TBR News November 6, 2010
The Voice of the White House
Washington, D.D., November 6, 2010: “I am going to continue to pound away on what many consider to be the critical future problem for many millions of Americans. That is, as we have been saying, the mortgage mess. Bits and pieces of this have been popping up in the news recently but the entire monster remains essentially hidden from view. And, naturally, considering how deadly it is, neither the White House, Congress nor the obedient media is going to inform any of you. What happened is this: For some years, many crooked and faked mortgages were given out, mostly by the Countrwide firm which was bought out by the Bank of America. What they did was to give inflated mortgages to people who had no credit. Fake credit reports were prepared by the Mozilla people and once the mortgages were approved, they were quickly sold to the major banks, including Goldman Sachs and the Bank of America. Many mortgages, good and bad, were put into ‘investment packages,’ sliced and diced and sold as fast as the banks could do it, mostly to the rich third world people, including the greedy Chinese. This means that when the poor fools pay their mortgages of, have to sell the house or just die, no one, ever, can locate the actual holder and so a clear title can never happen. That means you can’t sell your house because you don’t know who owns it. Now, we find out, the crooked banks and lenders have a huge number of the bad loan homes foreclosed on, the owners tossed out and the repossessed homes sold. Of course since the banks and lenders have no idea who owned the paper, the made up names, faked documents and used faked notary stamps to cover their swindles.The owners, paying or not, legally could not be put our of their homes and the poor trusting idiots who bought the homes are worse off. Since they cannot own the homes, they lose every penny of their down-payment money. Oh my, children, can you see why the government does not want to talk about this? What is needed is a strike by those with these worthless mortgages. Withhold your payments unless, and until, you can get a clear title and believe me, a MERS certificate is only good as a toilet paper substitute.”
Bank of America Fights Pressure on Mortgages
November 4, 2010
by Nelson D. Schwartz
New York Times
Bank of America on Thursday rebuffed claims by a lawyer for several big investors, including the Federal Reserve Bank of New York, that it should buy back troubled mortgages because the loans were made improperly.
In its first response to the investor claims, Bank of America argued that the effort would have the effect of speeding up the foreclosure process and force it to evict more homeowners. The investors’ claims have become a major worry on Wall Street as the foreclosure crisis has escalated.
A group of investors, including the Federal Reserve Bank of New York and Pimco, the money management firm, is pressing Bank of America to buy back a portion of some $47 billion worth of mortgages. They argue that Countrywide, a unit of Bank of America, has not been servicing the mortgages correctly and that the loans did not conform to underwriting standards.
In a letter from its lawyers Thursday, Bank of America said the problems stemmed from the economic downturn rather than any underlying problem with how the mortgages were sold to investors. It called the investor claims “utterly baseless.”
Signaling a much more aggressive legal stance, the bank also criticized the lawyer behind the effort, Kathy D. Patrick. It argued that a letter she wrote last month that was signed by clients was “written for an improper purpose, or in furtherance of an ulterior agenda.” Ms. Patrick did not immediately respond to calls seeking comment.
Since Ms. Patrick’s letter was released last month, Bank of America shares have slumped on fears that investor efforts to force it to buy back mortgages — known as put-backs — could be a drain on earnings for years. In recent days, several reports by Wall Street research firms have estimated the put-back claims could cost the industry $43 billion to $90 billion.
At the same time, Bank of America’s chief executive, Brian T. Moynihan, went on the offensive at a conference with bank analysts in Boston on Thursday. “I don’t think we should be put in a position where we aren’t trying to help homeowners through this strife because people want us to foreclose faster,” he said.
In addition, Mr. Moynihan said, he was caught off guard by the decision of the Federal Reserve and Freddie Mac, the government-controlled giant, as well as private investors to sign the letter.
Bank of America and other large institutions like JPMorgan Chase and GMAC Mortgage themselves have faced criticism that foreclosures have been pursued without the proper paperwork or with signatures by so-called robo-signers. But on Wall Street, the worry is that the investor effort to get the banks to buy back defaulted mortgages could actually be a longer and more expensive fight for the industry.
At the same time, Bank of America faces pressure to slow the foreclosure process, even as large investors — including the government in the case of the Federal Reserve and Freddie Mac — push for the foreclosures to proceed.
In Thursday’s letter, written by Wachtell, Lipton, Rosen & Katz, one of New York’s top law firms, Bank of America’s lawyers note that Freddie Mac has stated publicly that it is committed to help troubled mortgage holders keep their homes.
“Your demands to hasten foreclosures and to reduce loan modifications are patently inconsistent with that stated aim,” the letter said.
The investors also argue that Bank of America is keeping the mortgages on its books to collect fees, rather than proceed with foreclosures. But Barbara J. Desoer, president of Bank of America Home Loans, said that charge was false.
“We have no financial incentive to keep mortgages on the books longer,” she said. “Isn’t it better to modify the loan and keep people in their homes rather than foreclosing?”
Ms. Desoer said the underlying reason for the surge in foreclosures was the broader economic downturn, taking issue with critics who claim many of these loans should never have been made in the first place. “The economy declined, unemployment went up and house prices declined,” she said. “That’s not a reason for a loan to be put back.”
Republicans take aim at cost of Obama’s trip to India
November 5, 2010
by Holly Bailey
Yahoo News
Is President Obama’s trip to India really going to cost $200 million a day?
That’s the number making the rounds among the president’s conservative critics, including potential 2012 Obama challenger Mike Huckabee and U.S. Rep. Michele Bachmann (R-Minn.), as the president takes off Friday for a 10-day trip to Asia.
Huckabee made the claim to Fox News on Tuesday night (citing “reports”) and in the social media sphere. “Reports say that Obama’s trip to Mumbai, India tomorrow will cost taxpayers $200 million dollars a day – come to think of it, that’s much less than Obama’s been spending here,” Huckabee wrote in a Facebook message Tuesday night (misstating the day of Obama’s departure). “So maybe it’s not a bad thing he’s leaving.”
On Wednesday, Bachmann repeated the claim on CNN’s “Anderson Cooper 360.” “Within a day or so the president of the United States will be taking a trip over to India that is expected to cost the taxpayers $200 million a day,” Bachmann told Cooper. “He’s taking 2,000 people with him. He’ll be renting out over 870 rooms in India. And these are five-star hotel rooms at the Taj Mahal Palace hotel. This is the kind of over-the-top spending. It’s a very small example, Anderson.”
The only problem: The claims appear to be wrong.
The numbers evidently originate with the Press Trust of India, whose report was linked on the Drudge Report and picked up by Fox News host Glenn Beck. The news agency also wrongly said that the White House had blocked off the entire Taj Mahal Palace hotel for Obama’s visit and that the U.S. was stationing 34 warships—roughly 10 percent of the naval fleet–off the coast of Mumbai for security reasons.
The agency attributed the $200 million figure to an anonymous Indian government official. It didn’t attribute the warships claim to any source.
