DEFINITIVE ILLEGALITY OF SECURITISATION IS RECONFIRMED

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IT IS ILLEGAL TO ASSIGN AN ASSET WITHOUT THE ASSET-OWNERS’S PRIOR WRITTEN PERMISSION. ALL ENGAGED IN THIS RACKETEERING KNOW IT.

Sunday 18 April 2010 00:01

• ANY CONTRACT ENTERED INTO FOR AN ILLEGAL PURPOSE IS NULL AND VOID

• THE TEXT OF THE S.E.C.’S COMPLAINT AGAINST GOLDMAN SACHS & CO. FILED ON 16TH APRIL 2010 IS AVAILABLE IN THE REPORT ALSO DATED 18TH APRIL. TO ACCESS THE S.E.C. COMPLAINT, PLEASE PRESS ‘BACK TO ARCHIVE’ OR THE ARCHIVE BUTTON [HOME PAGE]. THE REPORT CONTAINS A BRIEF COMMENTARY IN NOTE FORM, THE S.E.C.’S RELATED PRESS RELEASE, AND THE COMPLAINT TEXT. THIS CASE SPECIFICALLY ILLUSTRATES MANY OF THE ISSUES EXPOSED IN THE PRESENT REPORT, WITH DEVASTATING EFFECT AND IMPACT.

• Securitisation is ABSOLUTELY ILLEGAL, and all those talking heads from the City of London and Wall Street who have been treating, for example, the Goldman Sachs scandal (that we warned you about years ago) as just ‘the inevitable fall-out after a period of financial crisis’, rather than the corrupt cause of the crisis, are KNOWINGLY MISLEADING THE GENERAL PUBLIC EXACTLY LIKE GOLDMAN SACHS, CITIBANK, BANK OF AMERICA, WACHOVIA, WELLS FARGO and the other US and foreign financial enterprises engaged in this racketeering. Which the IMF CONDONES.

And before you start shouting at the screen, if you’re reading this from Wall Street or the City of London, or from within the IMF and the World Bank, why don’t you pay attention to the fact that the Notes and References, as originally published in our journal Economic Intelligence Review, run to FIVE AND A HALF PAGES. SECURITISATION IS ABSOLUTELY ILLEGAL: AND THEY KNOW IT.

MISPRISION OF FELONY: U.S. CODE, TITLE 18, PART 1, CHAPTER 1, SECTION 4:
‘Whoever, having knowledge of the actual commission of a felony cognizable by a court of the United States, conceals and does not as soon as possible make known the same to some Judge or other person in civil or military authority under the United States, shall be fined under this title or imprisoned not more than three years, or both’.

‘Seeing what’s at the end of one’s nose requires constant effort’. George Orwell.

• 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.

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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 ‘politically incorrect’ [i.e., correct] intelligence books online from this website.

• CMKM/CMKX CASE DOCUMENTS:
Press Archive for this report [29th January 2010]
Case Number CV10-00031 JVS (MLGx):
SERVICE OF CMKM.CMKX $3.87 TRILLION SUIT VS. S.E.C.
You can also access the CMKM/CMKX text at: http://viewer.zoho.com/docs/paKdda
The biggest lawsuit in world legal history: The phantom share giga-scandal.

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NEW REPORT STARTS HERE:

EDITOR’S INTRODUCTION:
That Asset-Backed Securitisation [ABS] is fraudulent has been amply demonstrated by our website reports, in this service and in successive issues of International Currency Review. In the following uncompromising analysis, Mr Michael Nwogugu CPA, who is based in Maryland, demonstrates with pinpoint technical proficiency how accurate this assessment has been – inspired for our part inter alia by the US securities and technical expertise of Michael C. Cottrell, B.A., M.S.

The author has looked at securitisation from every legal angle, and finds securitisation under US law to be absolutely illegal, with no redeeming features whatsoever.

Given this state of affairs, it would damage the integrity of the English language to observe that it is astonishing that, far from paying attention to this glaring state of affairs, US investment banks, intermediaries, organised criminal syndicates, Intelligence Power cadres, officials in high places, and their counterparties abroad, further encouraged inter alia by the railroading behaviour of the Depository Trust and Clearing Corporation (DTCC), have been proceeding to gear up for ‘business as usual’ securitisation operations as though there had been no discontinuity.

In addition to being ILLEGAL UNDER U.S. LAW, securitisation is ILLEGAL UNDER COMMON LAW. If the prior written permission of the mortgagor (or other type of asset-holder) has not been obtained in writing, and in such a manner that the party IS FULLY AWARE THAT THEY HAVE GRANTED SUCH PERMISSION, the transfer and all subsequent transactions are ILLEGAL.

• Moreover, the legal axiom that ‘the money you make from exploitaing and abusing my money is my money’ likewise applies. PLUS:

• ANY CONTRACT ENTERED INTO FOR AN ILLEGAL PURPOSE IS NULL AND VOID.

Self-evidently, this study focuses on the US legal position. But the same basic principles apply in all Common Law Countries. So far, the talking heads in the so-called ‘Mainstream’ Media’ have chosen to ignore the fact that securitisation is ILLEGAL. Reality will soon be catching up with them, just as it is at last catching up with the likes of Goldman Sachs and other ‘protected’ enterprises.

REPRODUCED FROM:
ECONOMIC INTELLIGENCE REVIEW, VOLUME 12, NUMBERS 7 & 8, FIRST QUARTER 2010: pages 4-21. World Reports Limited, 108 Horseferry Road, Westminster, London SW1P 2EF, UK.

EXECUTIVE SUMMARY [REPRODUCED FROM OUR REPORT DATED 10TH MARCH 2010]:

WHY SECURITISATION IS ILLEGAL UNDER U.S. AND COMMON LAW
Securitisation is illegal under US legislation – primarily because it is fraudulent and causes specific violations of R.I.C.O., usury, Antitrust and bankruptcy laws. And it flies in the face of public policy in numerous ways, as was expounded in extensive detail in this analysis published in our journal Economic Intelligence Review 2009Q1 with several pages of book, article and case references.

To begin with, securitisation violates US State usury legislation. Secondly, all ‘true-sale’, ‘disguised loan’ as well as ‘assignment’ securitisations are essentially tax evasion schemes, and the penalties for tax evasion in the United States are excessively severe.

Thirdly, in all ‘true-sale’, ‘disguised loan’ and ‘assignment’ securitisations, the conflict of interest inherent in the sponsor also serving as the servicer constitutes fraud and conversion. In the fourth place, in all ‘true-sale’, ‘disguised loan’ and ‘assignment’ securitisations where the Special Purpose Vehicle [SPV] is a trust, the declaration of trust is void, as it exists for an illegal purpose.

In the fifth place, off-balance sheet treatment of asset-backed securities (both for ‘true-sale’ and for assignment transactions) constitutes fraud.

Sixth, all ‘true-sale’, ‘disguised loan’ and ‘assignment’ securitisations involve blatant fraudulent conveyances. In the seventh place, securitisation usurps United States bankruptcy laws and is accordingly illegal, as well as being also demonstrably contrary to public policy.

SECURITISATION ENTAILS GROSS VIOLATIONS OF R.I.C.O. STATUTES
In ‘true-sale’, ‘disguised loan’ and ‘assignment’ securitisations, there are fraudulent transactions which serve as ‘predicate acts’ under US Federal R.I.C.O. statutes.

The specific R.I.C.O. sections are: Section 1341 (mail fraud); Section 1343 (wire fraud); Section 1344 (financial institution fraud); Section 1957 (engaging in monetary transactions improperly derived from specified unlawful activity) [‘the money you make from the illegal exploitation of my money, is my money’]; and Section 1952 (racketeering).

Furthermore, securitisation constitutes violations of American antitrust statutes through market integration, syndicate collusion, price formation, vertical foreclosure, tying, price-fixing, predatory pricing, and the rigging of allocations.

Securitisation also involves void contracts, given the lack of consideration, illusory promises, the absence of any actual bargain, the absence of mutuality – and finally illegal subject matter and the contravention of public policy.

Securitisation is riddled with Fraudulent Transfer, Fraud in the Inducement, Fraud in Fact by Deceit, Theft by Deception (Fraudulent Concealment) and Fraudulent Conveyance: see the US securities regulations routinely breached in such activity, listed at the foot of this report and of most of these reports for THE PAST THREE++ YEARS, and other laws also routinely flouted in this context.

NOTWITHSTANDING THAT IT’S ILLEGAL, U.S. AUTHORITIES
CONTINUE TO PROMOTE AND ENCOURAGE SECURITISATION
Yet notwithstanding such crystal-clear indications that securitisation is 100% ILLEGAL under US Law, as well as under Common Law generally (so that these findings are largely applicable in all Common Law countries), US authorities from the highest level downwards, financial institutions, intermediaries, Intelligence Power operatives and others are gearing up for what they doubtless hope will be intensified racketeering and trading activity with (corrupt) foreign counterparties.

This behaviour is being fine-tuned ‘as we speak’, despite the reality that the securitisation activity being planned and implemented violates innumerable US statutes in the manner we summarise above, and notwithstanding that such activity is contrary to public policy. TAnd the International Monetary Fund knows all this perfectly well, yet sits idly by, accommodating this racketeering.

Indeed, it’s as though the Rule of Law did not exist. From the highest level of the US Treasury, the White House, the US State Department and the Central Intelligence Agency and its subsidiaries such as the lethal Office of Naval Intelligence (ONI), the mindset, intention and perverse primary objective has all along been to resume Fraudulent Finance based on securitisation, as quickly and as seamlessly as possible. The IMF and World Bank are parties to thus aberrant behaviour.

SUMMARY FORENSIC ANALYSIS PROVING THE ILLEGALITY OF SECURITISATION
From whichever angle securitisation is considered, it is ILLEGAL. For example, the contracts are themselves VOID. This is because the process of securitisation involves several contracts that are either signed simultaneously, or within a short timeframe – many of which are rendered void inter alia because there is no consideration in contracts used in effecting the securitisations.

Many such contracts involve unilateral executory undertakings containing illusory promises. A unilateral executory promise is not a consideration. Such promises typically include a promise made by the Special Purpose Vehicle to pay out periodic interest, whether contingent or non-contingent on whether the collateral pays cash interest.

Collateral-substitution agreements contain a promise whereby the sponsor agrees to substitute impaired collateral. An assignment agreement of future (not yet existing) collateral may well be deemed a unilateral executory promise by the sponsor.

Illusory promises are not valid consideration for a contract. Such promises may be found in the Subscription/Purchase Agreement, whereby an existing asset is being exchanged for a future asset that does not exist as of the date of the subscription/purchase agreement. To make matters worse, none of the agreements typically signed by the investor as part of his/her purchase of the Special Purpose Vehicle’s Asset-Backed Securities expressly incorporates the (typically illusory) promises embodied in the offering prospectus.

OR: The Special Purpose Vehicle’s promise to pay interest and/or dividends on Asset-Backed Securities ‘Interest-Onlys’, Preferreds and ‘Pincipal-Onlys’ are essentially illusory promises because the underlying collateral may not produce any cash flows at all: so there won’t be any interest/dividend payments.

Moreover the lack of mutuality characterising such contracts renders them null and void, by definition. In any such contract, each party must have firm control of the subject matter of the contract and the underlying assets (consideration), and there MUST be a direct contractual relationship between the parties concerned.

But this is not the case, especially as the Special Purpose Vehicle’s corporate documents (trust indentures or bylaws or articles of incorporation) may typically limit the right of each Asset-Backed Security investor; while there is typically no mutuality at all between the Special Purpose Vehicle and the sponsor/originator, because both entities are essentially the same, and are controlled by the sponsor before and after the securitisation takes place.

SECURITISATION: A COVER FOR TAX EVASION
In addition to their multiple violations of American State usury laws, all ‘true-sale’, ‘disguised loan’ and ‘assignment securitisations’ are essentially tax evasion arrangements. In the United States, the applicable tax evasion statute is the US Internal Revenue Code Section 7201 7 which reads: “Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution”.

Under this statute and related case law, prosecutors
must prove three elements beyond any reasonable doubt:

(1): The actus reus (the guilty conduct) – which consists of an affirmative act (not merely an omission or failure to act) that constitutes evasion or an attempt to evade either: (a) the assessment of a tax or (b) the payment of a tax.

(2): The mens rea or “mental” element of willfulness – the specific intent to violate an actually known legal duty. In the case of ‘true sale’ transactions, the tax evasion occurs because:

(a): The sponsor determines the price at which the collateral is transferred to the SPV, and hence, can arbitrarily lower/increase the price to avoid capital gains taxes – it being assumed here that the sponsor is a profit-maximising entity and will always act to minimise its tax liability and to avoid any tax assessment;

(b): The sponsor typically retains a ‘residual’ interest in the SPV in the form of IOs, POs and “junior pieces”, which are typically taxed differently and on a different tax-basis compared with the original collateral: hence, the sponsor can lower the price of the collateral upon transfer to the SPV, and convert what would have been capital gains, into a non-taxable basis in the SPV “residual”;

(c): There is typically the requisite “intent” by the sponsor – evidenced by the arrangement of the transaction and the transfer of assets to the Special Purpose Vehicle;

(d): Before securitisation, collateral is typically reported in the sponsors’ financial statements at book value (that is, lower-of-cost-or-market: under both the US and the international accounting standards, loans and accounts receivable are typically not re-valued to market-value unless there has been some major impairment in value) which does not reflect true Market Values, and results in effective tax evasion on transfer of the collateral to the SPV, as any unrealised gain is not taxed;

(e): The actus reus is manifested by the execution of the securitisation transaction and transfer of assets to the Special Purpose Vehicle (SPV);

(f): The mens rea or specific intent is manifested by the elaborate arrangements implicit in securitisation transactions, the method of determination of the price of the collateral to be transferred to the SPV, the aims of securitisation, and the sponsor’s transfer of assets to the SPV;

(g): The unpaid tax liability consists of foregone tax on the capital gains from the collateral (the transaction is structured to avoid recognition of capital gains), and tax on any income from the collateral which is ‘converted’ into basis or other non-taxable forms;

(h): Income (from the collateral) that would have been taxable in the sponsor’s own financial statements, is converted to a non-taxable basis in the form of the SPV’s Interest-Only (IO) and Principal-Only (PO) securities: part of the Interest-Spread (the difference between the SPV’s income and what it pays as interest and operating costs) is paid out to PO-holders, and this transforms interest into return-of-capital or just capital repayment, with no tax consequences.

In cases of ‘disguised loan’ or ‘assignment’ securitisation transactions, tax evasion occurs:

(a): Because the sponsor determines the price at which the collateral is transferred to the SPV, and hence can lower/increase the price of the collateral to avoid capital gains taxes;

(b): Because the sponsor typically retains a ‘residual’ interest in the SPV which is normally taxed differently and on a different tax-basis compared to the original collateral: hence, the sponsor can lower the price upon transfer to the SPV, and convert what would have been capital gains, to a non-taxable basis for tax purposes;

(c): Because the transfer of collateral to the SPV and the creation of Interest-Only and Principal-Only securities converts what would have been taxable capital gains into non-taxable basis;

(d): Because gain in the value of the collateral is not recognised for tax purposes, because there has not been any ‘sale’;

(e): Where the Asset-Backed Security (ABS) is partly amortising, any capital gains are converted into interest payments;

(f): Because actus reus is manifested by the execution of the securitisation transaction and transfer of assets to the SPV;

(g): Because the mens rea or specific intent is manifested by the elaborate arrangements implicit in securitisation transactions, the objectives of securitisation and the sponsor’s transfer of assets to the Special Purpose Vehicle;

(h): Because the unpaid tax liability consists of tax on the capital gains from the transfer of the collateral (the transaction is structured to avoid recognition of a sale, whereas the transfer to the Special Purpose Vehicle is effectively a sale), and tax on any income from the collateral which is ‘converted’ into basis or other non-taxable forms, by securitisation.

SECURITISATION VIOLATES THE U.S BANKRUPTCY CODE
AND THEREFORE ALSO CONTRAVENES PUBLIC POLICY
Any transfer or conveyance of the assets of a debtor that is deemed to be made for the purposes of hindering, delaying or defrauding actual or potential creditors, may be determined by Courts to be a Fraudulent Conveyance under Section 548 of the US Bankruptcy Code or under a relevant theory of Constructive Fraud.

Although each US State has its own laws regarding the appropriate elements of proof of Constructive Fraud, Section 548(a)(2) of the US Bankruptcy Code permits an inference of Constructive Fraud if the following factors exist:

(1): The debtor received less than reasonably equivalent value for the property transferred; and:

(2): The debtor was insolvent or became insolvent as a result of the transfer, or else retained unreasonably small capital after the transfer, or made the transfer with the intent or belief that it would incur debts beyond its ability to pay.

The following theories of Fraudulent Conveyance within the context of securitisation may apply:

• Where the sponsor/originator receives insufficient value for assets transferred.

• Where there is an ‘intent to hinder, delay or defraud’ creditors (representing an implicit pre-petition waiver of one’s right to file for bankruptcy), with regard to the originator’s transfer of assets to the SPV, or the originator’s transfer of assets to the SPV has clearly not been undertaken on an arms’-length basis.

• Where securitisation increases the originator’s bankruptcy risk; and:

• In all instances where securitisation usurps the United States’ bankruptcy laws and is therefore illegal on such a basis alone.

SECURITISATION VIOLATES FEDERAL R.I.C.O. STATUTES
Turning now to the reality that securitisation constitutes a violation of US Federal R.I.C.O. Statutes [see Legal Notes below], we can state without equivocation that the entire securitisation process constitutes violations of Federal R.I.C.O. statutes, because:

(1): There is the requisite criminal or civil ‘enterprise’ – consisting of the sponsor/issuer, the trustees and the intermediary bank. These three parties work closely together to effect the securitisation transaction.

(2): There are ‘predicate acts’ of:

(a): Mail fraud – using the mails for sending out materials among themselves and to investors.

(b): Wire fraud – using wires to engage in fraud by communicating with investors.

(c): Conversion – where there isn’t proper title to collateral.

(d): Deceit: misrepresentation of issues and facts pertaining to the securitisation transaction.

(e): Securities fraud: disclosure issues.

(f): It entails loss of profit opportunity.

(g): It involves the making of false statements and or misleading representations
about the value of the collateral.

(h): It entails stripping the originator/issuer of the ability to pay debt claims or judgment claims in bankruptcy court – a state of affairs that may apply where the sponsor is financially distressed and the cash proceeds of the transaction are significantly less than the value of the collateral.

There is also typically the requisite ‘intent’ by members of the enterprise – evident in knowledge (actual and inferable), acts, omissions, purpose (actual and inferable) and results. Intent can be reasonably inferred from:

(a): The existence of a sponsor that seeks to raise capital – and cannot raise capital on better terms by other means;

(b): The participation of an investment bank that has very strong incentives to consummate the transaction on any agreeable (but not necessarily reasonable) terms.

SECURITISATION ALSO VIOLATES U.S. ANTITRUST LEGISLATION
Securitisation further constitutes violations of US Antitrust laws, because the American Asset-Backed Securities and Mortgage-Backed Securities markets are dominated by relatively few large entities such as FNMA (Fannie Mae), Freddie Mac, the top five investment banks (all of which have conduit programs), and the top five credit card issuers (MBNA, AMEX, Citigroup, etc.), etc.. As a consequence, the top five ABS/MBS issuers control more than 50% of the US ABS/MBS market.

• This constitutes illegal market concentration under US Antitrust legislation.

THE ‘PHILIPPINES EXCEPTION’ BURIED IN THE CLAYTON ACT
In the Antitrust context, however, observe the following text from the Clayton Act, which specifically EXCLUDES transactions undertaken with The Philippines. Isn’t that interesting?

It provides a blanket rationale for the massive past and ongoing US clandestine focus on The Philippines, the CIA’s need for ‘black hole’ conditions there in connection with successive US operations to relieve Presidents Marcos and Aquino of the stolen and hidden ‘Yamashita’s gold’, the US Fraudulent Finance operations using Philippine institutions and related operations based in that territory, an aborted US operation to convert The Philippines into a new US State (as had been planned under Clinton for Somalia), and the frequent visits of operatives known to ourselves to The Philippines under cover of attending to ‘orphanages’:

§ 1 Clayton Act, 15 U.S.C. § 12 Definitions; short title:
(a) “Antitrust laws”, as used herein, includes the Act entitled:
‘An Act to protect trade and commerce against unlawful restraints and monopolies’, approved July second, eighteen hundred and ninety; sections seventy-three to seventy-seven, inclusive, of an Act entitled ‘An Act to reduce taxation, to provide revenue for the Government, and for other purposes’, of August 27th, eighteen hundred and ninety-four; an Act entitled ‘An Act to amend sections seventy-three and seventy-six of the Act of August twenty-seventh, eighteen hundred and ninetyfour’, entitled ‘An Act to reduce taxation, to provide revenue for the Government, and for other purposes’, approved February twelfth, nineteen hundred and thirteen; and also this Act.

‘Commerce’, as used herein, means trade or commerce among the several States and with foreign nations, or between the District of Columbia or any Territory of the United States and any State, Territory, or foreign nation, or between any insular possessions or other places that are under the jurisdiction of the United States, or between any such possession or place and any US State or Territory of the United States or the District of Columbia or any foreign nation, or within the District of Columbia or any Territory or any insular possession or other place under the jurisdiction of the United States:

Provided, That nothing in this Act contained shall apply to the Philippine Islands. The word ‘person’ or ‘persons’ wherever used in this Act shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country.

FANNIE MAE, FREDDIE MAC ENGAGED IN FURTHER ILLEGAL SECURITISATION:
RE-SECURITISING ALREADY SECURITISED ‘DUD’ ASSETS TO DUMP BACK ON THE BANKS
Even so, it became apparent in early March that Fannie Mae and Freddie Mac, both controlled by the US Government, were planning to force financial enterprises such as the CIA’s Bank of America Corporation, JP Morgan Chase & Co, Wells Fargo and Citigroup, Inc., to buy back further waves of newly securitised packages of mortgages – i.e., the former Government-Sponsored Enterprises are reportedly engaged again in repackaging mortgage securities already marked down to ‘true’ value.

In other words, they are trying to dump faulty securitised loans, as well as straight loans, back on the participating banks – under cover of such fantasies as the double-minded statement attributed to Sharon McHale, spokes‘person’ for Freddie Mac, located adjacent to the CIA in McLean, Virginia, on 5th March 2010: ‘We are trying to be good stewards of taxpayer dollars and as part of that, it’s important that those dollars not go to loans that should not have been sold to us in the first place’ – throwing the blame for Freddie Mac’s own scandalous racketeering behaviour back at the banks.

• Being interpreted, what this woman was saying was: this:

‘We are covering ourselves with a mantle of rectitude by posing as protectors of the taxpayer’s dollars in order to obfuscate our own ongoing racketeering behaviour, even as we prepare further Fraudulent Finance securitisations in violation of the relevant US legislation: and we couldn’t care less because we are owned by the Government itself, which is up to its neck in such violations’.

And Paul Miller, a former examiner for the Federal Reserve (hardly a guarantee of integrity, given the Fed’s own reputation for Fraudulent Finance), based in Arlington, VA, let the cat out of the bag with: ‘If you want to originate mortgages and keep that pipeline running, you have to deal with the push-backs. It doesn’t matter how much you hate Fannie and Freddie’ – and neither, apparently, does it matter to what extent the Rule of Law is cynically violated ‘in order to keep the pipeline (of Fraudulent Finance) running’. It doesn’t matter that securitisation is a form of racketeering.

GARY GENSLER IS NOT AS OPPOSED TO FRAUDULENT FINANCE AS HE SEEMS
The appointment of Gary Gensler as Chairman of the Commodity Futures Trading Commission under President Obama was greeted with signs of relief on Wall Street. Here was a hardened former Goldman Sachs trader with 18 years’ experience with that cynical, ruthless money shop, who could be relied upon to act at all times in the interests of Wall Street, not the investor and taxpayer.

But, as has since been reported elsewhere, over a private lunch at the Waldorf Astoria in midtown Manhattan on 6th January 2010, the 52-year-old Gary Gensler caused indigestion among the self-satisfied guests at the luncheon – Timothy O’Hara, head of global credit at Crédit Suisse Holdings USA, Inc.; Robert P. Kelly, CEO at Bank of New York Mellon Corporation; David B. Heller, co-head of the securities division at Goldman Sachs; and Seth Waugh, CEO of Deutsche Bank Americas.

Because when one banker asked Gensler what or whom he saw as the biggest obstacles to reform in the securities and commodities sectors, he replied: ‘You’.

Mr Gensler has been seeking derivatives control legislation that goes beyond current proposals, including what President Obama put forward during the summer of 2009. Notwithstanding the fact that if the derivatives situation is not addressed, the forthcoming crash will be so horrific as to be likely to tip the world into open, rather than covert, warfare, a certain Dr Samuel Hayes, Professor Emeritus of Investment Banking at Harvard Business School, Boston, told Bloomberg in February 2010 that ‘Gensler is going to raise real concerns’ for financial firms.

‘Derivatives are absolutely central to what is Wall Street in the 21st century’ – namely, a casino. ‘Nobody wants the regulations to affect them’.

‘GREATER TRANSPARENCY’ IS EVIDENTLY ALL HE‘S AFTER
On closer examination, Mr Gensler has actually been pushing for ‘more transparency’ in the over-the-counter derivatives market, so as to lower spreads between buyers and sellers and to make it easier for new competitors to enter the market – which the big banks aren’t keen on, as more participants will deprive them of profit.

So, Gary Gensler is not actually in the business of tackling the underlying crisis arising from the determination of financial institutions to continue playing Russian roulette, using the model first developed by the US Intelligence Power as it sought what it thought were foolproof methods of ensuring its financial independence from Congress and the open-ended funding pipelines that it considered appropriate to buttress its usurped status as a recalcitrant ‘State within the State’ impervious to reform and determined to brook no interference with its stolen hegemony.

INVESTORS’ MONEY USED TO REMUNERATE WALL STREET
In any case, the derivatives institutions and their back-up infrastructure have not the slightest intention of adopting any course other than ’business as usual‘ – and on a far larger scale than in the past. This obtuse madness WILL lead to a global collapse, as derivatives products are usually without real value. As a noted article in The New York Times of 7th February 2010 at last stated, investment banks trading derivatives do not own the mortgage bonds, the obligations from home owners, notes signed by home owners or the mortgage deeds of the deeds of trust.

The ‘structured products’, consisting of bundled documents ostensibly relating to the above but having NO RECOURSE to underlying real value, were, however, invested with ‘value’ arising from the name of the institution marketing the ‘asset’ – that is to say, arbitrary ‘value’ arising from the fact that, as a Goldman Sachs compliance officer actually admitted to the Editor of this service: ‘A structured product is worth what someone is prepared to pay for it’ – a penetrating statement which encapsulates the possibility that it may be (is) worthless: which is indeed the case.

‘THE MONEY YOU MAKE BY MISUSING MY MONEY IS MY MONEY’ – I.E., THE HOME OWNER’S
The money sloshing around between investment banks in this dirty market was investors’ money unwittingly advanced into pools of capital which winds up being used primarily to finance the fees, profits, insurance proceeds, insurance premia, and so forth – all for the benefit of Wall Street, paid to the investment banks, and not to investors who stumped up the money in the first place.

These fees and relationships are not and have never been disclosed to the home owner despite, in the United States, clear legislation requiring such transparency, including the Truth in Lending Act, and Deceptive Lending – which require full transparency and disclosure.

• Further legislation applicable to the securities sector in the United States is re-listed below – in the list that we have republished at the foot of our website reports for the past three years.

• The list of applicable securities regulations and laws is augmented by a legal tutorial which, again, we have published for the past three years at the foot of these reports,

It would appear that, notwithstanding such reminders, Wall Street and its compliant infrastructure, as well as its co-conspiring portfolio of dubious foreign trading counterparty institutions, has every intention of continuing to violate the relevant US rules and legislation – while at the same time continuing to abuse, in the mortgage sector, the home owner with the same cynicism as in the past.

Given the legal principle that ‘the money you make from misusing my money is my money’, it is quite clear that undisclosed fees, profits, kickbacks and other financial abuses perpetrated by these big speculative financial entities which produce no real wealth at all, but simply move money around between themselves, are payable to the home owner who signed the ‘loan’ papers in the first place.

THE ILLEGALITY OF SECURITIZATION
A legal analysis by MICHAEL NWOGUGU,
Certified Public Accountant (Maryland, USA); B.Arch.
(City College of New York). MBA (Columbia University).
Attended Suffolk Law School (Boston, USA).

Abstract:
Under US laws, securitization is illegal, primarily because it is fraudulent and causes very specific violations of R.I.C.O., usury, and antitrust laws. Securitization of many types of assets (loans, credit cards, auto receivables, intellectual property, etc.) has become and remains prevalent, particularly for financially distressed companies and companies with low or mid-tier credit ratings. This analysis focuses on securitization as it pertains to asset-backed securities and mortgage-backed securities, and analyzes critical legal and corporate governance issues.

Editor’s Note: This analysis does not elaborate that the illegal securitization model was developed and hijacked by the criminalised Intelligence Power, which is our contribution to the issue; but that is the sum of the matter, to be kept in mind at all times.

Keywords:
Securitization; antitrust; R.I.C.O.; constitutional law; capital markets; complexity; fraud.
[Some American English spelling has been retained].

Main abbreviations:
ABS = Asset-Backed Securities; SPV = Special Purpose Vehicle.

EDITOR’S INTRODUCTION
Under US legislation, securitization is illegal. Indeed many authors have illustrated the deficiencies in securitization (1). This analysis focuses on securitization as it pertains to asset-backed securities and mortgage-backed securities (2), (3).

The existing literature on legal and corporate governance issues pertaining to securitization is extensive, but has several gaps that have not been addressed at all or sufficiently:

• Whether securitization is legal.
• Whether securitization causes usury.
• The standards for usurious loans/forbearance.
• The specific components of cost-of-capital, for purposes of assessing usury violations.
• Antitrust liability in securitization transactions.
• Federal/State R.I.C.O. liability in securitization transactions.
• The constitutionality of securitization transactions.
• The validity of contracts used in effecting securitization transactions.
• Whether securitization usurps the purposes of the US Bankruptcy Code.

This analysis seeks to fill these significant gaps in the literature [and to answer questions vexing the US and international financial markets, for the definitive elimination of doubt – in support of our long-standing demonstration that securitization and the creation and marketing of ‘structured products’ represents serious fraud – Ed.].

Although the following analysis is supported with US case law, the principles derived are applicable to securitization transactions in both common-law countries and civil-law countries – which means that they are applicable in, for instance, the United Kingdom. In analyzing the legality of securitization, the following criteria are relevant:

• Origins and history of securitization – legislative history, evolution of securitization processes, and current practices. Carlson (1998), Janger (2002) and Lupica (2000) (4) trace the known history of US securitization to direct and specific efforts/collaborations to avoid the impact of US bankruptcy laws. Klee & Butler and other authors have traced the history of securitization to attempts to handle the problem of non-performing debt.

• Types of contracts used in securitization:

The primary criteria for enforceability.

• Purposes, wording and scope of applicable laws – state contract laws, State trusts laws, US Bankruptcy Code, and State/Federal securities laws. The legislative intent of the US Congress in drafting and revising the US Bankruptcy Code.

• How the applicable laws are applied in securitization processes – by market participants, regulators and lawyers that represent investors.

•The people, markets, and entities and organizations affected by securitization.

• The usefulness of existing (if any), possible and proposed (if any) deterrence measures designed to reduce fraud/crime/misconduct [such as has been extensively reported by this service, and in International Currency Review – Ed.].

• Transaction costs.

• The results and consequences of the application (or non-application) of relevant laws.

A: SECURITIZATION VIOLATES STATE USURY LAWS
Securitization violates State usury laws, because the resulting effective interest rate typically exceeds legally allowable rates (set by State usury laws) (5). There is substantial disagreement (conflicts in case-law holdings) among various US court jurisdictions, and also within some judicial jurisdictions, about some issues; and these conflicts have not been resolved by the US Supreme Court 6. On these issues, even the cases for which the US Supreme Court denied certiorari, vary substantially in their holdings. The pertinent issues are as follows:

1: What constitutes usury.
2: What costs should be included when calculating the effective cost-of-funds.
3. What types of forbearance qualify for applicability of usury laws.
4: Conditions for pre-emption of state usury laws. Where the securitization is deemed an assignment of collateral, the effective cost-of-funds for the securitization transaction is not the advertised interest cost (investor’s coupon rate) of the ABS securities, but rather the sum of the following elements:

• The greater of the sponsor’s/originator’s annual cost-of-equity (in percentages) or the percentage annual cash yield from the collateral (in a situation where the SPV’s corporate documents expressly state that the Excess Spread should be paid to the sponsor, the Excess Spread should be subtracted from the resulting percentage). The Excess Spread is defined as the Gross Cash Yield From The Collateral, minus the interest paid to investors, minus the Servicing Expense (paid to the servicer), minus Charge-offs (impaired collateral).

• The Amortized Value Difference:
The difference prevailing between the Market Value of the collateral, and the amount raised from the ABS offering (before bankers’ fees), which is then amortized over the average life of the ABS bonds (at a discount rate equal to the US Treasury Bond rate of same maturity) and then expressed as percentage of the market value of the collateral. This difference can range from 10-30% of the Market Value of the collateral, and is highest where there is a senior/junior structure, and the junior/first-loss piece serves only as credit enhancement.

• Amortized Total Periodic Transaction Cost:
The Pre-offering Transaction Costs are amortized over the average life of the ABS, a rate equal to the interest rate on an equivalent-term US Treasury bond. The Periodic Transaction Costs are then added to the Amortized Pre-offering Transaction Costs to obtain Total Periodic Transaction Cost which is expressed as a percentage of the value of the pledged collateral.

The Pre-offering Transaction Costs include external costs (underwriters’ commissions/fees, filing fees, administrative costs (escrow, transfer agent, etc.), marketing costs, accountant’s fees, legal fees, etc.) and internal costs incurred solely because of the securitization transaction (namely, costs incurred internally by the sponsor/originator, viz. direct administrative costs, printing, etc.). Periodic Transaction Costs = admin. costs, servicing fees, charge-off expenses, escrow costs.

• Foregone Capital Appreciation:
The foregone average annual appreciation/depreciation of the value of the collateral minus the interest rate on demand deposits, with the difference expressed as a percentage of the Market Value of the collateral.

The sum of these four elements is typically greater than state-law usury benchmark rates.

Where the securitization is deemed a ‘true-sale’, there is an implicit financing cost which is typically usurious, because it is equal to the sum of the following:

• Base Cost of Capital:
The greater of the sponsor’s or originator’s annual weighted-average-cost-of-capital, or the annual percentage yield from the collateral.

• The Amortized Total Periodic Transaction Cost:
The Pre-Securitization Transaction Costs paid by the sponsor or originator and directly attributable to the offering is amortized over the life of the ABS, at a rate equivalent to the interest rate on an equivalent-term US Treasury bond, and the result (the Amortized Pre-Securitization Costs) is then added to the Periodic Transaction Costs for only one period in order to obtain the Total Periodic Transaction Cost, which is then expressed as a percentage of the market value of the collateral. This is the Amortized Total Periodic Transaction Cost.

The Pre-Securitization Transaction Costs include external costs (underwriters’ commissions/fees, filing fees, administrative costs (escrow, transfer agent, etc.), marketing costs, accountant’s fees, legal fees, etc.) and internal costs incurred solely because of the securitization transaction (viz. costs incurred internally by the sponsor/originator, namely direct administrative costs, printing). Periodic Transaction Costs = admin. costs, servicing fees, charge-off expenses, escrow costs.

• The Value Difference:
This is the difference between the Market Value of the collateral, and the amount raised from the ABS offering (before bankers’ fees), is amortized over the average life of the ABS bonds and the result is then expressed as percentage of the Market Value of the collateral.

• This difference can range from 10 to 30%, and is highest where the senior/junior structure is used and the junior piece serves only as credit enhancement.

• Amortized Unrealized Losses:
Any unrealized loss in the carrying amount of the collateral, is amortized over the estimated average life of the ABS, and the result for one period is expressed as a percentage of the book value of the collateral. Most Asset-Backed Securities collateral data are recorded in financial statements at the lower-of-cost-or-market.

• Foregone Capital Appreciation:
foregone average annual appreciation/depreciation of the value of the collateral minus the interest rate on demand deposits, with the difference expressed as a percentage of the Market Value of the collateral. The sum of these elements is typically greater than state-law usury benchmark rates.

B: ALL ‘TRUE-SALE’, DISGUISED LOAN’ AND ‘ASSIGNMENT
SECURITIZATIONS ARE ESSENTIALLY TAX-EVASION SCHEMES
In the United States, the applicable tax evasion statute is the US Internal Revenue Code Section 7201 7 which reads as follows: “…….Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution………”.

Under this statute and related case law, prosecutors
must prove three elements beyond a reasonable doubt:

(1): The actus reus (the guilty conduct) – which consists of an affirmative act (and not merely an omission or failure to act) that constitutes evasion or an attempt to evade either: (a) the assessment of a tax or (b) the payment of a tax.

(2): The mens rea or “mental” element of willfulness –
the specific intent to violate an actually known legal duty.

In the case of ‘true sale’ transactions, the tax evasion (8) occurs because:

(a): The sponsor determines the price at which the collateral is transferred to the Special Purpose Vehicle and hence, can arbitrarily lower/increase the price to avoid capital gains taxes – it being assumed here that the sponsor is a profit-maximizing entity and will always act to minimize its tax liability and to avoid any tax assessment;

(b): The sponsor typically retains a ‘residual’ interest in the SPV in the form of IOs, POs and “junior pieces”, which are typically taxed differently and on a different tax-basis compared with the original collateral: hence, the sponsor can lower the price of the collateral upon transfer to the SPV, and convert what would have been capital gains, into a non-taxable basis in the SPV “residual”;

(c): There is typically the requisite “intent” by the sponsor – evidenced by the arrangement of the transaction and the transfer of assets to the Special Purpose Vehicle;

(d): Before securitization, collateral is typically reported in the sponsors’ financial statements at book value (lower-of-cost-or-market: under both American and international accounting standards, loans and accounts receivable are typically not re-valued to market-value unless there has been some major impairment in value) which does not reflect true Market Values, and results in effective tax evasion upon transfer of the collateral to the SPV because any unrealized gain is not taxed;

(e): The actus reus is manifested by the execution of the securitization transaction and transfer of assets to the Special Purpose Vehicle;

(f): The mens rea or specific intent is manifested by the elaborate arrangements implicit in securitization transactions, the method of determination of the price of the collateral to be transferred to the Special Purpose Vehicle, the objectives of securitization, and the sponsor’s transfer of assets to the Special Purpose Vehicle;

(g): The unpaid tax liability consists of foregone tax on the capital gains from the collateral (the transaction is structured to avoid recognition of capital gains), and tax on any income from the collateral which is ‘converted’ into basis or other non-taxable forms;

(h): Income (from the collateral) that would have been taxable in the sponsor’s financial statements, is converted into non-taxable basis in the form of the SPV’s Interest-Only (IO) and Principal-Only (PO) securities: part of the Interest-Spread (the difference between the SPV’s income and what it pays as interest and operating costs) is paid out to PO-holders, and this transforms interest into return-of-capital or just capital repayment, with no tax consequences.

In the case of ‘disguised loan’ or ‘assignment’ securitization transactions,
the tax evasion occurs because:

(a): The sponsor determines the price at which the collateral is transferred to the SPV, and hence can lower/increase the price of the collateral to avoid capital gains taxes;

(b): The sponsor typically retains a ‘residual’ interest in the SPV which is typically taxed differently and on a different tax-basis compared to the original collateral: hence, the sponsor can lower the price upon transfer to the SPV, and convert what would have been capital gains, into non-taxable basis for tax purposes;

(c): The transfer of collateral to the SPV and the creation of interest-only and principal-only securities essentially converts what would have been taxable capital gains into non-taxable basis;

(d): Any gain in the value of the collateral is not recognized for tax purposes, because there has not been any ‘sale’;

(e): Where the ABS is partly amortizing, any capital gains are converted into interest payments;
(f): The actus reus is manifested by the execution of the securitization transaction and transfer of assets to the Special Purpose Vehicle;

(g): The mens rea or specific intent is manifested by the elaborate arrangements implicit in securitization transactions, the objectives of securitization and the sponsor’s transfer of assets to the Special Purpose Vehicle;

(h): The unpaid tax liability consists of tax on the capital gains from the transfer of the collateral (the transaction is structured to avoid recognition of a sale, whereas the transfer to the Special Purpose Vehicle is effectively a sale), and tax liability on any income from the collateral which is ‘converted’ into basis or other non-taxable forms (Interest-Onlys and Principal-Onlys), by securitization.

C – 1: IN ALL ‘TRUE-SALE’, ‘DISGUISED LOAN’ AND ‘ASSIGNMENT’ SECURITIZATIONS, THE
CONFLICT OF INTEREST INHERENT IN THE SPONSOR ALSO SERVING AS THE SERVICER,
CONSTITUTES FRAUD AND CONVERSION: SEE OUR STANDARD LEGAL NOTES BELOW.
In most securitization transactions, the sponsor eventually serves as the servicer of the Special Purpose Vehicle asset pool.

As servicer, the sponsor: (a) determines when there has been impairment of collateral; (b) selects collateral for replacement; and (c) monitors collateral performance.

To prove fraud, prosecutors must prove several elements beyond a reasonable doubt:

(1): The actus reus (the guilty conduct) – which consists of an affirmative act (and not merely an omission or failure to act) of misrepresentation of material facts. In securitizations, the sponsor typically makes material misrepresentations:

(a) The sponsor/servicer selects the assets to be transferred to the SPV, and the terms of the offering Prospectus typically misrepresent the level of objectivity and fairness of the servicer/sponsor;

(b) The sponsor/servicer selects collateral for substitution where there are problems – the past and present disclosure statements and ABS offering documents materially misrepresent the sponsor/servicer’s objectivity/fairness.

(2): The mens rea or ‘mental’ element of willfulness – the specific intent to misrepresent the sponsor/servicer’s acts, truthfulness and objectivity/fairness, is manifested by the dual rôle of sponsor/servicer which constitutes a conflict-of-interest. Mens rea is also clearly inferable from the facts and circumstances: the sponsor/servicer clearly has significant economic, psychological and ‘legal’ incentives to maximize its profits by:

(a): Delaying substitution of collateral for as long as possible;

(b): Delaying recognition of collateral impairment, and:

(c): Substituting impaired collateral with sub-standard collateral; all of which make the sponsor highly unsuitable for the rôle of servicer;

(3): The reliance element: ABS investors rely heavily on the structure/arrangements, contracts and disclosure statements in securitizations, which are always relatively complex. These form the primary source of knowledge and valuation terms for the investor;

(4): The victim(s) suffer(s) loss as a result of the misrepresentations (whether of direct or proximate causation). Investors suffer losses because of the sponsor’s/servicer’s misrepresentations of its obligations, fairness, objectivity and fiduciary duties:

Specifically:

(a) Investors’ estimates of the values of Asset-Backed Securities are inaccurate and too high due to the servicer’s/sponsor’s misrepresentations;

(b) Investors incur unnecessary trading costs to re-balance their portfolios as the Asset-Backed Security becomes riskier;

(c) Investors and the sponsor/servicer incur additional monitoring costs whenever there is any report of impairment of collateral or substitution. Furthermore, in the ABS sales process, the underwriter makes certain representations concerning the effectiveness and predictability of the collection process. Under certain conditions, investors relying on such representations may have a securities fraud claim if the servicer fails to perform, such as in bankruptcy.

C-2: IN ALL ‘TRUE-SALE’, ‘DISGUISED LOAN’ AND ‘ASSIGNMENT’ SECURITIZATIONS WHERE
THE SPECIAL PURPOSE VEHICLE IS A TRUST, THE DECLARATION OF TRUST IS VOID AS IT EXISTS FOR AN ILLEGAL PURPOSE. [ALL CONTRACTS STRUCK FOR AN ILLEGAL PURPOSE ARE NULL AND VOID, SOMETHING THE CRIMINAL ENTERPRISES DON’T WANT YOU TO KNOW].
The declaration of trust relating to the SPV is void because the intent and purpose of the SPV is illegal and unconstitutional as described in this analysis and in Nwogugu (2006).

D: OFF-BALANCE SHEET TREATMENT OF ASSET-BACKED SECURITIES (BOTH
FOR ‘TRUE-SALE’ AND FOR ‘ASSIGNMENT’ TRANSACTIONS) CONSTITUTES FRAUD
Under prevailing accounting rules in the United States and most countries, if certain criteria were met, the debt raised by the Special Purpose Vehicle in securitization can be treated as off-balance sheet debt. However this requires compliance with three criteria:

(i) The Special Purpose Vehicle should be truly independent from the sponsor and the directors, fiduciary administrative duties notwithstanding.

(ii) The sponsor’s transfer of the assets to the SPV should be a ‘true sale’ and the sponsor should not have any ongoing economic interest in the assets.

(iii) The form and substance should transparently be identical, and the structure should not appear to be illusory or deceptive.

Nevertheless, these off-balance-sheet treatment criteria have been recently reformed by changes in accounting standards. The British-based International Accounting Standards Board and the US FASB are moving towards stricter reporting standards. Specifically:

• FIN 46 (FASB): Effective in 2003, FIN 46 applies only to companies subject to regulation by the FASB. Its objective is to substantially tighten the criteria necessary to obtain off-balance-sheet treatment for Special Purpose Vehicles, and its main thrust is capital adequacy.

• FIN 46 also imposes an obligation on originators to consolidate the accounts of an SPV (denying off-balance-sheet treatment) unless the total equity at risk is regarded as sufficient to enable the SPV to finance its own activities.

• IAS 32, IAS 39, and IFRS 7: International Accounting Standards (IAS) 32 covers the disclosure and presentation of financial instruments, but from 2007 onwards the disclosure aspects were replaced by the introduction of International Financial Reporting Standard (IFRS) (7). IAS 39 deals with the recognition and measurement of financial instruments, and has been challenged in two aspects:

(1): Introducing the concept of “fair value” accounting for financial instruments and (2): whether SPVs should be consolidated back into the balance sheet of the originator. Like Fin 46, IAS 32 may result in consolidation of most SPVs on-balance-sheet of the sponsors.

• Basel II: The Basel II disciplines are aimed at the global banking industry and call for a more scientific measurement of risk and of capital requirements for banks in order to support that risk. Since the general expectation has been that, in overall terms, the proposals could require the banking industry to maintain a higher rather than lower capital base, the proposals have met resistance from many banks. The Basel Committee’s rules/codes are not binding because the Committee is not a regulator: a situation exploited by the racketeering institutions.

But off-balance sheet treatment of ABS (Asset-Backed Securities) debt in securitizations, constitutes fraud because:

(1): The mens rea or ‘mental’ element of willfulness – the specific intent to misrepresent the true ‘Trust’ nature of the Special Purpose Vehicle debt – is manifested by the elaborate arrangements and structure of the securitization transaction.

(2): The actus reus (the guilty conduct): This consists of the affirmative act of misrepresentation of materials facts by not consolidating the Special Purpose Vehicle on the sponsor’s Balance Sheet.

In securitization, consolidation of the Special Purpose Vehicle onto the sponsor’s financial statements is warranted because the sponsor:

(a) Typically retains a residual economic interest in the Special Purpose Vehicle;

(b) Functions as servicer of the Special Purpose Vehicle asset pool – which grants the sponsor significant control over the assets and the SPV’s operations;

(c) Determines recognition of impairment of collateral, and selects and provides assets for ‘substitution’ of collateral; and:

(d) Typically misrepresents the level of objectivity and fairness of the servicer/sponsor in disclosure statements.

Taken together, these factors and all the aforementioned new accounting standards constitute sufficient actus reus.

(3): The reliance element:
The sponsor’s current and his prospective shareholders and other investors rely heavily on the structure/arrangements of securitizations, associated disclosure statements and assurances of off-balance sheet treatment of SPV debt in securitizations, which are relatively complex. These form the primary source of knowledge and valuation terms for the investor.

(4): The victim suffers loss as a result of the misrepresentation (direct or proximate causation): Investors suffer loss because of the sponsor/servicer’s misrepresentations of its obligations:

(a) Investors’ estimates of the values of the sponsor’s equity are inaccurate and excessively high due to the servicer’s/sponsor’s misrepresentations of the SPV debt;

(b) Investors incur unnecessary trading costs to re-balance their portfolios as the sponsor is deemed more risky;

(c) The investor and the sponsor/servicer incurs additional monitoring costs whenever there is any report of impairment of collateral or substitution.

E: ALL ‘TRUE-SALE’, ‘DISGUISED LOAN’ AND ‘ASSIGNMENT’
SECURITIZATIONS INVOLVE FRAUDULENT CONVEYANCES

Any transfer or conveyance of the assets of a debtor that is deemed to be made for the purposes of hindering, delaying or defrauding actual or potential creditors, may be determined to be a Fraudulent Conveyance (9).

In the United States, three sets of laws cover potential Fraudulent Conveyances:

(a) Section 548 of the US Bankruptcy Code (the Code); or

(b) Most States have adopted the Uniform Fraudulent Transfer Act (UFTA) (10) or else the older Uniform Fraudulent Conveyance Act (UFCA); or

(c) Fraudulent Transfers claims can also be made under a theory of constructive fraud, in which circumstantial evidence may warrant a finding that Fraudulent Transfers were made with the primary purpose of shielding assets from current or future creditors. Although each US State has its own laws regarding the appropriate elements of proof of constructive fraud, Section 548(a)(2)
of the US Bankruptcy Code permits an inference of constructive fraud if the following factors exist:

(1): The debtor received less than reasonably equivalent value for the property transferred; and:

(2): The debtor either: was insolvent or became insolvent as a result of the transfer, retained unreasonably small capital after the transfer, or made the transfer with the intent or belief that it would incur debts beyond its ability to pay.

The following are the various theories of Fraudulent Conveyance
within the context of securitization.

E-1: Sponsor/Originator receives insufficient value for assets transferred:

All ‘true sale‘ as well as ‘assignment’ securitizations involve Fraudulent Conveyances (as defined within the US Bankruptcy Code and the Uniform Fraudulent Transfer Act) because the originator receives insufficient value for assets that it transfers to the Special Purpose Vehicle (11), (12):

(i): Horizon mismatch:
In the case of receivables and fixed income assets, since the originator/sponsor sells these assets before their maturities, their effective yields and values are much lower than their stated yields, and hence, the originator receives less-than-normal value for assets transferred.

(ii): The originator always incurs substantial cash and non-cash transaction costs in such transfers, which reduces the net-value it receives from the transfer to the Special Purpose Vehicle. These costs include all legal fees, accounting fees, underwriting fees, monitoring costs, administrative costs, regulatory compliance costs, capital-budgeting costs (because the decision to securitize has inherent negotiation costs), conflict costs and resource allocation costs, etc.;

(iii): In these asset transfers, the originator loses all the future appreciation of the transferred assets: the transfers are done at book values or stated adjusted costs. The asset valuations for the transfers don’t consider future increases in asset value, and hence are an implicit undervaluation.

(iv): Where the assets transferred have residual values (as in computer leases and equipment leases), the originator often cannot accurately calculate such residual values and does not incorporate them in asset valuation, and loses such residual value; and hence, receives less than normal value for the assets transferred;

(v): In some securitizations, the originator’s transfer of assets to the SPV is backed by recourse (to the originator’s assets) and such recourse has economic value that reduces the net-value that the originator receives from the transfer. [Higgin & Mason (2004), Pantaleo et al. (1996) and Plank (1991) (13) describe the basis for the value of such recourse].

(vi): Where the originator and sponsor is financially distressed, securitization is often the chosen form of financing, and under Fraudulent Conveyance laws, securitizations are illegal because:

(1): Securitizations increase the bankruptcy risk of the originator/sponsor;

(2): The distressed company’s assets are typically valued at higher interest rates (which yield lower asset values) and hence, the originator loses value in the transfers.

(vii): The originator’s/sponsor’s net-cash proceeds from the securitization transaction is often significantly less than either the pre-transaction carrying value of the collateral, or the net realizable value of the collateral (liquidation value in a supervised open auction) – primarily because of transaction costs, over-collateralization, etc..

E-2: ‘Intent to hinder, delay or defraud creditors’:
Implicit pre-petition waiver of right to file for bankruptcy:

All ‘true sale‘ as well as ‘assignment’ securitizations involve Fraudulent Conveyances (as defined in the US Bankruptcy Code and the Uniform Fraudulent Transfer Act) because as described in this analysis, such securitizations are the equivalent of illegal pre-petition waivers of the right to file bankruptcy, and the waiver of the bankruptcy stay – all of which are sufficient evidence of ‘intent to hinder, delay, or defraud any creditor of the debtor’, which is the major element of Fraudulent Conveyance under the UFTA and the US Bankruptcy Code.

E-3: ‘Intent to hinder, delay or defraud creditors’:
originator’s transfer of assets to the Special Purpose Vehicle:

All ‘true sale‘ and ‘assignment’ securitizations involve Fraudulent Conveyances (as defined in the US Bankruptcy Code and the Uniform Fraudulent Transfer Act) because the originator‘s/sponsor‘s mere act of transferring assets to an SPecial Purpsoe Vehicle reduces the values of any of its unsecured creditors’ claims – i.e. trade creditors, holders of any unsecured loans, holders of certain preferred stock, etc.. (14).

Without such transfers, the unsecured creditors would have had access to such assets. This is sufficient evidence of ‘intent to hinder, delay or defraud’ existing creditors.

[It follows that the Rule of Law has been comprehensively flouted,
with the rot starting and condoned at the highest levels – Ed.].

E-4: ‘Intent to hinder, delay or defraud creditors’:
Originator’s transfer of assets to the SPV has not been undertaken on an arms’-length basis:

The originator’s transfer of assets to the SPV via a ‘true sale’ or ‘assignment’ is typically not done by means of arms’-length transactions. Most originators have substantial influence/control over the valuation of collateral, the selection of the appraiser and valuers, the choice of appraised collateral, the corporate form and life of the SPV, and the selection of the officers/trustees of the SPV. Hence, the originator can manipulate the values of collateral for accounting and economic purposes. The originator typically creates, funds and staffs the SPV – hires the SPV’s officers and directors and determines the SPV’s corporate governance policies. The combination of such excessive control, and the originator’s transfer of assets to the SPV is prima facie evidence of ‘intent to hinder, delay or defraud’ the originator’s existing and future creditors.

E-5: Securitization increases the originator’s bankruptcy risk:
Securitization can increase the bankruptcy risk of an originator (15), where:

(a) The cash proceeds from the securitization transaction are significantly less than either the carrying value of the collateral, or the net realizable value of the collateral (liquidation value in a supervised auction); or:

(b) Management reinvests the cash proceeds of securitization in projects that yield returns that are less than what the collateral would have yielded, or less than the company’s cost of debt.
Securitization via ‘assignments’ or else ‘disguised loans’ increases the risk to be borne by the originator/sponsor, and also increases its post-transaction cost of capital primarily because:

(a) The amount raised is less than the assets pledged;

(b) The pledge of assets to the SPV reduces the originator’s borrowing
capacity and financial flexibility;

(c) The pledge of assets to the Special Purpose Vehicle reduces the originator’s ability to repay other debt. Hence, the originator/sponsor loses value in the transfer of assets to the SPV.

F: SECURITIZATION USURPS UNITED STATES BANKRUPTCY LAWS AND HENCE IS ILLEGAL
Securitization undermines US Federal bankruptcy policy, because it is used (in lieu of secured financing) as a means of avoiding certain bankruptcy-law restrictions (16). Indeed, the origins of securitization in the United States can be traced directly to attempts by banks and financial institutions to avoid bankruptcy law restrictions.

An analysis of the legislative intent of the US Congress with regard to the US Bankruptcy Code confirms that securitization contravenes most policies of the US Bankruptcy Code (17).

• IT ALSO CONTRAVENES PUBLIC POLICY, WHICH EMBRACES:

(a): Recognition of financial distress;
(b): Stay of bankruptcy proceedings;
(c): Determination of claims and priorities of security interests;
(d): Fair division of value;
(e): The continuance or liquidation decision;
(f): Efficient reorganization.

In most cases, insolvency often occurs before management decides to file for bankruptcy. Many firms that are either financially distressed and or technically insolvent continue to operate as if they are normal companies, and enter into securitization transactions. often, securitization enables them to reduce the effect of actual and or perceived low credit ratings. Securitization is often a major strategic choice for financially distressed corporations (18). Under the US Internal Revenue Tax Code, securitization qualifies as a reorganization. The underlying issues are as follows.

