NOTE: Forgive typos/syntax errors: this text was redacted after a fourth sleepless night, in an effort to inform you all ASAP. I'll come back to this page later, to edit it properly as I'm currently friiiied!
Disclaimer: This is in no means intended to enrage the masses. It is offered as the documentary from which it is purged was; to inform the masses. Specially considering this is what Occupy is protesting about.
The Bail-Out: What happened?
Before speaking with the Media, please try, best as you can, to commit the following facts to memory.
UNDERSTANDING what happened will not only give you more confidence in the delivery of all your upcoming interviews with the Media, it will also enable you to start thinking about plausible fail-safe solutions, be it only to ensure something like this never happens again.
To aid your mnemonics, I strongly recommend you watch "Inside Job", by Charles Ferguson. It's a MUST SEE for anyone who wishes to understand what went down.
WARNING: What you'll find out in this documentary (and in the notes I took from it below) may upset you. Please remember that in order to attain Occupy's goals, everyone must remain PEACEFUL, RESPECTFUL and cool as Cucumbers whenever protesting. This being, if Occupy wants to be taken seriously not only by the Media but by everyone at large.
Occupy would do well to find a Solution to this issue - to protest for said Solution - and not just present this issue and its resulting devastation. As mentioned before, jail sentences are fine, if such is what Occupy is after but these would not (in any way) help our current economy recover (It would actually cost it yet more money, putting a further strain on everyone!)
@CommsHub1
- 30 -
The Money Masters (Full documentary; 3:29:19)
http://youtu.be/_9wYu1SR1Wk
"Inside Job", directed by Charles Ferguson (Intro)
http://www.youtube.com/watch?v=KOwVWosH2X0&feature=related
Source of information related here below:
Notes taken while watching "Inside Job", a documentary, by Charles Ferguson, available for viewing on Netflix.
5 Investment Banks involved:
• Goldman Sachs
• Morgan Stanley
• Lehman Brothers
• Merrill Lynch
• Bear Stearns
2 financial conglomerates involved:
• JP Morgan
• Citigroup
3 Securities Insurance Companies:
• AIG
• MBIA
• AMBAC
3 Rating Agencies:
• Moody's
• Standard & Poor's
• Fitch
Linking all of them together was the "Securitization Food Chain"
HOW IT HAPPENED
1. In the old days, Mortgages were paid back to lenders over
a long time so lenders were careful.
2. Then lenders began selling loans to Investment Banks, who combined
these, along with car and student loans to create complex
Derivatives named CDOs or "Collateralized Debt Obligations"
3. Investment Banks then paid Rating Agencies to give these
CDOs the highest credit rating (AAA), even though they KNEW
these were loans that were going to be written-off for
defaulted payments (were never going to be paid back)
4. The rating Agencies issued AAA ratings (Top rating a loan could have) on said CDOs and
5. The Investment Banks then sold said CDOs to Investors (who didn't know what the Investent Banks had done, with the participation of the Rating Agencies).
6. Retirement Funds, due to their nature, do not invest in just any type of Securities. they only invest in AAA rated Securities in oreder to safeguard the funds entrusted upon them.
7. Riskiest loans are called "sub-primes" and Retirement Funds would have never touched these Securities had they known these falsely AAA rated Securities were indeed sub-primes.
8. Knowing the Securities they sold to Investors were sub-primes and would default, the Investment Banks went as far as to insure these same Securities with the insurance companies mentioned here above.
9. In 1998 (A FULL 10 YEARS BEFORE THE FACT!!!), Clinton deregulated the leverage for Investment Banks, despite the strong warnings of experts like Ms. Brooksley Borne, who fought hard to see these reinstated only to be viciously ridiculed and professionally discredited [by Alan Greenspan, Reuben (didn't catch his first name), and Arthur Levitt, FCC Chairman] for having repeatedly attempted to warn both Clinton and Bush Adminstrations about the unavoidable market Collapse that would ensue.
10. Sub-primes were more attractive to Investment Banks because these carried higher interest fees and so began the 10 year 'era' of "Predatory loans"
11. Predatory Loans are high-interest and highly risky loans, generally issued to people who present a credit risk; people who went bankcrupt, people with a low credit score or bad credit history.