Pentagon spokesman Geoff Morrell called the warship claim “absolutely absurd.” “That’s just comical,” he said at Thursday’s Pentagon news briefing. “Nothing close to that is being done.”
The White House, meanwhile, issued a blanket statement that the $200 million figure “had no basis in reality” and was “wildly inflated.” The press office declined to disclose the trip’s actual cost, citing “security concerns.”
In a news briefing Thursday, White House Press Secretary Robert Gibbs also refused to release numbers, but he told reporters point-blank, “We are not spending $200 million a day.”
The nonpartisan FactCheck.org took up the issue, too, saying that even though the administration won’t release a price tag, there is “simply no evidence to support” a claim of $200 million a day. One reason to doubt the report, according to the group: The entire war in Afghanistan costs $190 million a day.
That is not to say that some of the precautions for Obama’s first presidential visit to India aren’t possibly a tad over the top. As the BBC reports, Indian officials have been removing coconuts from any trees that Obama might walk under, to prevent anything from falling on the presidential head. And as London’s Daily Telegraph notes, the country has deployed trained monkey catchers to prevent any “simian invasion” (a measure that Indian officials also took when President Bush visited in 2006).
Consumers’ right to file class actions is in danger
November 5, 2010
by David Lazarus
LA Times
If AT&T has its way before the Supreme Court, any business that issues a contract to customers would be able to prevent them from joining class-action lawsuits, taking away arguably the most powerful legal tool available to the little guy.
It hasn’t gotten a lot of press, but a case involving AT&T that goes before the U.S. Supreme Court next week has sweeping ramifications for potentially millions of consumers.
If a majority of the nine justices vote the telecom giant’s way, any business that issues a contract to customers — such as for credit cards, cellphones or cable TV — would be able to prevent them from joining class-action lawsuits.
This would take away in such cases arguably the most powerful legal tool available to the little guy, particularly in cases involving relatively small amounts of money. Class-action suits allow plaintiffs to band together in seeking compensation or redress, thus giving substantially more heft to their claims.
The ability to ban class actions would potentially also apply to employment agreements such as union contracts.
Consumer advocates say that without the threat of class-action lawsuits, many businesses would be free to engage in unfair or deceptive practices. Few people would litigate on their own to resolve a case involving, say, a hundred bucks.
“The marketplace is fairer for consumers and workers because there’s a deterrent out there,” said Deepak Gupta, an attorney for the advocacy group Public Citizen who will argue on consumers’ behalf before the Supreme Court on Tuesday.
“Companies are afraid of class actions,” he said. “This helps keep them honest.”
The case is AT&T Mobility vs. Concepcion. The basic question before the court is whether companies can bar class actions in the fine print of their take-it-or-leave-it contracts with customers and employees.
High courts in California and elsewhere have ruled that class-action bans are unconscionable and contrary to public policy.
At issue at next week’s court hearing is whether the Federal Arbitration Act of 1925 preempts state courts from striking down class-action bans. The federal law requires both sides in a dispute to take their grievance to an arbitrator, rather than a court, if both sides have agreed in advance to do so.
Vincent and Liza Concepcion sued AT&T in 2006 after signing up for wireless service that they’d been told included free cellphones. The Concepcions alleged that they and other Californians had been defrauded by the company because the phones actually came with various charges.
AT&T asked the U.S. District Court for the Southern District of California to dismiss the case because its contract forbade class actions. The court declined, ruling that a class-action ban violates state law and is not preempted by the federal law.
The U.S. 9th Circuit Court of Appeals upheld the lower-court ruling last year. AT&T subsequently petitioned the Supreme Court to hear the case.
William B. Gould IV, a professor emeritus at Stanford Law School and former chairman of the National Labor Relations Board under President Clinton, said the high court was clearly interested in extending the reach of the Federal Arbitration Act.
“This is a very important issue,” he said. “And this Supreme Court has indicated a measure of hostility toward class actions.”
Matthew Kaufman, a Los Angeles attorney who focuses on arbitration law, agreed with that perspective.
“This is a very conservative court that’s pro-business, and class actions are not good for business,” he said.
Marty Richter, an AT&T spokesman, said the company’s arbitration agreement “includes fair, easy-to-use provisions” that reflect “an innovative and highly consumer-friendly dispute resolution process.”
He noted that AT&T’s arbitration clause allows for at least $5,000 in compensation and double attorneys’ fees if the arbitrator awards the consumer more than AT&T offered to settle a dispute. “And we pay the entire cost of the arbitration, except the filing fee if a customer is claiming $75,000 or more,” Richter said.
Be that as it may, why is the company so intent on denying customers the choice of joining a class action? Shouldn’t consumers be allowed to decide what avenue to pursue in resolving a grievance?
“AT&T can offer the benefits of its consumer-friendly arbitration system only if the company is able to avoid the burdensome costs of lawyer-driven class actions, in which most of the money goes to lawyers — both plaintiff and defense lawyers — and class members get little,” Richter replied.
In other words, the company says the only way it can be generous in arbitration is if customers give up the right to join others in suing. Otherwise, those “burdensome” legal costs will force AT&T to be a more hard-nosed negotiator.
AT&T earned $12.5 billion in profit last year.
Public Citizen’s Gupta said consumers can expect similar treatment from other companies if the Supreme Court rules in AT&T’s favor.
“If the court decides that the federal law trumps state law in this case, there’s no limit to what companies could do,” Gupta said. “All companies and employers would be able to put arbitration clauses in contracts that prevent people from joining class actions.”
Briefs supporting the right to class actions have been filed by a number of consumer groups and civil rights organizations, including the Consumer Federation of America and the Lawyers’ Committee for Civil Rights Under Law.
On the opposing side — that is, backing AT&T’s case — are other telecom companies, as well as such well-heeled corporate interests as the American Bankers Assn., the Financial Services Roundtable and the U.S. Chamber of Commerce.
This is a case you’ll want to follow. You have a lot on the line.
David Lazarus’ column runs Tuesdays and Fridays. He also can be seen daily on KTLA-TV Channel 5. Send your tips or feedback to david.lazarus@latimes.com.
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The Director’s View
The week of November 7, 2010
Well, finally the American public got it right and put our people into office! Rand Paul gets to explain to the American public about the dangers of aspartame and fluoridation and hopefully, Rand can enlighten us about the NSA’s robot geese we have seen flying all over the country, photographing everyone. On the negative side the other side got Jerry Brown in as Governor of California. When our people find out about the reason Jerry got thrown out of the Jesuit seminary in Los Gatos, we will have more trouble. Jerry’s really inspired space program was best summed up in his campaign bumper sticker ‘We circle Uranus, looking for Klingons” So typical! That might not work in Arkansas but it sure did in California! Now, in all state offices the men’s toilets will have holes cut in the connecting stall walls. And our very own Michalle Bachmann, Beloved of Christ, wants to be Speaker so she can let the world know that America is a truly Christian country. She was so excited about the election results that they had to double up on her meds! We are highlighting a great new concept, published by Lothar Sneed, a strong Bachmann supporter. Please read this carefully! We also have to acknowledge that Jesus was a Jew and for that reason, all truly practicing and believing Christians have to not only recognize Israel’s abolute right to exist but also understand that Muslims are latcoming cultists and fully under the control of the Anti-Christ. Please read on…..