F-1: Implicit waiver of right to file for bankruptcy and/or Stay of Bankruptcy:

Securitization involves an implicit (and often an express) waiver of the debtor’s, originator’s, sponsor’s right to file for voluntary bankruptcy. This is achieved by using a bankruptcy-remote Special Purpose Vehicle and segregating the assets that otherwise would have been part of the bankruptcy estate (19), (20). Securitization involves an implicit (and very often an express) waiver of the creditor/Asset-Backed Securities-investor’s right to file for involuntary bankruptcy (21), (22).

US Courts have repeatedly held that such waivers are void as against public policy. In the absence of securitization, these same investors/creditors would have been creditors/ a.k.a. lenders to the sponsor/originator. This implicit waiver is achieved by employing a Special Purpose Vehicle and segregating the assets that otherwise would have been part of the bankruptcy estate; and by various forms of credit enhancement.

Without the automatic stay of the Bankruptcy Code, the debtor/sponsor would not need to transfer assets to an SPV. Carlson (1998) traces the history of securitization to direct and specific efforts/collaborations to avoid the impact of US bankruptcy laws (23).

Furthermore, there is a distinct difference of opinion among US courts about the enforceability of pre-petition waivers (of rights to file for voluntary or involuntary bankruptcy) which has not been resolved by the US Supreme Court (24). However, the standard securitization processes diverge substantially from the conditions in cases where the courts held that pre-petition waivers (or rights to file for bankruptcy) were unenforceable.

F-2: The U.S. Bankruptcy Code expressly invalidates certain pre-filing transfers:

Sections of the US Bankruptcy Code expressly invalidate certain types of pre-filing transfers, payments and transactions (that occur within a specific time period before the filing of bankruptcy). Most securitizations fall under the classes of voidable pre-filing transfers.

• Hence, under these foregoing circumstances/conditions, bankruptcy laws and associated principles are implicated and apply where the firm has not filed for bankruptcy.

Therefore, any pre-bankruptcy filing transactions that invalidate or contravene the principles of Bankruptcy Codes are illegal. The bankruptcy-remoteness characteristic of securitizations prevents the efficient functioning of US bankruptcy law, and jeopardises the law.

G: NEW THEORIES ON THE EFFECTS OF SECURITIZATION ON BANKRUPTCY EFFICIENCY
The following are new theories that explain how securitization
contravenes the basic principles of US bankruptcy laws:

G-1: The illegal wealth-transfer theory:

Securitization can result in Fraudulent Conveyance and in illegal transfer of wealth where the transaction effectively renders the originator/issuer company technically insolvent; or fraudulently transfers value to the SPV (in the form of low collateral values) and then to the ABS/MBS [Mortgage-Backed Securities] bond holders (in the form of low bond prices, and or high interest rates) (25). Courts have held that stripping a company of the ability to pay judgment claims is a ‘predicate act’ that is actionable under Federal R.I.C.O. statutes (26). Securitization can also result in illegal wealth transfers to the intermediary bank where it retains a residual interest in the Trust/SPV (residual securities) or is over-compensated (excessive cash fees, trustee positions, underwriter is granted a percentage of securities offered, etc.).

G-2: The Priority-changing theory:

To the extent that bankruptcy laws are designed to facilitate rehabilitation of troubled companies, and increase efficient allocation of debtor assets to creditors, securitization enables the debtor to defeat the Absolute-Priority principle; and effectively to re-arrange priorities of claims, particularly where the debtor/originator does not have any secured claims (but has only unsecured claims). This is achieved by securitizing unencumbered assets and applying credit enhancement to provide higher-quality securities (which is the equivalent of higher priority) to other creditors.

G-3: The Facilitation of inefficient-continuance theory:

Securitization enables the debtor/originator to change the progression of financial distress, by supplying cash that typically lasts for short periods of time, and often at a high effective cost of funds. This implicates the principles of ‘inefficient continuance’ (where an otherwise non-viable company that should be liquidated, sold/merged or substantially reorganized, continues to operate solely as a result of short-term solutions and or bankruptcy court orders), and hence, the sections of the Sarbanes-Oxley Act (‘SOX’) – which require certification of solvency of the company and adequacy of internal controls, and also carry criminal penalties for non-compliance (27).

The question of whether ‘inefficient continuance’ has occurred is a matter of law that should be decided by judges. Thus, all else remaining constant, where the necessary elements occur, (a securitization and ‘inefficient continuance’ and management’s certification of solvency and adequate internal controls), management and the company become criminally liable.

G-4: The information-content effect theory:

Securitization changes and distorts the perceived financial position of the originator/sponsor, because various forms of credit enhancement (senior/junior pieces, loan insurance, etc.) are used to achieve a high credit rating for the Special Purpose Vehicle – which may be misconstrued by stock-market investors as evidence of good prospects for the originator-company. To the extent that all securities offerings have relevant information content and associated signalling, then securitization by financially distressed companies effectively conveys the wrong signals to capital markets and hence, changes the expectations of creditors and shareholders (and in the case of bankruptcy, makes it more difficult to form consensus efficiently on a plan of reorganization once the bankruptcy petition is filed). In this realm, investor and creditor expectations are critical and have utility value and typically form the basis for investment/disinvestment and for negotiations about restructuring or any plan of reorganization.

US Courts have held that persons that create false impressions about the financial condition of a company are potentially liable under Federal R.I.C.O. statutes (28).

G-5: The information-content effect theory:

To the extent that securitzation defers or eliminates a potential creditor’s rights to file for involuntary bankruptcy, then securitization can be deemed to be fraudulent, and gives rise to criminal causes of action such as deceit, conversion, etc. The creditor’s right to file for a debtor’s involuntary bankruptcy is a valid property right that arises from State property law, State contract law, State constitutional laws, and Federal bankruptcy laws (29). Deprivation of, or interference with, this property right is a violation of the US Constitution. Securitization can defer or eliminate this property right, and hence violate the US Constitution where the transaction:

(a): Effectively rearranges priority of claims; or:

(b): Reduces the debtor-company’s borrowing capacity (value of unencumbered/unpledged collateral) to the detriment of secured and or unsecured creditors; or:

(c): Uses the proceeds of the transaction to pay-off some (but not all) members of a potential class of creditors that can file an involuntary bankruptcy petition.

H: SECURITIZATION CONSTITUTES A VIOLATION OF FEDERAL R.I.C.O. STATUTES
In ‘true-sale’, ‘disguised loan’ or ‘assignment’ securitizations, there are fraudulent transactions which serve as ‘predicate acts’ under Federal R.I.C.O. statutes (30).

The specific R.I.C.O. sections implicated are:
• Section 1341 (mail fraud)
• Section 1343 (wire fraud)
• Section 1344 (financial institution fraud)
• Section 1957 (engaging in monetary transactions in property
derived from specified unlawful activity).
• Section 1952 (racketeering).

The prices of the collateral are determined in negotiations between the sponsor/issuer and the intermediary bank and on occasion, the SPV’s trustees. This presents opportunities for ‘predicate acts’ (ie. fraud, conversion, etc.) because:

(1): The collateral could be under-valued or over-valued. There are no State or Federal laws that require independent valuation of collateral or appointment of independent/certified trustees in securitization transactions. The parties involved are often business acquaintances.

The originatorsponsor controls the entire process.

(2): The trustees can be, and are influenced by the sponsor/originator and or intermediary investment-bank.

(3): The required disclosure of collateral is sometimes insufficient. Specifically:

(a): It does not include historical performance of collateral pools;
(b): It does not include criteria for selection of collateral and for substitution of collateral;
(c) Criteria for replacement of impaired collateral are sometimes not reasonable;

(4): Mail and wire are used extensively in communications with investors and participants
in the transaction; and:

(5): There is compulsion – because the intermediary or investment bank has very substantial incentives to under-price the securities, and to inflate/deflate the value of the collateral in order to consummate the transaction and earn fees.

The entire securitization process constitutes violations of Federal R.I.C.O. (31) statutes because:

(1): There is the requisite criminal or civil ‘enterprise’ – consisting of the sponsor/issuer, the trustees and the intermediary bank. These three parties work closely together to effect the securitization transaction.

(2): There are ‘predicate acts’ (32) of:

(a): Mail fraud – using the mails for sending out materials among themselves and to investors.
(b): Wire fraud – using wires to engage in fraud by communicating with investors.
(c): Conversion – where there isn’t proper title to collateral.
(d): Deceit: Misrepresentation of issues and facts pertaining to the securitization transaction.
(e): Securities fraud: disclosure issues.
(f): Loss of profit opportunity.
(g): Making false statements and or misleading representations about the value of the collateral.
(h): Stripping the originator/issuer of the ability to pay debt claims or judgment claims in bankruptcy court – a state of affairs that may apply where the sponsor is financially distressed and the cash proceeds of the transaction are significantly less than the value of the collateral.

(3): There is typically the requisite ‘intent’ by members of the enterprise – evident in knowledge (actual and inferable), acts, omissions, purpose (actual and inferable) and results. Intent can be reasonably inferred from:

(a): The existence of a sponsor that seeks to raise capital – and cannot raise capital on better terms by other means;
(b) The participation of an investment bank that has very strong incentives to consummate the transaction on any agreeable (but not necessarily reasonable) terms.

I: SECURITIZATION CONSTITUTES VIOLATIONS OF U.S. ANTITRUST LAWS
The various processes in securitization constitute egregious violations
of the US Antitrust statutes (33), (34), (35). Specifically:

I-1: Market concentration:

The American Asset-Backed Securities and Mortgage-Backed Securities markets are dominated by relatively few large entities such as FNMA, Freddie Mac, the top five investment banks (all of which have conduit programs), and the top five credit card issuers (MBNA, AMEX, Citigroup, etc.), etc.. As a consequence, the top five ABS/MBS issuers control more than 50% of the US ABS/MBS market.
This constitutes illegal market concentration under US Antitrust legislation

I-2: Market integration:

The American Asset-Backed Securities and Mortgage-Backed Securities markets are essentially both national and international (that is to say, geographically-diverse entitiesand individuals participate in each transaction). Each Asset-Backed Securities (ABS) transaction/offering typically involves a ‘roadshow’ which consists of presentations to investors in various cities.

The cost of the roadshow is often paid by the underwriter(s) before its fees are paid by the sponsor. In addition, there are printing, mailing, traveling and administrative costs that increase with the greater geographical dispersion of investors. This has two main effects:

(a): It reduces competitive pressure on dominant investment banks and groups of investment banks (to the detriment of smaller investment banks); and:
(b): It raises market-entry barriers by making it more expensive to conduct ‘roadshows’ for new offerings. Hence, the market integration created by the industry practices of securities underwriters is anti-competitive and violates the Sherman Act, and the FTC Antitrust statutes.

I-3: Syndicate collusion:

The syndicates (of investment banks) used in distributing Asset-Backed Securities and Mortgage-Backed Securities (ABS/MBS) essentially collude to determine:
(a): The price at which each ABS tranche is sold;
(b): Which investors can purchase different tranches.

Collusion occurs because:

(a): In the typical Asset-Backed Securities (ABS) offering, the price determination process is not transparent or democratic because the lead underwriters typically negotiate the offering price with the originator/sponsor and the prospective investors (although some underwriters use auctions).

The lead underwriters purchase most of the new-issue ABS, and the balance is typically sold to ‘junior’ syndicate members (who presumably can arrange to buy more Asset-Backed Securities from the lead underwriters than were allocated to them).

In essence, the true price-demand characteristics and negotiability of junior underwriting-syndicate members are hidden simply because of the structure of the underwriting/bidding process. Hence, the existing syndicate-based ABS distribution system for new issue Asset-Backed Securities distorts the true demand for the ABS, clearly reduces competition, and facilitates and results in collusion, and therefore constitutes violations of the Sherman Act and the Federal Trade Commission (FTC) Antitrust statutes.

(b) Similarly, the ABS allocation process is not transparent. The lead underwriter and junior underwriters allocate new-issue ABS to investors based on subjectively determined ‘suitability’ and also ‘in-house criteria’. There are no established or generally accepted important guidelines for such ‘in-house’ criteria and associated allocation.

The lead and junior underwriters can typically collude to determine that only certain investors deemed appropriate are allocated the Asset-Backed Securities in question. Hence, the antitrust violation (collusion) occurs solely because of the underwriters’ discretionary choice of investors to whom ABS are allocated. This is more evident where the poll of investors consists mostly of institutional investors – so that final offering prices are more sensitive to choice of investors, and prices can change significantly simply by changes in allocation to investors. In such circumstances, the collusion is reasonably inferable here, so long as there are no statutory or generally accepted allocation criteria that have been approved by the NASD or other trade associations.

I-4: Price formation:
The prices of ABS securities may often be linked to the prices/yields of US Treasury bonds – the credit risk of ABS/MBS being priced relative to the risks of US Treasury bonds.

• This system distorts the true demand and supply balance for the ABS/MBS, and erroneously incorporates the demand/supply relationships of the US Treasury Bond market, into the ABS/MBS markets. The key question then, is whether there are conditions under which the US Treasury Bond market is completely de-coupled from the ABS market: or, phrased differently, whether there is sufficient justification for actual or perceived de-coupling of the US Treasury Bond market and the US ABS market. These conditions are as follows:

(1): The credit fundamentals of the US Treasury market differ substantially from those of the ABS market. (The Treasury market is much more sensitive to US Federal Reserve actions, currency fluctuations, consumer spending, Federal/State fiscal policies, etc.). The ABS market tends to be more sensitive to industry-specific and sometimes company-specific risks/factors.

(2): The use of various credit enhancement techniques and products further exacerbates the differences in the credit trends and/or quality in the US Treasury and ABS markets. In Asset-Backed Securities transactions, most forms of credit enhancement create a floor, but do not limit or affect other industry exposures or company exposures. In the US Treasury market, investors are subject to a greater variety of risks.

(3): Investors’ objectives in the US Treasury Bond markets differ from those of investors in Asset-Backed Securities markets. Hence, investors are very likely to view these two markets and the underlying risks differently, and should value the securities differently.

I-5: Vertical foreclosure:

In the ABS/MBS markets, some investment banks and commercial banks are active in almost all phases of the securitization process: origination (through in-house conduits); due diligence; disclosure and pricing; new issue securities offerings; and also in secondary-market trading. Similarly, non-bank entities can use their own asset portfolios (the origination of credit card receivables or mortgage receivables), shelf-registration and marketing procedures and/or Regulation-D/Rule 144A procedures (pricing and new-issue offerings) and in-house trading (secondary-market trading) to participate in almost all aspects of securitization processes.

Hence, these companies have almost no incentive to, and are not required to make their infrastructure and relationships available to competitors.

• Such vertical foreclosure constitutes violation of US antitrust laws.

I-6: Tying (36):

This arises in the following manner:

(a): The sponsor is sometimes formally or informally required to purchase other financial services (loans, letters of credit, custody services, etc.) from the investment bank, in order to effect the securitization transaction;

(b): The investors are sometimes required simultaneously to purchase two or more tranches of an ABS offering, or to promise to buy the same or similar ABS/MBS securities in order to be allocated ABS in new offerings;

(c): The sponsor and or investment bank may formally or informally require investors to purchase minimum dollar volume of ABS in specific offerings in order to be eligible for ‘allocations’ in future offerings. These acts constitute tying, which is anticompetitive and therefore illegal.

I-7: Price-fixing (37):

The Locus-shifting Theory is introduced here. Locus-shifting occurs when a potential and obvious party to a price-fixing scheme is effectively replaced (in pricing negotiations) by a third party that has the resources and willingness to alter dramatically the pricing of goods and services in either the transaction, or via a series of transactions or in the sector or the industry as a whole. Normally, price-fixing would occur between two sponsors or two intermediary banks.

Since the intermediary-investment bank is central to ABS offerings, and associated pricing and negotiations, the price fixing should be deemed to occur between the sponsor/originator and the investment bank (or between two sponsors).

Since each active investment binstitution typically underwrites many offerings simultaneously, and essentially controls the pricing of each new-issue ABS, the investment banks are the locus of said price fixing and are potentially liable for the associated antitrust violations. Further evidence of price fixing maybe obtained by analysing:

(a): The yield differentials of various ABS offerings in various asset classes (ie. automobiles, home equity, mortgages, etc.) by different sponsors within a specific block of time;

(b): The price differentials of various ABS offerings in various asset classes (autos, home equity, credit cards, mortgages, etc.) with the same rating, within a specific block of time.

I-8: Price-fixing (38):

Exclusive contracts facilitate and enhance anti-competitive behavior by contractually restricting conduct by and trade among participants in the market. In the US ABS/MBS markets, existing illegal exclusive contracts include:

(a) Contracts preventing the intermediary investment bank from providing financial services to other prospective securitization sponsor-companies in the same industry/sector;

(b) Contracts (by the sponsor, underwriter(s) or third parties) that prevent or limit the formation of a syndicate of securities dealers;

(c) Contracts that prevent the sponsor from selling securities through other underwriters, other than an appointed intermediary investment bank. These types of contract constitute direct violations of US Antitrust statutes.

I-9: Price-fixing (39):

There are several classes of Asset-Backed Securities:

(1): Securities that involve pure ‘pass-through’ of cash- flows, and hence rights to payment of cash from the SPV pool, but no ownership interest in the pool to:

(a): Interest-Only (IO) securities;
(b): Principal-Only (PO) securities; and:
(c): ‘Traditional’ Asset-Backed Securities that pay both interest and principal.

(2): Securities that confer ownership interests in the underlying pool to:

(a): Interest-Only (IO) securities;
(b): Principal-Only (PO) securities; and:
(c): ‘Traditional’ Asset-Backed Securities that pay both interest and principal.

(3): Debt-type securities that involve a security interest in the underlying collateral:
these manifest themselves as:

(a): Interest-Only (IO) securities;
(b): Principal-Only (PO) securities; and:
(c): ‘Traditional’ Asset-Backed Securities that pay both interest and principal.

In many instances, the Special Purpose Vehicle (SPV) offers many tranches in each of the above-mentioned classes of ABS. The tranches within each class typically vary by term, interest rate, duration, and bond-rating/risk-rating. Hence, in any situation where the tranches don’t have any priority as to security interests or rights-to-payment of cash flows from the pool, such stratified offerings within each class (‘IO’, or ‘PO’ or ordinary; or ‘pass-through’, collateral-type or equity-interest) constitute price discrimination because the underlying ‘asset’ and risk is essentially the same, although different securities are being offered in the same transaction (or in a series of transactions), at different prices to investors, based on the same underlying pool of assets.

• The distinguishing and critical element is that there is no contractually agreed-upon priority of claims as to security interests or right-to-payment of cash from the pool of assets.

I-10: Predatory pricing (40):

This occurs when investment banks under-price ABS offerings in order to obtain more investors, and to build name recognition for a particular issuer (that does or intends to come to the ABS market regularly). Evidence of predatory pricing may be inferred or established by:

(a): Comparing the offering prices of various new-issue ABS bonds sold by one sponsor/originator, in the same asset class (auto loans, home equity, credit cards, etc.), but at different times of the year, to offering prices of similar ABS bonds sold by other regular ABS sponsors/originators in the same time periods.

(b): Running regressions to identify any statistically significant relationship between:

(1): The difference in the yield of company XYZ’s ABS bond and the yields of other similar Asset-Backed Securities bonds; and:

(2): Various independent variables such as yield, price, asset type, bond rating, duration, industry, amount of offering, frequency of ABS offerings, types of investors, etc..

(c): Comparing the offering prices of various new-issue ABS bonds underwritten by one investment bank (in the same asset class, but at different times of the year) to offering prices of similar Aset-Back Securities bonds underwritten by other investment banks in the same time periods.

I-11: Rigging of allocations:

Most Asset-Backed Securities offerings are done via allocations of securities by investment banks to their brokerage customers:

(1): Most sponsors issue their Asset-Backed Securities or Mortgage-Backed Securities through bids by investment banks. Most bids for ABS securities are won by a few investment banking firms.

• This may suggest that customers have been ‘allocated’ among investment banks, which is also an indication of collusion.

(2): On occasion, the primary underwriters subcontract work (re-sell securities)
to secondary underwriters.

J: SECURITIZATION INVOLVES VOID CONTRACTS
The process of securitization involves several contracts that are either signed simultaneously or are all signed within a short timeframe. Many of these contracts are void and wholly illegal due to:

(a) Lack of consideration (41): There is no consideration in many contracts used in effecting securitizations. Many of these contracts are unilateral executory undertakings and contain illusory promises. There are three main issues:

(1): Unilateral Executory Promise (42): A unilateral executory promise is not consideration.
The following are some unilateral executory contracts in securitizations:

• The promise made by the Special Purpose Vehicle to pay out periodic interest, whether contingent or non-contingent on whether the collateral pays cash interest.

• Collateral-substitution Agreements contain a promise whereby
the sponsor agrees to substitute impaired collateral.

• Assignment Agreement: Assignment of future collateral (not yet existing)
may be deemed a unilateral executory promise by the assignor.

• Transfer Agreement: The sponsor agrees to transfer the collateral to the Special Purpose Vehicle, and the SPV in return pays cash to the sponsor.

(2): Illusory Promises (43): An illusory promise is not a valid consideration for a contract.

The following are some illusory promises inherent in securitization transactions:

• The Subscription/Purchase Agreement: The SPV’s promises to acquire the collateral with the cash raised from investors are essentially illusory promises. These promises are embedded in the offering Prospectus, but are typically not included other corporate documents. In most cases, the offering Prospectuses don’t state the exact steps in the SPV’s promised purchase of the collateral.

• The Purchase or Subscription Agreement: The Special Purpose Vehicle’s investors purchase beneficial interests in the SPV or the SPV’s debt. These beneficial interests evidence:

(a): The right to receive payments from the SPV; or:
(b): An ownership interest in the underlying collateral, or:
(c): A ‘participation’ in the underlying collateral.

However, at the time of executing this agreement, the only consideration that the SPV can grant to investors in exchange for the purchase amount, consists of promises to purchase the collateral in the future, and to make payments from the SPV’s assets.

Hence, an existing asset is being exchanged for a future asset that does not exist as of the date of the purchase/subscription agreement.

• Furthermore, all securitization offerings are done pursuant to ‘Subscription Agreements’ and likewise pursuant to Investor Questionnaires – both of which documents have to be signed by the prospective investor. None of the agreements signed by the investor as part of his/her purchase of the Special Purpose Vehicle’s Asset-Backed Securities expressly incorporates the promises that are embodied in the offering Prospectus. What typically exists is an implied agreement to subject the investor to the SPV’s articles of incorporation, Trust Indenture, and or Trustees’/Board of Directors’ (or Board of Trustees’) decisions.

• The SPV’s promise to pay interest/dividends on ABS IOs, Preferreds and POs are essentially illusory promises because the underlying collateral may not produce any cash flows: so there won’t be interest/dividend payments.

(3): No Bargain: Some courts have held that there is no consideration (and hence, the contract is void) where one party was not allowed to bargain for the alleged agreement (44).

In some securitizations, the process of setting offering prices for new Asset-Backed Securities issues does not afford all parties the opportunity to negotiate terms of the offering, especially individual investors, because the price of the ABS is typically determined primarily by the sponsor and the lead underwriters. Furthermore, in securitizations, the originator sets the terms of the Special Purpose Vehicle (trust documents, articles of incorporation, bylaws, etc.).

(4): No mutuality (45): In the securitization context, for there to be mutuality:

(a): Each party must have firm control of the subject matters of the contract and the underlying assets (consideration), and:
(b): There should/MUST be a direct contractual relationship between the parties concerned. At time of the Subscription Agreement, the Special Purpose Vehicle typically does not own or have rights to the collateral, and hence, there is not mutuality.

Furthermore, the concept of ‘piercing the SPV veil’ is introduced here (similar to ‘piercing the corporate veil’) and applies, since the following conditions exist:

• The economics of the transaction are an asset transfer from the sponsor/originator party to the Special Purpose Vehicle investors, in exchange for a loan to the sponsor.

• However, there is no direct contractual relationship.

• The sponsor typically controls the Special Purpose Vehicle before the Asset-Backed Securities offering and thus determines (or very substantially influences) the SPV’s post-offering operating characteristics. Since the prospective ABS investors don’t have firm pre-offering control of the SPV and cannot influence its post-offering policies, there is no mutuality between the SPV and the ABS investors; and securitization is accordingly void.

• The sponsor influences the appointment of the SPV’s Trustees or Board of Directors.
Thus, under contract law, the use of the Special Purpose Vehicle in securitization effectively eliminates any mutuality between the two main contracting parties: the sponsor and the investors. Secondly, there is no mutuality between the Special Purpose Vehicle and the investors:

• The Special Purpose Vehicle’s corporate documents (trust indentures or bylaws or articles of incorporation) typically limit the rights of each ABS investors and the group of Asset-Backed Securities investors.

Thirdly, there is no mutuality at all between the Special Purpose Vehicle and the sponsor/originator, because both entities are essentially the same, and are controlled by the sponsor before and after the securitization takes place.

(5): Illegal subject matter and contravention of public policy 46: As explained in preceding sections of this analysis, securitization constitutes violations of the Antitrust laws and US Federal R.I.C.O. statutes; and hence, the contracts used to effect securitizations are void and illegal.

CONCLUSION:
Under US legislation, Securitization is MANIFESTLY ILLEGAL.

Notes and References:

(1): Yamazaki Kenji, What makes Asset Securitization Inefficient? (2005); Berkeley Electronic Press, Working Paper #603; Steven Schwarcz, Enron and The Use and Abuse of Special Purpose Entities In Corporate Structures, 70 U. Cin. L. Rev. 1309 (2002); See further: Carlson D. (1998), The Rotten Foundations of Securitization, William & Mary Law Review, 39; Lupica L (2000), Circumvention of The Bankruptcy Process: The Statutory Institutionalization of Securitization, Connecticut Law Review, 33: 199-210; Thomas Plank, 2004, The Security of Securitization and The Future of Security, 25 Cardozo L. Rev. 1655 (2004).

(2): On securitization, see: Eastgroup Properties v. Southern Motel Association, Ltd., 935 F.2d 245 (11th Cir. 1991); Union Savings Bank v. Augie/Restivo Baking Co. (In Re Augie/Restivo Baking Co.), 860 F.2d 515 (2d Cir. 1988); In Re Bonham, 229 F.3d 750 (9th Cir. 2000); In Re Central European Industrial Development Company LLC, 288 B.R. 572 (Bankr. N.D. Cal. 2003); Special Report by the TriBar Opinion Committee, Opinions in the Bankruptcy Context: Rating Agency, Structured Financing, and Chapter 11 Transactions, 46 Business Lawyer 717 (1991); Sargent, Bankruptcy Remote Finance Subsidiaries: The Substantive Consolidation Issue, 44 Business Lawyer 1223 (1989). See In re Kingston Square Associates, 214 B.R. 713 (Bankr. S.D.N.Y. 1997). On “True-sale” and “signment” distinctions, see: Major’s Furniture Mart, Inc. v. Castle Credit Corporation, Inc., 602 F.2d 538 (3rd Cir. 1979); In re Major Funding Corporation, 82 B.R. 443 (Bankr. S.D. Tex. 1987); Fox v. Peck Iron and Metal Company, Inc., 25 B.R. 674 (Bankr. S.D. Cal. 1982); Carter v. Four Seasons Funding Corporation, 97 S.W.3d. 387 (Ark. 2003); A.B. Lewis Co. v. Nat’l Investment Co. of Houston, 421 S.W.2d 723 (Tex. Civ. App. – 14th Dist. 1967); Resolution Trust Corp. v. Aetna Casualty and Surety Co. of Illinois, 25 F.3d 570, 578 (7th Cir. 1994); In re Royal Crown Bottlers of North Alabama, Inc., 23 B.R. 28 (Bankr. N.D. Ala. 1982) (addressing ‘reasonably equivalent value’ in transfer by parent to subsidiary); Butner v. United States, 440 U.S. 48 (U.S. 1979); In re Schick, 246 B.R. 41, 44 (Bankr. S.D.N.Y. 2000): (State law determines the extent of the debtor’s interest; bankruptcy law determines whether that interest is “property of the estate”).

See specifically: Homburger & Andre, Real Estate Sale and Leaseback Transactions and the Risk of Recharacterization in Bankruptcy, 24 Real Property, Probate and Trust Journal 95, (1989). See: In re Integrated Health Services, Inc., 260 B.R. 71 (Bankr. Del. 2001).

See: HSBC Bank v. United Air Lines, Inc., 317 B.R. 335 (N.D. Ill. 2004). See: Jonathan C. Lipson, Enron, Asset Securitization and Bankruptcy Reform: Dead or Dormant?, 11 J. Bankr. L. & Prac. 1 (2002). See: Peter J. Lahny IV, Asset Securitization: A Discussion of the Traditional Bankrupt Attacks and an Analysis of the Next Potential Attack, Substantive Consolidation, 9 Am. Bankr. Inst. L. Rev. 815 (2001). See: Lois R. Lupica, Revised Article 9, Securitization Transactions and the Bankruptcy Dynamic, 9 Am. Bankr. Inst. L. Rev. 287 (2001). See: Lois R. Lupica, Circumvention of the Bankruptcy Process: The Statutory Institutionalization of Securitization, 33 Conn. L. Rev. 199 (2000). See further: Lois R. Lupica, Asset Securitization: The Unsecured Creditors Perspective, 76 Tex. L. Rev. 595 (1998). See: Stephen I. Glover, Structured Finance Goes Chapter 11: Asset Securitization by the Reorganizing Companies, 47 Bus. Law 611, 627 (1992). See: Thomas J. Gordon, Securitization of Executory Future Flows as Bankruptcy-Remote True Sales, 67 U. Chi. L. Rev. 1317, 1322-23 (2000).

See: In Re Kingston Square Assocs., 214 B.R. 713 (Bankr. S.D.N.Y. 1997) (creditors brought an involuntary petition against an SPV).

(3): On corporate governance issues pertaining to SPVs and securitization see the following materials: See: In Re Buckhead America Corp., #s 91-978 through 91-986 (Bankr. D. Del, Aug. 13, 1992); In Re Minor Emergency Center of Tamarac Inc., 45 BR 310 (Bankr. SD.FL., 1985); Revlon Inc. v. Mac andrews & Forbes Holdings, 506 A2d 173 (Del. 1986); In Re Kingston Square Associates, 214 BR 713 (Bnakr. SDNY 197).

See: Sheryl Gussset, A Not-So-Independent Director In A Bankruptcy Remote Structure, 17 Am. Bankr. Inst. J. 24 (1998). See: Roberg Dean Ellis, Securitization, Fiduciary Duties and Bondholders Rights, 24 J. Corp. L. 295 (1999). See: Richard Graf, Use of LLCs As Bankruptcy Proof Entities Widens, National L. J. , April 10, 1995 at B16. See: Schwarcz Steven, Enron and The Use and Abuse of Special Purpose Entities In Corporate Structures, 70 U. Cin. L. Rev. 1309 (2002). See: Schwarcz, Steven, Securitization Post-Enron, 25 Cardozo L. Rev. 1539 (2004). See also: Thomas Plank, 2004 Symposium: The Security of Securitization and The Future of Security, 25 Cardozo L. Rev. 1655 (2004). See: Thomas H, Effects of Asset Securitization On Seller Claimants, Journal of Financial Intermediation, 10: 306-330. See also: Nolan, Anthony, Synthetic Securitizations and Derivatives Transactions by Banks: Selected Regulatory Issues, Journal of Structured Finance, Fall 2006.

See: American Securitization Forum, ASF Securitization Institute: The Securitization Legal and Regulatory Framework, 2006. See: Yamazaki, Kenji, What makes Asset Securitization Inefficient? Working Paper # 603, Berkeley Electronic Press.

(4): See: Schwarcz S. (1999). Rethinking Freedom of Contract: A Bankruptcy Paradigm, Texas Law Review, 77: 515-599. See: Klee K & Butler, Asset-Backed Securitization, Special Purpose Vehicles and Other Securitization Issues. Uniform Commercial Code Law Journal, 35( 2). See: Carlson D (1998). The Rotten Foundations of Securitization, William & Mary Law Review, 39: See: Janger, Edward J, Muddy Rules For Securitizations, Fordham Journal of Corporate & Financial Law, 2002. See: Lois R. Lupica, Circumvention of the Bankruptcy Process: The Statutory Institutionalization of Securitization, 33 CONN. L. REV. 199 (2000). See: Steven L. Schwarcz, The Inherent Irrationality of Judgment Proofing, 52 STAN. L. REV. 1 (1999). See: S. 420, 107th Cong. 912 (2001); H.R. 333, 107th Cong. 912 (2001). See: Steven L. Schwarcz, The Impact on Securitization of Revised UCC Article 9, 74 Cm. KENT L. REV. 947 (1999) (“Revised Article 9 attempts to broaden its coverage to virtually all securitized assets”). See: Claire A. Hill, Securitization: A Low-Cost Sweetener for Lemons, 74 WASH. U. L.Q. 1061 (1996). See: Yamazaki Kenji, What makes Asset Securitization Inefficient? (2005); Berkeley Electronic Press, Working Paper #603. See: Saayman, Andrea, Securitization and Bank Liquidity In South Africa, Working Paper, Potchefstroom University, South Africa.

See: Sargent Patrick, Structural and Legal Issues in Commercial Mortgage Securitization Transactions, November 1, 2004.

(5): See: Schwarcz S. (2004). Is Securitization Legitimate? International Financial Law Review, 2004 Guide To Structured Finance, pp.115. See additionally: Schwarcz S (2002). The Universal Language of International Securitization, Duke (University) Journal of Comparative and International Law, 12:285-300. See: Frankel T., Cross-Border Securitization: Without Law But Not Lawless, Duke Journal of Comparative and International Law, 8: 255-265.

See further: Kanda H. Securitization In Japan, Duke Journal of Comparative and International Law, 8: 359-370. See: Klee K & Butler B. Asset-Backed Scuritization, Special Purpose Vehicles and Other Securitization Issues, Uniform Commercial Code Law Review, 35(3):23-33. See: Higgin E & Mason J. (2004). What Is The Value of Recourse To ABS? A Study of The Credit Card Bank ABS Rescue, Journal of Banking & Finance, 28(4):857-874. See: Carlson D (1998), The Rotten Foundations of Securitization, William & Mary Law Review, 39: See: Elmer P., Conduits: Their Structure and Risk, FDIC Banking Review, pp. 27-40.

See: Dawson P. Ratings Games With Contingent Transfer: A Structured Finance Illusion, Duke Journal of Comparative & International Law, 8: 381-391.

(6): See: Fogie v. Thorn, 95 F3d 645 (CA8, 1996) (cert. den.) 520 US 1166; Police v. National Tax Funding LP, 225 F3d 379 (CA3, 2000); Najarro v. SASI Intern. Ltd, 904 F2d 1002 (CA5, 1990) (cert. den.) 498 US 1048; Video Trax v. Nationsbank NA, 33 Fsupp2d 1041 (S.D.Fla.,1998) (affirmed) 205 F3d 1358(cert. den.) 531 US 822; In Re Tammy Jewels, 116 BR 290 (M.D.Fla., 1990); and: ECE technologies v. Cherrington Corp., 168 F3d 201 (CA5, 1999); Colony Creek Ltd. v. RTC, 941 F2d 1323 (CA5, 1991) (rehearing denied); Sterling Property Management v. Texas Commerce Bank, 32 F3d 964 (CA5, 1994); Pearcy Marinev. Acadian offshore Services, 832 Fsupp 192 (S.D.TX, 1993); In Re Venture Mortgage Fund LP, 245 BR 460 (SDNY, 2000); In Re Donnay, 184 BR 767 (D.Minn, 1995); Johnson v. Telecash Inc., 82 FSupp2d 264 (D.Del., 1999) (reversed in part) 225 F2d 366 (cert. denied) 531 US 1145; Shelton v. Mutual Savings & Loan Association, 738 FSupp 50 (E.D.Mich., 1990); S.E.C. v. Elmas Trading Corporation, 638 F. Supp 743 (D.Nevada, 1987) (affirmed) 865 F2d 265; contrast: J2 Smoke Shop Inc. v. American Commercial Capital Corp., 709 FSupp 422 (SDNY 1989) (cost of funds); In Re Powderburst Corp., 154 BR 307 (E.D.Cal. 1993) (original issue discount); In Re Wright, 256 BR 626 (D.Mont., 2000) (difference between the face amount and amount actually recovered or owed by debtor); In Re MCCorhill Pub. Inc., 86 BR 283 (SDNY 1988); In Re Marill Alarm Systems, 81 BR 119 (S.D.Fla., 1987) (affirmed) 861 F2d 725; In Re Dent, 130 BR 623 (S.D.GA, 1991); In Re Evans, 130 BR 357 (S.D.GA, 1991); contrast: In Re Cadillac Wildwood Development, 138 BR 854 (W.D. Mich., 1992) (closing costs are interest costs); In Re Brummer, 147 BR 552 (D.Mont., 1992); In Re Sunde, 149 BR 552 (D.Minn., 1992); Matter of Worldwide Trucks, 948 F2d 976 (CA5,1991) (agreement concerning applicable interest rate may be established by course of conduct); Lovick v. Ritemoney Ltd, 378 F3d 433 (CA5, 2004); In Re Shulman Transport, 744 F2d 293 (CA2, 1984); Torelli v. Esposito, 461 NYS2d 299 (1983) (reversed) 483 NYS2d 204; Reschke v. Eadi, 447 NYS2d 59 (NYAD4, 1981); Elghanian v. Elghanian, 717 NYS2d 54( NYAD1, 2000) (leave to appeal denied) 729 NYS2d 410 (here, there was no consideration in exchange for loan, and transaction violated usury laws); Karas v. Shur, 592 NYS2d 779 (NYAD2, 1993); Simsbury Fund v. New St. Louis Associates, 611 NYS2d 557 (NYAD1, 1994); Rhee v. Dahan, 454 NYS2d 371 (NY.Sup., 1982); Hamilton v. HLT Check Exchange, LLP, 987 F. Supp. 953 (E.D. Ky. 1997); Turner v. E-Z Check Cashing of Cookeville, TN, Inc., 35 F.Supp.2d 1042 (M.D. Tenn. 1999); Hurt v. Crystal Ice & Cold Storage Co., 286 S.W. 1055, 1056-57 (Ky. 1926); Phanco v. Dollar Financial Group., Case No. CV99-1281 DDP (C.D. Cal., filed Feb. 8, 1999). See: Van Voris, B. (May 17, 1999) ‘‘Payday’ Loans Under Scrutiny’, National Law Journal, p. B1.

(7): See: 26 U.S.C. § 7201. 26 USC Subtitle F, Chapter 75.
See: Cheek v. United States, 498 U.S. 192 (1991).

(8): SEC v. Towers Financial Corp. et al., 93 Civ. 744 (WK) (S.D.N.Y.)

(9): See: Schwarcz Steven, Enron and The Use and Abuse of Special Purpose Entities In Corporate Structures, 70 U. Cin. L. Rev. 1309 (2002). See: Schwarcz, Steven, Securitization Post-Enron, 25 Cardozo L. Rev. 1539 (2004). See: Thomas Plank, 2004 Symposium: The Security of Securitization and The Future of Security, 25 Cardozo L. Rev. 1655 (2004).

See further: Thomas H., Effects of Asset Securitization On Seller Claimants, Journal of financial Intermediation, 10: 306-330. See: Yamazaki, Kenji, What Makes Asset Securitization Inefficient? Working Paper # 603, Berkeley Electronic Press.

(10): The Uniform Fraudulent Transfer Act reads as follows:

SECTION 4: TRANSFERS FRAUDULENT AS TO PRESENT AND FUTURE CREDITORS:

(a) A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if:

(1) with actual intent to hinder, delay, or defraud any creditor of the debtor; or (2) without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:

(i): was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or:
(ii): intended to incur, or believed or reasonably should have believed that he [or she] would incur, debts that would be beyond his [or her] ability to pay as they became due.

(b) In determining actual intent under subsection (a)(1), consideration may be given, among other factors, to whether:

(1): The transfer or obligation was to an insider;
(2): The debtor retained possession or control of the property transferred after the transfer;
(3): The transfer or obligation was disclosed or concealed;
(4): Before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit;
(5): The transfer was of substantially all the debtor’s assets;
(6): The debtor absconded;
(7): The debtor removed or concealed assets;
(8): The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred;
(9): The debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred;
(10): The transfer occurred shortly before or shortly after a substantial debt was incurred; and:
(11): The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor. Under both the US Bankruptcy Code and UFTA (Section 544 of the US Bankruptcy Code also allows unsecured creditors to sue in Federal Bankruptcy Court using applicable State), judges must determine whether there has been Fraudulent Conveyance. Courts have developed a series of factors as criteria for proving the requisite intent. The factors to be considered (“badges of fraud”) in determining Fraudulent Conveyance include:

• Whether the transfer represented substantially all of the debtor’s assets.
• Whether the transfer was made around the time a substantial debt was incurred.
• Whether the debtor received reasonable consideration equivalent to the value of the assets conveyed or the obligation incurred.
• Whether the debtor became insolvent soon after the transfer.
• Whether the transfer was made to insiders or family members.
• Whether the transfer or the assets were concealed

(11): See: Roman Dan, Sarlito M & Mukhtiar A (Winter 2007), Risks to Consider when purchasing Technology-based IP for Securitization, Working Paper. See additionally: Nolan Anthony, Synthetic Securitizations and Derivatives Transactions by Banks: Selected Regulatory Issues, The Journal of Structured Finance, Fall 2006. See: Lucas Douglas, Goodman Laurie & Fabozzi Frank, Hybrid Assets in an ABS CDO: Structural Advantages and Cash Flow Mechanics, Journal of Structured Finance (Fall 2006). See further: Prince, Jeffrey, A General Review of CDO Valuation Methods, Journal of Structured and Project Finance (Summer 2006).

(12): See: Peter V. Pantaleo et al., Rethinking the Role of Recourse in the Sale of Financial Assets, 52 Bus. Law. 159, 159-63 (1996) (discussing types of permissible and impermissible recourse for sale treatment). See: Thomas E. Plank, The True Sale of Loans and the Rôle of Recourse, 14 GEO. MASON L. Rev. 287 (1991). See: Gordon T (2000). Securitization of Executory Future Flows As bankruptcy-Remote True Sales, University of Chicago Law Review, 67:1317-1322. See: Higgin E & Mason J (2004). What Is The value of Recourse To Asset-Backed Securities? A Study of Credit Card Bank ABS Rescues, Journal of Banking & Finance, 28(4); 857-874.

(13): See: Peter V. Pantaleo et al., Rethinking the Rôle of Recourse in the Sale of Financial Assets, 52 Bus. Law. 159, 159-63 (1996) (discussing types of permissible and impermissible recourse for sale treatment); See: Thomas E. Plank, The True Sale of Loans and the Role of Recourse, 14 GEO. MASON L. Rev. 287 (1991). See: Higgin E. & Mason J. (2004), What Is The value of Recourse To Asset-Backed Securities? A Study of Credit Card Bank ABS Rescues, The Journal of Banking & Finance, 28(4); 857-874. See: Lois R. Lupica, Revised Article 9, Securitization Transactions and the Bankruptcy Dynamic, 9 AM. BANKR. INST. L. REV. 287, 291-92 (2001). See: Carol M. Rose, Crystals and Mud in Property Law, 40 STAN. L. REV. 577, 600 (1988). See: Louis Kaplow, Rules Versus Standards: An Economic Analysis, 42 Duke L.J. 557 (1992).

(14): See: Yamazaki, Kenichi, What makes Asset Securitization Inefficient?, 2005.
Working Paper #603, Berkeley Electronic Press.

(15): See: Yamazaki (2005), supra.

(16): See: Schwarcz (2002), supra. See: Schwarcz (2004), supra. See: Klee & Butler, supra. See: Lipson J C (2002). Enron, Asset Securitization and Bankruptcy Reform: Dead or Dormant? Journal
of Bankruptcy Law & Practice, 11: 1-15. See: Lupica L (2001). Revised Articles Nine, Securitization Transactions and The Bankruptcy Dynamic, American Bankruptcy Institute Law Review, 9:287-299. See: Garmaise M (2001), Rational Beliefs and Security Design, Review of Financial Studies, 14(4):1183-1213. See: David A (1997), Controlling Information Premia by Repackaging Asset Backed Securities, Journal of Risk & Insurance, 64(4):619-648. See: DeMarzo P (2005), The Pooling and Tranching of Securities: A Model of Informed Intermediation, Review of Financial Studies, 18(1):1-35. See further: Report by The Committee On Bankruptcy and Corporate Reorganization of The Association of The Bar of The City of New York (2000): New Developments In Structured Finance, The Business Lawyer, 56: 95-105. See: Lupica L (2000), Circumvention of The Bankruptcy Process: The Statutory Institutionalization of Securitization, Connecticut Law Review, 33:199-209.

See further: Glover S (1992), Structured Finance Goes Chapter Eleven: Asset Securitization by the Reorganizing Companies, The Business Lawyer, 47:611-621. See: Gordon T (2000), Securitization of Executory Future Flows as bankruptcy-Remote True Sales, The University of Chicago Law Review, 67:1317-1322. See: Elmer P., Conduits: Their Stricture and Risk, FDIC Banking Review, pp.27-40. See: Lois R. Lupica, Revised Article 9, Securitization Transactions and the Bankruptcy Dynamic, 9 AM. BANKR. INST. L. REV. 287, 291-92 (2001). See: Steven L. Schwarcz, The Inherent Irrationality of Judgment Proofing, 52 STAN. L. REV. 1 (1999). See: Lynn M. LoPucki, The Irrefutable Logic of Judgment Proofing: A Reply to Professor Schwarcz, 52 STAN. L. REV. 55 (1999). See: Steven L. Schwarcz, The Impact on Securitization of Revised UCC Article 9, 74 Cm.KENT L. REV. 947 (1999) (“Revised Article 9 attempts to broaden its coverage to virtually all securitized assets”).

See: Christopher W. Frost, Asset Securitization and Corporate Risk Allocation, 72 TUL. L. REV. 101 (1997); See: Claire A. Hill, Securitization: A Low-Cost Sweetener for Lemons, 74 WASH. U. L. Q. 1061 (1996). See: Steven L. Schwarcz, Judgment Proofing: A Rejoinder, 52 STAN. L. REV. 77 (1999).

(17): See: Reams B & Manz W (eds.), FEDERAL BANKRUPTCY LAW: A LEGISLATIVE HISTORY OF THE BANKRUPTCY REFORM ACT OF 1994. See further: The Legislative History of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005; (FRB Leg. Hist); (S. 256 -LoC); Pub. L. 109-8, April 20, 2005, 119 Stat, 23. http://www.llsdc.org/sourcebook/leg-hist.htm.

See: Bankruptcy Reform Act of 1978: A Legislative History, Hein. See: Federal Bankruptcy Law: A Legislative History of The Bankruptcy Act of 1994; Pub. L. No. 103-394, 108 Stat. 4106, including the National Bankruptcy Commission Act and Bankruptcy Amendments (1987-1993).

See further: Ahern, Lawrence (Spring 2001). “Workouts” Under Revised Article Nine: A Review of Changes and Proposal For Study, American Bankruptcy Institute Law Review, 9:115-125.

See also: Ribstein, Larry & Kobayashi, Bruce (1996), An Economic Analysis of Uniform State Laws, Journal of Legal Studies, 25(1):131-199.

(18): See: Ashta A & Tolle L (2000), Criteria for Selecting Restructuring Strategies for Distressed or Declining Enterprises, Cahners Du Ceren, 6:1-20. See: Carlson D (1998). The Rotten Foundations of Securitization, William & Mary Law Review, 39. See: Higgin E & Mason J (2004), What is the value of Recourse to Asset-Backed Securities? A Study of Credit Card Bank ABS Rescues, in the Journal of Banking & Finance, 28(4); 857-874. See: Albany Insurance v. Esses, 831 F2d 41 (CA2, 1987) (making false statements about value of asset was a “predicate act”); Howell Hydrocarbons v. Adams, 897 F2d 183 (CA5 1990) (under Federal R.I.C.O. statutes, making a company look solvent when its not, constitutes a ‘predicate act’); The Matter of Lewisville Properties, 849 F2d 946 (CA5, 1988) (under Federal R.I.C.O., false pretenses constitutes ‘predicate acts’). See also: Bens D & Monahan S (Feb. 2005), Altering Investment Decisions to [conform to] Management Financial Reporting Outcomes: Asset Backed Commercial Paper Conduits and FIN 46, Working Paper.

(19): In the following cases, the named courts held that pre-petition waivers of the right to file for voluntary/involuntary bankruptcy, were unenforceable. See: In Re Huang, 275 F3d 1177 (CA9, 2002) (it is against public policy for a debtor to waive the pre-petition protection of the Bankruptcy Code); In Re South East Financial Associates, 21 BR 1003 (M.D.Fla, 1997); And: In Re Tru Block Concrete Products Ins., 27 BR 486 (E.D.Pa., 1995) (advance agreement to waive the benefits of bankruptcy law is void as against public policy); In Re Madison, 184 BR 686, 690 (E.D.Pa, 1995) (even bargained-for and knowing waivers of the right to seek bankruptcy protection must be deemed void); In Re Club Tower LP, 138 BR 307 at 312 (N.D.Ga, 1991); In Re Graves, 212 BR 692 (BAP, CA1, 1997); In Re Pease, 195 BR 431 (D.Neb., 1996); And: In Re Jenkins Court Associates Ltd. Partnership, 181 BR 33 (E.D.Pa., 1995); In Re Sky Group International Inc., 108 BR 86 (W.D.Pa., 1989); Association of St.Croix Condominium Owners v. St. Croix Hotel Corp., 692 F2d 446 (CA3, 1982).

But contrast: In Re University Commons LP, 200 BR 255 (M.D.Fla.) (debtors agreement that in the event debtor enters bankruptcy proceedings, the secured lender shall be entitled to court order dismissing the case as ‘bad faith’ filing an determining that: (i) no rehabilitation or reorganization is possible, and (ii) dismissing all creditor/ ABS-investor’s right to file for involuntary bankruptcy 21, 22: US courts have repeatedly asserted that bankruptcy proceedings are in the best interests of parties and all other creditors, and this is binding); In Re Little Creek Development, 779 F2d 1068 (CA5, 1986). See: 124 Congr. Record H 32, 401 (1978).

(20): There are several cases that hold that pre-petition waivers of the right to file for voluntary or involuntary bankruptcy, are enforceable: thus: In Re Shady Grove tech Center Associates Limited Partnership, 216 BR 386 (D.Md., 1998) (waiver of the right to file for bankruptcy is unenforceable) (opinion supplemented) 227 BR 422 (D.Md., 1998); In Re Atrium High Point Ltd. partnership, 189 BR 599 (MDNC 1995); In Re Darrell Creek Associates, 187 BR 908 (DSc, 1995); In Re Cheeks, 167 BR 817 (D.Sc, 1997); In Re McBride Estates, 154 BR 339 (N.D.Fla., 1993); In Re citadel Properties, 86 BR 275, MD.Fla., 1988); In Re Gulf Beach Development Corp., 48 BR 40 (M.D.Fla., 1985).

However, these cases are very distinguishable from standard securitization transactions because the following characteristics and/or conditions existed in these cases: (a) they involve only single-asset entities; (b) these entities had no employees; (c) the timing of filing of bankruptcy petition indicates an intent to delay or to frustrate creditors’ proper efforts to enforce their rights after a workout had failed; (d) there were no or few unsecured non-insider creditors (those existing had small claims); (e) there was no realistic chance of rehabilitation or reorganization; (f) the assets did not produce any cashflow.

(21): See cases cited in Notes 5, 6, 19 and 20.

(22): On pre-petition waivers of right to file for bankruptcy and waivers of bankruptcy stays, see: In re Huang, 275 F.3d 1173, 1177 (9th Cir. 2002) (“It is against public policy for a debtor to waive the pre-petition protection of the Bankruptcy Code”); In re Shady Grove Tech Center Assocs. Limited Partnership, 216 B.R. 386, 389 (Bankr. D. Md. 1998) (“The courts have uniformly held that a waiver of the right to file a bankruptcy case is unenforceable”); In re Tru Block Concrete Prods., Ins., 27 B.R. 486, 492 (Bankr. E.D. Pa. 1995) (advance agreement to waive the benefits conferred by bankruptcy law is void as against US public policy); In re Madison, 184 B.R 686, 690 (Bankr. E.D. Pa. 1995) (even bargained-for and knowing waivers of the right to seek bankruptcy protection must be deemed void); In re Club Tower L.P., 138 B.R. 307, 312 (Bankr. N.D. Ga. 1991); further, In re Orange Park S. Partnership, 79 B.R. 79, 82 (Bankr. M.D. Fla. 1987); In re Aurora Invs., 134 B.R. 982, 985 (Bankr. M.D. Fla. 1991) (debtor’s agreement that petition, if filed, would be in “bad faith” if its primary purpose is to delay foreclosure sale, is binding); In re University Commons, L.P., 200 B.R. 255, 259 (Bankr. M.D. Fla. 1996) (debtor’s agreement that in the event that debtor becomes subject of bankruptcy case secured lender shall be entitled to order dismissing case as “bad faith” filing and determining that (i) no rehabilitation or reorganization is possible, and (ii) dismissing all court proceedings is in the best interest of parties and all other creditors, is binding); In Re Little Creek Dev. Co., 779 F.2d 1068, 1073 (5th Cir. 1986). 47212 B.R. 1003, 1005 (Bankr. M.D. Fla. 1997). See: 124 Cong. Rec. H 32, 401 (1978) (“The explicit reference in Title-11 forbidding the waiver of certain rights is not intended to imply that other rights, such as the right to file a voluntary bankruptcy case under section 301, maybe waived”). See further: Klee, Kenneth & Butler, Brendt, Asset-backed Securitization, Special Purpose Vehicles and Other Securitization, Working Paper. Cases that enforced pre-petition waivers of the automatic stay focus upon:

(i): The financial sophistication of the borrower;
(ii): The creditor’s demonstration that significant consideration was given
for the pre-petition waiver;
(iii): The effect of the enforcement of the pre-petition waiver upon other
parties having legitimate interests in the outcome;
(iv): Circumstances of the parties at the time enforcement of the pre-petition waiver is sought;
(v): The enforcement of the pre-petition waiver being consistent
with public policy of encouraging out of court restructurings and settlements with creditors; and:
(vi): Other indicia which support granting relief from stay, such as “bad faith” criteria (i.e. single-asset case, two-party dispute, long history of pre-petition workouts, newly formed entity, filing on eve of foreclosure, no ongoing business to reorganize, few employees, no unencumbered funds, etc.). Cases that held that pre-petition stay waivers were enforceable include: In Re Shady Grove Tech Ctr. Assocs., L.P., 216 B.R.386, 390 (Bankr. D. Md. 1998); In Re Atrium High Point L.P., 189 B.R. 599, 607 (Bankr. M.D.N.C. 1995); In Re Darrell Creek Assocs., L.P., 187 B.R. 908, 910 (Bankr. D.S.C. 1995); In Re Cheeks, 167 B.R. 817, 818 (Bankr. D.S.C. 1994); In Re Powers, 170 B.R. 480, 483 (Bankr. D. Mass. 1994); In Re McBride Estates, Ltd., 154 B.R. 339, 343 (Bankr. N.D. Fla. 1993); In Re Citadel Properties, Inc., 86 B.R. 275, 276 (Bankr. M.D. Fla. 1988); In Re Gulf Beach Development Corp., 48 B.R. 40, 43 (Bankr. M.D. Fla. 1985).

Several courts, however, have refused to enforce pre-petition waivers
for any of the following reasons:

(i): The pre-petition waiver is the equivalent to an ipso facto clause;
(ii): Such clause is void as against public policy by depriving the debtor
of the use and benefit of property upon the filing of a bankruptcy case;
(iii): The borrower lacks the capacity to act on behalf of the debtor in possession;
(iv): The debtor has a business with a reasonable chance at reorganization and enforcement of the waiver would otherwise prejudice third-party creditors;
(v): The automatic stay is designed to protect all creditors and may not be waived by the debtor unilaterally to the detriment of creditors; and:
(vi): The waiver was obtained by coercion, fraud or mutual mistake of facts. Courts that have refused to enforce pre-petition waivers of the automatic stay have reasoned that the automatic stay protects not only debtors but also other creditors. US Courts disagree sharply about the utility, benefits and desirability of the enforcement of pre-petition waivers, and relevant criteria. Some courts have held that a pre-petition automatic stay waiver may be considered as a factor in determining whether cause exists for relief from the stay.

