying, in substance, that he had for years been paying returns to certain investors out of the principal received from other, different investors. MADOFF stated that the business was insolvent, and that it had been for years. Mr MADOFF also stated that he estimated the losses from this fraud to be at least approximately $50 billion. One of the Senior Employees has a personal account at Bernard L. Madoff Investment Securities LLC in which several million had been invested under the management of MADOFF.

(e). At MADOFF’s Manhattan apartment, MADOFF further informed the Senior Employees that, in approximately one week, he planned to surrender to authorities, but before he did that, he had approximately $200-$300 million left, and he planned to use that money to make payments to certain selected employees, family, and friends. (…)

5. On December 11, 2008, I spoke to BERNARD L. MADOFF, the defendant. After identifying myself, MADOFF invited me, and the FBI agent who accompanied me, into his apartment. He acknowledged knowing why we were there.

After I stated, “we’re here to find out if there’s an innocent explanation”, MADOFF stated, “There is no innocent explanation”. MADOFF stated, in substance, that he had personally traded and had lost money for institutional clients, and that it was all his fault. MADOFF further stated, in substance, that he “paid investors with money that wasn’t there”.

MADOFF stated that he was “broke” and “insolvent” and that he had decided that “it could not go on”, and that he expected to go to jail. MADOFF also stated that he had recently admitted what he had done to Senior Employees Nos. 1, 2 and 3.

WHEREFORE, deponent prays that BERNARD L. MADOFF, the defendant, be imprisoned, or bailed, as the case may be.

THEODORE CACIOPPI
Special Agent
Federal Bureau of Investigation

Sworn to before me this 11th day of December, 2008

[Signed] Honorable Douglas F. Eaton, United States Magistrate Judge,
Southern District of New York.

THE COMPLAINT BY THE SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission’s Complaint, filed with the Court on 11th December 2008 (08 Civ. 10791) informed the Court in summary that:

1. The Commission brings this emergency action to halt ongoing fraudulent offerings of securities and investment advisory fraud by Bernard L. Madoff (“Madoff”) and Bernard L. Madoff Investment securities LLC (“BMIS”), a broker dealer and investment adviser registered with the Commission. From an indeterminate period through the present, Madoff and BMIS has committed fraud through the investment adviser activities of BMIS. Yesterday, Madoff admitted to one or more employees of BMIS that for many years he has been conducting a Ponzi-scheme through the investment adviser activities of BMIS and that BMIS has liabilities of approximately $50 billion.

Mr Madoff told these employees that he intends to distribute any remaining funds at BMIS to the employees and certain investors in the investment advisor business, such as family and friends. Such a distribution will be unfair and inequitable to other investors and creditors of BMIS.

2. Expedited relief is needed to halt the fraud and prevent the Defendants from unfairly distributing the remaining assets in an unfair and inequitable manner to employees, friends and relatives, at the expense of other customers.

3. To halt the ongoing fraud, maintain the status quo and preserve any assets for injured investors, the Commission seeks emergency relief, including temporary restraining orders and preliminary injunctions, and an order:

(i) imposing asset freezes against the Defendants;

(ii) appointing a receiver over BMIS;

(iii) allowing expedited discovery and preventing the destruction of documents; and:

(iv) requiring the Defendants to provide verified accountings.

The Commission also seeks permanent injunctions, disgorgement of ill-gotten gains, plus prejudgment interest and civil monetary penalties against all of the Defendants.

On 12th December 2008, the SEC asked the Court to issue ‘a temporary restraining Order and an Order freezing assets and granting other relief’ (08 Civ. 10791 (LLS) ECF Case: to which, in a Note, the SEC stated that the Defendants had consented) directing that:

‘pending a final disposition of this action, Defendants, and each of their financial and brokerage institutions, agents, servants, employees, attorneys, and those persons in active concert or in participation with either of them who receive actual notice of such Order by means of personal service, facsimile service, telephonic notice, notice by e-mail, or otherwise, and each of them, hold and retain within their control, and otherwise prevent, any withdrawal, transfer, pledge, [offsetting or] encumbrance, assignment, dissipation, concealment or other disposal of any assets, funds, or other property (including money, real or personal property, securities, commodities, choses [sic] in action or other property of any kind whatsoever) of, held by, or under the direct or indirect control of, Defendants, whether held in the name of Madoff, BMIS, Madoff International or Madoff Ltd.., or for the direct or indirect beneficial interest of one or both of them, wherever situated, in whatever form such assets may presently exist and wherever located, and directing each of the financial or brokerage institutions, debtors and bailees, or any other person or entity holding such assets, funds or other property of the Defendants, to hold or retain within its control and prohibit the withdrawal, removal, transfer or other disposal of any such assets, funds or other properties, including, but not limited to:

(1) all assets, funds, or other properties held in the name of, held by, or under the control of one or both of the Defendants;

(2) all accounts in the name of Madoff or BMIS or on which Madoff is a signatory, including the accounts listed [herewith: the accounts were listed as Appendix A but are given here now]:

• JP Morgan Chase Account No: 000000140081703
Account in the Name of: Bernard L. Madoff Investment Securities

• JP Morgan Chase Account No: 000000066709466
Account in the Name of: Bernard L. Madoff Investment Securities

• The Bank of New York Mellon Account No: 890-0402-393
Account in the Name of: Bernard L. Madoff Investment Securities

• The Bank of New York Mellon Account No: 030-0951050
Account in the Name of: Bernard L. Madoff

• The Bank of New York Mellon Account No: 866-1126-621
Account in the Name of: Bernard L. Madoff Investment Securities LLC

• NOTE: On 30th December, it emerged that Irving J. Picard, the SIPC-appointed Trustee, had reached ‘an understanding’ with Bank of New York Mellon to have certain funds released.

MORE BANK OF NEW YORK MELLON BANK ACCOUNTS COME TO LIGHT
But the US Bankruptcy Judge, Burton Lifland, indicated that the Court papers outlining the said ‘agreement’ were ‘very basic’, according to Bloomberg, and asked Picard’s lawyer, Richard Bernard, for more information on the accounts in question. Bernard told the Court that there are ‘more funds and accounts’, without being specific.

He added that Bank of New York Mellon was holding some funds back because it may have “set-off rights” on certain claims, adding that he was limited in what he could say in open Court because of the ongoing criminal investigations. Clause III of the Order requested of the Court by the SEC and SIPC against BMIS filed on 15th December 2008 and signed by US District Judge Louis L. Stanton at 4:08pm on that date, reads:

‘ORDERED that all persons and entities are notified that, subject to the other provisions of 11 U.S.C. section 362, the automatic stay provisions of 11 U.S.C. section 362(a) operate as a stay of:

… G. The set-off of any debt owing to the Defendant that arose before the commencement of this proceeding against any claim against the Defendant’.

Clause VIII elaborates: ‘ORDERED that the stays set forth above shall not apply to:

G. Any set-off or liquidating transaction undertaken pursuant to the rules or bylaws of any securities clearing agency registered under section 17A(b) of the Securities Exchange Act of 1934, 15 U.S.C. section 78q-1(b), or by any person acting under instructions from and on behalf of such a securities clearing agency…’.

To illustrate again that the SEC has finally been galvanised in this case to be seen to be casting its net over EVERY PARTY involved with Mr Madoff, Paragraph III of the SEC’s Order to Show Cause, Temporary Restraining Order, and Order Freezing Assets and Granting Other Relief [dated 12th December 2008] stated [page 8 of the Court document]:

‘IT IS FURTHER ORDERED that Defendants show cause… why this Court should not also enter an Order enjoining them, and any person or entity acting at their direction or on their behalf, from destroying, altering, concealing or otherwise interfering with, the access of the [SEC] Plaintiff Commission to any and all documents, books and records, that are in the possession, custody or control of Defendants, and each of their partners, agents, employees, servants, accountants, financial or brokerage institutions, attorneys-in-fact, subsidiaries, affiliates, predecessors and successors and related entities that refer, reflect or relate to the allegations in the Complaint, including, without limitation, documents, books, and records referring, reflecting or relating to defendants’ finances or business operations, or the offer or sale of securities by Defendants and the use of proceeds therefrom’. ENDS.

The relevant Court-filed documents clearly and specifically identify all the possible categories of collaborators and participants, and all Madoff-related property wherever located, prohibiting the tampering with and destruction of documents and of course TEAR SHEETS, or any movement of funds, requiring the unravelling of all funds commingled between BMIS and Madoff’s personal account(s), so that anyone caught up in this maelstrom who disturbs the audit trail will fall within the Court’s sights for appropriate treatment.

Specifically, the Defendants were directed to ‘provide a verified accounting immediately’, against the background of the freezing of the assets of the Defendants, the appointment of Lee Richards, of Richards Kibbe & Orbe LLP as ‘Receiver for the Defendants’ assets including without limitation Madoff Securities International Ltd (“Madoff International”)’, the London platform from where the primary leveraging operations were run, ‘and Madoff Ltd’.

The SEC’s Order requesting the freezing of relevant accounts and other relief sought, as noted, prohibition of ‘the destruction, concealment, or alteration of documents by Defendants’. ‘It appears from the evidence presented that certain ill-gotten gains derived from the Defendants’ fraudulent conduct have been deposited into the accounts of BMIS and/or Mr Madoff’s personal accounts. Self-evidently, Madoff-linked accounts in London and on the Continent are clearly targeted by the language of the Court documents, but it remains to be seen whether this will result in transparency of whether, as may be expected, an opaque veil will be drawn over the international dimensions.

On 31st December 2008, it was reported that Pomerantz, a prominent law firm, was considering asking the US District Court for the Southern District of New York to publish the list that Madoff had been required to compile, detailing the precise whereabouts of the assets. This firm was reported to be seeking to sue hedge fund Ponzi operations that channelled money into the Madoff ‘money machine’. Bernard L. Madoff had been required by the US Court to draw up a detailed list of all his investments, assets, loans, lines of credit and accounts (should there be any beyond those already identified by the SEC in its documentation), and to furnish this information by close of business on New Year’s Eve (see below).

Bloomberg reported on 1st January 2009 that an SEC enforcement official, Andrew Calamari, had confirmed receipt of the list of assets required to have been delivered by Mr Madoff and BMIS by close of business on 31st December 2008, adding that the list will not be made public. The official said that the Court had not authorised the disclosure of the ‘domestic’ list: ‘The 18th December Court Order does not authorize public release of materials related to the Securities and Exchange Commission’s ongoing investigation’.

• Commenting on this point, Professor John Coffee of Columbia Law School told Bloomberg that the SEC may intend the data to be kept secret because ‘there is a danger that foreign regulators and foreign creditors may seek to seize that money if the names are made public’.

• This was the first hint that, in addition to the US domestic legal ‘spaghetti junction’ of conflicting litigation, the international dimension will magnify this legal quagmire by an order of magnitude.

Under the relevant Court order signed by Louis L. Stanton, US District Judge, the list had to include all assets held by Madoff’s operations for his “direct or indirect benefit”.

Madoff’s foreign operations, such as the London-based Ponzi scamming machine offices located off Berkeley Square, Mayfair, central London, were given until 26th January to compile and hand over their own lists. Exclusion of any information from such lists will incur severe consequences.

By the end of 2008, four related cases by aggrieved investors had already been filed since the Madoff ‘confession’, arrest and bail arrangements were publicised. The SEC is expected to take steps to repatriate assets held outside the United States. All cases lodged into this maelstrom will become entangled in the already complex demands of the SEC/SIPC/FINRA investigations.

On 3rd January 2009, Fred Longer, a lawyer representing Group Defined Pension Plan & Trust, a Jersey City, NJ-based investor, filed a lawsuit in the Manhattan Federal Court against the hedge fund operator Tremont Group Holdings [see list below] over Madoff-related losses. Also named was Tremont’s auditor, Ernst & Young LLP, with Longer claiming that the accounting firm missed warnings about the Ponzi scheme. This Complaint seeks class-action, or group, status.

It appears that losses disclosed by some clients, and in the public demain [see our list below] may have been inflated by purported gains shown in the clients’ accounts with Madoff. Thus, whereas Yeshiva University, New York, had valued its foldings with Madoff at $110 million, it stated on 30th December that its net investment was of the order of $14.5 million, before inflation by ‘fictitious profits’. So there may be large differences between ‘money ‘IN”, and totals ‘lost’.

EXPERT ADVANCE WARNINGS ‘DISREGARDED BY THE S.E.C.’
To add to the discomfort of the SEC and the entire Bush-corrupted Wall Street Establishment, it emerged before Christmas that Harry Markopolos, a derivatives expert who previously worked for Rampart Investment Management, a fund competing with the Madoff operations, had been warning the SEC for TEN YEARS prior to the Madoff exposures, that Bernard L. Madoff’s activities ‘stank to high heaven’. He spent ten years trying to induce the Securities and Exchange Commission to investigate Mr Madoff and all his works.

For instance, Markopolos had accused Madoff of using the names of UBS and Merrill Lynch to lend credibility to his Ponzi activities. This is a variant of our point that holders of ‘derived’ assets enjoy NO RECOURSE TO SOURCE OF FUNDS, with their ‘assets’ supported solely by the name(s) of the institution(s) marketing them (their values being, as a savvy Jewish friend of the Editor’s pointed out recently, ‘what somebody agrees to pay for them’).

The London Times reported on 19th December that:

‘According to the [Markopolos] documents, which were written in November 2005, Mr Madoff is alleged to have told potential investors that all his options trading business was channelled through UBS and Merrill Lynch’.

‘However, Mr Markopolos asserted: “The counterparty credit exposures for UBS and Merrill would be too large for these firms’ credit departments to approve. The SEC should ask Bernard Madoff for trade tickets showing he has traded OTC [over the counter] options thru these two firms”‘.

‘It is understood that neither UBS nor Merrill Lynch has any material exposure to Mr Madoff’s businesses and also that neither had had a sufficiently substantial relationship with Mr Madoff to have conducted these types of trades. Such a discrepancy raises serious questions about the truthfulness of Mr Madoff’s sales pitch to new investors, such as hedge funds, and whether Mr Madoff sought to exploit the longstanding reputations of UBS and Merrill Lynch [sic] to legitimise his own operations’.

On 22nd December, The Times, London, elaborated:

‘Harry Markopolos, a derivatives expert who once worked for a rival fund, spent ten years urging the SEC to investigate Mr Madoff. In numerous reports, including a 19-page document written in November 2005 entitled ‘The World’s Largest Hedge Fund is a Fraud’, Mr Markopolos picked apart the investment strategy of Mr Madoff’.

‘Some claims by Mr Markopolos were anecdotal – “I have spoken to the heads of various Wall Street equity derivative trading desks and every single one of the senior managers I spoke with told me that Bernie Madoff was a fraud” – but sizeable chunks of his accusations involve detailed analysis of Mr Madoff’s investment strategy. He questions the way that Bernard Madoff charged for commissions and alleges that Mr Madoff used the names of leading investment banks such as UBS and Merrill Lynch to lend credibility to his schemes’.

‘He also claims that the overall investment strategy of Mr Madoff would have been impossible to carry out. Mr Madoff sought to lure investors with the promise of 12% returns by buying blue-chip stocks and insuring against the possibility that their value would fall by selling derivatives – a process known as hedging. Mr Markopolos argues, however, that for Mr Madoff to have fulfilled such a strategy, he would have regularly done more business than the entire New York market in those securities’.

HEAVILY PROMOTED STAR WITNESS FAILS TO APPEAR: WAS HE THREATENED?
Unsurprisingly, Harry Markopolos was to be a star witness to be questioned on 5th January 2009 by the Financial Services Committee of the House of Representatives, where the Democrat Chairman of the panel, Barney Frank, was faced with having to steer a careful course between seeking to extract the truth from terrified SEC officials, and the known involvement of severely compromised members of the Legislative Branch of the United States Government.

• UPDATE: Bloomberg reported on 5th January that Harry Markopolos, the former Chief Investment Officer with Tampart Investment Management, Boston, cancelled his appearance before Congress, saying that he was ‘worn down’ and wanted more time to prepare his remarks, accoding to Barney Frank, Chairman of the House Financial Services Committee. This development has to be added to the roster of UNSATISFACTORY DEVELOPMENTS related elsewhere in this report. The impression gained is that Mr Markopolos may have been THREATENED and ordered to amend his testimony, ‘or else’. If such tactics are being used, it shows that the rats have STILL not realised that WHETHER THEY LIKE IT OR NOT, EVERYTHING WILL BE EXPOSED.

CALENDAR OF OFFICIAL REGULATORY AND ENFORCEMENT FAILURES
The Christian Science Monitor obliged on 5th January with a handy summary of the ongoing ‘lapses’ of supervision and enforcement by the corrupted Securities and Exchange Commission, to wit:

• 1992: Madoff’s name comes up in an SEC probe of Florida accountants who
allegedly sold unregistered securities.

• 1999: SEC examiners review trading practices at Madoff’s investment advisory firm.

• 2001: The SEC’s Boston office receives information from securities industry executive Harry Markopolos raising questions about the steady stock market returns of Madoff’s firm.

• 2004: The SEC looks into whether Madoff’s firm engaged in improper trading practices.

• 2005: The SEC interviews Madoff and family members, finding no improper trading practices.

• 2005: An industry-based regulatory office finds no improper trading practices by Madoff’s firm.

• 2005: SEC investigators meet with Markopolos, who alleges that Madoff’s firm is “the world’s largest Ponzi scheme”: see details above.

• 2006: An SEC enforcement investigation finds that Madoff and one of his clients misled regulators. As a result, Madoff agrees to register as an investment adviser.

• 2007: The Financial Industry Regulatory Authority (FINRA) examines Madoff’s firm. No regulatory action results. It appears that this entity took its cue from the corrupted SEC [yet see above].

PARALLEL INTERVENTION OF THE SECURITIES INVESTOR PROTECTION CORPORATION
United States District Judge Louis L. Stanton signed the Defendants’ consent to the total Order (only partially reported here) at 4.51pm on 12th December 2008. Additionally, under the Securities Investor Protection Act of 1970 (SIPA, 15 U.S.C. Sec 78aaa et seq.), the SEC and also the Securities Investor Protection Corporation requested (Civ. 08-10791) the Court on the 15th December 2008 to agree that ‘customers of the Defendant, Bernard L. Madoff Investment Securities LLC, are in need of the protection afforded by the’ SIPA, and in particular than the Court should order:

‘that all persons and entities are stayed, enjoined and restrained from directly or indirectly removing, transferring, setting off, receiving, retaining, changing, selling, pledging, assigning or otherwise disposing of, withdrawing or interfering with any assets or property owned, controlled or in the possession of the Defendant, including but not limited to the books and the records of the Defendant, and customers’ securities and credit balances, except for the purpose of effecting possession and control of said property by the Trustee’ (who was named as Irving H. Picard), with the firm of Baker and Hostetler LLP appointed Counsel for the Trustee.

Baker and Hostetler LLP has been established for 90 years and has offices in Cincinnati, Cleveland, Columbus, Cosa Mesa, Denver, HOUSTON, Los Angeles, New York, Orlando, Washington DC, Brazil and Mexico. Having been ordered to be appointed Trustee under SIPA via the SEC and Securities Investor Protection Corporation, Irving J. Picard proceeded to JOIN the New York office of Baker & Hostetler LLP, per the firm’s Press Release, dated 22nd December 2008 headed: ‘Court-Appointed Trustee In Madoff Fraud Investigation Joins Baker Hostetler in New York’.

Thus no sooner had the court-appointed Trustee, Irving H, Picard, been approved, than he joined the firm appointed as Counsel for the Trustee – raising the obvious question in the minds of this and other observers as to whether we have just uncovered a posible prospective inside stitch-up, the intent of which might logically be to control the exposure of information which would link the Madoff Master-Ponzi scheme and its subsidiary Ponzi operations directly with the Bush Sr.-Clinton Fraudulent Finance Crime Carousel, as has already been signalled above. It is not stated here that this IS the case: what is stated here is solely that the question has arisen.

A Memorandum of Law supporting the application of the Securities Investor Protection Corporation (all related documents labelled Civ. 08-10791), filed on 15th December, stated inter alia that:

‘A proceeding under SIPA is a liquidation proceeding. The Trustee has the same powers and title with respect to the broker-dealer and its property as a Trustee in bankruptcy, including the right to avoid preferences. SIPA does not attempt to make all customers whole [see above] and SIPC is not an insurer of customer accounts. SIPA establishes a plan of limited protection via the liquidation proceeding, in which SIPC’s role is carefully delineated’.

‘It contemplates that customers’ claims will be satisfied to the maximum extent possible from the assets already on hand with the member… SIPA was not intended for the protection of brokers and dealers. However, after a liquidation proceeding is commenced to protect a member’s customers, SIPA authorizes the Trustee to close out certain contractual commitments between the members and another broker-dealer. This authority was designed to avoid the so-called “domino effect”, namely, the chance that the demise of a member might precipitate the failure of one or more other broker-dealers’.

‘Under SIPA Sec 78eee(b)(1), the Court is required to issue a protective decree if the Court finds that any of the conditions specified in the legislation exists, each of which is ‘a clear manifestation of serious difficulties that create, at the very least, an unacceptably high risk of loss of customer property for which the Defendant is responsible and accountable’.

The application by SIPC concluded:

‘According to information provided by the Commission and FINRA [the Financial Industry Regulatory Authority], the Defendant is insolvent, is unable to meet its obligations as they mature, and is not in compliance with the requirements regarding financial responsibility under sections 15(c)(3) and 17(a) of the Securities Exchange Act of 1934, 15 U.S.C. sections 78o(c)(3) and 78q(a) (2000), and [also] Commission Rules 15c3-1, 15C3-3 and 17a-3, 17 C.F.R. sections 240.15c3-1, section 240.15c3-3 and section 240.17a-3. Consequently, three of the conditions referred to in SIPA section 78eee(a)(3) and specified in SIPA section 78eee(b)(1) exist’.

‘Pursuant to SIPA section78eee(b)(1), if the defendant consents to the issuance of a protective decree, the Court “shall forthwith issue a protective decree”’.

On the same day, 15th December 2008, Bernard L. Madoff Investment Securities LLC consented to the issuance of a protective decree by the Court, although whether this will in practice adequately serve the interests of the investors in the giga-Ponzi scheme, who were in many cases themselves operating subsidiary Ponzi schemes, remains to be seen. The obvious question in the mind of this investigator and others is: with the Court-appointed Trustee having joined the Court-appointed firm of Counsel, are we looking at a pre-prepared damage limitation operation carefully designed not to expose the corruption and to procure statutory remedies, but rather to cover up linkages which would provide further direct connections with the Bush-Clinton Fraudulent Finance Money Factory operations that have already been partially exposed by this service?

IF YOU THINK YOU’RE A VICTIM, THE FBI WOULD LIKE TO HEAR FROM YOU
On 18th December 2008, the FBI issued the following Press Release:

U.S. Department of Justice
Federal Bureau of Investigation

PRESS RELEASE
26 Federal Plaza
New York
NY 10278

For Immediate Release

December 18, 2008

U.S. v. Bernard L. Madoff
http://newyork.fbi.gov/pressrel/2008/nyfo121808.htm

If you believe that you have been a financial fraud victim in the above captioned matter, please provide the following information:

(1) Full name
(2) Mailing address
(3) Phone number
(4) COPIES of any documents that substantiate your loss (do not send original documents)

Please mail this information to:

FBI New York
ATTN: Victim Assistance Office
26 Federal Plaza
23rd Floor
New York, NY 10278

Madoff’s offices on Madison Avenue have been guarded 24 hours a day, partly to prevent attacks by irate scammed investors, with the office sealed since Bernard L. Madoff was arrested, while FBI, Securities and Exchange Commission, Securities Investor Protection Corporation and Financial Industry Regulatory Authority investigators conduct urgent forensic examinations of Mr Madoff’s multiple sets of books.

Because no information is yet available on the value of the leveraged and hypothecated ‘money OUT’ numbers, the focus, as noted above, has so far been (and may remain) on the ‘money IN’ losses attributed (as at the end of 2008) to investors and operators of sub-Ponzi schemes in the Madoff giga-Ponzi operation. Here is an interim list, based upon open data available at the end of 2008, of the affected parties, whose funds have been STOLEN, not lost:

INTERIM LIST OF ‘MONEY IN’ LOSERS ARISING FROM THE DELIBERATE COLLAPSING
OF THE MADOFF COMPONENT OF THE GLOBAL PONZI MONEY MACHINE*

*Note: Data extracted from open sources. Some data varies between source.

Abu Dhabi Investment Authority [at least $400 million]
Access International Advisors, René-Thierry Magon de La Villehuchet [$1,400 million]
Aozora Bank (Japanese bank) [$230 million]
Ascot Fund [Gabriel Capital, Ascot Partners] [$0.92 billion]
Ascot Partners [Gabriel Capital], hedge fund founded by L Ezra Merkin [$1,800 million]
AXA (French insurer) [$123 million]
Banco Santander, Optimal Investment Services, Geneva [$2,870 million-$3,100 million]
Bank Medici (Austrian Bank, believed bankrupted) [$2,100 million]
Banque Bénédict Hentsch & Cie [$47.5 million -$48.8 million]
BBVA (Spanish bank) [$369 million -$404 million]
Benbassat & Cie [$935 million]
BNP Paribas SA [initially $431-$478 million, later ‘billions of Euros of losses’]
Braman, Norman, former owner of the Philadelphia Eagles [$ unknown]
Bramdean Alternatives (Mrs Nicola Horlick) [9.5% of assets]
Caissse de Dépots et Consignations [$1.4 million]
Carl and Ruth Shapiro Family Foundation [see Carl Shapiro]
Carl Shapiro, former Chairman of Kay Windsor, Inc, apparel) [$545 million]
Chais Family Foundation [$ unknown]
Clal Insurance $0.8 million]
CNP Assurances [$4.1 million]
Congregation Kehilath Jeshurun [$3.5 million]
Crédit Mutuel [$124 million]
Dexia Bank [$107 million]
EIM Group (European investment firm) [$230 million]
Elie Wiesel Foundation for Humanity [$15.2 million: 100% loss]
Eric Roth, film writer [$ unknown]
Fairfield Greenwich Advisors & Group, Walter Noel [$7,500 million]
Fairfield Sentry/Sigma Fund [see Fairfield] [$7.28 billion]
Fairfield, CT (town pension fund for public employees) [$42 million]
Feinstein, Leonard, co-founder of Bed Bath & Beyond [$ unknown]
Fix Asset Management [$400 million]
Fortis Bank, Nederland (Dutch bank) [$1,350 million-$1,400 million]
Gerald Breslauer, Los Angeles financial adviser [$ unknown]
Gift of Life Bone Marrow Foundation [$1.8 million]
Great Eastern Holdings, Singapore [$64 million]
Groupama [$13.6 million]
Harel Insurance [$14.2 million]
Harley International Ltd [Cayman: all its assets: $2.76 billion managed as at end-October 2008]
Henry Kaufman, economist [$ unknown]
Herald USA [see Bank Medici] [$2.50 billion]
HSBC Holdings [$1,000 million]
Hyopswiss (Swiss private bank) [$50 million]
Jeffrey Katzenberg [$ unknown]
JEHT Foundation [$ unknown]
Jewish Federation of Greater Washington [$10 million]
Jewish Foundation of Greater Los Angeles [$6.4 million]
Julian J. Levitt Foundation [$6.0 million]
Kevin Bacon, actor [$ unknown]
Kingate Global Management [FIM Advisors] [$2.75 billion – $3,500 million]
Korea Life Insurance [$50 million]
Lautenberg, Senator Frank and family foundation [$ unknown]
Liliane Bettencourt, L’Oréal SA heiress [$ billions unknown]
LuxALPHA SICAV – American Selection [Ascot International Advisors] [$1.4 billion]
M & B Capital Advisers (Spanish bank) [$52.8 million]
Madoff Family Foundation [$19 million]
Maimonides School [Up to $5 million]
Man Group (British hedge fund) [$360 million]
Maxam Capital Management (CT-based fund of funds) [$280 million]
Mediobanca [$0.7 million]
Merkin, Ezra, Chairman of GMAC Corporation: see Ascot Partners
Mirabaud [$ several million]
Mortimer B. Zuckerman Charitable Remainder Trust [$30 million]
Natixis (French investment bank) [$554 million]
Neue Privat Bank [$5.0 million]
New York Law School through Ascot Partners [At least $3 million]
Nomura Holdings [$304 million]
Nordea Bank (Swedish bank) [$59 million]
North Shore-Long Island Jewish Health Care System [$5.7 million
Notz Stucki [$ unknown]
Optimal Strategic US Equity [see Santander] [$3.23 billion]
Picower Foundation [$958 million: has announced closure]
Pioneer Alternative Investments [$280 million]
Primeo Select Fund US [UniCredit. Pioneer Alt Invs] [$0.85 billion]
Ramaz School [$6.0 million]
Reichmuth, (Swiss private bank) The Reichmuth Matterhorn Fund [$327 million]
Robert J. Lappin Charitable Foundation [$8 million: 100% loss]
Royal Bank of Scotland [$599 million-$625 million]
Rye Select broad market Fund [see Tremont] $3.10 billion]
SAR Academy [$1.2 million]
Senator Frank R. Lautenberg’s Charitable Foundation [$ unknown]
Société Générale [$13.8 million]
Stephen Spielberg [$ unknown]
Sterling Equities [[$ unknown]
Swiss Life Holding (Swiss insurer) [$78.9 million]
Thema International Fund [see Bank Medici] [$1.10 billion]
Tremont Group Holdings, hedge fund of Massachusetts Mutual Life [$3,300 million]
Tufts University [$20 million]
UBI Banca (Italian bank) [$86 million]
UBS AG [$ unknown]
UniCredit (Italian bank) [$92 million]
Union Bancaire Privée (Swiss bank) [$700 million -$1,080 million]
Vincent Tchenguiz, UK property magnate, via Bramdean [£40 million]
Wilpon, Fred, owner of the New York Mets [$ unknown]
Wunderkinder Foundation, Steven Spielberg [$ unknown, heavy Madoff investor]
Yeshiva University, New York [$110-$125 million: but see text above]
Zuckerman, Morton, Chairman of Boston Properties, landlords of the Citibank offices at 399 Park Avenue and owner of The New York Daily News and U.S. News and World Report [significant losses through a fund that invested substantially all of its assets with Madoff’]

FORMER PRESIDENT CLINTON FORCED TO REVEAL HIS ‘DONORS’
Finally, in a further indication that the skids are well and truly under the highest-level financial fraudsters, we must add that former President Clinton released what The New York Times called ‘a complete list’ of more than 200,000 ‘donors’ [sic] to the William J. Clinton Foundation ‘as part of an agreement to douse concerns about potential conflicts of interest if Senator Hillary Rodham Clinton is confirmed as the Secretary of State in the Obama Administration’. The list revealed that ‘some of the world’s richest people and most famous celebrities handed over large checks to finance his Presidential Library and charitable [sic] activities’.

The New York Times’ articles [19th and 20th December 2008] did not, however, mention that the Clinton Library is equipped with some of the most sophisticated state-of-the-art eavesdropping and electronic equipment in the world, and that the new list of donors and donations (of which a small selection is appended below) is indicative of a ‘you scratch my back, I’ll scratch yours’ approach, also known in the United States as ‘pay to play’.

• The disclosure of these names represents a component of a deal intended to smooth the way for Mrs Clinton to be confirmed and to move seamlessly into the State Department. On 4th January, the facile British Press was praising Mrs Clinton as ‘an honest broker’. Manifestly, Fleet Street uses a dictionary not available to the rest of us. It would be helpful if the stupid UK journalists concerned would belatedly look up the word ‘honest’ in the Oxford English Dictionary.

Funds for the Katrina disaster were channelled corruptly into a joint ‘foundation’ controlled by George H. W. Bush Sr. and former President Clinton, under the ‘nose’ of the complicit or feeble Federal Emergency Management Agency (FEMA, originally funded with ‘Black Ops’ drug money).

The fate of the Katrina money has subsequently been ‘successfully’ obfuscated by the highest-level current and former office-holding criminal financiers, so that it is currently not possible to identify Katrina funds having been moved into the William J. Clinton Foundation: but logic would suggest that this would have occurred, and/or that the funds were used to finance illicit below-the-radar financial leveraging transactions, in the usual manner.

The ‘deal’, brokered by the Obama team represented by its co-chairwoman Valerie Jarrett, reflects a 5-page Memorandum of Understanding signed on 12th December 2008 with the William J. Clinton Foundation, represented by its Chief Executive, Bruce R. Lindsey. This Memorandum required Mr Clinton to disclose his past donors by the end of 2008 and any future contributors once a year.

It also required that that ‘if’ Mrs Clinton is confirmed, the Clinton Global Initiative, an offshoot of the Foundation, will be incorporated separately, will no longer hold events outside the United States and will refuse any further contributions from foreign governments.

More vaguely, other initiatives operating under the auspices of the Foundation would follow new rules and consult with US State Department ethics officials in certain circumstances. (There is of course no reference in the document to any requirement that the ‘ethics officials’ have oversight over the intended illicit financial activities of the criminal operative Hillary Clinton in the event that, as intended, this Jezebel winds up as Secretary of State).

Previously, Mr Clinton had declined to reveal the identities of donors to his Foundation, as Federal law does not require former US Presidents to reveal foundation donors. Clinton’s main argument had been that many donors expected confidentiality.

Yet, all of a sudden, this ‘concern’ was jettisoned, in the scramble to ensure that Mrs Clinton arrives at the State Department without being cuffed and jailed or bailed on the way.

To mask this U-turn, Clinton advocates waffled following the disclosures that the list showed that Mr Clinton had nothing to hide, which is NOT the point that Clinton relied upon earlier when he declined to publish the list in order to preserve the confidentiality of the donors. Many of these parties will certainly have been chagrined at the emergence of their identifies as Clinton donors, into the public domain – not least because as this concatenation of immense financial scandals progressively expands like a solar explosion, they risk their names being dragged into the sewer along with those of the Clinton criminals themselves.