12. Then being rewarded by hefty bonuses for the amount of sub-prime loans they were able to secure, everyday Banks began issuing loans to everyone and anyone they could (there was even talk, at some point of every day banks issuing 'fictive' loans to met their required quotas, in order to get a bonus.
13. Everyday Banks went about doing this, knowing full well the people contracting these high-interest carrying loans would eventually default, i.e.; be incapable of ever paying these back.
14. Interest rates shot to an all-time low for just said purpose.
15. Seeing these low interest rates, a lot of people invested in Real-Estate, creating a Bubble (meaning something that is growing/becoming profitable very fast)
16. The unfortunate thing here is that people who should never have been issued any loans found themselves getting offers in the mail about three times a week, getting "We have a pre-approved loan for you" type of mail from all kinds of competing banks in their vicinity.
17. A lot of people, who couldn't afford taking out high-interest loans, signed up for these and, of course, defaulted on these.
18. Meanwhile, Investment Banks were borrowing astronomical amounts of money, increasing their leverage up to 39:1, in order to secure more loans from all these everday Banks, to then create sub-prime CDOs, get the rating Agencies to fraudulently give these an AAA rating and then selling these to Investment/Retirement Funds, such as the 401K Retirement Fund whom, trusting the Rating Agencies' ratings, invested in these Securities.
19. Leverage is explained simply as follows; If I borrow 1$ from you while I have 1$ in my pocket, my leverage is 1:1, If I borrow 2$ from you while I have 1$ in my pocket, my leverage becomes 2:1, and so on.
20. Investment Banks' leverage, having been deregulated in 1998 (despite the valid concerns and warnings issued by many Experts), shot up to as much as 39:1
21. This meant that as little as a 3% decrease in their assets would leave Investment Banks insolvent, i.e.; Bankcrupt.
22. In the case of Goldman Sachs, Bear Stearns, Lehman Brothers and
Merrill Lynch, this sub-prime lending alone increased from 30 Billion$ to
over 600 Billion$ in 10 years.
23. Countryside Financial, the largest sub-prime lender, issued
97 Billion$ in loans and made 11 Billion$ profit as a result.
24. Lehman Brothers were the top underwriters of sub-prime
lending, at 106 Billion$.
25. Meanwhile... There was another ticking timebomb: AIG was selling huge amounts of Derivatives called Credit Default Swaps (500 billion$ worth!)
26. Look up Credit Default Swaps on Google. I don't want to give you everything cooked in the mouth :)
27. The CDOs (sub-prime high-interest risky bunch of loans), as expected, defaulted.
28. Investment/Retirement Funds saw their Securities collapse
29. The insurance companies whom had insured the CDOs, found themselves insolvent due to the immense quantity of CDOs that defaulted all at once.
30. This, Ladies and Gentlement, was a Ponzi Scheme. One ENABLED and UNABATED by BOTH Clinton and Bush Administrations.
Here are some "Success Stories":
Who got rich, aside from the Investment Banks, the everyday Banks, and the Rating Agencies? Well many people did. Some profited from the Market bubble honestly (not knowing what was going on behind the scene), via high ROI (Return on Investment) Real-Estate investments, others well... You now know the facts!
AIG-FP's Head, Joseph Cassano, made 315 million$, from 2000 to 2007. He then was kept as Consultant afterwards, making 1 million$/MONTH!!
Goldman Sachs Execs & CEOs:
Daniel Sparks, Mortgage Dept Head
Fabrice Tourre, Exec Dir Structured Trading
Lloyd Blankfein, Chairman & CEO
David Viniar, exec VP & CFO
Hedgefund Manager, John Paulson, made 12 Billion$
Hedgefunds Tricadia, Magnetar made billions betting AGAINST CDOs they had designed with Merrill Lynch, Lehman Bros & JP Morgan
Moody's (rating agency) quadrupled its profits (2000-2007)
Ben Bernanke, Feb 2006, became Pres of Fed Reserve Board... Despite warnings, he did nothing & declined to be interviewed
Frederic Mishkin, Governor, Fed Reserve (2006-2008) net worth 6-17M$
Mar 16, 2008: Bear Stearns ran out of cash and was acquired for 2$/share by JP Morgan
Richard Fuld, is CEO for Lehman Bros
Angelo Mozilo, CEO for Countrywide, made 470 Million$ (2003-2008)
Stan O'Neil, CEO Merrill Lynch, 90 Million$ (2006-2007) & got 161 Million$ severance!!