See aslo: In Re Darrell Creek Assocs., L.P., 187 B.R. 908, 913 (Bankr. D.S.C. 1995) (“out of court workouts are to be encouraged and are often effective”); In Re Cheeks, 167 B.R. 817, 819 (Bankr. D.S.C. 1994) (“the most compelling reason for enforcement of the forbearance agreement is to further the public policy in favor of encouraging out of court restructuring and settlements”);
In Re Club Tower L.P., 138 B.R. 307, 312 (Bankr. N.D. Ga. 1991) (“enforcing pre-petition settlement agreements furthers the legitimate public policy of encouraging out of court restructurings and settlements”). Cases holding pre-petition automatic stay waivers unenforceable include: In Re Southeast Financial Assocs., Inc., 212 B.R. 1003, 1005 (Bankr. M.D. Fla. 1997); In Re Graves, 212 B.R. 692, 694 (B.A.P. 1st Cir. 1997); In Re Pease, 195 B.R. 431, 433 (Bankr. D. Neb. 1996); In Re Jenkins Court Assocs. L.P., 181 B.R. 33, 37 (Bankr. E.D. Pa. 1995);Farm Credit of Cent. Fla., ACA v. Polk, 160 B.R. 870, 873-74 (M.D. Fla. 1993); Farm Credit of Cent. Fla., ACA v. Polk, 160 B.R. 870, 873-74 (M.D. Fla. 1993) (”The policy behind the automatic stay is to protect the debtor‘s estate from being depleted by creditor’s lawsuits and seizures of property before the debtor has had a chance to marshal the estate’s assets and distribute them equitably among creditors“); In Re Sky Group Int’l, Inc., 108 B.R. 86, 89 (Bankr. W.D. Pa. 1989) (”To grant a creditor relief from stay simply because the debtor elected to waive the protection afforded the debtor by the automatic stay ignores the fact that it also is designed to protect all creditors and to treat them equally“) (citing Assoc. of St. Croix Condominium Owners v. St. Croix Hotel Corp., 682 F.2d 446 (3d Cir. 1982)). Also see: In re Shady Grove Tech Ctr. Assocs., L.P., 216 B.R. 386, 393-94 (Bankr. D. Md. 1998); In re S.E. Fin. Assocs., Inc., 212 B.R. 1003, 1005 (Bankr. M.D. Fla. 1997); In re Darrell Creek Assocs., L.P., 187 B.R. 908, 910 (Bankr. D.S.C. 1995); In re Powers, 170 B.R. 480, 483 (Bankr. D. Mass. 1994); In re Cheeks, 167 B.R. 817, 819 (Bankr. D.S.C. 1994); In Re Shady Grove Tech Ctr. Assocs., L.P., 216 B.R. 386, 393-94 (Bankr. D. Md. 1998) (granting a stay relief for cause based upon a finding which included debtor’s pre-petition agreement not to contest request for stay relief given as part of pre-petition restructuring in which debtor was afforded substantial consideration). See: Steven L. Schwarcz, Rethinking Freedom of Contract: A Bankruptcy Paradigm, 77 Tex. L. Rev. 515 (1999). See: In Re Club Tower L.P., 138 B.R. 307, 311-12 (Bankr. N.D. Ga. 1991).

(23): See: Schwarcz S. (1999). Rethinking Freedom of Contract: A Bankruptcy Paradigm, Texas Law Review, 77: 515-599. See: Klee K & Butler B Asset-Backed Securitization, Special Purpose Vehicles and Other Securitization Issues, Uniform Commercial Code Law Journal, 35(2):. See: Carlson D (1998), The Rotten Foundations of Securitization, William & Mary Law Review, 39:

(24): See notes 5, 6, 19 and 20, supra.

(25): See: Shakespeare C (2003). Do Managers Use Securitization Volume and Fair Value Estimates To Hit Earning Targets? Working Paper, University of Michigan (School of Business). See further: Shakespeare C (2001), Accounting For Asset Securitizations: Complex Fair Values and Earnings Management, Working Paper, University of Michigan.

(26): Wooten v. Loshbough, 649 Fsupp 531 (N.D.Ind. 1986) (on reconsideration) 738 Fsupp 314 (affirmed) 951 F2d 768 (under Federal R.I.C.O. statutes, the stripping of a company’s ability to pay a Court-ordered judgment claim was a ’predicate act‘).

(27): See: Kulzick R (2004). Sarbanes-Oxley: Effects on Financial
Transparency, S.A.M. Advanced Management Journal, 69(1): 43-49.

(28): See: Albany Insurance v. Esses, 831 F2d 41 (CA2, 1987) (under Federal R.I.C.O. statutes, making false statements about the value of asset was a ‘predicate act’); Howell Hydrocarbons v. Adams, 897 F2d 183 (CA5 1990) (under Federal R.I.C.O. statutes, making a company look solvent when its not, constitutes a ‘predicate act’).

(29): See: Lockheed Martin v. Boeing, 357 Fsupp2d 1350 (M.D.Fla., 2005) (bidder violated competitor’s property rights to proprietary information by using it to produce winning bids).

(30): See: Colloff M (2005), The Rôle of the Trustee in Mitigating Fraud in Structured Financings, Journal of Structured Finance, 10(4):73-85. See further: Shakespeare C (2003), Do Managers Use Securitization Volume and Fair Value Estimates to Hit Earning Targets? Working Paper, University of Michigan (School of Business).

See: Shakespeare C (2001), Accounting For Asset Securitizations: Complex Fair Values and Earnings Management. Working Paper, University of Michigan. See: Katyal K (2003), Conspiracy Theory, The Yale Law Journal, 112(6):1307-1398.

See: Geary W (2002), The Legislative Recreation of R.I.C.O.: Reinforcing The ‘myth’ of Organized Crime, Crime, Law & Social Change, 38(4):311-315. See: Kulzick R (2004), Sarbanes-Oxley: Effects on Financial Transparency, S.A.M. Advanced Management Journal, 69(1): 43-49. See: Painter R (2004), Convergence and Competition In Rules Governing Lawyers and Auditors, The Journal of Corporation Law, 29(2):397-426. See: Jordans R. (2003), The legal approach to investment advisers in different jurisdictions, Journal of Financial Regulation and Compliance, 11(2):169-171.

See: Blanque P. (2003), Crisis and Fraud, Journal of Financial Regulation & Compliance, 11(1):60-70. See: Pickholz M & Pickholz J (2001), Manipulation, Journal of Financial Crime, 9(2):117-133. See: Zey M(1999), The subsidiarization of the securities industry and the organization of securities fraud networks to return profits in the 1980s, Work and Occupations, 26(1):50-76.

See: Aicher R, Cotton D & Khan T (2004), Credit Enhancement: Letters of Credit, Guaranties, Insurance and Swaps, The Business Lawyer, 59(3):897-973. See: Brief T & Ms Sweeney T (2003), Corporate Criminal Liability, The American Criminal Review, 40(2): 337-366. See: Landrum D (2003), Governance of limited liability companies – Contrasting California and Delaware models, The Real Estate Finance Journal, 19(1).

(31): See: 18 USC 1961-1968.

(32): See: Alexander v. Thornbough, 713 FSupp 1271 (D.Minn. 1989) (appeal dismissed) 881 F2d 1081; Mira v. Nuclear Measurements Corp., 107 F3d 466 (CA7, 1997); US v. Manzella, 782 F2d 533 (CA5, 1986)(cert. Denied.) 476 US 1123; Cadle Co v. Flanagan, 271 Fsupp2d 379 (D.Conn., 2003); Seale v. Miller, 698 Fsupp 883 (N.D.G.A., 1988); Georgia Gulf Corp. v. Ward, 701 Fsupp 1556 (NDGA 1988); Wooten v. Loshbough, 649 FSupp. 531 (N.D.Ind. 1986) (on reconsideration) 738 Fsupp 314 (affirmed) 951 F2d 768 (stripping of company’s ability to pay judgment claim was ‘predicate act’ under R.I.C.O. statutes); Formax v. Hostert, 841 F2d 388 (CAFed, 1988); Abell v. Potomac Insurance, 858 F2d 1104 (CA5, 1988) (appeal after remand) 946 F2d 1160 (cert. denied) 492 US 918; Aetna Ca. Ins. Co. v. P & B Autobody, 43 F3d 1546 (CA1, 1994); Albany Insurance v. Esses, 831 F2d 41 (CA2, 1987) (making false statements about value of asset was a “predicate act”); Alfadda v. Fenn, 935 F2d 475 (CA2, 1991)(certiorari denied) 502 US 1005; Laird v. Integrated Resources, 897 F2d 826 (CA5, 1990); Shearin v. E F Hutton, 885 F2d 1162 (CA3, 1989); Bank One of Cleveland v. Abbe, 916 F2d 1067 (CA6, 1990); BancOklahoma Mortgage Corp. v. Capital Title Co., 194 F3d 1089 (CA10, 1999); Howell Hydrocarbons v. Adams, 897 F2d 183 (CA5 1990) (under Federal R.I.C.O. statutes, making a company look solvent when its not, constitutes a ‘predicate act’); Matter of Lewisville Properties, 849 F2d 946 (CA5, 1988) (false pretenses constitutes ‘predicate acts’).

See: Securities Investor Protection Corp. v. Vigman, 908 F2d 1461 (CA9, 1990); International Data Bank v. Zepkin, 812 F2d 149 (CA4, 1987); Warner v. Alexander Grant & Co., 828 F2d 14528 (CA11, 1987); Mauriber v. Shearson/American Express, 546 FSupp 391 (SDNY, 1982); Farmers Bank F Delaware v. Bell Mortgage Corp., 452 FSupp 1278 (D.Del, 1978); Moss v. Morgan Stanley Inc., 719 F2d 5 (CA2, 1983); USACO Coal v. Carbomin Energy Inc., 689 F2d 94 (CA6, 1982); Binkley v. Shaeffer, 609 FSupp 601 (E.D.Pa., 1985); Sedima v. Imrex Co., 473 US 479 (1985) . See: Glanz M (1983). R.I.C.O. and Securities Fraud: A Workable Limitation, Columbia Law Review, 6:1513-1543. See: Masella J (1991), Standing to Sue In A Civil R.I.C.O. Suit Predicated On Violation OF SEC Rule 10b-5: The Purchase Or Sale Requirement, Columbia Law Review, 91(7):1793-1812. See: Coffey P (1990), The Selection, Analysis and Approval of Federal R.I.C.O. Prosecutions, Notre Dame Law Review, 65: 1035-1055. See: Matthews A (1990), Shifting The Burden of Losses In The Securities Markets: The Rôle of Civil R.I.C.O. In Securities Litigation, Notre Dame Law Review, 65: 896-906.

(33): See: Bradford National Clearing Corp. v. SEC, 590 F2d 1085 (DCCir, 1978); In Re Stock Exchanges Options Trading Antitrust Litigation, 317 F3d 134 (CA2, 2003); Gordon v. NYSE, 422 US 659 (1975); National Gerimedical Hospital v. Blue Cross of Kansas City, 452 US 378 (1981); Silver v. NYSE, 373 US 341 (1963) (no Antitrust immunity); Strobl v. NY Mercantile Exchange, 768 F2d 22.

(34), (35):
§ 1 Sherman Act, 15 U.S.C. § 1:

Trusts, etc., in restraint of trade illegal; penalty:

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by a fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.

§ 2 Sherman Act, 15 U.S.C. § 2:

Monopolizing trade a felony; penalty:

Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in discretion of the court.

§ 3 Sherman Act, 15 U.S.C. § 3:

Trusts in Territories or District of Columbia illegal; combination a felony:

Every contract, combination in form of trust or otherwise, or conspiracy, in restraint of trade or commerce in any Territory of the United States or of the District of Columbia, or in restraint of trade or commerce between any such Territory and another, or between any such Territory or Territories and any State or States or the District of Columbia (DC), or with foreign nations, or between the District of Columbia and any State or States or foreign nations, is declared illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $10,000,000 if a corporation, or, if any other person, $350,000, or by imprisonment not exceeding three years, or by both said punishments, in the discretion of the court.

3. CLAYTON ACT, 15 U.S.C. §§ 12-27, 29 U.S.C. §§ 52-53:

• § 1 Clayton Act, 15 U.S.C. § 12 Definitions; short title:

§ 1 Clayton Act, 15 U.S.C. § 12 Definitions; short title:
(a) “Antitrust laws”, as used herein, includes the Act entitled:
‘An Act to protect trade and commerce against unlawful restraints and monopolies’, approved July second, eighteen hundred and ninety; sections seventy-three to seventy-seven, inclusive, of an Act entitled ‘An Act to reduce taxation, to provide revenue for the Government, and for other purposes’, of August 27th, eighteen hundred and ninety-four; an Act entitled ‘An Act to amend sections seventy-three and seventy-six of the Act of August twenty-seventh, eighteen hundred and ninetyfour’, entitled ‘An Act to reduce taxation, to provide revenue for the Government, and for other purposes’, approved February twelfth, nineteen hundred and thirteen; and also this Act.

‘Commerce’, as used herein, means trade or commerce among the several States and with foreign nations, or between the District of Columbia or any Territory of the United States and any State, Territory, or foreign nation, or between any insular possessions or other places that are under the jurisdiction of the United States, or between any such possession or place and any US State or Territory of the United States or the District of Columbia or any foreign nation, or within the District of Columbia or any Territory or any insular possession or other place under the jurisdiction of the United States:

Provided, That nothing in this Act contained shall apply to the Philippine Islands. The word ‘person’ or ‘persons’ wherever used in this Act shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country.

(b) This Act may be cited as the “Clayton Act”.

• § 2 Clayton Act, 15 U.S.C. §§ 13(2):

Discrimination in price, services, or facilities:

(a) Price; selection of customers:

It shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce, where such commodities are sold for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them: Provided, That nothing herein contained shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered:

Provided, however, That the Federal Trade Commission may, after due investigation and hearing to all interested parties, fix and establish quantity limits, and revise the same as it finds necessary, as to particular commodities or classes of commodities, where it finds that available purchasers in greater quantities are so few as to render differentials on account thereof unjustly discriminatory or promotive of monopoly in any line of commerce; and the foregoing shall then not be construed to permit differentials that are based on differences in quantities greater than those so fixed and established: and provided further, That nothing herein contained shall prevent persons engaged in selling goods, wares, or merchandise in commerce from selecting their own customers in bona fide transactions and not in restraint of trade: and provided further, That nothing herein contained shall prevent price changes from time to time where in response to changing conditions affecting the market for or the marketability of the goods concerned, such as but not limited to actual or imminent deterioration of perishable goods, obsolescence of seasonal goods, distress sales under court process, or sales in good faith in discontinuance of business in the goods concerned.

(b) Burden of rebutting prima-facie case of discrimination:

Upon proof being made, at any hearing on a complaint under this section, that there has been discrimination in price or services or facilities furnished, the burden of rebutting the prima-facie case thus made by showing justification shall be upon the person charged with a violation of this section, and unless justification shall be affirmatively shown, the Commission is authorized to issue an order terminating the discrimination: Provided, however, That nothing herein contained shall prevent a seller rebutting the prima-facie case thus made by showing that his lower price or the furnishing of services or facilities to any purchaser or purchasers was made in good faith to meet an equally low price of a competitor, or the services or facilities furnished by a competitor.

(c) Payment or acceptance of commission, brokerage, or other compensation: It shall be unlawful for any person engaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods, wares, or merchandise, either to the other party to such transaction or to an agent, representative, or other intermediary therein where such intermediary is acting in fact for or in behalf, or is subject to the direct or indirect control, of any party to such transaction other than the person by whom such compensation is so granted or paid.

(d) Payment for services or facilities for processing or sale:

It shall be unlawful for any person engaged in commerce to pay or contract for the payment of anything of value to or for the benefit of a customer of such person in the course of such commerce as compensation or in consideration for any services or facilities furnished by or through such customer in connection with the processing, handling, sale, or offering for sale of any products or commodities manufactured, sold, or offered for sale by such person, unless such payment or consideration is available on proportionally equal terms to all other customers competing in the distribution of such products or commodities.

(e) Furnishing services or facilities for processing, handling, etc.: It shall be unlawful for any person to discriminate in favor of one purchaser against another purchaser or purchasers of a commodity bought for resale, with or without processing, by contracting to furnish or furnishing, or by contributing to the furnishing of, any services or facilities connected with the processing, handling, sale, or offering for sale of such commodity so purchased upon terms not accorded to all purchasers on proportionally equal terms.

(f) Knowingly inducing or receiving discriminatory price:
It shall be unlawful for any person engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by this section. Discrimination in rebates, discounts, or advertising service charges; underselling in particular localities; penalties:

• 15 U.S.C. § 13a:

It shall be unlawful for any person engaged in commerce, in the course of such commerce, to be a party to, or assist in, any transaction of sale, or any contract to sell, which discriminates to his knowledge against competitors of the purchaser, in that, any discount, rebate, allowance, or advertising service charge is granted to the purchaser over and above any discount, rebate, allowance, or advertising service charge available at the time of such transaction to the said competitors in respect of a sale of goods of like grade, quality, and quantity; to sell, or to contract to sell, goods in any part of the United States at prices lower than those exacted by said person elsewhere in the United States for the purpose of destroying competition, or of eliminating a competitor in such part of the United States; or, to sell, or contract to sell, goods at unreasonably low prices for the purpose of destroying competition or eliminating a competitor.

• Any person violating any of the provisions of this section shall, upon conviction thereof, be fined not more than $5,000 or imprisoned not more than one year, or both.

• 15 U.S.C. § 13b:

Cooperative association; return of net earnings or surplus:
Nothing in sections 13 to 13b and 21a of this title shall prevent a cooperative association from returning to its members, producers, or consumers the whole, or any part of, the net earnings or surplus resulting from its trading operations, in proportion to their purchases or sales from, to, or through the association.

• § 3 Clayton Act, 15 U.S.C. § 14:

Sale, etc., on agreement not to use goods of competitor:

It shall be unlawful for any person engaged in commerce, in the course of such commerce, to lease or make a sale or contract for sale of goods, wares, merchandise, machinery, supplies, or other commodities, whether patented or unpatented, for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, or fix a price charged therefor, or discount from, or a rebate upon, such price, on the condition, agreement, or the understanding that the lessee or the purchaser thereof shall not use or deal in the goods, wares, merchandise, machinery, supplies, or other commodities of a competitor or competitors of the lessor or seller, where the effect of such lease, sale, or contract for sale or such condition, agreement, or understanding may be to substantially lessen competition or tend to create a monopoly in any line of commerce.

• FTC Regulations: Section 5 of the Federal Trade Commission Act outlaw ”unfair methods of competition“ but do not define unfair. The Supreme Court has ruled that violations of the Sherman Act are also violations of Section 5, but Section 5 covers some practices that are beyond the scope of the Sherman Act. It is the FTC’s job to enforce Section 5.

(36): See: Eastman Kodak Co v. Image technical Services, 504 US 451 (1992); Jefferson parish Hospital v. Hyde, 466 US 2 (1984); Zenith Radio Corp. v. Hazeltine Research, 395 US 100 (1969).

(37): See: Business Electronics Corp. v. Sharp Electronics Corp, 485 US 717 (1988); Copperweld Corp. v. Independence Tube, 467 US 752 (1984); Monsanto Co. v. Spray-Rite Service Corp., 465 US 752 (1984); US v. Arnold, Schwin et al, 388 US 365 (1967); USPS v. Flamingo Industries, #02-1290 (2004); Brown v. Pro Football, 518 US 213 (1996); FTC v. Ticor Title Insurance Company, 504 US 621 (1992); Allied Tube & Conduit Corp. v. Indian head Inc., 486 US 492 (1988).

(38): See: Standard Oil Co v. US, 337 US 293 (1949); See: US v. Griffith, 334 US 100 (1948). See: Brooke Group Ltd. V. Brown & Williamson Tobacco, 509 US 209 (1993).

(39): See: Texaco v. Hasbrouck, 496 US 543 (1990); J Truet Payne Co v. Chrysler Motors, 451 US 557 (1981); Great Atlantic & Pacific Tea Co. v. Federal Trade Commission, 440 US 69 (1979); US v. United States Gypsum, 438 US 422 (1978); FTC v. Sun Oil Co., 371 US 505 (1963).

(40): See: Brooke Group Ltd. V. Brown & Williamson Tobacco, 509 US 209 (1993); Matsushita Electric v. Zenith Radio, 475 US 574 (1986); Utah Pie Co. v. Continental Baking Co. et al, 386 US 685 (1967).

(41): See: Parmenter v. FDIC, 925 F2d 1088 (CA8,1991); Ace-Federal Reporters v. Barram, 226 F3d 1329 (Ca.Fed., 2000)(on remand) 2002 WL 1292032; Workman v. UPS, 234 F3d 998 (CA7, 2000); Dibrell Brothers v. Banca Nazionale Del Lavoro, 383 F3d 1571 (CA11, 1999); Gibson v. Neighborhood Health Clinics, 121 F3d 1126 (CA7, 1997); Floss v. Ryans Family Steakhouses, 211 F3d 306 (CA6, 2000)(cert. denied) 531 US 1072; Heinig Furs, 811 Fsupp 1546 (M.D.Ala., 1993); Flanders Medeiros v. Bogosian, 88 Fsupp 412 (DRI, 1994)(affirmed in part) 65 F3d 198; Johnson Enterprises v. FPl Group, 162 F3d 1290 (CA2, 1998); Hoffman v. Bankers Trust, 925 Fsupp 315 (M.D.Pa, 1995); Prudential Insurance v. Sipula, 776 F2d 157 (CA7, 1985); In Re Sulakshma, 207 BR 422 (E.D.Pa, 1997).

(42): See: Gordon T (2000), Securitization of Executory Future Flows as bankruptcy-Remote True Sales, University of Chicago Law Review, 67:1317-1322.

(43): See: Valdiviezo v. Phelps Dodge, 995 Fsupp 1060 (D.Ariz., 1997). Johnson enterprises v. FPL Group, 162 F3d 1290 (CA2, 1998). Ryan v. Upchurch, 474 Fsupp 211 (SND, 1979)(reversed) 627 F2d 836. See: Rose J & Dawson P (Sept. 1997), Contingent Transfer: The Illusory Promise of Structured Finance. S&P Structured Finance, page 10.

(44): Prudential Insurance v. Sipula, 776 F2d 157 (CA7, 1985) (no consideration where party to contract could not bargain for alleged agreement).

(45): See: Tampa Pipeline Transport v. Chase Manhattan Service Corp., 928 Fsupp 1568 (MD.Fla., 1995) (affirmed) 87 F3d 1329.

(46): See: Imel v.Laborer’s Pension Fund Trust, 904 F2d 1327 (CA9, 1990) (cert. den.) 498 US 939 (contract should not alter statutory duties); Truck Ins. Exchange v. Ashland Oil, 951 F2d 787 (CA7, 1992); Cramer v. Consolidated Freightways, 255 F3d 806 (CA9, 2001) (cert. denied) 122 SCt 806; Lake James Community v. Burke County NC, 149 F3d 277 (CA4, 198) (cert. denied) 525 US 1106; Davis v. Parker, 58 F3d 183 (CA5, 1995); In Re NWFx, 881 F2d 530 (on rehearing) 904 F2d 469 (cert. denied) 498 US 941; Biomedical Systems v. GE Marquette, 287 F3d 707 (CA8, 2002) (cert. denied) 123 SCt 636 (post-contract formation failure to obtain statutorily required license invalidated agreement).

THE FOLLOWING DATA HAS BEEN PUBLISHED AT THE FOOT OF MOST OF THESE REPORTS FOR THE PAST THREE YEARS++. IT WAS COMPILED BY MICHAEL C. COTTRELL, B.A., M.S..

• THEY ARE 100% CONSISTENT WITH THE FOREGOING ANALYSIS, AND VICE VERSA:

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, Hauppauge: 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
• 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.

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• This is a very old, malevolent US counterintelligence DIRTY TRICK.

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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. The program has an invaluable ‘Preview before downloading’ feature.

• It is suitable for PC’s but not for Mac computers. As with all such programs, the License is renewable at a modest fee annually. This is done on-line in the usual way [with the supplier direct].

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.

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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.

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WORLD COURT ENFORCEMENT TEAM IN U.S. THIS WEEK

SWINE ‘FLU = BLACKMAIL OP. DROPPED BY OBAMA TEAM IN MEXICO

Thursday 30 April 2009 21:37

• WORLD COURT ENFORCEMENT PERSONNEL ARRIVE IN U.S.

• STATE OF EXTREME, UNPRECEDENTED GLOBAL TENSION

• SPLIT WITHIN THE RANKS OF THE WORKERS OF DARKNESS

• ENFORCEMENT OF THE WORLD COURT’S WRIT IS MANDATORY

• TRILLIONS OF DOLLARS STOLEN BY BUSH 41 AND 43 RETRIEVED

• OBAMA WHITE HOUSE ADVANCE TEAM RESPONSIBLE FOR ‘FLU OUTBREAK?

• CRIMINALS OPERATING INSIDE THE U.S. GOVERNMENT ARE WAGING BIO-TERRORISM AGAINST THE AMERICAN PEOPLE AND THE REST OF THE WORLD FOR SELF-ENRICHMENT

• DISINFORMATION SPREAD BY U.S. LAW ENFORCEMENT

• POSTSCRIPT: MORE ON OBAMA’S REMOVAL OF JESUS SYMBOL

• 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.

• In mid-March we published: International Currency Review Volume 34, #2 on Systemic Fraudulent Finance and The Legalisation of Financial Corruption. Also published recently are issues of our titles The Latin American Times, Economic Intelligence Review, London Currency Report, Interest Rate Service and Arab-Asian Affairs.

• For details, see the second white panel on the Home Page.

• To subscribe to our intelligence services, see the catalogue under World Reports Limited.

• 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. 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.

• 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.

• DONATIONS: You can help finance these exposures (which the Editor has to prepare on top of his normal publishing responsibilities) by sending us a donation. Press Make a Donation, which is live, and it takes you straight to our ultra-safe ordering system, which accepts Visa and MasterCard.

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.

NEW REPORT STARTS HERE:

WORLD COURT ENFORCEMENT PERSONNEL ARRIVE IN U.S.
At 1:50pm on Thursday 30th April we established that a contingent of heavy-duty enforcement personnel reporting to and representing the World Court and the Group of Ten financial powers have been operating in the United States since Monday 27th April. Their duty is to enforce the requirements of a writ, believed to have been dated 1st April, immediately ahead of the Group of Twenty (G-20) meeting in Canning Town, London, on 2nd April 2009, and which would have been deposited with the Meeting and served on President Obama in particular.

This may have been the origin of the story that Obama wouldn’t be attending the G-20 Meeting, and would be visiting the Tower of London instead, as a tourist – the cynical purpose of this tale being to signal to the foreign governments concerned that Obama wasn’t about to make himself available to accept service of the writ.

After second thoughts, presumably his arrogant entourage would have advised him: ‘Not to worry, you needn’t pay attention. Let them serve the writ’ (speculation on our part).

• Furthermore, we have just been told that President Obama is blocking the Settlements and that he himself has no intention of ever allowing them to occur. However this has been authoritatively dismissed as Bush Sr. disinformation propaganda, although it HAS become known that Mr Obama takes his orders directly from Bush Sr. Somehow, we DO NOT THINK THIS IS A VIABLE SITUATION.

Obama is also cited as having told the World Court that it is bought and paid for, so he needn’t pay attention to what it requires. By the same token, Obama is also authoritatively said to have told the Congress that it, too, is bought and paid for.

• However, again, our sources state emphatically that the appropriate law enforcement cadres DO NOT CONCUR, and that the Settlements WILL HAPPEN, and this this obstruction will be overcome.

From what we understand, a lot of very prominent people are in for a rude awakening.

STATE OF EXTREME, UNPRECEDENTED TENSION
For the situation has now reached a pitch of extreme tension, given that execution of the writ requires its demands to have been met by 1st May – which is of course the Feast of Beltane, the Number One World Revolution esoteric date, when misled, brainwashed nutcases dressed up as Druids assemble at Stonehenge to worship the devil, or figments of their own imaginations, while deluded revolutionary cadres around the world celebrate ‘the onward march of the Revolution’.

SPLIT WITHIN THE RANKS OF THE WORKERS OF DARKNESS
But what we are witnessing is of course a massive split within the ranks of the demented Luciferian protagonists of revolutionary action through corruption, because, since the Devil is the author of all lies and confusion, these people are all at loggerheads with each other in multiple dimensions – having, of course, been stealing money from each other and perpetrating grotesque abuses which not even their own evil allies can tolerate.

This will explain why, paradoxically, the sense is that the criminal group that is holding the whole world to ransom, headed by George H. W. Bush Sr., has gone too far even for ‘underworld’ and banking sector compartments previously considered to be its allies and fellow-travellers.

Which should not surprise any of us at all, and should also serve as a warning to those who persist with the erroneous belief that the Revolution cannot be stopped and that the worst outcomes (of which innumerable terrible scenarios are painted and repainted daily) are inevitable.

THEY ARE NOT, and both the exposures to date and their consequences should have made this plain enough by now. Far from being inevitable, the World Revolution is COLLAPSING.

ENFORCEMENT OF THE WORLD COURT’S WRIT IS MANDATORY
So what is happening ‘as we speak’? According to our sources, the heavy enforcement personnel (referred to as ‘the Swiss’) are REQUIRED to procure the demands set out in the World Court writ: that is to say, they have UNLIMITED POWERS TO EXECUTE THE WRIT and may use all means at their disposal to satisfy it. Nothing, we understand, is excluded in this context.

TRILLIONS OF DOLLARS STOLEN BY BUSH 41 AND 43 RETRIEVED
So far, we understand that:

• The World Court enforcement personnel (‘bailiffs’ with powerful backup’) have retrieved SEVERAL TRILLION DOLLARS STOLEN BY CRIMINAL U.S. PRESIDENTS BUSH 41 AND BUSH 43.

• They have presided over a wave of arrests all round Europe.

• They are poised to effect further arrests all over America, taking place in real-time now.

• They have powers to arrest holders of the highest offices INCLUDING THE U.S. PRESIDENT AND THE VICE PRESIDENT if they get in the way of execution and implementation.

• Interference or resistance to the will of the foreign governments as demanded by the World Court on their behalf, whether by the President of the United States or by any other holder of high (or any) office under the United States, will represent OBSTRUCTION OF JUSTICE, against which the enforcement team have power to retaliate in decisive fashion.

• The team may be entitled to deploy force to achieve their objectives: as indicated above, they can use ANY MEANS to enforce the World Court’s demands on behalf of foreign Governments and sovereign powers who have been defrauded by the United States Government.

• As also indicated above, they are NOT in a position to report back to the World Court that they have been unable to procure satisfaction of the requirements of the Court’s writ, or else the personnel THEMSELVES will be arraigned for OBSTRUCTION OF JUSTICE.

• Therefore, failure to implement the will of the wronged Governments as specified by the World Court’s Writ of Execution, is NOT AN OPTION.

OBAMA WHITE HOUSE ADVANCE TEAM RESPONSIBLE FOR ‘FLU OUTBREAK?
The Washington Post reported at 1:54pm Thursday that a member of the Security Advance team for President Obama’s recent trip to Mexico is suspected of having contracted swine ‘flu.

The Security Advance Team is part of Homeland Security which took over the Secret Service under former criminal President George W. Bush.

The obvious deduction is that this operative may have been handling the phial containing the swine ’flu pathogen, and that it was released in Mexico by the President’s personnel in advance of the President’s visit to Mexico – so that the resulting epidemic or much worse would appear to have originated in Mexico, whereas, as we asserted in the report dated 29th April, the laboratory-developed disease will have been developed at the Army Medical Command, Fort Detrick, MD.

This UNPRECEDENTED SCANDAL means that President Barack Obama, or the Bush-Clinton criminal gangsters, or all of the above, have deliberately unleashed one of the blackmail weapons that they have held up their sleeve in order to blackmail the US Government, the American people and the Rest of the World, should they find themselves up against a steel wall, as is now the case.

Thus criminal forces within the American Government are waging not just economic and financial terrorism against Americans and the Rest of the World, but BIOLOGICAL TERROR as well.

Either Obama will have to clean out the White House and his Cabinet forthwith, or he himself will be removed, by whatever means, or will find that the outcry is such that he has to leave office.

The international repercussions from this development will be COLOSSAL.

A senior British intelligence source cited by a correspondent is reported to have warned that this criminal group would perpetrate bio-attacks around the world, and that, as a consequence, millions of people would die. This intel source did not convey any such assessment to us, but then British intelligence doesn’t talk to us directly at all.

[On the contrary, MI6 attempted in 2004, through the veteran journalist Gordon Thomas, to deflect the Editor from pursuing these enquires, accompanied by threats of some trumped-up exposure or other which had already been disseminated to the UK ‘mainstream’ press. In response, the Editor published the entire text of the threatening conversations with Mr Gordon Thomas in our financial journal, which was the last that was heard of this operation. Since then, the Editor has been very conspicuously barred from the British media. But the consolation prize is that the readership of this website exceeds the entire readership of all British newspapers combined].

CRIMINALS OPERATING INSIDE THE U.S. GOVERNMENT ARE WAGING BIO-TERRORISM AGAINST THE AMERICAN PEOPLE AND THE REST OF THE WORLD FOR SELF-ENRICHMENT
Whichever way this unfolds, there is NO DOUBT now that the ‘pig ’flu’ outbreak is DIRECTELY CONNECTED with the criminal finance crisis which has come to a head this week as explained above. BEFORE we were aware of this Washington Post report, the following text had been prepared for this posting:

Against this background – none of which has been denied by knowledgeable sources with whom the data was checked – we now have no doubt whatsoever that the ‘Pig ‘Flu’ outbreak represents a deliberate bio-attack perpetrated by this criminal group. It is exactly as we perceived: CORNERED, they are unleashing, or threatening to unleash, the hideous weapons with which they have been BLACKMAILING the US Government, the American people, and the rest of the world.

We wouldn’t be surprised if it turns out that the ‘nukes in a suitcase’ bravado is part of the same armoury of blackmail weapons that this criminal gang has been holding in readiness, and which it has been using to prevent what needs to be done to cauterise this virus of criminality from the body of humanity. However the showdown is taking place, and the gang can’t stop it now.

If this is correct, then the US law enforcement community needs to understand that the blackmailer is always in a weaker position than the blackmailed. The reason for this simple reality is that once the blackmailer’s bluff has been called, he has ‘blown it’.

True, this criminal gang may have several layers of blackmail weaponry in their armoury. But the answer to that is that if their bluff is called with respect to the first blackmail layer, they will have been defeated before they can activate the second, escalated, blackmail dimension.

In any case, refraining from picking up these people because their blackmailing power is feared, represents OBSTRUCTION OF JUSTICE by law enforcement, including of course those elements referenced immediately below.

DISINFORMATION SPREAD BY U.S. LAW ENFORCEMENT
Separately, it has been stressed, correctly, elsewhere that ‘Black’ disinformation has been liberally disseminated by the ‘three-letter people’. The reason for this is that the head of that sub-snake is up to beyond his eyebrows in this criminal finance activity. The entire institution, a key component of US law enforcement, has therefore been compromised, which goes a very long way to explain why the US criminal gangs have not been brought down earlier.

We received several reports late on 29th April to the effect that Trustees and their lawyers had diverted paid-out funds to their own or separate accounts, although this corrupt practice has been ongoing for a long time. No doubt these people will be picked up in the prevailing sweep and will wind up contemplating, for 25 years, the life-cycles of the North American or European cockroach: if they survive, that is. And that, we suspect, is now very far from certain.

• It’s showdown time, big-time.

POSTSCRIPT: MORE ON OBAMA’S REMOVAL OF JESUS SYMBOL
In the report dated 29th April, the Editor has inserted a new segment concerning what happened when President Obama gave a speech at Georgetown University on 14th April. We are leaving the text in that report unchanged, but since posting it we have received photographs of the platform in the Georgetown University hall where Obama delivered his speech.

Behind the platform is a tableau with a triangular carved wooden headpiece which forms a focal point for the hall. Within the triangular surface delineated by the headpiece is the Christian symbol IHS painted in gold, with a cross rising above the H. This is a standard symbol used for centuries.

The Editor has before him a colour photograph of the platform with this carved wooden focal point, which contains, below the superstructure, the name Georgetown University and some other inscriptions not relevant to this commentary.

Also on the Editor’s desk is a second colour photograph showing the carved wooden headpiece with the gold-painted IHS blacked out, the entire area facing the hall being now entirely black.

The source who provided this information and photographs, is of impeccable credentials, integrity and standing, and the foregoing information is accurate. It seems that President Obama did not wish to be televised beneath the well-known symbol, traceable to the early Christian era, of Jesus Christ. You may draw your own conclusions.

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.

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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.

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• 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.

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IMF, WHITE HOUSE IN TRIANGULAR SETTLEMENT ‘SOLUTION’

SMOKE AND MIRRORS OBFUSCATION TO HIDE SOURCE OF FUNDS

Sunday 26 April 2009 03:00

• THIS REPORT WAS UPDATED 26TH AND 27TH APRIL. IMPORTANT POSTSCRIPT AT FOOT:
Updates are flagged in the ‘bullet point’ headings immediately below. A new report is pending…

• CALENDAR OF PERTINENT EVENTS FROM 8TH APRIL

• WHAT LIES BEHIND STRAUSS-KAHN’S CONFIDENCE IN RECOVERY?

• GOLD, CHINA, RUSSIA & BRAZIL’S $1.0 TRILLION TAKEN FROM DISGORGED BUSH LOOT

• RECONSTRUCTION OF WHAT APPEARS TO HAVE TAKEN PLACE

• UPDATE, SUNDAY 26TH APRIL: 5:00pm EST: TRIANGLE ALREADY COMING UNSTUCK?

• UPDATE, MONDAY 27TH APRIL: 9:30am EST: ANOTHER MURDER (IN THE BAHAMAS)
See under 23rd April in the ‘diary’ section of this report: Stanford-related liquidation.

• WHERE THE $1.0 TRILLION IS FEATURED IN THE G-7 COMMUNIQUE

• IMF ARRANGEMENT THOUGHT TO REPLACE THE LOMBARD ODIER SCHEME

• WITH CHINA OUT THE WAY AND THE WHITE HOUSE’S DEMANDS ‘SATISFIED’, WHAT NEXT?

• SENSE THAT ‘SOLUTIONS’ ARE DRIVEN BY LUST TO REVITALISE TRADING

• NEXT STEP: THE SETTLEMENTS, OR SOME OF THEM…

• THE LATEST OFFICIAL DERIVATIVES NUMBERS

• QUANTIFIED EUROPEAN BANK LOSSES

• UK TREASURY TAKING COSTLY LESSONS FROM BANKERS REPONSIBLE FOR THE CHAOS

• UPDATE: 27TH APRIL: 9:00pm EST: IMPORTANT CLOSING POSTSCRIPT. NEW REPORT PENDING… See at foot of this report above the standard Legal Notes that the crooks disregard.

• 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.

• In mid-March we published: International Currency Review Volume 34, #2 on Systemic Fraudulent Finance and The Legalisation of Financial Corruption. Also published recently are issues of our titles The Latin American Times, Economic Intelligence Review, London Currency Report, Interest Rate Service and Arab-Asian Affairs.

• For details, see the second white panel on the Home Page.

• To subscribe to our intelligence services, see the catalogue under World Reports Limited.

• 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. 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.

• 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.

• DONATIONS: You can help finance these exposures (which the Editor has to prepare on top of his normal publishing responsibilities) by sending us a donation. Press Make a Donation, which is live, and it takes you straight to our ultra-safe ordering system, which accepts Visa and MasterCard.

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.

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.

NEW REPORT FROM THE IMF/WORLD BANK SPRING MEETINGS STARTS HERE:

Washington, DC:

CALENDAR OF PERTINENT EVENTS FROM 8TH APRIL
In order to understand what we believe to have occurred with respect to ‘the Settlements’ as viewed from the Press Room here at the Spring Meetings of the International Monetary Fund and the World Bank, we will first summarise what sources reported to us from 8th April onwards.

Bear in mind that given the secretive nature of financial and banking transactions, and of the behind-the-scenes operations of international institutions, plus the constraints arising from the priorities of national and international law enforcement and limitations placed upon access by investigative journalists to uncomfortable information, we caution that what follows represents what has been reported to us in the course of our normal enquiries, and that it represents the truth ‘to the best of our knowledge and belief’.

• 8th April 2009: Michael Wise, the former Chairman of Silverado Savings and Loan, was reported by The Denver Post [on 14th April: note the huge time delay] to have jumped from the 9th Floor of a parking garage at Tampa International Airport. This information was reported by Henry Poage, of the Hillsborough Medical Examiner’s Office. According to this source, Mr Wise drove a rental car to the ninth floor of the short-term parking garage.

The Medical Examiner’s Office ‘ruled that the death was a suicide’, explaining that a security video shows Wise pacing, before stepping off the side and landing in a landscaped area with palm trees and some greenery, according to Tampa International Airport spokeswoman Brenda Geoghagan. Wise was taken to hospital but died in the emergency room at 1:39pm. So we are to believe that a report which did not surface for a week after the event is accurate in all respects, even though if one were to be determined to commit suicide, hiring a car beforehand might be considered very odd, while surviving a nine-storey fall even into some greenery is highly improbable.

This ‘suicide’ must be considered in the context of the spate of Clintonesque murders that have been taking place, as the crooks try to ‘clean up the playground’ so that the massive unravelling of their financial criminality that is now in full swing will encounter as many ‘dead ends’ as possible. There are ‘connections’ with the death of Mr Wise that are believed to be spectacular.

• 15th April, 10:22 pm UK time: Notwithstanding that he is under indictment, George H. W. Bush Sr. was STILL attempting to move funds irregularly on this date, in response to which Euroclear was shut down so that anticipated or identified irregular financial movements would not take place. We speculated internally that this development might also be connected with a Chinese lien on funds.

• 17th April, 10:15pm UK time: It was reported to us that the Bush Crime Family had summoned a ‘top-level’ meeting in Texas, to which key co-conspirators with Bush Sr. and Dr Alan Greenspan, his chief trader, were invited. A significant number of Bush Sr.’s leading foreign co-conspiratorial assets who flew to Dallas or Houston for the meeting were reportedly apprehended at the airport. This meeting was believed to have been summoned because of the need to repatriate funds.

This is consistent with earlier reports of key parties falling below the radar. For instance, a Dallas-based broker-Trustee who had been in DIRECT and continuing touch with the Editor of this service for at least two and a half years, sending emails describing ‘imminent payment scenarios’ which were always disappointed, has not been heard from since 11th April 2009. On that date, he had commented very sensibly on the situation that seemed about to arise if the IMF had been minded to impede, on the instructions of the White House, the Editor’s press accreditation for the Spring Meetings. (This was the serious situation referenced in our reports dated 13th/14th April).

On 14th April 2009, the Editor sent emails to this contact, which bounced. Altogether, we sent nine emails spaced over a period of days, and they have all bounced. The return emails contain an NSA code which is intended to indicate that the contact was now prohibited from communicating with us. In other words, the ‘loop’ of information using us as the fulcrum had outlived its usefulness, and was closed down, implying some change or other in the overall situation.

This episode will be incorporated in a detailed but separate study on the innumerable deception techniques and operations to which the Editor has been subjected throughout these extensive investigations. More broadly, the closing down of this information ‘loop’, reaching straight back to Bush Sr., we have solid reason to believe, could be interpreted as a positive sign of progress.

Such techniques are used in intelligence to gauge how a particular deception is performing, and whether it should be continue or be modified. It was clearly felt that communicating with the Editor would facilitate the feedback that these people thought they needed, to see how far they could push their thievery. But following the G-20 meeting in the London area, the situation changed.

We should clarify here the earlier information about Greenspan’s latest arrest. It was specifically reported, and confirmed, that this crook had been arrested and was incarcerated for a 30-day period pending a hearing before a Magistrate Judge. It is possible that when our sources speak of ‘arrests’ at this level, what may actually be meant here is ‘apprehended’.

The fact that Greenspan reportedly delivered one or more speeches which overlapped the period of alleged incarceration is not material, as he has a speech-writing team and could have submitted papers before these events. However much one may dig around looking for further and better particulars, though, a veil is usually drawn over these arrests of such prominent operatives.

Neverethless, Dr Greenspoon, like Bush Sr., is reported to us to be under indictment. That’s what matters in view of what follows. In addition, following the G-20 jamboree, we received at least half a dozen reports of further extensive arrests, both in Europe and in North America.

• 21st April, 9.35pm UK time: It is reported that (a) ‘a lot more arrests’ have taken place during the day and possibly earlier, and that (b) George H. W. Bush Sr. and Greenspan intervened OPENLY to block settlement moves, apparently in the most brazen manner. The explanation given to us was that with Vice-President Biden in charge of the National Security Council, which tells the President of the United States what to do [see the preceding report], and Biden working with the Clintons who are close long-term collaborators (and simultaneously enemies) of the Bush Crime Nexus, Bush Sr. may assume that he remains inviolable, EVEN THOUGH HE IS UNDER INDICTMENT.

21st April: For the first time, the Editor learns that the International Monetary Fund has acquired a large volume of gold for smelting. (When the Fund acquires gold, it is smelted immediately). These reports, from impeccable sources, could not specify the SOURCE of the gold acquired by the Fund.

At the Spring Meetings, the Editor has attempted to ascertain the answer to this question, so far without success. Obviously, parallels with the stealing of The Queen’s gold on 29th-30th March 2007 suggested themselves, but after consideration we did not suspect there had been any such repetition: those involved got a nasty shock when that theft was publicised by this service, and the gold had to be restored. So the issue remained, for the time being, up in the air. Nevertheless, the Editor formulated the following question, which he had intended to attempt to ask the Managing Director of the IMF (but unfortunately, again, at a Press Conference on Saturday, the IMF convenor appeared deliberately NOT to call the Editor of this service). The question would have been:

‘What is the source of the gold reportedly acquired and being smelted by the IMF, and are IMF tax-exempt accounts being used to hide diverted or stolen funds, or have they been used for these purposes in the past?’.

• 22nd April 2009: The Editor learns that David Kellermann, aged 41, the Chief Financial Officer of Freddie Mac, was found dead by his wife this morning. The news surfaced on the US broadcast media at about 9:30 am EST: so at least, compared with the Wise ‘suiciding’ that occurred on 8th April but was not reported by The Denver Post until 14th April, no attempt was made to hold back this sinister news. But everything else that surfaced (and has not yet been publicised in the so-called ‘mainstream’ media), is distinctly sinister. Thus:

• Mr Kellerman asked for protection (i.e. he’d been threatened) but received only very light cover.

• Mr Kellerman was sent home for two weeks. (Reason: they couldn’t ‘get at him’ while he was out and about so they needed him to be in a fixed location, our informants advised us at the time).

• Mr Kellerman shot himself and after he had shot himself he hanged himself [sic]. This is a feat which not even Houdini in all his glory could ever have achieved.

First, Kellerman was reported to have been found hanged. However special information received from reliable sources by this service indicates that the was SHOT FIRST, AND THEN HANGED.

Mrs Kellerman informed local media that her husband had committed suicide.

• As you can imagine, there is far more behind this hideous event than has surfaced. Indeed, the imperative to prevent Mr Kellerman testifying to what has been going on, which can conveniently be summarised as THE WHOLESALE STEALING OF ASSETS FOR COLLATERALISATION AND TRADING PURPOSES, would appear to have been so intense that he ‘had to be liquidated’.

In March 2009, Freddie Mac disclosed that it was being investigated by the US Attorney’s Office in Virginia, and had been supoenaed for documents related to accounting disclosure and corporate governance issues back to September 2008, which was precisely when, as previously advised, the $14.0 trillion of assets belonging to sovereign parties was placed into ‘lockdown’ (between 10th and 12th September), followed by the ‘triple gunshot threat’ left on the Editor’s voicemail and the warning that the Editor should be careful on his forthcoming visit to Washington for the IMF/World Bank Annual Meetings in October 2008. Special protection was provided throughout that visit.

The Securities and Exchange Commission (SEC) is also conducting an investigation into Freddie Mac, and has interviewed staff. A spokesman for Freddie Mac stated on 22nd April 2009 that the institution ‘knows of no connection between this personal tragedy and the ongoing regulatory enquiries’: which seems quite extraordinary, since what has so far been revealed is just the tip of the most immense iceberg in the Northern Hemisphere, we understand.

As indicated in the Update of 22nd April appended to our report dated 14th April, we are now in the Third Clinton Administration, with no checks and balances evident. The Clinton operatives have reverted to their usual form: liquidations. So far during the Spring Meetings, the Editor has heard no mention of the two ‘suicides’ referenced above, even though anyone who has not completely squashed their brains by sitting on them too hard must sense that these ‘Black’ developments are directly and specifically related to the headlong unravelling of the criminal finance Octopus.

• Note: Although the Clintons’ ill-gotten gains are believed to have been frozen (explaining why Bill is hardly rushing to the financial assistance of his CIA wife who has recently been described by another source as being more senior within the CIA than William Jefferson), they appear to have been attempting to use blackmail, the trade-off being ‘release our funds and we’ll cooperate’.

• 23rd April: We are informed that 147 key figures involved in the thefts and corruption have again been advised that they face indictment, and that NONE can rely on any prospect of immunity. This is the same number of indictments, or potential indictments, that were mooted back in 2007, but that went nowhere because of the usual high-level interference with law enforcement. However on this occasion, the information was accompanied by the following further elaboration:

• The 147 co-conspirators (including a large number of very well-known names) were told that if diverted funds were not ‘restored’ by close of business EST on Friday 24th April 2009, they would be arrested. We were separately advised that:

• Relevant law enforcement personnel (US Marshals) were IN PLACE ALL OVER WASHINGTON effective from 6.00pm on Friday 24th April, to effect the arrests. A large number of arrests was thought to be imminent, presumably if the stolen funds had not been ‘restored’.

• 23rd April: Hywel Jones, 55, a former Natwest banker, former prominent Director of the Bankers’ Association of the Bahamas and of the Bahamas Institute of Bankers, is shot in the back of the head by a sole gunman waiting in ambush outside the office of his offshore financial services company in Nassau, capital of the Bahamas. The ‘slim, dark male’ gunman escaped on a motorcycle.

On 25th April, Mr Jones, from Wales, was reported to be critically ill in a coma and was under police guard after having undergone emergency surgery.

It is believed that the bullet passed through his head. Mr Jones was arriving for work when he was shot. This is now thought to be a Stanford-connected liquidation. Recall that Stanford’s lone British accountant on Antigua, whose accounting contract with Stanford ended on 31st December 2008, died suddenly and mysteriously on New Year’s Day. There is speculation that Stanford International controlled some of the Japanese (Yamashita) gold.

There are no coincidences when imploding cascades of crimes unravel like this…

• 24th April: In the context of the US banks’ so-called ‘stress tests’, it has transpired that these institutions are now formally considered to be 100% liable for their off-balance sheet ‘assets’.

This ‘clarification’ has inevitably emerged because of the convoluted Geithner scheme whereby what are now suddenly being called ‘legacy assets’ are supposedly to be revalidated, following the devastating ‘shock’ delivered to the derivatives environment when interbank market liquidity, with the exception of drug money, dried up following the events of 10th-12th September 2008.

The problem that the designers of Geithner’s original scheme may not have factored in to their thinking in the rush to develop a formula which would enable the White House and its cronies to retain control of trading (according to the underlying thinking here) was that if those fraudulent assets are to be revalidated, the banks’ liabilities remain intact. (The same would apply even if, as we expect, Geithnerism collapses in ignominy, as there will be, as we predicted, few, if any ‘takers’ for repackaged ‘formerly toxic’ assets remarketed to restart the collapsed derivatives system).

Anyway, the upshot of this is that since the banks are liable for the fraudulent off-balance sheet assets, this means in practice that the off-balance sheet assets are in effect on-balance sheet! So this appears to be another case of shooting oneself and then hanging oneself afterwards.

But the situation has CHANGED during the IMF/World Bank Spring Meetings as will be explained.

• 24th April: The Editor attends a Press Conference off the Press Room given by the Canadian Minister of Finance and the Governor of the Bank of Canada. The meeting was held in between sessions of the Group of Seven (G-7). The Editor was able to take the microphone, and asked why discussions at these meetings were focused on repairing a broken financial system by attempting to restore the integrity of ‘Structured Products’ (derivatives) which had been demonstrated to be worthless and fraudulent inter alia because there is NO RECOURSE to the underlying source of real money (e.g. from the original mortgagor).

• It was tantamount to repairing a collapsed building with faulty cement.

The Editor pointed out that the Bank of Canada (unspoken, of course: which was deeply involved in dodgy financial operations preceding this crisis) and the Ministry of Finance know perfectly well that derivatives assets are fraudulent. He concluded by mentioning that ‘there IS a straightforward solution: it’s called trading on the books’.

At this, the room erupted and the Governor commented: ‘I thought there’d be a question like this, which is why a representative from the G-7 is at this meeting’! The clear implication was that the Governor of the Bank of Canada knows all about the G-7-Approved private sector Dollar System Refunding Programme using sovereign LOAN funds referenced in earlier reports, which would reliquefy the banks ON THE BOOKS, deliver massive ongoing taxation accruals to the US Treasury (and to the British Treasury as this programme is to be run from London, and trading funds held within the UK financial jurisdiction for 24 hours are liable for UK tax).

However after these comments, the Governor reverted to his script consistently with the ‘line’ at these meetings, which is to avoid all references to Fraudulent Finance, Ponzi Schemes, criminal operations, diversion, the Bush Crime Family and stealing of funds, and the ransacking of private monies which these people know all about but which are taboo subjects in these refined circles.

• 24th April: The Editor is informed that key Trustees have been put ‘on standby’ for payment in the coming week, starting on Monday. This would be consistent with the requirement imposed on the 147 perpetrators for stolen and diverted funds to be ‘restored’ by close of business on 24th April. As of 9.00pm EST on Saturday evening in the Press Room, where this report was being prepared, the Editor had not received any information about arrests having taken place.

• FACT: What normally happens is that these sequences follow a standard pattern, and that when the payments are anticipated WITHOUT draconian action having been taken, as on this occasion (?), the payments are aborted. So, pending confirmation of remittances (which may well be quite hard to come by) it won’t be possible to tell whether this nightmare is indeed coming to an end.

• 25th April: HOWEVER, M. Dominique Strauss-Khan, the Managing Director of the International Monetary Fund, told the media repeatedly on Saturday that ‘green shoots of recovery’ HAVE been detected and that the Fund’s view, thanks to substantial ‘progress’ which he says has been made at these meetings [see below], is that these will mature into signs of real recovery by around the third quarter, with tangible growth emerging in the first half of 2010.

WHAT LIES BEHIND STRAUSS-KAHN’S CONFIDENCE IN RECOVERY?
This makes no sense whatsoever in view of facts such as that a further five million foreclosures are anticipated in the United States in due course, with obvious implications for unemployment and consumption, while losses sustained to date arising from the crisis are now estimated in the many trillions of dollars. The Editor learned at one meeting, held in the IMF Governors’ Board Room, that the total value of new development contracts worldwide that have actually been cancelled since September last year exceeds $1,600 billion. And given the unprecedented contractions in real Gross Domestic Product predicted for the key European countries and Britain, these assertions from the IMF’s Managing Director fly in the face of all available evidence, even though the British Chancellor of the Exchequer used similar language recently (and was ridiculed for his pains).

GOLD, CHINA, RUSSIA & BRAZIL’S $1.0 TRILLION TAKEN FROM DISGORGED BUSH LOOT
So what on earth could M. Strauss-Kahn have been talking about? Here’s the likely answer:

(1) That the International Monetary Fund has acquired a large volume of gold which went for smelting very recently, has been separately confirmed by several key sources.

(2) The Wall Street Journal reported on 25th April that China, Brazil and Russia are to purchase the IMF’s first-ever bond denominated in Special Drawing Rights (SDRs). This is the IMF’s own unit of denomination, consisting of nothing but its name. It is backed by NOTHING WHATSOEVER. (Certain IMF statistics are denominated in SDRs, so that the poor analyst has to translate the numbers into dollars in order to get a ‘handle’ on what they mean).

• FACT: Assets denominated in SDRs will be as FRAUDULENT as the worthless ‘toxic’ derivatives with which we are familiar, since the SDR has no backing whatsoever and exists only in name. If, as we suspect, the intention is to launch this new SDR-denominated bond as a prelude to introducing a new generation of ‘asset’ which can be exploited along lines similar to the derivatives, the seeds have been sown for a NEW BUBBLE, which will implode just like the derivatives bubble.

And the IMF’s reputation and standing will be destroyed along with the SDR bond mountain that we believe is liable to take off as a consequence of this duplicitous ‘smoke and mirrors’ arrangement. The phrase ‘money laundering’ of course also springs readily to mind.

(3) Brazil is reported by The Wall Street Journal to be contributing up to $1.0 trillion which will be used to purchase these IMF Special Drawing Right-denominated bonds. BUT SEE BELOW…

(4) All of a sudden, the IMF has started signalling not only that ‘the worst may now be over’, but that global economic growth will be restored starting late this year and into 2010.

(5) China’s reserves of gold have risen very sharply, from around 600 tonnes, to over 1000 tonnes.