PARTIAL LIST OF CLINTON FOUNDATION ‘DONORS’
The following partial list of prominent ‘donors’ to the William J Clinton Foundation has been assembled to illustrate the ‘pay-to-play’ dimension of the way these crooks operate, lifting the veil on how these organised US gangsters have spread their filthy corruption throughout the world:

• Selected prominent donors to the William J. Clinton Foundation out of a total of 200,000 donors named by former President Clinton on 18th December 2008 in the interests of ‘transparency’ but contrary to the interests of the donors and as part of the deal to infiltrate Mrs Clinton into the State Department, where she will be ‘protected’ and from where the intention is that the fraudulent finance operations will continue:

Absolute Return for Kids [Between $1,000,001 and $5.0 million]
Abu Dhabi Ruling Family [$ not known by this service]
Alfonso Fanjul [$ not known by this service]
Alix Foundation [Between $1,000,001 and $5.0 million]
Amar Singh [Between $1,000,001 and $5.0 million]
Arnold H. Simon [Between $1,000,001 and $5.0 million]
Ausaid [Between $10,000,001 and $25 million]
Australian Government aid agency, an [$ not known by this service]
Barbra Streisand/Streisand Foundation [Between $1,000,001 and $5.0 million]
Bernard L Schwartz [Between $1,000,001 and $5.0 million]
Bill and Melinda Gates Foundation [Between $10,000,001 and $25 million]
Blackwater Training Center [$ not known by this service]
Blackwater Training Center [$ not known by this service]
Bloomberg L.P. [$ not known by this service]
Bren and Melvin Simon [Between $1,000,001 and $5.0 million]
Brunei Government aid agency, an [$ not known by this service]
Cameron Diaz, actress [Between $25,001 and $50,000]
Children’s Investment Fund Foundation, [More than $25 million]
Citi Foundation [Between $1,000,001 and $5.0 million]
Clinton Giustra Sustainable Growth Initiative, Canada [$1,000,001 to $5.0 million]
Copresida-Secretariado Tecnico [Between $10,000,001 and $25 million]
Denise Rich [Brand], former wife of Marc Rich [Hans Brand] [$250,001 to $500,000]
Dominican Government aid agency, an [$ not known by this service]
Dubai Foundation [Between $1,000,001 and $5.0 million]
Eli and Edythe Broade Foundation [Between $1,000,001 and $5.0 million]
ELMA Foundation [Between $10,000,001 and $25 million]
Elton John AIDS Foundation [Between $1,000,001 and $5.0 million]
Entergy Corporation [Between $1,000,001 and $5.0 million]
Frank Giustra, CEO, Radcliffe Foundation [Between $10,000,001 and $25 million]
Fred Eychaner [Between $10,000,001 and $25 million]
Freddie Mac [$ not known by this service]
Friends of Saudi Arabia [Between $1,000,001 and $5.0 million]
Gilbert R. Chagoury [Nigerian President Abacha crony] [$1,000,00 to $5.0 million]
Government of Brunei Darussalam [Between $1,000,001 and $5.0 million]
Government of Norway [Between $5,000,001 and $10 million]
Haim Saban and Saban Family Foundation [Between $5,000,001 and $10 million]
Howard and Michele Kessler [Between $1,000,001 and $5.0 million]
Howard Gilman Foundation [Between $1,000,001 and $5.0 million]
Hunter Foundation [Between $10,000,001 and $25 million]
Issam M. Fares & Wedge Foundation [Between $1,000,001 and $5.0 million]
James P. Greenbaum Jr. Family Foundation [Between $1,000,001 and $5.0 million]
John D. Mackay [Between $1,000,001 and $5.0 million]
Kingdom of Saudi Arabia [Between $10,000,001 and $25 million]
Kuwait Government aid agency, an [$ not known by this service]
Lakshmi N. Mittal [Between $1,000,001 and $5.0 million]
Lukas H. Lundin [Between $1,000,001 and $5.0 million]
MAC AIDS Fund [Between $1,000,001 and $5.0 million]
Mala Gaonkar Haarmann [Between $1,000,001 and $5.0 million]
Michael and Jena King [Between $1,000,001 and $5.0 million]
Michael Schumacher [Between $5,000,001 and $10 million]
Michael Smurfit [Between $1,000,001 and $5.0 million]
Harold Snyder [Between $1,000,001 and $5.0 million]
Nasser al-Rashid [Between $1,000,001 and $5.0 million]
Nationale Postcode Loterij [Between $5,000,001 and $10 million]
Norwegian Government aid agency, an [$ not known by this service]
Omani Government aid agency, an [$ not known by this service]
Open Society Institute (George Soros) [Between $1,000,001 and $5.0 million]
Paul Reynolds [Between $1,000,001 and $5.0 million]
Presidential Inaugural Committee [Between $1,000,001 and $5.0 million]
Princess Diana Memorial Fund [Between $1,000,001 and $5.0 million]
Qatari Government aid agency, an [$ not known by this service]
Richard Caring [Between $1,000,001 and $5.0 million]
Robert L. Johnson [Between $1,000,001 and $5.0 million]
Robertson Foundation [Between $1,000,001 and $5.0 million]
Rockefeller Foundation [Between $1,000,001 and $5.0 million]
Roy and Christine Sturgis Charitable and Educational Trust [$1,000,001 to $5.0 million]
Rupert Murdoch [$ not known by this service]
S. D. Abraham [Between $1,000,001 and $5.0 million]
Sheikh Mohammed al-Amoudi [Between $1,000,001 and $5.0 million]
Smith and Elizabeth Bagley [Between $1,000,001 and $5.0 million]
State of Kuwait [Between $1,000,001 and $5.0 million]
State of Qatar [Between $1,000,001 and $5.0 million]
Stephen L. Bing [Between $10,000,001 and $25 million]
Sterling Stamos Capital Management [Between $1,000,001 and $5.0 million]
Sultanate of Oman [Between $1,000,001 and $5.0 million]
Suzlon Energy [Between $1,000,001 and $5.0 million]
Swiss Reinsurance Company [Between $1,000,001 and $5.0 million]
Sydney E. Frank Foundation [Between $1,000,001 and $5.0 million]
T. G. Holdings [Between $1,000,001 and $5.0 million]
Taiwan Economic and Cultural Office [Between $1,000,001 and $5.0 million]
Taiwan Government aid agency, an [$ not known by this service]
Theodore W. Watt [Between $10,000,001 and $25 million]
Tom Golisano [Between $10,000,001 and $25 million]
Unitaid [More than $25 million]
Victor Phillip Dahdaleh Charitable Foundation [$1,000,001 to $5.0 million]
Victor Pinchuk, Ukrainian oligarch [Between $1,000,001 and $5.0 million]
Wallace W. Fowler [Between $1,000,001 and $5.0 million]
Wal-Mart Foundation [Between $1,000,001 and $5.0 million]
Walter H. Shorenstein [Between $1,000,001 and $5.0 million]
Walton Family Foundation [Between $1,000,001 and $5.0 million]
Wasserman Foundation [Between $5,000,001 and $10 million]
Zayed Family [Between $1,000,001 and $5.0 million]

CONCLUSION: U.S. DOLLAR REFUNDING MUST PROCEED AS DEMANDED BY THE G-7
Since the State Department controls much of the money operations, it is clear that the objective of the controlling corrupt “powers” has indeed been to continue the fraudulent finance operations from within the White House and the US Treasury for the next four or eight years, as previously: in other words, the fraudulent, debt-generating exotic financing was to continue seamlessly with a replacement set of highest-level fraudulent finance operatives in place, many of whom (led by Mrs Clinton and Rahm Emanuel) were/have been involved in this terrorism financing activity all along.

That is the objective ‘as we speak’. Will it be achieved? It is understood, to begin with, that former President Bill Clinton was captured some time ago on a videotape made in Alabama, referring to President-Elect Obama in disparaging ethnic terms. We have now learned that outgoing President George W. ‘Dog’ Bush is also on record as describing to Mr Obama in comparable language. Both these racist outbursts have been channelled back to the President-Elect, who reportedly laughed at the perpetrators. But ingrained in this response, we were told, was the following message:

‘You can be rude about me now, if you like. But wait and see what I’m made of when I am in power’.

Being interpreted, this means (we speak with ‘understanding’) that if you imagine that you can pressurise me, you have yet to learn what resources I can bring to bear to make you think again.

Therefore, whether the incoming President will in fact allow the fraudulent finance operations to continue seamlessly, thereby ensuring a colossal financial and economic implosion worldwide early in his Administration, the collapse of gigantic corrupted US and foreign institutions, the destruction of his Presidency and Law and Order, and the collapse of the US dollar plus an immediate reversion to ‘beggar-thy-neighbour’ competitive currency devaluations and a bitter global trade war followed by open warfare remains, in our view, on a knife-edge at this time.

• But the central issue THAT NO-ONE CAN POSSIBLY ESCAPE, is this:

DOLLAR REFUNDING CAN ONLY BE DONE BY GENERATING REVENUE, NOT DEBT
The US dollar needs refunding NOW, which cannot be done by the US Government at all, because the US Government CAN ONLY CREATE DEBT.

• IT CANNOT GENERATE REVENUE. No Government can GENERATE TAXABLE REVENUE.

The previous refunding of the US dollar was initiated by President Reagan and confirmed for public consumption by means of a communiqué dated 17th August 1982. The US dollar is in extreme need of a further refunding, to enable it to regain its capitalisation value and thus to renew the world’s international trading markets.

This can ONLY be done by means of the overdue Private Sector Refunding mechanism long since prescribed by the G-7-Approved Refinancing Programme of Capital Markets operations, generating cash REVENUE and not DEBT – with substantial ongoing on-the-books tax accruals paid into the US Treasury, to break the century-long, sterile and now completely discredited US debt-financing orgy which has brought the United States to its current status as a pariah state, reliant on exporting terrorism to ‘get its way’ and provide open-ended pretexts for it to seize the resources of others.

For this US Dollar Refunding Programme to be viable, there must be third party auditing: and the Government and its Presidential Cabinet, with an Economic Team tainted by the fraudulent finance operations of previous Administrations, cannot, in any case, be relied upon, given past experience, to do so in an objective manner.

To preclude a catastrophic perpetuation of the degenerate fraudulent finance carousel system, which is bringing the world financial and real economies to the verge of irremediable breakdown, accompanied by the collapse of colossal financial institutions and the US dollar, full disclosure and disciplined transparent regulation in perpetuity are prerequisites.

NO SOLUTION IS AVAILABLE OTHER THAN ON-THE-BOOKS.

It CANNOT be done off-the-books: and, despite immense Bush-Cheney bribery, if the Rest of the World sees the Obama Administration ‘trying this on’, and sidestepping the precise Group of Seven requirements, there will, as Senator C Dodd has said in another, related, context, be HELL TO PAY.

• WORLD-WIDE HELL TO PAY. THIS YEAR. PROBABLY IN THIS QUARTER.

SUMMARY: If the new Administration follows through with any ‘solution’ falling short of these long outstanding, pre-agreed G-7 standards, THE U.S. DOLLAR WILL COLLAPSE, the whole of humanity will suffer on a scale with no historical precedent, and the American Republic WILL NOT SURVIVE.

As the late, great Sherman Skolnik, who was right more often than wrong (sometimes he was completely off the wall, especially towards the end) used to day: Watch this space.

• References, Notes and the original Ponzi Scheme:

(1) Data courtesy of Victor Thorn, veteran researcher,
journalist and anti-New Underworld Order Author.

(2) Prudent Man Rule: This is the fundamental American principle that is applicable in respect of professional money management, originally asserted by Judge Samuel Putnum in 1830 as follows:

‘Those with responsibility to invest money for others should act with prudence, discretion, intelligence, and regard for the safety of capital as well as income’ [1830 Massachusetts Court decision: Harvard College v. Armory]. The Prudent Man Rule directs Trustees ‘to observe how men of prudence, discretion and intelligence manage their own affairs, not in regard to speculation, but in regard to the management and disposition of their funds, considering the probable income as well as the probable safety of the capital to be invested’. Investments in risky Ponzi and Pyramid Schemes and in ‘programs’ such as those referenced, typically breach the Prudent Man Rule.

Sources: (a) World Reports Limited website report dated 22nd July 2008 entitled: ‘U.S. market revamp is false prospectus’; (b) World Reports Limited website report dated 18th September 2008 entitled: ‘Michael C. Cottrell’s U.S. financial reform proposals; (International Currency Review, Volume 34, Number 1, THE COTTRELL PLAN, pages 243-272 and GLOSSARY, pages 293-326.

(3) On 13th and 22nd January 2007, this service SPECIFICALLY identified the methodology used by the CIA/Bush financial fraudsters as being based on the CLASSIC PONZI MODEL In retrospect, it is clear that few US Ponzi scam victims took the relevance of this on board. Now the name ‘Ponzi’ is finally all over the newspapers: but ONLY, so far, in the Madoff context. It needs to be applied to ALL THE INTERLINKED BUSH-CLINTON-CIA FINANCIAL SCANDALS, RIGHT ACROSS THE BOARD.
It is high time that our message in January 2007 was finally understood: PONZI is the STANDARD METHODOLOGY used for all these scamming operations mounted by criminalised US intelligence-linked cadres, to impoverish and steal from their victims AT HOME AND ABROAD. IT IS STANDARD PROCEDURE. The broken-hearted ‘package people’ investors are classic PONZI SCAM VICTIMS.

This is not, as some knee-jerk hysterics will claim, apologetics for the criminals: IT’S FACT. And the way to deal with FACT, however unpleasant, is to FACE IT. The way NOT to deal with FACT is to place one’s faith in ANONYMOUS SOURCES that, by definition, lack all credibility, whose reporting cannot be verified and which hide behind anonymity so that when they are caught out lying, they cannot be held accountable. These cowards are suspected by sane people of cynically peddling endless tall stories and disinformation that is fed to them for the self-evident purpose of keeping the scammed victims on the edge of their seats until they die. Beware of such faceless charlatans.

• MANY HAVE DIED WAITING FOR THEIR PIED PIPERS TO PLAY THEM A NICE CLOSING TUNE.

Website outlets focusing on keeping the scammed victims expecting payouts have now veered into total chaos mode, blaming everyone on earth from the probably recently deceased Madame Wu to Father Christmas in a deliberately shambolic and thoroughly cynical obfuscation offensive, designed EXCLUSIVELY to protect the perpetrators from the inevitable backlash and retribution that awaits them as soon as the scammed victims finally come to terms with the fact that they have been raped, pillaged, ransacked, and ‘hollowed out’. In readiness for the possibility that they’ll have to keep going for 8 more dreary years, targets have been switched from the Bushes to Obama.

The victims have all along been despised by the primary perpetrators, who couldn’t care less about their plight and are concerned EXCLUSIVELY with the protection of their assets and bodies against the days of reckoning that await them. The fact that the Omega Ponzi operations and related scams against private victims were perpetrated by the criminalised US intelligence community does NOT mean that the perpetrators will not receive their overdue come-uppance: it simply means that a war of attrition has to be waged against these devils, who have wrecked so many Americans’ lives.

(If the Editor is attacked for stating the truth after this posting, we will expose the backing behind the perpetrating website(s) involved in this outrageously cynical disinformation campaign).

The two initial reports in which we SPECIFICALLY exposed the Ponzi scamming dimension, which has of course now finally burst into the ‘mainstream’ with the ‘Madoff takedown’, were as follows:

(a) ‘US intelligence community OMEGA OPS/’Ponzi Game’ frauds’:
13th January 2007.

(b) ‘Treasongate background: Intel Ponzi Scamming:
Classic Ponzi Model for Unregistered Thievery’:
22nd January 2007

The report dated 22nd January 2007 containing our first posting of the summary of the classic Ponzi scam entitled ‘How Charles Ponzi pulled it off: Making a fine art out of a pyramid fraud’, was initially published in International Currency Review, Volume 27, Number 3, December 2001, pages 51-52.

• This text is now repeated immediately below, for ease of reference:

THE ORIGINAL PONZI SCHEME EXPLAINED: AGAIN, IN CASE YOU MISSED IT EARLIER
Charles Ponzi, an immigrant from Italy to Boston, MA, made millions of dollars for a brief period, by exploiting his shrewd observation that while national currencies were fluctuating wildly in 1920, just after the end of the First World War, the Universal Postal Union (UPU) issued coupons which were always worth a given amount of postage stamps.

In those days, European refugees were flocking to the United States, Canada and Brazil; and often, their only contact with their families and friends back home was an occasional letter, enclosing a few dollars. The Universal Postal Union arranged to move the millions of letters, standard business documents and messages across national borders by issuing Postal Reply Coupons. You bought a Postal Reply Coupon in your country of residence, and enclosed it with your letter.

Your mother, once she had received the letter, exchanged the Postal Reply Coupon for stamps at her local post office.

Charles Ponzi told friends in Boston: ‘Everybody’s heard of the Postal Union. They print coupons like these I’m holding here: Postal Reply Coupons. You can send a letter home, or anywhere in the world, with these coupons. And you can trade this coupon for a stamp in any country. I send my mother coupons with every letter that I write home’.

‘Now, in cooperation with certain large businesses in our city, I am making a fortune on the Postal Reply Coupon. Stocks are too risky. Forget it. And bonds, what are they paying right now? Maybe six percent? Savings accounts at Tremont Trust, they’ll give you four and a half cents on the dollar. Give them $100 and they’ll give you back $104.50. I can beat that into the ground’, Ponzi insisted, beating his cane against the floor. ‘My investors get 50 cents on the dollar. Place a hundred dollars with my Securities Exchange Company, and you take out $150. Put that $150 in, you’ll get back $225. That’s right, in six months, you can more than double your money’.

How could he pay 50%, when banks couldn’t even manage 5%? ‘Exchange rates’, Mr Ponzi explained. ‘Every morning I go down and check to see how the lira is doing against the dollar. Usually you get five lire for a dollar. This morning I checked, and with the war just ended, it takes 20 lire to the dollar’. While currency rates were bouncing around like popcorn, Mr Ponzi explained, the Postal Reply Coupon always bought one stamp. Here’s what I do’.

‘I send my cousin in Parma, Italy, $1.0. He exchanges the dollar for lire. With these 20 lire (2,000 centesimi), he can buy 66 Postal Reply Coupons (worth 30 centesimi each, the cost of a letter-sized stamp in Italy). Back in the United States, each of the coupons will buy one stamp, face value five cents. I redeem all 66 coupons for $3.30 worth of stamps. The magic happens in the exchange rate. In America, my dollar buys 20 Postal Coupons. But if I exchange the US dollar for lire, and buy the coupons in Italy, then return and buy the stamps in America, I get $3.30 worth of stamps for that same $1.0. My profit margin is 230%’.

‘Yeah, but $3.30 worth of stamps is still stamps’, complained an attentive listener.

‘I know’, said Ponzi. ‘So I sell the stamps at a 10% discount through my contacts with the larger firms downtown. Deducting the discount, I’ve got $3.0 cash now, from the $1.0 that I started out with.

Now, let’s say, I got that dollar from you. I will pay you back your dollar, plus 50 cents interest. Since I just sold $3.0 worth of stamps, I have a dollar and 50 cents for myself’.

‘I’m going to spend a third of that money on my offices and processing overheads, and a third on commissions and bonuses to my sales people; and then, ladies and gentlemen, I’m going to pocket the other third and take my wife for a stroll’.

This was the essence of the original Ponzi scheme. Note that in this description, Ponzi starts out by exploiting the fluctuations of exchange rates, and the lack of arbitrage; and note that, by the end of the explanation, he is simply offering 50% interest, which he pays out to old claimants out of the additional funds he has received from other investors who are likewise anticipating a 50% return on their investments, within a short space of time.

The germ of the idea was derived from the foreign exchange market; but once Ponzi has realised that people will pour money his way if they are promised a 50% return, he can finally abandon his elaborate explanation (‘his ‘prospectus’) of the exploitation of exchange rate fluctuations and the tedious task of shipping, receiving, handling and exchanging Postal Reply Coupons, which gave him the ‘easy money’ idea in the first place.

In other words, his sales pitch is no more than a now redundant, expendable illustration – a false prospectus which disguises the fact that he is really promoting a pyramid selling operation. For he has realised that all his investors care about is receiving 50% on their money. How this is to be achieved does not normally concern them.

By December 1920, Charles Ponzi was matching old money with ever larger amounts of new money. In May 1921 alone, almost $500,000 of new money poured into the Securities Exchange Company – as 1,500 or more new customers, lured by the 50% yield offered through advertisements, sought their share of the huge profits they thought would be forthcoming at minimal risk. The office now bulged with fat stacks of dollar bills.

THE FLOOR STARTS TO GIVE WAY BENEATH HIM
But problems started to arise when Joseph Daniels filed a lawsuit alleging that he had helped to found the Securities Exchange Company (SEC) with a loan of $230 worth of furniture plus $200 in cash. Daniels had indeed provided the beaten-up desks that had been offloaded in the dusty office, and had let Mr Ponzi have $200 to spark interest in the Postal Coupons.

It wasn’t simply a loan, Mr Daniels maintained, now that Mr Ponzi was drowning in cash. ‘We were partners. I put up capital and property’. On 2nd July, Mr Ponzi was handed a demand for $1.0 million.

The Boston Post telephoned, and Mr Ponzi told the reporter that he had indeed bought furniture from Mr Daniels, but that he had never received any money for investment from him.

But when the newly installed banking commissioner for Massachusetts, Joseph Allen, read the newspaper, he wondered: ‘Where did Ponzi come from? Who are his associates? How is he managing to double people’s money?’

Allen asked Ponzi to pop round to his office, for an interview. The Securities Exchange Company did not describe itself as a bank, nor did it offer any banking services. Therefore, in the absence of a complaint – and none had yet arrived – the Commissioner had no jurisdiction to examine Ponzi’s business. At the interview, Ponzi explained the curiosities surrounding Postal Coupons, pointed out that money chased money, collected his coat, doffed his hat, and bid Mr Allen goodbye.

But Richard Grozier, city editor at The Boston Post, had always thought that Charles Ponzi’s scheme was fraudulent; and to initiate what he fancied would indeed be the inevitable débacle, he elicited a comment from one of Boston’s leading citizens, Clarence Barron, the owner of Dow Jones & Co and The Wall Street Journal.

At the end of July 1920, The Boston Post carried a front page story entitled: ‘Clarence Barron questions the motive behind Ponzi’s scheme’.

Theoretically, Barron admitted, you could indeed turn a profit on the UPU coupons. But that was the only truth buried within the operation. You could never earn more than a few thousand dollars, not just because of the trouble involved in offloading the stamps and tracking the various conversions driving the process, but because there simply were not enough coupons available.

France, Romania and Spain had just abandoned the scheme, a few months earlier. A cursory check with the UPU showed that they had a few hundred thousand dollars’ worth of coupons in circulation – nowhere near the $10 million or $15 million Mr Ponzi claimed to be trading. So where was Ponzi getting his coupons from? Furthermore, the US Postal Service had announced, on 2nd July 1920, that Postal Reply Coupons would no longer be redeemable in lots larger than ten. So how was Ponzi converting his coupons into stamps?

Finally, Barron asked, if Ponzi is doubling everyone else’s money, why does he keep his own funds in regional banks? The Boston Post knew that Ponzi kept millions of dollars on deposit at seven or eight New England banks, and that the accounts were ballooning. How could a man who was paying 100% interest every 90 days, put up with drawing just 4% on his holdings? Barron concluded:

‘Right under the eyes of our Government, Mr Ponzi has been paying out US money to one line, with deposits taken from a succeeding line’ (another bank).

All of a sudden, all the doors which had flown back on their hinges at the sight of Mr Ponzi, were slamming tight shut. The Massachusetts District Attorney ordered Ponzi to cease and desist. His customers demanded their money back, and Ponzi was eventually jailed for Federal mail fraud, then deported. He wound up destitute in South America.

(4) The following documents were obtained by the Editor from the United States District Court for the Southern District of New York in December 2008:

1: Securities and Exchange Commission COMPLAINT vs: Bernard L. Madoff and Bernard L. Madoff Investment Securities LLC, Defendants: Reference: 08 Civ. 10791 filed 4:51pm 11 December 2008.

2: Securities and Exchange Commission COMPLAINT vs: Bernard L. Madoff and Bernard L. Madoff Investment Securities LLC, Defendants: Reference: 08 Civ. 10791 (LLS): Appointment of Receiver, Lee Richards, partner of Richards Kibbe & Orbe LLP ‘over all the assets and accounts of defendant Bernard L. Madoff Investment Securities LLC (“BMIS”) outside of the United States, to take control forthwith over BMIS’s dealings and transactions with any non-United States entity or counterparty, with full access to BMIS’s books and records necessary or useful to him in the exercise of his powers over BMIS’s foreign business or transactions’ signed by United States District Judge Louis L. Stanton at 6.42pm on 12th December 2008.

3: Securities and Exchange Commission ORDER vs: Bernard L. Madoff and Bernard L. Madoff Investment Securities LLC, Defendants: Reference: 08 Civ. 10791 (LLS) ECF Case: Order to show cause, Temporary Restraining Order and Order Freezing Assets and Granting Other Relief; Order consented to by defendants and therefore signed off by United States District Judge Louis L. Stanton at 4:51pm on 13th December 2008.

4: Securities and Exchange Commission and Securities and Investor Protection Corporation ORDER vs: Bernard L. Madoff and Bernard L. Madoff Investment Securities LLC, Defendants: Reference: 08 Civ. 10791: Appointing Irving H. Picard as Trustee and law firm Baker & Hostetler LLP as Counsel for the Trustee ‘with all the duties and powers of a Trustee as is prescribed by the Securities Investor Protection Act’, and inter alia authorising the Trustee ‘to take immediate possession of the property of the Defendant, wherever located, including but not limited to the books and the records of the Defendant, and to open accounts and obtain a safe deposit box at a bank or banks to be chosen by the Trustee’: signed by United States District Judge Louis L. Stanton at 4:08pm on 13th December.

5: Securities and Exchange Commission and Securities and Investor Protection Corporation ORDER vs: Bernard L. Madoff and Bernard L. Madoff Investment Securities LLC, Defendants: Reference: 08 Civ. 10791: Application to the Court of the Securities Investor Protection Corporation (SIPC), signed and filed on 15th December 2008.

6: Securities and Exchange Commission and Securities and Investor Protection Corporation ORDER vs: Bernard L. Madoff and Bernard L. Madoff Investment Securities LLC, Defendants: Reference: 08 Civ. 10791: Memorandum of Law in support of the application to the Court of the Securities Investor Protection Corporation; signed and filed on 15th December 2008.

7: Securities and Exchange Commission and Securities and Investor Protection Corporation ORDER vs: Bernard L. Madoff and Bernard L. Madoff Investment Securities LLC, Defendants: Reference: 08 Civ. 10791: Consent by Bernard L. Madoff Investment Securities LLC, signed by Bernard L. Madoff as ‘Sole Member’, to the service of the Complaint and the Application by the Securities Investor Protection Corporation, dated, notarised and filed on 15th December 2008.

8: United States of America v. Bernard L. Madoff: Case # 08 MAG 2735: AGREEMENT TO FORFEIT PROPERTY, signed by Bernard L. Madoff and Ruth Madoff on 17th December 2008 and filed on that date. The property forfeited: 133 East 64th Street, Apt 11A/PH, New York, NY 10065; 410 N. Lake Way, Palm Beach, FL 33480; 216 Old Montauk Highway, NY 11954.

9: Extensive miscellaneous related documentation.

George Orwell: ‘In an age of deceit, speaking the truth is a revolutionary act’.

US friend: ‘You are to be congratulated on a masterful piece of research in exposing the treason and the biggest heist in history’.

LIST OF U.S. STATUTES, SECURITIES REGULATIONS AND LEGAL PRINCIPLES OF WHICH THE CRIMINALISTS, ASSOCIATES AND ALL THE MAIN FINANCIAL INSTITUTIONS REMAIN IN BREACH:

LEGAL TUTORIAL: The Steps of Common Fraud:

Step 1: Fraud in the Inducement: “… is intended to and which does cause one to execute an instrument, or make an agreement… The misrepresentation involved does not mislead one as the paper he signs but rather misleads as to the true facts of a situation, and the false impression it causes is a basis of a decision to sign or render a judgment” Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Fraud’.

Step 2: Fraud in Fact by Deceit (Obfuscation and Denial) and Theft:

• “ACTUAL FRAUD. Deceit. Concealing something or making a false representation with an evil intent [scanter] when it causes injury to another…”. Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Fraud’.

• “THE TORT OF FRAUDULENT DECEIT… The elements of actionable deceit are: A false representation of a material fact made with knowledge of its falsity, or recklessly, or without reasonable grounds for believing its truth, and with intent to induce reliance thereon, on which plaintiff justifiably relies on his injury…”. Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Deceit’.

Step 3: Theft by Deception and Fraudulent Conveyance:

THEFT BY DECEPTION:

• “FRAUDULENT CONCEALMENT… The hiding or suppression of a material fact or circumstance which the party is legally or morally bound to disclose…”.

• “The test of whether failure to disclose material facts constitutes fraud is the existence of a duty, legal or equitable, arising from the relation of the parties: failure to disclose a material fact with intent to mislead or defraud under such circumstances being equivalent to an actual ‘fraudulent concealment’…”.

• To suspend running of limitations, it means the employment of artifice, planned to prevent inquiry or escape investigation and mislead or hinder acquirement of information disclosing a right of action, and acts relied on must be of an affirmative character and fraudulent…”.

Source: Black, Henry Campbell, M.A., ‘Black’s Law Dictionary’, Revised 4th Edition, St Paul: West Publishing Company, 1968, s.v. ‘Fraudulent Concealment’.

FRAUDULENT CONVEYANCE:

• “FRAUDULENT CONVEYANCE… A conveyance or transfer of property, the object of which is to defraud a creditor, or hinder or delay him, or to put such property beyond his reach…”.

• “Conveyance made with intent to avoid some duty or debt due by or incumbent or person (entity) making transfer…”.

Source: Black, Henry Campbell, M.A., ‘Black’s Law Dictionary’, Revised 4th Edition, St Paul: West Publishing Company, 1968, s.v. ‘Fraudulent Conveyance’.

U.S. SECURITIES REGULATIONS OF WHICH INSTITUTIONS
HAVE BEEN SHOWN TO BE IN BREACH [SEE REPORTS]:

• NASD Rule 3120, et al.
• NASD Rule 2330, et al
• NASD Conduct Rules 2110 and 3040
• NASD Conduct Rules 2110 and IM-2110-1
• NASD Conduct Rules 2110 and SEC Rule 15c3-1
• NASD Conduct Rules 2110 and 3110
• SEC Rules 17a-3 and 17a-4
• NASD Conduct Rules 2110 and Procedural Rule 8210
• NASD Conduct Rules 2110 and 2330 and IM-2330
• NASD Conduct Rules 2110 and IM-2110-5
• NASD Systems and Programme Rules 6950 through 6957
• 97-13 Bank Secrecy Act, Recordkeeping Rule for funds transfers and transmittals of funds, et al.

U.S. LAWS ROUTINELY BREACHED BY THE CRIMINAL OPERATIVES AND INSTITUTIONS:

• Annunzio-Wylie Anti-Money Laundering Act
• Anti-Drug Abuse Act
• Applicable international money laundering restrictions
• Bank Secrecy Act
• Conspiracy to commit and cover up murder.
• Crimes, General Provisions, Accessory After the Fact [Title 18, USC]
• Currency and Foreign Transactions Reporting Act
• Economic Espionage Act
• Hobbs Act
• Imparting or Conveying False Information [Title 18, USC]
• Maloney Act
• Misprision of Felony [Title 18, USC] (1)
• Money-Laundering Control Act
• Money-Laundering Suppression Act
• Organized Crime Control Act of 1970
• Perpetration of repeated egregious felonies by State and Federal public employees and their Departments and agencies, which are co-responsible with the said employees for ONGOING illegal and criminal actions, to sustain fraudulent operations and crimes in order to cover up criminalist activities and High Crimes and Misdemeanours by present and former holders of high office under the United States
• Provisions pertaining to private business transactions being protected under both private and criminal penalties [H.R. 3723]
• Provisions prohibiting the bribing of foreign officials [F.I.S.A.]
• Racketeer Influenced and Corrupt Organizations Act [R.I.C.O.]
• Securities Act 1933
• Securities Act 1934
• Terrorism Prevention Act
• Treason legislation, especially in time of war.

• Please be advised that the Editor of International Currency Review and associated intelligence services cannot enter into email correspondence related to this or to any of the earlier reports.

We are a private intelligence publishing house and have no connections to any outside parties including intelligence agencies. The word ‘intelligence’ on this website and in all our marketing material is used for marketing/sales purposes only and has no other connotations whatsoever: see ‘About Us’ on the red panels under the Notes on the Editor, Christopher Story FRSA, who has been solely and exclusively engaged as an investigative journalist, Editor, Author and private financial and current affairs Publisher since 1963 and is not and never has been an agent for a foreign power, suggestions to the contrary being actionable for libel in the English Court.

BLAIR HAS ‘ROLLED OVER’ TO AVOID ARREST AND JAIL

‘SHOPS’ THE POPE, MERKEL, DEUTSCHE BANK, HUNGARY AND THE OCTOPUS

Friday 31 October 2008 04:01

BLAIR’S CAPITULATION TRIGGERS SIMILAR RESPONSES ALL OVER THE UNITED STATES

THE GANGSTERS AND BANKSTERS HAVE LOST CONTROL: IT’S OUT OF THEIR HANDS

BROWN AND SARKOZY HOPING TO REDEEM THEMSELVES AND PROCURE RELEASES

MERKEL RISKING FATAL E.U. SPLIT TO PROTECT BUSH SR.’S ILLICIT FUNDS

MASSIVE RIFT AT THE HEART OF THE EUROPEAN UNION OVER THE SETTLEMENTS MONEY

GERMAN CHANCELLOR FINGERED BLOCKING SETTLEMENTS PAYOUT ON BUSH’S ORDERS

ELYSEE TREATY PARTNERS, FRANCE AND GERMANY, ARE NOW AT LOGGERHEADS

DAMAGE-LIMITATION VISIT BY MERKEL TO DOWNING STREET ON THURSDAY 30TH OCTOBER

MAIN PROP OF PAN-GERMAN E.U. STRATEGY THREATENED WITH COLLAPSE

SUDDEN SETTLEMENTS-DRIVEN RAPPROCHEMENT BETWEEN BRITAIN AND FRANCE

RELENTLESS EXPOSURES ARE FORCING THE PACE OF GLOBAL RESTITUTION

By Christopher Story FRSA, Editor and Publisher, International Currency Review and associated intelligence publications and information services. See this site for details and ordering facility.

Advertisement:
NON-U.S. INTERNET SECURITY SOLUTION CD AVAILABLE: FAR BETTER THAN NORTON ETC
It has now been established that the National Security Agency (NSA) works with/controls Microsoft, Norton, McAfee, and others, in pursuit of the Pentagon’s vast BIG BROTHER objective, directed from the ‘highest’ levels (not the levels usually referred to) which seek to have every computer in the world talk direct to the Pentagon or to NSA’s master computers.

This should come as no real surprise since the cynical spooks even assert this ‘in-your-face’ by advertising ‘INTEL INSIDE’, which says exactly what it means. More specifically, NSA have made great strides in this direction by having a back door built into Microsoft VISTA. Certain computers, especially those labelled with the logo of the ‘fully collaborating’ firm Hewlett Packard, have hard-core setups which facilitate the remote monitoring and controlling of personal computers by NSA, Fort Meade. We now understand that if you are using VISTA* you MUST NOT enable ‘file and printer sharing’ under any circumstances. If you say ‘YES’, so to speak, to ‘file and printer sharing’, your computer becomes a slave at once to NSA’s master computers. DO NOT ENABLE SHARING.

Unfortunately, this abomination is so far advanced that this may not be the only precaution that needs to be taken. As long as Microsoft continues its extensive cooperation with NSA and the NSC (National Security Council), the spying system that assists the criminalised structures, and thus hitherto the Bush-Clinton ‘Box Gang’ and its connections, with their fraudulent finance operations, NSA may be able to steal data from your computer. The colossal scourge of data theft is associated with this state of affairs: data stolen usually include Credit Card data, which the kleptocracy regards as almost as good as real estate for hypothecation purposes. Even so, you can make life very much more problematical for these utterly odious people by NOT USING U.S.-sourced so-called Internet Security and anti-virus software. Having been attacked and abused so often, we offer a solution.

We use a proprietary FOREIGN Internet Security program that devours every PC Trojan, worm, scam, porn attack and virus that the National Security Agency (NSA) throws at us. We are offering this program (CD) to our clients and friends, at a premium. The program comes with our very strong recommendation, but at the same time, if you buy from us, you will be helping us finance ongoing exposures of the DVD’s World Revolution and the financial corruption that has been financing it.

The familiar US proprietary Internet Security programs are by-products of US counterintelligence, and are intended NOT to solve your Internet security problems, but to spy on you and to report what you write about, to centralised US electronic facilities set up for the purpose. You can now BREAK FREE from this syndrome while at the same time helping us to MAINTAIN THE VERY HEAVY PRESSURE UPON THE CRIMINALISTS WE HAVE BEEN EXPOSING, by ordering this highest quality FOREIGN (i.e., non-US) INTERNET SECURITY SOLUTION that we have started advertising on this website. This offer has been developed in response to attacks we have suffered from the NSA nerds who appear to have a collective mental age of about five years, judging by their output.