Submitted by Lothar Sneed on November 2, 1010-
Brother and Sisters in Christ!!!!
We are honored to announce to you the founding of our NEW CHRISTIAN CHURCH!
We know that many of you are not satisfied with the enforced meekness of regular Christian churches; that you are often humiliated by your neighbors and co-workers for displaying the piscine symbols of the Faith on your cars and front doors, mocked because of your picketing of abortion clinics and Satanist movies and demands for censorship of everything but the stock market reports.
Now, we have the True Answer for you!
We have formed the Church of Jesus Christ the Avenger whose credo is the manifestation of Muscular Christianity and the total destruction of all alien forms of life who will not accept the Word of Christ as Gospel! Unlike their Jesus Christ who is meek and long-suffering, our Jesus Christ is capable of leaping over several buildings at a single bound and of smiting Satan with both hands and a length of lead pipe for good measure! Our Jesus Christ would never have kissed Judas but rather, have snapped his neck like a piece of celery in a Bloody Mary! Our Jesus Christ would not merely have torn the veil in the temple but instead, have reduced the building to instant rubble along with all the congregation!
No longer do pious possessors of the One Truth have to put up with mockery from alien cults such as the Mormons, Baptists, Seventh Day Adventists, Christian Scientists, Roman and Eastern Catholics, Hindus, Moslems and other false cults of Lucifer. Now, the Church of Jesus Christ the Avenger will smite them hip and thigh and cast them into Outer Darkness. This time there will be no wailing and gnashing of teeth because Jesus Christ the Avenger will have ripped off their jaws (and private parts as well)!
You can join our Church and experience the thrill of Power as you witness acts of Holy Vengeance daily on the television. Rejoice when Orthodox Jews are forced to eat pork sausage and sour cream, see Christian Scientists compelled to take drugs, laugh when Mormons are made to drink Coke and iced tea and be enraptured as Baptists are held under water for ten minutes!
Those of you who crave Creative Christian Action can join the Society of the Militant Meek, the Sword of the Lord and Gideon, and the guarantors that the Meek shall indeed inherit the Earth! We alone can guarantee this because it is our aim to Exterminate anyone who does not belong to our Church! And not only will we inherit the earth, we will also inherit all of the cars, TVs, DVDs, bank accounts, clothing and real estate of the Departed Satanists!
Membership in the Society of the Militant Meek is not automatic but application must be made to your local Church of Jesus Christ the Avenger along with the severed head of a Satanist. Please note that we cannot accept the severed head of an ex-spouse, a mother-in-law, a creditor or anyone else against whom you might have some unworthy Personal Objection . No, the head must be of a Satanist unknown to you. (The Pastor of your Church has lists for your use.)
We hope we have made you aware of our goals and we advise you that More Bulletins will Follow!
Comment:
“More wacko junk about Jerusalem Slim’s Friday Night Chowder and Marching Society! If it isn’t the ‘My Left Behind’ garbage, it’s the babblings of a senile Pat Robertson. Haven’t you morons better things to do? Why not go on about the Sacred Bunny? That makes about as much sense. My little girl, who is eleven, got sent home from school last week because she called the idiot Clenge girl a Jesus Freak (which she is; her whole family are class A nuts, believe me) and the teacher did everything but throw up, wailing and screaming. It’s gotten so bad you can’t call a spade a spade anymore because someone says you’re attacking the President. Maybe if John the Boner gets elected, people will calm down. I hope so.” Joethegrinder November 5, 2010
submitted by Maudine Krotchrotte on November 5, 2010-
I would like to know why everyone is ignoring the thousands of dead walruses that are washing up on all the Florida beaches? And the clouds of Methane gas that has poisoned hundreds of people as far away as Miami? We know that the Illuminati are behind this, pumping gas into the air from their hidden boats so they can kill off all the people in Florida and resettle it with their Priceless Robot People they have made in China. And some of us know about the mutant alligators that grow to be over thirty feet long that are all over Florida now. Yesterday, one of these ate a motorcyclist! We must stop this invasion by the Illuminati’s mutant robots and alligators before it is too late! Look what happened to California! It’s being taken over by millions of migrant beaners that are being controlled by the Illuminati and the Bilderburgers.
Comment: Oh I am so happy someone has dared to talk about this! I thought the Illuminati could keep it secret, seeing they and the Jews own all the American papers. Well, now that we have learned about it, let’s discuss the truth about 9-11. Dr. Fetzer is wrong again because we know from Henry Makow that mini-atom bombs were used on the buildings. I have seen the report by atomic scientists about the radioactive fall-out dust they found all over the streets after the building’s were blown down and how the Government hushed it up.
WonderWoman November 5, 2010
Comment: I got something for you, speaking of truth and beaners. Do you know how Mexicans keep the flies out of their living rooms? Answer: They shit in the hall! CaptainDuckwhistle, November 5, 2010
Submitted by Rapturelover on November 6, 2010
I am joyous to announce that the largest stature of Jesus Christ has been erected in Swiebodzin, Poland! It is over 167 feet tall! They are putting an aircraft warning light on top of the halo which is gold-leafed and glows in the dark. This is so wonderful I wonder if we couldn’t put a copy of this up here instead of the Statue of Liberty? Now that the Republicans are in, I guess we can do this. In fact, we should have Jesus statues in every town in America. And if the Muslims in this country don’t like this, they can go back where they come from. I’ll bet Rand Paul would support this.
Conversations with the Crow
When the CIA discovered that their former Deputy Director of Clandestine Affairs, Robert T. Crowley, had been talking with author Gregory Douglas, they became fearful (because of what Crowley knew) and outraged (because they knew Douglas would publish eventually) and made many efforts to silence Crowley, mostly by having dozens of FBI agents call or visit him at his Washington home and try to convince him to stop talking to Douglas, whom they considered to be an evil, loose cannon.
Crowley did not listen to them (no one else ever does, either) and Douglas made through shorthand notes of each and every one of their many conversation. TBR News published most of these (some of the really vile ones were left out of the book but will be included on this site as a later addendum ) and the entire collection was later produced as an Ebook.
Now, we reliably learn, various Washington alphabet agencies are trying to find a way to block the circulation of this highly negative, entertaining and dangerous work, so to show our solidarity with our beloved leaders and protectors, and our sincere appreciation for their corrupt and coercive actions, we are going to reprint the entire work, chapter by chapter. (The complete book can be obtained by going to:
http://www.shop.conversationswiththecrow.com/Conversations-with-the-Crow-CWC-GD01.htm🙂
Here is the forty-first chapter
Conversation No. 41
Date: Sunday, October 6, 1996
Commenced: 8:45 AM CST
Concluded: 9:38 AM CST
GD: Hello to you this morning, Robert. Up and around?