RECONSTRUCTION OF WHAT APPEARS TO HAVE TAKEN PLACE
It will be recalled that China, having obtained lien power from the World Court, demanded that the United States pay debts owed to it following the expiry of the 70-year maturity period of historical debts which the United States had reneged on and which may have explained the stealing of The Queen’s gold that we exposed in 2007, an operation that had to be aborted after our exposure, and the consequent restoration of the gold to its rightful owner.

Very recently, the Chinese declined to accept US currency or Treasuries, and tensions rose to fever pitch when President Obama reportedly ‘refused’ a Chinese demand that the United States must pay China in gold, a state of affairs that reconfirmed that China has lost confidence in the US dollar. China demanded that its payment must be ‘guaranteed’: and the only guaranteed means of payment is in gold. We therefore believe that what has taken place is the following:

• The large volume of gold recently ‘acquired’ by the IMF and smelted as always happens when the Fund acquires gold, has been credited for the account of CHINA, fulfilling China’s requirement.

• To satisfy the other side of the balance sheet, Brazil, as noted above, will suddenly be funding the IMF to the colossal tune of $1.0 trillion. This is FAR MORE than Brazil owns, which is why not a lot has emerged about this deal (certainly, nothing on that score that the Editor has been able to pick up in the Press Room and at the various meetings he has so far attended). So where has this huge sum of money suddenly materialised from?

• Answer: From hidden Bush Crime Family diverted and stolen funds stashed in Brazil.

In other words, the corners of this ‘smoke and mirrors’ triangle consists of China, the IMF and Brazil. Which helps to explain a number of recent developments, viz:

• The appearance of President Obama at the recent Organization of American States (OAS) meeting in Mexico, although of course this was a pre-arranged forum. But these meetings are in fact the outer face of what goes on behind the scenes. Deals were being done below the radar (including drug-trafficking and laundering transactions) as is always the case on these occasions.

• The fanfare with which the G-20 was ‘relaunched’ in London on 2nd April, when the Brazilian President Lula was seen hobnobbing with Presidents and Royalty at Buckingham Palace. All of a sudden, Brazil is on the map, but NOT for the reasons commonly supposed. No. The reason Brazil has ‘risen’ in the hierarchy of nations is that the Brazilian Government appears to have been very diligent in cooperating to freeze and confiscate the Bush Crime Octopus’s ill-gotten funds which have been accumulated in Brazilian institutions.

UPDATE, SUNDAY 26TH APRIL: 5:00pm EST: TRIANGLE ALREADY COMING UNSTUCK?
Notwithstanding the accuracy of the foregoing (reconfirmed to us on Sunday afternoon), the new arrangements to get the White House off the hook and able to exploit trading as intended, seemed ALREADY TO BE COMING UNSTUCK ON SUNDAY. Two days earlier, the Brazilian Finance Minister attending the Spring Meetings, Guido Mantega, apparently dismissed the substance of the Fund’s proposed sale of bonds denominated in SDRs as ‘insufficient’ and ‘premature’. However this was not revealed until the 26th, implying that the Brazilians had woken up to the likelihood that they have been pressurised to provide the third side of the triangle against their better judgment.

Should the Brazilians demur (which seems likely), the situation will be completely out of control since one element of the surreptitious ‘smoke and mirrors’ gold and money laundering operation will have been completed without the corresponding, albeit fraudulent, matching transaction.

Mantega was also reported by Bloomberg (on Sunday) as having said that any contributions by the four largest developing nations would be ‘provisional’, pending reforms that would increase their say in the forum of the International Monetary Fund. Because the United States is now beholden to these countries, the US Treasury Secretary, Timothy Geithner, said in a Treasury statement issued in the Press Room that he supports a ‘realignment’ of power in the Fund to reflect ‘the realities of the global economy’, along with a reduction of the number of IMF Board Members from 24 to 20.

That won’t please the Europeans, especially the British, one little bit.

WHERE THE $1.0 TRILLION IS FEATURED IN THE G-7 COMMUNIQUE
The ‘Statement of the G-7 Finance Ministers and Central Bank Governors’ Meeting’ dated 24th April carefully included a reference to the $1.0 trillion, in a sudden outbreak of ‘transparency’. Actually, what we observe is ‘candour’, which should NEVER be confused with TRUTH.

The text states:

‘We welcome progress being made in mobilizing temporary bilateral financing for the IMF; this financing will be rolled over into the IMF’s New Arrangements to Borrow, which in turn will be increased by up to $500 billion and see its membership expanded. We will work to implement the $250 billion general SDR allocation, as well as to use the additional resources from the IMF’s agreed gold sales to support the poorest, consistent with the IMF’s new income model. We are implementing the initiative to provide at least $250 billion in trade finance’.

• Total: $1.0 trillion.

The next paragraph begins: ‘We welcome the IMF’s introduction of new facilities, such as the Flexible Credit Line…’. This is to be another element of the new use that is to be made of SDRs, involving monthly credit extensions which could be construed as inflationary and will certainly underpin the intended exploitation of SDR-denominated bonds/assets that we detect.

IMF ARRANGEMENT THOUGHT TO REPLACE THE LOMBARD ODIER SCHEME
It is further believed that our exposure of the Lombard Odier Swiss guaranteed insurance wrap arrangement which was to have been operated in conjunction with the known CIA operative or asset Warren Buffett, literally ‘blew’ that scheme, which may explain the apparent earlier intent of the White House and therefore the IMF not to respond to this Editor’s routine application for press accreditation for this Spring Meeting (which was in turn apparently ‘blown’ when we indicated that this would free up the Editor to criticise the IMF and the World Bank, which is quite hard to do if you are at the same time accepting their generous hospitality).

The present analysis criticises the arrangement that is identified here, but it should be borne in mind that the Fund jumps to the command of the White House, whatever may be alleged to the contrary. The World Bank is of course a creature of the White House, and is currently fronted by the rather competent but colourless CIA operative Mr Robert Zoellick. Listening to Robert Zoellick on Saturday, the Editor formed the view that he has a very good grasp of his responsibilities and brief.

Anyway, the point here is this:

• The IMF SDR bond arrangement, financed by disgorged Bush Crime Family money from Brazil, effectively REPLACES the Lombard Odier scheme which collapsed after we had exposed it.

• It is designed with White House approval (hence Lula’s recently publicised close association with President Obama) to provide the new platform which is to be used to launch the fresh generation of ‘assets’ which (we believe) will soon grow up ‘alongside’ revived ‘legacy assets’ until these have been ‘successfully’ transferred onto the US Treasury’s books, in exchange for the ‘new generation’ of exotic Treasury ‘legacy’ instruments’ with extremely long maturities, probably varying from 30 to 45 or even 50 years out into the future. But there will be no ‘legacy’, since the ‘Trashets’ exchanged for these exotic US Treasury instruments will have no value, just as the paper that replaces them will have no value (i.e. their backing will be spurious).

The idea that such trash will be ‘worth something worthwhile’ in 25 years’ time is deviant stupidity. Incidentally, Paul Volcker has told the President to his face that Mr Geithner’s arrangements are absolutely unacceptable and, by implication, fraudulent.

With the new IMF ‘Flexible Credit Line’ in place, the prospect and probable intention is for outside parties quickly to become involved as counterparties, so that the International Monetary Fund will henceforth become the central player in what we foresee to be a new generation of exotic funding which, as noted above, will be JUST AS FRAUDULENT AS DERIVATIVES given that Special Drawing Rights are backed by nothing at all, except the very favourable standing of the Fund, which will be destroyed when the Fund’s reputation collapses along with the prospective SDR bond bubble.

WITH CHINA OUT OF THE WAY AND THE WHITE HOUSE’S DEMANDS ‘SATISFIED’, WHAT NEXT?
If this analysis is correct, China has been dealt with and the Geithner arrangements are in the process, as a direct result of developments during the IMF/World Bank Spring Meetings and the transfer of the huge volume of gold to China which we think occurred on 24th April, of being given the kiss of life, having shown (as we predicted) every sign of being stillborn. With the IMF at the centre of the carousel, revival of the derivatives sector so that these false assets can at least be transferred progressively onto the Treasury’s books as described, may proceed, and Mr Geithner needn’t be fired immediately. Paul Volcker, who made a number of very sober comments at the seminar that the Editor attended on Saturday, won’t be amused, but he’s not at the White House.

In particular, Volcker will be chagrined that the SDR, backed by zilch, is to become the new asset of preference, exploitable as was never intended, without any discernible steps being taken to back it by anything except the existing air which sustains it. No doubt Paul Volcker will be having further words with the President on this score. The IMF’s credit lines will extend credit based on NOTHING. And Volcker will doubtless be pointing out that even though the Oval Office and the Treasury will be associated with the Fund in this venture, that doesn’t make what is being proposed any less fraudulent. It simply incorporates the International Monetary Fund as an institutional co-conspirator in the blatant perpetration of financial fraud against future generations of Americans.

And to use the unbacked SDR as the lynch-pin for the refunding of the whole world seems to us to be inviting a catastrophe which, despite all the waffle that the Editor has so far listened to at these Spring Meetings, will, once again, NOT BE ANTICIPATED.

Because as with Geithner Plan Number One, the Treasury will be accumulating vast quantities of completely unnecessary debt which could be avoided if it were to come to its senses and permit implementation within the United States of the G-7-Approved private sector Refunding Programme using the LOAN funds provided for the purpose but which had to be withdrawn effective from 29th January 2009 because President Obama broke his signed, formal undertakings on that score: and so far as the sovereign lenders were concerned, 19 months of glaring, in-your-face, US criminalist abuse of their funds was enough, thank you very much.

SENSE THAT ‘SOLUTIONS’ ARE DRIVEN BY LUST TO REVITALISE TRADING
We have a distinct sense from all this that the exotic IMF arrangements outlined here represent compromises reached in order to astisfy the White House, rather than objective solutions that have been brought forward in order to meet the needs of the International Monetary Fund’s constituent government clients. This perspective is reinforced by the obvious fact that what is discussed for the consumption of the world’s press here is the front-facing information that is presented to the people, and which masks the sordid deals and trade-offs, that are reached behind the scenes.

This has been more obvious than usual this year, because on the several occasions when the Editor has so far been allowed to ask why he never hears words like Fraudulent Finance, Ponzi Schemes and criminal enterprise etc. mentioned, the point has been taken politely (for instance by the Governor of the Bank of Canada and also, separately, by the Finance Minister for Zambia) but then wholly dropped, with the rest of the answer focused on the ‘line’, which is all about how the Fund and the ‘rich’ countries are ‘responding’ to the crisis.

In other words, discussion of the criminal, fraudulent CAUSE of the calamity, and of the fact that this is a CRIMINAL FINANCE crisis first and foremost, rather than primarily a systemic crisis, is taboo.

And the reason for THAT is that the White House, CONTRARY to advice tendered by Paul Volcker, but of course influenced by the Clintons (for heaven’s sake) intends to reconstitute the carousel and the Fraudulent Finance operations, come what may. It is impervious to common sense. And its boss, the National Security Council, which controls the CIA controllers, tells Obama what to do.

NEXT STEP: THE SETTLEMENTS, OR SOME OF THEM…
Which leaves the Settlements, or some of them. Here we observe that the stimulus money that the President ‘fought for’ as though he was still fighting the election, HAS NOT MATERIALISED.

On 20th April, the Editor was informed that the US States were expecting to be paid stimulus funds that had been agreed upon, for them to finance infrastructure and other projects, as well as some welfare payments, and that the payments to the US States were due that week.

On 25th April, the Editor learned that Pennsylvania HAD TO BORROW $480 million, just to finance its immediate unemployment benefit obligations, subject to receipt of $18 billion pledged to it by the Federal Government, much of which is urgently need to fill an immense hole in its public employee pension arrangements, clearly implying that the payments to the US States had NOT taken place.

In some supermarket stores, there are hardly any customers. New York City diners that the Editor uses that were full of clientele even the last time he was in the United States in March, are almost empty much of the time. THE STIMULUS MONEY IS OR WAS, NOT AVAILABLE.

In the light of the foregoing developments (China out of the way and the White House having stitched up a variant of the Geithner Plan without in fact telling anyone), certain Settlements payments will probably now go ahead, and the States may finally get their delayed stimulus money.

Moreover the deliberate talking-up of the prospects for recovery late this year and into 2010 by Dominique Strauss-Kahn, in the face of quite appalling data and further shocks which can be seen lurking on the horizon, tells us that the Trustees who have been told to be on standby this time may actually find that they are paid and can ‘spend’ their funds.

We cannot enter into ANY second-guessing as to which categories of recipient may be paid, as it is not even certain that these deductions are solid (although as a first-hand, on-the-spot observer here in Washington, the Editor has a clear sense that they are). Quite apart from anything else, if there are any further problems, M. Strauss-Kahn is going to have egg all over his face in short order, so that any ambition he may harbour of succeeding M. Sarkozy will not be realised.

THE LATEST OFFICIAL DERIVATIVES NUMBERS
The IMF’s latest Financial Stability Report was not available from the printers but the Statistical Appendix was obtained. Table 4 shows that the notional value of derivatives contracts outstanding at end-June 2008, using Bank for International Settlements statistics adjusted for double-counting, stood at $683,725 billion, compared with $595,407 billion six months earlier.

Thus the notional value of these (actually worthless) ‘trashets’ rose by nearly $90 trillion ahead of the ‘lockdown’ of the $14.0 trillion in mid-September 2008 which occurred as the direct result of the advice we gave that the exploitation of the loan funds since 19th-20th June 2007 when they were first made available, was quite intolerable and should be made to cease by having the loan funds withdrawn. This advice was accepted. The rest is history.

As recently as the end of June 2006, the notional value of derivatives ‘assets’ outstanding, was $370,178 billion: so the volume doubled in the two years to mid-2008. Since the carousel stalled in mid-September 2008 (although compounding will have continued), the really interesting number will only surface into the public domain this time next year in the IMF data.

QUANTIFIED EUROPEAN BANK LOSSES
An IMF Working Paper which was the subject of the mentioned seminar, entitled ‘Financial Stability Frameworks and the Role of Central Banks: Lessons from the Crisis’, by Erlend Wlater Nier, shows quantified losses arising from the crisis attributed to banks in key European countries.

The figures shown are as follows: Banks in Italy, $2.4 billion; Netherlands, $12.1 billion; France, $25.1 billion; Belgium, $10.8 billion; Switzerland, $54.3 billion; United Kingdom, $61.3 billion; and Germany, $56.0 billion. It should be pointed out also that European banks are compliant with the Basel-II requirements monitored and brokered by the Bank for International Settlements.

Yet European banks (especially the big German and British banks) have accumulated even larger portfolios of rubbish fraudulent assets than even the US banks that we have described as criminal enterprises. How come, then, that the big US money center banks are not or have not been Basel-II compliant when some of the European banks which are in an even worse position, are compliant?

UK TREASURY TAKING EXPENSIVE LESSONS FROM BANKERS REPONSIBLE FOR THE CHAOS
One could go on for ever identifying the stupidities and aberrations of these people, but we’ll close with some revealing information published in The Times, of London, very recently, in an instance of the ‘mainstream’ here doing a first-rate job. The report revealed that the British Treasury is paying vast fees, thought to have exceeded $150 million to date, to the very bankers whose ‘irresponsible’ behaviour has resulted inter alia in the British Government having to increase its indebtedness in the space of the year to come, by more than the entire volume of debt incurred by the Government of the United Kingdom since it first started borrowing from the Bank of England in 1692.

Specifically, Deutsche Bank, Credit Suisse and Citibank have all been hired at enormous cost as advisers to the Treasury, suggesting that the Treasury has lost control and basically had no idea what was going on in its own bailiwick. The Credit Suisse team is based at Canary Wharf, the new high-rise financial sector development to the East of the City of London, but decamps regularly to the Treasury. Its team consists of at least 20 people. The Deutsche Bank team of four experts in Fraudulent Finance includes an Irish dealmaker who advised Barclays on its failed bid for ABN Amro. Credit Suisse and Deutsche Bank alone are believed to have scooped $100 million sterling equivalent between them, and separate fees are being shelled out to Citigroup, which had to be bailed out by the US authorities.

The impression to be gained from this exposure is that the British Treasury had no clue what was happening, and so was completely taken by surprise by the events of mid-September 2008 and their consequences: which probably explains why the British Treasury is staggered that a solution exists which has the capacity to reliquefy the banks without incurring any Treasury debt while at the same time delivering massive windfall tax accruals to the Exchequer.

• It’s called trading on the books.

• UPDATE: 27TH APRIL: 9:00pm EST: IMPORTANT CLOSING POSTSCRIPT:
As a general rule, when divisions arising at these international meetings are openly reported in the ‘mainstream’ media, the disagreements alluded to do not reflect the specific underlying tensions accurately. The cracks in the parched ground at the surface appear narrow, masking cavernous voids beneath. Such seems to be the outcome of the IMF/World Bank Spring Meetings ending in Washington, DC, on Sunday, amid considerable dissension and acrimony.

Simply put, with at least $34 trillion having been stolen and diverted by the Bush Crime Nexus, nothing like the total has yet been recovered under Obama, who knew about this state of affairs long before the Inauguration, has had more than his first 100 days to impose his will on the grim situation and to remove all who have been standing in the way of the resolution, and has failed to deliver. Accordingly, the IMF/World Bank Spring Meetings 2009 took place essentially in a financial vacuum. No mention whatever was made of these colossal thefts, and the Editor detected only one obscure hint of the criminal dimension – indicating with crystal clarity that the Fund operates in a virtual environment, the parameters of which are dictated (we know for a fact) by the White House.

For public consumption, the world’s press has got hold of the idea that the divisions between the financial powers that surfaced at the Spring Meetings concerned inter alia a failure to agree upon how to raise $500 billion in additional funding for the International Monetary Fund that was pledged at Gordon Brown’s G-20 jamboree at Canning Town, London, on 2nd April. It appears that over $300 billion has been ‘pledged’; but as we all know, ‘pledges’ and undertakings, following untold years of double-cross, lies and duplicity by the US Treasury, are devoid of all meaning. Deceit is catching, and, like pig flu, it’s become a worldwide epidemic. So far, no actual hard money (with the possible exception of a Japanese amount) has been forthcoming. It’s been all talk and very little action.

A second reported dispute that erupted during the Spring Meetings concerned the vexed issue of representation on the Board of the International Monetary Fund. Here, the open press reports, and the buzz in the Press Room, was that China, Brazil and India are throwing their new weight around by expressing reservations about their prospective and ASSUMED (by the United States and the IMF) participation in the exotic IMF funding arrangements described in part above, pending a full reform of their ‘quotas’ in the Bretton Woods institutions that represent their voting power, and an expansion of their status. The Times of London summed up the position, as perceived for public consumption, thus: ‘Along with other emerging market nations, China is reluctant to make bigger financial commitments in the IMF without being allowed a much greater part in decision-making at the Fund and its sister body the World Bank’.

Additionally, tensions emerged above the radar over attempts to persuade more countries to make one-off crisis contributions to the Fund’s resources, or to increase their existing commitments: the word ‘commitment’ in this unpleasant environment being meaningless: collectivisation is admired in theory by these brainwashed socialist ideologues, but resisted in actual practice when it comes to forking out hard cash. And really, since there’s a money famine, where’s the incentive?

And following years of the rampant, in-your-face corruption orchestrated by the Bush Crime Family (for DVD, Dachau) working hand-in-glove with his top criminal trader, Dr Alan Greenspan – with the Bush dimension of the DVD-controlled element of the CIA secretly financing the ‘Islamic Terror’ operation, while Greenspan, assisted these days, one suspects, by Rahm Emanuel, presides over the secret funding of the opposite dimension of the dialectic, namely the hardened Israeli Nazi war party – the whole world has been corrupted, and the dirty tricks and duplicity deployed by the US criminalist intelligence gangs are being replicated by other powers, notably the big emerging ones.

(Encouragingly, the new Israeli Government has just explicitly stated that it will not be so stupid as to attack Iran; but the underlying objective of getting the United States to do Israel’s dirty work in the Middle East, remains unchanged).

Some of the new ‘big players’, notably Brazil, still need training in how to recognise that they are being targeted by US ‘Black Arts’ operatives into making ‘commitments’ that they’ll come to regret. Thus, as soon as it became known (two days after the event) that the Brazilian Finance Minister, Guido Montaga, had expressed reservations (about the rôle assigned to Brazil as described in this report), we formed the impression that the Brazilians had got decidedly cold feet, having belatedly realised that they may have been dragooned into what will inevitably turn out to be a typical US ‘bait and switch’ stitch-up. If they have ‘twigged’ that they are being duped, they are learning fast.

Given the sophistication of routine US official duplicity, the rule these new powers should follow without deviation is: don’t make commitments or agree to anything with the Americans that you don’t feel comfortable with, which in practice means that you must have the ‘money in the bank’ before signing up for anything that Washington tries to stick to you. That may well mean not doing deals with these people at all, certainly not without a very long (Green)spoon.

In this connection, the ‘mainstream’ media got the entire dynamic back to front. Quoting the London Times one more time, ‘China, Brazil and India led developing nations in forcing through measures under which the IMF will sell bonds on world markets to raise additional funding as an alternative to some countries offering longer-term loans’.

In reality, the scheme to sell SDR-denominated bonds was concocted to complete the corrupt triangle described above under pressure from the White House which tells the IMF in general, and Dominique Strauss-Kahn in particular, what to do. And this White House is taking its instructions from Bush 41 and Greenspan. This information comes from impeccable sources.

• It is consistent with this Editor’s elaboration above that ‘developments’ at the Spring Meetings were driven by the imperatives laid down by the White House and NOT by the needs of the IMF’s constituent Governments. Which means that the IMF is PERVERTING ITS JOB.

Moreover since the basis of the putative arrangements is rotten, as described, it is NO SURPRISE that no sooner have they been deconstructed (by us), than they start to unravel. In this connection, not only have the Brazilians allowed their acute reservations and nervousness about being set up by the Americans to be known, but it has been specifically reported to us that the Chinese have been advised not to touch the IMF’s proposed SDR bonds with a thousand-foot bargepole.

Which of course probably means that the SDR-denominated bond scheme, like the Lombard Odier insurance-wrap scheme and the Geithner-Paulson-Obama operation on behalf of the ‘privileged’ to revalidate the moribund and dead derivatives sector so that the crooks can recover their currently unrealisable ‘value’, leaving future US generations holding the bag, won’t get off the ground either.

This postscript analysis is closing because the Editor is now suddenly in receipt of dramatic further information which will more conveniently be publicised in a separate report that is being started immediately. Thank you for your attention!

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.

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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.

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OBAMA PREFERS ‘TRASHETS’ OVER DEBT-FREE SOLUTION

STABILISATION WITHOUT DEBT TO BE HANDLED FROM LONDON

Tuesday 14 April 2009 14:00

UPDATE, 22nd April 2009:

‘SUDDEN DEATH SYNDROME’:
WELCOME TO THE THIRD CLINTON (MURDER) ADMINISTRATION

The sudden death of the 41-year-old Chief Financial Officer of Freddie Mac, reported this morning, should serve as a wake-up call for all those, including the delegates and media people attending the Spring Meetings of the International Monetary Fund and the World Bank this week/weekend, who have been naively and stupidly handling the global financial crisis as though this is some kind of technical glitch, rather than facing up to the central reality:

• THIS IS A CRISIS BROUGHT ABOUT BY RELENTLESS CRIMINAL FINANCIAL CONDUCT.

• And it’s being covered up with violence (very badly).

The Clintons, working with Bush Sr. and Greenspan (concerning which sorcerers more is pending), are in the driving seat: and because these operatives have been stealing, stealing, stealing, they cannot stop, since they have to keep covering up their past thefts, murders and related crimes.

So the cat is now well and truly out of the bag. THIS IS THE THIRD CLINTON ADMINISTRATION, and Obama is just one voice in a murderous criminal enterprise now run by Vice President Biden, who is in charge of the National Security Council (NSC) which tells the President what to do.

Vast sums of money have been stolen and these are the criminal operatives, working for their own self-enrichment and to sustain the illicit supremacy of the US Intelligence Power, a.k.a. the ‘State within the State’, a.k.a. the CIA, who are responsible for the ransacking and for the corruption of the international financial system, the banks and the intergovernmental institutions. Moreover the core corrupters have been joined of late by certain other personnel, as will shortly be revealed.

Their desperation is such that they couldn’t care less about the uproar that was bound to ensue from this latest Clintonesque ‘suiciding’. Furthermore the explanation for recent blatant actions by Bush Sr. and Greenspan is precisely that the Clintons are in the driving seat, with Biden in charge of the NSC: so they think they have total immunity, even though both are under indictment!

We were warned over a year ago by a ‘former’ US operative that the post-Bush II Administration would be worse than its predecessors: the only prediction that he omitted, was to confirm that life after Dubya would be CLINTON ADMINISTRATION #3.

This is the WORST OF ALL POSSIBLE WORLDS:
IT MEANS WALL-TO-WALL CORRUPTION, MORE MURDERS, MORE UNSPEAKABLE CRIMES, AND THE FURTHER RELEGATION OF THE UNITED STATES TO PARIAH STATUS.

• That’s how we and others are looking at the ‘whacking’ of the Freddie Mac CFO.

• NOTHING will be remedied UNTIL THESE CRIMINALS ARE DEALT WITH. How can a corrupted financial system be repaired when the crooks who destroyed it are STILL running the show?

• Journalists who sidestep this issue because they haven’t got the guts to speak the truth or because they quiver in awe of their weak or controlled Editors, need to ask themselves:

• Am I doing my job , or am I just a prostitute?

• STANFORD FACT: A Bloomberg report by Alison Fitzgerald and Michael Forsythe dated 16th April on the Stanford blow-out, contains, in its final paragraph, on the seventh page of this long report, the following reference: ‘Kevin Sadler, a lawyer with Baker Botts LLP in Austin, who represents the [Stanford] receivership…’. So, right at the end of the report lurks the most important fact of all: the receivership is in the hands of the Bush Crime Family’s TOP FIXER, James A. Baker III. The fox is calling the shots, rearranging the chickens.

• The rest of the article is very interesting: But not as interesting as:
THE ONLY FACT IN THE REPORT OF ANY SIGNIFICANCE, THE ONE AT THE END.

•ACHTUNG! Overnight 13th/14th April we received a large number of emails and some phone calls, all from the United States, indicating that www.worldreports.org was ‘down’ for a period and could not be accessed. We are very grateful for your emails and diligence! We have now (as of 1:30pm UK time on 14th April) checked every single word, on the assumption that there may have been some interference to the text originally published in International Currency Review, Volume 34, #2, from the NSC, and we find that no alterations have been made.

This is a SECOND post of the same report posted on 13th April. You can tell the difference by the single word-change in the title, which now reads: OBAMA PREFERS ‘TRASHETS’ OVER DEBT-FREE SOLUTION. Thus, if there’s further nonsense, they’ll know that we are capable of restoring the text exactly as before, so intereference is a waste of their time and everyone else’s.

•FURTHER ACHTUNG! Our website and communications were attacked by ‘the enemy’ AGAIN on 22nd April, for about two hours. This offensive activity by NSC/NSA is ILLEGAL. Our IT people are smart and have fixed the situation. Each time these idiots do this, they send a signal to MILLIONS around the world that we are telling the truth and that they don’t like it. They need brain surgery.

• Plus, every time they do this, they gratuitously signal that we’ve hit a bulls’eye.

Also, the ‘serious situation’ notice indicating a certain problem thought to have arisen because of US official anger at our work, was MIRACULOUSLY resolved in the course of this Monday, after that notice was added. We have left the notice in THIS report, with an additional sentence to that effect.

OUR REPORT DATED 14TH APRIL 2009 WHICH IS VERY IMPORTANT, NOW STARTS HERE:

• 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.

• WHITE HOUSE WILFULLY REJECTS SOUND FINANCE IN ORDER TO RETAIN CONTROL

• GRIEVOUS DISPLAY OF ARROGANCE AND TREASON AGAINST THE AMERICAN PEOPLE

• PRIVATE SECTOR REFUNDING WITHOUT OFFICIAL INVOLVEMENT IS THE ANSWER

• NEW GENERATION OF LETHAL ‘ASSETS’ (‘TRASHETS’) TO BE UNLEASHED ON THE WORLD

• GEITHNER-SUMMERS’ FRAUDULENT FINANCE GENERATES HUGE UNNECESSARY DEBT

• THE ESSENCE OF THE OBAMA WHITE HOUSE’S DE FACTO FINANCIAL TERRORISM EXPOSED

NAVIGATING THIS REPORT:

(1) PRIVATE SECTOR REFUNDING METHOD THAT YIELDS TAXABLE REVENUE AND NO DEBT

(2) ERRONEOUS AND OBTUSE FORMULA THAT CREATES COLOSSAL UNNECESSARY DEBT

(3) BY DEFINITION, THE PRIVATE SECTOR PRODUCES TAXABLE REVENUE

(4) THE PUBLIC SECTOR CAN ONLY PRODUCE MORE AND MORE DEBT: IT CAN’T TAX ITSELF

(5) U.S. FINANCIAL GURUS ‘COMING LATE TO THE PARTY’ ARE PICKING AT YOUR CORPSE

(6) SCANDALOUS OBFUSCATION OF FRAUDULENT FINANCE BY THE G-20

(7) OBAMA WANTS TO PROCEED WITH A NEW GENERATION OF FRAUDULENT FINANCING

(8) OBAMA THEREFORE APPEARS TO HAVE DOUBLE-CROSSED THE QUEEN

(9) THE MEETING AT THE HIGHEST LEVEL IN LONDON ON 1ST APRIL 2009

(10) KICKING AGAINST THE PRICKS: WHAT WASHINGTON INTENDS TO DO NOW

(11) WAVE OF FRAUDULENT FINANCE WILL GENERATE REVENUE AT HUGE COST

(12) THE REAL MOTIVE: THE CROOKS ARE TERRIFIED OF LOSING CONTROL OF TRADING

• THE LEGALISATION OF FINANCIAL CORRUPTION

• REASON FOR PRESENTING THIS ANALYSIS

• CHAPTER ONE:
THE LEGALISATION OF FINANCIAL CORRUPTION:
THE CREATION OF SECURITISATION AND CREDIT DEFAULT SWAPS

• CHAPTER TWO:
THE LEGALISATION OF FINANCIAL CORRUPTION:
DESCRIPTIONS OF THE RESULTING FINANCIAL FRAUDS AND SCAMS

• DESCRIPTIONS WITH CHARTS OF DERIVATIVE SCAM METHODOLOGY

• FOR FURTHER INFORMATION ABOUT THE LEGALISATION OF FINANCIAL CORRUPTION, PLEASE ADDRESS ENQUIRIES TO OUR ADVISER, THE U.S. SECURITIES EXPERT MICHAEL C. COTTRELL, B.A. M.S. ON 814-455 9218, as he is the source for the historical, technical and related intelligence in this report. The information contained herein was first published in International Currency Review, Volume 34, #2, in March 2009. When calling Michael Cottrell, full identification must be given. Without full identification, calls will not be taken. Email: pii-mcc@msn.com.

•The central issues raised in this report are the issues that MUST be addressed at the imminent IMF/World Bank Spring Meetings to be held in Washington, DC, concluding on 25th-26th April.

• In mid-March we published: International Currency Review Volume 34, #2 on Systemic Fraudulent Finance and The Legalisation of Financial Corruption. Also published recently are issues of our titles The Latin American Times, Economic Intelligence Review, London Currency Report, Interest Rate Service and Arab-Asian Affairs. For details, see the second white panel on the Home Page.

• To subscribe to our intelligence services, see the catalogue under World Reports Limited.

• 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. 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.

• 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.

• DONATIONS: You can help finance these exposures (which the Editor has to prepare on top of his normal publishing responsibilities) by sending us a donation. Press Make a Donation, which is live, and it takes you straight to our ultra-safe ordering system, which accepts Visa and MasterCard.

• VIRTUAL REALITY VERSUS REALITY:
Many Internet users do not seem to understand that a huge ongoing mind-control and influence-building offensive (Operation Mockingbird Mark II) has been mounted against the American people by the controlling Intelligence Power, which is a key instrument of the World Revolution. This evil operation has been running and corrupting for many years.

At least 60 US websites pump out or elaborate unprovenanced ‘virtual reality’ into which the nefarious Intelligence Power and its key operatives headed by George Bush Sr., can insert their chosen lies ‘du jour’. The purpose of the incessant barrage of lies, diversions, agitation and poisonous hate propaganda and other manifestations of this elaboration of the art of Dr Josef Goebbels, is to cover up the colossal catalogue of crimes that these agents of the Intelligence Power and their corrupted financial sector associates at home and abroad have perpetrated and continue to commit against the American people and the Rest of the World.

One technique used by this counterintelligence apparat is to intermingle serious analysis with New Age drivel and MK-Ultra-style mental manipulation designed to waylay those who have no sound grounding in faith and who drift in the wind, like the 19th century British Prime Minister Lord North, who was known as ‘the cushion’ because he resembled the shape of the last person who sat on him. Although we make no claim to infallibility, unlike the Pope, this service is not engaged in the devious and reprobate promulgation of virtual reality, which the targeted population is meant to confuse with reality. We focus instead on the truth as perceived to the best of our ability at the time of posting, however uncomfortable that may be for the crooks exposed in the process.

This does not mean to say that we are not from time to time deceived, like everyone else, by these odious liars and deceivers: but our focus at all times is on truth. We play no mind games, like these unspeakable reprobates, many of whom are paid to confuse, redirect and deceive.

And finally, this is done not because it is enjoyable, but so that the Editor can at least say to his daughters and their families: I tried to make the world a better place. In this connection, a Rabbi friend of the Editor told him once that his Jewish teaching is that ‘you are required to try, but you are not expected to finish’. Christians are required to finish: so we will continue the fight.

• A VERY SERIOUS SITUATION AFFECTING THE EDITOR OF THIS SERVICE IS PENDING BEHIND THE SCENES. Unless this matter (which we cannot go into right now) is resolved in short order, the unintended consequence will necessarily be a serious escalation of the exposures, which all the official parties concerned can avoid if they behave sensibly. At the moment there appears to be a stand-off. But the Editor will be placed in an impossible position if the wrong decision is taken.

• The matter referenced above was MIRACULOUSLY resolved on Easter Monday!!!!!

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:

(1) PRIVATE SECTOR REFUNDING METHOD THAT YIELDS TAXABLE REVENUE AND NO DEBT:

For longer than we can remember we have been pointing out that THERE IS A SIMPLE, STRAIGHTFORWARD, TRANSPARENT SOLUTION to the financial crisis.

For longer than we can recall, we have stressed that the decisions taken by the former Bush II Administration via the corrupted Treasury headed by that criminal financier Henry M. Paulson Jr., and the new even more convoluted decisions taken by the Geithner Treasury, are THE REVERSE OF THE SAID SIMPLE, STRAIGHTFORWARD SOLUTION to the financial crisis.

The Obama Administration and the Geithner Treasury have leveraged the Fraudulent Finance formulae developed under the corrupt Paulson Treasury, with the same objective:

• To reignite and reboot the moribund Fraudulent Finance derivatives ‘Structured Products’ Ponzi parallel financial system, also known as a colossal BANKER’S RAMP, that was closed down between 10th and 12th September 2008 as reported by this service, when the $14.0 trillion was placed out of these criminal operatives’ reach.

Given the above, it follows that this obtuse attempt to continue the Ponzi Fraudulent Finance represents a US NATIONAL SECURITY ISSUE and should be addressed as such.

Let’s not mince words here:

• Continuing with the Fraudulent Finance formulae concocted by the US Treasury and the Federal Reserve presents a grave threat to the stability, prosperity and the future of the Republic: and all concerned with this cynical rearguard operation to revive the collapsed derivatives sector should be handled with the severity reserved for them under the Patriot Acts, that lay down definitions of ECONOMIC AND FINANCIAL TERRORISM, which is what these people are perpetrating.

(2) ERRONEOUS AND OBTUSE FORMULA THAT CREATES COLOSSAL UNNECESSARY DEBT:

It is possible, but unlikely, that the President of the United States has not understood this. So let us, once again, explain where his perverse advisers have led him astray.

• FACT: The TRUTH is always simple. LIES are always complex, and become ever more so because successive lies have to be perpetrated in order to buttress the earlier lies. A policy built on lies will COLLAPSE. Like plutonium, lies have a half-life: they decay.

• As will be seen below, derivatives are so complex that no-one can understand what is going on: which is the WHOLE POINT. They’re based on LIES. They are FRAUDS.

• SUCH A STRUCTURE IS LIKE AN INVERTED PYRAMID:
As the original lie at the base of the inverted pyramid decays, fresh lies have to be invoked, like scaffolding, to prop up the earlier lies. Eventually, as the lies proliferate, the scaffolding of lies which is underpinning the inverted pyramid on either side becomes unstable, too, and eventually the entire structure collapses.

• Obama therefore faces, sooner rather than later, the absolute collapse of the pyramid of lies and diversionary financing deceits that his wilfully misguided colleagues and advisers have fed him.

So let us reiterate the SIMPLE TRUTH that the President needs to UNDERSTAND:

(3) BY DEFINITION, THE PRIVATE SECTOR PRODUCES TAXABLE REVENUE:

Here are the basic economic FACTS of the matter:

• By definition, the private sector generates REVENUE which the Government TAXES.

• It follows, therefore, that the SIMPLE SOLUTION to the entire crisis is to ALLOW THE PRIVATE SECTOR to recoup the situation using the financial trading techniques that have hitherto been used clandestinely and corruptly and which the criminal financiers want to continue undertaking below the radar so that they don’t have to pay tax.

• These trading techniques are NOT ILLEGAL. However they become illegal when performed clandestinely, with the proceeds held UNTAXED, off-balance sheet, and placed in secret offshore accounts. In other words, when combined with TAX EVASION, they become illegal.

• So the simple, straightforward, transparent ANSWER to the crisis is crystal clear. PRIVATE SECTOR trading on-balance sheet yielding WINDFALL TAXABLE REVENUES should proceed immediately, and should have started up in June 2007 after the Group of Seven Financial Powers agreed in northern Germany that this was the way forward, reapproving this solution in 2008.

• FACT: By blocking this SIMPLE, STRAIGHTFORWARD SOLUTION – the Refinancing Programme – the Bush Administration compromised the national security of the United States, committed treason against the Republic and its people, and engaged in ECONOMIC AND FINANCIAL TERRORISM.

The Obama Administration is continuing down the same futile path, and since it has the appalling example of its predecessor to contemplate, it should know better. So it is compounding the errors of its predecessor régime, and is likewise committing ECONOMIC AND FINANCIAL TREASON by choosing the PERVERSE ROUTE, and failing to apply THE CORRECT SOLUTION.

(4) THE PUBLIC SECTOR CAN ONLY PRODUCE MORE AND MORE DEBT: IT CAN’T TAX ITSELF:

By definition, the public sector generates DEBT. The public sector PRODUCES NOTHING and so, by definition, cannot generate revenue. It CANNOT TAX ITSELF, except through its payroll taxes. Since it cannot generate REVENUE, it relies on the taxpayer, on the creation of debt and also on printing money to finance its endlessly permissive operations.

• Therefore, the convoluted inventions of the Geithner Treasury and of the Bernanke Federal Reserve to reboot the derivatives sector represent perverse ARTIFICIAL CONSTRUCTS which, by definition, generate DEBT, not REVENUE. THIS IS ENTIRELY UNNECESSARY: see above.

• To embark upon complex Fraudulent Financing operations under the cover of ‘stimulating the economy’ but in reality, in order to revive the derivatives sector which has collapsed – and which is now widely understood to represent a MONUMENTAL FRAUD given that the so-called ‘Structured Products’ generally have NO RECOURSE to the underlying original source of funds – is to engage wilfully in FINANCIAL TERRORISM against the American people and the Rest of the World.

• Now as we have all observed, the Obama Administration thinks it can continue down this path. We have news for this President’s headstrong ‘experts’. Your tired formula is rotten and it will collapse. There are liable to be few takers for your artificially revivable fraudulent ‘assets’ scheme; and although you have wrapped your criminal intentions in a dense fog of complexity consistent with the pack of barefaced lies that you are marketing, you are trying to build your house on sand.

As you have already doubtless observed, you can’t even build the house, because the foundations are sinking into the sand before you even start bricklaying.

• So, if President Obama prefers for his Administration to run into the sand, by all means carry on! Just keep going with this revamped Fraudulent Finance formula, and see where it leads you. You are collectively as arrogant and perverse as your predecessors: and you doubtless imagine that because you think ‘they got away with it’, you will too.

WRONG! You are careering towards DISASTER.

• Since you know perfectly well what the CORRECT SOLUTION is, but are simply UNWILLING TO PURSUE IT, you cannot escape condemnation as perverse perpetrators of Financial Fraud and Economic and Financial Terrorism. It’s not as though you are ignorant. Not at all. We know for a fact that you are aware that the CORRECT SOLUTION is to proceed with the trading in the private sector without Government involvement, and to tax the resulting REVENUES, which will finance the entire Obama Programme, with money to spare – creating NO DEBT in the process.

• TO REPEAT: By NOT pursuing this course, you are explicitly and wilfully engaging in Economic and Financial Terrorism. You may believe that the people don’t yet ‘get this’. But believe us, they will, they will. And when they do, those lamp posts that your friend George Bush Sr. spoke about, may be used for ‘other purposes’.

(5) U.S. FINANCIAL GURUS ‘COMING LATE TO THE PARTY’ ARE PICKING AT YOUR CORPSE:

As mentioned in the preceding report, it has been our experience over decades that after we have stuck our necks out and our predictions are seen to have been correct (which is simply a question of making sure that one is following the relevant threads, and not blindly running after diversions), prominent economists, Nobel Laureates and other members of the community of the ‘Great and the Good’ pile in and ‘reveal’ the realities that we have previously exposed.

A number of these fragrant characters – Messrs Stiglitz, Black and Sachs, for instance – are at this time engaged in precisely such ‘revelations’, although NONE of them are stating what needs to be said: namely that you are promoting the doomed legalisation of Fraudulent Finance. For whatever reason, such people can’t bring themselves to employ the word: CRIMINAL.

But you can disregard almost every word they publish! Because what they are doing is criticising and pulling apart Geithnerism-cum-Bernankeism, which is a completely sterile activity! Geithnerism doesn’t need to be pulled apart because it’s irrelevant: it is going to collapse and the whole of the financial world knows it. And is rightly terrified that it will.

• And have these prominent ‘Establishment’ economists yet come up with the alternative
(there’s only ONE alternative)?

• Correct: They have NOT. What Stiglitz, Black and Sachs OUGHT all to be promulgating now is the CORRECT SOLUTION outlined above: Transparent, on-balance-sheet, fully taxed, visible trading operations in the private sector, generating ONGOING REVENUE – with the Government OUT OF IT ALTOGETHER and just raking in the windfall TAX REVENUES.

Instead of rabbiting on about the intricacies of Geithnerism, writing convoluted articles which make them look good but which go nowhere, they should be applying their acquired influence to FORCE this Government onto the right track. Yes, that would mean demanding the sacking of Geithner and Summers and placing Bernanke on notice that he must do what the President demands, or else.

And of course this all presumes that we have a President who knows what he is doing and wants to do the right thing, which are pretty tall assumptions but have to be made here for the sake of this argumentation – even though the President now appears to have lied to and double-crossed The Queen [see below] and is intent on going on with a false revival of the derivatives carousel.

(6) SCANDALOUS OBFUSCATION OF FRAUDULENT FINANCE BY THE G-20:

We always thought that the purpose of suddenly elevating the Group of Twenty to idolatry status was actually a device to diminish the importance of the Group of Seven (G-7), for the SPECIFIC purpose of smothering the G-7-Approved Refinancing Programme of transparent on-balance-sheet trading operations yielding taxable REVENUE without Government involvement.

And so it has proved – since, as noted in the preceding report, the G-20 Communiqué made NO MENTION of derivatives, Structured Products, Fraudulent Finance, Ponzi schemes, and all the other aberrations – assuming that the Press Room would buy this omission without comment.

Well, the Editor, who didn’t waste time attending the London Canning Town circus, turned out to be the ONLY COMMENTATOR, until The Times woke up the following Monday, to have NOTICED that there was NO MENTION of the underlying Fraudulent Finance causes of the crisis whatsoever.

• Which means that, since Gordon Brown organised the circus, and was therefore in a position to lay down what would be expected from it, he may be a direct participant in this deception and fully supports the continuation of the Fraudulent Finance rather than the implementation of the G-7 transparent DEBT-FREE Refunding Programme, which is the sole SOLUTION to the crisis.

(7) OBAMA WANTS TO PROCEED WITH A NEW GENERATION OF FRAUDULENT FINANCING:

Having returned home from his eight-day tour, to attend a Jewish Seder in the White House (the first time this has ever occurred), President Obama will proceed now with the PERVERSE COURSE.
Specifically, it is intended to standardise the derivatives default price and to proceed with the new derivatives trading platform based on the obtuse Geithner-Summers formula, with the following Economic Terrorism objectives:

• To suck every available good dollar out of unwise, reckless and short-sighted investors.

• To enable Carlyle and Carlyle Capital, for the Bush-DVD Crime Nexus, to extract their profits.

• After which there will be another COLLAPSE, probably within a year or even within six months [see below] which will be FAR, FAR WORSE than what has been experienced to date.

This is what the Obama Administration is going to do. That is their mad, reprobate intention.

(8) OBAMA APPEARS THEREFORE TO HAVE DOUBLE-CROSSED THE QUEEN:

We have been advised by UK sources who know the score that President Barack H. Obama is absolutely not to be trusted. However because he is Head of State, and given that the Editor is a ‘foreigner’, we have bent over backwards to give this man the benefit of the doubt, even though it soon became apparent that things weren’t right: The Queen’s $52 billion of ‘guarantees’ were stolen, before being ‘restored’; and the $14.0 trillion was finally withdrawn as we reported, on 29th January, after it had become clear that the Obama Administration was intent upon pursuing the perverse course, rather than the Refunding Programme.

[Malicious counterpropaganda intended to create the false impression that the $14 trillion that we reference is another $14 trillion stolen or partly stolen by others, and that the $6.2 trillion element is the same as the stolen $4.5 trillion again referenced in the preceding report, is unprovenanced, confusion-building deception the underlying motives for which, if exposed, would compromise and expose many facets of this offensive to bamboozle compartmentalised cadres and other parties].

We did form the impression earlier that the diplomatic skills that our Head of State is known to be able to deploy, had yielded the mutually appropriate results. And as we now understand this fluid situation, President Obama is believed to have been told by the British Head of State that it would be enormously in the mutual interest to proceed with the on-the-books, transparent private sector revenue-generating Refunding Programme agreed to by the G-7 in 2007 and 2008. It is believed that he indicated that he would at least take notice of this request, but please review the greater detail below. We do not really know whether he signed anything meaningful at the G-20 jamboree, although we do know that he entered into commitments which he reneged upon the moment he arrived back home: all that is known is that after ranting about the ‘Deliverables’ being ‘mandatory’, President Sarkozy calmed down, implying that unspecified ‘sensible’ decisions had been taken.

But it would now appear that President Obama simply paid lip service to what The Queen will have told him, without having the slightest intention of actually paying any attention to what Her Majesty had said after leaving her presence. If that is not the case, there is no evidence to the contrary.

What we do know is that the White House was reported to us on 11th April 2009 to be ‘extremely annoyed’ (more colourful language being employed) that the CORRECT SOLUTION laid out by this service, which WAS discussed at the meeting between the two Heads of State, was even raised.

One can speculate as to the causes of such annoyance, and one can also speculate that the matter alluded to above concerning the Editor of this service is indeed CONNECTED to the fact that the CORRECT SOLUTION was raised at that crucial Heads of State meeting.

Such speculation would be along the right lines!

• Shortly after we posted the preceding report, which included the intelligence that President Sarkozy had threatened STASI-Chancellor Merkel with ‘elimination’ because she was blocking the releases on behalf of Bush-DVD, Merkel suddenly cut short her visit to Afghanistan.

Another interesting development is reported here: the Editor received an email from Beijing at 11:45pm on 9th April (UK time) from a known and reliable Spanish contact, containing the following information: ‘Just to let you know that it is not possible to read your website in Beijing, except in international hotels’. This implies that the Chinese Government may also consider that our direct assertion of the truth is too painful, even for them – notwithstanding the reality that the Chinese authorities are very assiduous subscribers to our financial journal, International Currency Review.

(9) SOLUTION: INDEPENDENT PRIVATE SECTOR TRADING PLATFORM FROM LONDON:

This leaves the proposal to operate the private sector Refunding Programme independently from London as the ONLY remaining way out of the catastrophe that the Barack Obama Administration is perversely rushing towards, with its determination to press ahead with the new Geithner-Summers Plan which, bless him, Jeffrey Sachs, Economics Professor at Columbia University and Director of the ‘Earth Institute’ (!!), said on 6th April is ‘even worse than we thought’ (sic!) [see below].

• TO REPEAT WHAT IS STATED AT THE TOP OF THIS REPORT:

Operating the $ Refunding ANYWAY 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.

As for Professor Sachs, and to give him his due, Sachs elaborated:

‘Cynics [NO: realists – Ed.] believe that the Geithner-Summers Plan is exactly what it seems: a naked grab of taxpayer money for Wall Street interests. Geithner and Summers argue that it’s the least bad approach to a messy situation, in which we need to restore banking functions but don’t have any perfect ways to do that [NOT TRUE: see above – Editor]. If they are serious about their justification, let them come forward to confront their critics and to explain to the American people why the other proposals are not being pursued. So far, Geithner and Summers tell us that their plan is the only option, but without a word of further explanation as to why’.

In other words, Geithner and Summers are liars because they BOTH KNOW that there is another solution – namely, the transparent on-the-books taxable revenue-generating agreed Refunding Programme MINUS Government, that they have explicitly rejected. They have rejected it because they are working to refund Carlyle and Carlyle Capital, of behalf of the corrupt Bush-Clinton Cabal, and to relieve foolish investors of every good dollar so as to enable these operations to extract their profits at the expense of the soon-to-be-scammed investors concerned, and the taxpayer.

And of course, Jeffrey Sachs himself hasn’t yet got round to putting forward the ONLY SOLUTION, outlined above – which is surprising, given that he is not unendowed with the requisite ‘smarts’.

If he doesn’t do so soon, we would be perfectly entitled to conclude either that he’s actually rather dense, or else that, like the rest of these people, he’s ‘part of the problem’.

(9) THE MEETING AT THE HIGHEST LEVEL IN LONDON ON 1ST APRIL 2009:

Although self-evidently we are not privy to what was discussed between the Monarch and the President of the United States, we know through several sources that the Refunding Programme which will generate TAXABLE REVENUE WITHOUT U.S. TREASURY DEBT, was discussed and that key names that you know about were mentioned in this connection. At the mention of these key names, President Obama backed off and MAY HAVE uttered words to the effect: ‘No, that’s not the way WE are going to do it’, while also indicating a commitment (note the two opposite stances) and demonstrating a complete change of attitude from one of confrontation to one of cooperation in response to The Queen’s remarkable genuine professional ability to charm.

Whether the President bad-mouthed the key US expert in question to The Queen cannot possibly be known, but it can be deduced from information received that he may well have done so. The name in question is not appreciated at the White House and the US Treasury, because he speaks the truth and because neither intend to proceed with sound finance. He is of course the expert whose work we reproduce from International Currency Review, Volume 34, #2, below.

If President Obama did bad-mouth Michael C. Cottrell, B.A., M.S., it had NO EFFECT! Otherwise the White House would not be ‘extremely annoyed’ ‘as we speak’, and nor would the issue concerning the Editor of this service have blown up (to be alaborated later, if there is no resolution).

The perverse and ruinous intention is to proceed along the Fraudulent Finance route, which will end very quickly in disaster and – here’s the Editor’s point – WILL TAKE THE BRITISH ECONOMY AND BANKS DOWN WITH IT. (Now you know why the Editor is involved in this battle).

As an outline, what appears to have occurred is exactly as was predicted earlier on this website:

• Obama arrives at Stansted under a cloud.

• Obama attends at Buckingham Palace for his one-on-one meeting with The Queen.

• At this meeting, the Refunding Programme as explicitly explained directly to The Queen’s advisers by the key US name in question through ourselves, is raised. Also mentioned is the second key US name whose reputation for integrity is likewise impeccable.

• In the course of the interview, Obama’s stance was transformed for the purposes of completing the meeting, from one of confrontation to one of intended cooperation, and various commitments may have been given. These commitments appear to have been false.

• Obama then proceeds on his travels from podium to podium, and on arriving back home, we understand, indicated that he intends to proceed along the disastrous course concocted by his top appointed officials and advisers representing Biden (the new Cheney), Cheney himself, Summers and Bush 41 – who, we know, specifically intervened in the evening of 9th April 2009, to stop the release process, AFTER a conversation between the Editor and Michael C. Cottrell, B.A., M.S.

In summary, the President of the United States gave certain undertakings at the highest level in the United Kingdom without having the slightest intention of honouring them, thereby making it evident in retrospect that he was not interested in the G-7-Approved private sector Refunding Programme, and would be proceeding along the disastrous route recommended by the Financial Terrorists and traitors to the United States and the American people who are jeopardising US National Security and either couldn’t care less, or don’t understand where they are going.

Which of course means that the situation, as stated in the preceding report, is now far more tense and dangerous than was the case prior to the G-20 watershed meeting at which these matters were supposed (ostensibly) to have been stitched up behind the scenes.

(10) KICKING AGAINST THE PRICKS: WHAT WASHINGTON INTENDS TO DO NOW:

The intention of these operatives, headed by President B. Obama with the full cooperation of the NYSE and ICE, is to re-start the collapsed Fraudulent Finance derivatives, in the expectation that some fools abroad will pile into this deceitful DEBT-GENERATING process, thereby fraudulently restarting the carousel – with a view to elevating the ‘Toxic’ or ‘Legacy’ ‘assets’ (which have NO RECOURSE to the underlying flow-of-funds and so are accordingly fundamentally fraudulent and worthless), highly desirable, and enticing imprudent institutional investors like pension funds and money managers in the municipal sector, as well as reckless banks and greedy private investors at home and abroad who are pready to abandon the Prudent Man Rule, into this poisonous bonanza.

Once Carlyle and Carlyle Capital et al have ‘revalidated’ the existing overhang (including double-counting) of between $600 and $700 trillion of fraudulent derivatives ‘assets’ (that is to saym have converted the current dead, moribund and worthless Ponzi derivatives into cash) – while having procured that foolish foreign purchasers, American pension funds, municipalities and banks have stuffed themselves to the gills with a brand new generation of even more worthless fraudulent Ponzi ‘assets’ than the previous lot – these fraudsters will be in a position to take down the entire system – whereupon they will be in a position to scoop up all the residual good assets and a few banks that they covet, achieving their revolutionary objectives by means of Fraudulent Finance.

For the immediate future, we know for a fact that none of those parties in the background in the United States who have been told what is happening, are paying any attention. Their eyes glaze over and they block their ears. They are indifferent to the fact that on the other side of the balance sheet, the US Treasury is to accumulate a vast, open-ended additional overhang of official US debt, which will burden future generations of Americans out to infinity.

• And because WE KNOW that they DO understand the logic of the G-7-Approved revenue-generating, debt-free Refunding Programme, these people, ALL OF THEM, can be accused of:

• Committing treason against the American Republic and People.

• Criminal co-conspiracy to defraud the portfolios of pension funds, municipalities, institutions and unwise investors at home and abroad on a monumental scale.

• Criminal intent to revalidate worthless assets that they know to be fraudulent by the usual Ponzi Scheme method of PULLING IN NEW MONEY, in exchange for which new, even more prospectively poisonous false derivative ‘assets’ will be stuffed into portfolios in the United States and abroad (if foreigners fall for this latest official American scam) which the foolish purchasers will be unable to dispose of in due course when the new generation of ‘trashets’, in turn, is found to be worthless both because they are intrinsically so, and because there will suddenly be no takers for this trash.

• Gravely compromising and jeopardising US National Security by criminally mortgaging the futures of generations of Americans through the deliberate creation of wholly unnecessary debt to finance this Fraudulent Finance to ‘restore’ value to the likes of Carlyle and Carlyle Capital, in accordance with the treacherous intentions of George H. W. Bush Sr. on behalf of the DVD (Abwehr), Dachau and its sentinel, the bribed STASI-Chancellor Angela Merkel.

• Gross dereliction of law enforcement duty in failing to take the severest measures against all those in plotting this outrageous escalation of US official scamming, which is intended to buttress the usurped control of the Intelligence Power over the Executive Branch of the US Government, as previously explained by this service.

• Recklessly sacrificing economic and financial stability for criminal purposes as described.

• Exploiting public office for the fraudulent and criminal purposes in question, including self-enrichment and the financing of ‘Black Operations’ in open defiance of the clear interests of the American people and of future generations of Americans.