• To access details about the INTERNET SECURITY SOLUTION, just press THE LIVE LINK YOU HAVE JUST READ, or else press SERIALS in the red panel below. This opens up our mini-catalogue of printed intelligence publications. Scroll right down to the foot of that section, where you will see details of this service. When you buy this special product, you will also, as we clearly state above, be paying a special premium by way of a donation to help us finance these exposures.

The premium contains a donation for our exposure work and also covers our recommendation based on the Editor’s own experience that this INTERNET SECURITY SOLUTION will make your Internet life much easier. Some versions have a ‘Preview before downloading’ feature.

*VISTA: Virtual Instant Surveillance Tactical Application.

• INTERNATIONAL CURRENCY REVIEW, Volume 33, #s 3 & 4, all 972 pages of it, is making waves all over the world. It contains a blow-by-blow deconstruction of this crisis via the Wantagate plus our further analyses: and everything published therein is now well and truly ON THE GLOBAL PUBLIC RECORD. Accordingly the whole world owns a detailed, damning account of the serial criminality of the Bush-Cheney-Clinton ‘Box Gang’ et al., which CANNOT BE EXPUNGED.

• INTERNATIONAL CURRENCY REVIEW, Volume 34, #1, consisting of 400 pages, is ‘on machine’ and will be distributed worldwide in early November 2008. It tracks the fallout from our exposures of the criminality from mid-April to 6th October 2008, when the issue had to go to press. The Glossary that is published with The Cottrell Plan has been separated out and placed at the end of the issue, for long-term ease-of-reference purposes. The issue will be mailed to paid-up subscribers only.

• BOOKS: Edward Harle Limited has so far published FIVE intelligence titles: The Perestroika Deception, by Anatoliy Golitsyn; Red Cocaine, by Dr Joseph D. Douglass, Jr.; The European Union Collective, by Christopher Story; The New Underworld Order, by Christopher Story; and The Red Terror in Russia, by Sergei Melgounov. All titles are permanently in stock. We sell books DIRECT.

• Please Make a Donation to help finance Christopher Story‘s ongoing global financial corruption investigations, which have turned the whole world upside down and have exposed the corruption which was intended to enable the geocriminalist syndicate to seize the wealth of the entire world. These people have finally been more or less completely stopped in their tracks as a consequence of these exposures. Your assistance will be sincerely appreciated and will make a real difference, hastening the OVERDUE resolution of the worst financial corruption and linked financial fallout in world history. The Editor’s $35,000 Wanta bail-out money was not repaid and so has been stolen.

• See the second white panel for details of our latest distributed intelligence publications.

• MICHAEL C. COTTRELL’S PROPOSALS FOR THE REFORM OF THE U.S FINANCIAL SYSTEM, AND HIS DEBUNKING OF THE IMPRACTICABLE AND EXPENSIVE ‘PAULSON’ PROPOSALS, PLUS OUR EXTENSIVE GLOSSARY, POSTED ON 22ND JULY AND REPOSTED ON 12TH SEPTEMBER, WERE AGAIN ‘SNIPPED’ BY THE NSA’S MENTAL DEFECTIVES. THE REPORT WAS REPOSTED ON 18TH SEPTEMBER 2008. THE REPORT HAS BEEN EXTREMELY WELL RECEIVED WORLDWIDE.

• PRINT EDITIONS OF THE COTTRELL PLAN: Economic Intelligence Review, Volume 11, #s 9 & 10, published in July-August, was devoted almost entirely to The Cottrell Plan and to the extensive Glossary of financial market and related definitions, which explains where so many people have gone wrong. International Currency Review, Volume 34, #1, also contains The Cottrell Plan and the Glossary, placed at the end of this 400-page issue for long-term easy reference.

• Subscriptions by serious observers and analysts to our services may be placed via this website.

• NEW REPORT STARTS HERE:

CONFRONTED WITH HIS COMPLICITY, BLAIR ‘ROLLED OVER’ AND EXPOSED THE OTHER RATS
London, 30th October 2008: It can now be revealed that former British Prime Minister, Tony Blair, has ‘shopped’ the world-class financial criminals in order to avoid being arrested and sent to jail for the rest of his life. Fellow world-class criminal George W. Bush Jr. and his key White House staff were informed in the afternoon of 29th October that Blair had divulged EVERYTHING – identities of those involved and of bank accounts and coordinates – and that, accordingly, the present phase of the geocriminal gangland operation to hold the whole world to ransom has been DEFEATED.

Specifically, Blair, confronted with proof of his own involvement in these crimes, ‘rolled over’ on his comrades-in-crime and informed those tasked on the command of Her Majesty The Queen with procuring the Settlements releases and getting to the bottom of the global epidemic of gangland conspiracy to seize the assets of the whole world, that the following parties were engaged in these massive criminal operations:

• The German Pope and the Vatican Bank, headed by the former President of the Deutsche Bundesbank, Dr Hans Tietmeyer.

• Chancellor Angela Merkel [see preceding report].

• Dr Alan Greenspan [see most preceding reports].

• Deutsche Bank, the primary German bank/criminal enterprise working for DVD (Deutsche Verteidigungs Dienst, Dachau [see most preceding reports]), which in recent days has been identified as being in very severe trouble, with a huge ‘black hole’ in its falsified accounts.
The reason for the huge ‘black hole’ is identified in this report.

• FACT: Deutsche Bank finances the revolutionary mind-control operation which has severely subverted many strata of the official structures, the police, the banking sector, industry and local government cadres in the United Kingdom, calling itself Common Purpose. This operation was run out of the Office of the Deputy Prime Minister, formerly John Prescott, the revolting creature who was caught fornicating with his secretary in his office with the doors open so that his staff could hear what was going on. It is believed still to be run out of that office. It should be closed down.

• Hungary [details not yet available: but recall the prominent activity, partially exposed via this website, of ‘Baroness’ Eva Teleki, ‘former’ STASI [= Gestapo/DVD] operative interacting with the CIA [CIA-1, Frankfurt], whom this service fingered in 2006 as being thought to have financed the Underground and 7/7 bus explosion abominations in London using stolen funds].

Please refer also to our report dated 26th October 2008, specifically the segment on the ‘Wolfowitz moment’ problems facing the former French Finance Minister, Dominique Strauss-Kahn, current Managing Director of the International Monetary Fund, in connection with his relationship with a Ms. Piroska Nagy, the Hungarian-born former senior official in the IMF’s Africa Department, who is now working for the European Bank for Reconstruction and Development in London.

• It appears that this was a ‘honey trap’ operation that is now believed to have relevance in this context, similar to the ‘honey trap’ used against Wolfowitz.

• In addition, ‘Blair shopped lots of others’ according to our sources, providing comprehensive information on the personnel and banks involved, the illicit banking transactions, bank coordinates and related information which has provided the relevant authorities with a detailed picture of the global spider’s web of financial stealing, fraud and criminality, starting at the White House.

BLAIR’S CAPITULATION TRIGGERS SIMILAR RESPONSES ALL OVER THE UNITED STATES
Following Blair’s capitulation when faced with the evidence of his crimes, we understand that a large number of bankers and others have likewise been ‘rolling over’ and providing a wealth of detailed information on the financial corruption to investigators, identifying colleagues and others involved in these scams and revealing banking coordinates and related pertinent information.

In other words, the pace of the unravelling has accelerated sharply since Blair capitulated, so that the ‘takedown’ of these corrupt snakes has, we believe, reached a ‘tipping point’ beyond which no cover-up is feasible. At the same time, this is a very dangerous environment given that, with their backs to the wall, the criminal cabal is tempted to take matters into its own hands in order to hold on to power, in order in turn to retain control of the funds they have stolen and generated.

Any such development would be considered a TERRORIST ACT against inter alia The Queen, given that her funds are held hostage in lockdown in the face of the cabal’s intransigence.

Powerful countries share the view that under Bush II, the United States became a bandit country, a pariah state buttressed by a corrupt Intelligence Power and bribed segments of the military class.

BLAIR CONFESSION + THE ‘LOCK BOX’ RAIDS + PROBES = CALAMITY FOR THE OCTOPUS
As a consequence of this long-awaited breakthrough due to the petrified Tony Blair divulging all these ‘Black’ secrets, what is known as ‘a paradigm shift’ has occurred, which will eventually result in the takedown of the entire global criminalist network and will most certainly deliver some of the most prominent organised criminal operatives, including those holding high office, to jail. Back-up for this ‘paradigm shift’ is being contributed by certain ongoing judicial processes that have been functioning in the background concerning which no information is known or can be divulged.

The findings from Assistant Metropolitan Police Commissioner John Yates’ heavily armed raids of the London ‘safety lock boxes’ had of course been made available to the appropriate authorities in this context [see our report dated 2nd June, et seq.].

A segment on the Blair connection was included in the draft of the Editor’s report dated the 26th October, but was removed ‘on request’, pending formal developments. Specifically, Mr Blair was to have been supoenaed to appear before a special House of Commons Committee, ostensibly to face questioning over some dirty business in 1997 (ELEVEN years ago) involving the dubious character Bernie Ecclestone, boss of Formula One, and Blair’s exemption of the sport from a ban on tobacco advertising after Ecclestone had given £1.0 million to the Labour Party.

However the real purpose of the hearing would have been to ambush Blair with evidence derived from the aforementioned sources concerning his massive corruption, a development that would have at once implicated the financial criminalism gang and the Bush-Clinton Crime spider’s web.

In order for such an ambush to be feasible, the UK House of Commons authorities would need a platform for its investigations, since they will only deal with matters that are very strictly relevant to parliamentary business, standards and procedures. This explains why the geriatric matter of Bernie Ecclestone was to have been used as the platform for this exposure operation.

Faced with this situation (the background to which had been discussed on open telephone lines, including in conversations featuring the Editor of this service), Blair decided that he had no option but finally to come clean. In such circumstances, a financial and war criminal caught like this MUST reveal EVERYTHING, because if he holds anything back, he will ‘go down’ anyway.

In this connection, we understand that there is considerable concern in several quarters that this crook has not yet (evidently) been arrested and indicted.

THE SEGMENT ON BLAIR THAT WAS REMOVED FROM OUR REPORT DATED 26TH OCTOBER
Before continuing with further details on the current situation, we need to elaborate further about the segment on Blair which had to be removed from our report dated 26th October 2008.

The Editor‘s intention had been to ‘hang’ this crucial component of the report on an article by Sue Cameron that appeared in The Financial Times of 15th October. Since then a number of ‘pointed’ articles on Blair and ‘his money’ have appeared in the UK ‘mainstream’ media, including an article in The Times on 29th October 2008 talking about £12 million accumulated by Mr Blair, which journalists seem to think of as a large sum of money.

In reality, some of the illicit funds received or handled by or via Blair were, AS WE REPORTED AGES AGO, placed with bank accounts in Abu Dhabi. Blair’s corrupt money, or some of it, may be held in the name of (a) family member(s) in the British Virgin Islands. Malaysia is also an issue.

However the 15th October 2008 article in The Financial Times dealt exclusively with the ‘Bernie Ecclestone’ dimension, i.e. with the platform that was to be used for the purpose of ambushing Blair: which was as far as the newspaper could go, assuming it possessed further information, as seemed probable given the first sentence of The Financial Times’ article, as well as other highly pointed references therein:

‘Is the prison cell beckoning for Tony Blair?’ the article began ominously. ‘A glance through my copy of Erskine May, the parliamentary procedure bible that dates back to 1832, suggests that the former Prime Minister’s future could be dire’. What COULD the author if this piece be talking about?

‘This tome is a page turner when it comes to “misleading the House”, “penal jurisdiction”. The rules could be crucial because Michael Martin, the Commons Speaker, has ordered an inquiry into claims that Blair “deliberately misled” Parliament’.

Let us pause here for a brief moment. Equipped with the kind of explosive indications, if not actual intelligence, alluded to above, the Speaker of the House of Commons would have been left with no option but to exercise his latent powers to call for an inquiry, even in respect of what superficially appears to be the ‘lesser’ matter of the Bernie Ecclestone issue: otherwise he, with knowledge of the monumental crimes in question, would of course become a co-conspirator and would be liable to be impeached or otherwise ‘dealt with’ himself.

The FT article continued, citing documents released under the Freedom of Information Act (implying intensive investigative activity along these lines by the London financial paper):

‘Documents released under the Freedom of Information Act reportedly show that he ordered Formula One to be exempted from a ban on tobacco advertising hours after he met the sport’s boss, Bernie Ecclestone, who had given £1 million to Labour. Mr Blair told Parliament the decision was not made right after the meeting’.

Erskine May says “the acceptance by any Member of either House of a bribe to influence him in his conduct… or of any fee, compensation or reward in connection with the promotion of or opposition to any bill, resolution, matter or thing submitted or intended to be submitted to the House or any committee thereof, is a breach of privilege. Members of the House who have been found guilty of such an offence have been expelled or committed”‘.

‘The word “committed” means the slammer (prison). Offenders committed by order of either House are either detained in one of HM prisons or in the custody of Black Rod or the Serjeant-at-Arms”‘.

‘The Commons can treat the making of a deliberately misleading statement as a contempt. Mr Blair must be hoping they do not. The rules also say (you will like this bit): “Those who are committed for contempt may not be admitted to bail”‘.

It should be understood that certain articles appear in the ‘mainstream’ media by deliberate design.

This was one such article. Reading between the pointed lines, and taking due account of such comments as ‘(you will like this bit)’ it is concluded that, contrary to appearances, The Financial Times may, in respect of at least this dimension of the crisis, be ‘up to speed’, or at least that the writer of this article was briefed by a faction of British intelligence.

SARKOZY MADE AWARE OF GROSS FINANCIAL IRREGULARITIES ON 27TH OCTOBER
To continue the narrative: It will be recalled that Gordon Brown and President Sarkozy had to rush to China for the EU-Asia meeting, as reported in our 26th October presentation (‘If it’s Friday 17th October, it‘s Camp David. If it‘s Friday 24th October, it’s Beijing’).

As a consequence of that meeting, Sarkozy is believed to have obtained access to a separate (and new) ‘piggy bank’ worth $4.0 trillion, according to a Bloomberg report which surfaced briefly, before the subject was never mentioned again.

• But the Asian markets appear to have known about this, accounting for the sudden 14-point rise on the Hong Kong Hang Seng Index and such related phenomena as the extraordinary spike of nearly 1,000 points on the destabilised Dow Jones Industrial Average on Tuesday 28th October.

But on Monday 27th October, after it had been made evident to ‘the interested’ that the Settlement releases were to have started before midnight Paris time on the Sunday 26th October, M. Sarkozy‘s advisers identified gross irregularities associated with the fact that colossal sums of money had been removed from where they should have been (almost certainly accounting for subsequent reports of an immense ‘black hole’ within the DVD‘s criminal enterprise, Deutsche Bank).

FRANCE AND GERMANY AT LOGGERHEADS OVER THE SETTLEMENTS
Against this background, it can be revealed that behind-the-scenes tensions at the heart of the fragile and artificial New World Order Collective known as the European Union have risen sharply since we first reported on Sunday 26th October that the President of the European Union, Nicolas Sarkozy, was refusing to take calls from the White House and from President Bush’s aides.

According to our sources, Sarkozy blocked all calls from Bush 43 and his staff throughout Monday 27th October 2008, the day when these reportedly colossal irregularities were identified.

It was separately reported to us that the President of the United States worked himself up into a frenzy of anger, and that he was being verbally ‘beaten up’ by the malevolent forces inside and outside the US structures that have been seeking to block the Settlements in perpetuity – starting with his furious father, who has been complaining that his son ‘dropped the ball’ when he gave M. Sarkozy the power he needed at Camp David on 18th October to mastermind and to complete the Settlements payouts, for fear that President Sarkozy would arrest his father’s 26 most prominent Europe-based criminalist collaborators.

The waves of arrests reported earlier have therefore continued on both sides of the Atlantic, as more and more ‘sleepers’ working for Bush Sr. (and therefore the DVD) are picked up by Interpol, MI6, special agents and other law enforcement cadres, working in collaboration with the special representatives of The Queen, the Saudi Prince and the wronged Chinese authorities.

SARKOZY WOULDN’T PICK UP THE PHONE, SO BUSH HARASSED MERKEL INSTEAD
We speculate that, unable to reach the French President, therefore, Bush 43 called his corrupt client, Chancellor Angela Merkel, and used his blackmail powers against her to ‘require’ her to block the Settlements on his behalf and on behalf of his angry father.

He demanded his father’s pound of flesh. As previously reported, Merkel has been bribed by Bush 41 for the past four years, in exchange for which she was required to ‘look after’ his holdings of stolen, untaxed and otherwise illicit cash in accounts held at Germany’s largest financial institution.

After President Sarkozy called Chancellor Merkel on 18th October, as described in our report dated 26th October, and warned her against blocking the Settlements contrary to his ‘instructions’, Frau Merkel responded with arrogant disdain, and proceeded to do just the opposite of what M. Sarkozy required her to do – i.e., she ensured that at least two attempts at completing the Settlements were blocked (on Sunday night and Monday night, following the return of the leaders from the Beijing EU-Asia summit meeting. However the discovery of the immense ‘irregularities’ on Monday may have been the reason for the releases failing on that date).

• Actually, it is believed that Merkel immediately ordered Deutsche Bank to transfer the Bush Sr. funds over which she was de facto custodian, to (see below) the supposedly ‘safe hands’ of her fellow wily hun, Dr Hans Tietmeyer, head of the Vatican Bank, former President of the Bundesbank.

As previously reported, Sarkozy is under extreme pressure from the furious Heads of State and Government of the other 26 EU ‘Member States’ (excluding Germany) to procure the Settlements, having been given a deadline of 20 days in which to fulfill this requirement: or he will be removed from office, they say (or said, prior to the discovery of the ‘irregularities’, and Blair’s confession, which of course has ‘changed everything’).

Enquiries as to whether this threat is ‘reliable’ have been met by several of our sources with a vehement insistence that the other EU Governments mean what they say.

GORDON BROWN RUSHES BACK TO PARIS ON 28TH OCTOBER
The overall situation by Tuesday 28th October was therefore as follows:

(1) President Sarkozy’s intelligence services and aides had discovered gross irregularities while attempting to effect the Settlements on 26th/27th October.

(2) Sarkozy was refusing to answer desperate phone calls from the White House, given that Bush 43 had realised he had lost control andhis father could no longer micro-manage the deception.

(3) Sarkozy had cornered Chancellor Merkel and found her to be defiant, arrogant, rude and non-cooperative, so that a massive split had opened up at the core of ‘Europe’ (see below).

(4) Former Prime Minister Blair, who had been cornered thanks to a combination of evidence from the lock boxes and ‘background’ judicial process, and faced the prospect of being ambushed by the enquiry ordered by the Speaker of the House of Commons, Michael Martin, had meanwhile decided that he had no option but to do what didn’t come naturally, viz. to ‘come clean’, spilling the beans on an unprecedented scale, so that the spider’s web of financial corruption has collapsed.

AN UNPARALLELED DISASTER FOR THE GLOBALIST CRIMINAL SNAKES
To describe this as a cataclysmic disaster for the ‘criminal classes’ would be like saying that Hitler was basically a good man beneath a misleading exterior. The weight of evidence delivered as a consequence of the raids on the ‘safety lock boxes’, holding the stolen and other collateral and assets used to underpin the use of Britain as the ‘Master Platform’ for the financial corruption [see report dated 26th October] was bad enough.

But for Blair – a central criminalist operative ‘player’ in this Grandfather of all Financial Scandals, the biggest financial scandal in world history, who knows where the bodies are buried – to have fessed up to everything he knows to the special investigators who are looking into these ongoing terrorist acts committed against Her Majesty The Queen, is way beyond beyond what the arrogant criminal gangsters could ever have imagined in their worst cocaine-delusional dreams.

As noted above, the Bush 43 White House was advised of what information Blair has divulged, during the afternoon of 29th October. As a consequence of all this, matters are now completely out of the hands of the criminals, and people like the notorious veteran criminalist operative Mr Henry M. ‘Paulson’, ‘Treasury Secretary’, Michael Chertoff and many well-known names on the decadent Washington, D.C. scene, now have their hands tied as never before, as the situation unravels.

SNOW AND GREENSPAN FIRST ARRESTED BACK IN 2006 FOR STEALING $5.0TRILLION
This, by the way, is perhaps the place to reveal a further piece of the unravelling process. We now understand that John Snow, the former US Treasury Secretary, and Dr Alan Greenspan, were both ARRESTED in 2006 after they had stolen $5.0 trillion. They were then PARDONED by the criminalist occupant of this White House. This information has been supplied by a source located very deep inside the relevant US structures.

It illuminates the quite extraordinary double-deception that ensued when the Editor of this service, having parted with his own loan funds of $35,000, campaigned for the proper disposition of the $4.5 trillion brought over from the People‘s Bank of China in May 2006 [see Archive for details].

Why was the Editor able to continue the damning reports in question?

Here is the proximate answer to that question:

• Because they served, perfectly, the purposes of the Bush Crime Family – redirecting attention to the apparent misapplication of the $4.5 trillion by Paulson, and his conflict-of-interest in retaining sole signatory power over the funds – and AWAY from the fact that Messrs Snow and Greenspan had stolen $5.0 trillion, within which the $4.5 trillion resided, had been arrested, and then pardoned by the criminal President of the United States.

• The Editor never understood why he was ‘left alone’ during those months: now he does.

• It should be understood that our straightforward policy all along has been to ‘walk in a straight line’, which disconcerts and eventually destabilises all the surrounding and ongoing deception operations, in accordance with Story‘s Third Law: ‘Sooner or later, all covers and operations are blown’. The reason deception can typically be exposed by this very straightforward method is that manipulation of the messenger eventually falls foul of the demands of hidden deception strategy, especially when the time comes to make a tactical or a strategic change.

• Therefore, by ‘hanging in there’ for long enough, the deception operations in question eventually become unhinged, which is what has occurred in this classic case.

• BECAUSE, when the LOAN funds from HM The Queen and Prince Al-Aweed al-Talal were made available in June 2007, it became ‘hazardous’ for this ‘line’ to be allowed to continue. See previous reports to enable you to reach your own conclusions on this score.
[The Editor will not respond to related questions].

FROM PARIS, BROWN AND SARKOZY CONFRONT MERKEL WITH HER CORRUPTION
Against this background, Gordon Brown arrived in Paris, as noted, on Tuesday the 28th October. Whereupon Chancellor Merkel was confronted with the disturbing news that the former UK Prime Minister, Blair, had ‘rolled over’ on her, as well as on other corrupt figures such as the Pope (who is NOT the Vicar of Christ, but the lackey of His opposite; here is the contemporary proof: see the Editor‘s work ‘The New Underworld Order‘ for further and better particulars).

This time, Merkel changed her tune, since Brown and Sarkozy possessed all the evidence and information they needed, arising from the lethal combination of the ‘safety lock box’ disclosures, the judicial processes in the background, the information in the hands of the Speaker of the House of Commons, and the devastating confession of Britain’s criminal former Prime Minister, who has probably lost everything in the process, but may have just managed to escape jail (uncertain).

Instead, this duplicitous German Frau BLAMED Deutsche Bank, which has alienated vast funds, inter alia to the corrupt Vatican Bank, under the control of the former President of the Bundesbank, Dr Hans Tietmeyer, who faithfully serves his German False Priest Master (standing in the room of Christ and thereby blocking the faithful from access to Jesus), and the DVD, Dachau, by this means.

• She had the brazen chutzpah to blame Deutsche Bank when SHE HERSELF had exercised her powers to order Deustche Bank to send Bush Sr.’s secret corrupt funds to the Vatican Bank!

Naturally, Brown and Sarkozy were having none of this. Chancellor Merkel has been severely cut down to size, with unconfirmed rumours that both she and the Pope were arrested: there can be no point in speculating further about this, because at these stratospheric levels, such ‘arrests’ may often be ‘momentary’ affairs and are NEVER reported to the ‘mainstream’ unless such a report is deemed necessary by the controlling intelligence cadres involved.

After what appears to have been a joint confrontation with Frau Merkel, Brown and Sarkozy made arrangements to travel to the Middle East, armed with the ‘hot’ banking coordinates and details supplied via Blair’s confession, stopping we believe in Abu Dhabi and Riyadh, and then back to China, where they will either be serving arrest warrants and demands for execution on behalf of The Queen, ordering the immediate repatriation of funds, or both of the above.

It should be added here that, for the time being, pre-Settlement, the Rule of Law and the ongoing strategic and tactical deception activities are IN ALIGNMENT. However AFTER the Settlement, it should NOT be assumed that this will remain the case. After all, M. Sarkozy’s half-brother, Olivier (Oliver in the United States), is a Director of the Carlyle Group, a candidate for being described as the head (if not the heart) of the Octopus, and G. Bush Sr.’s slush fund operation, which is involved in intelligence, industrial and military operations on a huge scale (even though we were advised some time ago that it had been forced to close down its trading platform operations).

In other words, right now, it is in M. Sarkozy’s interests to be pressing RUTHLESSLY for the re-establishment of the Rule of Law in the lawless intergovernmental sphere.

And make no mistake: as his underworld face reveals, this man is indeed RUTHLESS. The position, so far as he is concerned, is: either people cooperate, OR THEY GET KILLED. That’s the way it is.

But AFTERWARDS, when DARKozy emerges covered in glory, it will probably be a different matter. So relaxation after the Settlements would be a VERY BAD IDEA. Remember: the modus operandi is duplicity and open-ended DOUBLE-MINDEDNESS.

EUROPEAN UNION COULD BREAK UP OVER THIS CRISIS
This overall situation is dynamite, threatening to smash the European Union at its very core, given that a house divided against itself cannot stand, and illustrating the following:

• When it comes to money, the rats don’t just bite each other, they engage in bitter and ruthless, ongoing warfare inside their filthy sack.

• Chancellor Merkel was, until cornered, even prepared to allow the EU pan-German construct, the plaything of generations of the pan-German secret continuing Nazi élite, to be smashed up rather than to concede what has to be done to complete the Settlements, just in order to protect Bush Sr., who blackmails her, and to cover up her own crimes.

This of course is ironic in the extreme in view of the our elaboration here that:

• Merkel was being being bribed, and now blackmailed, by the Bush Crime Family to block the Settlements, thereby threatening to pull the European Union apart – given Sarkozy’s obligation to procure the payout, so that the EU political hegemony mechanism established by the Nazis’ long-range strategic Continuum, Deutsche Verteidigungs Dienst (DVD), Dachau, the extension of the Nazi Abwehr (counterintelligence) and the contemporary manifestation of the Nazis’ Madrid-based postwar German Geopolitical Centre, is in immediate jeopardy and could very easily be destroyed by the rivalry and vituperative hatred that has erupted between Sarkozy and Frau Merkel over the German Chancellor’s intransigence in blocking the Settlements.

• Since George Bush Sr. has represented and basically controlled the operations of the DVD, Dachau, in the Western Hemisphere for decades, ever since he replaced the ageing Admiral Canaris (Samuel Randall Pittman) after the DVD ‘seat’ had been kept warm for him in 1974-76 by triple agent Dr Henry Kissinger, we now have the amusing spectacle of the controller of the EU long-range strategic deception programme engaged in a de facto sabotage operation against his clandestine German colleagues’ sacred project.

• FACTS: Kissinger persuaded President Ford to sack William Colby (who was later ‘suicided’ while boating on the Potomac River) as Director of Central Intelligence and to instal instead George H. W. Bush Sr., of German extraction, who has been positively identified as the long-term supremo of the DVD, concentrating on the destruction of ‘the Main Enemy’, Britain and America, in revenge for Germany’s terrible defeats in two Illuminati World Wars.

• It will be recalled that when the Editor of this service identified Eva Teleki and Marc Rich (a.k.a. Hans Brand) in a transatlantic telephone call in 2006 as DVD operatives, and fingered the DVD as the central enemy of ‘the Main Enemy’, there were THREE SEPARATE GASPS from the assorted eavesdroppers during the telephone call in question.

• Canaris (Samuel Randall Pittman) made his North American HQ in Oklahoma City. The Murrah Building in Oklahoma City, blown up during the era of President Clinton, an operative ‘working for’ George Bush Sr., was the location of the files on the German and Zionazi penetration operatives buried inside the US intelligence community and elsewhere within the US structures.

BUSH SR., DVD CHIEF, WILLING TO SACRIFICE GERMAN EUROPE FOR ‘HIS’ MONEY
What all this has demonstrated is that Bush Sr., and his maddened son, have been prepared to sacrifice the product of 7+ decades of surreptitious long-range strategic European hegemony operations by the heirs of the Nazis’ Abwehr which Bush Sr. has spent his life promoting (as an unchecked traitor to the United States and the American people), all in order to retain control over the Bush Crime Family’s illicit hoard of stolen and scammed funds and assets, a good proportion of which was being guarded by Chancellor Angela Merkel, bribed by Mr Bush Sr. for the purpose.

Put another way, the Bush Crime Family was quite prepared to smash up the European Union in order to hold on to its illicit funds in accounts that Merkel had not frozen in Germany (and probably Switzerland as well, given that arrests have been reported from both countries, as noted in the preceding report). Arrests have also just been reported from London.

As indicated, we speculate that when Chancellor Angela Merkel realised that we had exposed her operation and her links with Bush Sr., and that these links were proven by the ‘lock box’ evidence and Tony Blair’s confession, she ordered Deutsche Bank to transfer Bush Sr.’s illicit funds, which were doubtless propping up Deutsche Bank, to inter alia the now German-controlled Vatican Bank, where she imagined, given that the Vatican is an ‘offshore state’ located in the centre of Rome, that they would be safe and from where they could not possibly be extracted.

Unfortunately for Frau Merkel, she failed to reckon with the fact that her duplicity and her bovine stupidity had meanwhile been uncovered as a consequence of former British Prime Minister Tony Blair’s comprehensive confession, in exchange for which he was not arrested on the spot and may (although this is very far from certain) avoid spending the rest of his life at Her Majesty‘s Pleasure.

As for the Pope, we would expect that he will be the first Pope in history to resign in disgrace.

WHAT WE SEE THROUGH THE KEYHOLE…
Since the parasitical European Union Collective is a massive albatross around the necks of the British, and is hated almost everywhere, an E.U. ‘train wreck’ would be greeted (other than among the Great Brainwashed) with unfettered joy and laughter: and a good day would be had by all.

Furthermore, not a single Europhile pundit has ever considered the possibility that there might come a time when the two conspiring central ‘builders of Europe’, France and Germany, might cease their cohabitation and start throwing pillows at each other, followed by chucking furniture around the bedroom and breaking all the ornaments on the mantelpiece.

But that is precisely what we see through the keyhole as we snoop into their fetid bedroom to find out what is going on. Mind you, the hotel staff have all heard the crashing of the furniture and the splintering of the ornaments on the mantelpiece, and have just called the police, in the guise of Inspector Gordon Brown, who had rushed yet again to Paris on 28th October 2008, probably after learning that Blair had ‘shopped’ everyone and in order to find out what had been going on the other side of the Channel. Here, on the face of it, was the answer to that question:

• Frau Merkel, who had told Sarkozy ‘you’re full of …’, when told by the EU President that he had the power to have her arrested, had initially become so angry with President N. Sarkozy that she would’nt speak to him. After all, the ruthless Sarkozy had hardly minced his words, as we reported on 26th October. But this arrogant German Frau had other ideas…

• In blocking the Settlements (and ordering Deutsche Bank to remove tell-tale funds to the Vatican Bank), Frau Merkel, especially given that she was warned not to do any of this by the President of the European Union, was of course engaged in a wilful act of terrorism (as defined by the EU’s own legislation) against The Queen: so she placed herself indeed in grave danger of being arrested, since the EU legislation, funnily enough, is no respecter of persons.

• So it has fallen to Inspector Gordon Brown to act as intermediary to smooth things over, a task to which he is eminently unsuited.

• In an extraordinary twist, Chancellor Merkel was originally scheduled to appear in London on Thursday 30th October, where she was to meet Brown, who initially appeared to be cast in the rôle of go-between, until the Tony Blair confession changed everything for the much worse, so far as Chancellor Merkel was concerned.

Although logic would suggest that there wouldn’t have been much point in Merkel visiting London given the background, The Financial Times of Friday 31st October displayed a staged photograph of Brown embracing Chancellor Merkel on the steps of Number Ten Downing Street, illustrating once again that images of these people frequently belie the reality (another manifestation of the familiar scourge of dualism and double-mindedness).

After all, according to our information, matters have been wrenched well and truly out of the hands of the criminal gangsters, of which she is one, who have all completely lost control of the situation. The staged picture of Brown embracing Frau Merkel suggests, however, that Mr Brown really has been tasked with acting as intermediary. Brown and M. Sarkozy have to travel to the Middle East and China next, doubtless accompanied by a cadre of special ‘retired’ MI6 and Interpol agents, and equipped with appropriate documentation, no doubt, also from the World Court/ICJ.

It may be assumed that the staged picture on the front page of The Financial Times is to be taken, by ‘the interested’, as a clear signal that an accommodation and resolution of these matters is to be expected. As an alternative to the breakup of the European Union, that seems unavoidable.

Brown, of course, remains under intense pressure from Her Majesty the Queen to procure the Settlements, given that her LOAN funds plus those of Prince Al-Aweed Al-Talal (the $6.2 trillion) and the LOAN funds of $7.8 trillion provided by the Chinese parties, for the total of $14.0 trillion, were being held hostage as a consequence of Chancellor Merkel’s intransigence on behalf of Bush Sr., and because she is bribed and blackmailed by the Bush Crime Family as described.

WORST FINANCIAL CORRUPTION CRISIS IN HUMAN HISTORY
Need we repeat that this is unquestionably the biggest ongoing financial corruption scandal in world history, with the potential to wreak absolute havoc with the entire structure of civilisation and to plunge the world into open warfare. The upside here, however, is that this corruption is being systematically exposed, will continue to be systematically exposed, and that the criminal cadres have lost control, with matters having been taken completely out of their hands.

This accounts for the fact that President George Bush Jr. was reported to us to be beside himself on Sunday and Monday 26th-27th October, when M. Sarkozy was refusing to take his calls.

• Imagine, therefore, how much madder he must have been after he was advised in the afternoon of Wednesday 29th October 2008 of chapter and verse concerning the damning details that Mr Blair had finally disgorged, as described above. One imagines that the US President may have needed restraining by means of a straightjacket.

THE $14 TRILLION SETTLEMENT LOAN FUNDS IN U.S. LOCKDOWN
As previously reported, the $14.0 trillion Settlement funds are supposedly still held in LOCKDOWN with the custodial group accounts at large US financial institutions, following the measures taken in September to put a drastic stop to this nonsense by The Queen, in cooperation with the Prince and the Chinese parties. This statement must now assume (because we have no further information) that they have not, DESPITE THE LOCKDOWN, been compromised and subjected to removal, and that they are not co-mingled with the funds alienated on Merkel’s orders from Deutsche Bank.

• The loaned funds were originally transferred from Britain, Europe and China to the US Treasury custodial group accounts specifically to finance the ‘real money’ restitution payments payable in US dollars under the hijacked Settlements.

When the LOCKDOWN orders and constraints were imposed, the $14.0 trillion could, on the face of it (but see above) no longer be exploited illegally as base to sustain the financing of the carousel which was keeping both the stock market and many huge institutions afloat: so the crash started in earnest in mid-September, as a consequence.