Martin Feldstein, prof economics, Harvard, Reagan's Chief Financial Advisor, a major player in deregulation 1988-2009, was on board of BOTH AIG & AIG FINAncial PRODUCTS
Larry Summers, who played a keyrole in deregulation, became president of Harvard in 2001, made millions consulting. Net worth Between 16.5 & 39.5 Million$ (That's all? Loser!)
Comments from some in the Financial Industry
Jerome Fons, Former Managing Director for Moody's Rating Agency said 100s billions of $ were being rated PER YEAR and that if rating agencies had refused to play ball we wouldn't have had mess.
Rating Agencies were NOT held liable because they claimed their ratings were OPINIONS (1st Amendment, which they are NOW trying to rob OCCUPY from in Protest, was the Defense used by their lawyers)
Lemons handed out to:
In 2004, FBI was already getting warnings about epidemic of mortgage fraud and doctored loan documents, inflated appraisals yet... No one did a thing about it.
Between 1998-2008 Financial Industry spent 5 BILLION$ in lobbying & ELECTORAL CAMPAIGN donations
Oct 4th 2008, Bush signs a 700 Billion$ bailout bill
David McCormick, Under Secty of Treasury, Bush admin - A bloody liar!!!
Deserving of Recognition:
As early as 1998, both CLINTON and BUSH ADMINISTRATIONS were REPEATEDLY warned by Experts about what would ensue from Deregulation (I name these "Heroes" below), and that Ms. Brooksley Borne, in particular, was VICIOUSLY RIDICULED and DISCREDITED (in 1998!!!! - 10 years before Collapse!!) for her heroic efforts in desperately trying to warn anyone who'd listen about the inevitable Collapse that would ensue.
Alan Greenspan, Chairman Fed Reserve; Reuben (his last name escaped me) and Arthur Levitt, FCC Chairman viciously, and vehemently discredited Ms. Brooksley Borne (who deserves a Nobel Prize, be it only for the grave professional affront she suffered)
In Sept. 2005,
Raghuram Rajan delivered a paper in an effort to warn of upcoming financial collapse. He was the Chief Economist (2003-2007) for IMF (Intl Monetary Fund)
In 2006,
Nouriel Roubini tried to warn
Mr Joseph St-Denis, Auditor, quit AIG-FP in 2007 after trying to warn and never got bonus
In 2007
Alan Sloan's Article in Washington Post's Business Section and in Fortune Magazine
In May 2007,
Bill Ackman publishes "Who's holding the Bag", in an effort to warn the masses but too few people know much about finances. A shame, really!
Dominique Strauss-Kahn, IMF, spoke with Govt Treasurer, Fed Reserve, to no avail
In 2008, early,
Charles Morris published "The Two Trillion Dollar Meltdown"
AIG Bailout
- Costs tax payers > 150 Billion$
- 14 Billion$ went to Goldman Sachs
- At same time (Sept 2008) Henry Paulson & Geitner forced AIG to surrender its right to sue Goldman & other Banks for fraud
- Unemployment rose to 10%
Crysler Bailout (Why not? We're giving away money, anyway. Come one, come all!!)
- Dec 2008, GM & Chrysler face bankcruptcy
- 10 Million workers in China lose their job.
- Singapore 30% exports dropped
- 6 million foreclosures by early 2010
Addressing Obama on regulatory reform?
It's a Wall Street Govt!!
Obama chose (or was most likely IMPOSED);
- Timothy Geitner as Treasury Secretary. Geitner was Pres of NY Fed Reserve during crisis and a key player in paying Goldman Sachs 1:1 for its bets against mortgage.
- William C Dudley, now Pres of Fed Reserve, used to be with Goldman Sachs
- Mark Patterson, Chief of Staff Treasury Dept, former Lobbyist for Goldman Sachs
- Lewis Sachs, Senior Treasurer, Head of Tricadia