• Engaging in these criminal acts in time of war, exacerbating the treason that they are committing.

• Openly engaging in gross acts of Economic and Financial Terrorism, as provided for in their own national security legislation.

(11) NEW WAVE OF FRAUDULENT FINANCE WILL GENERATE REVENUE AT HUGE COST:

Buried inside this intended giga-scamming operation is the US official intent to generate revenue by these means – revenue that may OR MAY NOT be taxed. On the basis of past experience, a huge proportion of the intended Ponzi transactions will be handled, as usual, off-balance sheet, so that the proceeds will be shovelled into ‘offshore’ accounts, despite the latest revived G-20 ‘offensive’ against tax evasion. Whether the offshore centres will comply with the pressures being exerted on them now that the Bush Crime Family is ostensibly ‘out of the way’ (Bush II TORPEDOED the OECD’s operations against the offshore centers in 2001) remains unclear.

But even if a significant proportion of the new Fraudulent finance transactions are taxed, the tax accruals will have been MORE THAN OFFSET by the huge increase in US Treasury debt that is to be created and is being created on the other side of the US Federal Government’s balance sheet.

And as we have pointed out, IT IS NOT NECESSARY TO CREATE ANY NEW TREASURY DEBT AT ALL. So, what is the problem?

• ANSWER: This is the Geithner-Volcker-Summers-Bernanke-Obama method of purporting to have these transactions occur in the private sector WHILE RETAINING CONTROL.

(12) THE REAL MOTIVE: THE CROOKS ARE TERRIFIED OF LOSING CONTROL OF TRADING:

What they are terrified of is LOSING CONTROL OF TRADING. That’s the bottom line.

• So they are quite happy to burden the present and future generations of Americans with colossal unnecessary Treasury debt IN ORDER TO RETAIN CONTROL.

• Therefore, THEY ARE COMMITTING TREASON AGAINST THE AMERICAN PEOPLE, since there is an alternative method of getting out of this mess: by RELINQUISHING CRONYISM CONTROL so that the Government sector is not engaged in creating UNNECESSARY DEBT to finance this scam.

Discontent may remain muffled for now in the context of the official attempt to invent a ‘feel-good’ factor for public consumption, in the ‘expectation’ that the imminent Fraudulent Finance rebooting operation with the Lombard Odier external ‘insurance wrap’ will reignite the productive economy, whereas its purpose is to exchange the worthless existing derivatives pile for NEW MONEY, in accordance with the standard Ponzi principle.

This operative said on 9th April that the US economy will begin to feel as if it is recovering within the next few months, as the “sense of free fall” comes to an end. Addressing the Economic Club of Washington, this operative offered NO EVIDENCE WHATSOEVER for his assertions, as his woolly phraseology revealed. There were ‘still substantial downdrafts’ (no mention of the ten huge Bush-related Ponzi networks waiting to ‘blow’ in Europe, of course); but Mr Summers was ‘reasonably confident’ that ‘the sense of a ball falling off the table’ will come to an end within months.

‘We will no longer have that sense of free fall’, he waffled, adding that his aim was to ensure that the downturn is not an ‘historic event’. He thought that in the past 6-8 weeks ‘things have felt a little better’ on the basis of ‘a substantial anecdotal flow of information’.

Tell that to the owner of the diner frequented by the Editor of this service in Midtown New York, which was empty when last visited, or to the Midtown breakfast diner which is normally so crowded on Sunday mornings that for years it was a waste of time turning up there. The other Sunday the Editor strode past and observed plenty of tables, so he renewed his acquaintance with the place.

Exactly what class of weed Mr Summers has been consuming is unknown. But what we do know is that, as President Obama’s ‘closest economic adviser’, this operative is a key driving force behind the intended Fraudulent Finance offensive that will crucify the present and future generations of Americans because of the HUGE BURDEN OF UNNECESSARY DEBT that it will generate – thanks to Summers’ perverse refusal, along with his colleagues, to TAKE THE CORRECT ACTION.

Meanwhile the blocking operations of the Connecticut Trust group on behalf of George H. W. Bush Sr. have continued unabated since we ‘outed’ these criminals. On 9th April 2009, further sabotage activity by this group was reported. Releases are being sabotaged because the criminal controllers intend to have everything their own way, supported by Gold Badges who are likewise intent on not doing their jobs, but instead collaborating in the intended official Fraudulent Finance orgy.

• On the other hand, we received information from usually reliable sources on Easter Day, believe it or not, to the effect that an unspecified number of arrests had taken place that day, of key people at their homes under US Homeland Security legislation, and that those arrested were said to have been hauled away without being read their rights. [When we report such arrests etc, we replicate what sources tell us. If confirmed we say so: on Sunday it was not possible to confirm such reports].

• Also on Easter Day, we learned that a previously wealthy Russian who had bought a property in West Palm Beach for $125 million from Donald Trump, who had previously acquired the palace in question for $45 million, was of course trying to dispose of it, and that Donald Trump had offered him $25 million for it! This information comes from local real estate sources.

THE LEGALISATION OF FINANCIAL CORRUPTION
The following analysis, published in International Currency Review, Volume 34, Number 2, on pages 2-37, will demonstrate even to those perverse US officials and bankers whose ears are blocked and who have eyes to see but refuse to see, that we have the full authority of due diligence and proper professional analysis behind us – plus the necessary clout to have published what follows in our journal, the latest issue of which is now resident with governments and their structures, as well as with central banks, treasury departments, international institutions, intelligence agencies, and other subscribing official and private sector organisations and policymaking environments.

The ICR financial analysis, entitled ‘The Legalisation of Financial Corruption: The Creation of Securitisation and Credit Default Swaps’ ( as Chapter One) and ‘The Legalisation of Financial Corruption: Descriptions of the Resulting Derivative Financial Frauds and Scams’ (Chapter Two), has been in the international public domain for a month now, and is based upon research and analysis specially conducted for this service by the sole US securities expert who is telling the truth and pulling no punches (an ACCURATE statement), Michael C. Cottrell, B.A., M.S.

Our website will be upgraded this year to enable us to publish charts and illustrations. At the moment, we do not have this capacity. Therefore, in Chapter Two, the references to the three charts are supplemented by Notes appended at the foot of the analysis, following the list of 163 References and Notes appended to the analysis itself.

These three Notes are NOT NUMBERED because numbering them would interfere with the existing hierarchy of references. To know more about the three charts explaining the scamming operation under Paulson’s TARP deception, which is the precursor of the Obama Administration’s even more convoluted TALF arrangements, see chart references: Figures One, Two and Three.

• CHART LEAFLET DISTRIBUTED IN VIRGINIA AND D.C:

These three charts have been distributed by a senior authority by hand in Virginia and Washington DC in the form of a four-page International Currency Review leaflet entitled:

‘Revaluing worthless, false ‘Structured Products’
(in order to refinance corrupt Fraudulent Finance operations in the process):

Deconstruction of the Paulson Treasury ‘TARP’ operation:

Three charts exposing official Fraudulent Finance
published in International Currency Review: VOLUME 34, NUMBER 2, MARCH 2009’.

The International Currency Review presentation is followed by the definitive world Glossary of Deceptive and Exotic Derivatives Terms [pages 39-87], including specially invented terminology consistent with this lie-factory, which serves the purpose of OBFUSCATION so as to mask what is happening in the derivatives sector behind a fog of jargon. This glossary is not published here.

REASON FOR PRESENTING THIS ANALYSIS
Finally, this analysis is presented here for two key reasons:

(1) To demonstrate that our professional conclusion and our recommendation that the debt-free Refunding Programme must proceed from London is based upon solid and accurate analysis, not just upon vapid arm-chair opinion; and:

(2) To make it impossible for those interested parties who are opposed to doing what has to be done the honourable and correct way, to deny that we know what we are talking about here which, believe it or not, we have heard is taking place.

• After nearly four decades of publishing this journal, it ought to be understood that we DO know what we are talking about, which is why governments and their structures, banks, central banks, international institutions, leading investors and certain intelligence agencies worldwide subscribe to International Currency Review.

• FACT: Indicative of its petty-minded revulsion at being told what it doesn’t want to know, last December the Paulson Treasury cancelled its sub. to International Currency Review, to which it has subscribed since the early 1970s, and asked for a refund, which we do not provide (see ‘How we do Business’ on our website)!!! (When you buy a pair of shoes at a shoe store, you don’t return to the store and ask for the money back on one shoe! You paid for two shoes and you keep the shoes).

THAT’S HOW STUPID THESE DEVIOUS PEOPLE HAVE BECOME. They don’t fancy having a serious journal lying around in their Library – as has been the case for nearly four decades – describing their behaviour as duplicitous and criminal: which it is.

If that wasn’t the case, we wouldn’t describe it as such, would we? The US Treasury is engaged in systematic Financial and Economic Terrorism against the American people and the Rest of the World. This is not a figment of our imagination: money-laundering is Financial Terrorism according to the Patriot Act legislation. Too bad that they make an exception for serial official misconduct.

• CHAPTER ONE:
THE LEGALISATION OF FINANCIAL CORRUPTION:
THE CREATION OF SECURITISATION AND CREDIT DEFAULT SWAPS

PART ONE: THE HISTORICAL BACKGROUND
The financial market environment that produced credit derivatives and other structured products was the cumulative consequence of the following:

• BCCI, which was deliberately imploded and its surpluses stolen;

• The Bush Task Group on Regulation of Financial Services;

• CAPCOM, CARLYLE, ENRON, and:

• The Gramm-Leach-Bliley Act of 1999.

A: BCCI: THE BANK OF CREDIT AND COMMERCE INTERNATIONAL
This bank was established as a partnership involving the Bank of America, with an initial fully paid-up capitalisation of $10,000,000 – $2,500,000 provided by the Bank of America for a 25% ownership share, in collaboration with Agha Gasan Albedi of Pakistan (1). The bank’s primary supporters, both politically and financially, were Sheikh Zayed bin Sultan Al-Nahyan, the eventual ruler of the United Arab Emirates (UAE), and Kamal Adham, known as ‘the godfather of Middle Eastern Intelligence’ (2).

Bank of America’s expansion into the Middle East was ‘justified’ on the basis that it took advantage of ‘Corbanking’ (= correspondent banking). The transference of funds into external Financial Center banks and the offering of access to master trusts, foreign exchange, depository services, and check-clearing through correspondent banking networks, enabled the Bank of America to gain a foothold into Islamic banking institutions (3). Pakistan became the clear choice for Western banks intending to establish Corbanking relationships – due to three characteristics:

(1): The reality of ‘Islamisation’;
(2): The existence in Pakistan of a highly skilled banking profession;
(3): The emergence of a new government committed to liberalisation, i.e., specifically to privatisation of national banks and the establishment of new investment banks (4). Islamic banking prohibits the payment of interest on money deposited with the bank, and usury. Additionally, the new government of Zulfikar Ali Bhutto committed itself to liberalising and privatising the country’s banks as a way to encourage foreign business enterprises into Pakistan. Habib Bank and the Muslim Commercial Bank provided links between the Islamic-oriented banks and the new liberalised investment banks that were established in the country (5).

During the Second World War, the United States used the Office of Special Services (OSS) and its Board of Economic Warfare (BEW) as primary instruments to harass and destroy the economic activities of Nazi Germany. The Central Intelligence Agency (CIA) employed the same strategies, through BCCI’s correspondent arrangements throughout the Middle East (6).

BCCI thus became a primary instrument by means of which the so-called ‘Reagan Doctrine’ was to be implemented. This US strategy was packaged for public consumption as an offensive aimed at financing and supporting anti-Communist insurgencies around the world, as President Reagan had ostensibly ‘decided’ that the Cold War had outlived its sell-by date.

[Addendum by the Editor: In reality, a much darker imperative was at work: 1989 was the 72nd anniversary of the Russian Revolution. In accordance with the secret logic of the ‘Rule of 72’, it was time for the ‘torch’ of Revolution to be handed back to the classic revolutionary power of all time, the United States. The United States’ aberrant behaviour as a pariah state reflects this].

THE RELEVANT REAGAN NATIONAL SECURITY DECISION DIRECTIVES
In the course of 1982 and 1983, President Ronald Reagan secretly issued three National Security Decision Directives (NSDD) for the purpose of steering US foreign policy:

• NSDD-32, NSDD-66, and NSDD-75.

• NSDD-32, issued in March 1982, declared that ‘that the United States would seek to neutralise Soviet control over Eastern Europe’, and authorised ‘the use of covert action and other means to support anti-Soviet organisations in the region’ (7).

• NSDD-66, issued in November 1982, declared that that it would be ‘US policy to disrupt the Soviet economy by attacking a ‘strategic triad’ of critical resources that were deemed essential to Soviet economic survival (8).

• Finally, in January 1983, NSDD-75 was issued, calling for ‘the United States not to just co-exist with the Soviet system, but to change it fundamentally’ (9).

NSDD-66 and NSDD-32 allowed the Reagan-Bush White House to undertake more drastic measures towards implementation of the ‘Reagan Doctrine’ by seeking any means necessary to secure low oil prices, that would damage the Soviet economy, while also arming and supporting Iraq and the anti-Soviet Mujaheddin Afghanistanis.

This operation utilised the BCCI financial conduit provided by the CIA and the National Security Council under Vice President George H.W. Bush Sr.. The war was costing the Central Intelligence Agency (CIA) more than $100 million dollars a year, and ‘necessitated’ funding Pakistan’s ISI (Inter-Services Intelligence) which was actively supporting the Mujaheddin against the Soviets (10).

The CIA engaged with more than 200 leading US corporations in this context, so that all these US corporations thereby provided cover for the operations of specifically CIA-sponsored and CIA-supported US corporate entities (such as Chemical Bank of New York) (11).

B: CHEMICAL BANK OF NEW YORK
Chemical Bank of New York was established in 1934, when Lehman Brothers, a Wall Street Investment firm, bought 20% of the Rockefeller shares in the Corn Exchange Bank of New York.

The Corn Exchange Bank was then merged into the Chemical Bank and became the Chemical Corn Exchange Bank – later re-named the Chemical Bank of New York.

On 20th November 1978, Chemical Bank established the Chemical New York Southwest, Inc., in Houston, Texas, as a loan production affiliate of Chemical Bank, New York, NY. The Directors of Chemical Bank also created ChemLease, Inc. as an equipment finance affiliate, which changed its name to Chemical Business Credit Corporation in January, 1980, with a brief to provide equipment and commercial finance services (12).

Chemical New York Corporation, a bank holding company, re-structured its international financing operations, in April 1983, and in doing so, promoted:

(a) Mr William B. Harrison, Jr., to head the US Corporate division encompassing all corporate lending in the United States;
(b) Mr Maurice H. Hartigan II, as the head of Account Management and Solicitation of Correspondent Banks, brokerage firms, and insurance companies;
(c) Mr Barry T. Linsley, as head of all Treasury and foreign exchange operations
in Europe and the Middle East; and:
(d) Mr William C. Pierce, as head of the Energy and Minerals Group (13).

In September 1984, Chemical Bank established a special Government Relations Office in Washington, D.C., to be known as Chemical New York, Inc., located at 2000 Pennsylvania Avenue, N.W.., although Chemical New York Inc.’s District of Colombia-registered office was at 1025 Vermont Ave., N.W. (14). Chemical New York purchased Texas Commerce Bancshares, owned by the family of James A. Baker III (President Reagan’s Chief of Staff) in 1987 (15).

The Federal Reserve Board approved an application, on 21st April 1988, from Chemical New York Corporation to be engaged through a subsidiary, Chemical Futures, Inc., in the execution and the clearance of futures contracts on a municipal bond index.

• Chemical Futures, Inc. was allowed by the Federal Reserve Board to solicit, execute, and clear futures contracts on major (international) commodities exchanges for non-affiliated persons, and would be allowed to serve as a futures commission merchant on the Chicago Board of Trade (16).

By 1996, Mr. Harrison had become Chairman and Chief Executive Officer (CEO) at Chase Manhattan Bank, New York, whereupon he successfully merged Chase Manhattan Bank with Chemical Bank for the sum of $35 billion US dollars. This merger incorporated the assets acquired by Chemical Bank when Chemical Bank merged with Manufacturers Hanover Corporation, in 1991. Thus, by the end of 1996, Chemical Bank/Chase Manhattan Bank had become the largest banking operation in the United States, with assets of over $235 billion (17).

• Chemical Bank and BCCI: Although BCCI only existed between 1972 and 1992, it paved the road for financial terrorism, the scourge which has been and continues to be exposed through our website and published reports, because it became the financial conduit for White House/CIA/NSC operations and lethal adventures following on from the circumstances outlined at the beginning of this report, which should be considered and used as a verbal flow-chart. BCCI was used for:

(1) The purchase of arms for the anti-Soviet Mujaheddin in Afghanistan, via the CIA [and DCI/Vice President G.H.W. Bush];
(2) Arms purchases by BOTH Iran and Iraq during their eight-year war, so that de facto the United States was one of the powers sustaining the war with arms sales; and:
(3) The self-destruction of the Soviet Union’s financial system, induced by means of bribery and an economic warfare operation involving CAPCOM, et al., Chemical Bank, et al., and the CIA (embracing the open-ended financial operations of free-wheeling CIA operatives, such as Leo Wanta, who was assisted by the much more resourceful and effective Chinese intelligence financier, Howie Kwong Kok)(18).

C: CAPCOM

Capcom was created by BCCI’s Treasury Department head, Ziauddin Ali Akbar, who capitalised the corporation with funds from BCCI and BCCI customers (19). Akbar registered a shelf corporation, on 26th April 1984, named Hourcharm Ltd., at his home address in London (England), and then, on 22nd May 1984 renamed it Capital Commodity Dealers, Ltd. before again renaming the company as Capcom Financial Services, Ltd., in July 1984 (20). Capcom was thereafter funded with additional monies, to an amount of £25,000,000 (approximately $37,000,000, in 1984 US dollars) (21).

Its speciality was changing its name and spawning offshoots. Specifically, Capcom Financial Services Ltd. then went through a number of variations:

• Capcom Securities, Ltd.;

• Capcom Inc.;

• Capcom Co., Ltd.;

• Chemical Futures, Inc.; and:

• Capcom Equities, Inc. (22).

• Capcom, Inc. was formed in Cleveland, Ohio, on 8th August 1976; in Boca Raton, Florida, on 26th August 1976; and in Washington, D.C., in 1981 (23).

Capcom Co., Ltd. operated/operates as a London-based Japanese Management Consulting Services firm which was established in 1991 (24).

Finally, Capcom Equities, Inc. (re-named as Everest Securities, Inc., on 19th March 1990), was set up on 12th August 1988, in Illinois, with its registered office in Plantation, Florida (25).

BCCI’s network of banks aided the movement of massive amounts of funds to arms suppliers in the United States Canada, China, and Soviet satellite countries, and provided the main mechanism for Capcom profits/losses from the purchase and sale of options derived from the Chicago Mercantile Exchange to flow on and off the BCCI books (26). This ‘options scheme’ facilitated the ‘loss’ of a minimum of between $250 million and $500 million within a Capcom/BCCI ‘black hole’ (27).

D: BUSH TASK GROUP ON REGULATION OF FINANCIAL SERVICES (1983-1985)
In December 1982, Vice President George H.W. Bush announced the formation of The US Task Group on Regulation of Financial Services to:

‘Review the Federal Government’s regulatory structure for financial institutions and propose any desirable legislative changes to the existing system’.

It was against that official background that, in a keynote speech addressing The American Assembly at Columbia University, on 8th April 1983, Bevis Longstreth, a Commissioner with the US Securities and Exchange Commission [SEC], made a detailed appraisal of the Financial Services Industry and regulations, the full text of which is given as Appendix Three with this presentation (28):

‘If a salesman… deals directly with the consumer of financial services – he would have to contend with various US and State financial services regulators. If the salesman is affiliated with a broker-dealer, he must become a registered (securities) representative [in order] to sell securities.

To qualify, he must meet detailed requirements with respect to character and competency; in recommending transactions he is subject to rigorous ‘suitability’ standards and generally to the NASD’s (National Association of Securities Dealers) Rules of Fair Practice. In addition, he is subject to the BLUE SKY laws of the States where his clients reside’ (29).

‘If the salesman wants to sell commodity futures or commodity options he must be qualified as an associated person of a futures commission merchant and conducts his activities in accordance with the regulatory scheme administrated by the Commodity Futures Trading Commission (the CFTC) and the National Futures Association’ (30).

‘If the salesman wants to sell insurance products he is subject to the jurisdiction of the state insurance regulators. If he wants to provide investment advice, with respect to securities, he must register as an investment adviser under the Investment Advisors Act and conform to its requirements, including state regulations’ (31).

‘If the salesman is employed by a bank, he can offer securities, manage pooled investments and render investment advice. Because a bank is not a broker or dealer and is exempted from the Investment Advisors Act, the securities laws do not apply. A different set of regulations apply, issued by bank regulatory authorities’ (32).

According to Mr. Longstreth, these multiple regulatory schemes were/are inefficient, ineffective, and, therefore, irrational. He believed that the time had come to ‘clear out this regulatory thicket in favour of a functional approach – based on identifying what aspects of function warrants regulation, and then design a regulatory agency to administer the regulation’ (33).

Mr. Longstreth addressed the ‘need’ to de-regulate ‘Pooled Funds’ (now known as HEDGE FUNDS), since the function of pooled funds is the management of the customer’s money based upon the supposed ease of management and economies of scale. At the time, in 1983, pooled funds were subject to the Investment Company Act of 1940 and the Securities Act of 1933 (34).

Additionally, banks may not sponsor mutual funds, but may organise common and collective trust funds that are very similar to mutual funds. However, banks are regulated by the Comptroller of the Currency’s Regulation 9, and in some cases, ERISA [Employee Retirement Income Security Act of 1974], which address conflicts of interest. Mr Longstreth questioned ‘whether any reason justifies preserving the differences in regulation of pooled funds’ over better management of the funds on behalf of the customer (35).

Another type of fund that Mr. Longstreth raised regulatory questions about was Money Market Mutual Funds and the implicit evasion of Regulation Q.

The issue of risk, in the case of Money Market Mutual Funds, may be slight, but the deposit may not be paid out at par (‘breaking the buck’).

Moreover, since passage of the Garn-St. Germain Act, the question of money market deposit accounts was made a matter of law (36).

Mr Bevis Longstreth also made out a case for the consolidation of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), on the basis that then-recent (1983) legislation had made the jurisdiction between the two agencies so close, that there was now little overlap. However, the term ‘commodity’ is also defined under the US Commodity Exchange Act as a ‘security’, and the many broker-dealers regulated by the SEC are also futures commissioned merchants subject to the CFTC regulations (37).

Mr. Longstreth concluded that the Glass-Steagall Act of 1933 had reflected a clear Congressional determination that avoidance of the ‘hazards’ and ‘financial dangers’ to banking that arise when commercial banks engage in investment banking, outweighed the advantages of competition, convenience or expertise that might support bank entry into the investment banking arena (38). …Yet, he elaborated, ‘the growing interdependence of financial intermediaries should give pause to policymakers tempted by the siren song of Adam Smith’.

Therefore, Mr Longstreth concluded that it was ‘my thesis that’:

(1) Market discipline can only assure soundness in an overall environment where institutions are PERMITTED TO FAIL;

(2) The linkages among financial intermediaries often are too extensive (and growing stronger and more numerous) to PREVENT ANY ONE FAILURE FROM TRIGGERING OTHERS;

(2) Therefore, the collateral consequences of failures often impose unacceptable costs on the financial system; and:

(4) Accordingly, to assure soundness, a new system of direct regulation is needed – a system broad enough to encompass all financial intermediaries, and flexible enough to enable the forces of full disclosure and market discipline to do their share of the job (39).

Finally, Mr Longstreth urged people to study the Federal Reserve Act as the most logical source of regulation and emergency funds, but noted that the Federal Reserve Act was too archaic and inflexible to do the necessary regulatory job (40).

The BUSH TASK GROUP (the 1983 task force) was established as the result of US Congressional hearings (1981-1983) regarding enforcement of The Corrupt Foreign Practices Act (1977) involving corporate reporting and accounting (41).

The Task Group was formed, in part, as a result of the SEC Chairman John S. R. Shad’s proposal for a one-year task force which would:

(1) Review the regulatory structures applicable to the securities, banking, thrift, and insurance industries in the United States;

(2) Propose that financial services should be regulated by functional activities rather than by outmoded industry classification;

(2) Recommend that overlapping, duplicative, and conflicting regulatory activities be consolidated, having identified the overlaps, duplications and conflicts; and:

(4) Recommend that ‘excessive regulation’ within and between agencies should be eliminated under new legislation (42).

The Bush Task Group endorsed proposals for the substantial reorganisation of the Federal regulatory system for depository institutions. The proposals would repeal the exemptions in the Securities Act of 1933 covering the registration of securities issued by banks and Savings and Loan Associations and would transfer to the SEC, the burden of administering periodic reporting, proxy solicitation, and short-swing profits provisions of the Exchange Act… .

Thus, these initiatives would consolidate the administration of securities disclosures requirements for banks and US Savings and Loan Associations, ostensibly resulting in more uniform disclosure financial disclosure to public shareholders and securities analysts and facilitating evaluation of comparative investment risks (43).

The Securities and Exchange Commission (the SEC) would become the repository for filings of all publicly held institutions, Savings and Loan Associations, and holding companies, as it is for all other publicly owned companies.

In early 1984, the SEC testified in support of legislation to facilitate the development of the private secondary mortgage market.

The resulting legislation was signed by President Reagan on 3rd October 1984, and was designed to encourage offerings of mortgage-backed securities by private issuers (44).

OSTENSIBLY ‘UNINTENDED’ CONSEQUENCES
The financial deregulation that resulted from the Bush Task Group of 1985 has led to an age of heightened power for the Federal Reserve System via the following mechanisms, contributing to the collapsing system now in evidence:

(1) The continued expansion (coverage) of Regulation K,
i.e., international banking and Edge Act corporations;

(2) The further expansion of free-market activities introduced under:
The Omnibus Banking Bill of 1980;

(3) The Competitive Equality Banking Act of 1987;

(4) The Electronic Fund Transfer Act;

(5) The Financial Institutions Reform, Recovery, and Enforcement Act of 1989;

(6) The Foreign Bank Supervision Enhancement Act of 1991;

(7) The Gramm-Leach-Bliley Act of 1999;

(8) The Legal Certainty for Bank Products Act of 2000; and:

(9) Title 31, United States Code, Subtitle IV (45).

The Bush Task Group Report on Regulation of Financial Services (Blueprint for Reform) presented on 26th and 27th March 1985 contained several recommendations concerning the deregulation of the banking industry, including:

• The Federal bank oversight supervisory agencies should be thinned out;

• A Federal Banking Agency should be created;

• The Securities Act of 1933 should be amended;

• Restrictions in the Investment Company Act of 1940 should be removed; and:

• The Trust Indenture Act of 1939 should also be amended.

The overall emphasis of this report was primarily to reduce the regulatory oversight of Federal supervision of national banks – thereby allowing the banks to gain access to the lucrative, but prohibited, non-banking financial services arena (46).

E: CARLYLE
The Carlyle Group, describing itself today as a ‘global private equity firm’, was established in 1987, in Washington, D.C., as a Private Partnership by Stephen L. Norris, and David M. Rubenstein (47).

The partnership then hired William E. Conway, Jr., Daniel A. D’Aniello, and Greg Rosenbaum. By 1995, Messrs Rubenstein, Conway, and D’Aniello reportedly collectively owned an approximate 50% interest in the group’s general partnership, with the California Public Employees Retirement System (CalPERS) as the only US institution owning a stake in the partnership (a 5.5% share, for $175 million, paid in 2001) (48).

In September 2007, Mubadala Development Company, ‘an investment group owned by the government of Abu Dhabi, which is part of the United Arab Emirates’, purchased a ‘7.5% share of Carlyle’s general partnership, for $1.35 billion’ (49). Wikipedia has named George H.W. Bush and former Secretary of State James A. Baker III as notable investors in Carlyle Group [sic!] (50).

In our reports, we have pointed out that the participants in this colossal ‘money machine party’ operated on the assumption that the bonanza would continue for ever – as is presupposed by the reality that the Depository Trust and Clearing Corporation (DTCC) boasted during 2008 that it had cleared $1.8 quadrillion of derivatives transactions.

This entity is owned by a group of US clearing banks, now including inter alia Deutsche Bank, which purchased the clearing facilities from JPMorganChase. It has guaranteed over $600++ trillion of derivatives ‘assets’ outstanding and, as more and more of these contracts reach maturity and fail, its guarantees are being called, with actual or prospectively DISASTROUS consequences.

It was the height of irresponsibility for the banks to have set up a corporation to guarantee these exotic transactions (clearing them = guaranteeing them). When the guarantees are called, they must be honoured (operation of law).

Notwithstanding the above, on 31st January 2007, William E. Conway, Jr., sent a letter to the firm’s ‘investment professionals worldwide’, which contained some revealing observations, in which Mr Conway attributed the continued rise of world stock markets to a glut of liquidity in the world financial system, describing the glut as reflecting:

‘… the availability of enormous amounts of cheap debt’.

Mr Conway’s letter elaborated: ‘This cheap debt has been available for almost all maturities, most industries, infrastructure, real estate and all levels of the capital structure’. He said that there is so much liquidity in the world’s financial systems that ‘lenders (even ‘our’ lenders) are making very risky credit decisions’.

‘And of course when [the liquidity bubble] ends, the buying opportunity will be once in a lifetime. But I do not know when it will end’. Mr Conway also expressed concern that the resulting US recession could become a global depression.

F: ENRON
Enron started life on 25th April 1930, as a component of a group of filed companies, operating in different US states, with the various DBA (‘Doing Business As’) companies having different names, such as the Northern National Gas Company. Enron was crossed-filed as a corporation in Texas on 10th December 1934, in Iowa on 26th August 1935, and in Delaware on 11th October 1934 (51).

Enron evolved into a component of the US intelligence community’s Energy Operations, with various agreements and contracts being secured from Middle Eastern parties resulting from the Allies’ victories in the Second World War.

In parallel, though, Enron also became an energy behemoth given its multiple cross-filed component corporations consisting of legal, chartered, and assumed names, i.e., Enron Corporation; Northern National Gas Company; Division of Internorth, Inc. (this name being registered three times); The Peoples’ Natural Gas Company; Division of Internorth, Inc.; Northern Natural Gas Company; Energy Systems Company; Division of Internorth, Inc.; Internorth, Inc.; HNG/Internorth; Enron Oil & Gas Company; EOG Resources, Inc.; HNG Fossil Fuels Company (52).

[The replicated/duplicated names represent separate companies,
registered and filed separately in different States].

Enron, et al., was/were exploited during the Reagan-Bush Administration, via CIA/DCI William Casey’s various ‘Enterprise Operations’, to move monies and materials around the world in order to meet the needs of ‘LASMO’, Amerada Hess, and other entities involved with the implementation of President Ronald Reagan’s Executive Orders NSDD-32, NSDD-66, and NSDD-75., referenced above (53). Enron was also deployed as a conduit for monies and jobs for the South American operations of the NSC-CIA during the George H.W. Bush Administration (54) [e.g., Falklands].

Between 1985 and 1987, Enron had set up four phoney offshore shell corporations to arrange sham oil trading contracts with Enron. Messrs. Mastroeni and Bourget were convicted and sentenced for defrauding Enron and for filing false tax returns – all under the sole supervision of Mr Kenneth Lay, Enron’s Chairman and Chief Executive Officer (55).

Enron’s offshore entities were (and in some cases still are) numerous and had/have multi-year, multi-million dollar contracts with such corporations as Kuwait Foreign Petroleum Exploration Co., El Paso Energy Partners, LP., BG-Enron, Enron Oil & Gas India Ltd. (EOGIL), Chaco, Amerada Hess Corp., and Trans Pacific Petroleum NL.(56) Amerada Hess forms a component part of the LASMO/Wilmington Trust operations of the 1990s (57).

We have already seen that Enron, et al. consisted of a large number of filings – winding up with 20 legal, chartered, and assumed DBA names filed in numerous States throughout the United States.

Enron’s top leadership, represented by Jeffrey K. Skilling and Kenneth L. Lay, were aggressive in securing debt to increase Enron’s capital to finance the expansion of its operations. At the same time, the conglomerate spawned over 3,500 offshore Special Purpose Entities or Vehicles (SPEs or SPVs) to hold assets that had been illegally moved from Enron’s balance sheet to the balance sheets of these so-called Special Purpose Vehicles.

The SPEs benefited from quite extraordinary ‘special exemptions from regulation’, applicable for EnronOnline, as specified in a 200-page attachment to the 11,000-page General Funding Bill passed by Congress on 15th December 2000 (58).

These SPE exemptions allowed Enron, et al., to own as little as three percent of the limited partnership with any outside interest partner, i.e., OSPREY Partnership, which generated $3.9 billion off-balance sheet debt – backed only with preferred stock – which was to be convertible into 50 million common shares in Enron (59).

EnronOnline was launched, on November 29, 1999, as the first web-based transaction system. This innovation allowed buyers and sellers to buy, sell, and trade commodity products globally – but only through Enron. The site allowed energy users to trade natural gas, electricity, and over 500 other products including credit derivatives, bankruptcy swaps, pulp, gas, plastics, paper, steel, metals, freight, and even TV commercial time.

This ‘off-the-floor’ trading platform soaked up tremendous volumes of Enron’s funds, since Enron was either the buyer or the seller of the aforementioned commodities and securities. Essentially, Enron was draining itself of its cash flow via EnronOnline’s trading activities. EnronOnline was closed down for online trading on 28th November, 2001 (60).

Given its huge debt burden, Enron’s survival hinged on its credit rating status. At the end of October 2001, both Moody’s and Fitch declared that Enron had been slated for review for possible downgrade (61). The possible downgrade would force Enron to issue millions of shares to cover the guaranteed loans, and thus devalue the stock further.

On 29th October 2001, the rumour spread on Wall Street that Enron was seeking one to two billion dollars’ worth of additional financing from the banks – a development that contributed to Moody downgrading Enron’s credit rating or senior unsecured long-term debt ratings, to Baa2, just above junk bond level. Standard & Poor’s downgraded Enron to BBB+ on 30th October 2001 (62, 63).

Enron had created myriad offshore entities [see above] that were used for planning and avoiding taxes, while increasing Enron’s reported ‘profitability’ and of course ensuring the accumulation of vast (Ponzi) untaxed profits offshore.

Enron’s ownership and management had full freedom of currency movement, internationally, enjoying total anonymity, so that losses were thereby hidden while off-balance sheet profits accrued to the companies and their ‘executives’.

The operations of these Special Purpose Enterprises (SPEs) made Enron appear more profitable than its actual financial condition warranted, and created a dangerous spiral that required Enron to perform better and better in each succeeding quarter – requiring deception to be employed in order to hide the obvious fact that Enron was haemorrhaging cash. Although the inside executives knew of this situation, the public did not, since Enron’s Securities Exchange Commission quarterly and annual filings did not reveal the true financial situation – as is required by law.

Arthur Anderson, LLP, Enron’s accounting firm, was well aware of this unlawful situation, but did nothing to correct it, and, in fact, participated (co-conspired, as a professional Accessory to the Fact) in structuring the offshore so-called Special Purpose Enterprises to enshroud the process from public scrutiny (64).

On 2nd December 2001, Enron filed for Chapter 11 bankruptcy (65). Robert E. Rubin, a US Treasury Secretary during the Clinton Presidency, telephoned the Treasury and spoke to the Undersecretary for Domestic Finance, Peter Fisher, about ‘what (Mr Fisher) thought of the idea’ of the US Treasury persuading bond-rating agencies to hold off reducing the freefalling Enron credit rating.

Such an intervention would help both Enron and Citigroup, one of Enron’s leading creditors. Quite properly, Mr Fisher told Rubin, who was Citigroup’s CEO, that the idea was not appropriate; and he took no action to assist Enron (66).

The US Treasury Secretary of the day, Paul O’Neill, the Commerce Secretary, Donald Evans, and the Federal Reserve Chairman Dr Alan Greenspan, all likewise revealed that they had received calls, on 2nd December 2001, from Enron’s CEO Kenneth L. Lay asking for help for Enron (67).

Thereafter, Enron, like BCCI and CAPCOM, was charged by the Securities and Exchange Commission and other authorities, with falsely reporting profits from commodity trading (68), leaving debts ‘off the books’, and overstating profits by $400 million plus, in its annual reports (69).

G: THE FINANCIAL SERVICES MODERNIZATION ACT OF 2000:
THE GRAMM-LEACH-BLILEY ACT (GLBA)

This Act updated the United States’ laws governing financial services by repealing two provisions of the GLASS-STEAGALL ACT, namely, Sections 20 and 32.

These two provisions prohibited the affiliation of commercial and investment banking firms, and limited officer and director interlocks between them (70). GLBA overrides restrictions in the Bank Holding Company Act (BHC Act), and the limitation on bank holding companies to engage in the insurance business (71).

The Act created a new ‘financial holding company’ category under Section 4 of the Bank Holding Company Act. Such holding companies can engage in a statutorily provided list (menu) of financial activities, including insurance and securities underwriting and agency activities, merchant banking and insurance company portfolio investment operations (72). Activities that are ‘complementary’ to financial activities were/are also authorised.

The non-financial activities of firms predominantly engaged in financial activities (at least 85% financial) are grandfathered for at least 10 years, with a possibility for a five-year extension (73).

The expanded ranges, according to certain testimony before a Congressional Committee, allow for technological advances and for meeting the needs of wholesale and retail customers (74).

Additionally, the Federal Reserve Board was authorised to be the umbrella regulator for financial holding companies, since GLBA allows financial services firms to engage in merchant banking (75).

This activity placed American banks on a footing similar to their European counterparts. European financial institutions engage in investment banking, advising, and negotiating in mergers and acquisitions activity, and in a variety of other services including securities portfolio management for customers, insurance, the acceptance of foreign bills of exchange, dealing in bullion, and participating in commercial ventures (76).

PART TWO: FNMA [‘FANNIE MAE’] AND FHLMC [‘FREDDIE MAC’]:

PART TWO – A:

THE FEDERAL NATIONAL MORTGAGE ASSOCIATION [FNMA]:
The Federal National Mortgage Association [FNMA] was first organised by the Reconstruction Finance Corporation (RFC) on 10th February 1938 with a capital stock of $10 million, owned by the RFC, and surplus of $1 million under the name National Mortgage Association.

It was rechartered under the Housing Act of 1954, and made a constituent agency of the Housing and Home Finance Agency.

The functions, powers, and duties of the Housing and Home Finance Agency were transferred to the Department of Housing and Urban Development on 9th September 1965. Effective from 1st September 1968, FNMA was now converted into a Government-sponsored private corporation (a Government-Sponsored Enterprise, or GSE) – with respect to its secondary market operations for home mortgages.

Additionally, under the same legislation, the Government National Mortgage Association (GNMA, or ‘Ginnie Mae’), was established to continue other functions, i.e., special assistance functions, management and specified liquidating functions, guarantees of mortgage-backed securities, and participation sales – supervised by the Secretary of Housing and Urban Development (HUD) (77).

On 1st September 1968, FNMA had capital consisting of privately-held common stock worth approximately $140 billion and preferred stock held by the Secretary of the Treasury worth approximately $160 billion. By 30th September 1968, FNMA had retired its preferred stock with proceeds from the sale of subordinated capital debentures, thus becoming an entirely private corporation, although a majority of its board of directors continued to be appointed by the US Secretary of Housing and Urban Development (HUD). Under the 1968 Act, by 1st May 1970, FNMA, with the concurrence of the Secretary of HUD, had resolved that at least one-third of FNMA’s common stock was or would be owned by persons or institutions in the mortgage lending, home building, real estate, or related businesses (78).

However, FNMA continued to operate as a Government-Sponsored Enterprise, being treated as such in the annual Office of Management and Budget documentation, with specific charter accords that made it subject to several possible forms of Federal supervision, although this supervision also provided it with several conspicuous advantages:

(1) The Secretary of the Treasury has the authority, which is entirely discretionary, to purchase obligations of the Federal National Mortgage Association up to a specified amount outstanding at any one time;

(2) The corporation’s common stock and its other securities were to be exempt from registration requirements and other laws administered by the Securities and Exchange Commission (SEC) to the same extent as securities issued or guaranteed by the US Government;

(3) FNMA was made exempt from paying any taxes to any State or local taxing authority except for real property taxes, but it pays full Federal corporate income taxes; and:

(4) The corporation’s obligations were to be issuable and payable via the facilities of the Federal Reserve Banks, which are paid by FNMA for their services (79).

It is to be noted that the FNMA’s notes and debentures (prior to 8th September 2008) were not Federal Government obligations nor are/were they Federally guaranteed by an agency of the Federal Government, even though the Government-Sponsored Enterprises’ operations were routinely incorporated in the annual Office of Management and Budget (OMB) presentations – in recent years, with yawning gaps shown in the summary accounts displayed in the documentation, as re-presented in Figures A and B on pages 16 and 17, to illustrate [refers to our journal: Editor].

However, FNMA obligations were/are guaranteed by an agency of the US Government, and having the Full Faith and Credit of the United States behind them, are mortgage-backed bonds issued by the FNMA guaranteed by the Government National Mortgage Association (80).

PART TWO – B:

THE FEDERAL HOME LOAN MORTGAGE CORPORATION [FHLMC]:
The Federal Home Loan Mortgage Corporation was established on 24th July 1970 under the Federal Home Loan Mortgage Corporation Act [FHLMCA] of the Emergency Home Finance Act of 1970 (12 U.S.C. 1430, Note) (81).

This entity was established for the purpose of strengthening the existing secondary markets in residential mortgages insured by the FEDERAL HOUSING ADMINISTRATION or guaranteed by the Veterans Administration, and assisting in the further development of secondary markets for non-Federally insured or guaranteed residential mortgages (82).

The entity is also authorised to purchase residential mortgages from members of the FEDERAL HOME LOAN BANK SYSTEM as well as other institutions whose deposits or accounts are insured by agencies of the US Government, US Federal Home Loan Banks, and the Federal Savings and Loan Insurance Corporation (83).

FHLMC is empowered to raise funds to purchase the aforementioned mortgages via the issuance of securities in the capital market. When the FHLMC was created in 1970, this process existed only for Government-insured or guaranteed mortgages, and it was expected that encouraging the growth of a secondary market for conventional mortgages would increase the effective supply of residential mortgage financing and make mortgage investments more attractive to markets (84).

In 1972, the FHLMC developed a computerised matrix to assist the underwriting of single-family conventional mortgages; in 1975, it introduced the Guaranteed Mortgage Certificate (GMC) (85).

By 1977, the US secondary market for conventional residential mortgages had matured, and by 1978, the Federal Home Loan Mortgage Corporation had obtained Congressional approval to begin developing a new purchase program for home improvement loans, i.e., adding new rooms, the rehabilitation or improvement of an older home, and/or the installation of energy efficient features (86). Other activities that have been developed in this context include the Renegotiable Rate Mortgage Purchase arrangement, which created a secondary mortgage market, and a purchase program for the Pledged Account Mortgage (PAM) (87).

Under this scheme type, so-called (Mortgage) Participation Certificates (PCs), also known as Pass-Through Securities, are provided in registered form only, having original principal balances of $100,000, $200,000, $500,000, $1,000,000, and $5,000,000.

The FHLMC sells these PCs through a group of securities broker/dealers as well as through the corporation’s own Marketing Department.

Each PC holder collects on the pooled mortgages, including prepayments and interest. The FHLMC guarantees punctual payment of interest and the full payment of principal (88).

Guaranteed Mortgage Certificates (GMCs) represent undivided interests in conventional (non-FHA-insured and non-VA-guaranteed) residential mortgages.

GMCs pay interest semi-annually, and principal once per annum in guaranteed minimum amounts. Any GMC certificate holder may call upon the FHLMC to repurchase the GMC at par (value) in 15, 20, or 25 years after the original date of issuance, depending upon the specific issue (89).

A program of FHLMC Swap transactions was instituted in 1981 to enhance the liquidity position of Federal Savings and the Loan Insurance Corporation-insured Savings and Loan Associations by replacing mortgage loans with guaranteed FHLMC Mortgage Participation Certificates (PCs) (90).

This scheme was to operate as follows:

• A single institution (individual seller swap transaction) or a group of institutions (multiple seller swap transactions) would sell mortgage loans to the FHLMC with an aggregate outstanding principal balance sufficient to meet the FHLMC’s pool formation requirement of $100 million.

• The FHLMC would sell PCs to these institutions backed by the same mortgages.

• The associations would continue to service the mortgage loans and pay a guarantee fee to the FHLMC. The PC rate would be keyed to the lowest coupon rate of the pooled mortgages. Gains or losses on the subsequent sale, purchase, or exchange of PCs emanating from these swap transactions would be accounted for on the books of the insured institutions (91).

The Federal Home Loan Mortgage Corporation remains a corporate instrumentality of the United States, but it is not considered a Federal agency. The FHLMC has historically had been exempt from all Federal, state, and local taxation.

On 18th January 1984, the US Congress repealed its Federal income tax exemption, effective 1st January 1985. However, the securities sold by Freddie Mac continue to be subject to Federal and State taxes (92). FHLMC was, until FY 2009, displayed in the [journal] section of the annual Office of Management and Budget documentation under the heading ‘Government-Sponsored Enterprises’.

PART THREE: THE EMERGENCE OF ‘STRUCTURED PRODUCTS’
So-called ‘Structured Products’ are defined as representing a pre-packaged investment strategy based on derivatives, a basket of securities, options, indices, commodities, debt issuances, foreign currencies, and swaps.

SEC Rule 434 defines structured securities as ‘securities whose cash flow characteristics depend upon one or more indices or that have embedded forwards or options or securities where an investor’s investment return and the issuer’s payment obligations are contingent on, or highly sensitive to, changes in the value of underlying assets, indices, interest rates or cash flows’ (93).

‘Structured Products’ have been described as arising from the ‘needs’ of companies that want to issue debt more cheaply – one method of achieving this objective being to issue a convertible bond. The convertible bond is a debt that, under certain circumstances, can be converted to equity.

Specifically, ‘convertible securities’ are securities, usually preferred shares or else debentures, that may be exchanged for a designated number of shares of another class, usually common shares, called the conversion securities (94).

The ratio between the convertible and conversion securities is fixed at the time the convertible securities are issued, and is usually protected against dilution (95).

This exchange for the potential higher return, providing that the investors are prepared to accept the lower interest rates, could in theory return a greater value to the investor over time.

Investment banks, under the Gramm-Leach-Bliley Act (The Financial Services Modernization Act), chose to append features to the basic convertible bond – such as increased income in exchange for limits on the convertibility of the conversion securities or principal protection.

These extra features were based upon the premise that investors could also use strategies that employed options and other derivatives – in a pre-packaged product. Thus, investors accepted lower interest rates on debt, and purchased new products with higher promised returns via option and derivative features.

• Derivatives are actually contracts that derive their value from the underlying or supporting securities instrument, and offer investment managers and traders numerous risk and return strategies that were traditionally unavailable or too expensive to implement (96).

• Derivative contract instruments involve futures, forward, and option contracts.

• A futures contract is an agreement to buy or sell a specific amount of a commodity or financial instrument at a particular price on a specific future date (97).

• A forward contract is similar to a futures contract, since it is an agreement to buy or sell the future delivery of a valued item at a specified price at a specified date (98).

However, this contract is not standardised and is traded Over-The-Counter (OTC) by direct contact between the buyer and seller, and is not marked to the market (marked-to-market), i.e., there is no interim cash flow between the parties (99).

Additionally, forward contracts embrace credit risk, since either party may default at the contracted time and price due to the lack of a formal exchange to vet the creditworthiness of the parties (100).

An option contract is an agreement which the seller of the option grants the buyer the right to purchase (from, or to sell to), the seller, a designated (security) instrument at a specific price within a specified time frame (101). The seller is referred to as the writer, and the buyer’s payment is referred to as the option price or option premium.

Finally, when the option’s instrument is purchased or else sold, this transaction is referred to as exercising the option, and the price paid at the delivery of the option instrument is the strike price. The right to buy the option is a call option, and the right to sell the option is a put option (102). Options can also be written, or sold, on cash instruments or futures.

Combinations of derivatives and financial instruments create structures that have (had) significant risk/return and/or cost savings profiles.

Thus, ‘Structured Products’ are designed to provide investors with highly targeted investments correlated to their (the investor’s) specific risk profile, given the return requirements and market expectations as analysed by the investment bank.

The financial engineering tricke yields a ‘value’ for the derivative securities – based on combining the ‘underlyings’ (underlying security instrument) like shares, bonds, indices or commodities – with derivatives, to produce the projected values of the options, forwards, and swaps (103).

The process of hedging with futures is a bond or investment bank portfolio manager’s method of counteracting the risk involved in holding long term debt instruments, since derivatives are not disclosed on the balance sheet, due to their short-term nature (104). Swapping futures that have cash-streams gives the appearance of containing any risk of default of the debt instrument.

Moreover the issuers can avoid any SEC disclosure, since these contracts have not been required to be disclosed on their financial statements. For instance, in 1996, Wall Street traded $500 billion in Repos and $200 billion in currency and interest rate swaps every day, without disclosure (105).

• A Mortgage-Backed Certificate (MBC) is a ‘Structured Product’ that is backed by mortgages.

Such MBCs are issued by both the Federal Home Loan Mortgage Corporation, and the Federal National Mortgage Association. Other types of such certificate are guaranteed by the Government National Mortgage Association.

Investors in these instruments receive payments for the interest and principal paid on the underlying mortgages. Until the 7th September 2008, Mortgage-Backed Certificates and the secondary mortgage market was meant to have helped (in theory, at any rate) to keep mortgage money available for home financing purposes (106).

• A Collateralized Debt Obligation (CDO or CBO) is another type of ‘Structured Product’, comprised of investment-grade bonds backed by a pool of variously rated bonds, including junk bonds. CDOs represent different degrees of credit quality, rather than maturities. Underwriters of CDOs package a sizeable and diversified pool of bonds, including high-risk, high-yield junk bonds, which are then separated into TIERS.

Typically, the top tier represents the higher quality collateral (paying the lowest interest rates), the middle tier is backed by riskier bonds (i.e., bonds paying a higher interest rate), and the bottom tier represents the lowest credit quality with no fixed interest rate (paying residual interest payments – that is, money left over after the other tiers have been paid out) (107).

• A Collateralized Mortgage Obligation (CMO) is a mortgage-backed bond that separates mortgage pools into different maturity classes, called tranches.

This type of ‘Structured Product’ applies income from payments and pre-payments of principal and interest from the mortgages in the pool in the order that the CMO pays out. Tranches pay the income stream in different rates of interest with maturities from a few months to 20 years.

CMOs are issued by FREDDIE MAC and other private issuers, and they are backed by Government guarantees or by other top-grade mortgages with AAA ratings. However, if mortgage rates drop sharply, the resulting flood of refinancings of mortgages could cause pre-payments to soar; and in these circumstances, CDO tranches will be repaid before the expected tranche maturity (108).

• Collateralized Debt Obligations Cubed (CDO-CUBED) are so-called special-purpose vehicles or entities with securitised payments in the form of tranches. CDO-CUBED are backed by a pool of Collateralized Debt Obligation Squared (CDO-SQUARED) tranches. CDO-CUBED allow the banks to resell the credit risk that they have taken once again, by repacking their CDO-SQUAREDs (109).

• A CDO-SQUARED is a CDO in which the collateral portfolio or reference portfolio consists of other CDO tranches (110).

• Yet another ‘Structured Product’ is the Credit Default Swap (CDS), an instrument that was first developed in the late 1990s for bonds, loans, and similar instruments related to bank transactions. Within a CDS, one party (the protection buyer) buys protection on the credit or risk of default, and the other party or counter-party is the seller (the protection seller), who sells the credit protection.

The primary ‘benefit’ of the Credit Default Swap is its power as a new source of risk distribution – since it frees up regulatory capital, which facilitates additional business. Payout is linked to a credit event (default) and to the performance of a reference entity (i.e., the underlying obligor), not to a specific bilateral trade transaction. Interestingly, since there is no transfer of ownership of the underlying asset, the CDO tool solution can be cheaper and more flexible than an assignment of the underlying asset (111). These are the formal features of these exotic instruments.

PART FOUR: THE U.S. TREASURY SEIZES FNMA AND FHLMC
On Sunday, 7th September 2008, in the context of the exposures of massive financial fraud and meltdown revealed by this service, the (former) US Treasury Secretary, Mr Henry M. Paulson Jr., announced plans to take control of Fannie Mae (FNMA) and Freddie Mac (FHLMC), to replace the companies’ Chief Executives, and to provide up to $200 billion in capital to restore the enterprises or agencies to ‘financial health’ (112).

Paulson noted that more than $5 trillion of debt and mortgage-backed securities issued by Fannie and Freddie is owned by central banks and other investors worldwide.

He elaborated: ‘Failure of either of them would cause great turmoil in our financial markets here at home and around the globe’ (113).

The seizure transferred directly into the US Government’s hands control of the bulk of the secondary home mortgage market, and assumed direct responsibility for ‘solving the housing crisis’. It marked the total failure of the public-private experiment that was developed to create a robust home ownership environment for Americans, via companies with private shareholders seeking to maximise profits with public oversight and fiduciary responsibility (114).

In its attempt to bolster the US mortgage market, the US Treasury was to buy on the open market at least $5 billion of new mortgage-backed securities issued by Fannie Mae and Freddie Mac (115). Accordingly, this arrangement protects the investments of bondholders, including mutual funds that hold huge amounts of debt issued by both corporations.

The Treasury’s intervention also specifically assisted those investors such as Pacific Investment Management Company, the substantial Newport Beach, CA, bond manager, that had only recently purchased large amounts of mortgage-backed bonds.

Initially, Treasury was to purchase $1 billion of preferred shares in both of the former Government-Sponsored Enterprises. The preferred shares were to yield 10% and were to be senior to those issued earlier – thus giving the Government the first right to receive dividends.

The US Treasury was also to receive warrants that give the Government the right to a 79.9% share for a nominal amount.

The US Treasury further pledged to provide up to $200 billion to the companies so that they may survive despite heavy losses on mortgage defaults (116).

However, existing common shareholders would suffer a dilution of their shares and earnings if the Government exercises its warrants.

The preferred shareholders may fair better, since the Office of Thrift Supervision has stated that roughly 2% of the 829 companies that it regulates have a concentration in common or preferred shares of Fannie Mae or Freddie Mac surpassing 10% of their Tier 1 capital.

Regulators say they will work ‘to develop capital-restoration plans ‘to resolve this issue’’ (117).

The Treasury has imposed Conservatorships on the Federal National Mortgage Association (FNMA) and upon the Federal Home Loan Mortgage Corporation (FHLMC), with control and supervision of day-to-day operations to be provided by the Federal Housing Finance Agency, which is designated as the ‘regulator’ of the two entities.

This required the CEOs of Fannie Mae and Freddie Mac to step down, and the replacement of the firms’ Boards of Directors. Additionally, dividends on common and preferred stock were eliminated at both the enterprises. The entities could increase their guarantee mortgage-backed securities holdings without limits, and could still buy replacement securities for their portfolios (118).

Another aspect of this seizure was that the enterprises/agencies were provided with a back-stop credit facility. Secured loans were to be made available on an ‘as needed’ basis until the end of 2009, to be based on available collateral to match the requested loan. Loans were to be funded directly from the General Fund at the Federal Reserve Bank of New York. Such loans would not be extended with maturities beyond 31st December 2009 (119).

The US Treasury’s scheme limited the size of each of these enterprises’ mortgage portfolios to a maximum of $850 billion as of the end of 2009. Currently, the portfolios own or guarantee about $5.3 trillion in mortgages and related securities.

Effective beyond 2009, the Treasury intends the enterprises’ mortgage holdings to shrink by about 10% a year until each entity reaches $250 billion (120).

CHAPTER TWO:
THE LEGALISATION OF FINANCIAL CORRUPTION: DESCRIPTIONS OF THE RESULTING FINANCIAL FRAUDS AND SCAMS

DERIVATIVE SCAM METHODOLOGY:

MBS-CDO-CDS LOAN ORIGINATION
Loan origination begins with a prospective home buyer and with a valid mortgage seller, i.e., an individual makes an application for a mortgage loan from a mortgage bank. Upon the appropriate financial investigation, the applicant is approved as the mortgage borrower. A mortgage loan is a debt instrument giving conditional ownership of an asset, secured by the asset being financed.

The borrower gives the lender a mortgage in exchange for the right to use the property while the mortgage is in effect, and agrees to make regular payments of principal and interest. The mortgage lien is the lender’s security interest and is recorded in title documents in US public land records (UCC1). A mortgage involves real estate and is a long-term debt, normally 25-30 years (121).