RTC: Well, the sun did come up and animal instincts get us going. And then there is coffee. Are you a coffee drinker, Gregory?
GD: I never used to be, but I am now. I hate the taste of the stuff which is funny because my grandfather was a big-time coffee broker. We had coffee all over the kitchen in little bags. My uncle was an expert and when my father got out of the business, he continued long after my grandfather died. Coffee gets you going but if I drink too much of it, my wiring gets fried.
RTC: The world runs on coffee.
GD: They buy a lot of it. My grandfather wasn’t exactly poor. That’s how I know about your people and the Guatemala business. My uncle was involved in it and it was well-known around the house. Grandfather was tied up with Levi and Zentner…the United Fruit people…. and the Grace Steamship company. Uncle was born in Petropolis in Brazil and was fluent in a number of languages, including Portuguese. Yes, there seemed to have been quite a connection between American business and the CIA. And of course, the White House and Congress.
RTC: Well, you’ve seen the tip of the big iceberg, haven’t you, Gregory?
GD: How big is it?
RTC: It’s not so much the size but the power of it. This country isn’t run by little local political action groups or small town newspapers. Democracy is only a word that sounds good. The public hates to vote although I understand that in Switzerland it is mandatory. They don’t care as long as they make money. Do you know how much money it costs to run for Congress? Many millions. And where does the money come from? Aunt Anna’s cookie and mad money jar? No, it comes from corporate interests who want to keep things balanced on their side of the books.
GD: That’s not a great revelation, Robert. No one really cares, as you say, as long as they have television and a car. Back in the Depression days when people didn’t have television sets and no cars, a lot of the underpaid and overworked workers were Communists. Once Roosevelt got the war started for us, business boomed and the workers ceased to be Communists.
RTC: Oh, that’s absolutely true, Gregory, but don’t underestimate the power of the Communist bugaboo to terrify the public into letting us do what we wanted.
GD: Gehlen told me that in ’48 when he was asked by the Army brass to prepare an intelligence paper proving the Russians were about to launch a huge attack on the West, there were two forces behind all of this bullshit. The first was the Army who didn’t like to be reduced in size. Generals had to retire you know and they didn’t like that. And, business had been booming during the war and they, like the generals, didn’t much like shutting down plants and making less money. This from the horse’s mouth so to speak. Oh, and it worked. Leaked to Congress and Harry Truman, it started the Cold War.
RTC: Nicely put and remember this for Critchfield. Yes, that’s basically the long and short of it. At this moment, the United States is run by four major power sources. They are all interconnected and they have the common goal of protecting their asses and increasing their profits. We have what they call big business which consists of international companies, mostly the huge New York banking giants but some manufacturing companies as well. This country got great by being a manufacturing country but that’s slipping a bit. At the turn of the century it was railroads and steel, but that has faded a little…
GD: A little? A lot.
RTC: Yes, a question of degree, I suppose. Anyway, we have really big business as one entity. The other is the political part of our society. Most Congressmen are put into office to take care of business.
GD: And then we have Huey Long, who was not interested in business.
RTC: Yes, and Roosevelt had him shot very dead, didn’t he?
GD: Yes.
RTC: But Congress passes the laws and since most of them are on the take, they are careful not to pass too many laws to injure their business paymasters.
GD: But under Roosevelt they went the other way.
RTC: But Roosevelt is dead and when he died, we had a new dawn of commerce. And Congress knows where the money comes from and acts accordingly. Eventually we will see someone in the Oval Office who is also Chairman of the Board of Chase Bank. Just joking, but there are those who would love the concept. We have business and political and then we have the Mafia. Yes, it is a huge industry, spawning billions of dollars in revenue. Joe Kennedy turned to them to get Jack elected and then turned on them and began to persecute them using the other brother. Look at all the damage that short-sighted behavior did to the family. And that leads us into our very own CIA. We are at the top of the pyramid, Gregory, for a number of reasons. As you know, we started out as a small advisory group whose job it was to supply Harry Truman accurate international intelligence. Harry never trusted the Army and he found out about the humped Gehlen Report and wanted more facts to work with. Now we got Allen Dulles whose brother, John Foster, was a lawyer with Sullivan and Cromwell in New York. Sullivan and Cromwell was, in essence, a Nazi establishment. They were firm supporters of Hitler and worked with the Schroeder bank in Cologne. And you ought to know that when he was Ambassador to England, Joe Kennedy did business with Hitler and got huge blocks of I.G. Farben stock. It got taken away at the end of the war, seized by the Justice Department and one of the first things Joe did when Jack became President was to have him put Bobby in as AG so he could get his stock back. Oh yes, those people were for Hitler right up to the last week of the war. And even afterwards as well. Of course now that Jews are getting more power here and especially in the CIA, we do not mention any of this. Same thing with your Mueller friend. Of course we used him because he was the top Nazi expert on Communists. Why not? But, of course, if the Jews ever had to face that fact, they would come unglued. Can you imagine the huge headlines in The New York Times?
GD: Yes, I can. We called that Second Coming Type.
RTC: Wrong. The New York Times is run by Jews and sucks at Israel’s tit but they would never discuss this, let alone put it on the front page. Why? Because we have control over what they print. You see, we help our friends in business with delicate political nuisance problems. Like the nice Belgians in the Congo who had all that uranium. Kill off the left wing politicos who tried to grab it all. They really weren’t Communists planning to give uranium to Russia but that’s what we told the President and that’s what our friends who publish The New York Times heard. And that’s what they published and that’s what they condoned. Naturally, with such a dangerous menace, the CIA rushed up to save us all and kill off old Patrice.[1] Same in Guatemala and the same in Iran with Mossadegh. The enemy is identified as dangerous to our business friends. We do studies to prove it to the rabble such as …fake documents and all that…that these enemies are vile Communists, working for the Soviet Union, and a real danger to all of America. On the one hand, get permission to destroy these enemies and on the other, launch a publicity campaign through our many friends in the media to make it just another heroic crusade.
GD: Oh, say it isn’t so, Robert.
RTC: I see you are a baseball fan, Gregory.
GD: No, that’s where it came from, but I am not a baseball fan. I was feigning shock and horror at your dastardly revelations. Do go on, though.
RTC: So we have business, the press, the mob on one side thanks to Jim Angleton’s organization, the legislative branch and that’s it. We don’t control, Gregory, we influence. A press campaign, planned in our offices here, and an assassination or bomb blast there. We have it down to an exact science. A nice balance at that.
GD: And the Mueller business?
RTC: A mere bump in the road. If you had brought this up twenty years before, they would have killed you but by now, it’s unpleasantly cold coffee. They’ll just ruin your reputation by using paid hacks. They media would never discuss this, believe me. You could have Heinrich Mueller’s body in a glass case and the press would be as silent as the grave. We would ask them nicely to drop it and guess what? They would.