Imposition of the LOCKDOWN orders with respect to the said LOAN funds had become absolutely necessary in order to signal to the criminalist cadres that further interference and blocking tactics would have the most drastic consequences. And so it has turned out.

LENINIST BUSH CHANGED HIS MIND AT ONCE, AND HAS BEEN MAD EVER SINCE
Looking back, it is self-evident that the moment that Sarkozy had escaped from Camp David on 18th October armed with the documents signed by Bush 43 that M. Sarkozy needed (to be reinforced by World Court papers obtained on the following Monday, 20th October), the United States’ Leninist President, George W. Bush Jr., changed his mind, as usual.

• But it was too late. He was then verbally ‘beaten up’ by his father and other malevolent forces and was already hurting badly enough, well before the news and detail of the Blair ‘confession’ hit the White House in the afternoon of 29th October.

And Sarkozy couldn’t have cared less, which was why he wasn’t answering the telephone. As for Gordon Brown, he had exited Camp David abruptly, we were told, or else was given the boot by 43, as neither man can stand being in the presence of the other.

So now, by late October, the European performance of this Punch and Judy Show had reached the battering stage. Punch (Sarkozy) had landed several massive blows onto the nose of Judy (Merkel), who responded by sulking in a corner and refusing to play any more. Up popped the Joker (Brown), who darted backy forthy between Punch and Judy, winding up bashing Judy on the cranium so that she has disappeared below the floor boards.

To deploy one last metaphor here: Merkel stood in front of the Settlements train careering towards her at 100mph, thinking she could order it to stop, only to discover too late that she was mistaken.

New telephone hot lines will probably need to be installed at Number 10 Downing Street, the Elysée Palace and the German Chancellery, since the wires are believed to be overheating as these three representatives of the Illuminati insult each other in a lethal fight that allows of NO COMPROMISE.

MURKY MERKEL HAS ALL BUT DESTROYED GERMANY’S TOWER OF BABEL
This explains why Frau Merkel’s behaviour is beyond irrational. Of course, she is cornered: for not only had she been taking bribes from Bush Sr., but as a consequence, the filthy Bush Crime snakes were preparing to deploy certain assets based in Germany (CIA-1, Frankfurt) to blackmail the lady.

Because of her unenviable situation, this one-time Secretary of the Agitation and Propaganda Department of the Young Communists at East Berlin’s Marx-Lenin University faced the choice of caving in, or risking the destruction of the ‘indelible’ ties linking France and Germany in perpetuity.

She chose the path of destruction, ordering Deutsche Bank to remove Bush Sr.’s corrupt funds (which she needed out of the way anyway, to hide the evidence) and then, when confronted with damning evidence obtained inter alia from Blair’s ‘confession’, blaming Deutsche Bank for the chaos, on the assumption that it wouldn‘t become known that she herself, as custodian of Bush Sr.’s illicit funds in Germany, had instructed Deutsche Bank (presumably as she has Bush Sr.’s Power of Attorney) that the funds be transferred into the ‘safe hands’ of her fellow DVD agent, Dr Hans Tietmeyer, former President of Deutsche Bundesbank, appointed to head that notoriously corrupt institution, the Vatican Bank, by the German Pope.

• The ‘black hole’ reportedly ‘discovered’ on Monday 27th October at Deutsche Bank appears to have been related to this sequence of events.

‘IRREVOCABLE’ 1963 BILATERAL TREATY OF THE ELYSEE IN TERMINAL JEOPARDY?
Recall that the ‘indelible’ ties between France and Germany were cemented by the Treaty of the Elysée of 23rd January 1963, signed by German Chancellor Konrad Adenauer, the Hitler-era Mayor of Cologne, and close friend of Hitler’s favourite bankers, Drs. Abs and Pferdmenges, and French President Charles de Gaulle. The Treaty, which has no expiry date, requires the parties to reach ‘an analogous position’ in respect of ALL international issues of common concern, and to coordinate their positions at all international meetings, in perpetuity.

Since President Sarkozy informed Chancellor Merkel on 18th October 2008 that he has the power to have her arrested forthwith, implying that the European Presidency is more powerful, by an order of magnitude, than the Chancellor of Germany, this stance manifestly threatened to blow the Treaty of the Elysée apart, WITHOUT RECOURSE.

• And if France and Germany fall out, the main hydraulic jack that holds up the roof of the rotten European Commission and the European Union Collective generally, would be liable to collapse.

In summary, the Treaty of the Elysée is in tatters, which has HUGE implications for the pan-German Abwehr/DVD’s subversive, anti-nation state construct, the European Union Collective.

• American readers unfamiliar with all this need to understand that the facts that the European Union is (a) socialist/collectivist and (b) a huge long-range pan-German/DVD strategic deception construct, are NOT incompatible. Nazism is National Socialism: Communism and its derivatives are International Socialism, representing, as usual, a false, manipulated thesis/antithesis dialectic.

ITALY STANDS READY WITH NEWLY MINTED LIRE BANKNOTES
Beyond that, the Italian authorities are now fully stocked with newly minted Italian lire, against the increasing likelihood that disillusionment with the Euro will be followed by the re-establishment of their own national currency. A similar tendency is being noted in Greece. Once that happens, the unravelling of the Euro will escalate, and the Danes, who we are told are rethinking their earlier decision to stay outside the Collective Currency, will probably drop the stupid idea of joining it.

The widening of intra-European Union bond yield spreads has heightened continuing uncertainty as to whether Italy and Greece, and others, can possibly continue sharing the same currency as Germany without suffering terminal damage.

BRITAIN SEVERELY ENRONISED, WITH MUCH WORSE TO FOLLOW
As for the hollowed-out British financial and real economies, a general belated realisation that the United Kingdom’s finances and real economic prospects are in almost terminal disarray had driven the pound’s dollar rate down to $1.5280 by the close on 28th October, compared with its peak of $2.0457 on 10th December 2007, a decline of nearly 52 cents – and a depreciation of over 25%.

As previously reported, Britain was used as the Master Platform for the perpetration and marketing of the Bush-Clinton-CIA-DVD fraudulent finance orgy, which has now been brutally exposed, and will continue to be exposed, as a gigantic Ponzi operation.

FRAUDULENT DERIVATIVES PONZI SCAMS TO BE EXPOSED IN A NEW STUDY
The study on this subject that we are preparing will reveal and will prove that the derivatives are fraudulent and worthless. Indeed the very notion that an ‘asset’ marketed without recourse has value ‘derived’ from a real asset that lies many stages removed from the holder, is self-evidently glaringly fraudulent, such assets deriving their notional ‘values’ while the ‘party’ continued, if at all, from the NAMES of the corrupt financial enterprises marketing them, alone.

This is not a failure of so-called capitalism as such: it represents a combination of the deliberate, premeditated failure of US securities market regulation, plus an associated organised criminal offensive, the ultimate purpose being Fascism on a global scale – to be manifested through the acquisition at fire-sale prices of every asset relevant to power and hegemony in the world.

We submit that the exposures have STOPPED THIS HAPPENING – this being the second time that this attempted global control offensive has been halted at the last minute. The first time round, the consequences of the ransacking of the Savings and Loans by the SAME organised Fascist group of criminals, with the same ultimate objective, were mitigated

If the mortgager defaults, the only party who would know that this had occurred, would of course be the original mortgage lending bank. All the subsequent discount purchasers of the derived and securitised (collectivised) assets would have no clue.

Therefore, the thoroughly dishonest assumption perpetrated by the criminal enterprises marketing these fake assets throughout was always that the ‘derived assets’ obtained their value from the original property holder’s mortgage payments flow, when this assumption might be bogus. In any case, replicating value by this means is nothing less than a variant of the Ponzi or pyramid selling fraud: and that indeed is what will be exposed.

MANDELSON ‘TOO CLOSELY INVOLVED WITH RUSSIAN MAFIYA GANGSTERS’
WorldNetDaily reported on 28th October 2008 that UK intelligence sources have revealed that the dangerously controversial Lord Mandelson, yanked out of Brussels and then kicked upstairs to the House of Lords by Gordon Brown shortly after we had exposed that the kidnapped five-year-old Madeleine McCann had been selected by the President of the European Commission, José Manuel Barroso, for his own gratification in line with the practice of the paedophile ring operating within the European Commission itself, appears ‘repeatedly’ in top secret files given his regular contacts with the disintegrating Russian KGB-GRU criminalist oligarch, Oleg Deripaska.

WorldNetDaily says that the files have the highest ‘Y-category’ security rating, which can be read only by the MI6 intelligence chief and DVD stooge John Scarlett, and by the head of MI5, Jonathan Evans (begging the question, of course, of WHO leaked this information).

According to the American Internet-based service, ‘both services have launched an “intensive investigation” into the Izmailovo Organisation, thought to be the most powerful of the Russian mafia gangs, members of which are identified in these files as having ‘contacts’ with the Russian intelligence oligarch.

During the week ending on 24th October 2008, a two-day conference at the US State Department reviewed developments in Russia and the former Soviet Union. Asked by the Editor of this service to comment on the general finding from this conference, a source replied that the conclusion was that ‘Russia and the ‘former’ Soviet Union are almost completely in the hands of organised crime’.

One of the MI6 intelligence files reportedly identifies the Izmailovo Organisation as ‘a multi-faceted criminal family. They specialise in money laundering using banks in Bulgaria, Hungary [please see above: Editor] and the Cayman islands. They also deal in prostitution. They have their own in-house security force staffed by former Russian Special Forces’.

The files on the extremely dubious Lord Mandelson are reportedly held on a secure database shared by MI5, MI6 and GCHQ, the British intelligence community‘s huge eavesdropping centre based at Cheltenham, Gloucestershire.

We comment that while we believe the foregoing intelligence to be accurate, it should be noticed that the entire Deripsaka sequence, enmeshing George (Gideon) Osborne, the Conservative Party Shadow Chancellor and reputed ’handler’ of the brainwashed Conservative leader David Cameron, Nathaniel Rothschild, son of Lord (Jacob Rothschild) and the very dangerous ‘loose canon’ and factotum Peter Mandelson, may also represent a diversionary operation masterminded inter alia by John Scarlett, DVD-serving head of MI6, to ‘change the subject’ in the face of the knowledge that a trap had been set for Blair which would be bound to lead to the exposure of the dwelling places of all of the putrid arms of the Octopus, leading straight to the Bush White House.

Meanwhile, extensive arrests have now been reported, as noted, from London, as well as from Germany, Switzerland and the United States. There, the corrupted intelligence community ‘State within the State’ Intelligence Power is targeted for takedown or makeover, with both candidates for the Presidency voicing reform plans and McCain talking about a greatly slimmed-down community much better attuned to decisive operations against America’s enemies.

First place to start would be to change the name of the CIA’s corrupt Langley establishment from the George Bush Center for Intelligence. The incoming President, or Interim Authority, should DO THIS FIRST. It would send a necessary instantaneous signal to all concerned that their foul reign of terror and their treachery against the American people WILL NOT BE ALLOWED TO CONTINUE.

APPENDIX:

The following report by Agence France-Presse dated 28th October 2008 is appended:

It is an interesting example of how the ‘mainstream media’ and its feeds are able to notice very significant shifts in international relationships, while highlighting the WRONG factors by way of explaining what is observed, and drawing the WRONG conclusions because it is being bamboozled by the theatre rather than understanding what is going on behind the curtain:

PARIS (AFP): Prime Minister Gordon Brown was to meet French President Nicolas Sarkozy for the third time this month on Tuesday, in a sign of increased cooperation between London and Paris on the economic crisis.

France’s traditionally close bond with Germany has been tested by sniping between the offices of Sarkozy and Chancellor Angela Merkel, while Brown has become a regular visitor to Paris since the credit crunch hit [CONFIRMATION OF OUR ANALYSIS HERE AND ON 26TH OCTOBER: Ed.].

Sarkozy, the current holder of the European Union Presidency, hopes to build a common European front at a Brussels summit next week, ahead of a meeting of the G-20 group of current and leading emerging powers in Washington on November 15.

The French leader has said he would like to see the world agree to “refound the global financial system”, and needs all the support he can get.

Brown has been more cautious on the rôle governments should play in the new order, but has also been keen to show leadership on reforming world finance, with the spectre of recession haunting Europe and the world.

The pair were to meet later Tuesday at La Lanterne, Sarkozy’s private residence in the forested park around the Palace of Versailles west of Paris, but first their ministers for Europe met at the French Foreign Ministry.

Afterwards, both ministers agreed on the need to forge a common European stance ahead of November’s G-20 summit. “This is not just an EU problem, it’s not a Eurozone problem, a UK or a French problem, it’s a global problem”, said Caroline Flint, Britain’s Minister for Europe, after talks with her counterpart Jean-Pierre Jouyet.

“Our discussions at EU level can only help us be prepared and persuasive when it comes to looking at what sort of changes we need at a global level to make sure we can limit the damage”, she said. Jouyet said London and Paris had agreed on “the need for tight international cooperation and for Europe to come (to the G-20) united, carrying a common vision of a new economic and financial order”. [Note the constant repetition of the Communist word ‘common’: Ed.].

He said the meetings showed that “relations between our countries have never been so intense, and the cooperation never so tight”.

Long known as a sceptic towards the European Union, Brown was thrust centre stage this month as the 15 nations in the euro single currency used Britain as the model for a united bank rescue plan.

Throwing out the usual protocol, Sarkozy invited Brown to Paris to brief Eurozone members on his plan, and both won plaudits in their respective national media for taking charge of the situation.

On wider reform of the international financial sector, Brown and Sarkozy have also led calls for far greater global regulation and a new role for the International Monetary Fund (IMF) to avert future crises. In contrast, France has clashed repeatedly with its traditional European ally Germany over the response to the crisis, with Chancellor Merkel leading resistance to Mr Sarkozy’s proposal to create an “economic government” for the Eurozone.

Sarkozy would also like to see Europe set up national sovereign wealth funds to shelter strategic parts of their economies from global turmoil – moves that are anathema to Merkel’s more laissez-faire approach. For Jean-Pierre Maulny, the Deputy Director of the Institute for International and Strategic Research, the ad-hoc cooperation between M. Sarkozy and Brown on the finance crisis could mark the start of a longer-term shift in Europe.

“Given the importance of the issues involved, it could have consequences for the balance of power in Europe. That could weaken and alarm the Germans” [ACCURATE: Ed.].

But [THE NOT-UP-TO-SPEED: Ed.] Philip Whyte, senior research fellow at the Centre for European Reform, warned not to “read too much” into the thawing of ties.

“When it comes down to long-term considerations of France’s interest, Germany remains the primordial relationship,” Whyte said. [Editor: sic!!!].

REITERATION OF THE STATUTES, SECURITIES REGULATIONS AND LEGAL PRINCIPLES OF WHICH THE CRIMINALISTS, ASSOCIATES AND KEY FINANCIAL INSTITUTIONS ARE IN BREACH:

LEGAL TUTORIAL: The Steps of Common Fraud:

Step 1: Fraud in the Inducement: “… is intended to and which does cause one to execute an instrument, or make an agreement… The misrepresentation involved does not mislead one as the paper he signs but rather misleads as to the true facts of a situation, and the false impression it causes is a basis of a decision to sign or render a judgment” Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Fraud’.

Step 2: Fraud in Fact by Deceit (Obfuscation and Denial) and Theft:

• “ACTUAL FRAUD. Deceit. Concealing something or making a false representation with an evil intent [scanter] when it causes injury to another…”. Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Fraud’.

• “THE TORT OF FRAUDULENT DECEIT… The elements of actionable deceit are: A false representation of a material fact made with knowledge of its falsity, or recklessly, or without reasonable grounds for believing its truth, and with intent to induce reliance thereon, on which plaintiff justifiably relies on his injury…”. Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Deceit’.

Step 3: Theft by Deception and Fraudulent Conveyance:

THEFT BY DECEPTION:

• “FRAUDULENT CONCEALMENT… The hiding or suppression of a material fact or circumstance which the party is legally or morally bound to disclose…”.

• “The test of whether failure to disclose material facts constitutes fraud is the existence of a duty, legal or equitable, arising from the relation of the parties: failure to disclose a material fact with intent to mislead or defraud under such circumstances being equivalent to an actual ‘fraudulent concealment’…”.

• To suspend running of limitations, it means the employment of artifice, planned to prevent inquiry or escape investigation and mislead or hinder acquirement of information disclosing a right of action, and acts relied on must be of an affirmative character and fraudulent…”.

Source: Black, Henry Campbell, M.A., ‘Black’s Law Dictionary’, Revised 4th Edition, St Paul: West Publishing Company, 1968, s.v. ‘Fraudulent Concealment’.

FRAUDULENT CONVEYANCE:

• “FRAUDULENT CONVEYANCE… A conveyance or transfer of property, the object of which is to defraud a creditor, or hinder or delay him, or to put such property beyond his reach…”.

• “Conveyance made with intent to avoid some duty or debt due by or incumbent or person (entity) making transfer…”.

Source: Black, Henry Campbell, M.A., ‘Black’s Law Dictionary’, Revised 4th Edition, St Paul: West Publishing Company, 1968, s.v. ‘Fraudulent Conveyance’.

U.S. SECURITIES REGULATIONS OF WHICH INSTITUTIONS
HAVE BEEN SHOWN TO BE IN BREACH [SEE REPORTS]:

• NASD Rule 3120, et al.
• NASD Rule 2330, et al
• NASD Conduct Rules 2110 and 3040
• NASD Conduct Rules 2110 and IM-2110-1
• NASD Conduct Rules 2110 and SEC Rule 15c3-1
• NASD Conduct Rules 2110 and 3110
• SEC Rules 17a-3 and 17a-4
• NASD Conduct Rules 2110 and Procedural Rule 8210
• NASD Conduct Rules 2110 and 2330 and IM-2330
• NASD Conduct Rules 2110 and IM-2110-5
• NASD Systems and Programme Rules 6950 through 6957
• 97-13 Bank Secrecy Act, Recordkeeping Rule for funds transfers and transmittals of funds, et al.

U.S. LAWS ROUTINELY BREACHED BY THE CRIMINAL OPERATIVES AND INSTITUTIONS:

• Annunzio-Wylie Anti-Money Laundering Act
• Anti-Drug Abuse Act
• Applicable international money laundering restrictions
• Bank Secrecy Act
• Conspiracy to commit and cover up murder.
• Crimes, General Provisions, Accessory After the Fact [Title 18, USC]
• Currency and Foreign Transactions Reporting Act
• Economic Espionage Act
• Hobbs Act
• Imparting or Conveying False Information [Title 18, USC]
• Maloney Act
• Misprision of Felony [Title 18, USC] (1)
• Money-Laundering Control Act
• Money-Laundering Suppression Act
• Organized Crime Control Act of 1970
• Perpetration of repeated egregious felonies by State and Federal public employees and their Departments and agencies, which are co-responsible with the said employees for ONGOING illegal and criminal actions, to sustain fraudulent operations and crimes in order to cover up criminalist activities and High Crimes and Misdemeanours by present and former holders of high office under the United States
• Provisions pertaining to private business transactions being protected under both private and criminal penalties [H.R. 3723]
• Provisions prohibiting the bribing of foreign officials [F.I.S.A.]
• Racketeer Influenced and Corrupt Organizations Act [R.I.C.O.]
• Securities Act 1933
• Securities Act 1934
• Terrorism Prevention Act
• Treason legislation, especially in time of war.

• Please be advised that the Editor of International Currency Review and associated intelligence services cannot enter into email correspondence related to this or to any of the earlier reports.

We are a private intelligence publishing house and have no connections to any outside parties including intelligence agencies. The word ‘intelligence’ on this website and in all our marketing material is used for marketing/sales purposes only and has no other connotations whatsoever: see ‘About Us’ on the red panels under the Notes on the Editor, Christopher Story FRSA, who has been solely and exclusively engaged as an investigative journalist, Editor, Author and private financial and current affairs Publisher since 1963 and is not and never has been an agent for a foreign power, suggestions to the contrary being actionable for libel in the English Court.

MICHAEL C. COTTRELL’S U.S. FINANCIAL REFORM PROPOSALS

MORE RELEVANT THAN EVER GIVEN BASEL-II COMPLIANCE REQUIREMENTS

Thursday 18 September 2008 02:00

U.S. FINANCIAL MARKET REVAMP LAST MARCH IS A FALSE PROSPECTUS BY TREASURY

ALTERNATIVE PLAN PRESENTED HEREWITH IS SIMPLER, TIMELY, CHEAPER AND EFFECTIVE

PRESIDENT’S WORKING GROUP ‘REFORM PLAN’ EXPOSED AS A SELF-SERVING RUSE

BETTER PLAN BY MICHAEL C. COTTRELL, B.A., M.S. CAN BE UP AND RUNNING IN MONTHS

CONVOLUTED ‘PAULSON’ FABRICATION WOULD COST IMMENSE $ SUMS TO IMPLEMENT

TREASURY’S PROPOSALS REQUIRE SEVEN NEW AGENCIES, MR COTTRELL’S JUST ONE

THREE-STAGE ‘PAULSON’ PROPOSALS CALCULATED TO UNDERMINE MARKET PSYCHOLOGY

ALTERNATIVE PLAN SUPPLEMENTED BY A COMPREHENSIVE SECURITIES MARKET GLOSSARY

Economic Intelligence Review contains Michael C. Cottrell’s Rules-Based Reform Plan and the extensive Glossary of Financial Market Definitions. Publication date: Friday 15th August 2008.

• See our report dated 12th August 2008 inter alia for historical intelligence on GEORGIA. See reports dated 14th, 16th, 18th and 19th August for Georgia and Settlements Crisis Updates.

• INTERNATIONAL CURRENCY REVIEW, Volume 33, #s 3 & 4, all 972 pages of it, is making waves all over the world. It contains a blow-by-blow deconstruction of this crisis via the Wantagate plus our further analyses: and everything published therein is now well and truly ON THE GLOBAL PUBLIC RECORD. Accordingly the whole world owns a detailed, damning account of the serial criminality of the Bush-Cheney-Clinton ‘Box Gang’ et al., which CANNOT BE EXPUNGED FROM THE RECORD.

• BOOKS: Edward Harle Limited has so far published FIVE intelligence titles: The Perestroika Deception, by Anatoliy Golitsyn; Red Cocaine, by Dr Joseph D. Douglass, Jr.; The European Union Collective, by Christopher Story; The New Underworld Order, by Christopher Story; and The Red Terror in Russia, by Sergei Melgounov. All titles are permanently in stock. We sell books DIRECT.

• Please Make a Donation, if you feel able to do so, to help finance Christopher Story‘s ongoing global financial corruption investigations. Your assistance will be very sincerely appreciated and will make a real difference, hastening the OVERDUE resolution of the worst financial corruption and linked financial fallout in world history. The Editor’s $35,000 Wanta bail-out money has been stolen.

• See the second white panel for details of our latest distributed intelligence publications.

By Christopher Story FRSA, Editor and Publisher, International Currency Review, World Reports Limited, London and New York. For earlier reports, press the ARCHIVE. Order your intelligence subscriptions and our ‘politically incorrect’ intelligence books online from this website.

SIMPLE RULES-BASED MARKET STABILISATION PLAN BY MICHAEL C. COTTRELL, B.A., M.S.
In the first quarter of 2008, Michael C. Cottrell, B.A., M.S., President of Pennsylvania Investments , Inc., contacted the Editor of this service to brief him in detail on the dubious stratagems behind the disparate proposals that were finally unveiled at the end of last March by the President’s Working Group on Financial Markets, a.k.a. the ‘Paulson proposals’.

As a result of several conversations, Mr Cottrell, one of the foremost securities markets experts in the United States, prepared a critique of the US Treasury’s extraordinary ‘Plan’, which he was easily able to demonstrate is highly destablising, not least since its plainly confused recommendations undermine financial market confidence while demonstrably serving the interests of the criminalist kleptocracy at the expense of the genuine investment community. This analysis is presented here.

In short, the Working Group’s ‘blueprint’ is shown herewith to be a false prospectus.

Having discredited the Working Group’s proposals, which would call for the creation of no less than SEVEN expensive and mischievously overlapping new US regulatory bureaucracies and for the abolition of the essential rules-based securities market environment, which would be phased out over an imprecise but prolonged timeframe, Michael Cottrell presents his own effective and simple solution to the chaos brought about by years of officially condoned fraudulent finance.

This will require just ONE new US regulator, will call for the revalidation by Congress of the Glass-Steagall Act and for the decisive re-establishment of the essential rules-based system which the Securities and Exchange Commission (SEC) has neglected to enforce in recent years, and can be implemented in full within the space of just a few months, at most. Additionally, Mr Cottrell’s simple Plan will be infinitely cheaper to implement than the top-heavy Working Group proposals.

The Editor has incorporated Mr Cottrell’s proposal into this analysis; and the extensive Glossary, built around Michael C. Cottrell’s original framework, has been expanded so that all concerned can readily understand what has to be done. Michael C. Cottrell, B.A., M.S., can be contacted direct on: 814-455 9218 (voicemail), and at: pii-mcc@msn.com.

Mr Cottrell’s reform framework has been elaborated by the Editor to incorporate ideas for which he alone is responsible but which Mr Cottrell has graciously approved.

• Important Note: We can only report US law as it stands. We cannot make exceptions and neither can we speculate as to the prospective actions of authorities given, for instance, the admission by UBS that it broke the law, and the consequences of that admission for some US investors who may consider that they are eligible for Settlement payouts. Nor can we enter into ANY correspondence concerning that matter. The only issues that we will discuss arising from this post are Mr Cottrell’s practical and straightforward recommendations: and these issues should be raised with him direct.

EXECUTIVE SUMMARY
This paper describes, exposes and then systematically demolishes the credibility and relevance of the so-called ‘Paulson’ proposals, a.k.a. the mish-mash of convoluted notions brought forth by the President’s Working Group on Financial Markets at the end of March 2008.

In passing, it questions the basis upon which expectations of repayment by some US participants in ‘humanitarian’, Omega and other often unregistered, and therefore usually (in the United States) illegal, Ponzi schemes are predicated, shows why these schemes are illegal by comparing them to what the US securities and other relevant US legislation requires, and presents inexpensive and constructive proposals to replace ‘Paulson’s’ dog’s dinner – which, incidentally, would call for the establishment of no less than SEVEN expensive new US bureaucratic agencies, whereas the Plan, devised by the securities expert Michael C. Cottrell, M.S., which is advanced here, would require just ONE new agency instead. Further, Mr Cottrell’s scheme could be up and running within a few months, whereas the ‘Paulson’ dog’s dinner is phased over an indeterminate timeframe.

OFFICIAL PROPOSALS ARE MISCHIEVOUS
On investigating this matter, we were quite surprised at the ease with which the Working Group’s spurious obfuscation operation could be shown to be a glaringly false prospectus that has been jumbled together in order to disguise what can only be described as its underlying mischievous intent. For these proposals dishonestly seek to convey an impression of regulatory reform (in response to the chaos in the financial markets which has been brought about exclusively by the serial criminality of holders of high office) – whereas their actual purpose is to mask the objective of precluding meaningful reform in favour of cosmetic adjustments consistent with an even more permissive and crime-friendly environment than exists today.

Indeed a pattern of nefarious US official behaviour has become clear since the deregulation of the Savings and Loan Associations in 1982. It can be summarised as follows. Far from entertaining any clear intention of curbing excesses and seeking to contain financial sector crises and instability brought about by organised financial fraud condoned at the highest levels of American power, the participating US authorities typically allow the prevailing crisis of confidence and its real economic consequences to escalate until, as happened at the end of the 1980s with the messy ‘responses’ developed by Congress to the ‘hollowing out’ (enronisation) of the thrifts, the problems become so huge that radical departures are agreed upon ‘under duress’ which, in turn, provide the intended basis for a proliferation of fraudulent financial operations ‘by other means’.

FOLDING THE CRIMINALISTS’ CRISIS INTO A ‘UNIVERSAL SOLUTION’
This is exactly what these cynical ‘Paulson’ proposals are predicated to achieve. The underlying motive here is to ‘fold’ the contemporary financial and economic crisis into a ‘ universal solution’ which will, if this Treasury has its way, give the arch-planners of fraudulent finance practices, carte blanche to proliferate their scams and aberrations for many years to come.

Accordingly, the fraudulent prospectus disgorged by the President’s Working Group on Financial Markets needs to be consigned forthwith to the trash can. This report will help to achieve that.

As indicated, we present a simple, straightforward, constructive, inexpensive and quickly and easily implemented alternative Plan to replace it. Its author, Michael C. Cottrell, M.S., one of the United States’ foremost securities markets experts, argues that no further attention should be paid to the dishonest and discredited ‘Paulson’ proposals, which have in any case more or less run into the sand; and that the straightforward measures advocated below should be adopted, instead.

They would immediately inject the necessary discipline into the marketplace, precluding scope for securities scamming models to which the notorious American kleptocracy has become accustomed.

This paper is supplemented by an extensive Glossary of securities environment terms, for the benefit of the lay reader. The Editor has incorporated several appropriate new terms in the list.

SELF-SERVING PLAN TO ‘CLEAN UP’ MESS THE CRIMINALISTS THEMSELVES CREATED
Among the most distasteful characteristics of the world-class financial criminals exposed through our reports is their habit of advising the Rest of Us how the distasteful consequences of their own glaring criminality are to be overcome. The flip-side of the accomplished US financial criminalist is typically an unimpressive ‘angel of light’, who preaches the virtues of sound finance, in order to mask the fact of his endless reprobate financial misbehaviour.

Thus, having presided over and orchestrated the stealing of colossal sums of other people’s money, the US intelligence operative calling himself Henry M. Paulson Jr. [but see Memorandum below], as advertised, promulgated, in March 2008, a set of goofy and confused proposals for the ostensible ‘reorganisation’ of the way the US financial markets are regulated, which amounts to a pre-planned ‘new regulatory order’ – but the purpose of which, on investigation, turns out NOT to be improved financial sector discipline, but rather the cynical and surreptitious institutionalisation of market conditions that will facilitate replication of the abuses and fraudulent finance that have so far been exposed, but on a far broader scale, in the years to come.

A prerequisite for understanding what follows, and the prevailing financial days of reckoning and their origination generally, is to recognise the subversive reality of the ‘angels of light’ deception model. The financial sector traditionally clothes itself in a mantle of assumed righteousness, which is reinforced by generational layers of perception yielding a belief that financial institutions are, generally speaking, models of rectitude which cannot deviate from the strict codes of conduct that are presumed to surround them, and therefore from the Rule of Law.

BELATED, GRUDGING REALISATION THAT WHAT HAS BEEN REPORTED IS ACCURATE
Because this general lazy presumption is rarely, even today, called into question, it took, to our certain knowledge, certain British and American circles over two years to reach the staggered conclusion that what we have been reporting was accurate, both in general terms and more often than not, in terms of specifics as well.

By the same token, the underlying assumption that the exotic Treasury proposals developed by the President’s Working Group on Financial Markets, which will be demolished here, are of beneficial and enlightened intent, has no basis in reality, as will now be examined. On the contrary, as might have been expected, they represent ANOTHER pathetic scam, a deception, a diversion, a PLOY.

We will begin with a ‘straight’ summary of the ‘Paulson’ proposals, which will then be exposed as representing a false and deceitful prospectus.

THE FALSE PROSPECTUS AS ANNOUNCED
Following our exposures of financial fraud between June 2006 and the same month a year later, tensions rose to such a pitch behind the financial sector scenes that the US authorities felt the sudden need to be seen to be ‘doing something’ – an urge that resulted in the establishment of the President’s Working Group on Financial Markets.

But by ‘doing something’, the criminalists actually meant leveraging the financial crisis which has developed as a direct consequence of their criminality through the advocating of false ‘reforms’ under cover of which they intended to institutionalise a permissive US environment which would guarantee that their addiction to manufacturing liquidity out of thin air through untaxed high yield investment programs (out of bounds to ordinary mortals because outside the officially protected corruption zone, they are lethally risk Ponzi scams: see below), would be OK’d without recourse.

The phrase ‘Working Group’ is a designation used by Israeli intelligence to describe an operation inside the Israeli Government structures (viz., intelligence), with a focus on developing a modus operandi to achieve an instructed objective, according to Robert Littell [‘Vicious Circle’, Overlook Press, Peter Mayer Publishers, New York, 2006].

After ‘labouring’ for eight months, the Working Group brought forth a convoluted, fragmented and opaque ‘THREE-STAGE plan’ to ‘reform’ US regulation of the very financial institutions with which the now disgraced ruling kleptocracy has been collaborating to scam ordinary American citizens, mortgage ‘holders’, the US Government itself, and foreigners who fail to do their ‘due diligence’.

The overall effect of the regulatory fragmentation plan put forward in bad faith (as we demonstrate below) by the Working Group would be to place the control of all financial markets wholly under the power of the President of the United States – which, given the criminality of the present and recent incumbents, would be a recipe for the institutionalisation of fraudulent finance, the elimination of all remaining checks and balances, and consequently for a corrosive financial market environment leading to a financial meltdown in a few years’ time which would make the present crisis look like a pleasant afternoon by the seaside.

Before we go any further, we must summarise the Working Group’s proposals without commenting in any detail immediately on their implications:

STAGE ONE, AS PROMULGATED BY THE PRESIDENT’S WORKING GROUP:

• The President’s Working Group on Financial Markets would be expanded to add banking sector regulators not hitherto participating in its deliberations, in order to broaden the Working Group‘s supposed focus to incorporate the whole of the US financial sector, rather than just the financial markets as such (begging the question: what was the problem? Why the delay?).

• Lending by the Federal Reserve: Because non-bank financial institutions have, since December 2007 (thanks to the chaos brought about by fraudulent finance operations over which this ‘Paulson’ himself presided) had access to the US Federal Reserve, the Fed would be able to conduct on-site examinations of such borrowers and impose conditions on their operations.

• Establish a Mortgage Origination Commission to consist of six Board Members, taken mainly from Federal structures. The new entity would proceed to establish minimum licensing standards and testing criteria, and would gauge and grade the adequacy of each State’s mortgage control system. This would be accompanied by clarification of which Federal body is to enforce mortgage lending legislation (which, for some unexplained reason, the Working Group could not manage to do).

STAGE TWO, AS PROMULGATED BY THE PRESIDENT’S WORKING GROUP:

• Federal Oversight of State-Chartered Banks: It was reported that the US Treasury recommended a study to determine whether the Federal Reserve or the Federal Deposit Insurance Corporation (FDIC) should have oversight of State-chartered banks. (Great! So we need a ‘study’. Why didn’t the Group perform that study, then? Why the ‘need’ for further delay while the ‘study’ is carried out?).

• Thrift Charter to be eliminated: The following banking sector regulator was categorised as ‘past its sell-by date’: The Office of Thrift Supervision. This entity, which oversees US Savings and Loan Associations (so-called ‘Thrift Institutions’) should be closed down and folded into the Office of the Comptroller of the Currency, which has oversight of National Banks. (No reason given).

• A new (optional) Federal Insurance Charter: The US Treasury proposed the creation of a Federal regulator to cover the insurance sector, which is extremely corrupt in the United States. The first step would be to ask Congress to create an Office of Insurance Oversight within the US Treasury, to focus on international issues and to advise the Treasury on insurance sector affairs. This would be the first step towards the creation of step two, namely the creation of a new Federal Insurance Charter. (Notice that everything is ‘spaced out’, laid-back, confused and overlapping).

• Revised payments and settlement arrangements: Under the eccentric proposals brought forward by ‘Paulson’, it was suggested that the Federal Reserve Board should be given oversight and rule-making authority over the payment and settlement systems for the processing of payments and the transfer of securities between financial institutions and their clients. (Hence, de facto regulation of the securities markets would devolve into the hands of the untrustworthy Federal Reserve).