Originally, mortgages were written exclusively as fixed-rate fully amortizing loans, but they have evolve dinto loans that are more flexible. Recent innovations in the packaging of mortgage loans for resale in the Secondary Mortgage Market to investors have helped to create a national market for mortgage lending and a wide variety of synthetic financial instruments (122).

The mortgage issuing bank executes and lodges a UCC1 at the appropriate office of public records in the local court house department (in the United States) as a matter of public information and also legal authority. The mortgage lien (UCC1) is subject to a code of US legislation governing various commercial transactions, including the sale of goods, banking transactions, secured transactions in personal property, and other matters that are designed to bring uniformity to these areas in the legislation of the various states that have adopted the Uniform Commercial Code (123).

The Mortgage Note is a written promise to repay a mortgage loan plus interest. This gives the lender a security interest in the mortgage property. The Mortgage Note is the Promissory Note stating the principal amount due, the rate of interest, and the terms for repayment of the funds advanced. The borrower signing the Note, and any cosigners, are personally liable to repay the debt – and are detailed in the UCC1 (124).

US Federal or private insurance programs that protect mortgage lenders against the default risk generally require mortgage insurance. The mortgage insurance premium is paid by the borrower. Federal insurance coverage is administered by the Federal Home Loan Housing Administration, and private mortgage insurance programs are administered by private insurance companies. Private mortgage insurance is provided by specialised insurance companies (125).

The mortgage banker originates mortgages for resale to investors, and derives income much like a merchant banker – via origination fees and servicing income.

Loans are sold in one or two ways: (a) By private placement of whole loans or pools of loans with a single investor, typically an institutional investor, such as an insurance company; or elee: (b) by issuance of securities that are backed by mortgage loans (126). [Note: The originating and early stages of the process are illustrated in the first chart, Figure One, not shown here].

INSTITUTIONAL ORIGINATION, SALE AND RESALE OF MBS, CDS & CDOs:
In this type of scam [Figure 2 in our printed edition], the investment banker (or firm) acts as the underwriter or agent serving as intermediary between the issuer (the mortgage banker, et al.) of the securities, and the investing public.

• A firm-commitment underwriting occurs when the investment banker, either as manager or participating member of an investment banking syndicate, makes outright purchases of new securities from the issuer and distributes them to dealers and investors – profiting on the spread between the purchase price and the public offering or selling price (127).

• A best effort offering is a conditional arrangement whereby the investment banker markets a new issue without underwriting it, acting as an agent rather than principal and taking a commission for whatever volume of securities the banker succeeds in marketing to parties who may not have performed adequate due diligence.

• Another type of conditional arrangement is referred to as a standby commitment, when the investment banker serves clients issuing new securities by agreeing to purchase for resale any securities not purchased by existing holders of rights (128).

The secondary mortgage market is defined as the buying, selling, and trading of existing mortgage loans and mortgage-backed securities that have been underwritten and packaged for resale – to provide liquidity for the originating lending institution (129). Mortgages originated by the lenders are purchased by Government agencies (namely, the Federal Home Loan Mortgage Corporation and the Federal National Mortgage Association), and by investment bankers, (such as (formerly) Lehman Brothers, and by Goldman Sachs, etc.).

These agencies and bankers, in turn, create pools of mortgages, which they repackage as mortgage-backed securities, called Pass-Through Securities or Participation Certificates, which are then sold to investors. Thus, the secondary mortgage market encompasses all activity beyond the Primary Market, which is between the homebuyers and the originating mortgage lender (130).

• Pass-Through Securities represent pooled debt obligations repackaged as shares, that pass income from debtors through the intermediary, to investors. The most common type of so-called pass-through is a bog standard Mortgage-Backed Certificate, usually Government-guaranteed, where homeowners’ principal and interest payments pass from the originating bank or Savings and Loan through a Government agency or investment bank to investors, net of service charges. Other types of assets marketed via pass-through are auto loans and/or student loans (131).

• Additionally, Participation Certificates represent an interest in a pool of funds or in other instruments, such as a mortgage pool (132).

• The underwriting process of creating a pooled debt obligation is the business of investment bankers, who usually form an underwriting group, (a purchase group or syndicate), to pool the risk and assure ‘successful’ distribution of the issue.

The syndicate operates under an agreement among underwriters. The underwriting group appoints a managing underwriter or lead underwriter, who/which is usually the originating investment bank/ banker that prepares the plan details and the SEC registration material (133).

The underwriting agreement represents the underwriters’ commitment to purchase the securities, and gives details of the public selling price, the underwriting spread, including all discounts and commissions, the net proceeds to the issuer, and the settlement date. The issuer agrees to pay all expenses incurred in preparing the issue for resale, including the costs of registration with the SEC and of the prospectus, and agrees to supply the managing underwriter with sufficient copies of both the preliminary prospectus and the final, statutory prospectus (134).

The issuer guarantees:

(1) To make all required SEC filings and to comply fully
with the provisions of the Securities Act of 1933;

(2) To assume responsibility for the completeness, accuracy,
and proper certification of all information in the registration statement and prospectus;

(3) To disclose all pending litigation;

(4) To use the proceeds for the purposes stated;

(5) To comply with State securities laws;

(6) To work to get listed on the agreed-upon exchange; and

(7) To indemnify the underwriters for liability arising out of omissions
or misrepresentations for which the issuer had responsibility (135).

• Figure 1 on page 25 [of the journal: see Special Chart Note below] provides a flowchart to illustrate how these MBS/CDO/CDS scams are structured and develop, identifying the primary institutions involved. This chart is reproduced exactly as supplied to us by our expert adviser, Michael C. Cottrell, B.A., M.S., with visual enhancement by the Editor of this service.

• Figure 2 on page 27 [of the journal: see Special Chart Note below] ‘zooms’ in on the right-hand component of Figure 1, showing how the institutional resale of the MBS/CDS/CDOs is scammed internationally, showing the underwriting, issuing, selling, and the purchasing of the mortgage-backed securities of FNMA and FHLMC via pooled securitisation.

As noted, prior to 8th September, 2008, FNMA and FHLMC were both Government Sponsored Enterprises (GSEs) which owned or guaranteed approximately 50% of the mortgage market in the United States, aggregating over $5 trillion of outstanding debt and mortgage-backed securities issued by them (136). As publicly traded securities, these GSE-issued mortgage-backed securities were purchased by other mortgage originators, securitised by them, and ‘re-sold’ by them as mortgage-backed securities to other investors (137).

The referenced world-wide institutions shown in Figures 1 and 2 – Goldman Sachs, A.I.G., Lehman Brothers, Morgan Stanley. Citibank. JPMorganChase, Wachovia, Deutsche Bank, Barclays Bank, Bank of England, NatWest [RBS], Coutts [RBS], General Motors, Ford Motor Company and General Electric – purchased, re-packaged, and re-sold the various ‘Structured Products’ under the guise of offsetting the risks of the ‘challenging market environment’, according to numerous financial experts who ventilated on this subject between 2001 and September 2008.

Even after the credit freeze that developed following the measures taken in mid-September 2008 in the United Kingdom which resulted in the placement into ‘lockdown’ of $6.2 trillion of LOAN funds plus $7.8 trillion of sovereign funds for the Settlements (= $14.0 trillion) referenced in our website reports – thereby depriving the carousel of its illegally exploited ‘real’ cash base – there have been innumerable attempts to induce the public to view ‘Structured Products’ in a positive light.

For instance, on 5th November 2008, The Wall Street Journal displayed more than one full page describing the advantages and values of ‘Structured Products’ and why investors should continue to buy them, promoting them as tools to help manage volatility and to protect portfolios (138).

WALL STREET JOURNAL COMMENTS ON ‘STRUCTURED PRODUCT’ TYPES
Regarding the standard types of ‘Structured Products’, the article stated that some use leverage to enhance upside returns and may or may not cap (limit) the upside.

• Absolute Return Notes: Pay returns if the underlying (security) goes up or down but are not traded outside a specific range (139).

• Buffered Return Enhance Notes:
Provide downside protection if the ‘underlyings’ do not breach a preset barrier, while Reverse Convertible Securities pay handsome coupons and the performance upside of a stock; but if the stock breaches a downside price, they will convert into that stock’s shares (140).

There are also Partial- or Fully Principal-Protected Notes, which guarantee that some or all of an investor’s principal will be returned at maturity even if the underlying performs poorly (141).

The Wall Street Journal article elaborated:

‘Issuers of Structured Products are large investment banks or affiliated firms in the United States or around the world. Issuers may craft a structured investment that they believe would appeal to many investors, then sell these so-called ‘off-the-shelf’ investments’ through large, regional or independent broker/dealers, and/or financial planners. An issuer may also customize a single Structured Product tailored to a specific investor’s needs’ (142).

Additionally, the WSJ article concluded that ‘… one important aspect with structured investments is to understand the credit risk in the product, i.e., the risk that an issuer may not be able to honor its obligation to repay investors in the future is a risk inherent in many Structured Products…’ (143).

NEW DERIVATIVE SCAMMING LEGISLATION:
THE EMERGENCY ECONOMIC STABILIZATION ACT OF 2008

Public Law 110-343, also known as The Emergency Economic Stabilization Act of 2008, was signed into law by President Bush Jr. on 3rd October 2008.

Within this act was also enacted the Troubled Assets Relief Program (TARP) which authorised the US Secretary of the Treasury to spend up to $700 billion to purchase distressed assets. The Act stated that its purpose is: ‘To provide authority for the Federal Government to purchase and insure certain types of troubled assets for the purposes of providing stability to and prevent disruption in the economy and financial system and protecting taxpayers, to amend the Internal Revenue Code of 1986 to provide incentives for energy production and conservation, to extend certain expiring provisions, to provide individual income tax relief, and for other purposes’ (144).

The law authorised the Secretary of the Treasury to draw up to $250 billion for immediate use, and then required the President of the United States to certify when an additional $100 billion of funds are needed. Disbursement of the final $350 billion was subject to Congressional approval (145).

Mr Neel Kashkari was appointed on 6th October 2008, by Treasury Secretary Paulson, as the interim head of the Office of Financial Stability , formed under the legislation, and was tasked to administer the TARP program (146).

The Troubled Assets Relief Program has several administrative units:

(1) A Mortgage-backed Securities Purchase Program – to identify which of the troubled assets should be purchased, and the purchase mechanism to be used;

(2) A Whole Loan Purchase Program – to identify which types of loans should be purchased first from regional banks, and how to value them, since the banks are clogged with whole residential mortgage loans;

(3) An Insurance Program – to establish a viable scheme to insure troubled assets, including mortgage-backed securities and whole loans;

(4) An Equity Purchase Program – to purchase equity in a broad array of financial institutions; and

(5) A Home Ownership Preservation Scheme – to help US homeowners when TARP purchases mortgages and MBS securities, and other ‘Structured Products’ (147).

However, by 12th October 2008, it had become evident that TARP as described to Congress and as administered by the Office of Financial Stability could not be operated in accordance with the legislation and described above.

On 23rd September 2008, Treasury Secretary Paulson had told the US Senate Banking Committee that ‘some said we should just stick capital in the banks, take preferred stock in the banks. That’s what you do when you have failure, this is about success’(148). Mr Paulson also told lawmakers that it made more sense to jumpstart the frozen credit markets (frozen over, due to the MBS-CDS-CDO illiquidity) with ‘market measures’, by which he meant buying up assets rather than institutions (149). Then, within a few days, Mr Henry M. Paulson Jr. confirmed his intention to buy stakes in banks by asserting that: ‘We can use the taxpayer’s money more effectively and efficiently, get more for the taxpayer’s dollar, if we develop a standardized program to buy equity in financial institutions’(150).

The Treasury was the source of the US Federal Government’s plan, under the disreputable Bush II Administration, to buy up to $700 billion worth of illiquid Mortgage-Backed Securities (MBS) with the supposed intent to increase liquidity availability in the secondary mortgage markets and to reduce potential losses by financial institutions owning these securities (151).

TARP was sold to Congress on the basis that the US Treasury would spend the $700 billion on the frozen credit securities in a ‘reverse auction’ whereby financial institutions are invited to compete against each other in offering to sell their mortgage-backed securities at a low price.

Bonds for a single pool of mortgages are divided into more than a dozen tranches, with different seniority, different credit ratings, and different rules for payment.

The performance of the underlying mortgages (‘the underlyings’) varies greatly from one pool to another. It was against this background that Mr William Poole, a retired President of the Federal Reserve Bank of St. Louis, stated: ‘I am not aware that the Treasury Department presented any evidence on auctions that have been successful when they are used for assets that are so heterogeneous’(152).

THE TARP OPERATION AND MR KASHKARI
Within Public Law 110-343, Congress required the formation of a Congressional Oversight Panel to ensure the proper usage and expenditure of the TARP funds. (This development replicated and probably copied Mr Cottrell’s demand for the insertion of an Oversight Panel when it transpired early in 2008 that any transactions involving Leo/Lee Wanta could not be contemplated without such a safeguard – prior to the necessary and unavoidable severance of relations between Mr Cottrell and Wanta, publicised on our website in March 2008 and by this service).

The Interim Assistant Secretary for Financial Stability, Neel Kashkari, submitted an update on 8th December 2008, with respect to the oversight arrangements made for the Troubled Assets Relief Program (153) (TARP). An appointed Oversight Panel Board selected the Federal Reserve Board Chairman, Dr Ben Bernanke, to be Chairman of the Oversight Board. The legislation required the Board to meet once a month, but it met five times in the space of two months, with numerous staff calls between meetings. Additionally, the law required the appointment of a Senate-confirmed Special Inspector General to oversee the program (154).

The legislation also required the Government Accountability Office (GAO: previously the more appropriately named Government Accounting Office) to establish a physical presence inside the US Treasury to monitor the TARP.

The US Treasury duly provided workspace for the auditors within days of the President signing the law, and the Treasury Secretary, Mr Paulson, had his first call with the Acting Comptroller General, Mr Gene Dodaro, on Tuesday 7th October 2008. The Acting Comptroller General and his team met the US Treasury’s team for the first time on Thursday 9th October 2008.

Subsequently, Mr Kashkari participated in multiple briefings with the GAO and the respective staffs met almost daily for ‘program updates’, and to review contracts (155).

The GAO’s very conscientious staff met the Treasury’s team on Saturday 22nd November 2008, before their report was finalised. The GAO’s report provided a review of the TARP programs and progress – essentially a snapshot at the 60-day mark of this large and complex project (156).

The law required the US Treasury to publish a Transaction Report within two business days of completing each transaction. The US Treasury proceeded to publish four transaction reports – on 29th October 2008, 17th November, 25th November, and 26th November 2008 – covering the 54 transactions then competed (157).

The law also required the US Treasury to publish a Tranche Report to Congress within seven days of each $50 billion commitment that has been made.

The comprehensive Tranche Report must provide details on the following:

• The transactions undertaken to date.

• The impact of these transactions on the financial system.

• The challenges that remain to be addressed: plus:

• Additional measures that may be necessary to address those challenges.

The US Treasury published, to begin with, three Tranche Reports – on the 3rd November, 21st November, and 2nd December 2008 (158).

Further, the law required the Treasury to provide a detailed report on the overall program within 60 days of the first exercise of the TARP purchase authority.

That report was submitted to the Congress on 5th December 2008 (159). At this stage, Mr Kashkari stated in public that ‘we must remember that just over half of the money that was allocated to the Capital Purchase Program has been received by the banks’ (160).

On Monday 8th December 2008, the US Senate confirmed New York Prosecutor Neil Barofsky as the Special Inspector General within the Treasury Department who was responsible for auditing TARP. On that self-same day, the US Treasury Department released a statement notifying Congress that it had committed a total of $335 billion to financial-rescue programs since October 2008. This amount left $15 billion remaining in the first tranche of $350 billion approved by Congress (161).

HOW THE LEGISLATION ASSISTED THE FINANCIAL FRAUDSTERS:
THE PAULSON TREASURY’S TARP $700 BILLION PLATFORM SCAM

Figure 3 [of the journal: see Special Chart Note below] illustrates the process of taking the private mortgage, commercial mortgage, credit card loans, and/or any other fungible debt, and via the underwriting group or underwriting trust pool, and turning that debt into a securitised ‘Structured Product’ to be pooled and sold into the global institutional market place.

The boxes in the ICR charts indicating ‘Pool A-1’ etc. represent the securitised pools of mortgages, and other ‘assets’, and the various tranches of these ‘Structured Products’.

These tranches and/or pools are then sold on to the banks, investment banks, and ‘financial products’ companies for re-sale and/or re-packaging and then re-sale to international banks, investment banks, and corporations.

Treasury Secretary Henry Paulson’s TARP plan to obtain unlimited authority over $700 billion was premised on the basis that via a reverse auction, the structured products/derivatives could be purchased by the Treasury TARP group and re-packaged, via the new FNMA and FREDDIE MAC, and then re-sold at a profit.

BASED ON THE FALSE PRESUMPTION THAT THE ‘ASSETS’ HAVE VALUE
This operation assumed that the illiquid derivatives have a specific value or a market value.

Such an assumption is definitely false, since there is NO actual and specific asset that is directly attached to the structured product – given the obvious fact that the asset was split from the locally filed UCC-1 that defines who is the mortgagee and mortgagor, and who has legal claim to the asset once the mortgage or debt is paid in full.

• IN OTHER WORDS, holders of these fake, exotic ‘assets’ have no recourse to the original underlying source(s) of ‘real money’ funds.

SEPARATION OF THE ASSET AND THE LEGAL AUTHORITY TO CLAIM THE ASSET
This separation of the asset and the legal authority to claim the asset occurred during the financial securitisation process of pooling, re-pooling, and re-packaging – supposedly (for international public consumption) to spread the risk of default to as many holders as possible – thus furthering the development of the Credit Default Swap derivatives market.

The typical CMO (‘Structured Product’) has ‘A’, ‘B’, ‘C’, and ‘Z’ tranches, representing fast pay, medium pay, and slow pay bonds plus a tranche that bears no coupon but receives cash flow from the collateral remaining after all the other tranches are satisfied (see previous discussion) (162).

More sophisticated CMOs have multiple ‘Z’ tranches and a ‘Y’ tranche incorporating a sinking funds schedule (163).

Figure 3 illustrates a non-public TARP program, prior to the appointment of Mr. Kashkari, et al. and the Congressional Oversight Panel restrictions.

Under the guise of a government ‘bailout’ theme and marketed to Congress and the US general public as being for the purpose of buying the illiquid asset-backed securities, Treasury Secretary Paulson intended to operate TARP as a Trading Platform – that is to say, as an International Hedge Fund benefiting from US Government Guarantees – from within Treasury (behaviour which has hitherto been completely illegal) to purchase, at a higher price than necessary, the CDO, CDS, MBS etc. derivatives from the very entities and banks that have directly contributed to the mass-production and sale of these toxic illiquid ‘Structured Products.

The purpose of this Trading Platform was/is therefore to use public funds to quantify the value of the toxic products, and to overpay the elitist holders, i.e.: the likes of leading Fraudulent Finance specialists, viz: AIG, CITIBANK, GOLDMAN SACHS, CARLYLE CAPITAL, CARLYLE GROUP.

BECAUSE, once the ‘Structured Products’ had been valued, via reverse auction, and purchased, Paulson and his friends would then be able to re-pool and re-package the relevant derivatives via FNMA and FHLMC for re-sale into the demonstrably gullible marketplace, where the phrase ‘due diligence’ appears to be foreign to many operators in the market – thereby repeating the process for as long as possible.

Profits from this Trading Platform could then be transferred to an unknown Master Custodial Account set up within the external international monetary system – such as a receptacle set up for this purpose by President George W. Bush Jr. in Benin, West Africa – without the knowledge of, or any accountability to, the American Taxpayer, the US tax authorities, or anyone else.

CONCLUSION:

Thus, public funds were to be used yet again to generate private accruals, while a massive fraud would be concealed under cover of the necessity of ‘managing’ the illiquidity of the ‘Structured Products’ and regaining credit flow within the international banking system. See the flow charts: Figures 1-3 in the International Currency Review presentation [see Special Chart Notes below]

References and Notes:

General Note: Some use has been made of references captured via Wikipedia, an on-line ‘do-it-yourself’ encyclopaedia. The Editor is not enamoured of these ‘communising’ websites which seek to make information universally available, given that a hidden agenda may apply in some cases. For instance, a certain US platform allows its ‘users’ to upload copyrighted material and then says that it is compliant with US legislation if the illicit upload of the copyrighted material is pointed out to them: in other words, the entity specifically claims that it is not required to perform due diligence and has no duty of care with regard to infringements of copyright belonging to others.

In that case, it is known that the object of the exercise is to steal the copyright material and to drive small publishers out of business. It is the Editor’s specific experience that alteration of errors on Wikipedia has been followed by the restoration of those errors. In the instances noted below, Mr Cottrell has ‘seen through’ Wikipedia to the original sources, which should be referenced should further research be intended.

01. Michael C. Cottrell, ‘Elite Power and Capital Markets’, (Master of Science Thesis, Mercyhurst College, 2001), page 81.
02. Ibid., page 81.
03. Cottrell, ‘Elite Power and Capital Markets’, page 80.
04. Cottrell, ‘Elite Power and Capital Markets’, page 80.
05. Cottrell, ‘Elite Power and Capital Markets’, page 80.
06. Cottrell, ‘Elite Power and Capital Markets’, page 79.
07. Cottrell, ‘Elite Power and Capital Markets’, page 83 (383).
08. Cottrell, ‘Elite Power and Capital Markets’, page 82 (384).
09. Cottrell, ‘Elite Power and Capital Markets’, page 82 (385).
10. Cottrell, ‘Elite Power and Capital Markets’, page 85 (407, 409, 410, 411).
11. Cottrell, ‘Elite Power and Capital Markets’, page 85.
12. Cottrell, ‘Elite Power and Capital Markets’, page 85 (414, 415, 416, 417).
13. Cottrell, ‘Elite Power and Capital Markets’, page 86 (418, 419).
14. Cottrell, ‘Elite Power and Capital Markets’, page 86 (420).
15. Cottrell, ‘Elite Power and Capital Markets’, page 86 (422).
16. Cottrell, ‘Elite Power and Capital Markets’, page 86 (424).
17. Cottrell, ‘Elite Power and Capital Markets’, page 86-87 (425, 426, 427).
18. Ibid., page 81.
19. Federation of American Scientists, ‘BCCI-CAPCOM’, Washington, D.C., 2008,
(available at http://www.fas.org/irp/congress/1992_rpt/bcci/21capcom.htm), Internet, page 2.
20. Ibid., page 2.
21. Ibid., page 2.
22. Cottrell, ‘Elite Power and Capital Markets’, page 87.
23. Cottrell, ‘Elite Power and Capital Markets’, page 87.
24. Ibid., page 87.
25. Ibid., page 87.
26. Cottrell, ‘Elite Power and Capital Markets’, page 88.
27. Ibid., page 88.
28. Bevis Longstreth, Securities and Exchange Commission Commissioner, ‘Open Letter to Bush Task Group on Regulation of Financial Services and Wirth Commission on Capital Markets’, Securities and Exchange Commission, Washington, D.C., 1983, (available for access at: www.sec.gov/new/speech/1983/040883longstreth), page 5.
29. Ibid., page 5.
30. Ibid..
31. Ibid..
32. Ibid., page 6.
33. Ibid..
34. Ibid..
35. Ibid., page 7.
36. Ibid..
37. Ibid., page 9.
38. Ibid., page 10.
39. Ibid., page 12.
40. Ibid., page 13.
41. John S. R. Shad, Chairman, ‘50th Annual Report of U.S. Securities and Exchange Commission for the fiscal year ended September 30, 1984’, U.S. SEC Library, Washington, D.C., 1984, (available at http://www.sec.gov/about/annual_report/1984), Internet, page 42.
42. John S. R. Shad, op. cit.
43. Ibid., page 42.
44. Ibid., page 42.
45. Cottrell, ‘Elite Power and Capital Markets’, page 124.
46. Cottrell, ‘Elite Power and Capital Markets’, page 124.
47. Wikipedia, Dan Brody, ‘The Iron Triangle: Inside the Secret World of the Carlyle Group’, John Wiley & Sons, 2003, ISBN 0-471-281085.
48. Wikipedia, John Mintz, ‘Founder Going Beyond the Carlyle Group.’, The Washington Post, 9th January 1995, F9.
49. Thomas Heath, ‘Pair of Proposals Take Aim at Carlyle Group’, The Washington Post, 15th February 2008, (at http://www.washingtonpost.com/wpdyn/content/article/ 2008/02/14AR2008021403573.html).
50. Wikipedia, ‘Carlyle Group’, (at http://en.wikipedia.org/wiki/Carlyle_Group), page 1.
51. Cottrell, ‘Elite Power and Capital Markets’, page 169 (10, 11, 12, 13).
52. Cottrell, ‘Elite Power and Capital Markets’, page 169 (14, 15, 16, 17, 18, 19, 20, 21, 22).
53. Cottrell, ‘Elite Power and Capital Markets’, page 169.
54. Cottrell, ‘Elite Power and Capital Markets’, page 169.
55. Cottrell, ‘Elite Power and Capital Markets’, page 170 (23, 24).
56. Cottrell, ‘Elite Power and Capital Markets’, page 170 (25).
57. Cottrell, ‘Elite Power and Capital Markets’, page 170.
58. Cottrell, ‘Elite Power and Capital Markets’, page 170 (27, 28, 29).
59. Cottrell, ‘Elite Power and Capital Markets’, page 170 (29, 30).
60. Wikipedia, ‘Enron: Enron Creditors Recovery Corporation’, Wikipedia Foundation, Inc., 2008, (available at http://www.wikipedia.org/enron/enrononline), Internet, page 6.
61. Wikipedia, ‘Enron’, Alex Berenson and Richard A. Oppel, Jr. ‘Once-mighty Enron Strains under Scrutiny’, The New York Times, 28th October 2001, page B1.
62. Wikipedia, ‘Enron’, Richard A. Oppel, Jr. ‘Enron seeks additional financing’, The New York Times, 29th October, 2001, page A8-A9.
63. Ibid., ‘Enron credit rating is cut, and its share price suffers; concern increasing on borrowing capacity’. (Moody’s Investors Service lowers credit rating), The New York Times, 30th October 2001, page C2.
64. Wikipedia, ‘Enron: Enron Creditors Recovery Corporation’, page 9-10.
65. US Government information. ‘Enron: Crouching Profits, Hidden Debt’, Diamar Interactive Corporation, 1996, (available at http://www.about.com), Internet, page 1.
66. Ibid., page 2.
67. Ibid., page 2.
68. Cottrell, ‘Elite Power and Capital Markets’, page 171 (32).
69. US Government Information. ‘Enron: Crouching Profits, Hidden Debt’, page 1: See also Note 65.
70. Cottrell, ‘Elite Power & Capital Markets’, page 134. (162), Richard M. Whiting, ‘Promises Finally Kept: Glass-Steagall Repealed…and More’, The Journal of Lending & Credit Risk Management, [Lexis-Nexis] (Robert Morris Associates/Information Access Company, 2000, accessed 27 December 2001) from:http://www.nexis.com/research; Internet.
71. Ibid..
72. Financial Services Modernization Act, CRA Amendments in the Gramm-Leach-Act,
(available from http://www.banking.senate.gov/conf/grmleach.htm) page 1.
73. Ibid..
74. Cottrell, ‘Elite Power & Capital Markets’, page 134. (166), Congress, Senate, Committee on Banking, Housing, and Urban Affairs. The Gramm-Leach-Bliley Act: Financial Services Modernization. 106th Congress, 1st Session, 24 and 25 February 1999, page 204-205.
75. Cottrell, “‘Elite Power and Capital Markets’, page 134. (167), Richard M. Whiting, ‘Promises Finally Kept: Glass-Steagall Repealed…and More’, The Journal of Lending & Credit Risk Management. [Lexis-Nexis] (Robert Morris Associates/Information Access Company, 2000, accessed 27 December 2001) from http://www.nexis.com/research; Internet.
76. John Downes, A.B., and Jordan Elliot Goodman, A.B., M.A., eds.,
‘Dictionary of Finance and Investment Terms’ s.v. ‘Merchant Bank’.
77. Glenn G. Munn, F.L. Garcia and Charles J. Woelfel, eds., ‘Encyclopedia of Banking & Finance’, 10th Ed., Chicago: Probus Publishing, 1994, (Electronic Portion, Orem: Infobase Press, 1994), s.v. Federal National Mortgage Association.
78. Ibid., page 1.
79. Ibid., page 1.
80. Ibid., p.2.
81. Glenn G. Munn, F.L. Garcia and Charles J. Woelfel, eds., ‘Encyclopedia of Banking & Finance’, 10th Ed., Chicago: Probus Publishing, 1994, (Electronic Portion, Orem: Infobase Press, 1994), s.v. Federal Home Loan Mortgage Corporation
82. Ibid., page 1.
83. Ibid., page 1.
84. Ibid., page 1.
85. Ibid., page 1.
86. Ibid., page 2.
87. Ibid., page 2.
88. Ibid., page 2.
89. Ibid., page 2.
90. Ibid., page 2.
91. Ibid., page 3.
92. Ibid., page 3.
93. Wikipedia, ‘Structured Product’, Securities Exchange Commission, (available at http://sec.gov/division/corpfin/forms/regc.htm#delivery), page 1.
94. Robert W. Hamilton, ‘Corporations’, 4th Ed., St. Paul, Minn.: West Publishing Company, 1997, page 593.
95. Ibid.. page 593.
96. Cottrell, ‘Elite Power and Capital Markets’, page 145. (248) Frank J. Fabozzi with T. Dessa Fabozzi and Irving M. Pollack, ‘The Handbook of Fixed Income Securities‘, 3rd Ed., New York: Richard D. Irwin, Inc., 1991, page 669.
97. Cottrell, ‘Elite Power and Capital Markets’, page 145 (249) Downes, ‘Dictionary of Finance and Investment Terms’, s.v. ‘Futures Contract’.
98. Cottrell, ‘Elite Power and Capital Markets’, page 145-146. (248) Frank J. Fabozzi with T. Dessa Fabozzi and Irving M. Pollack, ‘The Handbook of Fixed Income Securities‘, 3rd Ed., New York: Richard D. Irwin, Inc., 1991, page 670.
99. Cottrell, ‘Elite Power and Capital Markets’, page 146. (248) Frank J. Fabozzi with T. Dessa Fabozzi and Irving M. Pollack,‘The Handbook of Fixed Income Securities‘, 3rd Ed., New York: Richard D. Irwin, Inc., 1991, page 671.
100. Ibid,.
101. Cottrell, ‘Elite Power and Capital Markets’, page 146. (248) Frank J. Fabozzi with T. Dessa Fabozzi and Irving M. Pollack, ‘The Handbook of Fixed Income Securities‘, 3rd Ed., New York: Richard D. Irwin, Inc., 1991, page 670.
102. Cottrell, ‘Elite Power and Capital Markets’, page 146. (248) Frank J. Fabozzi with T. Dessa Fabozzi and Irving M. Pollack, ‘The Handbook of Fixed Income Securities‘, 3rd Ed., New York: Richard D. Irwin, Inc., 1991, page 672.
103. Wikipedia, ‘Structured Product’, page 3.
104. Cottrell, ‘Elite Power and Capital Markets’, page 146. (255) Roger Lowenstein, ‘When Genius Failed: The Rise and Fall of Long-Term Capital Management’, New York: Random House, 2000, page
105. Cottrell, ‘Elite Power and Capital Markets’, page 146. (256) Roger Lowenstein, ‘When Genius Failed: The Rise and Fall of Long-Term Capital Management’, New York: Random House, 2000.
106. Downes, ‘Dictionary of Finance And Investment Terms’, s.v. ‘Mortgage-Backed Certificate’.
107. Downes, ‘Dictionary of Finance And Investment Terms’, s.v. ‘Collateralized Debt Obligations’.
108. Downes, ‘Dictionary of Finance And Investment Terms’, s.v. ‘Collateralized Mortgage Obligations’.
109. ‘Collaterized Debt Obligation Cubed – CDO CUBED’, Investopedia, ULC, 2008.
110. ‘CreditFlux Dictionary’, CreditFlux Ltd., 2008, at http://www.creditflux.com/glossary; Internet.
111. JPMorgan Chase & Co., ‘Credit Default Swaps and Trade: A Useful Tool for Distributing Risk.’, JPMorgan Chase & Co., 2008.
112. James R. Hagerty, Ruth Simon, and Damian Paletta, ‘U.S. Seizes Mortgage Giants’,
The Wall Street Journal, 2008, September 8, 2008, page A1.
113. Ibid., page A15.
114. Ibid., page A15.
115. Ibid., page A15.
116. Ibid., page A15.
117. Ibid., page A15.
118. Ibid., page A15.
119. Ibid., page A15.
120. Ibid., page A15.
121. Thomas Fitch, ‘Dictionary of Banking Terms’, 3rd Edition, Hauppauge: Barron’s Educational Series, Inc., 1997, s.v. ‘Mortgage’.
122. Ibid..
123. Steven H. Gifis, Law Dictionary. 2nd Edition, Hauppauge: Barron’s Educational Series, Inc., 1984, s.v. ‘Uniform Commercial Code’ [UCC].
124. Thomas Fitch, ‘Dictionary of Banking Terms’, s.v. ‘Mortgage Note’.
125. Thomas Fitch, ‘Dictionary of Banking Terms’, s.v. ‘Mortgage Insurance.’.
126. Fitch, ‘Dictionary of Banking Terms’, s.v. ‘Mortgage Banker’.
127. John Downes, A.B., and Jordan Elliot Goodman, A.B., M.A., eds., ‘‘Dictionary of Finance and Investment Terms’, 7th Edition., Hauppauge: Barron’s Educational Series, 2006, s.v. ‘Investment Banker’.
128. Ibid..
129. John Downes, A.B., and Jordan Elliot Goodman, A.B., M.A., eds., ‘Dictionary of Finance and Investment Terms’, s.v. ‘Secondary Mortgage Market’.
130. Ibid..
131. John Downes, A.B., and Jordan Elliot Goodman, A.B., M.A., eds., ‘Dictionary of Finance and Investment Terms’, s.v. ‘Pass-Through Security’.
132. John Downes, A.B., and Jordan Elliot Goodman, A.B., M.A., eds., ‘Dictionary of Finance and Investment Terms’, s.v. ‘Participation Certificate’.
133. John Downes, A.B., and Jordan Elliot Goodman, A.B., M.A., eds., ‘Dictionary of Finance and Investment Terms’, s.v. ‘Underwrite’,
134. John Downes, A.B., and Jordan Elliot Goodman, A.B., M.A., eds., ‘Dictionary of Finance and Investment Terms’, s.v. ‘Underwriting Agreement’.
135. Ibid..
136. Blackrock, ‘Government Takeover of Fannie Mae and Freddie Mac’, Blackrock, Inc., 2008, (available at http://www.blackrock.org), p.1.
137. Ibid..
138. Lori Pizzani, ‘Structured Investment Products, Tools to Help Manage Volatility, Protect Portfolios’,
The Wall Street Journal, November 5, 2008, Dow Jones: New York, 2008, page C11.
139. Ibid..
140. Ibid..
141. Ibid..
142. Ibid..
143. Ibid..
144. Wikipedia, ‘Public Law 110-343’.
145. Wikipedia, ‘Troubled Assets Relief Program’, Summary of the Emergency Economic Stabilization Act of 2008 (http://banking.senate.gov/public/_files/latestversionEESASummary.pdf), United States Senate Committee on Banking, Housing and Urban Affairs, page 1.
146. Deborah Solomon, ‘Regulators Outline Steps to Quell Crisis’, The Wall Street Journal, Dow Jones: New York, October 7, 2008, page A6.
147. Wikipedia, ‘Troubled Assets Relief Program’, http://www.accountability-central.com/single-view-default/article/treasury-update-on-implementation-of-troubled-asset-relief-program-tarp-before-institute-of-intern, Internet, page 1.
148. Edmund L. Andrews and Mark Landler, ‘White House Overhauling Rescue Plan’,
The New York Times, October 12, 2008, http:///www.nytimes.com/2008/10/12/business, Internet, p. 3.
149. Ibid..
150. Ibid..
151. Wikipedia, ‘Emergency Economic Stabilization Act of 2008’, AP Article: ‘Rescue Plan Seeks $700 Billion to Buy Bad Mortgages’, (http://www.nytimes.com/aponline/business/AP-Financial-Meltdown.html) article by The Associated Press in The New York Times September 20, 2008.
152. Ibid., page 4.
153. Herbie Skeete, ‘US Treasury Interim Assistant Secretary For Financial Stability Neel Kashkari Update on The TARP Program’, Mondo Visione Ltd: London, 2008, available at: http://www.mondovisione.com/index.cfm/section=news&;action, page 1.
154. Ibid., page 2.
155. Ibid., page 2.
156. Ibid..
157. Ibid., page 3.
158. Ibid., page 3.
159. Ibid..
160. Ibid., page 4.
161. Maya Jackson Randall and Michael R. Crittenden, ‘Treasury Could Improve Management of TARP’, The Wall Street Journal, December 9, 2008, Dow Jones: New York, 2008, page C4.
162. John Downes, A.B., and Jordan Elliot Goodman, A.B., M.A., eds., ‘Dictionary of Finance and Investment Terms’, s.v. ‘Tranches’.
163. Ibid..

Captions to the charts that appear in International Currency Review Volume 34, Number 2 [March 2009] but are not shown in this website presentation:

Figure 1, page 25 of the journal: MBS-CDO-CDS scam (Fraudulent Finance) flowchart, showing how a single loan triggering one solitary cashflow of mortgage payments is typically leveraged and intermingled with other such origination cashflows into exotic ‘derivatives’ known as ‘Structured Products’ via pools which are sold on to investment banks before being marketed internationally, where the US securities legislation (the 1933 and 1934 Securities Acts) does not apply. There is no precedent for such colossal OFFICIALLY organized fraud.

Figure 2, page 27 of the journal: MBS-CDO-CDS scam (Fraudulent Finance) flowchart: Institutional sale and resale of so-called ‘Structured Products’ that have zero intrinsic value because beyond the originating Mortgage Bank, none of the subsequent parties enjoys prospective access to the single originating stream of funds. As a former Goldman Sachs official, speaking privately, told the Editor of this service: ‘These ‘assets’ are worth what someone is prepared to pay for them’.

Since they have been comprehensively discredited, except among those compartmentalised intermediaries, bankers, intelligence cadres and others who may not yet be ‘up to speed’ (if any such creatures remain, which given developments since September 2008, logic would suggest is unlikely), ‘what someone is prepared to pay for them’ effectively means nothing. As Mr Michael C. Cottrell’s narrative shows, the Paulson Treasury TARP operation had as one of its hidden purposes the injection of ‘value’ into worthless hybrid collectivised ‘assets’.

• Addendum: Of course, this is the PRIMARY OBJECTIVE of both the Geithner TARP deception and its Obama Administration successor schemes.

Figure 3, page 33 of the journal: This chart shows how the routine operations of the Fraudulent Finance ‘Money Machine’ were to be ‘revalidated’ via the Paulson Treasury’s Troubled Assets Relief Program (‘TARP’) enacted within the Emergency Economic Stabilisation Act of 2008, signed into law by President George W. Bush Jr. on 3rd October 2008. Specifically, the diagram exposes the fact that $700 billion of US taxpayers’ funds and new Federal Government debt was in fact to be deployed for the specific benefit of Carlyle, Carlyle Capital, George Bush Sr., James Baker and others, who are responsible for the financial crisis not least by blocking the sole answer: the On-the-books Refunding Program.

• NOTE:
In further work we’ve done on this subject, we have extended these charts to demonstrate that the Geithner TALF Plan is specifically intended for the same purpose: to refund the likes of Carlyle and Carlyle Capital, under cover of purporting to be specifically designed to ‘stimulate’ the economy.

Unlike the private sector Refunding Programme agreed by the Group of Seven financial powers in 2007 and 2008, the Paulson-Geithner ‘solution’ theoretically generates revenue all right (assuming there are any fools out there internationally who will fall for this new generation of officially driven derivatives Ponzi scamming) while perversely and unnecessarily generating colossal mountains of Treasury debt on the other side of the balance sheet of the US Federal Government

In this context, revenues generated from this ‘Legitimised Fraudulent Finance’ will yield, say, 35% in tax accruals – always provided the proceeds are held on-balance sheet, contrary to the practice hitherto of holding the proceeds off-balance sheet in offshore accounts and untaxed (tax evasion); whereas 100% of official debt will have been UNNECESSARILY created in the background: thereby mortgaging the futures of several generations of Americans.

THE WHITE HOUSE/CIA MOTIVE: TO STAY IN CONTROL
The reason that this disastrous Fraudulent Finance approach has been adopted by the Obama Administration is that, by this means, the Government and its corrupted cronies STAY IN CONTROL OF TRADING OPERATIONS WITH NO COMPETITION. That is the motive.

By contrast, the pure way of achieving a sound recovery within the exiting framework without creating ANY NEW DEBT AT ALL, is for the private sector to handle the refunding operation WITH NO GOVERNMENT INVOLVEMENT.

That way, the Government gets to tax 35% of the accrued proceeds of the eight on-balance sheet trades per banking day, thus acquiring NEW MONEY WITH NO DEBT.

The Obama Administration’s decision to pursue the reprobate course represents a wilful refusal to conduct the affairs of the US Treasury in a responsible manner, representing TREASON against the American people and the Republic.

The ‘reason for the Treason’ is that it knows that there is a SOUND WAY TO PROCEED and has deliberately chosen the unsound route for unsound reasons, instead.

Since the Obama Administration’s unsound decision will gravely impair the prospects not only of the American people but of ‘the whole of humanity’, it represents effectively a DECLARATION of FINANCIAL WARFARE ON THE REST OF THE WORLD, WHICH IS TO BE FLOODED WITH ‘TRASHETS’.

‘We will do things OUR way’, even though WE KNOW that what we intend to do is irresponsible, reckless, economically illiterate, and is the financially unsound route to perdition:

AND THE WHITE HOUSE KNOWS IT.

• LATE NEWS: FREEDOM WATCH USA JUMPS ON OUR BANDWAGON
Although we have no brief at all for Larry Klayman, the agitprop group Freedom Watch USA that he runs out of Washington DC has expanded a class action lawsuit filed in US Federal Court in Los Angeles on behalf of shareholders in A.I.G. (American International Group) which has just been amended to include Treasury Secretary Geithner, former Treasury Secretary Henry M. Paulson and the former Chairman of the SEC Christopher Cox.

AIG shareholders have seen the value of their shares collapse by an estimated $214 billion. We must be sharply aware that this lawsuit may, like the lawuits referenced in our preceding report, represent a component of the CIA’s ‘collapsing’ operation, which is now in full gear, whereby all strands of the multi-faceted scandal are ‘collapsed’ into a welter of open-ended litigation, so that the underlying issues become sub judice and nothing ever gets resolved (on purpose). It’s the Bush/DVD CIA’s neat way of hiding their incessant thefts.

However some of the public comments made by this operator echo findings published in our reports, even though of course Klayman cites that Missouri Professor as his inspiration (without mentioning that the Missouri Professor Black ‘may have been’ jolted out of his serial academic daydreams by this service). Samples:

• ‘The American people, not the compromised ruling elite in Washintgon, DC, have begun a second American Revolution to take the country back from the con men on Wall Street and on Pennsylvania Avenue, who under successive Administrations played a central part in the meltdown of the US financial system and economy’.

• ‘The inspiration for this amendment was information disclosed by University of Missouri Professor William K. Black on the Bill Moyers’ Public Broadcasting Service television show last Friday, when he implicated these Government officials in a massive cover-up of the banking scandal, mostly for the benefit of Goldman Sachs, the former employer of both Paulson and Geithner, in which they held a significant financial interest’.

• FOR BACKGROUND, SEE OUR 2006-2007 Wantagate reports concerning Henry ‘Conflict-of-Interest’ M. Paulson Jr..

• ‘As for Cox, his reckless and intentionally impotent oversight at the SEC is the basis of the claim against him’ referenced above.

• ‘Freedom Watch will not rest [GOSH! Ed.] until justice is done and it won’t come from the Obama Administration, bent on deceiving the US taxpayer that it intends to clean up this corruption, all the while lining the pockets of its friends at A.I.G. with the Government bailout money, who gave handsomely to have their President elected’.

Remember, you read all about this HERE months and several years BEFORE these US operatives started getting in on the act. It has now, ALL OF A SUDDEN, since G-20, become ‘acceptable’ to start saying what this service has been proclaiming since 2006.

Nor is it appropriate for us to jump for joy at this development. This is because one of the more insidious techniques used by the Intelligence Power is to ‘take over’ issues, so that they can then be CONTROLLED. And given what we know about the character running this operation (which would sit very uncomfortably for him if published), this is likely to be the intention here. Another clue that this is not an objective operation, is that the sum of money being claimed is not that large, given that trillions of dollars have been systematically looted by these organised criminals who have hijacked the US Federal Government and the banks.

Nevertheless, at this early stage, it is appropriate to note that what you read on this website and in our printed publications first, is now belatedly ‘sort of’ MAINSTREAM.

• Very late in the day, of course, because these ‘professionally concerned’ operatives didn’t have either permission or the guts to expose this corruption earlier. Shame on them.

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.

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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.

DUPLICITY CATCHES UP WITH CRIMINAL INSTITUTIONS

‘SNIPPED’ PORTION OF 26TH MARCH REPORT PROVES WE ARE CORRECT

Monday 30 March 2009 00:00

• THE NSA’S ‘SNIPPING’ OF OUR POINTED REPORT DATED 26TH MARCH PROVES THAT THE ‘SNIPPED’ TEXT WAS ACCURATE AND SO MUCH TO THE POINT THAT THEY HAPPILY RISKED CONFIRMING ITS ACCURACY BY ‘SNIPPING’ IT. IF IT HAD BEEN INACCURATE, THEY WOULD HAVE LEFT IT UNTOUCHED SINCE IT WOULD HAVE BEEN CONTRIBUTING TO THE FOG OF CONFUSION THEY CULTIVATE. THESE FOOLS ARE IN URGENT NEED OF BRAIN SURGERY.

• UK NEWSPAPER BARRED BY COURTS FROM PUBLISHING INCRIMINATING BARCLAYS DATA

• OFFSHORE SUBSIDIARIES OF U.S. FRAUDULENT FINANCE SPECIALISTS

• ‘TAX HAVENS ARE SUNNY PLACES FOR SHADY PEOPLE’ SAYS LORDS SPOKESMAN

• QUITE A BACKGOUND FOR THE G-20 MEETING, HUH?

• DIVERSE G-20 PARTICIPANTS WITH COMPETING AGENDAS AND OPERATIONS

• THE WHITE HOUSE MEETING BETWEEN OBAMA AND THE BANKERS ON 27TH MARCH

• PERVERSE WHITE HOUSE APPOINTMENTS OF CRIMINALIST ASSOCIATES CONTINUE

• GORE CONNECTION WITH LOMBARD ODIER DARIER HENTSCH

• SOROS SAYS G-20 FAILURE WILL TRIGGER ‘A DEPRESSION’

• CONTROLLED ‘MAINSTREAM’ PRESS COVERAGE AVOIDS THE MAIN ISSUE

• POSTSCRIPT: THE ‘STATE WITHIN THE STATE’ IS ANGRY:

• 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.

• DONATIONS: You can help finance these exposures (which the Editor has to prepare on top of his normal publishing responsibilities) by sending us a donation. Press Make a Donation, which is live, and it takes you straight to our ultra-safe ordering system, which accepts Visa and MasterCard.

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.

THE FOLLOWING TEXT WAS CRIMINALLY ‘SNIPPED’ BY THE NSA NERDS FROM OUR REPORT DATED 26TH MARCH 2009. THEREFORE, WHAT IS INDICATED BELOW IS CLEARLY CORRECT.

Given the importance of all this text, we reappend the entire portion that was snipped, and have also restored the ‘snipped’ text on the original report dated 26th March. If it is illegally ‘snipped’ again, we will retore it again. Interfering with a ‘foreign’ website is illegal.

This latest aberration shows with CRYSTAL CLARITY that what we are saying is ACCURATE: witness the fact, which is alluded to below the restored ‘snipped’ text, that current pre-G-20 coverage in the ‘mainstream’ media in both London and New York is discussing every nuance under the solar system with the single exception of the ONLY ISSUE THAT MATTERS: namely, the perverse intention to restore the Fraudulent Finance Ponzi fraudulent trading operations so that the greedy US ‘State within the State’ Intelligence Power that controls the Federal Government can continue its secret offshore financing operations so as to retain its power contrary to the interests of the American people and the Rest of the World.

• The text ‘snipped’ from the 26th March 2009 report is given immediately below. When our text is ‘snipped’, we have IMMEDIATE confirmation that it’s accurate (which we don’t need to be told, or we wouldn’t have posted it in the first place). If the text had been inaccurate, the CIA/NSA would be delighted because we would be contributing to the fog of confusion that they sponsor in order to be able to continue with their corrupt and fraudulent activities unexposed. So these people are in serious need of brain surgery: when they ‘snip’, they reconfirm the accuracy of what they ‘snipped’.

• We were advised of the criminal ‘snipping’ by phone and a number of emails. Sample comment from one US correspondent advising us of the ‘snipping’:

‘As always, we in the United States appreciate and rely on your reports, for we can get nothing from our brainwashed and controlled media’.

‘All intelligent persons in the United States are outraged at the actions of this criminal clique of hardened criminals who have taken over our democracy. This is NOT what we voted for in November of last year’. Email received from a US address: 29th March 2009: 14:01:05.

• GAME, SET AND MATCH. WE REST OUR CASE:

THE MAD INTENTION: TO MAKE THE ENTIRE DERIVATIVES SECTOR WHOLE AGAIN
With the Lombard Odier-wrapped illicit derivatives trading programme in full swing and being showered with what ‘new money’ the crooks have been able to generate and steal, the criminal official intention is to rebuild the broken derivatives sector, with the assistance of ‘bought and paid for’ corrupt hedge fund operators and money managers (not all of whom are professional sheisters obviously), and to keep the carousel going and building, fed with new money filched from gullible investors, whether borrowed on permissive terms from the Federal Reserve or not, with a view to making the entire derivatives mountain of around $700 trillion (excluding double-counting) ‘whole’ – notwithstanding the reality that hardly any of these derivatives ‘Structured Products’ contain ANY real value at all, since almost all of them are NON-RECOURSE.

This is all explained in the latest issue of International Currency Review, and also in Economic Intelligence Review [see second white panel], as well as in the four-page leaflet containing the three main charts which is being distributed in Washington, DC, and elsewhere.

All that our latest subscriber printed materials do is to point out the stark reality of the fact that these false constructs (derivatives) are by definition totally fraudulent and devoid of value, so that retrospective attempts sponsored by the demented US Government to pass off that they contain value represents a massive, unprecedented fraud on the US taxpayer and future generations of Americans, while at the same time:

• Guaranteeing the accumulation of new mountains of debt arising from the Federal Reserve’s outrageous lending for speculative purposes; and:

• Guaranteeing a hyperinflation. Pundits are now suggesting that this phenomenon will emerge in several years’ time. The Editor’s view is that the choices made by the new bunch of fantasists in charge in Washington are so extreme, So damaging, so wrong-headed and so destabilising, that the hyperinflationary pressures will become apparent much sooner than that – WITHOUT delivering any ‘beneficial’ impact to the ‘real’ economy in the interim.

IS THIS BEING DONE ON PURPOSE?
The decisions made since Obama took office are SO perverse that one is tempted to join those who insist that this is all being done on purpose. The correct answer to such empty speculation is that we don’t know whether this is the case or not.

On the basis of the Christian knowledge that the devil is the author of all lies and confusion, the Editor’s view is that these operatives are wallowing in devilish confusion and have fallen prey to diversionary, self-defeating, complex, elaborate ‘whizz-kid’, knee-jerk ‘solutions’ in a desperate bid to ‘resolve’ the colossal problem created by the corrupted money center banks themselves, which were indulging, until mid-September 2008, in unproductive, illicit, off-balance sheet speculative activity on a scale with no historical precedent.

That suggests that if it had not been for such wasteful,unproductive, untaxed, off-balance sheet speculation, many of the banks in question would be surplus to requirements.

According to Story’s First Law, ‘all organisations are run for the benefit of those who are running the organisation’. This, of course, explains why, deprived of the toys that they were playing with, the banks went on strike and have been hoarding and stealing funds ever since – precisely with a view to restarting the speculative, win-win Ponzi Fraudulent Finance that they were wallowing in prior to mid-September 2008, instead of focusing primarily on lubricating the real economy.

BANKS SUPERFLUOUS TO REQUIREMENTS
The smarter solution would have been to allow more than just Lehman Brothers to go to the wall. Wall Street, where the wall is, is supposed to believe in free markets, with no participant being subsidised at the expense of other participants. The new, decadent, twist is that all the relevant participants can have their corporate snouts in the trough, and to hell with the hyperinflationary consequences. The Wall Street institutions and the satellite hedge funds and other intermediaries, along with the banks, are all being subsidized AT THE EXPENSE OF THE REAL ECONOMY.

• It’s called a banker’s ramp.

IT’S NOT ‘THE ECONOMY, STUPID’: ITS ‘THE DERIVATIVES, STUPID’
And to cover all this up, the United States is now governed by a man who takes his cue from Fidel Castro and President Chavez. He thinks his gift of the gab can be relied upon somehow to save him from the devastating and very rapidly approaching adverse consequences of his perverse, wrong-headed decisions, which are holding up the recovery of the Rest of the World.

And he is using this gift of the gab to LIE to the American people that this is all about reviving the real economy, when it isn’t. It’s all about reviving the fraudulent derivatives sector carousel.

AND NOTHING ELSE.

• CMKM UPDATE:
The previously reported theft of the $12.8 billion was orchestrated to achieve three objectives at the same time:

• To dissolve the multi-billion dollar claims and Court Order related to CMKM et al, and to make it clear that the CMKM Attorney(s) have signed the appropriate documentation to secure the funds held at the Depositary Trust Clearing Corporation under Court Order, and STEAL THE MONEY.

• To satisfy the ‘Payee’ et al, by authorising and signing a Presidential Executive Order (15th January 2009) – thereby circumventing public disclosure (and possible physical threat when George W. Bush was no longer President of the United States) and STEAL THE MONEY.

• To STEAL the $12.8 billion via Presidential Order/Court Claim – and funds sitting under the control of the DTCC – with the intent to send the money to Carlyle et al., without any repercussions – via Bank of America, Tyler, Texas, and then to Canada.

• LORD MYNERS UPDATE:
Some time ago we reported that Lord Myners, the City (of London) Minister in the Gordon Brown Government, had publicly suggested that City bankers engaged in Fraudulent Finance should be prosecuted. We then received a prompt message to the effect that ‘they’ would be grateful if we did not ‘go on about this’. There was no explanation, as usual.

It has since emerged that Lord Myners, who was selected to head up the British Government’s investigation into tax havens, chaired a hedge fund group operating through Jersey, Channel Islands. Jersey is used by fund managers to keep profits offshore so as to avoid British tax.

Before becoming a Government Minister, Lord Myners was appointed to head a company that took over Liberty Ermitage Jersey, controlling investments worth about $2.0 billion. Myners made his fortune with Gartmore, a prominent City fund management outfit, the Jersey, C.I., offshoot of which handled millions of pounds for more than 4,100 overseas investors.

Lord Myners was also involved with Aspen Re, a reinsurance firm located in Bermuda, thereby saving large sums in tax annually. A UK Treasury spokesman said on 23rd March:

‘All of his past business roles are a matter of public record and he has made a full declaration of the interests. The experience he brings continues to be hugely valuable to the Government at a time when we are working to restore and rebuild the banking sector’.

In other words, the British Government is relying, in part, on the toxic experience of a hedge fund manager, familiar with the Fraudulent Finance sector of course, to advise them on how to REBUILD the banking sector which has been devastated by its indulgence in Fraudulent Finance.

Maybe when he called for British bankers who have been engaged in Fraudulent Finance to be prosecuted, he was going too far for the likes of certain interests. It is normally the case that these people reinvent themselves as ‘whiter than white’ (‘Blankfeinism’), but it would appear that Lord Myners’ linen might not necessarily emerge gleaming white from the wash.

APPENDIX ONE:
Observations from The New York Times on the latest instalment of ‘Geithnerism’ [25th March 2009]:

• Can banks that received Government bailouts use taxpayer money to bid on toxic assets, in the hope of making a profit? [Correct answer: NO – Ed.].

• Can banks sell some assets and then use the proceeds, leveraged by generous Government financing, to buy more of the same? [Correct answer: NO – Ed.].