GD: The machine seems to run well enough.
RTC: We’ve had time to perfect it. There are always glitches but so far, we have been able to repair them. But it isn’t like it used to be, Gregory. Then it was a band of brothers and now the whole agency has gotten too big, too compartmentalized and too stiff. The power is there but it is an old power, not a dynamic one. One of these days, parts will start falling off and then it will be replaced with another group that will march to a different drummer.
GD: Things always change, Robert, mark that.
RTC: I’m afraid I’m stuck in the old days, thinking the old thoughts and doing what I got used to doing. I told you not to get old, Gregory. I’ve seen it before. Sweet children grow up to be anarchists, faggots, drug addicts, bank robbers, drunks and so on. Wives leave you for someone else, your business changes way past recognition and you become redundant and out you go. You don’t recognize the cars in the street, the music is terrible and the trouble is you remember too much.
GD: And tend to romanticize the past instead of learning from it.
RTC: We write books, but in my case, I can’t. In the first place, I am forbidden to by contract with the Agency and in the second, I can write reports but not books. You write books, though. Of course, so do Joe and Susan. I don’t think very much of Joe, Gregory but I think you might do well to write things up. Joe can see for about two inches in front of his nose, but I find you can see for miles.
GD: It’s a blessing and a curse. I have a secret for you, Robert. You won’t believe me, of course, but here it is, For reasons I don’t even begin to understand, I can meet a new person and almost at once see right into them and know just who and what they are. They may be a professional football player, but if I talk with them for three minutes, I can see that they are gay. Or a religious leader and see he is a drunk. But only face to face. Can’t do it on the phone on by mail. And I think sometimes these people sense I am poking around inside their psyche. I never say a thing to them but some people can sense my invasion of their often rotten soul. And for no reason apparent to a, say, neutral observer, they suddenly hate me.
RTC: They’re afraid of you, Gregory. People fear the predator.
GD: Yes, I’m sure they do, but I am not predatory. I am very understanding of other people.
RTC: Trust me, Gregory, you’re a born predator. That’s one of the reasons I trust you. I prefer to know a wolf as a wolf than a yapping little dog that sneaks around and bites you in the lower leg. You would go for the throat and the kill. No, seeing into people is a gift. I ran enough agents in my time and I know. Always go for the throat.
GD: Yes. I was once confronted with six armed men who were trying to kill some people I happened to be with. I had a gun, a Belgian Browning 9mm. The High Power model with a 13 shot box mag. These fellows were shooting at my friends and at me. I had nothing to do with the business but I had the gun. I got it out and I nailed all six. Five through the head and one in the neck. Before I left the scene with my wounded friend, I went over and shot that one through the head. I didn’t want any witnesses. And I got my brass.
RTC: I never knew that one, Gregory. How old were you at the time?
GD: Seventeen and a couple of months.
RTC: You were in the service?
GD: No. A tourist.
RTC: Six at one throw?
GD: Five on the spot and one a few moments later.
RTC: A dumb question here, but did it bother you?
GD: Yes, terribly. My friend bled all over my shoes before I got him to a safe place. It took a lot of work to get the blood off. And I ruined a very good tie. He got it in the upper leg so I used the tie to keep him from bleeding out. Fortunately, the artery was spared and he survived.
RTC: And it never bothered you?
GD: Why should it? These jerks were shooting at me and in time, they might have killed me, too. Fuck them, Robert. Now they’re turning green in a box somewhere, waiting for the Last Trumpet. Yet in my flesh shall I see God? Oh, I think not. Heaven’s doormat will be a horrible, oozing mess come trumpet day.
RTC: Predatory, Gregory, in word and deed. No wonder the club does not like you.
GD: Club?
RTC: Bill, Tom, Trento and a few others. They warn me about you. I can see why. Their old warning system, the caveman one, is still fitfully working and they can sense you are a danger. Seventeen? Was that the first time?
GD: No, when I was in Germany just before that, I got jumped by a DP. He had an iron bar and I emptied a clip from a .380 into his pump. They had quite a bit of trouble from these DPs from Poland. They were all Polish Jews from the liberated camps and until the Army rounded them all up and shipped them, under guard, to Israel, they cut quite a path. And I got another one over by a putting green. He pulled a knife and his buddy had a wooden pistol. My friend got him and broke his neck and I got the one with the knife using a nine iron. I ruined the club but you should have seen his head. It looked like a cherry pie dropped on the sidewalk. Dragged both of them into the hedges and off we went. The club went into the river. I guess they found them later by the stench and all the flies.
RTC: Very predatory, Gregory.
GD: Self-defense, Robert, self-defense. What else would you call it?
RTC: Good reflexes among other things.
GD: God must hate me for making his doormat so filthy,
(Concluded at 9:38 AM CST)
Dramatis personae:
James Jesus Angleton: Once head of the CIA’s Counterintelligence division, later fired because of his obsessive and illegal behavior, tapping the phones of many important government officials in search of elusive Soviet spies. A good friend of Robert Crowley and a co-conspirator with him in the assassination of President Kennedy
James P. Atwood: (April 16, 1930-April 20, 1997) A CIA employee, located in Berlin, Atwood had a most interesting career. He worked for any other intelligence agency, domestic or foreign, that would pay him, was involved in selling surplus Russian atomic artillery shells to the Pakistan government and was also most successful in the manufacturing of counterfeit German dress daggers. Too talkative, Atwood eventually had a sudden, and fatal, “seizure” while lunching with CIA associates.
William Corson: A Marine Corps Colonel and President Carter’s representative to the CIA. A friend of Crowley and Kimmel, Corson was an intelligent man whose main failing was a frantic desire to be seen as an important person. This led to his making fictional or highly exaggerated claims.
John Costello: A British historian who was popular with revisionist circles. Died of AIDS on a trans-Atlantic flight to the United States.
James Critchfield: Former U.S. Army Colonel who worked for the CIA and organizaed the Cehlen Org. at Pullach, Germany. This organization was filled to the Plimsoll line with former Gestapo and SD personnel, many of whom were wanted for various purported crimes. He hired Heinrich Müller in 1948 and went on to represent the CIA in the Persian Gulf.
Robert T. Crowley: Once the deputy director of Clandestine Operations and head of the group that interacted with corporate America. A former West Point football player who was one of the founders of the original CIA. Crowley was involved at a very high level with many of the machinations of the CIA.
Gregory Douglas: A retired newspaperman, onetime friend of Heinrich Müller and latterly, of Robert Crowley. Inherited stacks of files from the former (along with many interesting works of art acquired during the war and even more papers from Robert Crowley.) Lives comfortably in a nice house overlooking the Mediterranean.