• Futures and Securities markets: The US Treasury used this report to call for the merger of the Commodity Futures Trading Commission (the CFTC) and the Securities and Exchange Commission (the SEC), neither of which has been doing its job properly, given the sheer scale of the bribery and corruption behind the scenes, plus reports that the SEC has itself been engaged in trading on own account (see below).

In particular, the Treasury proposed that the Securities and Exchange Commission, which operates (or should operate) on the basis of precise rules and regulations backed by rigorous enforcement, should ‘preserve’ the modus operandi of the US Commodity Futures Trading Commission, which is that business should instead be conducted in accordance with stated ‘principles’.

In other words, the Treasury wanted to scrap the rules-based system (required under the 1933 and 1934 Securities Acts) and to replace it by a vague ‘principles- based’ system’, which would mean that enforcement would be almost impossible – because a régime of relativism would prevail and key terms would remain undefined.

Securities professionals are taught and intensively trained to operate exclusively on the basis of the SEC’s ‘rules-based’ system, which precludes any deviation whatsoever from the established rules (provided the regulations are enforced, which has not been the case for years because of corruption within the Securities and Exchange Commission itself).

STAGE THREE, AS PROMULGATED BY THE PRESIDENT’S WORKING GROUP:

A new US regulatory structure would be imposed over the longer term, under which US financial institutions would be asked to choose between one of three Federal Charters:

• Federally Insured Depository Institution:
This would be applicable to all lenders with Federal deposit insurance.

• Federal Insurance Institution:
Applicable to all insurers offering retail ‘products’ which entail some degree of Federal guarantee.

• Federal Financial Services Provider:
This charter would cover all other categories of financial services firms.

Under this regime, the following SEVEN NEW FEDERAL AGENCIES, each with its own hyper-expensive self-serving bureaucracy would ‘regulate’ US financial institutions:

• The Market Stability Regulator: Under this vague proposal, the Federal Reserve was to ‘look out’ for threats to the stability of the United States’ diverse financial system, whether they originated with banks, insurance corporations, mortgage lenders, investment banks, hedge funds, or with any other type of financial institution.

The Federal Reserve could require corrective measures to be taken to address current risks or to curb future risk-taking, but these powers could only be exercised if overall financial stability was threatened. In other words, this entity would essentially achieve nothing at all, leaving the financial markets alone (until it was too late), thereby passively facilitating a progressive repetition of the near-catastrophe experienced since the mid-1980s, but on a far larger scale.

• Prudential Financial Regulatory Agency: This new entity would regulate US financial institutions buttressed by explicit Government guarantees associated with their operations, such as Federal deposit insurance. The new US agency would assume the rôles of the current Federal prudential regulators, including the Office of the US Comptroller of the Currency and the Treasury’s Office of Thrift Supervision. Yet another (subsidiary) regulator would focus on the hitherto unrestrained and unregulated off-off-budget Government-Sponsored Enterprises (GSEs) which, though established by the Federal Government, were placed (on creation) into the ‘private’ sector and have implicit Government backing, such as the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Bank System. See our report dated 26th December 2007 for insights into how Fannie Mae, for instance, has been used to perpetrate fraudulent financial transactions in the US mortgage sector [Archive].

• Conduct of Business Regulatory Agency: This new regulator would be charged with ‘consumer protection’ with respect to all categories of financial entities. The agency would watch disclosures and business practices, and would supervise the licensing of certain types of financial firm.

It would absorb many of the functions of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), and would undertake some responsibilities that are currently handled by the Fed, state insurance regulators, and the Federal Trade Commission.

• Federal Insurance Guarantee Corporation: This new agency would replace the Federal Deposit Insurance Corporation, charging premia to guarantee bank deposits and insurance payouts.

• Corporate Finance Regulator: This new entity would take over other functions of the Securities and Exchange Commission, such as the oversight of corporate disclosures, governance issues, accounting, and other matters.

In other words, SEVEN NEW BUREAUCRACIES would regulate everything and achieve nothing.

THE PURPOSE OF THE FALSE PROSPECTUS: OBFUSCATION
Confused? That’s precisely what is intended. As can be seen, this curious pot-pourri of convoluted arrangements matches the intentions of those who framed it (and who will not see it implemented, we feel sure). Those intentions can be summed up in the single word: OBFUSCATION.

For these proposals were developed during the immediate aftermath of the emergence of overt financial sector strains arising from the ongoing exposures of the open-ended financial fraud; and their purpose, from the outset, was not to enhance regulation and to make it ‘more efficient’, but rather to bring forward a novel framework under cover of ‘overdue reforms necessitated by the credit crunch and the financial crisis generally’, which could be exploited and leveraged to cover up, rather than to further expose, the serial financial criminality that blew up in the faces of the US kleptocracy as a consequence of the exposures of its endless criminality.

In other words, the President’s Working Group on Financial Markets appears to have been briefed in bad faith, its task being to develop a platform and framework of proposals which would serve the purpose of obfuscating financial criminality, while appearing to do the opposite. This was, in short, nothing less than a typical deception, intended to convey the dubious impression that ‘reform’ was (belatedly) being recommended, while in practice substituting the existing regulatory system which has not been properly enforced, with a vague, woolly régime framed so as to facilitate the very free-wheeling fraudulent finance and risk-taking that the proposals are supposed to deter.

Since, however, the proposals were brought forward by deception operatives whose speciality has all along been dialectical ying-yang behaviour, duplication and duplicity, the discovery that these proposals are a sham, comes as no surprise. Whether those who listened to ‘Paulson’ making this pitch on 2nd July 2008 at the Royal Institute of International Affairs (Chatham House) in London (the globalist UK think-tank which masquerades as a free-standing institution of the British nation state while constantly undermining it), understood this duplicity, seems improbable.

On that occasion, ‘Paulson’ presented a series of vague generalities for the consideration of the British ‘Great and the Good’ assembled to hear this pitch, such as that ‘the financial landscape has changed, and non-bank financial institutions play a significantly greater role’ than used to be the case. (When one of our special contacts attempted to make himself known to this ‘Paulson’ fellow, he vanished out of sight).

But the existing US regulatory régime has not ‘failed’ because it is no longer ‘fit for purpose’. It has ‘failed’ for three straightforward reasons:

(1) Some of the regulatory agencies, such as the Federal Reserve Board itself, the Securities and Exchange Commission, and the Commodity Futures Trading Commission, are/have been corrupt.

(2) The corrupt regulators have accordingly failed to regulate, let alone to enforce their regulations.

(3) The focus of the corrupt regulators is to prolong the obfuscation operation, to verbalise their dereliction of duty through spinning for the benefit of the likes of The Wall Street Journal, and to seek to draw a veil over such issues as the SEC’s ‘legitimisation’ of naked shorts for a restricted group of participants, whereas a regulator should be completely impartial. The overall objective is self-preservation, protection of their own personal interests, and staying out of jail themselves.

• In respect of ‘naked shorts’, has the SEC conveniently forgotten the old securities market adage:
‘He who sells what isn’t his’n, Must put it back or go to prison’?

TERMS DELIBERATELY LEFT UNDEFINED UNDER THE INTENDED ‘PRINCIPLES-BASED’ REGIME
In place of the existing (albeit unenforced) regulatory régime, ‘Paulson’ proposed a system not of rules-based regulation, which could be enforced if the regulatory agencies themselves were not corrupt, but of ‘principles’-based regulation, which, by definition, would entail that there would be no rules to be enforced, terms are not defined, and that breaches of ‘principles’ are liable to be irrelevant because it would always be a nuanced matter of relatavist judgment whether principles were being flouted, or not. In otherwise, such a régime would not amount to a regulatory régime at all, but rather to a crooks’ charter and paradise. ALL OVER AGAIN.

If the existing US regulatory agencies were doing their jobs properly, they would be adequate for the purpose – and certainly far more adequate than the deliberately complexified, overlapping and obfuscatory framework suggested by the President’s Working Group on Financial Markets.

But while the Working Group may be redundant and has discredited itself, the financial market issues that it was supposed to have addressed, remain in existence and as intractable as before.

THE EXISTING U.S. REGULATORY FRAMEWORK
The existing US regulatory framework, for the record, consists of the following agencies:

• Federal Reserve System: Supposedly regulates the US monetary system and oversees bank holding companies. Historically lacked real assets apart from its contract to print the currency of the United States, which ought to be a function of the US Treasury,

• Securities and Exchange Commission (SEC): Established by the Congress in 1934 to regulate the securities markets in accordance with stated rules and under the 1933 and 1934 Securities Acts, to maintain ‘fair’ markets and to protect investors. The SEC also, as a primary element of its oversight powers, reviews corporate financial statements, is supposed to enforce the securities regulations, and provides guidance for the framing of accounting rules.

• Federal Deposit Insurance Corporation (FDIC): This regulator insures deposits lodged by bank customers against the failure of banks. The FDIC was created in 1933 to build and maintain public confidence and to encourage stability in the financial system by fostering sound banking practices.

• Office of the Comptroller of the Currency: This traditional arm of the US Treasury Department was established in 1863 to supervise and regulate National Banks and the Federal branches of foreign banks. Its purpose is to promote the safety and soundness of the banking system and to conduct on-site examinations of banks across the nation.

• Commodity Futures Trading Commission (CFTC): Established as a US agency in 1974, this entity is supposed to ensure the open and efficient operation of the US futures markets, which started out trading agricultural futures, and now trade sophisticated synthetics (derivatives).

• Office of Thrift Supervision: This agency issues and enforces regulations governing the United States’ Savings and Loan sector (Thrift Institutions). It is responsible for ensuring the safety and soundness of deposits with Thrift Institutions.

SHORT HISTORY OF U.S. FINANCIAL TRANSPARENCY

(A) 1890 to the 1920s:

Leading American financiers of the late 19th century, such as John J. Astor, Cornelius Vanderbilt, John D Rockefeller and J. P. Morgan (1), provided capital to finance the establishment of very large corporations and combines, also known as the trusts, which came to wield enormous power across entire industrial sectors. As a consequence, by the year 1890, the control of 5,000 corporations was held by about 300 such trusts operating all over the country. By 1900, the largest dozen of these combines were capitalised at over $1.0 billion (2) .

Accordingly, investment bankers became corporate directors – with Morgan, for instance, having board representation on 78 investment bank companies.

Therefore, when these large corporations needed injections of capital, the bankers who were sitting on their Boards claimed to represent the bondholders (3).

Disclosure of financial information was entirely voluntary, even though disclosure of predator practices could only be revealed via the balance sheet (4). The Sherman AntiTrust Act of 1890 was enacted in order to define and make the monopolistic activities of such trust companies illegal (5).

In 1914, the Clayton Anti-Trust Act sought to increase competition across the business sector by restricting predatory corporate activity such as acquiring other competing corporations and the practice of allowing interlocking corporate directorships (6).

And the Federal Trade Commission Act, passed in the same year, established a regulatory authority, acting as the ‘watchdog of competition’, to protect the American consumer from ‘unfair methods of competition’ (7). In other words, raw, unregulated capitalism was by now seen as being prone to abuse and in need, therefore, of official constraint.

(B) 1920s to 1941:

During this period, the number of investment companies that were formed in the United States steadily increased from six in the year 1921, to 46 in 1925 (8).

While most of these investment companies were subject in some measure to the ‘Blue-Sky’ [see Glossary] requirements, the State statutes and regulations appear not to have treated investment companies much differently from the general run of corporations and business trusts (9).

As previously, disclosure of financial information remained voluntary, even though the disclosure of predatory practices could only be conveniently disclosed through the balance sheet (10).

Between 1927 and 1929, these investment companies raised approximately $2,300,000,000 from the sale of new securities. Their assets increased from $550,000,000 in 1927 to almost $2,600,000,000 in 1929 (11). Distribution of the shares in these fixed trusts reached peak levels during 1930 and 1931, when $600,000,000 of their shares were sold, inducing the passage of various US statutes and the promulgation of regulations which brought the expansion of these fixed trusts to an end (12).

In 1933, North Carolina adopted a regulation (which in due course was adopted as Section 11 of the Investment Company Act of 1940) which prohibited the charging of any sales load on the switching of trust shares (13). As a consequence of the lessons learned the 1920s and early 1930s, including bitter experiences suffered by investors with ‘bucket shops’, the original and copycat Ponzi and Pyramid-selling schemes, and other forms of fraudulent finance that flourished in this free-for-all environment, the Congress passed the stringent Securities Acts of 1933 and 1934, followed by the Maloney Act of 1935; and in the banking sector, the Banking Act of 1933 and the Glass-Steagall Act of 1933 which restricted US banks to banking operations and precluded their participation in the securities markets. The Securities Acts were updated by the Securities Acts Amendments of 1970.

THE EXPENSIVE FALSE PROSPECTUS ANALYSED:

U.S. TREASURY’S 2008 REGULATORY ‘REFORM’ PROPOSALS (14), (15)

Astonishingly, in view of the obvious fact that these proposals would be bound to have an impact on fragile financial market confidence, the Working Group’s suggestions were phased, with short- medium- and long-term proposals set within an imprecise timeframe, interspersed with periods of reflection for ‘study’, and personnel being liable to be poached from old regulatory agencies that would remain alive in one phase, but not the next, and with every opportunity taken to ensure that the responsibilities of no less than SEVEN newly proposed, expensive agencies would overlap as much as possible, while existing agencies would languish in a state of limbo or uncertainty pending prospective abolition, or not, as might be decided in a later phase.

Self-evidently, this confused prospectus is a recipe for undermining confidence in the integrity of financial market regulation, and therefore in the integrity of the financial markets themselves, as well as maximising the potential for obfuscation, as will be seen:

(A) THE SHORT-TERM PROPOSALS:

The President’s Working Group on Financial Markets is/was intended, we read, to be composed of a Coordinator of Financial Regulatory Policy and to cover the entire American financial sector, as indicated above, not merely the financial markets.

It was thus to incorporate banking regulators not currently participating in the study group, and would need to broaden its financial focus to capture the whole of the financial sector.

Hence the Working Group was to facilitate inter-agency coordination and communication, with a view (ostensibly) to developing proposals to mitigate all systemic risks to the financial system, to enhance the integrity of the financial markets, to promote protection of consumers and investors, and to support the efficiency and competitiveness of the financial markets.

Since overall ‘competitiveness’ covers the stance of any given financial market environment by comparison with foreign counterparts, the Working Group would or will have had to consider the impact of any proposals it puts forward on the competitiveness of the market in question, with its equivalents abroad; and the moment that such considerations had to be considered, the knee-jerk response of the Working Group’s membership is liable to have been to opt for the most lenient and liberal ‘solution’ on the drawing board.

As for the proposed creation of a Federal Mortgage Origination Commission (MOC), this huge new bureaucracy would be headed by a Director appointed by the President of the United States for a four- or six-year term – which means that, in accordance with the standard corrupt US practice, the job would be likely to go to a presidential crony.

The six Board members would be supplied from the Federal Reserve, the Office of the Comptroller of the Currency (OCC), the Office of Thrift Supervision (OTS) and the Federal Deposit Insurance Corporation (FDIC), even though the last of these three agencies were to be abolished under the proposals, and the Federal Reserve itself remains vulnerable, under unpublished H.R. 2778 of the 110th Congress, to be abolished and merged within the US Treasury.

The other two Board Members would be supplied from the National Credit Union Association and the Conference of State Bank Supervisors.

The new Mortgage Origination Commission would develop minimum licensing standards, testing criteria and a system for grading the adequacy of each State’s financial regulatory arrangements. The drafting of regulations covering national mortgage lending legislation would, the Working Group apparently proposes, remain exclusively with the Federal Reserve, as provided for under the Truth in Lending Act.

Finally, the States should be given clear authority to enforce Federal mortgage legislation upon independent mortgage originators, that is to say, those mortgage originators considered to have been responsible for originating most of the so-called ‘sub-prime’ loans.

There was no reference to the practice of collectivising such mortgage loans, let alone with false documentation purporting to represent other mortgages but which lack any underlying asset at all, for the purpose of ‘securitisation’ and marketing to gullible investors at home and abroad who may not perform adequate (or any) due diligence.

For the short term, too, the Treasury’s blueprint put forward two considerations relating to the overall stability of the financial markets. Specifically:

(1) The prevailing temporary liquidity provisioning process, designed to alleviate threats to market stability (launched in December 2007 in the face of the crisis of confidence which overwhelmed the American authorities given the accumulated consequences of their incompetence, criminality and mismanagement of the US financial system), must ensure:

• That the process is calibrated and transparent (with no definition of terms here);

• That appropriate conditions are attached to the lending, (with no explanation of ‘appropriate’);

• That information flows to the Federal Reserve System via on-site examinations, and/or that other conditions or means can be imposed as determined by the Federal Reserve, with no recourse and without any indication here of what the Federal Reserve might have in mind.

(2) The President’s Working Group should consider broader regulatory issues related to discount window access for non-depository (i.e., investment banking) institutions. So, this Working Group has not yet undertaken such considerations? What, then, was it doing between August 2007 and March 2008, exactly?

(B) THE MEDIUM-TERM PROPOSALS:

Under this heading, the Treasury recommended, as summarised above:

• Elimination of ‘redundant’ banking regulators, without providing any rationale for such a drastic and reckless measure, and without having practical alternative proposals formulated or in place;

• Closing down the Office of Thrift Supervision, ditto;

• Folding the responsibilities of the Office of Thrift Supervision into the Office of the Comptroller of the Currency, again with no rationale for such action being provided.

Having shredded key existing regulatory institutions without replacing them (at this stage), the Treasury proposed that the next step should be that a leisurely ‘study’ should be undertaken, to establish whether the Federal Reserve or the Federal Deposit Insurance Corporation (the FDIC) should have oversight of the State-chartered banks.

This seems to us to be quite ridiculous, and asking for trouble. First, some existing regulators are abolished, without the Treasury at this stage having a clue what should take their place. Secondly, having abolished the regulators, the Treasury would then embark upon a ‘study’ to decide what to do next, as it says it is undecided (cannot make up its mind) whether the Fed or the FDIC should oversee the State-chartered banks – a confused recommendation akin to throwing all the furniture out of the window before deciding what, if anything, should replace it.

A moment’s reflection will convince even the most enthusiastic supporters of the corrupt US ‘Paulson’ Treasury that these proposals are, of put it mildly, mischievous.

Nobody who cares about US financial market stability can possibly take them seriously: indeed, the proposals , even as far as has so far been described here, are so mixed up and destabilising, that it is no exaggeration to ask whether they represent some kind of spoof.

Has some malevolent gremlin substituted this mischievous verbiage for what the Working Group actually submitted? Given the track record of ‘Paulson’s criminalist Treasury, that may not be as far-out a proposition as it may appear to be.

The third element of the intermediate recommendations brought forward by this muddled report departed from common sense by recommending that the Federal Reserve – which has achieved notoriety thanks to its two-tier policy of purporting to represent the Rule of Law while at the same time surreptitiously condoning and facilitating corrupt financial practices through exploitation of the unaudited and secretive Federal Inter Bank Settlement Fund – should acquire oversight and rule-making authority over payment and settlement systems that process payments and transfer securities between financial institutions and their clients.

This would be worse than placing the fox in charge of the chicken coop: it would ultimately lead to the liquidation of the chickens by guaranteeing the perpetuation of the fraudulent finance model that has been exposed by notorious recent developments. And again, no coherent rationale for this supposed ‘reform’ was presented with the recommendations.

Put another way, the report then recommended that the Federal Reserve should acquire oversight and, inconsistently, rule-making authority, over the payment and settlement systems that process payments and transfer securities between financial institutions and customers.

Since this all-embracing ‘reform’ would include ALL institutions, this would mean inter alia that the Federal Reserve would in practice acquire rule-making authority over securities broker-dealers. Hence, the rule-making authority to be abolished with the folding of the Securities and Exchange Commission (see below) would reappear under the aegis of the Federal Reserve, although we are not told what category of rules the Fed would promulgate. It can be taken as read that the rules to be promulgated by the Federal Reserve would bear no discernible relationship to the rules long since established (but lately, not enforced) by the Securities and Exchange Commission.

On top of this nonsense, the proposals recommended a further unresolved ‘solution’, calculated to maximise uncertainty – this time in the insurance sector. First, the Working Group floated the idea of creating a Federal regulator to oversee the insurance industry.

Then, after floating this suggestion, the Treasury wants to ‘ask Congress’ to create a new Office of Insurance Oversight (OIO) which would function from within the Treasury, meaning of course that the Treasury would control the insurance sector directly. Since the Treasury, like the US Federal Reserve, has demonstrated that it is thoroughly corrupt, this recommendation would simply enable the corrupt Treasury to capture and channel the well-known corruption that bedevils the insurance sector in the United States. The OIO would supposedly focus upon international insurance sector issues, while also providing the Treasury with ‘advice’ – a completely meaningless concept since the entity, resident within and therefore a part of the Treasury, would accordingly be advising itself.

[The probable hidden intention here would be to replicate the Federal Financing Bank (FFB), which is likewise an office (plus some filing cabinets) situated within the US Treasury but which for many years enjoyed off-budget status, thereby providing the Treasury with increased ‘wriggle-room’ for its usual ‘smoke-and-mirrors’ financial shenanigans. As matters stand today, the Federal Financing Bank is one of the basic mechanisms that enables the Secretary of the Treasury to manipulate the Government’s finances by exploiting the fact that is allowed by statute to have $15.0 billion of debt outstanding at any one time, so that by means of creative bookkeeping, up to $15.0 billion extra can be borrowed on those occasions when the Congress has deployed its residual ‘control’ over the spending of the Executive Branch by refusing to raise the Statutory Debt Limit, in exchange for some Federal Budget concession or other that it seeks to extract from the Executive Branch].

In short, and Office of Insurance Oversight inside the Treasury would simply be leveraged by the corrupt Treasury for its own purposes, and in furtherance of the dubious interests of the official perpetrators of fraudulent finance operations who have been cornered and are running for cover.

Even worse are the quite appalling proposals affecting the securities sector. The Working Group suggested, as mentioned above, that the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) should be merged – again, providing no rationale for such a radical shake-up. The actual purpose here would be to end the settlement reached by the Securities Acts of 1933 and 1934, which provided for the securities sector to be governed by the strict application of precisely defined rules – the settlement that ended the chaos arising out of the undisciplined free-for-all allowed in the 1920s, when bucket-shops ripped American investors off and investors enjoyed no protection from sharks other than that provided by the ‘Blue Sky’ above – in favour of standardising the so-called ‘principles-based’ approach employed by the ineffective Commodities Futures Trading Commission. Neither the SEC nor the CFTC have, in recent years, fulfilled their regulatory responsibilities, due to internal corruption; but scrapping the rules-based approach in favour of the CFTC’s permissive ‘principles-based’ approach would guarantee and perpetuate financial corruption perhaps for generations to come.

An indication of the deceptive nature of this recommendation can be gauged by the mealy-mouthed language employed to present this sorcery for public consumption. Specifically, the Working Group postulated that the Securities and Exchange Commission should seek to ‘preserve’ the CFTC’s principles-based approach, presupposing of course that the SEC should DROP its rules-based approach: but in order to mask this deception, THIS CENTRAL RUSE WAS LEFT UNSTATED.

‘Preserving’ the principles-based approach used by the ineffective CFTC would, self-evidently, be inconsistent with ‘preserving’ any rules-based approach – which is the point of this proposition.

What the Treasury is seeking to achieve here is to pass off a fraudulent reform as a key element of an improved regulatory system, when what would be perpetrated would be the de facto elimination of the existing framework which, if properly applied, would protect investors from fraud and make it impossible for fraudulent finance operations such as those that have been exposed, to exist, let alone to flourish. In other words, this recommendation represents a typically diversionary fraud by the ‘Paulson’ Treasury, consistent with the reputation it has earned for itself as an institution of the Federal Government in which no trust can currently be placed, not least because, on the basis of its recent behaviour, it cannot be relied upon to honour its obligations.

(C) THE LONG-TERM PROPOSALS:

Not content with the chaos that would be created as a consequence of this wrecking operation to date, the Working Group, true to its false prospectus, capped this truly shambolic mish-mash with a series of half-baked long-term proposals, the net effect of which would be to leave everything up in the air, thereby maximising scope for a 1920s-type free-for-all – and ensuring that the investment environment of future years would be consistent with the underlying intention of this dog’s dinner of spurious proposals – namely to facilitate the perpetuation of fraudulent finance, following the shocks administered to the criminalist kleptocacy by recent developments.

By staging its fitful proposals over a prolonged and imprecise timeframe, the US Treasury has of course already compromised the prospects for global financial stability, since no-one now knows what is coming next. The fact that proposals have been put forward in such a vague, disjointed and dissonant manner has itself added to the febrile atmosphere of uncertainty, although the Treasury doubtless hopes that the deceptions encased within these proposals will have passed its targeted audiences by – an example being the attendees at the Chatham House event in London addressed by ‘Paulson’ at the beginning of July. These people will have been easily impressed by anything that the Secretary of the Treasury might have told them – the purpose of such presentations being to build an unthinking ‘consensus’ (in London, especially) for the treacherous ‘reforms’ that the corrupt ‘Paulson’ Treasury is putting forward.

The so-called long-term proposals (with no timeframe mentioned) would involve, to begin with, a revolution in the status of all US financial institutions. All lenders equipped with Federal deposit insurance would be granted a brand new charter certifying them as a Federally insured depository institution. All insurers offering retail products involving some degree of Federal guarantee, would be chartered as a Federal insurance institution, under the direct regulatory control (see above) of the Treasury. Finally, all other types of financial institution would receive a charter signifying their status as a Federal services provider. Note the crucial use of the adjective ‘Federal’ here: what is intended is the usurpation or duplication by the Federal Government (it is not yet clear which) of ALL the regulatory functions currently exercised by the State Governments. Whether usurpation or duplication is intended, this proposition must have gone down like a lead balloon in State capitals.

Under the first of this final batch of dubious proposals, a so-called Market Stability Regulator, namely the Federal Reserve itself, or else an entity that is subservient to it (unclear), would be established, which, however, would hardly undertake any regulating of the financial markets at all. Instead, it would ‘look out for’ threats to the stability of the US financial system, whether they might originate with mortgage lenders, banks, insurance companies, investment banks, hedge funds or any other category of institution. The only environment in which the so-called new Market Stability Regulator would intervene would be when it had formed the subjective judgment that corrective action needed to be taken to address current risks, or that it is necessary to constrain further risk-taking. This proposal appears to have nothing to recommend it at all.

Establishing further expensive bureaucracies without any teeth is a pernicious practice equivalent to a fudge, and the impression given here is that the Working Group needed somehow to convey the impression that the permissive environment that it was subversively recommending would be watched closely for aberrations, whereas the underlying and thoroughly dishonest intention and consequences of these proposals will be to maximise potential for market abuses across the board.

The next piece of gross mischief would entail the establishment of a so-called Prudential Financial Regulatory Agency, with a brief to regulate financial institutions which have explicit Government guarantees associated with their business operations. Hence this new agency would regulate all institutions equipped with Federal deposit insurance. This agency would also take over the roles of the current Federal prudential regulators (for no discernible reason), such as the Office of the Comptroller of the Currency and the Office of Thrift Supervision.

The agency should, the report argued, focus on the protection of consumers and ‘help’ to maintain confidence in the financial system (by unspecified means). The agency would operate on the basis currently applied to the regulation of the insured depository institutions – in which case, since this new agency would replicate existing practice, why do the existing regulatory arrangements need to be changed? – using the standard capital adequacy requirement techniques, imposing investment limits, circumscribing the scope of an institution’s activities, and directing on-site risk management supervision. The agency would be focused on institutions, rather than operating generically.

On top of all this, a separate new regulator was proposed, to focus on the powerful and wayward Government-Sponsored Enterprises (GSEs) which have been surreptitiously exploited to facilitate fraudulent finance operations, such as the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Bank System. As we discussed in our report dated 26th December 2007, corrupt mortgage lenders have been transferring the full risk and ownership of mortgages to these off-off-budget entities which were established by the Government but positioned immediately upon their foundation, into the private sector, so that they could be excluded from the scrutiny of the Federal Budget process.

The crisis surrounding Fannie Mae and Freddie Mac that blew up during the week ending 11th July 2008 – over seven months after we posted our report on the abuse of the foreclosure process on 26th December 2007 – illustrated the mischievous and destabilising nature of the Working Group’s proposals, because this dimension of the crisis ‘suddenly‘ ran out of control in July 2008, despite the fact that the President’s Working Group had intended to ‘deal with’ the Government-Sponsored Enterprises problem under its ‘long-term’ category, rather than as an immediate, burning issue of the greatest significance, as flagged by our report dated 26th December last year.

This miscalculation alone showed the Working Group to be extremely incompetent, in dereliction of its self-appointed duties, and quite incapable of handling the huge mess for which its own largely corrupt membership has been specifically responsible. Fancy treating the US GSEs as a long-term problem when several of the key GSEs have all along been at the very centre of the machinery of fraudulent finance that is in the process of being widely exposed, and which the Working Group was meant to be addressing! This was surely taking OBFUSCATION too far.

No rationalisation was presented for the proposal that a separate regulator should be established to ‘regulate’ these off-budget entities, other than the spurious one that implicit Federal backing is qualitatively differentiated from explicit Government backing. Presumably the woolly thinking here is that the legal status conferred by Federal Statute on the GSEs would be violated if the proposed Prudential Financial Regulatory Agency were to assume regulatory responsibility for the GSEs – which have hitherto, by the way, escaped all regulation and have thus provided fruitful ongoing scope for organised criminal and financial fraud operations.

The other agencies proposed by the Working Group simply would compound the confusion and the seemingly deliberate dispersion of responsibilities which this dog’s dinner of recommendations perpetrates. Specifically:

• A so-called Conduct of Business Regulatory Agency would cut across the ‘responsibilities’ of the mish-mash of other agencies, establishing the basis for endlessly unresolvable turf wars that lead nowhere. This bureaucracy would ‘observe’ disclosure information and business practices (with no indication of what it would do with these observations), and would also engage in the licensing of certain categories of business firms (so that its personnel would be tin gods).

It would supposedly absorb ‘many of’ the functions of the Securities and Exchange Commission, the Commodities Futures Trading Commission, the Federal Reserve System, of the State insurance regulators and even the Federal Trade Commission. The rationale of all this is left unclear.

However it would do so, according to the Working Group’s blueprint, after an undefined period of uncertainty and therefore turmoil – during which hiatus the usual pork-barrel lobbying operations would have been deployed at full throttle, with no-one knowing which way any of the cats would be liable to jump, and a state of officially contrived chaos having long since been generated.

By this stage, the divisions of regulatory responsibilities will have multiplied to such an extent that every agency would have burgeoning responsibilities overlapping with some or all of the others, so that nothing at all could ever be resolved – a remarkably classical Leninist formula for ensuring the definitive perpetuation of the collective will of a small clique at the centre. Lenin established two orders for his Party-State, under which all the institutions of the State were replicated by Party entities. This meant that a complainant making representations to the State structures would find that his case would be frustrated by the parallel Party structures, and vice versa. This is exactly the state of affairs, albeit a much more fragmented and complicated one, that the President’s Working Group has put forward. This blueprint would have the following overall consequences:

• It would complete the process of discrediting capitalism which the free-wheeling fraudulent finance operations perpetrated by the exposed criminalist operatives and institutions have successfully initiated to date; and:

• By ensuring the perpetual overlapping of responsibilities with their concomitant bureaucratic turf warfare, it would institutionalise and confirm absolute power and freedom of corrupt action for the central controlling élite, namely for a successor group of organised financial criminals who would build upon this new foundation of institutionalised US regulatory confusion, to create the conditions for the next global financial showdown, which would certainly be terminal.

Since, whether ideologues like it or not, the ultimate objective is the destruction of free enterprise and the abolition of all private property except for the privileged criminalised élite, that showdown would be terminal. It is not going to happen, but that is the long-range objective.

Two other expensive US agencies would, under the convoluted blueprint, be tacked on to the contrived ramshackle mess so far recommended. The proposed Federal Insurance Guarantee Corporation, which is to replace (for no apparent reason) the existing Federal Deposit Insurance Corporation (FDIC), would charge premiums to ‘guarantee’ bank deposits and insurance payouts.

No terms are defined here (as is the case throughout this false prospectus), so it is not clear why the FDIC cannot, if really necessary, have its existing statute amended so as to expand or modify its responsibilities in accordance with this proposal. What is wrong with the existing structure?
This unanswered question is applicable throughout.

Finally, the Working Group floated the batty idea of a Corporate Finance Regulator which would supersede the functions of the Securities and Exchange Commission (SEC), and would focus on corporate disclosures, corporate governance, accounting matters, and other issues. Presumably the idea here is that there should be a special agency which sticks its nose into the affairs of US corporations generally – a suggestion that may mask a cynical political objective to subject all US corporations to an officially sponsored espionage system which would be abused, if information gathered by this agency fell into the ‘wrong’ hands. If we assume, as we must, given recent past experience, that the underlying intentions here are malevolent and mischievous, the creation of such an agency would signal to anyone who is not sitting on his or her brains that an ever more socialist United States had essentially finished with capitalism altogether.

There is also an obvious sense that these convoluted ‘regulatory’ proposals have been brought forward in bad faith for yet another reason: their purpose includes the need to deflect criticism that ‘nothing is being done to stop this happening again’. Meanwhile, the socialist European Union has predictably responded with various trial balloons suggesting that the unprecedented display of financial scandal that has been partially exposed, can at long last be exploited as a rationale for the imposition of European-style socialist (Communist) regulation which, by its nature and intent, would smother risk-taking and close off innovation.

For example, Tony Robinson, chief spokesman for the Socialist Group in the Soviet-style European Parliament, said on 3rd July 2008, quite correctly, that the capitalist system had disgraced itself and must now face much stricter regulation. Since we must agree that the capitalist system has indeed disgraced itself as a consequence of the hijacking of the American official structures by organised criminal cadres, it is hard to argue against what Mr Robinson had to say:

‘There is a groundswell of opinion building up for action at a European level. Our group wants a ban on all investment funds speculating on food. We support a proper functioning market, but what we have seen in this crisis is a most distasteful morality where decisions are driven by greed. Hedge funds have used debt to take over companies and strip out their assets. This must stop’.

Leaving aside the ideological hang-ups and ignorance of the market system embedded in these comments, it is a fact that although proposals for a pan-European regulator have not yet been crystallised into a draft EU Directive, the European Parliament has been ‘debating’ three separate proposals to crack down on private equity, hedge funds, and banking sector bonuses.

(Actually, no debate ever takes place inside the European Parliament: rather, the Members (MEPs) address the podium just as they do in the covert Soviet system. Indeed, the European Parliament chamber precisely replicates the Soviet model. In order to complete the transformation, all that would be necessary would be to replace the esoteric European flag above the podium with the familiar bust of Lenin and a nice red star plus a hammer and sickle, and we would all be back to square one. The Editor witnessed this reality in Brussels with his own eyes several weeks ago).

Should such an outcome materialise over time, as intended, the process would have been given decisive added momentum by the pillaging and fraudulent finance that have been exposed since June 2006. This would be a supposedly ‘unintended consequence’ of the organised criminality.

RESULT: EXTREME LACK OF REGULATION ENFORCEMENT
That the proposals put forward by the President’s Working Group are damaging and would have grim consequences has been well attested by people who know what they are talking about.

For instance no less than THREE former Chairmen of the Securities and Exchange Commission, David Ruder, Arthur Levitt and William Donaldson, have condemned these proposals outright, although the language they have used to date has been inappropriately circumspect.