• Might investment houses be tempted to overpay, if doing this buoys up the value of their own investments? [TARP provides for an Oversight Review Committee with clawback powers to compel restitution if too much is paid. This explains why Goldman Sachs is rushing to pay back the billions it received from the Government so that it is not bound by the TARP restrictions. No-one is asking about ‘source of funds’: whence the Goldman billions for repaying the Government? – Ed.].

• In the end, it will be the taxpayer who will be largely footing the bill.
[Not ‘in the end’: straight away – Ed.].

• Joseph E. Stiglitz, a Nobel Prize-winning economist, in an interview with Reuters, called the program “very badly flawed” and said it offered “perverse incentives” that amounted to “robbery of the American people”. [Couldn’t have said it better ourselves – Ed.].

• Bert Ely, a prominent banking consultant, said investors would be cautious because many crucial details were still missing – the size and terms of loans they would receive from the Federal Deposit Insurance Corporation, for example, and the amount of equity they would be allowed to put in, and whether banks would be allowed to walk away if they did not like the price at auction. “Today we know a lot more than we did yesterday, right?” Mr Ely said. “I’m being facetious!”.

• Many questioned the auction mechanism to sell toxic assets off from banks’ balance sheets. Price, most experts agree, is the biggest sticking point. The banks want to sell high. Potential investors want to buy low. [There is STILL no indication of how the fake ‘assets’ that are to be bought initially, will be priced – Ed.].

• Banking executives said that that their institutions would not want to unload ‘assets’ at fire-sale prices, a step that would compel many of the banks to raise sizeable amounts of additional capital. [Even though ‘fire-sale’ prices would be much too expensive given that the assets are fraudulent to begin with and therefore worth $0. $0 + $0 = $0, usually – Ed.].

• Under the accounting rules, banks must carry securities on their books at market prices. Most financial firms have already marked down these ‘assets’ to prices that might be low enough to lure buyers. But banks need not carry ordinary loans at market value. Instead, they are allowed to hold them at their higher values until they are repaid. So, for many commercial banks, selling loans now, at distressed prices would almost certainly lead to large losses. Such losses might raise questions about how some banks will fare in a so-called stress test that Federal regulators are in the process of applying to about 20 lenders.

“I don’t see how they are going to get the banks to sell”, said an executive at a large bank.
There are going to be substantial write-downs taken to get them off the books”.
[In other words, ‘Geithnerism’ CHANGES NOTHING. It doesn’t ‘amend reality’].

INTENTION HAD BEEN TO GET STARTED WITH CHINESE MONEY
After the Chinese parties had made the grave mistake of caving in to cynical pressure from the US authorities to participate in the latest instalment of ‘Geithnerism’, the Chinese would presumably have indicated their willingness for some of their funds to be used to purchase ‘toxic’ assets. The banks would have said: ‘But at what price?’ The Chinese would have responded: ‘Well if you don’t know the start-up buying price, we want our money back’. At which point the banks said: NO WAY.

APPENDIX TWO [excerpted from the report dated 24th March 2009]:
FACE-TO-FACE EXCHANGE BETWEEN PRESIDENT OBAMA AND THE QUEEN

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?

• ALSO snipped was the standard legal data that we have been publishing for the past 48 months and more, which gets up their craw, too. The standard text of the Legal Notes is found below.

• THE NEW REPORT THAT WE WERE PREPARING BEFORE OUR 26TH MARCH REPORT WAS ‘SNIPPED’ STARTS HERE AND IF THEY INTERFERE AGAIN WE WILL RESTORE THIS TEXT TOO:

UK NEWSPAPER BARRED BY COURTS FROM PUBLISHING INCRIMINATING BARCLAYS DATA
On 20th March 2009, The Guardian plastered its front page with a report in which it revealed some outline details about the scandal involving Barclays Bank’s secret routine use of tax havens, when of course the ordinary taxpayer is precluded from doing so without disclosing such usage to the UK tax authorities. In its lead report, The Guardian stated that Barclays’ schemes:

‘… are similar to those detailed in documents published by The Guardian this week which have been the centre of a three-day hearing at the High Court, and are the subject of a gagging order’.

The British newspaper’s report continued:

‘The internal Barclays memos were leaked by a mole to the Liberal Democrats. The new allegations reiterate claims that the bank’s main purpose in entering into these schemes was to make profits from tax avoidance through an intricate circuit of offshore Cayman Islands and Luxembourg-based companies. The profits are said to be enormous and the deals so complex that HM Revenue and Customs (HMRC) struggles to unravel them’.

‘Barclays has vigorously denied the claims and earlier this week won an emergency injunction forcing The Guardian to remove internal bank documents from its website. A Judge confirmed the ban, saying the documents contained confidential commercial information and legal advice’.

‘The Guardian is also banned from giving information about other publicly accessible sources of copies of the documents’.

• FACT: Barclays Bank, one of the most egregious Fraudulent Finance institutions in Britain, is said to be in negotiation with the UK Treasury to secure insurance money which will burden all British taxpayers for years to come, from the Government, to protect it against huge losses arising from its own Fraudulent Finance operations. The Guardian pointed out that ‘pressure has been mounting on banks to unwind tax avoidance schemes when they are taking money from the public’.

‘Royal Bank of Scotland, in which UK taxpayers own 70% of the shares, has since disbanded its department responsible for creating tax avoidance schemes’.

‘Sources with detailed knowledge of the Structured Capital Markets division of Barclays told The Guardian yesterday that its main purpose was to make profits from tax trades’.

‘Every single thing SCM does is a tax trade’, said one. ‘The deals start with tax and then commercial purpose is added to them’. The newspaper’s report elaborated:

‘The sources painted a picture of a brutally competitive environment at SCM, source of a major part of Barclays’ past profits. One describes high-rolling poker games, abrupt sackings and the use of a ‘motivation game’ in which an executive was strapped into a mock electric chair’.

• In other words, exactly the kind of behaviour that you would expect from a fully-paid-up ‘Black’ institution serving the interests of the Forces of Outer Darkness.

OFFSHORE SUBSIDIARIES OF U.S. FRAUDULENT FINANCE SPECIALISTS
Before reporting the sequel to The Guardian’s revelations below, the following open information listing the offshore entities of well-known US Fraudulent Finance institutions is pertinent here:

• A,I.G.: Last time we checked: 728 subsidiaries in offshore centres.

• Bank of America: 59 subsidiaries in the Cayman Islands.

• Citigroup: 427 subsidiaries: 21 in Jersey, 91 in Luxembourg, 19 in Bermuda, 158 in the Caymans.

• Countrywide Financial: Two subsidiaries in Guernsey.

• Goldman Sachs Group: Three subsidiaries in Bermuda, Five in Mauritius, 15 in the Caymans.

• Lehman Brothers: 31 subsidiaries in the Cayman Islands.

• News Corporation (Rupert Murdoch): 33 subsidiaries in the Cayman Islands. Others known.

• Wachovia: 18 Subsidiaries in Bermuda, three in the British Virgin Islands, 16 in the Caymans.

‘TAX HAVENS ARE SUNNY PLACES FOR SHADY PEOPLE’ SAYS LORDS SPOKESMAN
On Thursday 26th March, the Liberal Democrats’ Treasury spokesman, Lord Oakshott, delivered a broadside against the Prime Minister, Gordon Brown, and the secretive activities of Barclays Bank Plc – thus highlighting, for global public consumption, the DOUBLE STANDARDS that bedevil the panicking official classes as the unravelling of the Fraudulent Finance giga-scandal threatens to swamp the overhyped Group of Twenty meeting in London on 2nd April, when the leaders of 20 powers with competing agendas and bitter rivalries and resentments over US official corruption, are supposed to be producing a formula for stabilisation in the course of meetings lasting precisely four and a half hours. There is no way this meeting can deliver without the release of the hijacked Settlements and termination of the banditry by US banks and authorities partly reported here.

Nor can any global recovery take place without the G-7-Approved private sector Dollar Refunding Programme yielding REVENUE as opposed to the convoluted, scatterbrained ‘solutions’ devised by the Geithner Treasury to rekindle the dead derivatives sector which was dealt a motal blow by the events of 10th-12th September 2008, as also reported by this website and in our services.

Lord Oakshott used parliamentary privilege to say what newspapers have been banned from saying by a Court injunction won by Barclays.

The media is, however, allowed to report his speech, which this and other services are now doing.

In the 26th March debate in the House of Lords on tax evasion, Lord Oakeshott said:

‘Tax havens are sunny places for shady people’.

‘No one sends their money to Monaco or the Cayman Islands because they are centres of excellence for fund management’.

‘From Antigua to Belize, you use a tax haven because you have something to hide, be it from the taxman, the authorities where you live or even your family’.

‘ “Low tax and low disclosure” is the polite way in which the apologists for tax havens put it, but if you are Mobutu or Mugabe, Mrs Imelda Marcos or a Colombian with a big briefcase, a brass-plate
company in an anonymous office block means that your millions leave no trace and tell no tales’.

‘Gordon Brown is strutting the world’s stage as Mr Clean-up, the man to make tax havens and tax dodgers quake in their boots’.

‘OH YEAH? – Why then did the [British] Treasury say only yesterday that the asset protection scheme for banks to dump their bad debts on the taxpayer and the code of practice covering tax avoidance for the banking sector due next month, are “separate issues”?’

‘That is the most unjoined-up government imaginable’.

‘Why has the budget of HM Revenue and Customs’ hard-pressed tax avoidance team, led by
Mr Tailby, been cut by five per cent from 6th April?’

‘Barclays will be laughing all the way to the Cayman Islands. Our taxmen are like fat policemen running after a speeding Ferrari; they need all the help that they can get’.

‘We all rejoice at the sinner who repenteth, but this is the same Gordon Brown who as Chancellor cuddled up to the bankers so hard that it hurt and who showed no interest in taxing or regulating hedge funds registered in the Cayman Islands and run by non-doms in Mayfair, or the private equity millionaires with their absurdly generous special tax breaks. . .’ .

‘Why will the Prime Minister and the Treasury not use their power over the banks to stamp out tax abuse right under their nose in London?’

‘You do not have to take a Caribbean cruise; all you have to do is get on a boat down the Thames to Canary Wharf. . .’.

‘Nearly-nationalised Royal Bank of Scotland (RBS) claims to have closed down its tax avoidance
operations at Head Office but still actively promotes its operations in offshore tax havens and via its private bank in Switzerland’.

‘Barclays has developed tax avoidance into a massive profit centre in its own right, with vast sums of the bank’s money touring tax havens on what in one case amounts almost to a three-day super saver return ticket from Canary Wharf, saving Barclays, not the taxpayer, mountains of tax’.

‘Documents leaked to the Liberal Democrats, which appear to detail systematic tax avoidance on a grand scale by Barclays, were injuncted last week’.

‘The Sunday Times and The Guardian had already made them front-page news and these documents are widely available on the internet from sites such as Twitter, wikileaks.org, docstoc.com and gabbr.com.

‘The Guardian had to remove them from its website and cannot tell its readers where to find them’.

‘These documents describe deals worth billions of pounds set up by Barclays Bank in order to make money out of depriving the UK and foreign exchequers of revenue’.

‘Barclays would not last for one minute without the British taxpayer standing behind it, yet it is holding out one hand for taxpayers’ money while it picks taxpayers’ pockets with tax avoidance activities on the other’.

‘Unlike Barclays, HM Revenue and Customs cannot match the best tax and legal brains that money can buy and unpick these deals’.

‘It is a sad day for democracy if a Judge sitting in secret can stifle this essential public debate’.

‘Louis Blom-Cooper and three distinguished colleagues wrote to The Guardian:

“Barclays may properly be regarded as an operator in the private sector, but its corporate status, carrying with it all the advantages that incorporation confers on the institution, and performing a function so vital to the country’s economy, was such that Mr Justice Blake should have concluded that Barclays Bank was akin to that of a public authority and susceptible to the precepts of public sector activity. Perhaps the Court of Appeal will exhibit rather more boldness in supporting the Guardian’s valuable crusade against tax avoidance”.

‘Vince Cable [the Liberal Democrats’ Treasury spokesman in the House of Commons] has done his duty and sent all these documents to HMRC and the Financial Services Authority’.

‘I believe that it is my duty today to tell, as I just have, Parliament about Barclays’ tax avoidance machine with its aggressive exploitation of tax havens and to tell the public, in their own interest, where they can get chapter and verse and judge [this matter] for themselves’.

‘Barclays has a whole department, the Structured Capital Markets division, inside Barclays Capital, dedicated to dodging the taxman, and has been reported as paying Mr Roger Jenkins, who runs it, £40 million a year’.

‘Vince Cable and I are now being told of more, even murkier, deals. About a third of a billion pounds has been added to Barclays Bank’s bottom line by the following six “projects”, from what we see:’

• ‘Barclays’ Project Knight, set up in 2007, with capital of more than $16 billion, involved making loans to American banks needing Federal funding: Wachovia, WaMu, Bank of America, BB&T.

‘This allowed Barclays to benefit from “double-dip” tax credits, as they are called, and made the bank £100 million or more’.

• ‘Project Faber, also in 2007, involved capital of £1.5 billion and made Barclays £29 million in tax profits [according to our information]’.

‘That involved using tax havens in the Isle of Man and the Caymans for subsidiaries to channel loans to Luxembourg banks’.

• ‘Project Brontos in 2007 was a scheme between Barclays and Italian banks to save Italian tax; it made Barclays £15 million in profits at a conservative estimate’.

• ‘Project Valiha, with capital of nearly £400 million, involved an elaborate trade with interest rate swaps that could be transferred to an American counterparty, alleged to be A.I.G., which gained Barclays £69 million in tax-free profits’.

• ‘Project Brazil, set up in 2005-06, made Barclays £30 million in tax profits from currency trades.

• ‘Project Berry: a Barclays subsidiary buys index-linked gilts and lends them back to Barclays so that it can collect tax reliefs worth £134 million’.

‘How many more of those morbid mutants are on the books of Barclays’ Structured Capital Markets?
‘Before the Treasury takes on any of the toxic assets of Barclays, we must know how much tax it has avoided, how and with whom, and what has passed through or is still hidden in tax havens. . .’ .

QUITE A BACKGOUND FOR THE G-20 MEETING, HUH?
No G-20 ‘agreement’ that omits a comprehensive, permanent global ban on Fraudulent Finance will make any sense or can be expected to yield the appropriate results, although if the releases have been done by the end of the 72-hour (Swift) window expiring at the end of March, the G-20 may be able to make an announcement referencing some formula implying the availability of new liquidity.

• However even THAT is a problem because given the background of endless lies and deceit, and in the absence of consensus on CLOSING DOWN FRAUDULENT FINANCE, none of the participants will make any reference to SOURCE OF FUNDS, and nor will the G-20 press statement.

DIVERSE G-20 PARTICIPANTS WITH COMPETING AGENDAS AND OPERATIONS
Contemplating the list of highest-level participants, it boggles the mind that the confused British Government can have seriously believed that these people could possibly expect to reach any lasting, properly grounded consensus: which is why Gordon Brown stamped out a huge ‘carbon footprint’ and careered round the world to browbeat foreigners into ‘forging a consensus’ ahead of this meeting which London is rightly terrified will be a gigantic flop. When he got back, exhausted, he briefed the press in Downing Street on Saturday about the forthcoming G-20 meeting, costing £4 million an hour which, as previously noted, has been exiled: to the far-away London ExCel Centre, which is squeezing the meeting that is meant to save the whole world from a depression worse than the 1920s, between London International Dive Show and MillionaireMind Intensive UK Live.

• Principal participants at the G-20 meeting, with their hang-ups, are as follows:

• Argentina: Cristina Fernandez de Kirchner, 56: Focused on new secret trading ops. with US.

• Australia: Kevin Rudd, 51: Guardian of huge secret US installations near Alice Springs.

• Brazil: Luiz Inácio Lula da Silva, 63: Focused on new secret trading ops. with Americans.

• Canada: Stephen Harper, 49: Guardian of huge corrupt US deposits at Canadian banks.

• China: Hu Jintao, 66: Livid about US double-cross over the $13 trillion and other US scams.

• Czech Republic [EU Presidency]: Mirek Topolanek, 52: Says Obama’s policies = ‘road to hell’.

• France: Nicolas Sarkozy, 54: At loggerheads with everyone, Chancellor Merkel especially.

• Germany: Angela Merkel, 54: Guardian of Bush Sr.’s corrupt funds; at loggerheads with Sarkozy.

• India: Manmohan Singh, 76: Holds or held stashed stolen trillions from fraudulent trades.

• Indonesia: Susilo Bambang Yudhoyono, 59: Orphanages mask hidden ops. by US CIA agents.

• Italy: Silvio Berlusconi, 72: Italian ‘gentlemen’ and Pope = heirs to Mussolini’s finance ops.

• Japan: Taro Aso, 68: Scammed by George Bush Sr., taken to cleaners, thoroughly confused.

• Mexico: Felipe Calderón: 46: Drug war leverage over US, as CIA won’t quit drug-trafficking.

• Russia: Dmitri Medvedev, 43: Boom-bust trauma: serves Gorbachev’s long-range strategy.

• Saudi Arabia: Ibrahim al-Assaf, age uncertain: Kingdom’s fingers burned by Bushes and CIA ops.

• South Africa: Kgalema Motlanthe, 59: Included pending intended Benin trading platform.

• South Korea: Lee Myung Bak, 67: Bush Crime and other CIA fraudulent funds stashed in Seoul.

• Turkey: Recep Tayyip Erdogan, 55: Allows US drug operations into the former Soviet Union.

• United Kingdom: Gordon Brown, 57: Prophet of ‘stimulus’ in lieu of tackling derivatives issue.

• United States: Barack Obama, 47: It’s not the economy, stupid. It’s the derivatives, stupid.

• FACT: The CIA’s poisonous disinformation ops. (Operation Mockingbird) and anonymous spooks continue to excoriate The Queen, turning facts back to front and upside down, indicating just how nervous the ‘State within the State’ has become over the complete breakdown and uncovering of its multiple secret ‘Black’ Fraudulent Finance and Ponzi financing operations and the prospect that the Refunding Programme run from London will deliver ‘clean’, taxed funds onto the books of the big banks, so that this good money will unavoidably ‘drive out’ the BAD MONEY that these fools think they can continue to generate, so as to maintain their evil, destructive control over the US Federal Government in general and the Executive Branch in particular.

The biggest threat they face comes from the sole guardian of the Rule of Law, namely The Queen. Which also explains why various US intelligence community compartments are running operations against the British Monarchy. So much for the so-called SPECIAL RELATIONSHIP, which these US crooks are successfully destroying: because, as an Obama apparatchik pointed out to the Brown entourage, Britain isn’t ‘special’ to the United States at all. Then get out of our laundry!

THE WHITE HOUSE MEETING BETWEEN OBAMA AND THE BANKERS ON 27TH MARCH
The White House released a list of the bank CEOs who met with President Barack Obama on Friday.
‘At this meeting, the President will reiterate his belief that getting the economy back on track will require an understanding that each of us must look beyond our own short-term interests to the wider set of obligations we have to each other in order for America to succeed,’ the White House statement stated, according to Reuters, even though the meeting had already taken place.

The banking executives who attended the ‘brunch’ included:

• Jamie Dimon, JP Morgan Chase & Co
• Ken Chenault, American Express
• John Koskinen, Freddie Mac
• Ronald Logue, State Street Corp
• Robert Kelly, Bank of New York Mellon Corporation
• Rick Waddell, Northern Trust
• James Rohr, PNC Financial Services Group Inc.
• Lloyd Blankfein, Goldman Sachs Group Inc.
• John Mack, Morgan Stanley
• Vikram Pandit, Citigroup*
• John Stumpf, Wells Fargo & Co
• Cam Fine, Independent Community Bankers
• Edward Yingling, American Bankers Association (ABA)
• Richard Davis, U.S. Bancorp
• Ken Lewis, Bank of America

The actual cabal of bankers, excluding the Freddie Mac and ABA executives, was, unsurprisingly, the esoteric number THIRTEEN. Those with knowledge of the Works of Darkness will not be in any way surprised by this revelation. See the Editor’s study The New Underworld Order for details.

At this meeting, the bankers were given their marching orders. As we did not have a fly on the Oval Office wall, we will not elaborate beyond drawing your attention to the following keywords in this context: PROSECUTION, IMMUNITY, PRESIDENTIAL PROTECTION, GOING PUBLIC.

PERVERSE WHITE HOUSE APPOINTMENTS OF CRIMINALIST ASSOCIATES CONTINUE
The Washington Post reports on Sunday 29th March that President Obama announced three senior US Treasury Department nominees on Saturday. They are:

• Helen E. Garrett, to be Assistant Treasury Secretary for Tax Policy. A member of President George W. Bush’s 2005 ‘bipartisan’ tax reform advisory panel, she is a former Professor at the University of Chicago Law School. The Garrett family has been heavily involved with the Bushes.

• Michael S. Barr, who was an adviser to the Clinton Administration’s Treasury Secretary, Robert E. Rubin, latterly the guardian of the Clintons’ funds at Citibank, and who managed to preside over the removal of said funds from the institution before he left it: to be an Asistant US Secretary of the Treasury for Financial Institutions. He is a Senior Fellow at the Center for American Progress and the globalists’ Brookings Institution. Thick with RUBIN.

• George W. Madison, to be General Council at the Treasury. He was a partner at Mayer, Brown & Platt in New York, where he practised banking and finance law. The firm ‘issued a lot of paper’.

Whoever is making these decisions is STICKING THEIR NOSES UP at the American people and the Rest of the World by DELIBERATELY picking people associated with the Fraudulent Finance orgy.

GORE CONNECTION WITH LOMBARD ODIER DARIER HENTSCH
The following text, reported on Bloomberg and sourced from Reuters, Geneva, is, uh, interesting:

‘The sustainable investment firm run by Al Gore, the former US Vice-President, is about to be closed to new investors, having raised close to its $5.0 billion target’.

‘Generation Investment Management will probably restrict inflows into its main Global Equity Fund next month, Gore and David Blood, co-founder of the company, said at a news conference Tuesday (24th March). Blood said the firm could not manage more than $5.0 billion in assets…. He declined to name clients, but said they were typically institutions, with 45% to 50% coming from Europe, 25% from Australia and the rest from the United States’.

‘The private Swiss bank LOMBARD ODIER DARIER HETSCH, which started selling the fund in Europe last year, is now the biggest investor in it, said the bank’s senior partner, Thierry Lombard’.

SOROS SAYS G-20 FAILURE WILL TRIGGER ‘A DEPRESSION’
The arch-speculator and financial sorcerer George Soros appeared on the front page of The Times, London and across a double-page spread inside Murdoch’s severely degraded title, to announce that the G-20 summit meeting, which will last for four and a half hours hours, will usher in a global depression ‘if it fails’: he then added that the odds are that it will fail.

• FACT: The Bretton Woods meetings took 22 days to complete.

In a typical Sorosian outbreak of ‘Blankfeinism’, Soros pronounced:
‘You’ve got to come up with practical measures that are going to provide protection to the whole developing world, periphery countries, against a storm that originated from the center [unspoken: and in which I was a prominent participant – Ed.] against a calamity that is not of their own making’.

• Translation: We are looking to the G-20 to agree to pour vast resources of ‘new money’ into the Third World, especially Africa where Bush Jr. and Paulson have set up the newest secret trading platform in obscure Benin. We need LOTS AND LOTS OF NEW MONEY to grease the carousel that we are all intent on restarting with regard only for our own agenda and interests, as we are the élite and we dictate what is good for the world, by which we mean ourselves. We hide behind high-falutin’ ‘humanitarian labels’, like Gore with his ‘climate change’ fund. It makes people ‘feel good about themselves’ when investing in our Ponzi scamming schemes.

CONTROLLED ‘MAINSTREAM’ PRESS COVERAGE AVOIDS THE MAIN ISSUE
On both sides of the Atlantic, the controlled ‘mainstream’ press has been waffling about every peripheral and irrelevant G-20 nuance under the sun, in order to avoid addressing the ONLY ISSUE THAT MATTERS, namely that this is a CRIMINALISM CRISIS, first and foremost, and that the root cause of the global calamity is the reckless, ruthless and ongoing pursuit of Fraudulent Finance operations, protected by the US Intelligence Power: the ‘State within the State’ which finances its operations by means of these ‘Black’ criminal finance scams and cannot ‘handle’ the prospect of being unable to generate corrupt funds on the scale to which it has become accustomed.

The only thing we can say in favour of the ‘mainstream’ right now is that it would appear that certain journalists realise that things are ‘not right’ and are venting their annoyance by writing copy which not even the Editor of this service would contemplate writing in these always sober reports.

• Examples:

• From the Times, London, 28th March 2009, page 34:

‘Among the extras [at the conference] will be an Australian Prime Minister who was once caught eating his earwax on television, an Argentine President known as the Queen of Botox, and a Spanish Prime Minister who looks like Mr Bean. But each and every member of the cast will arrive with a set of narrow national or regional interests that are unlikely to serve the interests of creating a new world consensus’ [Accurate: – Ed.].

• And the ExCel Centre, lacking the majesty more usually associated with such a great international gathering of leaders, is a fitting venue for such a summit about global economic blight’ [unspoken: brought about by the wall-to-wall corruption of the globalist elite represented by the participants themselves: – Ed.].

• ‘This soulless grey bulk was built in the graveyard of what was once the world’s largest port. Its name, with irritant capital letters in the wrong place, is redolent of the foetid marketing strategies of the recently evaporated development boom…’.

• From The New York Times, 29th March, page 4 of The Week in Review:

‘Some have likened [The task facing the G-20] to rebuilding an aircraft in mid-flight, and on its success may depend the future wellbeing of much of the world’s population of 6.5 billion, not to mention the fragile political prospects of Mr Brown’.

•FACT: As previously reported, the conference was exiled to the ExCel Centre in Canning Town, ‘Docklands’, when the whole operation was subtly downgraded some time ago. The cover ‘line’ is that holding the conference in that dump rather than at the appropriately appointed and located Queen Elizabeth Conference Centre opposite Westminster Abbey and the Houses of Parliament – the only part of London that most of the visitors know – was necessary because of urgent security concerns, given that mass demonstrations are planned to coincide with the event. But the real reason is that official expectations for the outcome are close to zero, unless the releases take place, which we won’t know for a day or two.

• One other point: You may recall that the overt Communists’ modus operandi was ALWAYS to have ANOTHER conference in prospect. Official Strategy was implemented by moving seamlessly from one conference to the next, so that all concerned were occupied full-time ‘preparing for the next meeting’. That kept everyone working on the Leninist agenda.

Exactly the same procedure is at work with these successive globalist meetings. In this instance, the entire meeting can be seen to be WHOLLY UNNECESSARY. Why? Because only a few weeks later these people will be meeting again in the G-20 forum at the IMF/World Bank Spring Meetings in Washington, DC (second half of April).

Therefore, quite clearly, this G-20 spectacle event (not) is little more than a ‘do-something’ mass perception-moulding exercise in manipulating public opinion, so that popular anger does not get completely out of hand.

Not quite yet, anyway.

• POSTSCRIPT: THE ‘STATE WITHIN THE STATE’ IS ANGRY:
It is clear by its childish behaviour that the CIA/NSA/NSC is angry that its endless duplicity is being systematically exposed.

First we have renewed lies and diversionary untruths about The Queen on flaky websites posted by anonymous spooks. Then the NSA fools ‘snip’ our report dated 26th March 2009, as reported above. Now, we are informed of an attack by the Larouche CIA compartmentalised cadre which specialises, on behalf of the German dimension of the CIA ET AL., and its Deutsche Verteidigungs Dienst (DVD), Dachau, Nazi Abwehr Strategic ‘Black’ Deception Continuum bosses, in excoriating the British in order to divert the attention of the gullible from the true source of the world’s evils: THE ONGOING NAZI CONTINUUM. These people have long since discredited themselves: in the 1960s, Larouche himself was a Marxist-Leninist World Revolution agitator.

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.

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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.

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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.

U.S. FRAUD SCHEME LAUNCHED MONDAY IN BIG TROUBLE

QUESTION: WHAT IS THE ‘PRICE’ OF FRAUDULENT ‘ASSETS’ THAT HAVE NO VALUE?

Thursday 26 March 2009 00:01

MISPLACED WALL STREET GLEE AT FRAUD AGAINST U.S. TAXPAYERS

MID-SEPTEMBER ‘LOCKDOWN’ RECONFIRMED AS MOMENT OF TRUTH

INTERNATIONAL CURRENCY REVIEW DECONSTRUCTION OF FRAUDULENT FINANCE

MERKEL ORDERED REVENGE MURDER OF BRITISH TROOPS IN NORTHERN IRELAND

REVIVING THE CARCASS OF THE EXPIRED DERIVATIVES SECTOR

OBAMA SIGNS LOMBARD ODIER DARIER HENTSCH UP FOR ROLLING TRADING PROGRAM

PERVERSE U.S. OFFICIAL STRATEGY DOOMED TO FAILURE

BEST INDEPENDENT FINANCIAL BRAINS AREN’T BUYING IT

GOVERNMENT ARRANGED FOR THE BANKS TO STIFF THE CHINESE

BANKS USE BASEL-II AND TARP AS THEIR PRETEXT FOR ILLEGAL SEIZURE

CORRUPT GOVERNMENT AND CORRUPT BANKS WORKING TOGETHER

SO, WHAT ARE THE CHINESE GOING TO DO ABOUT THIS CRISIS?

BRITISH AND CHINESE HAVE BEEN TOO POLITE FOR TOO LONG

CONGRESS CANNOT CHANGE BASEL-II RULES! THAT’S THE POINT

BANKS ‘BLACKMAILING’ GOVERNMENT: BY PRIOR AGREEMENT

TOP OFFICERS OF THE BIG BANKS SHOULD HAVE BEEN ARRESTED

HOW THE CHINESE REACT TO THIS U.S. SCAM IS WHAT MATTERS NOW

G-20 MEETING IN LONDON WILL BE A FLOP

CRIMINALISTS DON’T CARE ABOUT PONZI VICTIM SUICIDES

THE MAD INTENTION: TO MAKE THE ENTIRE FAKE DERIVATIVES SECTOR WHOLE AGAIN

IS THIS BEING DONE ON PURPOSE?

IT’S NOT ‘THE ECONOMY, STUPID’: ITS ‘THE DERIVATIVES, STUPID’

• 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.

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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:

MISPLACED WALL STREET GLEE AT FRAUD AGAINST U.S. TAXPAYERS
On Monday 23rd March, as everyone knows, the Dow Jones Industrial Average soared by 6.8%, or 497.48 points, after details were released of how the Geithner Treasury proposes to relieve the criminal banks of the proceeds of their Fraudulent Finance operations, also known as ‘troubled assets’. TV screens were plastered with the unsavoury spectacle of brokers hugging each other, clasping hands and slapping each other on the back with joy.

Wall Street was ecstatic over the latest instalment of the gigantic fraud which the Obama-Biden-Geithner cabal have concocted to achieve the real objective of reigniting the derivatives trading carousel to inject value into worthless assets, lurking behind the public consumption objective of ‘freeing up the banks to start lending again’.

And, as usual, investors were jumping to knee-jerk conclusions, as was made clear by the crass reporting of this episode by The New York Times, which included comments such as the following attributed to T. Timothy Ryan Jr., President of the Securities and Financial Markets Association, who said the opposite of the truth of the matter:

‘For the first time in seven months, I can say they’ve done it right’.

MID-SEPTEMBER ‘LOCKDOWN’ RECONFIRMED AS MOMENT OF TRUTH
Before we continue, note the ‘seven months’ period mentioned here. Seven months takes us back to 10th-12th September 2008, when the $14.0 trillion of sovereign and HM The Queen’s LOAN funds were placed into ‘lockdown’ following the advice that we felt compelled to provide concerning the outrageous ongoing exploitation of The Queen’s LOAN money, which had been languishing within the Treasury Custodial Account network since it was sent over by the Bank of England on 19th-20th June 2007 to Bank of New York Mellon, whereupon the funds were hijacked for carousel financing purposes contrary to the instructions of the owner(s) of the funds.

The entire $14.0 trillion was finally removed from access by US parties altogether on 29th January 2009, after it had become clear that President B. Obama was in breach of the undertakings that he signed during his European trip last year, to effect the releases and proceed with the transparent Group of Seven-Approved Dollar private sector System Refunding Programme agreed upon by the G-7 financial powers in 2007 and 2008.

The Editor’s ‘exchange’ between Her Majesty The Queen and President Obama, published with the report dated 24th March 2009, summarises the present ‘state of play’ with respect to the proposal to proceed with the Refunding Programme independently of US Government intermeddling, from London. It is appended to this report as an Appendix for your convenience.

Mr Timothy Ryan Jr.’s reference to ‘seven months’ indicates what we know to be the case, namely that the ‘lockdown’ of the $14.0 trillion was the crucial factor that triggered the showdown.

It is also clear that because that happened, the White House, both under Bush II and Obama, are wilfully determined to ‘do it their way’ in accordance with the wishes of the money center banks – ‘their way’ involving the revalidation and revaluation of derivatives assets that are worth nothing because they are all NON-RECOURSE. This is clearly demonstrated, with the aid of charts, in the latest issue of International Currency Review [Volume 34, #2], which was mailed worldwide on 18th March 2009, just as the worst criminal event recorded to date in this crisis, apart from the stealing of The Queen’s gold, was about to ‘pop’ (see below).

INTERNATIONAL CURRENCY REVIEW DECONSTRUCTION OF FRAUDULENT FINANCE
To the extent that we have been able to clarify matters here, it is therefore a fact that every major government, institution and central bank in the world that matters has our deconstruction, in words and pictures, of the Fraudulent Finance Ponzi carousel – so that any attempt to smother reality is a complete impossibility. The issue’s theme is Systemic Fraudulent Finance and The Legalisation of Financial Corruption – which is exactly what the Geithner Treasury and the Obama White House are attempting to achieve. There is no change whatsoever from the previous Administration.

Now, the pack of hedge fund ‘big noises’ who have said they will ‘support’ the Geithner Fraudulent Finance Upgrade is headed by Bill Gross, of Pimco, which ‘works for’ George Bush Sr.’s criminal network, and therefore meets the requirements of the Nazi bank which stands behind this crisis – namely Deutsche Bank. It will be recalled that the German Chancellor, Angela Merkel, is bribed by Bush Sr. to protect his network’s assets within the German banking system.

MERKEL ORDERED REVENGE MURDER OF BRITISH TROOPS IN NORTHERN IRELAND
So it was no surprise to us when, all of a sudden a few weeks ago, a number of British troops in Northern Ireland were shot dead in cold blood at point-blank range. Why did this suddenly happen? Because, we are advised by UK intelligence sources, the German Chancellor, in deference to DVD, Dachau, gave the instructions for the Irish terrorist network, an instrument of long-range German Abwehr pressure against the United Kingdom, to be re-activated.

And why did Frau Merkel give these instructions?

Because the DVD and their associates inside Deutsche Bank had worked out that the events of 10th-12th September last year represented the gravest threat to the DVD’s operations and to its primary institution, Deutsche Bank, since the Second World War,

In parenthesis, it will be readily recalled that immediately after the 7/7 bombing of the London Underground and a bus in Central London, the order for which was given by the former French President Chirac on behalf of the Franco-German alliance, i.e. DVD, the Germans were told by a furious British Government (even though Tony Blair was totally compromised by both the Bush Crime Family and the European Union: see our report dated 12th October 2005: Archive) that if these terrorist acts, including the atrocities that were still ongoing in Northern Ireland, which unpenetrated components of UK intelligence knew were controlled ultimately by DVD, did not cease forthwith, Britain would initiate measures to exit from the European Union Collective.

Rather than risk facing the collapse of their long-range strategic deception entrapment operation calling itself the European Union, the Germans complied, and called off their controlled ‘assets’ in the Irish theatre. These were deliberately and provocatively reactivated by Chancellor Merkel the other day, in revenge for the deadly blow inflicted on the German hegemony project, by the events of 10th-12th September 2008 reported by this service.

REVIVING THE CARCASS OF THE EXPIRED DERIVATIVES SECTOR
Meanwhile the Obama-Geithner team are trying to rebuild the carcass of the exposed derivatives giga-pyramid-selling scam, despite the now deeply embedded and widely held knowledge that derivative so-called ‘Structured Products’ are worthless, and represent dead trash.

They are doing this by printing money and by creating debt out of thin air, while simultaneously operating a carousel platform which was triggered after the US Treasury found a foreign bank corrupt enough to agree to provide the foreign ‘wrap’ needed to reignite Fraudulent Finance trading under the radar, using monies that were ‘sequestered’ after the withdrawal of the $14.0 trillion on 29th January 2009, to form the basis for the secret trading operations which have been running for several weeks now at full tilt behind the scenes.

OBAMA SIGNS LOMBARD ODIER DARIER HENTSCH UP FOR ROLLING TRADING PROGRAM
The foreign bank was selected and signed up when President B. Obama arrived in Ottawa, Canada, on 19th February 2009, accompanied by the Chairman of his National Economic Council, Lawrence Summers, and the National Security Adviser, General Jim Jones. The visit, lasting seven hours, was Obama’s first trip abroad. A former US Ambassador to Canada, Gordon Griffin, made the following revealing statement about the visit:

‘There is an important “beyond Canada” component to this. Ottawa is providing a global platform’, he said. But he did not elaborate. Let us, therefore, elaborate in his stead.

The ‘important “beyond Canada”’ dimension’ referred obliquely to the signing of Lombard Odier Darier Hentsch, a very old Swiss bank, as the master counterparty for the hidden carousel trades that have been activated since shortly after that visit.

In other words, it took the Obama Administration just three weeks to find a corrupt foreign bank to do its dirty work – a display of wilful intent to engage in Fraudulent Finance on a gigantic scale (see below) in gross defiance of the Group of Seven, which had long since agreed the cost-free formula for reliquefying the US banks on-the-books – a formula which would cost the US Treasury and the taxpayer NOTHING because it would yield private sector TAXABLE REVENUE.

PERVERSE U.S. OFFICIAL STRATEGY DOOMED TO FAILURE
Instead of adopting this strategy, President Obama has knowingly adopted the perverse route to perdition, in deference to the blackmailing behaviour of the US banks: accordingly, since Obama is prepared to have the Federal Reserve lend untold volumes of fiat money creating Treasury debt in the background, he is deliberately and knowingly mortgaging the future of several generations of Americans, when he could have adopted the correct course and salvaged not only the American banking system, and economy, but the country’s battered reputation as a pariah state.

But he decided otherwise.

The Editor is perfectly well aware of allegations being made against the President of the United States, in all dimensions; but as a frequent visitor and friend of America, he considers that it would be unseemly for a ‘foreigner’ to engage in the polemical debate that is raging under that heading.

Furthermore, as a visitor, it is incumbent upon him to try to be polite about the Head of State, which is why he gave Mr Obama the ‘benefit of the doubt’ in the report dated 24th March 2009. It is not our job to enter into acrimonious internal debates that do not directly impinge upon the key vexatious INTERNATIONAL ISSUES that we have every right and a duty to our subscribers, to address. Some Americans who complained about the Editor’s ‘benefit of the doubt’ comment may have failed to take proper account of the Editor’s position here.

However given the grave INTERNATIONAL consequences of the doomed policies that President Obama is pursuing, we now have no hesitation, especially in the light of what transpired on Monday 23rd March – to be elaborated below – in stating that President Obama is engaged in Financial and Economic Fraud, not only against the American people, but against the Rest of the World, as well. We hope that this statement clarifies our position once and for all.

BEST INDEPENDENT FINANCIAL BRAINS AREN’T BUYING IT
Cutting a swathe through The New York Times’ coverage on Tuesday 24th March of the obscene outbreak of selfish euphoria on Wall Street on Monday, the following sober observations by Daniel Alpert, a Managing Director of the hedge fund Westwood Capital, stood out (in a secondary article):

‘We see another $1.5 to $2 trillion of as yet unrecognized losses from US assets still to hit global financial sector balance sheets and challenge its institutions. The near daily announcements over the past two weeks, by money center banks and finance companies, that they are making money this year on an operating income basis, have become borderline irresponsible, relative to the known continued deteriorations in value of the assets on their balance sheets and the continuing impact of a worsening recession’.

In other words, everyone’s under water: so what are they talking about?

Bearing in mind that the object of the White House exercise is FIRST OF ALL to reignite and re-start the derivatives carousel right across the board – an intention of extreme perversity, as we’ve explained – here is a deconstruction of events from 18th March 09 onwards, showing how ruthless these criminals are and why they can now be considered as dangerous as their evil predecessors.

Restarting the moribund (since 10th-12th September 2008) derivatives fraudulent money machine necessitates velocity of transactions once the pump has been primed: otherwise, in this carousel trading system, everything stalls. What the criminalist financiers NEED to reignite the system is LOADS OF NEW MONEY. This is why Geithner has come up with this scheme for new public-private partnerships, financed by fiat money generated by the Federal Reserve out of thin air but creating permanent real official debt on the other side of the balance sheet, so that the ‘private sector’ can provide the ‘new money’ that the criminalist financiers need to restart their giga-trading platform.

GOVERNMENT ARRANGED FOR THE BANKS TO STIFF THE CHINESE
We now understand that, as explained in the report dated 24th March, the Chinese parties were paid $13 trillion, between Wednesday 18th and Friday 20th March 2009, although given that the phrase ‘source of funds’ is strictly taboo now, neither we nor our sources are able to identify the complete provenance of this enormous volume of money – representing the ‘first instalment’ of the colossal sum that the Chinese are owed as explained in the preceding report.

But the Chinese parties then made the fatal mistake of agreeing to place some of these funds into a sort of ‘public-private partnership’ arrangement in the context of the latest Geithner wheeze which sent Wall Street investors into paroxysms of misplaced delight on 23rd March.

Guess what happened?

• The banks held onto the money. The banks would not release the funds repositioned with them by the Chinese parties, for the purpose for which the funds are intended. The US money center banks basically said: ‘We’re not paying anyone’.

BANKS USE BASEL-II AND TARP AS THEIR PRETEXT FOR ILLEGAL SEIZURE
Now the current Basel-II full disclosure regulations and the TARP legislation preclude the creating of non-securities such as derivatives ‘products’ for buy-sell trading operations by the new public-private partnership in which the Chinese parties were enticed to participate – thereby ‘enabling’ the banks to refuse to cooperate and to use this state of affairs as their excuse for holding onto the reinvested Chinese funds.

So, even as the Chinese parties were left understandably fuming and livid with anger at having AGAIN been defrauded by the crooks in the White House and the US Treasury, Timothy Geithner and Dr Ben Bernanke appeared before the House Banking Committee on Tuesday 24th March to ‘plead’ for changes in the banking regulations to permit ‘looser’ requirements – in other words, to ‘ask’ Congress to junk Basel-II (unspoken) so that the newly invested Chinese money could be legally deployed for the purpose intended by the Chinese after their arms had been twisted when they had demanded payment, or else they would exercise their lien over the Federal Reserve.

CORRUPT GOVERNMENT AND CORRUPT BANKS WORKING TOGETHER
Before we go any further, it needs to be understood that the criminal enterprise banks and the US Government ARE WORKING TOGETHER. This week, the big banks are the culprits. Last week, the authorities were the culprits. But now that it is the big BANKS who are illegally holding onto the Chinese money: after all, if it cannot legally (under Basel-II/TARP) be deployed for the derivatives trading purposes intended (which was a disastrous mistake on the part of the Chinese), the proper course of action for the banks would be to send the money back. But, being criminal enterprises, they have of course held onto it instead. Which was the whole purpose of the exercise.

Because the Government and the banks work together, the US authorities twisted the arms of the Chinese and persuaded them to participate in transactions KNOWING THEM TO BE ILLEGAL. To go through the motions of appearing to be ‘kosher’, Geithner and Bernanke appeared the next day before the House Banking Committee to ask the US Congress to ‘loosen the regs’ so that inter alia (unspoken, as indicated above) the Chinese derivatives trades can go ahead in the context of the latest instalment of the Geithner shambles. All very clever, very cynical, ruthless, and criminal.

SO, WHAT ARE THE CHINESE GOING TO DO ABOUT THIS CRISIS?
The central issue arising from this deplorable state of affairs can therefore be summarised in the form of the following questions:

• What are the Chinese parties intending to do, given that they have yet again been double-crossed by the US authorities but cannot blame the US authorities directly because the problem has ‘arisen within the banks’?

• And how long will the Chinese parties give the Americans before they take drastic action, as is their right, to obtain satisfaction following this latest display of outrageous criminal US official and commercial banking behaviour?

BRITISH AND CHINESE HAVE BEEN TOO POLITE FOR TOO LONG
If this Editor may now be permitted to indulge here in unsolicited advice, both the Chinese and the British parties have, in our view, been far too accommodating all along, as this crisis has expanded. The British are too accommodating because at the highest levels, business is still conducted on the basis of gentlemanly exchanges, and everyone is TOO POLITE.

• When dealing with gangsters, politeness is taken for weakness, which is why the British, too, have been repeatedly taken to the cleaners by these crooks.

The Chinese, too, are extremely polite: we know this from the impeccable manners and behaviour towards us of the Chinese Government subscribers to our printed publications. It is not for us to advise (but we hereby do so!) that when dealing with the organized criminal gangsters who have long since usurped power in the United States, politeness is a waste of time. It has its place at the beginning of a conversation: but the deceived and double-crossed Chinese parties need not now adhere to traditional, civilised cultural values when the magnitude of the crimes committed against them is known by both sides. On the contrary, a much harder line, and a willingness to adopt harsh countermeasures, is indispensable. These crooks have their weak spots, and the Chinese parties have more than enough intellectual resources to analyse their mentality correctly.

CONGRESS CANNOT CHANGE BASEL-II RULES! THAT’S THE POINT
Now it stands to reason that if the House Banking Committee were to have agreed to implement regulatory changes that fly in the face of Basel-II rules, any such changes, if agreed upon, would take weeks or months to travel through Congress. But the Committee could hardly consider any such departure. So what is the net result?

The banks get to keep a sizeable proportion of the Chinese trillions, which, you won’t be surprised to hear, they will be trading inside the Lombard Odier Darier Hentsch-wrapped derivatives carousel that was started up with the direct approval and very probably under the SIGNATURE of President Barack Hussein Obama – who, along with his Vice President Joseph Biden, has been talking up the Geithner Fraudulent Finance proposals that caused such an outbreak of unfettered joy on Wall Street. Which is another way of saying that President Barack Obama, Mr Timothy Geithner, Dr Ben Bernanke and Vice President Joe Biden, are co-conspirators in massive frauds.

Because in respect of the refusal of the banks to release the Chinese money that they have now effectively stolen, these operatives aided and abetted this latest outrageous theft, and it is clear from Obama’s visit to Canada, where he signed up Lombard Odier Darier Hentsch, that they knew precisely what they were doing all along.

BANKS ‘BLACKMAILING’ GOVERNMENT: BY PRIOR AGREEMENT
There is another way of looking at this – namely, that the banks are effectively BLACKMAILING the US Administration in accordance with the following equation:

• Get the regulations (Basel-II) loosened, and then we’ll think about releasing the Chinese monies. Unspoken: We may or may not also think about releasing other monies, especially $3.0 trillion to a US paymaster, that we were supposed to have released on 23rd March but conveniently managed to avoid doing. Also unspoken: We’ll do what we think is best for us and no-one else.

Because of course on Monday 23rd March, when payouts were widely expected, NOBODY WAS PAID because the banks kept all the money. The banks are holding a gun to the White House.

But on the other hand, the White House is quite content with this state of affairs because although that’s the way it looks, in reality the White House and the US Treasury are in cahoots with the banks because the primary object of everything Obama is doing is to reignite the derivatives carousel, which is the very opposite policy he should be pursuing.

TOP OFFICERS OF THE BIG BANKS SHOULD HAVE BEEN ARRESTED
The official response to the US money center banks’ seizure of the Chinese and other funds should have been to arrest all the senior officers of all the banks in question, and to do so in front of the TV cameras. Instead of which, co-conspirator Mr Timothy Geithner and co-conspirator Dr. Bernanke, against whom papers were served some time ago, appeared before the House Banking Committee to ask Congress’s assistance in making it possible for the banks to ‘enable the Chinese funds to be put to the use for which they were intended’. (Not really).

Except that, having got their fingers burned yet again, the Chinese parties should surely have decided by now that there is no way they will participate in ANY further US dollar transactions whatsoever – which may be why JPMorganChase has announced that it is disposing of certain shares in ICB, a Chinese institution (code for: the Chinese told them to get out of their laundry).

If we boil all this down further, we can see not only that:

• This operation against the Chinese was a deliberate dialectical operation coordinated between the Obama-Geithner team and the money center banks;

but also that:

• The banks have annexed a great deal of Chinese (and other) money that they will now be trading illegally, while at the same time they are anticipating a ‘get out of jail free card’ for their ‘virtuous’ behaviour in being ‘unable’ to release the Chinese funds for buy-sell fraudulent derivatives trade operations because to engage in such derivatives transactions (which they do all the time anyway) under Basel-II rules, would be fraud, commanding substantial jail sentences.

Geithner is a co-conspirator and a fraudster in appearing before Congress to try to get it to agree to changing the law, knowing full well that the Congress will have great difficulty conceding that it should water down Basel-II – not least because if that were to happen, all foreign banks would be precluded from dealing with the US banks under the Bank for International Settlements-brokered arrangements. Therefore, the appearance before the House Banking Committee of Geithner and Bernanke to argue for changes which Congress cannot in all ‘conscience’ (sic) possibly deliver, represented in itself a fraudulent charade.

HOW THE CHINESE REACT TO THIS U.S. SCAM IS WHAT MATTERS NOW
As we understood the situation on 25th March, the Chinese parties appear not yet to have decided how to react to this latest American official provocation. However there seems every prospect that if this hideous logjam is not broken, the Chinese will recall all debts from the dollar system. They are also talking in public about the dollar being replaced by a new international currency based on the International Monetary Fund’s Special Drawing Right (SDR) composite unit – something that cannot possibly be agreed overnight, and will take a long time to come to fruition, if it ever does. But open Chinese official talk along these lines is intended to raise the temperature of the ‘debate’,

Once again, diplomatic behaviour seems quite out of place here. It would be preferable for the Chinese to publicise what has been going on. The Editor cannot see why the power of genuine publicity cannot be put to good use in intergovernmental relations.

Instead of fighting these swine behind diplomatic cover stories such as the tensions in the South China Sea, why not go public with the necessary criminal information?

In the unlikely event of this further unsolicited advice being taken, the proper course of action must be to publicise precise details of the relevant aborted transactions (dates, precise times, references and so on) so that nothing can be challenged.

Given the extreme gravity of these abominations, publicising them might do more to bring these American official crooks and criminal banking enterprises to their senses (if they have any) than any other course the Chinese could take.

G-20 MEETING IN LONDON WILL BE A FLOP
By extension, we can now safely predict that the next conference on the calendar, the Group of 20 meeting in the London area, will be a bitter flop. The wronged Chinese parties have no incentive left to assist these US criminals out of the mess they have willfully expanded under President B. Obama. And here’s another point to bear in mind.

These crooks are only too delighted when observers such as the Editor of this service focus, for instance, on the Madoff scandal, the Stanford dimension, or the Friehling indictment.

Why? Because these developments represent, for these criminal operatives, something called COLLATERAL DAMAGE. They couldn’t care less about Madoff or his victims, or about Stanford ditto (although they took good care to murder Stanford’s sole accountant on 1st January 2009, the day after his contract with Stanford expired). So, while we are publishing reports about these PAST Fraudulent Finance operations, the criminalists in power and in the criminal banks are well away with their new Fraudulent Finance operations.

CRIMINALISTS DON’T CARE ABOUT PONZI VICTIM SUICIDES
The other day the Editor received yet another email from one of the 320,000 Ponzi victims, asking whether, in the Editor’s opinion, the money ‘due’ on the ‘humanitarian’ or ‘prosperity’ programs would ever be paid. In the first place, this is an unfair question: it is not the Editor’s responsibility to offer ‘opinions’ on other people’s problems (although the Editor does know the true answer to that question). But more to the point, the correspondent reminded the Editor of what he already knows – that many Ponzi victims have committed suicide, died in despair, suffered family breakdowns or other traumas as a direct consequence of the despicable behaviour of these criminals, who appear to have stolen ALL their money – consistently with the classic Ponzi scamming model. We started explaining this in the first quarter of 2007, long before the word Ponzi became almost as common as deleted expletives following the Madoff explosion: but the affected victims didn’t want to know.

But the point here is this: do these unspeakable criminals care a fig about the fact that an unknown number of these unfortunate people have committed suicide or died in despair?

Need we stress that the criminal operatives, having their consciences seared through with a hot iron, are completely indifferent to the suffering they have caused? True Christians know that these people will perish in hell for eternity – a fact that many of the perpetrators themselves also know full well, which is one reason why, psychologically, the fools think they have nothing left to lose by carrying on with their corrupt ‘business as usual’.

THE MAD INTENTION: TO MAKE THE ENTIRE DERIVATIVES SECTOR WHOLE AGAIN
With the Lombard Odier-wrapped illicit derivatives trading programme in full swing and being showered with what ‘new money’ the crooks have been able to generate and steal, the criminal official intention is to rebuild the broken derivatives sector, with the assistance of ‘bought and paid for’ corrupt hedge fund operators and money managers (not all of whom are professional sheisters obviously), and to keep the carousel going and building, fed with new money filched from gullible investors, whether borrowed on permissive terms from the Federal Reserve or not, with a view to making the entire derivatives mountain of around $700 trillion (excluding double-counting) ‘whole’ – notwithstanding the reality that hardly any of these derivatives ‘Structured Products’ contain ANY real value at all, since almost all of them are NON-RECOURSE.

This is all explained in the latest issue of International Currency Review, and also in Economic Intelligence Review [see second white panel], as well as in the four-page leaflet containing the three main charts which is being distributed in Washington, DC, and elsewhere.

All that our latest subscriber printed materials do is to point out the stark reality of the fact that these false constructs (derivatives) are by definition totally fraudulent and devoid of value, so that retrospective attempts sponsored by the demented US Government to pass off that they contain value represents a massive, unprecedented fraud on the US taxpayer and future generations of Americans, while at the same time:

• Guaranteeing the accumulation of new mountains of debt arising from the Federal Reserve’s outrageous lending for speculative purposes; and:

• Guaranteeing a hyperinflation. Pundits are now suggesting that this phenomenon will emerge in several years’ time. The Editor’s view is that the choices made by the new bunch of fantasists in charge in Washington are so extreme, So damaging, so wrong-headed and so destabilising, that the hyperinflationary pressures will become apparent much sooner than that – WITHOUT delivering any ‘beneficial’ impact to the ‘real’ economy in the interim.

IS THIS BEING DONE ON PURPOSE?
The decisions made since Obama took office are SO perverse that one is tempted to join those who insist that this is all being done on purpose. The correct answer to such empty speculation is that we don’t know whether this is the case or not.

On the basis of the Christian knowledge that the devil is the author of all lies and confusion, the Editor’s view is that these operatives are wallowing in devilish confusion and have fallen prey to diversionary, self-defeating, complex, elaborate ‘whizz-kid’, knee-jerk ‘solutions’ in a desperate bid to ‘resolve’ the colossal problem created by the corrupted money center banks themselves, which were indulging, until mid-September 2008, in unproductive, illicit, off-balance sheet speculative activity on a scale with no historical precedent.

That suggests that if it had not been for such wasteful,unproductive, untaxed, off-balance sheet speculation, many of the banks in question would be surplus to requirements.

According to Story’s First Law, ‘all organisations are run for the benefit of those who are running the organisation’. This, of course, explains why, deprived of the toys that they were playing with, the banks went on strike and have been hoarding and stealing funds ever since – precisely with a view to restarting the speculative, win-win Ponzi Fraudulent Finance that they were wallowing in prior to mid-September 2008, instead of focusing primarily on lubricating the real economy.

BANKS SUPERFLUOUS TO REQUIREMENTS
The smarter solution would have been to allow more than just Lehman Brothers to go to the wall. Wall Street, where the wall is, is supposed to believe in free markets, with no participant being subsidised at the expense of other participants. The new, decadent, twist is that all the relevant participants can have their corporate snouts in the trough, and to hell with the hyperinflationary consequences. The Wall Street institutions and the satellite hedge funds and other intermediaries, along with the banks, are all being subsidized AT THE EXPENSE OF THE REAL ECONOMY.

• It’s called a banker’s ramp.

IT’S NOT ‘THE ECONOMY, STUPID’: ITS ‘THE DERIVATIVES, STUPID’
And to cover all this up, the United States is now governed by a man who takes his cue from Fidel Castro and President Chavez. He thinks his gift of the gab can be relied upon somehow to save him from the devastating and very rapidly approaching adverse consequences of his perverse, wrong-headed decisions, which are holding up the recovery of the Rest of the World.