Reinhard Gehlen: A retired German general who had once been in charge of the intelligence for the German high command on Russian military activities. Fired by Hitler for incompetence, he was therefore naturally hired by first, the U.S. Army and then, as his level of incompetence rose, with the CIA. His Nazi-stuffed organizaion eventually became the current German Bundes Nachrichten Dienst.
Thomas K. Kimmel, Jr: A grandson of Admiral Husband Kimmel, Naval commander at Pearl Harbor who was scapegoated after the Japanese attack. Kimmel was a senior FBI official who knew both Gregory Douglas and Robert Crowley and made a number of attempts to discourage Crowley from talking with Douglas. He was singularly unsuccessful. Kimmel subsequently retired and lives in retirement in Florida
Willi Krichbaum: A Senior Colonel (Oberführer) in the SS, head of the wartime Secret Field Police of the German Army and Heinrich Müller’s standing deputy in the Gestapo. After the war, Krichbaum went to work for the Critchfield organization and was their chief recruiter and hired many of his former SS friends. Krichbaum put Critchfield in touch with Müller in 1948.
Heinrich Müller: A former military pilot in the Bavarian Army in WWI, Müller became a political police officer in Munich and was later made the head of the Secret State Police or Gestapo. After the war, Müller escaped to Switzerland where he worked for Swiss intelligence as a specialist on Communist espionage and was hired by James Critchfield, head of the Gehlen Organization, in 1948. Müller subsequently was moved to Washington where he worked for the CIA until he retired.
Joseph Trento: A writer on intelligence subjects, Trento and his wife “assisted” both Crowley and Corson in writing a book on the Russian KGB. Trento believed that he would inherit all of Crowley’s extensive files but after Crowley’s death, he discovered that the files had been gutted and the most important, and sensitive, ones given to Gregory Douglas. Trento was not happy about this. Neither were his employers.
Frank Wisner: A Founding Father of the CIA who promised much to the Hungarian and then failed them. First, a raging lunatic who was removed from Langley, screaming, in a strait jacket and later, blowing off the top of his head with a shotgun.
Robert Wolfe: A retired librarian from the National Archives who worked closely with the CIA on covering up embarrassing historical material in the files of the Archives. A strong supporter of holocaust writers
It Begins: Military’s Cyberwar Command Is Fully Operational
November 4, 2010
Wired.com
Fifteen thousand military computer networks became protected on November 3, 2010. Those ensconced within the informational phalanx called the event Cyber Command Day. They lived only to face a new challenge — the war against the Machines.
In truth, yesterday wasn’t quite so dramatic. The Department of Defense announced that the military’s new command for protecting its networks against cyberassault had achieved “full operational capability,” meaning the new U.S. Cyber Command, which opened for business in May, is 100 percent ready for duty, just a month behind schedule. Not that “full operational capability” fills in many of the blanks about when it’s acceptable for Cyber Command to attack a foreign network or how deeply it’ll be involved in the civilian internet.
Since Defense Secretary Robert Gates ordered its creation in 2009, there’s been a lot of confusion about just what Cyber Command will do. Its first leader, Army General Keith Alexander — who also commands the network-infiltration and surveillance experts at the National Security Agency — has portrayed it as a reactive organization, helping protect warfighting commands’ networks against cyberattacks and teaching the military good cyber-hygiene. And he’s repeatedly said the command will only get involved in the dot-gov and dot-com side of the internet during emergencies, when civilian government agencies come calling.
Only the boundaries of those emergencies remain undefined. And in practice, Cyber Command will routinely work with the Department of Homeland Security’s protectors of the civilian side of the internet. Last month, the Departments of Defense and Homeland Security inked an agreement to send Cyber Command officers to DHS to receive “requests for cybersecurity support” for “operational planning and mission coordination.”
The new “full operational capability” of the command doesn’t clarify any of that. Largely, it’s a bureaucratic shift: a new Joint Operations Center is now in existence, absorbing officers from two predecessor components of the command. An official statement promised vaguely that the command will “continue to grow the capacity and capability essential to operate and defend our networks effectively.”
Congress may choose to clarify what that means. A possible new leader of the House intelligence committee, Republican Mac Thornberry of Texas, has been a cybersecurity buff for years. In the Senate, Joe Lieberman and Susan Collins introduced a bill this spring that would give the president broad powers to declare a cyber-crisis and take charge of private firms’ networks. For now, the most conspicuous aspect of Cyber Command’s full functionality may be that it hasn’t yet become self-aware and waged a war of termination against humanity.
Wealth managers want to wean investors off gold
November 3, 2010
by Alina Selyukh
Reuters
(Reuters) – After a year of record demand, gold is getting tepid reviews from top U.S. wealth managers who say it is no longer the safe haven it was at the peak of the financial crisis.
As investors soured on stocks and bonds and worried that government stimulus spending would fuel inflation, they queued in scores to stock up on gold. Whether physical bullion or derivatives, gold was deemed safe and the closest alternative to sticking cash under the mattress.
Money managers to the rich, though, warned that by now there is tremendous risks lurking behind gold’s shine.
“That play has already passed by,” said Lawrence Hughes, chief executive of BNY Mellon Wealth Management, speaking at the Reuters Wealth Management Summit on Wednesday.
Investors “need to be careful not to do what people do in line at the grocery store: always jump to the fastest-moving line or, in this case, to the hot-performing category,” he said.
As the economy recovers, financial advisers are weaning the rich from their gold and other low-return assets in favor of higher-yielding investments, to “get the money from under the mattress and working again,” said Robert McCann, chief executive of UBS Wealth Management Americas.
Gold prices started slipping in the past month after almost doubling since October 2008. Last month, prices for both spot gold and gold futures for December delivery on the Comex exchange reached all-time highs. Spot gold peaked at $1,387 an ounce in mid-October.
Many investors have heavily invested in gold to hedge against the risk of inflation, but executives said the market does not warrant gold’s value.
“Gold has flown up in price,” said Gordon Fowler, chief executive and chief investment officer for Glenmede, a Philadelphia-based wealth manager for the very wealthy.
“Inflation would have to go up 90 percent in this country for those two numbers to get back in line,” he said.
Now that many central banks have stopped selling and started buying gold, soaring demand in Europe, Turkey and India has been driving the gold rush. That has sparked worries that a gold bubble is forming.
Financial executives told the summit that their rich clients have not gone overboard with gold purchases, but they keep investing in the precious metal to protect themselves from inflation, market tumbles and swings in the dollar.
“There’s an interesting dynamic in gold. It’s a different kind of commodity … Gold is a store of wealth,” UBS’ McCann said, putting his target valuation at $1,500 an ounce.
Many financial advisers are still offering gold as an investment option, not in pursuit of returns but as a way to diversify.
“Within a properly diversified portfolio with precious metals, there is a place for gold,” said George Lewis, head of Royal Bank of Canada’s wealth and asset management.
Reporting by Alina Selyukh. Editing by Robert MacMillan
Applications for jobless aid rise sharply
November 4, 2010
by Christopher S. Rugaber
Associated Press
WASHINGTON (AP) — The number of people seeking jobless benefits jumped sharply last week, after two straight weeks of declines.