Their general view is that a Treasury initiative to adopt the ‘principles-based’ regulatory approach applied by the Commodity Futures Trading Commission would be ‘a mistake’ (16) . David Ruder, an SEC Chairman under President Reagan, has commented that:

‘It’s not at all useful for the Securities and Exchange Commission to function on the basis of ‘a prudential-based attitude’ in which regulators solve problems by discussing them informally with market participants and asking them to change… we have an enforcement approach’ (17).

For his part, the former SEC Chairman, Arthur Levitt, a Bloomberg Board Member, has commented:

‘That proposal does more violence to protecting America’s investors from the standpoint of transparency as anything in the Paulson proposal’ (18) – referring specifically to substitution of a ‘principles-based’ approach for the tried and tested (until wantonly unenforced) rules-based approach which the existing securities market legislation requires of the SEC.

As matters stand the SEC is, however, considering the easing of its rules to allow foreign stock exchanges and brokerages to sell securities direct to US investors, under supposed surveillance by overseas regulators (such as the British Financial Services Agency) ‘who have rules that are similar to those in the United States’ (19).

In other words, even as we speak, the Securities and Exchange Commission is thinking of watering down its currently poorly enforced rules-based system to allow various foreign stock exchanges and brokerages to deal directly with US investors, rather than going through US intermediaries – so that there would be no control over the volume of dodgy financial ‘products’ that could soon be sold back into the United States, given that non-institution US investors would not necessarily be subjected to any surveillance at all. This might very well be hazardous in the future.

As for the immense problems surrounding derivatives – leveraged, securitised, hypothecated products yielding accruals that are not denominated in real US dollars, but rather exclusively as digitised entries generated electronically in just nanoseconds on bank statements – the Working Group’s proposals sidestepped them altogether: a sure indication that the real purpose of these proposals has never been to ‘solve’ any of the intractable problems created by the invasion of the capitalised system by organised crime, but rather that their purpose is precisely to obfuscate what has been happening so as to draw a veil over the criminal activities that have led to this crisis.

The irresponsible securitisation of ‘sub-prime’ loans and the hoodlum practice of mixing them up with fraudulent paper backed by no assets at all, were not even addressed.

THE ‘PROGRAMS’, OMEGA PONZI SCAMS, ETC.
Exotic investment schemes marketed by scamsters promising sky-high returns into which many Americans entered and ploughed their savings a number of years ago, and which have not paid out, may have purported to be exempt from registration under the Securities Acts of 1933 et seq. [see Glossary below] and in terms of State securities registration requirements.

Such unregistered schemes, unless narrowly they are exempt from registration in conformity with relevant stringent statutory restrictions (such as being confined, for instance, to no more than 35 subscribers nationwide), are all illegal and violate the National Association of Securities Dealers (NASD) and SEC regulations, and were/are also further illegal as they may not have been registered with the relevant State Securities Commission.

When considering such participations, such US investors, in conformity with the Prudent Man Rule under the 1933 Act [see Glossary] should, in performing their Due Diligence, have been in receipt, and should have reviewed, the necessary registration and prospectus documents meeting the requirements of the NASD, the SEC and State Regulators.

In cases where the issuer was a bank, the participants have undoubtedly been victimised. In all other instances, they will have acted on the basis of fraudulent documents which made them co-conspirators. The issuers were and remain engaged in Ponzi schemes, as we have several times reported [see Glossary and Appendix] and are all co-conspirators and open to prosecution under R.I.C.O. and other relevant US legislation, including multiple anti-money-laundering legislation.

Furthermore, it is likely that some American participants will have signed Non-Disclosure forms or agreements, a fatal error which will have meant that they can have no recourse to US authorities for relief from being scammed, not least because in having participated in any of these schemes and signing such forms, they became co-conspirators themselves, as indicated.

They cannot therefore seek protection from the relevant regulators, and neither can they disclose their participations, especially where money-laundering will likely have been intended, since this presupposes tax evasion: and under the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982, US taxpayers are required to report all sources of income, wherever it was earned anywhere in the world. It follows that all receipts by US taxpayers since the passage of this Act which have not been reported to the Internal Revenue Service are taxable, which means that all US taxpayer holdings in offshore accounts that are not declared for tax are vulnerable to payment of the tax and penalties. Imprisonment is also dished out to tax evaders in the United States with abandon.

But the participants in these programs have received nothing and have so far forfeited 100% of their investments. Having signed Non-Disclosure documents purporting to protect the program organisers or distributors from the consequences in the United States of their criminality, and the participants from the consequences inter alia of prospective tax evasion and of co-conspiring in a felonious transaction, some participants have been left dangling and are at the mercy of ruthless MK-ULTRA-style perception manipulators who have been managing their expectations for years.

Under the regular securities laws of the United States, investors and participants have to show source of funds. How can they take receipt of the proceeds of these ‘program’ and Omega-type Ponzi schemes without exposing themselves to US authorities, in many cases with prospectively grievous consequences?

These participants need to ask themselves: are the websites that may have been managing their expectations for years disclosing both sides of the equation, or have they simply been expressing justified anger and frustration at the brazen evil of the high-level, well-connected perpetrators of these scamming programs, thus deceiving their intended readerships by failing to look at the other side of the issue, namely the possibility that the scamsters may have compromised the investors?

They also need to consider whether it is likely that the hitherto ‘protected’ perpetrators of these scams have, all along, also been relying upon their knowledge that their victims may be impotent because they may be engaged in prospective tax evasion, as a rationale for the integrity of the Greenspan-Bush Sr. ‘Never-Pay’ model. In this connection, it is axiomatic that crooks always seek to compromise their victims, thereby ensuring, for instance, that they cannot testify against them.

In the case of the Swiss banks that marketed such participations, their first priority is understood to have been to obtain the targeted investor’s signature on the coveted Non-Disclosure document. Then the participant was typically asked to prove his or her funds. Thirdly, the participant may have been requested to travel to Europe, or to courier funds to the bank’s European address, where their account would have been be opened. In cases where very large amounts were put up, the bank’s aircraft was actually dispatched to collect the participant and his funds..

Participants in these schemes may be caught, if any of these unfortunate conditions apply to their circumstances. Co-conspiracy is a function of motive. If the motive was to receive inordinately high yields and/or to evade taxes in breach of the Prudent Man Rule, TEFRA and/or Internal Revenue Service regulations, it is not at all clear on what basis expectations of repayment of principal with interest may be predicated. The fact that the perpetrators (‘principals’) of these scams are indeed despicable, ruthless snakes is no comfort for the participants because the perpetrators may have taken care to ensure that those whom they have scammed are co-conspirators as well as victims.

Even more disconcertingly, the professional perpetrators of these fraudulent finance operations were fully aware of what they were doing from the outset, and may have deliberately ensured, in these cases, that their participants became co-conspirators and would therefore become impotent to recover their funds, which the perpetrators always intended to steal.

Their evil intentions will have been based upon extensive experience of the psychological reality that victims of financial Ponzi and Pyramid scams often collapse into a state of permanent denial, unable to move beyond the mental barrier that they have lost everything. This attitude is typically associated with embarrassment at the fact that the victim has been scammed, a state of mind akin to the humiliation of being mugged or the victim of common theft.

What has been achieved to date as a direct consequence of these exposures, though, is that life has been made extremely uncomfortable for the professional and official sector perpetrators of all categories of fraudulent finance, and will most certainly become more uncomfortable day by day – as official enforcement procedures, which grind slowly but surely, bring more and more decisive pressure to bear on these snakes. Despite everything that has had to be said above, this may still provide some minimal degree of comfort, no doubt, for the victimised participants; but it may not alleviate their problems or their suffering.

What we can say with confidence is that the prevailing sense of pessimism in the United States is misplaced. Perceptions are often slow to catch up with reality. We are being bombarded with data which has almost no bearing on the current environment, which can be summed up as follows: the crooks are on the run, are being hounded day and night, have nowhere to turn, did not anticipate what was about to hit them, and have been caught completely unprepared for the onslaught.

S.E.C. ‘CORRUPTLY ENGAGED IN OWN ACCOUNT TRADING’
And here is another exposure: the Securities and Exchange Commission – still the chief securities market regulator, no less – is itself apparently corrupt. For instance, it has failed to enforce its own regulations, and has only (it appears) been galvanised into action very recently, in response to the cacophony generated inter alia by our reports. No-one has been impressed by Mr Cox’s statements recently, because the failure of the SEC to do its job properly has become widely known.

The SEC irresponsibly dismantled their own enforcement division, and to make matters very much worse, have been engaged in trading, or allowing insiders to trade, for their own account.

For what purpose? The likelihood must be that SEC personnel have been trading for their own personal enrichment, taking their cue from the Black House: the nefarious principle being that if the President of the United States and his most senior colleagues are content to exploit public office for self-enrichment purposes, then what is to stop lesser officials doing the same?

The fact that the Securities and Exchange Commission, which exists for the purpose of regulation only, has reportedly branched out into participating in exotic money-making programmes instead of concentrating on its job of regulating the securities sector, provides us with a further indication of the extreme decadence of the US financial system which can hardly hope to recover unless such grotesque abuses are eliminated.

COUNTER-PROPOSALS FOR CLEANING UP THE MESS
It is perfectly clear to anyone who is not sitting on their brains that the so-called ‘Paulson’ Treasury proposals, a.k.a. the mish-mash of half-baked notions served up by the President’s Working Group on Financial Markets, is not fit for purpose and should be relegated to the dustbin of history with immediate effect. It is further clear that these messy proposals have actually exacerbated the crisis by introducing new dimensions of uncertainty surrounding future US Government policies, thereby further undermining confidence in an environment so febrile that the entire edifice of fiat money cards has been teetering on the verge of collapse anyway.

Given the perverse effects of these proposals on financial market confidence, we can legitimately go further, and accuse the Working Group of irresponsible behaviour which is tantamount to the financial criminality which the proposals are intended to obfuscate.

To place consideration of the problems surrounding the Government-Sponsored Enterprises in the ‘long-term reform category’ when, within months of our report on the subject last December, this central dimension of the overall crisis blew up in the Working Group’s faces, surely provides all who ‘need to know’ with sufficient evidence of the Working Group’s incompetence, let alone its clearly mischievous intent, to warrant the Working Group being closed down forthwith – before it does any more damage, like the proverbial elephant in the china shop.

Michael C. Cottrell, M.S., the securities markets expert, has therefore prepared the following basic recommendations, which should be substituted for the cack-handed and extremely damaging false prospectus promulgated last March by the disreputable President’s Working Group on Financial Markets, fronted by this ‘Paulson’ fellow.

MR COTTRELL’S COUNTER-PROPOSALS ARE AS FOLLOWS:

(A) Comprehensive funding of the necessary enforcement structures, which must remain intact. The organisations most suited for this function remain the Securities and Exchange Commission and the Federal Trade Commission. Before summarising Mr Cottrell’s proposals, here are some examples of what has happened when these regulators fail to do their jobs properly, or at all:

(1) The Securities and Exchange Commission (SEC): This entity must enforce its regulations with vigour, in the context of the further reforms that Mr Cottrell recommends, below:

The Chairman of the Senate Banking Committee, Christopher Dodd, and Senator Jack Reed, have asked the Government Accountability Office (formerly the Government Accounting Office, GAO) to investigate why sanctions imposed by the SEC plunged by 51%, to $1.6 billion, in the regulator’s most recent fiscal year. According to the SEC’s Annual Reports, it opened 15% fewer probes during the same period, than in the preceding fiscal year (20).

For instance, the Securities and Exchange Commission failed to enforce its regulations in the case of American Business Financial Services, Inc. (ABFS), located in Philadelphia, PA, which operated from 1988 until it declared bankruptcy in January 2005.

This case is revealing in the context being considered here.

ABFS financed its operations by selling its notes to the general public, by means of newspaper advertisements and mass mailings, which promised high interest yields. The notes it sold carried no collateral and were not insured, so that they were worthless when ABFS declared bankruptcy (21). More than 22,000 individual investors lost a total of approximately $750 million. The bankruptcy trustee has filed suit against Bear Stearns & Co., J. P. MorganChase & Co., Morgan Stanley and Crédit Suisse, to recover monies lost when these investment banks allegedly allowed or enabled ABFS to overstate the value of assets on its books (22).

ABFS extended loans to borrowers burdened with poor credit, worth more than $6.0 billion in the aggregate, which were then packaged for marketing purposes, but which essentially represented securitised pools of sub-prime loans. ABFS also secured cash from individual investors by selling the investors uncollateralised notes via public offerings (23).

The investment banks converted the sub-prime loans and uncollateralised notes into ‘interest only strips’, or ‘residuals’ which represented ‘the right to receive future cash flows from securitised loans’ (24). ABFS assigned to these securities a value much higher than their actual worth because the falsification of these values made ABFS look more financially sound than was in fact the case.

Specifically, ABFS booked more than $500 million in ‘fictitious assets’ when the investment banks allowed ABFS to underestimate early repayments of the ‘sub-prime’ loans. ABFS assumed its had a 23% prepayment rate when, in reality, Crédit Suisse had questioned the percentage as being too low. In fact, repayment rates were running at between 30% and 35% of total such ‘assets’ (25) .

Wall Street investment banks finally stopped securitising AFBS sub-prime loans when one investment bank received a letter dated 15th May 2003, addressed to the Federal Bureau of Investigation (FBI) and the SEC asking: ‘Who is protecting these (AFBS) investors?’

Notwithstanding this state of affairs, the Securities and Exchange Commission did not launch an investigation into the behaviour of ABFS until 2004, when ABFS asked for SEC approval to enable it to make another public offering (26). In this, as in so many other instances, the US Securities and Exchange Commission simply failed to enforce its own regulations.

We have summarised these regulations in our reports since 2006, in case this fact had escaped the SEC’s notice. It hasn’t escaped the notice of the financial community generally, so we are entitled to ask why the Securities and Exchange Commission appears to have been an exception.

The SEC regulations of specific relevance to these issues that NEED TO BE ENFORCED include the following [see also the usual Annex at the end of this report].

These details have been published here for at least 18++ months, so as to emphasis the chronic necessity of substituting the Rule of Law for the Law of the Jungle:

• NASD Rule 3120, et al.
• NASD Rule 2330, et al
• NASD Conduct Rules 2110 and 3040
• NASD Conduct Rules 2110 and IM-2110-1
• NASD Conduct Rules 2110 and SEC Rule 15c3-1
• NASD Conduct Rules 2110 and 3110
• SEC Rules 17a-3 and 17a-4
• NASD Conduct Rules 2110 and Procedural Rule 8210
• NASD Conduct Rules 2110 and 2330 and IM-2330
• NASD Conduct Rules 2110 and IM-2110-5
• NASD Systems and Programme Rules 6950 through 6957

(2) Federal Trade Commission: This Government structure has authority to investigate fraudulent transactions in all markets.

According to a plea bargain agreement announced on 8th April 2008, a former Board Member at the New York Mercantile Exchange pleaded guilty to two felony counts relating to illegal natural gas trading. Mr Steven Karvellas, aged 48, made trades and then waited to watch how they turned out before assigning the trades either to his own account or to his client’s account – an abuse referred to as ‘trading ahead of the customer’, which is a violation of the SEC’s Fair Dealing With Customer rules. Karvellas was a floor Exchange Board Member of the publicly traded Nymex Holdings, Inc., and indeed headed up its compliance review committee when the illegal trades took place (27).

Under the supervision of the Commodity Futures Trading Commission (CFTC), floor brokers such as Mr Karvellas can operate both as broker for customers and trade for own account operations. This practice is referred to as the ‘dual trader’ mode, with the floor broker under an obligation to act at all times in the customer’s best interest, a responsibility that entails an obligation upon the broker to seek the best possible prices for the customer 28 .

Ironically (perhaps not, since we are of course dealing with the familiar double-mindedness here), in a letter addressed in 2002 to Nymex Holdings members as part of his campaign for re-election to the Board, Mr Karvellas opined that ‘the shocking collapse of Enron indicates that our Exchange does wear a white hat in the financial world. We illustrate how markets should operate, honestly and with openness and transparency that gains the public’s trust’ (29).

In January 2008, a Grand Jury subpoenaed a five-year-old trading ticket related to this investigation and to Mr Steven Karvellas, who pleaded guilty to tampering with physical evidence by ordering a subordinate to destroy the subpoenaed trading ticket (30).

Nymex, which has been or is currently being acquired by the Chicago Mercantile Exchange (CME, Inc.), and other floor exchanges, have been financially hurt by the emergence of electronic trading, and have attempted to reduce costs and to speed up the ‘open-outcry’ process [see Glossary] (31).

But floor trading remains vulnerable to manipulation: for instance, in 2005, 15 traders at the New York Stock Exchange (NYSE) were indicted on charges of cheating investors. Although many of these traders actually won their criminal cases, the Exchange realised that it had to ‘do something’, and upgraded its surveillance systems at a cost of about $20 million (32).

These examples, which could be replicated here ad nauseam, illustrate the absolute necessity for a regulatory régime that is underpinned by enforcement, which must be implemented without fear or favour at all times – so that everyone participating in the financial markets is aware of the severe consequences of any breach of the rules and regulations.

Talk of operating on the basis of relatavist ‘principles’ is not only irresponsible and unprofessional: it encourages the misplaced belief among the easily swayed and the corrupt, that the ‘way forward’ need not include enforcement as conceived in the 1930s, so that everyone can feel comfortable and at ease – a recipe for the proliferation of fraudulent finance on an open-ended basis.

Moreover it is crystal clear that the dishonesty, hesitation and the sheer confusion surrounding the ‘Paulson’ proposals have severely exacerbated a fragile situation and the crisis of confidence which the criminal incompetents in charge of US financial affairs have never intended, on the basis of the massive evidence of their ongoing corruption, should be addressed in an orderly fashion, since their agenda has all along diverged from the public interest.

Almost as though it had suddenly woken up from a long slumber, the SEC was reported to have launched a probe on 13th July 2008 into the manipulation of stock prices through the spreading of false rumours, focusing on compliance controls which are supposed to be applied by traders and investment houses. This initiative appeared to mimic a similar attempt by the UK Financial Services Authority FSA) in London, to crack down on rumour-mongering and short-selling in the UK market following the plunge in the shares of HBOS (Halifax Bank of Scotland) last March.

The FSA was unsuccessful in its search, suggesting that the SEC’s response represents a belated cosmetic attempt to be seen to be ‘doing something’, since the SEC must certainly be aware of the FSA’s failed investigation. However nothing that the US regulator does now, with the benefit of any hindsight and with the fraudulent prospects implied by the Treasury’s proposals hanging over its head, can make up for its past failure to enforce its own regulations – as a consequence of which fraudulent securities operations/scams have assumed colossal and, as we have been observing, catastrophic proportions, in recent years.

The SEC’s failure and dereliction of duty is no reason for abandoning the enforcement approach in favour of a contrived, weak ‘principles-based’ approach. On the contrary, what remains essential is proper and rigorous enforcement of appropriate regulations.

(B) Mr Cottrell insists that the following structure and disciplines should be created and imposed:

Office of Inspector General for Financial Markets Compliance (OFMC):
A new regulatory entity with the function described by its title should be established by Statute, who would be required to report directly to the Chairman and ranking Member(s) of the following US Congressional Committees, who would be considered to be their superiors (Bosses):

• The US Senate Financial Services Committee.

• The US House of Representatives’ Financial Services Committee.

All management and field personnel employed by the Office of the Inspector General for Financial Markets would need to be fully trained and qualified compliance officers. Specifically:

• They must be field-tested and recognised as licensed compliance officers, and they must all be licensed under the following régimes:

(1) Financial Industry Regulatory Authority (created in July 2007 through consolidation of the NASD (National Association of Securities Dealers) and the NYSE (the New York Stock Exchange) member regulation régimes [see also: Glossary]) with respect to the following examinations:

• Series 24 [General Securities Principal];
• Series 27 [Financial and Operations Principal];
• Series 4 [Registered Options Principal];
• Series 51 [Municipal Fund Securities Principal]; and:
• Series 53 [Municipal Securities Principal].

(2) They must be licensed members of NYSE Member firms.

(3) They must be licensed as US Treasury compliance officers.

Nothing short of the deployment of management and field personnel qualified to these demanding industry standards will suffice. Because this is so, it is self-evident that the half-baked, confused and deliberately fragmentary proposals put forward by the President’s Working Group, which are intended to OBFUSCATE the situation and to lodge total power in the hands of the Presidency by default, with no checks and balances at all, represent a fraudulent prospectus, which should be consigned to oblivion forthwith. NO FURTHER CONSIDERATION SHOULD BE GIVEN TO THEM.

(C ) Michael Cottrell further demands (recommends is much too weak a word here) that The Glass-Steagall Act of 1933 must be re-enacted in order to re-establish once and for all the very stringent regulatory requirements enshrined in the 1933 and 1934 Securities Acts.

In the same context, and in parallel, the divisive Gramm-Leach-Bliley Act – written by lobbyists for the banking sector – must be repealed.

(D) Regulation of Credit and Debt Derivatives:
An essential further reform will be the development of overdue new securities regulations specifically focused on the creation, use and risk limitation of structured instrument vehicles (credit and debt derivatives). These new regulations would be enforced by the Securities and Exchange Commission (and the Federal Trade Commission, as appropriate), and of course subject to compliance oversight by the trained personnel of the newly established Office of the Inspector General for Financial Markets Compliance [see above].

(E) Finally, the revitalised regulatory regime for all US financial markets will be seen to be entirely rules-based, with all ‘legacy’ ‘principles-based’ thinking and language expunged from the system, which must be backed up by rigorous enforcement applied impartially and across the board.

SEC, FTA AND OFMC management and field personnel would be well remunerated, but at the same time subject to specified and appropriately severe sanctions in cases of official corruption within these structures. One reason why the regulations have not been properly enforced, or applied at all, in recent years is that the existing agencies, and/or certain personnel within them, have been corrupted. Fish rot from the head.

CONCLUSION
This far simpler regulatory régime requires a minimum of new legislation, building upon existing regulatory structures and experience, with the introduction of precisely ONE new US agency (the OFMC), compared with SEVEN new burdensome, confusing, bureaucratic, intentionally overlapping, obfuscatory agencies as proposed by the Working Group on Financial Markets (33).

Therefore, these straightforward reforms, instead of being spurious and deliberately opaque and spread out over an indeterminate timeframe, exacerbated by the carrying out of vague ‘studies’ as specified in the ‘Paulson’ proposals, could be implemented within a very limited timeframe at an early stage of the next Presidency. Establishing ONE new agency instead of SEVEN should, of itself, provide a powerful incentive for adopting Mr Cottrell’s straightforward proposals and for rejecting the hugely expensive and mischievous dog’s dinner put forward by the Working Group.

Such an initiative would do more to restore confidence in the battered US financial markets than innumerable further confused announcements by the ‘Paulson’ Treasury and other intermeddlers, and would place the incoming Administration on a sound financial market footing, without which everything it touches will disintegrate as has happened under the criminalised Bush II Presidency.

In short, these are straightforward, practical reforms which can be legislated for and implemented quickly. They can also be publicised with advantage ahead of their implementation, so that the US and world financial markets are made appropriately aware of the smack of firm, sound and decisive governance, with all that this approach will imply for the restoration of confidence in the battered financial markets in the United States and worldwide. (34).

Notes and References:

1. Howard Abadinsky, ‘Organized Crime’, 6th Edition, Belmont,
Wadsworth Thompson learning, 2000, pages 49-58

2. Gary Giroux, Ph. D., ‘A Short History of Accounting and Business’, available at: http://acct.tamu.edu/giroux/financial.html (Internet), page 1.

3. Giroux, op. cit., page 1.

4. Giroux, op. cit., page 2.

5. Michael C. Cottrell, M.S., ‘Elite Power & Capital Markets’ thesis submitted in partial fulfillment of the requirements for Master of Science, Mercyhurst College, 2001, page 33.

6. Cottrell, op. cit., page 33.

7. Cottrell, op. cit., page 33.

8. John H Hollands, Acting Director, Investment Company Division, Securities and Exchange Commission (SEC), ‘Government Regulation of The Distribution of Investment Company Shares’, dated 8th October 1941, page 2.

9. Hollands, op. cit., page 2.

10. Hollands, op. cit., page 2.

11. Hollands, op. cit., page 2.

12. Hollands, op. cit., page 2.

13. Hollands, op. cit., page 2.

14. ‘Treasury’s Summary of Regulatory Proposal’, The New York Times Company, 29th March 2008, available at: http://www.nytimes.com (Internet).

15. Kara Scannell and Michael R Crittenden, ‘Treasury’s Blueprint: the View from Washington’,
The Wall Street Journal, 31st March 2008, Section A, page 15.

16. Jesse Westbrook, ‘SEC Overhaul Bid by Bush Condemned by SEC Chairman (Update 1)’, New York, Bloomberg, L.P., 8th April 2008, available at: http://www.bloomberg.com (Internet), page 1.

17. Westbrook, op. cit.,, page 1.

18. Westbrook, op. cit., page 2.

19. Westbrook, op. cit., page 2.

20. Westbrook, op. cit., page 1.

21. Steve Strecklow, ‘Subprime Lender’s Failure Sparks Lawsuit Against Wall Street Banks’,
The Wall Street Journal, 9th April 2008, Section A, page 1.

22. Strecklow, op. cit., page A1.

23. Strecklow, op. cit., page A14.

24. Strecklow, op. cit., page A14.

25. Strecklow, op. cit., page A14.

26. Strecklow, op. cit., page A14.

27. Aaron Lucchetti and Gregory Meyer, ‘Dual Traders Under Fire’, The Wall Street Journal,
9th April 2008, Section C, page 1.

28. Lucchetti and Meyer, op. cit., page C18.

29. Lucchetti and Meyer, op. cit., page C1.

30. Lucchetti and Meyer, op. cit., page C18.

31. Lucchetti and Meyer, op. cit., page C18.

32. Lucchetti and Meyer, op. cit., page C18.

33. The seven new agencies recommended by the President’s Working Group on Financial Markets, which of course obfuscate the regulatory environment out to infinity, with intent, are: Mortgage Origination Commission; Market Stability Regulator; Prudential Financial Regulatory Agency; Government-Sponsored Enterprises Regulator; Conduct of Business Regulatory Agency; Federal Insurance Guarantee Corporation; and: Corporate Finance Regulator.

34. The one dimension of Mr Cottrell’s practical reforms that will require an appropriate lead-time concerns the recruitment of the necessary trained and licensed management and field compliance personnel for the new Office of the Inspector General for Financial Markets Compliance (OFMC).

In addition to the need to remunerate such expert personnel sufficiently well not least in order to minimise the temptation to succumb to bribery (which has bedeviled enforcement of late), financial compensation must reflect the expertise of recruited staff and the exceptional importance of their responsibilities. At the same time, it will not be necessary to recruit a large compliance staff. A tight ship is recommended, given that a modest staff can be motivated to higher levels of achievement, especially since the recommended ethos would be one of sober determination to stamp out market abuses and corruption generally. Despite the ravages inflicted by the permissive financial market environment in recent years, it is believed that the pool of such qualified experts who are keen to enforce the Rule of Law in the United States remains of sizeable proportions.

GLOSSARY OF U.S. FINANCIAL MARKET DEFINITIONS

References only entries specifically germane to the market issues purportedly addressed by the President’s Working Group on Financial Markets, and relevant to Mr Cottrell’s alternative proposal:

• Annunzio-Wylie Anti-Money Laundering Act of 1992:
This legislation enlarged the definition of ‘financial transaction’, and made money-transmitting, without reporting, a crime. Source: Howard Abadinsky, ‘Organized Crime’, 6th Edition, Belmont: Wadsworth/ Thompson Learning, Inc., 2000, page 411.

• Anti-Drug Abuse Act of 1988:
This law detailed undercover operations involving money-laundering. Source: John Madinger and Sydney A. Zalopany, ‘Money Laundering: A Guide for Criminal Investigators’, New York: CRC Press, LLC, 1999, page 43.

• Anti-Trust Laws:
US Federal legislation designed to prevent monopolies, cartelisation and restraint of trade. Landmark statutes include:
(1): Sherman Anti-Trust Act of 1890, which prohibited actions or contracts tending to create a monopoly and initiated an era of trust-busting;
(2): Clayton Anti-Trust Act of 1914, passed as an amendment to the Sherman Act, which dealt with local price discrimination, interlocking directorates, holding company activities and restraint of trade; and:
(3): Federal Trade Commission Act of 1914, which created the Federal Trade Commission (FTC), with the power to conduct investigations and the power to issue orders preventing unfair practices in interstate commerce. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Ed., Happauge: Barron’s Educational Series, 2006, s.v. ‘Antitrust Laws’.

•Bailout Bill:
See Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA).

• Bank Holding Company Act of 1956:
This act brought, for the first time, holding companies under the banking regulations, and provided that the holding company was subject to the same regulation and examinations as member banks. A Holding Company is a company that exercises control over another via voting shares. Organisation as a holding company allows a banking firm to engage in other non-deposit taking activities, such as discount brokerage operations, securities underwriting, and general public or industrial leasing.
Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA 13th February 2002; Munn, ‘Encyclopedia of Banking and Finance’, page 84; Fitch, Dictionary of Banking Terms, page 225. See: Financial Holding Company.

• Bank Holding Company Act Amendments of 1970:
This legislation expanded the Bank Holding Company Act of 1956 by legislating for a new Holding Company that controls only one bank, and limiting the permissible activities of these entities to those ‘closely related to banking’. The effect of these amendments was to permit one-bank holding companies, such as Bank of New York Company, Inc., to become conglomerates with subsidiaries in non-banking fields without regulation. Sources: Mr Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, op. cit., thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, Administration of Justice Department, Mercyhurst College, Erie, PA, on 13th February 2002; Munn, ‘Encyclopedia of Banking and Finance’, page 87; Thomas A. Eder, Thompson Desktop Financial Directory, Volume 3, Skokie: Thompson Financial Publishing, Inc., 1993, page 252. See: Financial Holding Company.

• Banking Act of 1935:
This legislation implemented changes to the Federal Reserve Board, prohibiting any banker from serving on the Board of Directors, or being an officer or employee, of more than two institutions. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; Munn, ‘Encyclopedia of Banking and Finance’, page 89. See: Financial Holding Company.

• Bank Secrecy Act of 1970:
This legislation, the formal title of which is the Currency and Foreign Transactions Reporting Act of 1970, extended to the Secretary of the US Treasury great flexibility in respect of official definitions of ‘monetary instruments’, which could now all of a sudden include ‘coins and currency of a foreign country, travelers’ checks, bearer negotiable instruments, bearer investment securities, stock on which title is passed on delivery’. The ostensible intention of this law was to deter criminal activity in order to assist criminal investigations by requiring all financial institutions to report large cash transactions and the transportation of such instruments initially exceeding $5,000, (now, amounts that in excess of $10,000). Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; See also Munn, ‘Encyclopedia of Banking and Finance’, p.109; John Madinger, Sydney A. Zalopany, ‘Money Laundering: A Guide for Criminal Investigators’, New York, CRC Press, LLC, 1999, page 43.

• Basel-II:
The Bank for International Settlements (BIS), located in Basel, Switzerland, has established and provides the Secretariat for the Basel Committee on Banking Supervision, which consists of senior representatives of bank supervisory authorities and central banks from Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, Netherlands, Spain, Sweden, Switzerland, the United Kingdom and the United States. Basel-II is the comprehensive updated and agreed version of ‘International Convergence of Capital Management and Capital Standards’ revising the 1988, 1996 and 2005 texts to secure an international standard on revisions to supervisory regulations governing the capital adequacy of internationally active banks. Source. and for further information: Basel Committee on Banking Supervision, ‘International Convergence of Capital Measurement and Capital Standards’, Basel, Press & Communications, 2004, available at: http://www.bis.org (Internet).

• Bucket Shop:
An illegal brokerage firm which accepts orders from customers but does not execute them right away, as Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) regulations require. Bucket shop brokers confirm the price that the customer asked for, but in fact make the trade at a time considered to be advantageous to the broker, whose profit is the difference between the two prices. Sometimes bucket shops neglect to fill the customer’s order and just pocket the money. Main source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Bucket Shop’.

• Clayton Anti-Trust Act of 1914:
This law was passed in order to increase competition in business, by restricting the corporate activity of acquiring other competing corporations or the practice of interlocking directorships. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; additionally: Jack C Plano and Milton Greenberg, ‘The American Political Dictionary’, 4th Edition, Hinsdale, The Dryden Press, 1976, page 328. See: Anti-Trust Laws.

• Clear:
(a): In banking: Collection of funds on which a cheque (check) is drawn, and payment of these funds to the holder of the check.
(b): In the securities sector: Comparison of the details of a transaction between brokers prior to settlement; final exchange of securities for cash on delivery. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Clear’.

• Commodity Futures Trading Commission (CTFC):
An independent agency created by Congress in 1974 which is responsible for regulating the US commodity futures and options markets. The CFTC is responsible for ensuring the integrity of the commodity futures and options markets everywhere, and for protecting market participants against manipulation, abusive trade practices, and fraudulent operations. Primary source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘CFTC’.

• Commodity Futures Contract:
A Futures Contract that is tied to the price movements of a particular commodity. This arrangement enables contract buyers to purchase a specific amount of a listed commodity at a specified price on a particular date in the future. The price of the contract in question is determined using the ‘open outcry’ system on the floor of a US commodity exchange such as the Chicago Board of Trade or the Commodity Exchange in New York. Commodity Futures Contracts are typically based upon (a) meats (cattle and pork bellies); (b) grains (corn, oats, soybeans and wheat); (c) key metals (gold, silver and platinum); and energy products (heating oil, natural gas, and crude oil). Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Commodity Futures Contract’.

• Commercial Bank:
A State or National Bank owned by stockholders that accepts demand deposits, makes commercial and industrial loans, and performs other banking services for the public. The phrase Full Service Bank covers banks that, as is the case with many commercial banks, supply trust services, foreign exchange, trade financing and international banking services. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Ed., Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Comm. Bank’.

• Compliance Department:
A department typically established by brokers and all US organised stock exchanges to oversee market activity and make sure that trading and other activities comply (in the United States) with Securities and Exchange Commission (SEC) and specific Exchange regulations. A company that does not adhere to the rules can be delisted. And a trader or brokerage firm that violates the rules can be barred from trading. Main source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Compliance Department’.

• Compliance Examination:
Periodic bank examination by a Federal regulatory agency to ensure compliance with consumer protection regulations, such as the Community Reinvestment Act, the Equal Credit Opportunity Act and the Truth in Lending Act. Financial institutions are required by law to issue reports at regular intervals – for example, an annual statement of their mortgage lending in the lender’s market area. Compliance examinations are intended to uncover any hidden violations of consumer protection regulations so that remedial action can be taken. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Ed., Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Compliance Examination’.

•Consumer Credit Protection Act of 1968: See: Truth in Lending Act.

• Criminalism: A new word invented by the Editor of this service, meaning the perpetration and exploitation of organised criminal operations in the interests of political strategy and/or one or more secret agendas; noun, ‘criminalist’, an operative or other cadre who engages in criminalist activities and assumes that he is protected and can therefore continue such activities beyond and above the reach of the Rule of Law. The Editor first used this word in the context of Soviet criminal operations, as exposed in Soviet Analyst, and has since extended it to cover the American variant.

• Currency and Foreign Transactions Reporting Act of 1970: See: Bank Secrecy Act.

• Debenture:
A certificate or bond acknowledging a debt on which fixed interest is being paid. Source: Oxford Senior Dictionary, Oxford University Press, 1984.