And he is using this gift of the gab to LIE to the American people that this is all about reviving the real economy, when it isn’t. It’s all about reviving the fraudulent derivatives sector carousel.

AND NOTHING ELSE.

• CMKM UPDATE:
The previously reported theft of the $12.8 billion was orchestrated to achieve three objectives at the same time:

• To dissolve the multi-billion dollar claims and Court Order related to CMKM et al, and to make it clear that the CMKM Attorney(s) have signed the appropriate documentation to secure the funds held at the Depositary Trust Clearing Corporation under Court Order, and STEAL THE MONEY.

• To satisfy the ‘Payee’ et al, by authorising and signing a Presidential Executive Order (15th January 2009) – thereby circumventing public disclosure (and possible physical threat when George W. Bush was no longer President of the United States) and STEAL THE MONEY.

• To STEAL the $12.8 billion via Presidential Order/Court Claim – and funds sitting under the control of the DTCC – with the intent to send the money to Carlyle et al., without any repercussions – via Bank of America, Tyler, Texas, and then to Canada.

• LORD MYNERS UPDATE:
Some time ago we reported that Lord Myners, the City (of London) Minister in the Gordon Brown Government, had publicly suggested that City bankers engaged in Fraudulent Finance should be prosecuted. We then received a prompt message to the effect that ‘they’ would be grateful if we did not ‘go on about this’. There was no explanation, as usual.

It has since emerged that Lord Myners, who was selected to head up the British Government’s investigation into tax havens, chaired a hedge fund group operating through Jersey, Channel Islands. Jersey is used by fund managers to keep profits offshore so as to avoid British tax.

Before becoming a Government Minister, Lord Myners was appointed to head a company that took over Liberty Ermitage Jersey, controlling investments worth about $2.0 billion. Myners made his fortune with Gartmore, a prominent City fund management outfit, the Jersey, C.I., offshoot of which handled millions of pounds for more than 4,100 overseas investors.

Lord Myners was also involved with Aspen Re, a reinsurance firm located in Bermuda, thereby saving large sums in tax annually. A UK Treasury spokesman said on 23rd March:

‘All of his past business roles are a matter of public record and he has made a full declaration of the interests. The experience he brings continues to be hugely valuable to the Government at a time when we are working to restore and rebuild the banking sector’.

In other words, the British Government is relying, in part, on the toxic experience of a hedge fund manager, familiar with the Fraudulent Finance sector of course, to advise them on how to REBUILD the banking sector which has been devastated by its indulgence in Fraudulent Finance.

Maybe when he called for British bankers who have been engaged in Fraudulent Finance to be prosecuted, he was going too far for the likes of certain interests. It is normally the case that these people reinvent themselves as ‘whiter than white’ (‘Blankfeinism’), but it would appear that Lord Myners’ linen might not necessarily emerge gleaming white from the wash.

APPENDIX ONE:
Observations from The New York Times on the latest instalment of ‘Geithnerism’ [25th March 2009]:

• Can banks that received Government bailouts use taxpayer money to bid on toxic assets, in the hope of making a profit? [Correct answer: NO – Ed.].

• Can banks sell some assets and then use the proceeds, leveraged by generous Government financing, to buy more of the same? [Correct answer: NO – Ed.].

• Might investment houses be tempted to overpay, if doing this buoys up the value of their own investments? [TARP provides for an Oversight Review Committee with clawback powers to compel restitution if too much is paid. This explains why Goldman Sachs is rushing to pay back the billions it received from the Government so that it is not bound by the TARP restrictions. No-one is asking about ‘source of funds’: whence the Goldman billions for repaying the Government? – Ed.].

• In the end, it will be the taxpayer who will be largely footing the bill.
[Not ‘in the end’: straight away – Ed.].

• Joseph E. Stiglitz, a Nobel Prize-winning economist, in an interview with Reuters, called the program “very badly flawed” and said it offered “perverse incentives” that amounted to “robbery of the American people”. [Couldn’t have said it better ourselves – Ed.].

• Bert Ely, a prominent banking consultant, said investors would be cautious because many crucial details were still missing – the size and terms of loans they would receive from the Federal Deposit Insurance Corporation, for example, and the amount of equity they would be allowed to put in, and whether banks would be allowed to walk away if they did not like the price at auction. “Today we know a lot more than we did yesterday, right?” Mr Ely said. “I’m being facetious!”.

• Many questioned the auction mechanism to sell toxic assets off from banks’ balance sheets. Price, most experts agree, is the biggest sticking point. The banks want to sell high. Potential investors want to buy low. [There is STILL no indication of how the fake ‘assets’ that are to be bought initially, will be priced – Ed.].

• Banking executives said that that their institutions would not want to unload ‘assets’ at fire-sale prices, a step that would compel many of the banks to raise sizeable amounts of additional capital. [Even though ‘fire-sale’ prices would be much too expensive given that the assets are fraudulent to begin with and therefore worth $0. $0 + $0 = $0, usually – Ed.].

• Under the accounting rules, banks must carry securities on their books at market prices. Most financial firms have already marked down these ‘assets’ to prices that might be low enough to lure buyers. But banks need not carry ordinary loans at market value. Instead, they are allowed to hold them at their higher values until they are repaid. So, for many commercial banks, selling loans now, at distressed prices would almost certainly lead to large losses. Such losses might raise questions about how some banks will fare in a so-called stress test that Federal regulators are in the process of applying to about 20 lenders.

“I don’t see how they are going to get the banks to sell”, said an executive at a large bank.
There are going to be substantial write-downs taken to get them off the books”.
[In other words, ‘Geithnerism’ CHANGES NOTHING. It doesn’t ‘amend reality’].

INTENTION HAD BEEN TO GET STARTED WITH CHINESE MONEY
After the Chinese parties had made the grave mistake of caving in to cynical pressure from the US authorities to participate in the latest instalment of ‘Geithnerism’, the Chinese would presumably have indicated their willingness for some of their funds to be used to purchase ‘toxic’ assets. The banks would have said: ‘But at what price?’ The Chinese would have responded: ‘Well if you don’t know the start-up buying price, we want our money back’. At which point the banks said: NO WAY.

APPENDIX TWO [excerpted from the report dated 24th March 2009]:
FACE-TO-FACE EXCHANGE BETWEEN PRESIDENT OBAMA AND THE QUEEN

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?

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.

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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.

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UPDATED: EMBARGO SANCTIONS TOOK EFFECT NOON EST

PRESIDENT ERUPTED INTO AN OUTBURST OF HITLERIAN FURY

Monday 11 February 2008 18:17

URGENT UPDATE, 12.45AM, TUESDAY 12TH FEBRUARY:
This Update amends certain information in the report below and at the same time confirms its overall accuracy. Specifically:• The statement in the earlier Update below that the 160 representatives of foreign countries that have been waiting around, on and off, since last October for the settlements, were told to go home, was correct. However AFTER the event in the Oval Office described below, this instruction was reversed, and the representatives of the 160 countries were advised to wait around in the United States for a further 48 hours, pending resolution of this crisis.

• We are AUTHORITATIVELY advised that this further ‘slippage’ does NOT imply the emergence of yet another deception device to gain more time, because certain events will take place in the very near future (which you may be able to work out from what we have already stated) that will force the issue once and for all. All that can be stated right now is that the retraction of the advice to the 160 representatives is highly significant, and that the earlier instruction they received to go home, was correct. What has changed is that the instruction has since been reversed, BECAUSE:

• Our earlier information that matters had to have been resolved by 6.00 EDT (which remains as we originally stated the matter, unchanged in the text of the first version of this report dated the 11th February, given below) was incorrect, because our sources have since advised that the 6.00pm in question was PARIS time, six hours ahead of East Coast time in the United States.

• Therefore, the ABSOLUTE DEADLINE for the application of the G-8’s embargo sanctions was NOON ON MONDAY. And at noon on Monday, the sanctions duly kicked in. The precise sanctions which began to bite against the US then are not yet indicated, but what we do know is this:

• The four oil tankers which were sitting half a day off the coast of Saudi Arabia en route to the United States WERE TURNED BACK AFTER NOON EASTERN STANDARD TIME. That explains why they were turned back during Monday, rather than later as would have applied if our 6.00pm EDT point had been accurate. We therefore update and amend this information accordingly.

• The CIA was quote furious unquote when it discovered that we had published this information. The hardest evidence of sanctions was first revealed by the changed shipping movements. The Agency assumes that it alone is entitled to the possession of information to the exclusion of the hoi polloi, the Goyim and the masses. Well, we disagree. Since these developments affect the future of the whole of humanity, our policy is to publish every scrap of information we can lay our hands on.

NOW:

• We ALSO know that when the embargo sanctions took effect from noon onwards, the reality of the situation was borne in on the President of the United States FOR THE FIRST TIME.

• Whereupon the man erupted into a Hitlerian rage. ‘I am the President of the United States, I tell people what to do, no-one tells me what to do, I set policy and I take orders from nobody’: add any expletives deleted to taste. In response to which latest Adolf Hitler-style outburst, the international community is reported to have responded that the G-8 has taken its decisions, is implementing its decisions, and will not be paying attention to anything you say (unspoken: because you, Sir, are a common and a war criminal and you are facing the come-uppance that you arrogantly thought could never happen to you, Mister). Anyway, the US President erupted into such an outburst of fury that, when he finally came to his senses (not that he has any), the scenery had completely changed.

• Now what happened thereafter, we do not know. But what we DO know is that, whereas a few hours ago, the overall situation looked absolutely hopeless, the CURRENT state of affairs is that a concerted last-minute, long-past-midnight attempt is being made to resolve the matter over the next 48 hours. WE FURTHER UNDERSTAND THAT, AS IS HINTED ABOVE, CERTAIN VERY DECISIVE DEVELOPMENTS ARE LIKELY TO ENSUE SHORTLY, WHICH WE CANNOT GO INTO.

Because of the rapidly changing situation, we have added the above at the top of the report filed on 11th February, which also contains the earlier Updates timed at 9.30pm Monday. These, plus the original text (with an error corrected) remain as originally posted, so that the sequence is plain.

• UPDATE, 9.30PM UK TIME, 11TH FEBRUARY:
UNCONFIRMED REPORT THAT THE 160 COUNTRY REPRESENTATIVES THAT HAVE BEEN WAITING ON AND OFF FOR SETTLEMENT SINCE OCTOBER, WERE ALL TOLD TO GO HOME TODAY. OTHERWISE THEY MAY BE STRANDED…

• UPDATE, 9.30PM UK TIME, 11TH FEBRUARY:
THE FOUR OIL TANKERS OFF SAUDI ARABIA [SEE BELOW] WERE TODAY ORDERED TO RETURN TO THEIR SAUDI PORT, AND NOT TO PROCEED TO THE UNITED STATES.

• UPDATE, 9.30PM UK TIME, 11TH FEBRUARY:
THERE HAS BEEN NO SIGN OF SETTLEMENT TO DATE.

G-7(8) SANCTIONS PAPERS SIGNED WITH THE WORLD COURT TODAY

SETTLEMENT HAS TO DONE NOW AND COMPLETED BY 6.00PM EDT MONDAY

IF SETTLEMENT IS ABORTED, THE U.S. PRESIDENT, VICE PRESIDENT, CABINET, CONGRESS AND THE SUPREME COURT WILL BE ARRESTED IN ACCORDANCE WITH THE G-8’S WORLD COURT ORDERS (WE BELIEVE, BY THE U.S. MILITARY), ACCORDING TO FOCUSSED SOURCES

INTERNATIONAL BANKING WILL BE SHUT DOWN ON WEDNESDAY

• FOUR OIL TANKERS OFF SAUDI ARABIA ORDERED TO STAND BY TO RETURN TO PORT

• TWO AMERICAN SHIPS WERE TURNED AWAY BY JAPAN SUNDAY

• ALL AMERICAN COMMERCIAL AND MILITARY AIRCRAFT ARE ON STAND-BY TO RETURN TO THEIR AMERICAN HUBS THIS EVENING AND TOMORROW IN THE EVENT OF NON-PAYMENT

• FOREIGN CARRIERS WILL HAVE TO RETURN HOME BECAUSE OF RETALIATION

FULL-BLOWN GLOBAL TRADE AND FINANCIAL WARFARE WILL BREAK OUT IMMEDIATELY

THE WEST WILL BE SPLIT DOWN THE MIDDLE, BUT IT WILL BE SHOWN TO BE BUSH’S FAULT

THE UNITED STATES’ BORDER WITH CANADA MAY HAVE TO BE CLOSED

• NOTE ON THE DEFINITIONS OF THE VARIOUS GROUPS OF NATIONS REFERRED TO:
The Group of Eight and the Group of Ten: The Group of Eight consists of the United Kingdom, the United States, Canada, France, Germany, Italy, Japan and Russia (admitted in 1998). The Group of Eight minus Russia is called the Group of Seven, and it continues to function in that format from time to time. The Group of Ten, confusingly, consists of 11 members: United Kingdom, Belgium, Canada, France, Germany, Italy, Japan, Netherlands, Sweden, Switzerland and the United States.

Thus there is overlap. It is generally thought that for practical purposes the Group of Ten (G-10) has integrated its strategy on sanctions against the United States, with the Group of Eight. In all current coverage, the ‘Black Sheep’ is the United States, which is obviously excluded from the drastic sanctions decisions that have been taken. It is absolutely unprecedented for the Group of Eight/Ten nations to implement economic embargo/sanctions against one of its member countries.

• The controlled ‘mainstream media’ is so embarrassingly behind the curve over this crisis that it would be laughable if it were not pathetic and disgraceful. Certain controlled websites, ditto.

By Christopher Story FRSA, Editor and Publisher, International Currency Review, World Reports Limited, London and New York: www.worldreports.org. Press NEWS and the ARCHIVE Button on the www.worldreports.org Home Page for our ‘Wantagate’ reports since April 2006.

• The white panel below NEWS gives details of our intelligence titles as they are published.

• Please Make a Donation, if you feel able to do so, to help finance Christopher Story‘s ongoing financial global corruption investigations. Your assistance will be very sincerely appreciated and will make a real difference, hastening the necessary resolution of the worst financial corruption and linked financial fallout in world history. Our Wantagate reports been calling all the shots, given the hijacking of Wanta’s Settlement. This is the 92nd Wantagate report: over a million words to date.

• BOOKS: ‘The Red Terror in Russia’, by Sergey Melgounov, is published by Edward Harle Limited and available via this combined website. It describes what the Dark Forces pulled off in Russia, and what they may have in mind for the United States and Britain (a.k.a. ‘the Main Enemy’) if we do not pull ourselves together. See also the Editor’s 740-PAGE book ‘The New Underworld Order’, for the detailed background on the World Revolution crisis that we are all living through.

• Note: Please keep on not shooting the messenger. The following report is based upon our best information and belief. If matters turn out differently, or the timeframe changes, as has occurred since Saturday, this will reflect NEW developments AFTER collection of the intelligence contained herein. We have flies on walls all over the place, but sometimes they may be on the wrong walls.

THE INITIAL G-8 COMMUNIQUE IS DECEPTIVE
The G-8 issued a communique waffling about the turmoil in the credit markets without, of course, mentioning that the global financial crisis is 100% attributable to the massive long-term fraudulent finance offensive masterminded by an international criminal syndicate bent on seizing the assets of the whole world, in accordance with the Thousand-Year Reich delusion promulgated on behalf of the manic Pan-German elite by their intelligence clone Adolf Schickelgruber, a.k.a. Hitler, and their renegade Zionazi associates working together under the evil umbrella provided by the Dachau-based ‘Black’ German counterintelligence agency, Deutsche Verteidigungs Dienst (DVD).

Of course, the purpose of the G-8’s anodyne communique was to pretend that things are relatively normal, and also to cover the likelihood that settlement will take place, as well as saving the G-8/G-10 from having to assume the worst. But we believe a duplicate communique, which can be issued separately, is ready to be publicised in the event that the settlement process, which is believed to have begun, is aborted by the traitors and the crime syndicate, in collaboration with their criminal enterprise banking associates.

Ambassador Wanta’s $4.5 trillion (plus $350-$400 billion of interest due under the Universal Commercial Code) is held in a ‘package’ that is separate from all other payments, as we had stressed from the outset. This only became clear again within recent days.

DECISIVE SANCTIONS COMMUNIQUE READY TO BE ANNOUNCED
As indicated, issuance of the usual anodyne communique did not preclude the further issuance of a substantive one, spelling out the definitive features of the embargo sanctions against the United States, which military sources inform us, through intermediaries, are in place. The message from this source, timed and dated 11:03pm (UK time) 10th February 2008, stressed ‘without specifics that the sanctions are already in place, and the (US) military is fully aware and up to speed on it’.

The research group reporting to the Joint Chiefs had studied our posted reports dated 9th and 10th February, prior to providing us with these guarded observations. We naturally acknowledge their need for circumspection and do not complain about the lack of specifics here.

The military-sourced information included a further comment that the group believed that the Group of Eight will issue a statement about the embargo sanctions today.

• However, illustrating how rapidly the situation is liable to change, this input is contradicted by three separate intelligence sources who now affirm that the drastic sanctions outlined in our two preceding reports will be implemented tomorrow, Tuesday 12th February 2008, should access and payment not have been effected by 6.00pm New York time this date (today). The sanctions are real, and we believe that if payment/settlement is again aborted, they will be implemented. Period.

RISING TENSION INDICATED BY BUSH’S ‘RETALIATION IN ADVANCE’
The Guardian led with a report on Monday 11th February to the effect that ‘Bush orders clampdown on flights to US: EU officials furious as Washington says it wants extra data on all passengers’.

The curiously timed report stated that the Bush Administration is pressing the 27 EU Governments to sign up for a new range of so-called security measures for transatlantic travel, including allowing armed guards on all flights by US airlines from Europe to America (such as may well be closed down tomorrow – Editor). The Guardian elaborated that ‘the demand to place armed air marshals onto the flights is part of a travel clampdown by the Bush regime that officials in Brussels have described as ‘blackmail’ and ‘troublesome’’, etc etc.

But the way WE read this report, and its timing, is that the Bush Administration is, even at this late stage, trying to blackmail its way out of the bind for which its leadership’s own criminality is solely responsible. This development should be placed on the negative side of the ledger right now.

BUSH’S BAGMAN TRIGGERS INCREDULITY AT PARIBAS
The ‘excuse’ on Saturday was that this ‘Joe Gross’ character, believed to be Bush’s Bagman, Marvin Davis, whom we believe may be Marvin Bush, arrives at Paribas in a surprise visit last Friday, as we reported on 10th February, carrying instructions which diverged from all previous instructions. Prior to last Friday, the general instruction to all the criminal enterprise banks had been: ‘Go through the motions of complying with administrative procedures relative to payment, knowing that the process will be aborted as in the past’, in accordance with the ‘never-pay’ model developed by the arch financial criminal Dr Alan Greenspan in collaboration with Godfather George Bush Sr., that we have described in earlier reports.

• The purpose of that model was to ensure that 100% of funds contributed by investors could remain stolen, along with Ambassador Wanta’s funds and every cent leveraged off the top of them.

But on Friday, all of a sudden, Bush’s Bagman arrives at Paribas with an actual order to settle, and for the bank to get on with it without delay. As we described yesterday, this caused dismay among the bank’s General Management, because the institution had everything set up to ‘comply’ with the ‘never-pay’ model, and had never expected to be called upon to procure settlement at all.

• Therefore, bank officers were dumbfounded and protested that they could not comply within the timeframe (namely: DO IT ON SATURDAY 9TH FEBRUARY, OR ELSE).

We concede that THIS demarche, too, could have been a deception, but given the overall flood of current intelligence, we doubt that this is the case. Time will shortly tell.

REITERATION OF THE AGREED-UPON G-8 SANCTIONS AGAINST THE UNITED STATES
The other sanctions which will be applied, failing settlement by 6.00pm EDT today, include:

• All US commercial and military flights to the nine G-10 countries will be refused landing permission. US carriers have accordingly been advised to stand by to fly all aircraft home.

• Wire transfer payment and receive facilities handling US remittances involving the embargo-setting countries will be suspended, causing immense and far-reaching financial, followed by economic, disruption. International banking will be effectively closed down on Wednesday.

• Saudi Arabia and the ‘country level’ of the oil cartel will cease oil deliveries to the United States.

SANCTIONS AGAINST THE UNITED STATES ARE ALREADY TAKING EFFECT
That NONE OF THIS IS BLUFF can now be asserted with complete confidence, because:

• Two US Naval vessels attempting to berth in Japan were turned away and ordered to leave Japanese waters on Sunday 10th February.

• Four oil tankers which are located half a day out from Saudi Arabia have received instructions to stay there until further notice. They will be ordered to return to Saudi Arabia if the release has not taken place by 6.00pm EDT TODAY.

• President Chavez of Venezuela stated over the weekend that Venezuela may suspend its oil deliveries to the United States. The ostensible context of this threat is legal action by ExxonMobil in US, Dutch and British Courts aimed at the freezing of the assets of Petroleos de Venezuela (PDV) in order to obtain compensation from Venezuela following the earlier nationalisation by the Chavez Government of a large oil project. Chavez explicitly stated that ‘if Bush wants to harm us, we’ll harm him back’. This matter needs to be considered in the overall embargo/sanctions context described here and in the two preceding reports. In other words, if those 4 Saudi tankers turn back to Saudi Arabia, Venezuelan oil deliveries will not be available to the United States either.

To elaborate further:

• All American commercial and military aircraft will be ordered to leave foreign locations and to return to their United States hubs in the event of the settlements being aborted today [see above]. This information has leaked because all US airlines have been so advised. This affects all foreign airlines that fly in and out of the United States as well.

• International banking transactions will be completely collapsed by Wednesday in the event that the releases have not been implemented by 6.00pm today.

• The US border with Canada may have to be closed.

• It follows that the standard of living of all Americans will suffer a blow without precedent, and Americans will not know what has hit them. They will soon find out, when the entire Government is arrested: see here:

BUSH, CHENEY, ENTIRE CABINET, SUPREME COURT AND CONGRESS WILL BE ARRESTED
We further understand that the Group of Eight countries minus the United States (Canada, Britain, France, Germany, Japan, Russia and Italy) signed the necessary paperwork with the World Court TODAY which provides for the prompt implementation of the already threatened arrests on treason charges of the following:

• President George W. Bush Jr.
• Vice President Richard Cheney
• The entire Bush II Cabinet
• All Members of Congress, including presidential candidates
• The entire membership of the United States Supreme Court

In the light of special information about the US military being ‘fully up to speed with’ and on top of the rapidly developing situation, it stands to reason that the military will perform these arrests on behalf of the agents/agencies acting for the World Court, namely Interpol, MI6 and possibly other unnamed agencies. That is our working assumption.

It should be pointed out that all the above are themselves, without exception, also vulnerable to prosecution not least for breach of the Misprision of Felony Statute (as indeed is every reader of these reports who, knowing the facts of these criminal actions, fails to report them as specified in the Statute). It will be recalled from our list of Clinton Presidential Pardons that some of those who were pardoned by former President Clinton had been jailed on Misprision of Felony charges. It therefore follows that this is BY NO MEANS A DEAD STATUTE. On the contrary:

U.S. CODE, TITLE 18, PART 1, CHAPTER 1, SECTION 4: MISPRISION OF FELONY:
‘Whoever, having knowledge of the actual commission of a felony cognizable by a court of the United States, conceals and does not as soon as possible make known the same to some Judge or other person in civil or military authority under the United States, shall be fined under this title or imprisoned not more than three years, or both’.

HELLISH KNOCK-ON CONSEQUENCES COULD BE IMMINENT: LINES AT GAS STATIONS
The knock-on consequences if the Wanta and other settlements are aborted today will be quite horrific. Given the idiotic ‘just-in-time’ globalisation procurement system, supplies of everything under the sun will suddenly dwindle to near-nothing. Prices and costs will go through the roof as shortages of everything, including food, intensify at once. Supplies of oil taken from the Strategic Petroleum Reserve will alleviate the immediate impact of the oil embargo, but gasoline will have to be rationed, and lines will suddenly erupt at gas stations around the United States – which is the most politically sensitive of all developments for any US Government.

It will be blamed for the hardships that the American people will abruptly be called upon to endure. And those hardships will have been brought about exclusively by the criminal financial operations of the most corrupt US Administration in history, AND BY NO OTHER FACTOR.

The stock market will implode as the banking sector is closed down, banks will be on their last legs or will never reopen their doors, Wall Street will look ridiculous and will be seen to be redundant, the political consequences will be extreme, and heaven knows what grim social consequences will ensue. We would not be at all surprised to see racial attacks, including threats against bankers and other capitalists perceived to be thieves, as the truth of what has been going on seeps through the bovine resistance of the controlled ‘mainstream’ media, into the general public domain.

The actual state of the US financial system today has been well summarised by Bob Chapman in his ‘International Forecaster’. What Mr Chapman has to say rang true with this Editor, but we took steps to obtain a second opinion from an eminent expert, who said that Chapman’s report was ‘spot on’. In order not to spoil his hyperbole, we append his accurate description of where the United States is at, to this report, as an Appendix.

Quite clearly, if one major bank collapses, the resulting rolling systemic contagion will engulf all vulnerable banks worldwide. That this may occur in the event of the G-8’s threatened sanctions being applied against the United States (as has already started to happen: see above) is a virtual certainty. If the sanctions go fully into effect, wealth destruction may occur on a scale with no historical precedent, beggar-thy-neighbour trade warfare will erupt across the globe, exchange controls will be imposed, and it will hardly be long before physical warfare ensues, although one cannot yet predict what precise concatenation of evil events would trigger such an outcome.

U.S. MILITARY ‘FULLY UP TO SPEED’ AND READY FOR WORST CASE SCENARIO
As indicated above, the US military is reported by our impeccable sources to be ‘fully up to speed’ and ready for the worst case eventuality. Since, by defying the entire international community and continuing to renege on their formal undertakings and persisting with their endlessly proven, very closely monitored financial criminality, President Bush and Vice President Cheney will have acted contrary to their solemn obligations and against the interests of the United States and the American people, they will have committed gross treason (not that this would be anything new) and would in our opinion be certain to be arrested, along with the entire Cabinet, Members of Congress and the entire Supreme Court. This is provided for in the documents signed by the Group of Eight powers minus the United States with the World Court this morning. The US Supreme Court is in contempt and the clock is ticking on that score, as well.

The Editor of this service and others believe that the wayward schizophrenic in the White House is perfectly capable, as Adolf Hitler was, of doing the opposite of what is rational, since he, like Herr Shickelgruber, is dictated to by ‘familiars’ who tell him when to agree, when to renege on what he agreed yesterday, and when to stand on his head. He is also governed by the input of his manic CIA handlers, who are doubtless working to the DVD’s global calamity agenda. We therefore face, as we stated yesterday, the most critical global situation since 1939.

THE THREE OBVIOUS POSSIBILITIES
Obviously, there are three possibilities: (1) Settlement at last today; (2) Further defiance by the White House, leading to the promulgation and formalisation of the sanctions that are already in force tomorrow; (3) Further ‘slide’ in the situation, as in the past.

However we believe that the international community is so seized of the urgency of the situation that the third alternative is less likely than either (1) or (2). But one thing is certain: None of this would have come about had it not been for EXPOSURE, as the Syndicate never had, as we now know for certain, any intention of paying any payee a single penny. Ever.

APPENDIX:

The worst case scenario is described here by Bob Chapman in his ‘International Forecaster’. It accurately describes the state of affairs as it exists today: so the worst case scenario is where we’re at already. It can only be averted by settlement and prompt implementation of The Wanta Plan. The Editor has left Mr Chapman’s engagingly forceful language unchanged with the exception of a mild (if understandable) expletive, the incidence of which has been somewhat reduced.

Our only comment would be that, in his first sentence, he should have stated ‘You need look no further than the World Reports website, before then looking inside ‘the offices occupied by credit managers and loan underwriters and banks and lending institutions around the world’’. Not being aware of Wantagate placed Mr Chapman at something of a disadvantage, although his diagnosis is brilliant and accurate. Because he didn’t choose to factor The Wanta Plan and the settlements into his analysis, he implies that the meltdown that he so graphically describes is unavoidable: whereas while we agree with him that ‘it could be’, we also know that The Wanta Plan and the settlements will ‘rescue’ the situation at the final nanosecond.

The cost of this will be something approaching hyperinflation in 18 months’ time, which will be attributable exclusively to the serial financial criminality of the Bushite-Clinton faction of the international geopolitical financial fraud syndicate. The forthcoming inflationary holocaust will probably decimate the next US Government, as may possibly be intended. ‘Enjoy’ (ugh).

US MARKETS

If you’re still wondering what the current credit-crunch catastrophe is all about, you need look no further than the offices occupied by credit managers and loan underwriters at banks and lending institutions around the world. Each time one of these poor, unfortunate souls picks up a loan file, bullets of sweat start to run down their foreheads as their minds are filled with ominous foreboding and their hearts are gripped by a deadly mixture of bone-chilling horror and stark, raving terror, wondering whether this particular loan will be the one that ends their wavering career and the very handsome salaries and bonuses that they have become accustomed to receiving over the past several years during which defaults have been virtually nonexistent. What are they afraid of?

According to a recent article by Jim Willie, there are a total of some 10.4 trillion dollars worth of dollar-denominated bonds of which at least 7 trillion dollars worth are prime AAA and of which about 1.4 trillion dollars worth are subprime BBB, with the remainder being Alt-A’s which are somewhere in between. He further states that according to the various bond indices, the prime bonds have lost about 30% of their value, amounting to a loss of about 2.1 trillion dollars, which Wall Street refuses to even discuss, while the subprime bonds have lost about 80% of their value, amounting to a loss of about 1.1 trillion dollars. And let’s not forget the ALT-A’s which are kicking in another cool trillion in losses and which the pirates of Wall Street are still dancing around much the same way that a bandito’s victim would do a Mexican hat dance around a sombrero while bullets whistle and ricochet around his wildly moving feet. FINANCIAL ARMAGEDDON, BATMAN, THAT’S A MIND-BLOWING 4.2 TRILLION DOLLARS OF LOSSES!!!

Yes, you read that correctly, that’s trillion with a “T” and this combined total is close to one third of the entire US Gross Domestic Product, which has just been ‘flushed’ in a matter of months!

These jaw-dropping losses on AAA, ALT-A and BBB paper are greater by a factor of ten than the grossly understated loss figures that the three stooges of our financial system, meaning our corrupt government, Wall Street and corporate America, would have us believe!

This unbelievable total of 4.2 trillion dollars of losses is spread around the globe, and due to our opaque and completely unregulated system of banking and finance, for which we can thank our farcical, fraudulent, feckless Fed, no-one knows where the freak any of these losses are or who the walking-dead victims are! This is like a financial nightmare adaptation of George Romero’s horror classics “Night of the Living Dead” and “Dawn of the Dead”.

And this does not even take into account the multiplication of these losses due to leverage or the further downgrading of AAA paper due to the loss of AAA status by bond insurers which is the only thing that made many of these bonds AAA in the first place! If you were a credit manager or a loan underwriter, would you approve a multi-million or multi-billion dollar loan to anyone for any reason unless you were absolutely 100% sure you would get repaid on time?

Every time you pick up a file, it’s like playing Russian roulette with your career for crying out loud! And you were wondering why we have a credit crunch? We wonder why any loans get approved AT ALL! In fact, we’re starting to feel some of that bone-chilling horror ourselves as we try to wrap our minds around the immensity of these problems.

What have these madmen done to the world economy?! If you are a credit manager or a loan underwriter, you’re not looking at a 70 or 80 percent recovery if one of these zombies is on your approval list. You’re looking at a big goose egg, a big ZIPPO, and we don’t mean the kind you use to light cigarettes! This is where a bevy of security guards show up in your office and ask you to empty out your desk after which they quietly escort you out the front door to your car and insist that you leave the premises immediately.

And Heaven forbid that anyone should so much as whisper anything about the potential losses from credit default swaps and interest rate swaps lest they die of a huge myocardial infarction from merely discussing such losses, much less trying to comprehend them, because the magnitude and consequences of such losses are completely unprecedented and beyond the ken of mortal men!

We are told that there are 450 trillion dollars of notional bond debt covered by interest rate swaps, which is about thirty times US GDP. This is sheer madness. We are told in “studies” that the losses
should be limited to about 6%, or “only” 27 trillion dollars [WHICH ‘JUST HAPPENS’ TO BE THE WANTA FIGURE: Editor]. That alone is enough to send chills up and down your spine while your single heart palpitates. But aren’t these the same people that told us the real estate markets were experiencing a slight downturn and that it would be contained?

And didn’t they say the same thing about the credit crunch? What if they’re wrong again this time?! What if it’s 7%. That’s “only” another 4.5 trillion dollars of losses! That’s more than all the prime, Alt-A and subprime bond losses put together (at least so far)! What if it’s 20%? That would be a 90 trillion dollar loss! That’s 6 times GDP for Pete’s sake!

And what about all the lunatics who bought crazy credit default swaps without buying any of the underlying bond debt. Don’t they know that in order to make a claim under a credit default swap you have to turn the security over to the insurer, or you’re dead in the water? And what happens when the amount of the swaps exceeds the debt that is supposed to be covered. Is everyone supposed to play musical chairs to see who is left standing without holding a bond to redeem?

Has anyone involved had so much as a single thought going through their heads while all this was happening? This credit default swap situation alone is pure unadulterated lunacy, but we have not even mentioned the interest rate swaps yet. There’s another 600 trillion of notional principal wrapped up in these weapons of mass financial destruction.

That’s forty times GDP in notional principal. Who was asleep at the wheel while these puppies multiplied? For every trillion of notional principal, all those who are on the wrong end of these thermonuclear devices by only a 1% differential between fixed and variable rates get to eat 10 billion in losses. When we get double digit inflation due to rampaging risk reassessment from imploding bonds and credit default swaps while the Fed attempts in vain to raise rates [SEE PREVIOUS REPORT: Editor] to stop hyper-stagflation as it reaches full bloom in its reign of terror, what if the differential between fixed and variable returns for those on the wrong end of these reserve-vaporizers rockets to 10%.

That is 100 billion per trillion of notional principal. Whew, we sure hope the big banks who own most of these reserve-destroying financial meat grinders don’t have lopsided trading positions between fixed and variable rate swaps, but given what we’ve seen so far, we hold out little hope for a good conclusion. [Editor: That’s because Mr Chapmen never read up about Wantagate and The Wanta Plan: just shows what thought ‘compartmentalisation’ does, doesn’t it?].

Bank reserves are being eaten alive by loan defaults and asset write-downs faster than the Fed can replace them. That is because the fractional reserve system Ponzi scheme is now working in reverse and unravelling big-time. The Federal Reserve and Wall Street made a big blunder and grossly underestimated the percentage of loan defaults from toxic waste and the impact that this would have in non-subprime sectors while they grossly overestimated the liquidity of this kind of maniac paper and falsely boosted its credit rating.

And remember, the Fed cannot control the creation of credit by non-bank institutions, which are also getting hammered. The banks that dabbled in toxic waste must either borrow reserves from the Federal Reserve, or call in a total of demand loans equal to 7 or 8 times the amount of reserves
that have been lost, or they will become insolvent and have to be liquidated by the FDIC which in the end won’t even be able to pay losses at pennies on the dollar while the entire financial system comes tumbling down unceremoniously.

That is why the discount window is wide open. If banks are forced to call in loans, the party is over. The whole system will implode and deflate. The banks can’t even roll over the paper they used to fund mortgage loans and the government has had to step in with the FHLB and Fannie and Freddie to replace the lost loan capital. The Federal Reserve is fighting so many battles on so many fronts that their heads must spinning like Linda Blair’s character in “The Exorcist”.

While all this is happening, the over six hundred billion in home equity loans that fuelled consumer spending last year have been completely cut off. Two trillion dollars’ worth of home value has been lost on account of declining home values as the US real estate market explodes and goes down in flames, and who knows how much in stock losses has been suffered since the end of 2007?

Does anyone have any money or equity left, we wonder? What will fuel consumer spending and stop the economy from going into a deep recession [ANSWER: CONSEQUENECS OF THE WANTA PLAN AND THE SETTLEMENTS: Editor]. The ISM services sector reading has already completely
collapsed while consumer confidence reported for the RBC Cash Index has plummeted to the lowest levels since the index was created in 2002.

What hope does our economy have when the 150 billion stimulus package is only one quarter of the home equity injections that will be lost for 2008 that helped keep us moving in 2007? We sit here stunned and comatose as the circuits in our brains are fried by these financial lightning bolts [Editor: And because we haven’t taken Wantagate on board]. This whole situation is going to turn into a disaster of epic proportions from which we may not recover for many, many years, if ever.

HERE THE EDITOR MUST INTERJECT: AND IT’S ALL BECAUSE CRIMINALITY BECAME THE NORM, IN ACCORDANCE WITH THE ‘ANOMIE’ ENVIRONMENT DESCRIBED BY EMILE DURKHEIM (1858-1917).

Move over Japan, we’re going to show you a thing or two about how to implode an economy so that it doesn’t recover for decades! The big banks are going to have to completely empty the sovereign wealth funds just to stay afloat! After this utterly magnificent debacle is all over, visitors entering the United States will be given the following greeting by US customs officials:

‘Welcome to the United Banana Republics of America (UBRA). Please watch your wallets as former central bankers are known to inhabit these territories. Due to the EXTREMELY high concentration of unemployed bankers, brokers, loan originators and real estate agents, the use of shark repellant is highly recommended. In the UBRA, only gold and silver coin* is acceptable as payment for goods. If you brought paper money, that’s fine, since you can always use it as fuel to keep warm. We hope you brought your own food because we don’t have any. But if you want to drink some ethanol, we have plenty of that. It has quite a kick too! We use it stay inebriated so we don’t have to deal with our problems, which are endless. Be advised that you enter this country at your own risk. That is because all weapons have been confiscated, so you’re on your own. Have a nice trip!’

*New York stores are reportly displaying ‘WE ACCEPT EUROS’ signs

When the smart money finally gets a grip on all this madness, gold is not going to through the ozone. Gold is not going into the stratosphere. Gold is not going to the moon. Gold is not going into the solar system. Gold is not even going intergalactic. Gold is going inter-dimensional as it passes through a wormhole and explodes past the Einstein-DeSitter radius at the outermost bounds of the visible universe! ENDS.

• Editor’s Note: We did warn erstwhile friends in the US welfare industry that if Wantagate failed, they would wind up running soup kitchens. Unfortunately, that warning went in one ear and out the other, like so many others.

WANTAGATE FILE DATA, INCLUDING STATUTES AND S.E.C. RULES FLOUTED BY THE CROOKS:

CITIBANK MUST PAY $350 BILLION+ INTEREST UNDER U.C.C. REGULATIONS
Uniform Commercial Code: Article 4A – Funds Transfer: Section 4A-305:
LIABILITY FOR LATE OR IMPROPER EXECUTION OR FAILURE TO EXECUTE PAYMENT ORDER:

(a) If a funds transfer is completed but execution of a payment order by the receiving bank… results in delay in payment to the beneficiary, the bank is obliged to pay interest… to the beneficiary of the funds transfer for the period of delay caused by the improper execution.

As stated in our report dated 4th October, we then calculated that the amount of interest payable to the beneficiary by Citibank, given its delay in paying out the diverted funds since June 2006, was around $350 billion. This amount is rising BY THE DAY, and is now approaching $400 billion.

• [As we revealed at the time] Citibank ‘agreed’ to pay $352 billion by way of interest, following our publication of the above statements. However, the Editor, not being a banker, merely made a rough guestimate at the amount of interest payable by Citibank, consequent upon its criminal frustration and diversion of the Settlement funds since June 2006.

• The actual amount of interest payable by Citibank as an interest penalty, if calculated on the basis of overnight rates, might approximate well over $1.0 trillion. So the institution, having been made aware of our posting dated 1st November, grabbed the Editor’s rough estimate of $350 billion, and added a couple of billion on to make the figure look different. ENDS.

YOU CAN ORDER WANTAGATE ISSUES OF OUR FINANCIAL JOURNAL AS A PACKAGE
We sell, as a special package, the relevant recent back issues of International Currency Review, containing a massive amount of information and back-up documentation, for a flat fee of $750.00, payable in advance. Please use the CONTACT US facility to place your order and send check to the London office: World Reports Limited, 108 Horseferry Road, Westminster, London SW1P 2EF, United Kingdom. Orders may also be emailed direct to the Editor at: cstory@worldreports.org.

• Another way of ordering this package is to (a) forward us a CONTACT US email requesting the package, and then (b) to order International Currency Review via the ultra-safe ordering facility at the World Reports Limited section of this website.

• Please state in the CONTACT US facility that you have ordered International Currency Review but that you specifically want to receive the Wantagate package only.

• Editor’s Note: We are still, from time to time, receiving emails from frustrated people seeking documentation to ‘back up’ what we publish in these reports. Such correspondents choose to overlook the well-known fact that we have published several huge issues of International Currency Review [SEE ABOVE] which contain hundreds of pages of facsimiles of relevant documents. Since we are a commercial operation, we cannot make these volumes available free of charge.

• However copies are available in many university and other libraries around the world, and of course they can be ordered via this website at any time. But the main point here is that complaints along these lines reveal lack of knowledge of the background, which is that an immense volume of relevant documents has been published in our printed intelligence services.

LEGAL SECTION:
PLEASE READ THIS INFORMATION, AS IT INDICATES THE DEPTH OF THE DEPRAVITY THAT WANTAGATE HAS EXPOSED. REPETITION OF THIS BASIC DATA IS STILL NECESSARY…

• We now repeat, yet again, our familiar summary of the Statutes, securities regulations and fraud information that we have appended to these reports for many months. The reason we append this information is to remind everyone of their clear responsibilities under the US Misprision of Felony legislation, and of course to provide a legal basis for these reports.

LEGAL RECAPITULATION FROM REPORT DATED 30TH AUGUST 2007:
Reiteration of the fraudulent transactions involving Bank of New York Mellon – a bank so arrogant and conspicuously indifferent both to its tarnished reputation and to its grotesque breaches of US law and of N.A.S.D./S.E.C. Regulations, that it now takes first prize in the crowded competition for the title of ‘Most arrogant and corrupt financial institution in America’. At least, this was the case until the perpetration of the ‘Saturday scam’ described above and on 13th November:

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 on 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’.

SECURITIES REGULATIONS OF WHICH BANK OF NEW YORK MELLON IS IN BREACH AND OF WHICH THE SIX ‘LEVY BANKS’ MAY LIKEWISE BE VARIOUSLY IN BREACH [CREDIT SUISSE, UBS, DEUTSCHE BANK, BANK OF AMERICA, CITIBANK, THE BANK OF ENGLAND]:

• 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

In addition to which Bank of New York Mellon is in violation of:
• 97-13 Bank Secrecy Act, Recordkeeping Rule for funds transfers and transmittals of funds, et al.

LAWS BREACHED BY CRIMINAL OPERATIVES WHO HAVE HIJACKED AMBASSADOR SIR LEO WANTA’S $4.5 TRILLION SETTLEMENT AGREED AT THE HIGHEST U.S. LEVELS IN BAD FAITH IN MAY 2006, AND HAVE CONTINUED THEIR SERIAL CRIMES EVER SINCE:

• 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 criminal 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

This list shows to what extent the Bush II Administration condones one Rule of Law for the Rest of Us, and absolute contempt for domestic and international law for the officials and bankers who are illegally diverting and exploiting Wanta’s funds.

The Directors and others listed in Part 1 of the Wantagate Listing of Institution Directors and others posted on 11th June may likewise be Accessories to the Fact of, and/or co-conspirators in, wittingly or unwittingly, the egregious violation of the laws itemised above. This list is reproduced in International Currency Review, Volume 33, #s 1 & 2, September 2007, on pages 163-168.

U.S. CODE, TITLE 18, PART 1, CHAPTER 1, SECTION 4: MISPRISION OF FELONY:

‘Whoever, having knowledge of the actual commission of a felony cognizable by a court of the United States, conceals and does not as soon as possible make known the same to some Judge or other person in civil or military authority under the United States, shall be fined under this title or imprisoned not more than three years, or both’.

Wicked Pedia Update dated 2nd December 2007:

WIKIPEDIA IS PART OF AN NSA DISCREDITING OPERATION
As previously reported, the Editor’s attention was drawn, in the second half of November 2007, to a pack of old lies, diversionary claptrap and disinformation posted on Wikipedia under ‘Leo Wanta’.

Although this posting appeared FOR THE FIRST TIME on 12th November 2007, it consisted almost entirely of ancient lies, including disinformation dredged out of ‘Thieves’ World’, a hatchet job published in 1994 by Simon and Schuster by the late Claire Sterling, a CIA operative.

Mrs Sterling died suddenly after being summoned for her second meeting with the Federal Bureau of Investigation, under Clinton.

ANCIENT DISCREDITED LIES POSTED IN NOVEMBER 2007
The fact that the OLD Wikipedia lies appeared for the first time as late as 12th November 2007, and consisted almost totally of old, discredited lies, omitting the Master Lie that the CIA retailed after the Ambassador had been taken down, namely that he was DEAD, indicated quite clearly to the Editor and his advisers that this latest evil display of regurgitated disinformation represented a deliberate operation by the US intelligence community’s disinformation and lie machine, to begin, all over again, the process of discrediting Ambassador Leo Wanta – so that they can relieve him of his funds by some false pretext or other after a ‘gag order’ has been signed.

The definitive up-to-date information on the Ambassador’s affairs has been published on this website, and in several issues of International Currency Review, Economic Intelligence Review, Soviet Analyst and Arab-Asian Affairs, all published by World Reports Limited, for several years. Copies of these publications are in official, institutional and library hands all over the world. Therefore, any posting about Ambassador Wanta that relies upon ancient lies and fails to take account of the accurate information that we have published, can easily be demonstrated to represent yet another US intelligence community and NSA discrediting operation.

PRELUDE TO ‘SETTING UP’ WANTA ALL OVER AGAIN
We now understand that the Principals have been advised (for the past several weeks) that they will not be allowed to reveal that they have been paid. This loony state of affairs is designed to ‘set them up’ for a future discrediting operation whereby false witness will be deployed against them to the effect that they have stolen the money, or some such pack of lies, which they will be unable to refute because they will be bound by the ‘prerequisite’ gag order that is intended. Its purpose, of course, is to ‘legitimise’ the old and new lies that the US disinformation apparat will be preparing for future use. The likelihood is that the new discrediting operation will be extended to Michael C. Cottrell, M.S., as well. We are prepared for this intended onslaught.

EDITOR’S TRUE REPORT REPEATEDLY REPLACED BY OLD LIES
On 19th November, the Editor posted on Wikipedia the accurate text about Leo Wanta that is now reproduced below. The Editor’s accurate text was then removed by Wikipedia, leaving the ‘old lies’ that had existed previously. When the Editor became aware of this, he reposted the accurate text below, and, given that his own copy had been deleted, he then deleted the pack of lies, leaving his own accurate text up on the Wikipedia site instead, without the lies.

On 2nd December, the Editor was advised by a monitor that the Editor’s accurate text had been removed and that the old discrediting lies had been reposted on the page by Wikipedia. When the Editor checked, he found that the page could no longer be edited because of what the site managers described as ‘vandalism’.

IT’S ‘VANDALISM’ TO POST THE TRUTH, NOT ‘VANDALISM’ TO POST LIES
It was not ‘vandalism’ to delete the truth and to replace the truth by old lies, but it was ‘vandalism’ to delete ‘old lies’ and replace them by the truth.

We are therefore able to conclude from this Wicked Pedia outrage, as follows:

1. Wikipedia, which purports to ‘change the world’, prefers lies to the truth.

2. Wikipedia is therefore, by definition, a source of disinformation and lies, and cannot be trusted as a source of reliable information in any context.

3. The only category of sick society that would have any interest in disseminating lies about Ambassador Wanta, the United States’ greatest living patriot, rather than the truth, is the mentally disturbed US counterintelligence disinformation apparat (a.k.a. the US STUPIDITY COMMUNITY) which, by its actions in deleting the Editor’s ACCURATE information and replacing it with old lies, and by its illegal behaviour in ‘snipping’ our website texts as stated above, thereby reveals the desperation of its concerns, which all have to do with covering up official criminality.

4. It is now far too late for the US stupidity community to repair the damage that it has done since June 2006, when the Ambassador’s funds were first hijacked by the criminal financial operative Henry M. Paulson, US Treasury Secretary. So it is laying the groundwork for a renewed discrediting operation against Ambassador Wanta and his colleagues.

• We and others will see to it that this intention is defeated, and that such nefarious scheming is exposed for the amoral and disgusting Luciferian behaviour that it represents.

The ACCURATE text that the Editor posted on the Wikipedia site, follows. (The Editor, after all, PAID FOR AMBASSADOR WANTA’S EXIT FROM PROBATION, FOR GOODNESS SAKE, SO HE CAN HARDLY BE A SOURCE OF DISINFORMATION, CAN HE?). This information will be very widely distributed by other means, in order to provide all concerned with the necessary ‘heads-up’ as to what these US Dark Forces have in mind. They are out of their minds and in Satan’s mind:

The disinformation about Leo Wanta (Lee Wanta) below was first posted on 12th November 2007. It contains ancient CIA disinformation and long since exposed lies going back to the early 1990s, and obfuscates the truth. The report appended immediately below was added on 19th November 2007, to correct the disinformation contained in the original stub.

It was subsequently removed and is hereby replaced. This sequence of events, which suggests that egregious lies are preferred to the truth, has been recorded on www.worldreports.org, which contains all the updated and breaking Wanta material, that was ignored and traduced in the stub at the foot of this report.

THE ACCURATE TEXT THAT WIKIPEDIA REPEATEDLY DELETED
This is the correct information that we posted on 19th November 2007:

The ‘information’ posted below represents a deliberately malevolent, false disinformation picture which has no bearing on reality. It is a travesty of the truth of the matter and cites Christopher Story as the author of some of the disinformation, which is libellous and implies that Story, the veteran
Editor of International Currency Review of nearly 40 years’ standing, is engaged in the egregious dissemination of lies, which is not the case.

This is such an egregiously malevolent stub of disinformation that readers should prudently dismiss it altogether; they should start afresh by accessing Christopher Story‘s website, which is: www.worldreports.org., reading from the Archive.

www.worldreports.org is the authoritative source for all updated information on Ambassador Lee Emil Wanta. The source ‘Thieves’ World’ was a CIA disinformation work prepared by the late CIA disinformation operative Claire Sterling, published in 1994.

This stub regurgitates ancient lies perpetrated by the CIA, which lied for many years that Lee (Leo being his intelligence community name) Wanta was dead. The CIA proclaimed that he was dead so that corrupt cadres could ransack his funds (see below).

He ‘ceased to be dead’ with effect from 21st July 2005 after Christopher Story, a British private citizen, had paid $35,000 from his scarce private funds pro bono publico by way of ‘restitution’ to an American lawyer for onward payment to the Wisconsin State Department of Corrections, to procure Mr Wanta’s release from his illegal probation.

Despite his Ambassadorial status, Wanta had been illegally ‘taken down’ in Switzerland on 7th July 1993 without a warrant on a trumped-up Wisconsin State charge of having failed to pay $14,129 in falsely assessed Wisconsin State fabricated tax that he never owed because he had been resident in Vienna on US Presidential intelligence work since June 1988.

This data is all in the public domain, has been published for several years in International Currency Review, the Journal of the World Financial Community, and can be read on Mr Story’s website.

International Currency Review is a banking and financial journal with a worldwide circulation: ISSN 0020-6490. It is published by World Reports Limited, London.

Notwithstanding that this fabricated tax demand (orchestrated by US criminal intelligence) had been paid twice under protest by Lee Emil Wanta from abroad (in May and June 1992), the funds were improperly allocated by the Wisconsin State Department of Revenue and were never credited to the false account maintained by them for the Ambassador. (Christopher Story holds documentary
proof of both payments). They were paid a third time by Christopher Story in June 2005, which action duly procured Mr Wanta’s release from illegal probation effective 14th November 2005.

As a consequence of Wanta thus ceasing to be dead, the CIA’s lie that he was dead collapsed in chaos, and all the subsidiary old false witness lies that the CIA had perpetrated, including those assembled for disinformation purposes in the stub below (which, in line with the standard false witness used throughout by detractors, attempts to portray Christopher Story as a source of disinformation) were discredited as well.

Why was Wanta taken down? So that the criminal intelligence cadres running the US Government could ransack the $27.5 trillion of funds assembled by Leo Wanta on President Reagan’s orders, in the course of his Financial Warfare operations against the USSR.

Under Reagan’s Executive Order 12333 of 1981, US intelligence officers were permitted to establish corporations which could thereafter contract with the CIA/DIA/DEA/NSA et al for the purpose of fulfilling allotted intelligence tasks allocated to them.

The financial proceeds of operations conducted by such corporations were consequently the property of the corporations and thus of their shareholders, a legal fact of life which has never been, and cannot be, disputed. This was not a good idea because almost all US intelligence
operatives are liars and do not function on the basis of the Rule of Law at all, if they can help it.

Lee Wanta is the well-known patriotic exception to this rule: he operates solely in accordance with US law, in contrast to the behaviour of other US operatives, which is why the kakocracy* needed to remove him from the scene, as duly occurred July 1993.

Once Wanta had been illegally arrested (contrary to international law, as a diplomat) and then thrown into a stinking Swiss jail on 7th July 1993, the criminal cadres inside the US official structures immediately ransacked Mr Wanta’s bank accounts according to plan.

The history of this matter is, and has been, elaborated in great depth on Christopher Story‘s website www.worldreports.org. and has been extensively published, as mentioned, in International Currency Review and other World Reports Limited intelligence publications.

Students are advised perhaps to begin with the ‘Wisconsingate’ report dated 6th August 2007, which forensically dissects, with detailed documentary back-up, the Wisconsin Department of Revenue’s tax fabrication operation against Wanta, stretching back for over 20 years, that has been exposed by Christopher Story in minute detail, and which formed the fabricated basis for Wanta’s illegal takedown in 1993, despite the fact that Wisconsin has no jurisdiction beyond its borders.

The overall Wantagate crisis, which is the sole and continuing underlying cause of the prevailing global financial and economic day of reckoning that the world is now facing, has been triggered by the fact that the George W. Bush Jr. White House, aided and abetted by other senior office-holders, hijacked the compromise financial settlement of $4.5 trillion that the White House itself agreed (in a classified accord that was finalised in May 2006) should be paid over to Ambassador Wanta, so that the stolen and diverted remaining $23 trillion of his funds (and the many hundreds of trillions of dollars hypothecated upon them) could be released from a de facto lien arising from the collapse of the CIA’s lie that Wanta was dead.

For clearly, since he had ceased to be dead, 100% of these funds (plus the hundreds of trillions of fiat ‘funny’ money generated by illegal leveraged operations from that base) belonged to Lee Wanta and to no-one else: a situation that the banks ‘could not handle’.

The entire narrative of what has become the worst financial corruption crisis in world history (which this stub consisting of disinformation attempts to obfuscate) is set out in great detail on Christopher Story‘s website www.worldreports.org., to which all readers are directed in order for the accurate state of affairs to be understood. As indicated, this stub below is a travesty and a disgrace, as it regurgitates long since discredited CIA lies, presents a diversionary, distorted and misleading picture, and because it malevolently incorporates Christopher Story as a source for some of this disinformation.

It is a disgusting instance of ignorant and malevolent US counterintelligence disinformation and deceit at its very worst.

All the statements in the above commentary may be verified by reference to www.worldreports.org and International Currency Review. Another publication covering this matter in detail is Economic Intelligence Review, also published by World Reports Limited, London. Wanta students should access the Archive on the www.worldreports.org Home Page.

A book devoted to Ambassador Wanta and the Wantagate crisis is in preparation

The Wanta disinformation referred to above has been deleted from this page. ENDS.

DIPLOMATIC STATUS OF THE PRINCIPALS
The Ambassador and his colleagues now have special diplomatic status (conferred upon them by HM The Queen in 2007), which means that the Ambassador is now an Ambassador several times over. This factor greatly complicates the intended discrediting offensive that the mad US stupidity community’s Dark Forces contemplate, their sole objective being of course to cover up their own criminality, in line with pending ‘thought crime’ legislation which has the same Nazi-style objective.

*Note: ‘Kakocracy’: Governance by a clique representing the worst elements of society, in their interests and to the exclusion of all other interests, from the Greek, kakos, meaning foul, or filthy.

Ambassador Leo Emil Wanta: Diplomatic Passport Numbers 04362 & 12535 a.k.a. Frank B. Ingram [FBI] (Sector V) SA32NV; and a.k.a. Rick Reynolds, SA233MS. AmeriTrust Groupe, Inc: Federal EIN Number 20-3866855; Virginia State Corporation Identification Number: 0617454-4; Virginia State Department of Taxation Identification Number: 30203866855F001.

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