The increase undermines hopes that unemployment claims, after falling four times in the previous five weeks, were on a sustained downward trend. That would signal layoffs were slowing and hiring was picking up. Instead, claims remain stuck at an elevated level.
The Labor Department said Thursday that initial claims for unemployment aid rose by 20,000 to a seasonally adjusted 457,000 for the week ending Oct. 30. Wall Street analysts polled by Thomson Reuters had expected a smaller rise.
Claims have fluctuated around the 450,000 level all year. They will need to drop below 425,000 to signal sustained job gains.
“Those looking for an imminent spurt of job creation are, for yet another week, likely to be disappointed,” said Dan Greenhaus, chief economic strategist at Miller Tabak, in a note to clients.
The weekly applications for unemployment benefits are volatile, but are considered a real-time snapshot of the job market. They reflect the pace of layoffs and indicate whether companies are hiring.
Separately, labor productivity rebounded in the July-September quarter, rising by 1.9 percent, after falling in the previous quarter.
But even with the decline, productivity, or output per hour worked, is still growing at a much weaker pace than last year. That could be a positive sign that companies will have to step up hiring to meet growing demand.
Meanwhile, the four-week average of claims, a less volatile measure, rose by 2,000 to 456,000.
Claims fell steadily last year, from about 600,000 in June 2009 when the recession ended to about 470,000 at the end of the year. There has been only minor improvement since then.
The unemployment claims report comes one day before the Labor Department is scheduled to release the jobs figures for October. Economists project that report will show that employers added a net total of 60,000 jobs last month, while the unemployment rate remained 9.6 percent for the third straight month.
That would be an improvement from September, when the economy lost 95,000 jobs. But September’s figures were made worse by a loss of 77,000 temporary census workers. Few temporary census workers remain and won’t have much impact on Friday’s report.
A gain of 60,000 jobs is far below the 200,000 jobs a month needed to keep up with population growth and to help get some of the 15 million unemployed back to work.
The number of people continuing to claim unemployment benefits dropped by 42,000 to 4.34 million, the lowest since November 2008.
But that doesn’t include several million people claiming extended unemployment aid, paid for by the federal government. More than 5 million people received the emergency benefits during the week ending Oct. 16, the latest data available. All told, more than 8.7 million people received jobless benefits that week.
The emergency benefits program, extended several times by Congress, is set to expire at the end of this month. Many analysts doubt Congress will extend it again. That could cause as many as 1 million people a month to lose benefits, according to the National Employment Law Project, a nonprofit group.
Some companies are hiring. Richmond, Va.-based CarMax, the nation’s largest used car chain, said Wednesday that it is hiring more than 1,200 people in sales, service and other operations.
At the same time, some struggling firms are still cutting staff. Biotech company Biogen Idec Inc. said Wednesday that it is laying off 13 percent of its work force, or 650 employees, to cut costs.
US Debt Crisis: What NOT to Do When Your Country is Broke
November 3, 2010
by Bill Bonner
Agora Publishing
Another month gone by. Another month closer to bankruptcy.
Not you, dear reader.
We’re talking about the US government.
But hold that thought…
Let’s turn to the markets. Hmmm… Not much action. The Dow rose a piddly 4 points on Friday. Gold went up $15. Not much to talk about there…
Investors are waiting to see what happens next week. They’re sitting on the edge of their chairs. Will Ben Bernanke play it cool? Or will he want to do something really big, bold, and bumbling?
We’re not as curious as most investors. We doubt that he will want to go too far in either direction. Most likely, he’ll do what investors expect… announce more quantitative easing – money printing, in other words – but being a little cagey about how much, and when.
So, let’s turn back to the biggest bankruptcy of all time.
Many are the ways the facts are interpreted, distorted and bearded. But the numbers keep going up.
The red numbers, that is.
The US press barely reports the story. They know Americans aren’t interested. In the US, people figure we’ll muddle through… we’ll work our way out of debt.
Or, hey, maybe there will be a miracle! In the US, we believe in all sorts of things that are miraculous… unbelievable… and preposterous.
Got too much debt? We’ll fix it by giving you more debt!
People short of real money? We’ll fix that by giving them make-believe money.
Did the authorities miss the biggest financial blow up of all time? Did they fail to stop the biggest Ponzi schemer in history – even after they were tipped off? Did they completely “blow it” when it came to controlling the bubble and the damage it caused?
Yes? Well, let’s give them $10 trillion of the taxpayers’ cash and credit and see if they can do better the next time!
Fantasies, hallucinations, delusions – and don’t forget the “war on terror”… the first war on nobody in particular in history.
But let’s get back to who owes what to whom. We’re talking about the US government. And Canada’s Globe and Mail has the story:
The scary actual US government debt
Boston University economist Laurence Kotlikoff says US government debt is not $13.5-trillion (US), which is 60 per cent of current gross domestic product, as global investors and American taxpayers think, but rather 14-fold higher: $200-trillion – 840 per cent of current GDP. “Let’s get real,” Prof. Kotlikoff says. “The US is bankrupt.”
Writing in the September issue of Finance and Development, a journal of the International Monetary Fund, Prof. Kotlikoff says the IMF itself has quietly confirmed that the US is in terrible fiscal trouble – far worse than the Washington-based lender of last resort has previously acknowledged. “The US fiscal gap is huge,” the IMF asserted in a June report. “Closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 per cent of US GDP.”
This sum is equal to all current US federal taxes combined. The consequences of the IMF’s fiscal fix, a doubling of federal taxes in perpetuity, would be appalling – and possibly worse than appalling.
Prof. Kotlikoff says: “The IMF is saying that, to close this fiscal gap [by taxation], would require an immediate and permanent doubling of our personal income taxes, our corporate taxes and all other federal taxes.
“America’s fiscal gap is enormous – so massive that closing it appears impossible without immediate and radical reforms to its health care, tax and Social Security systems – as well as military and other discretionary spending cuts.”
He cites earlier calculations by the Congressional Budget Office (CBO) that concluded that the United States would need to increase tax revenue by 12 percentage points of GDP to bring revenue into line with spending commitments. But the CBO calculations assumed that the growth of government programs (including Medicare) would be cut by one-third in the short term and by two-thirds in the long term. This assumption, Prof. Kotlikoff notes, is politically implausible – if not politically impossible.
One way or another, the fiscal gap must be closed. If not, the country’s spending will forever exceed its revenue growth, and no one’s real debt can increase faster than his real income forever.
Prof. Kotlikoff uses “fiscal gap,” not the accumulation of deficits, to define public debt. The fiscal gap is the difference between a government’s projected revenue (expressed in today’s dollar value) and its projected spending (also expressed in today’s dollar value). By this measure, the United States is in worse shape than Greece.
Prof. Kotlikoff is a noted economist. He is a research associate at the US National Bureau of Economic Research. He is a former senior economist with then-president Ronald Reagan’s Council of Economic Advisers.