• Depository Institutional Deregulation and Monetary Control Act of 1980:
This law gave the Federal Reserve Board tighter control over monetary policy. It also required the Fed to assign examiners to examine foreign operations of State member banks, and prohibited the Fed from rejecting any application from a one-bank holding company on the basis of a stock loan, unless that applicant’s financial arrangements were deemed to be unsatisfactory. The applications were to be judged on a case-by-case basis. The Act further proclaimed that collateral was no longer required to support Federal Reserve notes held in the vaults of the Federal Reserve banks, and that the kinds of eligible collateral for Federal Reserve notes were expanded to include those of foreign governments and/or agency or any other ‘asset’ purchasable by Federal Reserve Banks. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; Munn, ‘Encyclopedia of Banking and Finance’, pages 252 and 253.

• Derivative Instrument (Derivative):
A contract the value of which is determined from publicly traded securities, interest rates, currency exchange rates, or market indices. Derivative Contracts are often ostensibly used for the purpose of ‘protecting’ assets against changes in value. Types of derivatives include the following:

(1): Over-the-counter derivative ‘products’, such as currency swaps and interest rate swaps, which are privately negotiated bilateral agreements, transacted OFF the organised US exchanges. In the currency markets, forward delivery contracts allow traders to lock in current prices when buying and selling baskets of currencies for future delivery.

(2): Derivative securities: Bond-like securities created when pools of loans and mortgages are packaged and sold to investors. In the hands of knowledgeable users, derivative contracts have many applications in the floating interest environment, such as managing currency and interest rate risk, or locking financing costs in by swapping floating rate debt for fixed-rate debt.

Derivatives gained public notoriety in the 1990s when a number of corporations and municipalities embarked upon the use of derivatives for speculative purposes (known as ‘taking a view on the market’), and suffered large losses when interest rates moved against them. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Derivative’.

• Disclosure:
Release by listed companies of all information, both positive and negative, that might bear on an investment decision, as required by the Securities and Exchange Commission (SEC) and the stock exchanges. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Compliance Examination’.

• Edge Act:
Passed in December 1919, the Edge Act, under the heading ‘Banking Corporations Authorized to Do Foreign Banking Business’, permitted the establishment of foreign banking corporations that aided in the financing of foreign trade. This allowed US banks to establish branches in foreign countries to accommodate American corporations engaged in foreign trade transactions. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, his thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science (M.S.), The Administration of Justice Department, Mercyhurst College, 13th February 2002; Munn, ‘Encyclopedia of Banking and Finance’, page 289.

• Equal Credit Opportunity Act of 1974:
Monitored by the Federal Trade Commission (FTA), this legislation seeks to ensure that all US consumers are given an equal chance to obtain credit. The Act prohibits discrimination in the granting of credit on the basis of race, colour, religion, national origin, sex, marital status, age, receipt of income from any public assistance scheme, and good faith exercise of any rights under consumer protection legislation. The US Department of Justice may file a lawsuit under the Act where a pattern or practice of discrimination appears to exist. For further information, see: http://www.usdoj.gov/crt/housing/housing_ecoa.htm (Internet).

• Emergency Banking Relief Act:
Passed on 9th March 1933, this Act was triggered following the national liquidity crisis that followed the stock market crash of 29th October 1929 and the extended ‘bank holiday’ of the 4th-12th March 1933. The bank holiday closed all banks nation-wide for one week by order of President Franklin D Roosevelt, to control the wave of banking failures and to restore confidence in the United States’ battered banking system. This legislation permitted banks to issue new stock, with the new stock exempt from subjecting the holder to be liable for the bank’s previously issued stock. The Act also authorised the issuance of US Federal Reserve Bank notes that were redeemable in lawful money in the United States, as 100% obligations of the Federal Government. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, Administration of Justice Department, at Mercyhurst College, Erie, PA, 13th February 2002; Moore, ‘The Federal Reserve System’, pages 81-82; Fitch, ‘Dictionary of Banking Terms’, pages 46 and 83.

• Enronisation: A new word coined by the Editor of this service, meaning ‘hollowing out’. Verb: ‘to enronise’; noun: ‘enronist’, a financial criminal who ‘hollows out’ a targeted entity. The essence of the destruction of Enron was that executives and directors formed private partnerships and stole or diverted financial assets or proceeds from the corporation into offshore bank accounts of the partnerships. These diverted monies were then systematically leveraged and hypothecated into high-yield investment and other programs which wound up being far more profitable than Enron itself. Such illegitimate financial arrangements proliferated, so that the original enterprise, Enron, was ‘hollowed out’, while the illicit partnerships prospered, with 100% of the proceeds being held undeclared and untaxed offshore. ‘Enronisation’ strategies are applied not only to companies, but also to whole countries (e.g., Ireland, Zimbabwe, Iceland, probably also Spain (forthcoming)).

• Federal Reserve Act of 1913:
The purpose of this legislation, according to the precise language of the Act, was ‘to provide for the establishment of US Federal Reserve Banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States and for other purposes’. The Act established two basic structures:
(1): A central body known as the Federal Reserve Board; and:
(2): Not more than 12 Reserve banks located throughout the country. The Federal Reserve Board is comprised of seven members appointed by the President of the United States and confirmed by the US Senate for 14-year terms. Sources: Mr Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, his thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, Administration of Justice Department, Mercyhurst College, Erie, PA, on 13th February 2002 Carl H. Moore, The Federal Reserve System, Jefferson: McFarland & Company, Inc., 1990, page 7; Fitch, Dictionary of Banking Terms, page 46.

• Federal Trade Commission Act of 1914:
This legislation established the Federal Trade Commission as the ‘watchdog of competition’, and as a comprehensive regulatory authority empowered to protect the consumer against ‘unfair methods of competition’. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, the thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science (M.S.), for The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; See also: Munn, ‘Encyclopedia of Banking and Finance’, page 383. See: Anti-Trust Laws.

• Financial Future:
A Futures Contract based upon (relating to) a financial instrument. Such contracts usually move under the influence of interest rates: as interest rates rise, contracts fall in value; as rates decline, contracts gain in value. Examples include: Treasury Bills, Treasury Notes, GNMA Pass-Throughs, foreign currencies, and Certificates of Deposit (CDs). Main source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Ed., Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Financial Future’.

• Financial Guarantee:
A non-cancellable indemnity bond guaranteeing the timely payment of principal and interest due on securities by the maturity date. If the issuer defaults, the insurer will pay out a fixed sum of money to holders of the securities. Financial guarantees are further written by banks which are allowed to operate in the insurance business by the Garn-St Germain Act of 1982, which prohibited banks from entering the insurance business. Insurance companies selling bond insurance must be monoline underwriters, a status which precludes their direct ownership by property and casualty insurance corporations. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Financial Guarantee’

• Financial Holding Company: The Bank Holding Company Act of 1956 prohibited any affiliations between banks and insurance companies (referred to as ‘firewall restrictions’). A Bank Holding Company qualifies as a Financial Holding Company if:
(1): Its banking subsidiaries are ‘well capitalised’ and ‘well managed’; and:
(2): It files with the Federal Reserve Board a certification to such effect and a declaration that it elects to become a Financial Holding Company.

Securities firms and insurance companies must undergo a two-stage process: first, they must qualify as Bank Holding companies under the 1956 Act; and secondly they must then qualify as Financial Holding Companies. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Financial Holding Company’.

• Financial Industry Regulatory Authority (FINRA): FINRA was brought into existence in July 2007 through consolidation of the National Association of Securities Dealers (NASD) and NYSE Member Regulation. It is the largest US non-governmental regulator and covers all securities firms doing business in the United States. FINRA oversees nearly 5,000 brokerage firms, about 172,000 branch offices and more than 676,000 registered securities representatives. Source: Financial Regulatory Authority, corporate information ‘About FINRA’: copyright 2008 FINRA; this document is available from: http://www.finra.org (Internet).

• Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA):
Enacted on 9th August 1989, this legislation addressed the crisis affecting the Savings and Loan Associations (‘thrifts’) after the sector had been ‘enronised’ by the criminalist kleptocracy headed by George H. W. Bush Sr. Also known as the Bailout Bill, this legislation revamped the regulatory, insurance and financing structures, establishing the Office of Thrift Supervision. It created:

(1): The Resolution Trust Corporation (RTC) which, operating under the management of the Federal Deposit Insurance Corporation (FDIC), was charged with closing or merging institutions which had become insolvent and would be becoming insolvent in the future;

(2): The Resolution Funding Corporation (a.k.a. REFCORP), which was charged with borrowing from private capital markets to fund the RTC’s operations to manage the remaining assets and liabilities that had been taken over/assumed by the Federal Savings and Loan Insurance Corporation (FSLIC), a Government-Sponsored Enterprise (GSE), prior to 1989;

(3): The Savings Association Insurance Fund (SAIF), which was to replace the FSLIC as the insurer of ‘thrift’ deposits and would henceforth be administered by the FDIC separately from its bank deposit insurance programme, which then became the Bank Insurance Fund (BIF); and:

(4): The Federal Housing Finance Board (FHFB), which was charged with overseeing the Federal Home Loan Banks.

• The Resolution Trust Corporation was authorised to accept additional insolvent institutions up to June 1995, after which date responsibilities for the handling of newly failed institutions was shifted to SAIF. This typically convoluted mishmash of arrangements successfully (up to a point) masked and obfuscated the reality, which was that the Savings and Loans Associations (S & Ls) had been systematically scammed and ‘enronised’ by the organised kleptocracy, this being the model for the kleptocracy’s subsequent systematic attacks on the US financial bedrock.

• The overall strategy here was to allow the scandal to escalate to the point where Congressional action became mandatory, whereupon Congress was pressurised to establish institutions that the insiders could then exploit – in this case, to buy up vast portfolios of land and assets for cents on the US dollar, which were then used as collateral for borrowings that were in turn leveraged and hypothecated into high-yield trading programmes for the benefit of the corrupt insider community.

Source for technical information (not the commentary):
John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIERRA)’.

• Financial Institutions Regulatory Act of 1978 prohibits management interlocks by banks operating in the same Metropolitan Statistical Area (MSA). However it exempts the smaller banks, and permits interlocks of up to 49% of a bank’s management officers. See also entry: Interlocking Directorates. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Interlocking Directorates’.

• Financial Operations Officer, of a Securities firm: The financial Operations Officer of a securities firm is equally responsible with the Registered Principal [see Principal, of a Securities firm], for the firm’s financial reports to the SEC and the NASD, for the accurate record-keeping of the firm’s Net Capital Account, and for all trades and customer accounts and correspondence, advertising, and sale literature issued by the company. The Financial Operations Officer must also pass the Series 27 (Financial and Operations Principal) as well as the Series 7 (General Securities Representative) Examinations conducted by the NASD; and must further pass written procedures and oral interview prior to assuming this position with the firm. Source: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, the thesis he submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA, on 13th February 2002; NASD, ‘National Association of Securities Dealers, Inc.: Manual’, April 1998, page 3171; NASD, ‘NASD Compliance Check List’.

• Financial Services Modernization Act (FSMA) of 1999, also known as the Gramm-Leach-Bliley Act: This Act repealed parts of the Glass-Steagall Act of 1933 and the Bank Holding Company Act of 1956. It permits commercial banks, merchant banks, securities firms and insurers to affiliate through the structure called the Financial Holding Company. Under the Act, Nationally (Federally) Chartered Banks are permitted to engage in most financial activities through Direct Subsidiaries. The FSMA permitted Financial Holding Companies to:
1: Lend;
2: Exchange;
3: Transfer;
4: Invest for others;
5: Safeguard money or securities (custodial services);
6: Engage in insurance activities, including insuring and acting as principal, agent, or broker for all types of insurance (including health), and providing financial advice (including the provision of financial advice to investment companies);
7: Issue or sell instruments representing interests in pools of assets that are permissible for a bank to hold indirectly;
8: Underwrite, deal in, or make a market in securities with no limitation as to revenue;
9: Engage in activities outside the United States;
10: Be seized of the following (text is verbatim here): ‘The Federal Reserve Board has determined to be usual in connection with the transaction of banking or other financial operations abroad’.
Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. under: ‘Financial Services Modernization Act’.

• FinCEN [Financial Crimes Enforcement Network] is a bureau of the US Treasury which collects and analyses information about financial transactions in order to combat money laundering, the financing of terrorism, and other financial crimes and fraudulent finance. In line with the double-mindedness which characterises the kakocracy, almost all the senior criminalist figures identified in our reports have themselves been engaged in financing terrorism on a colossal scale.

Created in 1990, FinCEN seeks to realise the potential of critical information-sharing among law enforcement agencies and its other partners in the regulatory and financial communities. While the Financial Crimes Enforcement Network’s task is to safeguard the US financial system from abuses associated with financial crime, including the financing of terrorism, money laundering and other illicit activities, it does nothing the curb the excesses of the criminalists holding high office, who assume that the privileges and power of their offices, together with their prolific use of the ‘Black Arts’ of bribery and blackmail, protect them from the consequences of their actions.

While, therefore, FinCEN’s publicity presupposes that it thinks it is doing a good job, the record inter alia of our reports suggests the reverse. FinCEN was established by order of the Treasury Secretary (Treasury Order Numbered 105-08) on 25th April 1990. In May 1994, its responsibilities were broadened to include regulatory responsibilities, and the US Treasury’s Office of Financial Enforcement (OFE) was merged with FinCEN in October 1994. On 26th September 2002, after the passage of Title III of the USA Patriot Act, Treasury Order Numbered 180-01 [1] made FinCEN an official bureau within the Department of the Treasury.

Under Section 314(a) of the USA Patriot Act of 2001, Federal law enforcement agencies, through FinCEN, are empowered to reach out to more than 45,000 points of contact at over 27,000 financial institutions to locate bank accounts and transactions by persons that may be involved in terrorist financing and/or money laundering. This cooperative partnership between the financial community and law enforcement allows disparate items of information to be identified, centralised, and rapidly evaluated. FinCEN has its headquarters in Vienna, VA. See: www.fincen.gov [Internet].

• Full Disclosure: Public information requirements established by the Securities Act of 1933, the Securities Act of 1934, and the major US stock exchanges. Source: John Downes and Jordan Elliot Goodman, see their ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Full Disclosure’.

• Garn-St Germain Depository Institutions Act of 1982: This Federal law was enacted in 1982, and authorised banks and savings institutions to offer a new type of account, known as the Money Market Deposit Account, which is a transaction account with no interest rate ceiling, to compete more effectively with money market mutual funds. The legislation also gave the Savings and Loan Associations the authority to extend commercial loans; and it gave Federal regulatory agencies the authority to approve, for the first time, interstate acquisitions of failed institutions and also savings institutions. Thus, the Act effectively created the environment for the subsequent enronisation of the Savings and Loan Associations, providing inter alia that:

(1): Savings and Loan Associations were authorised to extend commercial, corporate, business or agricultural loans up to 10% of assets after 1st January 1984;

(2): The deposit interest differential, allowing Savings and Loans and Savings Banks to offer rates on interest-bearing deposit accounts that were 0.25 of 1% higher than commercial banks, was lifted, as of January 1984;

(3): The Act authorised a new capital assistance program, the Net Worth Certificate Program, under which the US Federal Savings and Loan Insurance Corporation and the Federal Deposit Insurance Corporation would be able to purchase novel capital instruments called Net Worth Certificates from savings institutions with net worth-to-assets ratios of under 3%, and would subsequently redeem the certificates as they regained financial health;

(4): The Act permitted Savings and Loan Associations to offer checking accounts (demand deposit accounts) to individuals and business checking accounts to customers who had other accounts;

(5): Savings and Loans were authorised to increase their consumer lending from 20% to 30% of assets, and to expand their dealer lending and floor-plan loan financing;

(6): The Act raised the ceiling on direct investments by savings institutions in nonresidential real estate from 20% to 40% of assets, and also allowed investment of 10% of assets in education loans for any educational purpose, and up to 100% of assets in state and municipal bonds;

(7): The Act pre-empted State restrictions on enforcement by lenders of due-on-sale clauses in most mortgages for a three-year period ending on 15th October 1985, and further authorised State chartered lenders to offer the same kind of alternative mortgage deals that nationally chartered financial institutions were allowed to offer (opening the door to what became the ‘sub-prime’ crisis;

(8): The Act authorised the Comptroller of the Currency to charter Bankers’ Banks, or depository institutions owned by other banks;

(9): It made State chartered industrial banks eligible for Federal deposit insurance; and:

(10): It raised the legal lending limit for National Banks from 10% to 15% of their capital and surplus.

Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Garn-St. Germain Depository Institutions Act’. See also: Financial Guarantee; Savings and Loan Deregulation.

• Glass-Steagall Act of 1933:
Legislation passed by Congress which:

(1): Authorised deposit insurance;

(2): Prohibited commercial banks from owning full-service brokerages (Securities Houses of Broker/Dealers);

(3): Prohibited banks from undertaking investment banking activities, for instance underwriting corporate securities or municipal revenue bonds;

(4): Was framed to insulate bank depositors from the risk involved when a bank deals in securities, in order to prevent banks from collapsing.

The Glass-Steagall Act was disabled by the Financial Services Modernization Act (a.k.a. the Gramm-Leach-Bliley Act, a.k.a. the Financial Services Modernisation Act). Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Glass-Steagall Act’.

• Gramm-Leach-Bliley Act of 1999:
See: Financial Services Modernization Act; Glass-Steagall Act of 1933.

• Guarantee: This entails the acceptance of responsibility for payment of a debt or for performance of some obligation if the person (entity) primarily liable fails to perform. The guarantor acquires a Contingent liability – namely, a potential liability that is not going to be recognised in accounts until the outcome becomes probable in the opinion of the company’s accountant. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Guarantee’.

• Guaranteed Bond: A Bond that is characterised by the fact that the principal and interest are guaranteed by a firm other than the issuer. Both guaranteed stock and guaranteed bonds become, in effect, debenture (unsecured) bonds of the guarantor. Source: John Downes and Jordan Elliot Goodman, see: ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Guaranteed Bond’.

• High-Yield Investment Program:
A sophisticated scam perpetrated in many instances by corrupt elements of US intelligence and associates, masterminded inter alia by the arch-criminalist George H. W. Bush Sr. and his corrupt co-conspirator, Dr Alan Greenspan, the former Chairman of the Federal Reserve Board. Due to overuse of this term by the corrupt operators, it has become more or less synonymous with the generic term ‘fraudulent finance’, and with Ponzi and Pyramid Schemes (known as ‘pyramid-selling schemes’ in Britain). Experts are divided as to whether most High-Yield Investment Programs are Ponzi schemes, or not. Our own investigations suggest that colossal sums of stolen and duplicated funds (as explained in the Wantagate reports) were also used in these schemes, with stolen money being employed as purported back-up for promised and actual initial payouts. However these were never intended to occur beyond the first and perhaps the second layers, as the fraudulent finance techniques were used to entice retail investors into parting permanently with their funds, often after signing illegal Non-Disclosure Agreements.

High-yield investment programs were/are able to collect large amounts of money for the criminalist operators because initial payoffs to first and second round participants (financed from the stolen money in the case of the giga-scams presided over inter alia by the aforementioned master crooks) gave the scams momentum by spreading news of the sizeable initial payments by word of mouth – a situation that prevails as long as new participants can be found and/or old participants are foolish enough to leave their money in the schemes in the hope of gaining high rolled-up interest on their initial investments. Participants are usually attracted by some form of an appeal to emotion or faith that the program will help them to achieve rapid financial freedom. High-Yield Investment Programs may also mirror pyramid-selling schemes by offering current investors incentive commissions, for instance, 9% of investment by the participant on top of promised accruals, to recruit new investors.

Notorious documented High-Yield Investment Programs include:
(1): OSGold, founded as an e-gold ‘imitation’ in 2001 by David Reed, It folded in 2002. According to a lawsuit filed in US District Court in 2005, operators of OSGold may have made off with $230 million.

(2): The second largest documented High-Yield Investment Program was PIPS (People In Profit System), or Pure Investors. Started by Bryan Marsden in 2004, this scheme spanned more than 20 countries. PIPS was investigated by Bank Negara Malaysia in 2005, resulting in Marsden and his wife being charged in a Malaysian Court with some 97 counts of money laundering more than 77 Malaysian ringgit, equivalent to $20 million [New Straits Times, 11th October 2006]. Yet even after these charges were brought, many of Marsden’s followers continued to support him and to believe that they would be seeing their money in future. A similar rationalisation and denial syndrome can be observed in many other High-Yield Investment Program contexts.

(3): Indicted operators or schemes under investigation:
12DailyPro Autosurf (United States: Securities and Exchange Commission); Ginsystem, Inc. (Singapore: Commercial Affairs Department of Singapore); IT4US (United States); PlexPlay (Norway: HegnarOnline, in Norwegian); Solidinvestment (United States).

The foregoing provides merely a preliminary outline of the background to these scams, concerning which a considerable literature now exists. Promoting or perpetuating Ponzi schemes is a criminal offence punishable by jail terms or fines in most countries. The fact that the High-Yield Investment Program monitoring websites publicise disclaimers to the effect that the sites ‘do not promote the programs advertised’ on their websites, does not absolve the operators from criminal liability.

A disturbing feature of this environment is that a large number of High-Yield Investment Program participants persist in participating in further schemes long after they have already lost money in schemes that have either folded, or in respect of which the operator has disappeared. The fact that most of the publicised schemes are openly labelled scams on the relevant Internet monitor boards, even though their operators are themselves criminally liable, suggests that many participants are well aware of the risks they are running, know that the schemes are fraudulent, but choose to put money in them anyway, like addicted gamblers.

Former officials and members of the US armed forces may have been taken in by indications that the operators were officially connected or even that the scams in which they have participated were legitimate because of such alleged connections, including intelligence backgrounds.

The perpetrators play on the understandable anger felt by those who have been scammed, even though they were originally enticed by the US perpetrators into becoming prospectively felonious participants themselves, a condition which leads psychologically to the state of denial that in turn supposedly provides the perpetrators with the protection that they require.

However the operators, sitting on their stolen funds, may well fear the ultimate outcome, should manipulation of the expectations of the scammed investors cease to remain perversely ‘credible’, or those manipulative counterintelligence Psy-Ops initiatives are closed down.

• Hypothecation:
Originally a pledge of property as collateral for indebtedness without transfer of possession to the party extending the loan. This arrangement is common in the case of mortgages. The borrower retains legal ownership of the property but provides the lender with a lien over the property until the debt is paid off. Rehypothecation occurs when a broker pledges hypothecated client-owned securities in a margin account to secure a bank loan.

The fraudulent finance buried inside the ‘sub-prime’ mortgage nexus of scandals was explained in our report dated 26th December 2007 [www.worldreports.org: Archive]. As described in that report, the ‘homeowner’ has been scammed, either he or she has been coerced into signing several top copies of the same document, enabling the lending bank to claim ownership even though the bank has sold the mortgage on the basis of another top copy, for instance, to one of the co-conspiring Government-Sponsored Enterprises; or because the bank has alienated its ownership of the loan to the GSE in question, or has packaged the mortgage with other loans, as well as with worthless securities underpinned by no real asset, and has sold such packages on to parties (usually abroad) which have not performed due diligence.

In our report of 26th December 2007, we advised ALL US ‘homeowners’ facing foreclosure to let the Court know that the underlying contract has been requested from the bank. In most instances, the bank will be unable to supply it, because it has sold on the mortgage to the GSE, having therefore already passed on the risk. People facing foreclosure who ask for the contract can usually expect to be pleasantly surprised at the outcome of their cases.

• Internal Revenue Service (IRS):
The IRS is part of the US Treasury Department, and was officially created by Act of Congress on 1st July 1962. The IRS is responsible for administering and enforcing the Internal Revenue Code (IRC), as established under US Congressional authority, passed in 1913, to levy taxes on the income of individuals and corporations.

In 1939, the IRC was codified from the separate Internal Revenue laws. The IRS Code was further overhauled in 1954, with substantive new provisions being added concerning depreciation, the double taxation of dividends, research and experimental expenditures, carryback on operating losses, tax on ‘unreasonable’ accumulations of surplus, preferred stock bail-outs, and collapsible corporations and partnerships.

Of the enormous changes to the IRC implemented since 1954, the most important for the context we are dealing with here was the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 which, inter alia, required US taxpayers to report all sources of income, wherever it was earned anywhere in the world. It follows that all receipts received by American taxpayers since the passage of this Act which have not been reported to the Internal Revenue Service are taxable, which means that all US taxpayer holdings in offshore accounts that have not been declared for tax are liable for tax and penalties. Main source: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, for The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; see also: Munn, ‘Encyclopedia of Banking and Finance’, page 589.

• Interlocking Directorates:
These reference commercial banks or savings institutions which have individuals on their Boards of Directors who further serve on the Board or Boards of one or more unaffiliated competitor(s) operating in the same marketplace. The US Financial Institutions Regulatory Act of 1978 prohibits management interlocks by banks operating in the same Metropolitan Statistical Area (MSA). But it exempts smaller banks, and also permits interlocks of up to 49% of a bank’s management officers. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Interlocking Directorates’.

• International Banking Act of 1978:
This legislation essentially places American branches and agencies of foreign banks under the supervision of US bank regulators. The provisions included: authorising the Comptroller of the Currency to license and supervise a foreign bank; authorising Federal bank agencies to examine US offices of any foreign bank; subjecting any foreign bank branch or holding company to the Bank Holding Company Act, just like any US bank holding company; and imposing reserve requirements and Federal deposit insurance coverage for foreign banks to the same extent as the US member banks. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, for The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; see: Munn, ‘Encyclopedia of Banking and Finance’, page 563.

• International Banking Act of 1987:
Created a Federal regulatory structure similar to the Federal Reserve to examine the assets and liabilities of foreign banks on-site, and to ensure similar licensing and regulation of non-banking activities of foreign banks. It also required the Federal Reserve to maintain the same competitive equity requirements for foreign banks as for US member banks. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; Munn, ‘Encyclopedia of Banking and Finance’, page 563.

• Investment Banking:
The sale and distribution of a new offering of securities, carried out by a financial intermediary (an investment banker), who purchases securities from the issuer as principal, and assumes the risk of distributing securities to investors. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, the 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Investment Banking’.

• Investment Company Act of 1940:
This Act requires that all companies which offer securities or investment advice to the public must register with the Securities and Exchange Commission. For instance, any advisory corporation that offers investment advice (not straight reporting, but advice) must register with the SEC. For those who may be interested, this explains why this service does not offer advice and will not respond to the frequent requests for financial investment advice that we routinely receive. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, for The Administration of Justice Department, Mercyhurst College, 13th February 2002; Munn, ‘Encyclopedia of Banking and Finance’, page 589.

• Kakocracy: Rule by the worst elements of society exclusively in their own interests and with cynical and permanent disregard for the interests of anyone else.

• Kleptocracy: The ascendancy of a rapacious, thieving class of co-conspiratorial bandits protected by public office that is bent on maximising the open-ended potential of their office and power for personal enrichment and for the furtherance of clandestine agendas divorced from the interests of the people and the constituencies they are supposed to serve. This term is used in these reports even though kleptomania is strictly defined in the Oxford Senior Dictionary as ‘an uncontrollable tendency to steal things, with no desire to use or profit by them’.

The definition is interesting, because it reveals an element of madness that is clearly inherent in the behaviour of the criminalist snakes identified in these reports. This madness can be observed in the rapacious behaviour, for instance, of the arch-criminalist DVD godfather, George Bush Sr., whose avarice for other people’s money notoriously knows no bounds, despite his age, indicating that he chooses to remain unaware of his own mortality: a characteristic of greed which can only be described as symptomatic of mental derangement.

• Leverage, Financial and Investment:

(1): Financial Leverage: Debt in relation to equity in a firm’s capital structure (such as long-term debt, preferred stock, and shareholders’ equity. Financial leverage is measured by the debt-to-equity ratio: the more long-term debt there is, the greater the financial leverage.

(2): Investment leverage: A means of enhancing return or value without increasing investment: for instance, by buying securities on margin with borrowed money. Extra leverage may be achievable if the leveraged security is convertible into common stock.

(3): Note: Option contracts provide leverage, with NO borrowings, offering the prospect of high return for little or no investment.

Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Leverage’.

• Maloney Act of 1938: An amendment to the Securities Act of 1933 which created the US National Association of Securities Dealers (NASD). The legislation promoted the organisation of member securities dealers as a Self-Regulating Organizations (SRO) under the supervision of the Securities and Exchange Commission (SEC) to institutionalise a code of ethics in the securities industry and its enforcement nationwide. NASD members are known as Broker/Dealers, since they represent both clients that buy and/or sell securities, and themselves, as a principal, when they are engaged in underwriting and/or selling a stock or bond issue directly to the public. The NASD is the only firm operating under the Maloney Act. See: NASD: National Association of Securities Dealers. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; NASD, ‘National Association of Securities Dealers, Inc.: Manual, April 1998, page 3171.

• Margin Accounts: See Mark to [The] Market and: Margin Requirements

• Margin Requirements:
The minimum amount that a client must deposit in the form of cash or eligible securities in a Margin Account, as is spelled out under Regulation T of the Federal Reserve Board. Regulation T requires a minimum of $2,000 or 50% of the purchase price of eligible securities bought on margin or 50% of the proceeds of short sales. Also referred to as the Initial Margin. Primary source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Margin Requirement’.

• Margin Security:
This is a security that may be bought or sold in a Margin Account. Regulation T of the Federal Reserve Board defines margin securities as:

(1): Any registered security (a listed security or a security having unlisted trading privileges);

(2): Any OTC margin stock or OTC margin bond, which are defined as any unlisted security that the Federal Reserve Board (FRB) periodically identifies as having the investor interest, marketability, disclosure and solid financial position of a listed security;

(3): Any OTC security designated as qualified for trading in the National Market System under a plan approved by the Securities and Exchange Commission;

(4): Any mutual fund or unit investment trust registered under the Investment company Act of 1940. Other securities that are not exempt securities must be transacted in cash. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Margin Security’.

• Mark to [The] Market:
Adjustment of the valuation of a security or portfolio to reflect current (prevailing) market values. For instance, Margin Accounts are marked to market in order to ensure compliance with financial maintenance requirements. (In UK parlance, the definite article is dropped). Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Mark To The Market’.

• Money laundering:
Passing illegally acquired funds or taxable funds on which no tax has been paid inter alia with the intent to evade tax and to hide the funds from relevant national authorities. American legislation addressing money-laundering includes:

(1): The Bank Secrecy Act of 1970;
(2): The Money Laundering Control Act of 1986;
(3): The anti-Drug Abuse Act of 1988;
(4): The Annunzio-Wylie Money Laundering Act of 1992;
(5): The Money Laundering Suppression Act of 1944; and:
(6): The Terrorism Prevention Act of 1996.

The Money Laundering Control Act of 1986 made money laundering a Federal crime corresponding to the previously passed Organized Crime Control Act of 1970. See separate entries in Glossary.
Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; Munn, Encyclopedia of Banking & Finance, page 109; also: John Madinger and Sydney A. Zalopany, ‘Money Laundering: A Guide for Criminal Investigators’, New York, CEC Press, LLC, 1999, page 43; Howard Abadinsky, ‘Organized Crime’, 6th Edition, Belmont: Wadsworth/Thompson Learning, Inc., 2000, page 411; FINCEN, ‘The Global Fight Against Money Laundering’, Financial Crimes Enforcement Network (FINCEN, 1999, available from: http:// www.occ.treas.gov/launder (Internet).

• Money Laundering Control Act of 1986:
This legislation made money laundering a Federal crime corresponding to the previously passed Organized Crime Control Act of 1970. See: Money laundering.

• Money Laundering Suppression Act of 1994: Legislation which required that ‘any person who owns or controls a money services business’ must register with the Secretary of the Treasury. Source: FINCEN, ‘The Global Fight Against Money Laundering’, Financial Crimes Enforcement Network (FINCEN, 1999, available from: http:// www.occ.treas.gov/launder (Internet).

• Municipal Securities Rulemaking Board (MRSB): See Self-Regulatory Organization (SRO), below.

• NASD: National Association of Securities Dealers:
A non-profit organisation that was formed under the joint sponsorship of the Investment Bankers’ Conference and the US Securities and Exchange Commission (SEC) in order to comply with the requirements of the Maloney Act. NASD Members include virtually all investment banking houses and firms dealing in the Over-the-Counter Market.

Operating under the supervision of the SEC, the basic purposes of the NASD are to:
(1): Standardise practices in the field;
(2): Establish high moral and ethical standards in the securities trading business;
(3): Provide a representative body to consult with the Government and investors on matters of common interest;
(4): Establish and enforce fair and equitable rules of securities trading;
(5): Establish a disciplinary body capable of enforcing the above provisions.

The NASD requires members to maintain ‘quick assets’ in excess of current liabilities at all times.

Within the NASD, a special Investment Companies Department concerns itself with the problems of investment companies and has the responsibility of reviewing companies’ sales literature in that segment of the securities industry.

Michael C. Cottrell, M.S., has described the NASD’s contemporary responsibilities as including the following (to be read in conjunction of the foregoing information):

(1): Nationwide inspections of member firms;
(2): Provision of centralised computerised surveillance of the trading of NASD Automated Quotations, of its sister company NASDAQ;
(3): Enforcement of Securities and Exchange Commission rules and regulations, as well as of its own rules for members;
(4): To review underwriting arrangements for securities offered to the public;
(5): To perform and monitor qualification examinations of personnel of members; and:
(6): To coordinate and cooperate with the SEC, the States and with other Federal agencies.

The responsibilities of the SEC do NOT include trading on own account [see text], a gross abuse of which it has been and continues to be accused. This abuse is inconsistent with its responsibilities as a regulator and is considered by experts to be a scandalous development. See also: Financial Industry Regulator Authority (FINRA). Sources: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘NASD’; Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; Munn, ‘Encyclopedia of Banking & Finance’, page 696.

• National Market System: See: Securities and Exchange Commission (SEC).

• Non-Disclosure agreement:
An illegal document which, if signed by a participant to a transaction, precludes any recourse to official regulators for protection after the participant has predictably been scammed, and likewise precludes any legal recourse.

• Office of the Comptroller of the Currency (OCC):
This is the chief regulator of US National Banks. The Comptroller of the Currency is appointed by the President of the United States for a five-year term, with Senate confirmation. The OCC, the supervisory agency covering nationally chartered banks, is the oldest US Federal regulator of financial institutions. The Comptroller of the Currency also serves as one of the three Directors of the Federal Deposit Insurance Corporation. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Ed., Happauge: Barron’s Educational Series, 1997, c.v. ‘Comptroller of the Currency’.

• Office of Thrift Supervision (OTS):
This US Federal agency was established under the Financial Institutions Reform, recovery and Enforcement Act of 1989 to examine and supervise Savings and Loan Associations (‘thrifts’) and Federal Savings Banks. It replaced the Federal Home Loan Bank Board as the primary regulator of State chartered and Federally chartered savings institutions. It is a bureau within the US Treasury Department. The Director and Chief Operating Officer (CEO) of OTS is appointed by the President of the United States with Senate confirmation, and is also one of five directors of the Federal Deposit Insurance Corporation (FDIC). The fact that the OTS is structured within the US Department of the Treasury parallels the position with the Office of the Comptroller of the Currency. Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, c.v. ‘Office of Thrift Supervision’.

• ‘Open outcry’:
A non-electronic method of communication between professionals on a stock or futures exchange involving shouting and the use of hand signals to transfer information primarily about buy and sell orders. The component of the trading floor where this takes place is often called the pit. The best-known ‘open outcry’ markets in the United States remain the New York Mercantile Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade, the Chicago Board Options Exchange, and the Minneapolis Grain Exchange. In the United Kingdom, the London Metal Exchange (LME) still makes use of the ‘open outcry’ method. Many traders prefer the ‘open outcry’ system on the basis that physical contact in the pit allows traders to speculate as to the motives or intentions of buyer/seller, so that positions can be adjusted accordingly.

• Organized Crime Control Act of 1970:
See Money Laundering Control Act of 1986; and Money laundering.

• Over-the-Counter:
(1): Of a security: A security that is not listed and traded on an organised exchange;
(2): Of a market: A market in which securities transactions are conducted through a telephone and computer network connecting dealers in stocks and bonds, rather than, as classically, on the floor of an exchange. Over-the-counter stocks are traditionally those of smaller companies that do not meet the listing requirements of the New York Stock Exchange or the American Stock Exchange.

In recent years, however, many companies that qualify for listing have chosen to remain with Over-the-Counter trading, because they consider that the system of multiple trading by many dealers is preferable to the centralised trading approach of the New York Stock Exchange, where all trading in a stock has to go through the Exchange specialist in that stock. The rules for Over-the-Counter stock trading are written and enforced largely by the US National Association of Securities Dealers (NASD), which is self-regulating (see NASD).

Prices of Over-the-Counter stocks are published in daily newspapers, with the National Market System stocks listed separately from the rest of the Over-the-Counter market. Over-the-Counter markets incorporate markets in both Government and municipal bonds. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Over-the-Counter (OTC)’.

• Pass-Throughs:
Pass-Through Securities: Pools of fixed-income securities that are backed by a package of assets. A servicing intermediary collects monthly payments from issuers and, after deducting a fee, remits or passes them through to the holders of the pass-through security. This device is also known as a ‘pass-through certificate’ or a ‘pay-through security’. The most common type of pass-through is a mortgage-backed certificate, whereby ‘homeowners’’ payments pass from the original lending bank through a Government agency or investment bank to the investors (per the supposed model).

• Ponzi Scheme:
A scam designed to entrap the unwary investor, as described in the following analyses published on this website [see Archive) and in International Currency Review:
(1): ‘Treasongate Update: Omega ‘Ponzi Game’ scams, 13th January 2007;
(2): ‘Treasongate Background: Intel Ponzi Scams’, 22nd January 2007.

So-called ‘lending programs’, a.k.a. High-Yield Investment Programs operating along Ponzi or Pyramid Scheme lines promoted clandestinely inter alia by corrupt elements of the criminalist US intelligence community (including the CIA’s OMEGA OPS scams) will comply with none of these stringent regulations and requirements, and are accordingly, by definition, ALL ILLEGAL IN THE UNITED STATES. This may well be the basis upon which non-payment of these accounts has been predicated. The question therefore arises: why have these illegal schemes been so widespread, having given rise to a colossal constituency of the American ‘broken hearted’, who have been scammed in one way or another but who have been clinging to the hope, like Rip van Winkel, that they, their family trusts or their restless associations of ‘the scammed’, will finally be paid out one sunny day far out into the future?

The generic answer to this question is that the cynical, criminalised fraudster élite, headed by the crooks controlling and inside the intelligence community, have taken precautions to instal their own corrupt operatives within and in control of certain enforcement institutions, including the SEC.

Enron and the Federal Deposit Insurance Corporation (FDIC) have been used to proliferate and perpetuate these illegal securities scams: indeed, it is from operations such as the CIA’s nefarious Enron scamming system, that the derivatives overhang and crisis have mainly arisen.

As a consequence, blind US official (Federal and State) eyes have been turned to what has been going on, the securities regulations have not been enforced with respect to such illegal Ponzi frauds, and the old system whereby anyone involved with trading securities was blackballed for life if caught engaged in irregular activities, has been moribund since the 1970s.

When an uncorrupt SEC Commissioner tried, quite recently, to enforce the regulations, he was removed from his post on some typically trumped-up pretext or other. In other words, the wolves are and have been in charge of the chicken coops.

So key enforcers are, as matters stand, co-conspirators in the despicable, hitherto (but since the Wantagate and the subsequent exposures, no longer) proliferating intelligence community-driven Ponzi Game operations that have devastated an unknown number of American families – with the proceeds channelled through corrupt participating banks into offshore accounts. See Appendix to this report for the narrative of the original Ponzi fraud.

• Principal:
(1): The person with highest authority in a business, or a person for whom another acts as an agent.
(2): A capital sum as distinguished from the interest on it.
(3): See also: Principal, of a Securities firm.
Source: Oxford Senior Dictionary, Oxford University Press, 1984.

• Principal, of a Securities firm:
An NASD member firm is directed by a Registered Principal, who can be the sole proprietor, an officer, a partner, a manager of an office of Supervisory Jurisdiction, and/or a Director of the firm.

The Registered Principal is answerable for all actions taken on behalf of the firm, and all trades submitted by the firm, and all actions of its registered representatives, subject to the rules and regulations of the NASD, SEC and the State of registration. The Registered Principal must pass the Series 24 (General Securities Principal) and also the Series 7 (General Securities Representative) Examinations conducted by the NASD, and must pass the written procedures and oral interview before assuming this position for the firm. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, the thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, Administration of Justice Department, Mercyhurst College, Erie, PA, on 13th February 2002; NASD, ‘National Association of Securities Dealers, Inc.: Manual’, April 1998, page 3171; NASD, NASD Compliance Check List, Gaithersburg: NASD MediaSource, 1992.

• Principle:
A basic truth or a general law or doctrine used as a basis of reasoning or a guide to action or behaviour; a fundamental truth or doctrine, as of law; a comprehensive rule or doctrine which furnishes a basis or origin for others; a settle of action, procedure or legal determination. Also defined as: a truth so clear that it cannot be proved or contradicted unless by a proposition which is still clearer. Sources: Oxford Senior Dictionary, Oxford University Press, 1984.; Henry Campbell Black, M.A., ‘Black’s Law Dictionary’, Revised 4th Edition, St Paul, West Publishing Company, 1968, s.v., ‘Principle’.

• Prudent Man Rule:
This is the fundamental American principle that is applicable in respect of professional money management, originally asserted by Judge Samuel Putnum in 1830 as follows:

‘Those with responsibility to invest money for others should act with prudence, discretion, intelligence, and regard for the safety of capital as well as income’ [1830 Massachusetts Court decision: Harvard College v. Armory]. The Prudent Man Rule directs trustees ‘to observe how men of prudence, discretion and intelligence manage their own affairs, not in regard to speculation, but in regard to the management and disposition of their funds, considering the probable income as well as the probable safety of the capital to be invested’. Investments in risky Ponzi and Pyramid Schemes and in ‘programs’ such as those referenced, typically breach the Prudent Man Rule.

• Public Offering Price: See: ‘Underwrite’ below.

• Pyramid Scheme or scam: See: Ponzi Scheme.

• Registered Principal: See: Principal, of a Securities firm.

• Registered Representative, of a Securities firm:
This officer is licensed and authorised to purchase and/or sell stocks, bonds, options, limited partnerships, tax shelters, mutual funds, and variable annuities on behalf of a customer or the firm.

The Registered Representative must have qualified by passing the Series 7 (General Securities Representative) Examination and must be registered with the firm as an authorised representative. Additionally, all licensed representatives must have passed the NASD Series 63 (Uniform State Law) AntiFraud Examination, and must register with each State the firm intends to operate in.

Source: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, The Administration of Justice Department, Mercyhurst College, Erie, PA, 13th February 2002; NASD, ‘National Association of Securities Dealers, Inc.: Manual’, April 1998, page 3201; NASD, ‘NASD Compliance Check List’.

• Risk:
Uncertainty as to whether an asset will earn an expected rate of return, or whether a loss may occur: Various categories of risk apply in the securities market environment:

(1): Delivery risk: The possibility that the buyer or seller of an instrument or foreign exchange may be unable to meet obligations at maturity.

(2): Liquidity risk: The possibility that a bank may have insufficient cash or short-term marketable assets to meet the needs of depositors and borrowers.

(3): Settlement risk: The possibility that the failure of a major bank, or its inability to honour payment commitments in a wire transfer network, could have a domino effect on other institutions, causing similar failures elsewhere. In the United Kingdom, this is usually referred to as ‘systemic risk’.

Source: Thomas P. Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Happauge: Barron’s Educational Series, Inc., 1997, s.v. ‘Risk’.

• Risk Free Asset:
A non-callable, default-free bond such as a short-term Government security. While such an asset is not risk-free in terms of inflation, it is (given that the Government can always print money) risk-free in a dollar sense. Source: Jerry M. Rosenberg, ‘The Essential Dictionary of Investing & Finance’, New York, Barnes & Noble, Inc., 2004, s.v. ‘Risk Free Asset’.

• Rule of Law, A (indefinite article):
The way this may be defined in the present context is to begin with the word ‘Rule’. A ‘Rule’ is an established standard, guide or regulation, especially a regulation set up by an official authority. It prescribes or directs action or forbearance. The term also covers a regulation made by a Court of Justice or a public office with reference to the conduct of business therein. Hence, ‘A Rule of Law’ encompasses a legal principle, or a body of legal principles, of general application, sanctioned by the recognition of authorities, and usually expressed in the form of a maxim or logical proposition. The word ‘Rule’ is used because in doubtful or unforeseen circumstances it is a guide or norm for the decision of those concerned (Toullier, tit. Prel. No. 17).

Source: Henry Campbell Black, M.A., ‘Black’s Law Dictionary’, Revised 4th Edition, St Paul, West Publishing Company, 1968, s.v. ‘Rule of Law’.

• Rule of Law, The (definite article): Note that the foregoing diverges from ‘The Rule of Law’. The common interpretation of The Rule of Law is that ‘the Law rules’ or is paramount: in other words that everyone in society, including the Government, operates within the ordered framework of the Law, precluding arbitrary behaviour. It is important to distinguish between the indefinite and the definite article here, because ‘Rule of Law’ has a different meaning, depending on which is used.

• Savings and Loan Deregulation:
The Garn-St Germain Act of 1982 cut Savings and Loan Associations loose from the tight girdle of ‘old-fashioned’, ‘restrictive’ Federal legislation, opening the door wide to the ransacking and enronisation of the ‘thrift’ banking sector, which in turn laid the groundwork for the subsequent giga-financial scandals that are now being exposed. President Reagan unveiled this legislation at a Rose Garden presentation and signing ceremony on 15th October 1982, before an audience of 200 people. Billed as a major piece of deregulation legislation, this law represented nothing less than the US criminal kleptocracy’s charter to ransack and pillage the middle and working classes. For 50 years, American families had relied on Savings and Loan Associations to finance their homes; but Reagan now pronounced that ‘outmoded regulations left over from the 1930s Great Depression’ had been preventing thrift institutions from competing in the complex, sophisticated financial marketplace of the free-wheeling 1980s.

When signing the bill with a flourish, Reagan pronounced: ‘All in all, I think we’ve hit the jackpot’.

But those who ‘hit the jackpot’ turned out, predictably, to be the organised criminal kleptocracy that had infiltrated official structures, could immediately mobilise criminal funds to buy their way into thrift institutions, and were embedded inside the corrupted US intelligence community. A new breed of swashbuckling Savings and Loan executive sprang up on cue, like weeds, out of the rich soil fertilised at the October 1982 Rose Garden ceremony.

Among their leaders was the notorious Neil Bush, then-Vice President George H. W. Bush’s son, who became a Director of Silverado Savings and Loan, of Denver, CO, and Andrew Cuomo, the son of New York Governor Mario Cuomo, who tried to buy Financial Security Savings of Delray Beach, Florida. The former Governor of Illinois, Dan Walker, bought First American Savings of Oak Brook, Illinois. Within 18 months of the Rose Garden signing, Edwin Gray, Chairman of the Federal Home Loan Bank Board (FHLBB) was provided with a grim, classified report and video, which revealed a swathe of abandoned, half-finished condominium units financed by Empire Savings and Loan of Mesquite, Texas: this was when the FHLBB was made aware of the fact that organised criminal cadres had immediately taken advantage of the deregulation of the Savings and Loans, and that an open-ended financial implosion was under way as a consequence. The enronisation of the US thrift industry was an ‘inside job’ from the outset. Source: ‘Inside Job: The Looting of America’s Savings and Loans’, Stephen Pizzo, Mary Fricker and Paul Muolo, McGraw-Hill Publishing Company, New York, 1989, ISBN 0-07-050230-7.

• Securities Act of 1933: This Act, which followed the 1929 crash and the Great Depression, was framed in accordance with the interstate commerce clause of the US Constitution, and requires that any offer for sale of securities using the means and instrumentalities of interstate commerce must be registered under the terms of the 1933 Act. Prior to the 1933 Act, the public regulation of securities in the United States had been governed mainly by State laws (commonly referred to as the ‘Blue Sky’ laws). With passage of the 1933 Act, the patchwork of existing State securities laws was left in place, to supplement the Federal legislation. A crucial dimension of the law is that the 1933 Act makes it illegal to commit fraud in conjunction with the offer or sale of securities.

Exemptions to the registration process under the Act are extremely tightly prescribed.

Hence, except for extremely narrowly defined offerings (for instance, to groups of no more than 35 investors), securities offered or sold to the general public in the United States must be registered by the filing of a registration statement with the Securities and Exchange Commission.

The prospectus for the offering is generally filed in conjunction with the registration statement. The SEC itself prescribes the relevant forms on which an issuer’s securities must be registered, and these forms call, inter alia, for:

(1): A description of the issuer’s properties and business;
(2): A description of the securities to be offered for sale;
(3): Information about the management of the issuer;
(4): Information about the securities (if other than common stock); and:
(5): Financial statements certified by independent accountants.

It is illegal for an issuer to lie or to omit material facts from a registration statement or prospectus. Secondary market transactions may take place without registration. Under Rule 144A, resales of restricted securities between ‘Qualified Institutional Buyers’ (QIBs) are exempted, thus creating a secondary market in restricted securities among the largest Wall Street houses.

• Securities Acts Amendments of 1975: See: Securities and Exchange Commission (SEC).

• Securities and Exchange Commission (SEC): A Federal agency created under the Securities Exchange Act of 1934, to administer the following legislation:
(1): The Securities Exchange Act of 1934;
(2): The Securities Act of 1933;
(3): The Public Utility Holding Company Act of 1935;
(4): The Trust Indenture Act of 1939;
(5): The Investment Advisor Act of 1940; and:
(6): The Securities Acts Amendments of 1975, which ratified free market determination of brokers’ commissions and gave the SEC authority to oversee the development of a National Market System.

The SEC has five Commissioners, appointed by the President of the United States on a rotating basis for five-year terms. The statutes administered by the SEC are designed to:
(1): Promote full disclosure;
(2): Protect the investing public against malpractice in the securities markets;
(3): Require all issues of securities offered in interstate commerce or through the mails, to be registered with the SEC;
(4): Supervise all national securities exchanges and associations;
(5): Supervise investment companies, investment counselors and advisers, Over-the-Counter brokers and dealers, and virtually all other individuals and firms operating in the investment field.

Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘SEC‘.

• Securities Exchange Act of 1934: This legislation, which governs the US securities markets, was enacted on 6th June 1934. The Act:
(1): Outlawed misrepresentation and manipulation, and other abusive practices in respect of the issuance and marketing of securities.
(2): Created the Securities and Exchange Commission to enforce the Securities Acts 1933 and 1934.
The primary stipulations of the 1934 Securities Act are as follows:
(1): Registration of all securities listed on stock exchanges, and periodic disclosures by issuers of financial status and changes in condition.
(2): Regular disclosure of holdings and transactions of ‘INSIDERS’ (officers and directors of a corporation and those who control at least 10% of equity securities).
(3): Solicitation of proxies enabling shareholders to vote for or against policy proposals.
(4): Registration with the SEC of stock exchanges and brokers and dealers to ensure their adherence to SEC rules through self-regulation.
(5): Surveillance by the SEC of trading practices on stock exchanges and Over-the-Counter (OTC) markets, to minimise the possibility of insolvency among brokers and dealers.
(6): Regulation of Margin Requirements for securities purchased on credit. These requirements are set by the Federal Reserve Board.
(7): The provision of subpoena power for use by the SEC in investigations of possible violations and in enforcement actions.

Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Securities Exchange Act 1934’.

• Self-Regulatory Organization (SRO):
These are Federal organisations established to enforce fair, ethical and efficient practices in the securities and commodities futures industries. The practices are referred to as ‘industry rules’ to distinguish them from regulatory agencies such as the Securities and Exchange Commission (SEC) or the Federal Reserve Board. SROs include:
(1): All the national securities and commodities exchanges; and:
(2): The National Association of Securities Dealers (NASD), representing:
• All firms operating in the Over-the-Counter market; and:
• The Municipal Securities Rulemaking Board (MSRB), established under the US Securities Acts Amendments of 1975 to regulate brokers, dealers and banks dealing in municipal securities. The NASD enforces the rules promulgated by the MSRB with bank regulatory agencies. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘SRO’.

• Settlement:
(1): Of Securities: The conclusion of a securities transaction in which a broker/dealer pays for securities bought for a customer or delivers securities sold, being paid from the buyer’s broker.
(a): Regular Way Delivery and Settlement is completed on the third full business day following the date of the transaction for stocks (called the Settlement Date).
(b): Government Bonds, and Options, are settled on the next business day.
(2): Of Futures/Options: Represents the final price, established by Exchange Rule, for prices prevailing during the closing period and upon which Futures Contracts are Marked to The Market. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Settlement’.

• Sherman AntiTrust Act:
Passed in July 1890, this legislation described in general terms, without the benefit of definitions, activities that were viewed as monopolistic and were therefore illegal. Many of the definitions had already been determined by case law involving court actions by employers combating the activities of trade unions. The Act forbade ‘every contract, combination… or conspiracy in the restraint of trade or commerce’. Sources: Michael C. Cottrell, B.A., M.S., ‘Elite Power & Capital Markets’, thesis submitted in partial fulfillment of the requirements for the Degree of Master of Science, for The Administration of Justice Department, Mercyhurst College, Erie, PA 13th February 2002; Jack C. Plano and Milton Greenberg, ‘The American Political Dictionary’, 4th Edition, Hinsdale, the Dryden Press, 1976, page 328.

• Story’s First Law:
‘All organisations are run for the benefit of those running the organisation’.

• Story’s Second Law:
‘The interests of the supplier and the consumer diverge’.

• Story’s Third Law: ‘Sooner or later, all operations and covers are blown’.

• Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA):
Federal legislation which reversed some earlier tax reductions, established a 10% withholding tax applicable to dividends, repealed accelerated appreciation deductions and provided that American taxpayers must report all sources of income, wherever it was earned anywhere in the world.

It follows that all receipts received by US taxpayers since the passage of this Act which have not been reported to the Internal Revenue Service (IRS) are taxable, which means that all US taxpayer holdings in offshore accounts that have not been declared for tax are liable for US tax and also for penalties. It also means that ‘program’ participants expecting their funds eventually to be paid into offshore accounts may not only be in denial about the fact that they have been scammed, but may have also allowed themselves to become co-conspirators in tax evasion with the perpetrators of the scams themselves. It is standard criminalist practice to procure that targeted victims are enticed into compromising themselves by the perpetrators.

• Terrorism Prevention Act of 1996:
This legislation added terrorism-related crimes as predicates for money-laundering. Madinger and Sydney A. Zalopany, ‘Money Laundering: A Guide for Criminal Investigators’, New York: CRC Press, LLC, 1999, page 43.

• Transparency:
(1): In Financial Reporting: Ease of understanding, made possible by FULL, CLEAR and TIMELY disclosure of relevant information.
(2): In Securities Transactions, price transparency means access to information concerning the depth of the market that would enable detection of fraud or manipulation. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Transparency’.

• Trust Indenture Act of 1939:
This legislation supplemented the Securities Act of 1933, requiring the appointment of a suitably independent and qualified trustee to act for the benefit of the holders of securities. The legislation specified certain substantive provisions for such a trust indenture that must be entered into by the issuer and the trustee. The law is administered by the Securities and Exchange Commission (SEC).

• Truth in Lending Act:
Federal legislation which established disclosure rules that lenders must observe in dealings with borrowers. The Act stipulates that consumers must be told annual percentage rates, potential total cost, and any special loan terms. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Consumer Protection Act of 1968’.

• Truth in Lending Act (TILA) of 1968:
This legislation is designed to protect consumers involved in all kinds of credit transactions, including (and especially) mortgages. It is contained in Title 1 of the Consumer Credit Protection Act as amended. The purpose of the legislation is to promote the informed use of consumer credit by requiring disclosures about its terms, and gives consumers the right to cancel certain credit transactions that may involve a lien on the consumer’s principal home. It regulates certain credit card practices, and provides a mechanism for the fair and timely resolution of credit disputes. The law requires the uniform and standardised disclosure of costs and charges so that consumers can shop around (thereby promoting competition). The legislation further prohibits certain practices associated with credit secured on a consumer’s principal dwelling. The lender must disclose to the borrower the annual percentage rate charged (APR), which must reflect the cost of the credit to the consumer. The legislation proved ineffective in curbing the abuses which were highlighted as a consequence of the corruption exposures, because many mortgage lenders failed to comply with the Act’s disclosure provisions, and were not prosecuted or penalised accordingly.

• Underwrite:
To assume the risk of buying a NEW ISSUE of securities from an issuing corporation or Government entity and reselling the securities to the public, either directly or through dealers. The underwriter makes a profit on the difference between the price paid to the issuer and the Public Offering Price, called the Underwriting Spread. Source: John Downes and Jordan Elliot Goodman, ‘Dictionary of Finance and Investment Terms’, 7th Edition, Happauge: Barron’s Educational Series, Inc., 2006, s.v. ‘Underwrite’.

• Underwriting Spread: See ‘Underwrite’ above.

• Vault Cash Act of 1959:
This legislation modified the reserve requirements of Federal Reserve member banks to allow the banks to count their vault cash, in excess of specified percentages of their deposits, as part of their required reserves. This was one of innumerable retrograde modifications since the Second World War which have facilitated covert financial operations, to the detriment of global financial stability and integrity. Source: Munn, ‘Encyclopedia of Banking & Finance’, page 589.

APPENDIX:

THE ORIGINAL PONZI SCHEME EXPLAINED:

Charles Ponzi, an immigrant from Italy to Boston, MA, made millions of dollars for a brief period, by exploiting his shrewd observation that while national currencies were fluctuating wildly in 1920, just after the end of the First World War, the Universal Postal Union (UPU) issued coupons which were always worth a given amount of postage stamps.

In those days, European refugees were flocking to the United States, Canada and Brazil; and often, their only contact with their families and friends back home was an occasional letter, enclosing a few dollars. The Universal Postal Union arranged to move the millions of postwar letters, business documents and messages across national borders by issuing Postal Reply Coupons.

You bought a Postal Reply Coupon in your country of residence, and enclosed it with your letter. Your mother, once she had received the letter, exchanged the Postal Reply Coupon for stamps at her local post office.

Charles Ponzi told friends in Boston: ‘Everybody’s heard of the Postal Union. They print coupons like these I’m holding here: Postal Reply Coupons. You can send a letter home, or anywhere in the world, with these coupons. And you can trade this coupon for a stamp in any country. I send my mother coupons with every letter that I write home’.

‘Now, in cooperation with certain large businesses in our city, I am making a fortune on the Postal Reply Coupon. Stocks are too risky. Forget it. And bonds, what are they paying these days? Maybe six percent? Savings accounts at Tremont Trust, they’ll give you four and a half cents on the dollar. Give them $100 and they’ll give you back $104.50. I can beat that into the ground’, Ponzi insisted, beating his cane against the floor. ‘My investors get 50 cents on the dollar. Place a hundred dollars with my Securities Exchange Company, and you take out $150. Put that $150 in, you’ll get back $225. That’s right, in six months, you can more than double your money’.

How could he pay 50%, when banks couldn’t even manage to pay 5%? ‘Exchange rates’, Mr Ponzi explained. ‘Every morning I go down and check to see how the lira is doing against the US dollar. Usually you get five lire for a dollar. This morning I checked, and with the war just ended, it takes 20 lire to the dollar’. While currency rates were bouncing around like popcorn, Mr Ponzi explained, the Postal Reply Coupon always bought one stamp. Here’s what I do’.

‘I send my cousin in Parma, Italy, $1.0. He exchanges the dollar for lire. With the 20 lire ( or 2,000 centesimi), he can buy 66 Postal Reply Coupons (worth 30 centesimi each, the cost of a letter-sized stamp in Italy). Back in the United States, each of the coupons buys one stamp, at face value five cents. I redeem all 66 coupons for $3.30 worth of stamps. The magic happens in the exchange rate. In America, my dollar buys 20 Postal Coupons. But if I exchange the dollar for Italian lire, and buy the coupons in Italy, then return and buy the stamps in America, I get $3.30 worth of stamps for that same $1.0. My profit margin is 230%’.

‘Yeah, but $3.30 worth of stamps is still stamps’, complained an attentive listener.

‘I know’, said Ponzi. ‘So I sell the stamps at a 10% discount through my contacts with the larger firms downtown in our city. Deducting the discount, I’ve got $3.0 cash now, from the $1.0 that I started out with. Now, let’s say, I got that dollar from you. I will pay you back your dollar, plus 50 cents of interest. Since I just sold $3.0 worth of stamps, I have a dollar and 50 cents for myself. I’m going to spend a third of that on my offices and processing overheads, and a third on commissions and bonuses to my sales people; and then, ladies and gentlemen, I’m going to pocket the other third and take my wife for a stroll’.

THE ORIGINAL FALSE PROSPECTUS IS SOON ABANDONED, AND REPLACED BY… ZILCH
This was the essence of the original Ponzi scheme. Note that in this description, Ponzi starts out by exploiting the fluctuations of exchange rates, and the lack of arbitrage; and note that, by the end of the explanation, he is simply NOW offering 50% interest, which he pays out to claimants out of the additional funds he has received from other investors who are likewise anticipating a 50% return on their investments, within a short space of time.

The germ of the idea was derived from the foreign exchange market; but once Ponzi has realised that people will pour their money his way if they are promised a 50% return, he can abandon his elaborate explanation (his ‘prospectus’) of the exploitation of exchange rate fluctuations and the tedious task of shipping, receiving, handling and exchanging Postal Reply Coupons, which gave him the ‘easy money’ idea in the first place.

In other words, his sales pitch is no more than a now redundant, expendable illustration – a false prospectus which disguises the fact that he is really promoting a pyramid selling operation. For he has realised that all his investors care about is receiving 50% on their money. How this is to be achieved does not normally concern them.

ALL THEY WANT IS A HUGE RETURN ON THEIR MONEY.

By December 1920, Charles Ponzi was matching old money with ever larger amounts of new money. In May 1921 alone, almost $500,000 of new money poured into the Securities Exchange Company – as 1,500 or more new customers, lured by the 50% yield offered through advertisements, sought their share of the huge profits they thought would be forthcoming at minimal risk. The office now bulged with fat stacks of dollar bills.

THE FLOOR STARTS TO GIVE WAY BENEATH HIM
But problems started to arise when Joseph Daniels filed a lawsuit alleging that he had helped to found the Securities Exchange Company (SEC) with a loan of $230 worth of furniture plus $200 in cash. Daniels had indeed provided the beaten-up desks that had been offloaded in the dusty office, and had let Mr Ponzi have $200 to spark interest in the Postal Coupons. It wasn’t just a loan, Daniels maintained, now that Ponzi was drowning in cash. ‘We were partners. I put up capital and property’. On 2nd July, Mr Ponzi was handed a demand for $1.0 million.

The Boston Post telephoned, and Mr Ponzi told the reporter that he had indeed bought furniture from Mr Daniels, but that he had never received any money for investment from him.

But when the newly installed banking commissioner for Massachusetts, Joseph Allen, read the newspaper, he wondered: ‘Where did Ponzi come from? Who are his associates? How is he managing to double people’s money?’

Allen asked Ponzi to pop round to his office, for an interview. The Securities Exchange Company did not describe itself as a bank, nor did it offer any banking services.

Therefore, in the absence of a complaint – and none had yet arrived – the Commissioner had no jurisdiction to examine Charles Ponzi’s business. At the interview, Ponzi explained the curiosities surrounding Postal Coupons, pointed out that money chased money, collected his black hat and coat, doffed his hat, and bid Mr Allen goodbye.

But Richard Grozier, city editor at The Boston Post, had always thought that Charles Ponzi’s scheme was fraudulent; and to initiate what he fancied would be the inevitable coming débacle, he elicited a comment from one of Boston’s leading citizens, Clarence Barron, the owner of Dow Jones & Co and The Wall Street Journal.

At the end of July 1920, The Boston Post carried a front page story entitled: ‘Clarence Barron questions the motive behind Ponzi’s scheme’.

Theoretically, Barron admitted, you could indeed turn a profit on the UPU coupons. But that was the only truth buried within the operation. You could never earn more than a few thousand dollars, not just because of the trouble involved in offloading the stamps and tracking the various conversions driving the process, but because there simply were not enough coupons available.

France, Romania and Spain had just abandoned the scheme, a few months earlier. A cursory check with the UPU showed that they only had a few hundred thousand dollars’ worth of coupons left in circulation – nowhere near the $10 million or $15 million Mr Ponzi claimed to be trading. So where was Ponzi getting his coupons from? Furthermore, the US Postal Service had announced, on 2nd July 1920, that Postal Reply Coupons would no longer be redeemable in lots larger than ten. So how was Ponzi converting his coupons into stamps?

Finally, Barron asked, if Ponzi is doubling everyone else’s money, why does he keep his own funds in regional banks? The Boston Post knew that Ponzi kept millions of dollars on deposit at seven or eight New England banks, and that the accounts were ballooning. How could a man who was paying 100% interest every 90 days, put up with drawing just 4% on his holdings? Barron concluded:

‘Right under the eyes of our Government, Mr Ponzi has been paying out US money to one line, with deposits taken from a succeeding line’ (another bank).

All of a sudden, all the doors which had flown back on their hinges at the sight of Mr Ponzi, were slamming tight shut. The Massachusetts District Attorney ordered Ponzi to cease and desist. His customers demanded their money back, and Ponzi was eventually jailed for Federal mail fraud, then deported. He wound up destitute in a poor house in South America (1).

Reference:
(1). ‘How Charles Ponzi pulled it off: Making a fine art out of a pyramid fraud’, International Currency Review, Volume 27, Number 3, December 2001, pages 51-52.

ANNEXE:

REITERATION OF THE STATUTES, SECURITIES REGULATIONS AND LEGAL PRINCIPLES OF WHICH THE CRIMINALISTS, THEIR ASSOCIATES AND RELEVANT BANKSTERS ARE IN BREACH:

LEGAL TUTORIAL: The Steps of Common Fraud:

Step 1: Fraud in the Inducement: “… is intended to and which does cause one to execute an instrument, or make an agreement… The misrepresentation involved does not mislead one as the paper he signs but rather misleads as to the true facts of a situation, and the false impression it causes is a basis of a decision to sign or render a judgment” Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Fraud’.

Step 2: Fraud in Fact by Deceit (Obfuscation and Denial) and Theft:

• “ACTUAL FRAUD. Deceit. Concealing something or making a false representation with an evil intent [scanter] when it causes injury to another…”. Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Fraud’.

• “THE TORT OF FRAUDULENT DECEIT… The elements of actionable deceit are: A false representation of a material fact made with knowledge of its falsity, or recklessly, or without reasonable grounds for believing its truth, and with intent to induce reliance thereon, on which plaintiff justifiably relies on his injury…”. Source: Steven H. Gifis, ‘Law Dictionary’, 5th Edition, Happauge: Barron’s Educational Series, Inc., 2003, s.v.: ‘Deceit’.

Step 3: Theft by Deception and Fraudulent Conveyance:

THEFT BY DECEPTION:

• “FRAUDULENT CONCEALMENT… The hiding or suppression of a material fact or circumstance which the party is legally or morally bound to disclose…”.

• “The test of whether failure to disclose material facts constitutes fraud is the existence of a duty, legal or equitable, arising from the relation of the parties: failure to disclose a material fact with intent to mislead or defraud under such circumstances being equivalent to an actual ‘fraudulent concealment’…”.

• To suspend running of limitations, it means the employment of artifice, planned to prevent inquiry or escape investigation and mislead or hinder acquirement of information disclosing a right of action, and acts relied on must be of an affirmative character and fraudulent…”.

Source: Black, Henry Campbell, M.A., Black’s Law Dictionary’, Revised 4th Edition, St Paul: West Publishing Company, 1968, s.v. ‘Fraudulent Concealment’.

FRAUDULENT CONVEYANCE:

• ‘FRAUDULENT CONVEYANCE… A conveyance or transfer of property, the object of which is to defraud a creditor, or hinder or delay him, or to put such property beyond his reach…”.

• “Conveyance made with intent to avoid some duty or debt due by or incumbent or person (entity) making transfer…”.

Source: Black, Henry Campbell, M.A., ‘Black’s Law Dictionary, Revised 4th Edition, St Paul: West Publishing Company, 1968, s.v. ‘Fraudulent Conveyance’.

U.S. SECURITIES REGULATIONS OF WHICH KEY INSTITUTIONS HAVE BEEN SHOWN TO BE IN BREACH:

• NASD Rule 3120, et al.
• NASD Rule 2330, et al
• NASD Conduct Rules 2110 and 3040
• NASD Conduct Rules 2110 and IM-2110-1
• NASD Conduct Rules 2110 and SEC Rule 15c3-1
• NASD Conduct Rules 2110 and 3110
• SEC Rules 17a-3 and 17a-4
• NASD Conduct Rules 2110 and Procedural Rule 8210
• NASD Conduct Rules 2110 and 2330 and IM-2330
• NASD Conduct Rules 2110 and IM-2110-5
• NASD Systems and Programme Rules 6950 through 6957
• 97-13 Bank Secrecy Act, Recordkeeping Rule for funds transfers and transmittals of funds, et al.

U.S. LAWS ROUTINELY BREACHED BY THE CRIMINAL OPERATIVES AND BANKSTERS:

• Annunzio-Wylie Anti-Money Laundering Act
• Anti-Drug Abuse Act
• Applicable international money laundering restrictions
• Bank Secrecy Act
• Conspiracy to commit and cover up murder.
• Crimes, General Provisions, Accessory After the Fact [Title 18, USC]
• Currency and Foreign Transactions Reporting Act
• Economic Espionage Act
• Hobbs Act
• Imparting or Conveying False Information [Title 18, USC]
• Maloney Act
• Misprision of Felony [Title 18, USC] (1)
• Money-Laundering Control Act
• Money-Laundering Suppression Act
• Organized Crime Control Act of 1970
• Perpetration of repeated egregious felonies by State and Federal public employees and their Departments and agencies, which are co-responsible with the said employees for ONGOING illegal and criminal actions, to sustain fraudulent operations and crimes in order to cover up criminalist activities and High Crimes and Misdemeanours by present and former holders of high office under the United States
• Provisions pertaining to private business transactions being protected under both private and criminal penalties [H.R. 3723]
• Provisions prohibiting the bribing of foreign officials [F.I.S.A.]
• Racketeer Influenced and Corrupt Organizations Act [R.I.C.O.]
• Securities Act 1933
• Securities Act 1934
• Terrorism Prevention Act
• Treason legislation, especially in time of war.

• Please be advised that the Editor of International Currency Review cannot enter into email or other correspondence related to this or to any of the earlier reports.

We are a private intelligence publishing house and have no connections to any outside parties including intelligence agencies. The word ‘intelligence’ on this website and in all our marketing material is used for marketing/sales purposes only and has no other connotations whatsoever: see ‘About Us’ on the red panels under the Notes on the Editor, Christopher Story FRSA, who has been solely and exclusively engaged as an investigative journalist, Editor, Author and private financial and current affairs Publisher since 1963 and is not and never has been an agent for a foreign power, suggestions to the contrary being actionable for libel in the English Court.