He says the US cannot end its fiscal crisis by increasing taxes. He opposes further stimulus spending because it will simply increase the debt. But he does suggest reforms that would help – most of which would require a significant withering away of the state. He proposes that the government give every person an annual voucher for health care, provided that the total cost not exceed 10 per cent of GDP. (US health care now consumes 16 per cent of GDP.) He suggests the replacement of all current federal taxes with a single consumption tax of 18 per cent. He calls for government-sponsored personal retirement accounts, with the government making contributions only for the poor, the unemployed and people with disabilities.
Without drastic reform, Prof. Kotlikoff says, the only alternative would be a massive printing of money by the US Treasury – and hyperinflation.
Wait a minute, says our old friend Jim Davidson. Professor Kotlikoff is wrong. He “unaccountably overstates the solvency of the US,” he says.
Jim makes a good point. It’s not total GDP output that supports the government. It’s just the private sector part. The government part is a cost…not a source of financing. The total fiscal gap – unfunded government obligations – is over $200 trillion. It’s about 14 times GDP. But compared to the real output of the private sector, it’s 20 times as great.
If this were a more traditional debt burden, it would have to be financed. Interest rates are at a 60-year low. But they could easily be back up at 5% in short order. At that rate, it would take 100% of private sector output just to keep up with it.
Professor Kotlikoff is right. The US is already broke. Busted. Bankrupt. It cannot possibly honor its commitments. One way or another, it must default on them.
But how? That’s what we’re going to find out.
And more thoughts…
“Retirement Disaster Ahead,” says The Wall Street Journal.
Yep. Too many retirees. Too little money.
They’re counting on Social Security. But as we see above, government is going to have a hard time honoring its commitments.
The other thing that is happening is that some basic costs – namely food and energy – are going up, even as the consumer price index stays flat.
Why are food and energy becoming more expensive? Because the foreigners are buying food and energy. And there are a lot of them. Foreigners, that is.
And why is that bad news? Where does that leave the typical US retiree? Without increases in the CPI the US government doesn’t adjust Social Security payments to the upside. Meanwhile, the real cost of being retired – food, fuel… along with everything else – goes up.
Most likely, the strain of trying to support so many retired people will destroy the modern welfare state model. As in Argentina, old folks will find that they don’t get from the government what they were promised. They’ll have to figure out how to make do on their own.
Our advice: Don’t grow old. Don’t retire. Don’t get sick. Don’t trust the feds. And don’t sell your gold.
Hagens Berman Sobol Shapiro: JP Morgan and HSBC Face RICO Charges in Silver Futures Class Action Lawsuit
Banks alleged to have used naked short-selling to rig market
November 3, 2010
PR Newswire
NEW YORK, JP Morgan Chase & Co. (NYSE: JPM) and HSBC Securities Inc. (NYSE: HBC) face charges of manipulating the market for silver futures and options in violation of federal commodities and racketeering laws, according to a new lawsuit filed Tuesday in the U.S. District Court for the Southern District of New York.
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The suit – which alleges violation of the Commodity Exchange Act and the Racketeering Influenced and Corrupt Organizations (RICO) Act – alleges that the two banks colluded to manipulate the market for silver futures starting in the first half of 2008 by amassing huge short positions in silver futures contracts they had no intent to fill, but did so to force silver prices down to their benefit.
The suit was filed on behalf of Carl Loeb, an independent investor in silver futures and options, by Seattle-based Hagens Berman Sobol Shapiro LLP, a class-action and complex litigation firm.
“The practice of naked short selling has long been a serious issue on Wall Street,” said Steve Berman, co-counsel and managing partner at Hagens Berman. “What we know about the scope and intent of JP Morgan and HSBC’s actions in this short-selling scheme dwarfs any other similar attempt to manipulate a commodities market.”
According to the complaint, JP Morgan amassed a sizeable short position in silver futures and options in part through its March 2008 acquisition of investment bank Bear Stearns. By August 2008, JP Morgan and London-based HSBC controlled more than 85 percent of the commercial net short position in silver futures contracts.
The suit alleges that, starting in early 2008, the two banks began manipulating the silver futures market by accumulating unusually large “short” positions and then secretly coordinating enormous sales of silver futures contracts on the Commodity Exchange, which is known as “COMEX” and is part of the New York Mercantile Exchange.
According to the lawsuit, JP Morgan and HSBC used a variety of methods to coordinate their manipulation of the market for silver futures contracts, signaling when to flood the COMEX market with short positions, which caused the price of silver futures and options contracts to crash.
The suit describes two “crash” events that were set in motion by JP Morgan and HSBC, one in March 2008, and the other in February 2010, after defendants had amassed large short positions. In the wake of both events, the suit alleges, COMEX silver futures prices collapsed.
“We believe that JP Morgan and HSBC’s scheme was carefully conceived and coordinated to maximize their profits at the expense of innocent investors who believed that they were trading in a market free from manipulation,” Berman said.
The complaint also contains allegations that in September 2008, the U.S. Commodity Futures Trading Commission launched an investigation that would eventually consider allegations made by a London-based independent metals trader named Andrew Maguire that the silver futures market was being manipulated.
The complaint alleges that Maguire disclosed to the CFTC on Feb. 3, 2010 that he received a signal from the two banks of their intent to drive down the prices of silver futures two days later, on Feb. 5, 2010. Maguire’s information was correct and the price of silver dropped dramatically between Feb. 3, 2010 and Feb. 5, 2010.
In addition, the lawsuit states that both JP Morgan and HSBC still maintain highly concentrated holdings in short positions in silver futures and options, giving both banks the ability to continue manipulating the price of silver.
Plaintiffs’ attorneys have asked the court to certify the case as a class action and enjoin JP Morgan and HSBC from continuing their alleged conspiracy and manipulation of the silver futures and options contracts market.
Attorneys also ask the court to award damages and attorneys’ fees to the class.
About Hagens Berman
Seattle-based Hagens Berman Sobol Shapiro LLP represents whistleblowers, investors and consumers in complex litigation. The firm has offices in Boston, Chicago, Colorado Springs, Los Angeles, Phoenix, San Francisco and Washington, D.C. Founded in 1993, HBSS continues to successfully fight for investor rights in large, complex litigation. More about the firm and its successes can be found at www.hbsslaw.com.
Media Contact: Mark Firmani, Firmani + Associates Inc., 206.443.9357 or mark@firmani.com.
SOURCE Hagens Berman Sobol Shapiro LLP
[1] Patrice Émery Lumumba July 2, 1925–17 January 17, 1961 was a Congolese independence leader and the first legally elected Prime Minister of the Republic of the Congo after he helped win its independence from Belgium in June 1960. Only ten weeks later, Lumumba’s government was deposed in a CIA-controlled coup during the Congo Crisis. He was subsequently imprisoned and murdered by a CIA officer.