How the banksters on Wall Street stole everything and how the politicos let them:
On Tuesday, March 11th, 2008, somebody — nobody knows who — made one of the craziest bets Wall Street has ever seen. The mystery figure spent $1.7 million on a series of options, gambling that shares in the venerable investment bank Bear Stearns would lose more than half their value in nine days or less. It was madness — “like buying 1.7 million lottery tickets,” according to one financial analyst.
But what’s even crazier is that the bet paid.
At the close of business that afternoon, Bear Stearns was trading at $62.97. At that point, whoever made the gamble owned the right to sell huge bundles of Bear stock, at $30 and $25, on or before March 20th. In order for the bet to pay, Bear would have to fall harder and faster than any Wall Street brokerage in history.
The very next day, March 12th, Bear went into free fall. By the end of the week, the firm had lost virtually all of its cash and was clinging to promises of state aid; by the weekend, it was being knocked to its knees by the Fed and the Treasury, and forced at the barrel of a shotgun to sell itself to JPMorgan Chase (which had been given $29 billion in public money to marry its hunchbacked new bride) at the humiliating price of … $2 a share. Whoever bought those options on March 11th woke up on the morning of March 17th having made 159 times his money, or roughly $270 million. This trader was either the luckiest guy in the world, the smartest son of a bitch ever or…
Or what? That this was a brazen case of insider manipulation was so obvious that even Sen. Chris Dodd, chairman of the pillow-soft-touch Senate Banking Committee, couldn’t help but remark on it a few weeks later, when questioning Christopher Cox, the then-chief of the Securities and Exchange Commission. “I would hope that you’re looking at this,” Dodd said. “This kind of spike must have triggered some sort of bells and whistles at the SEC. This goes beyond rumors.”
Cox nodded sternly and promised, yes, he would look into it. What actually happened is another matter. Although the SEC issued more than 50 subpoenas to Wall Street firms, it has yet to identify the mysterious trader who somehow seemed to know in advance that one of the five largest investment banks in America was going to completely tank in a matter of days. “I’ve seen the SEC send agents overseas in a simple insider-trading case to investigate profits of maybe $2,000,” says Brent Baker, a former senior counsel for the commission. “But they did nothing to stop this.”
The SEC’s halfhearted oversight didn’t go unnoticed by the market. Six months after Bear was eaten by predators, virtually the same scenario repeated itself in the case of Lehman Brothers — another top-five investment bank that in September 2008 was vaporized in an obvious case of market manipulation. From there, the financial crisis was on, and the global economy went into full-blown crater mode.
Like all the great merchants of the bubble economy, Bear and Lehman were leveraged to the hilt and vulnerable to collapse. Many of the methods that outsiders used to knock them over were mostly legal: Credit markers were pulled, rumors were spread through the media, and legitimate short-sellers pressured the stock price down. But when Bear and Lehman made their final leap off the cliff of history, both undeniably got a push — especially in the form of a flat-out counterfeiting scheme called naked short-selling.
I don’t hold any thought of these criminals ever coming to justice; they own too many businesses, judges and politicians for this.
The only way these people will ever be caught is through a whole-sale revolution.
Want some more bankster ‘tinfoil?’
Well here’s some more!
One of America’s wealthiest men was among six hedge fund managers and corporate executives arrested Friday in a hedge fund insider trading case that prosecutors say generated more than $25-million (U.S.) in illegal profits and should be a wake-up call for Wall Street.
Raj Rajaratnam, a partner in Galleon Management and a portfolio manager for Galleon Group LLP, a hedge fund with up to $7-billion in assets under management, was accused of conspiring with others to trade based on insider information about several publicly traded companies, including Google Inc.
U.S. Attorney Preet Bharara told a news conference it was the largest hedge fund case ever prosecuted and marked the first use of court-authorized wiretaps to capture conversations by suspects in an insider trading case.
He said the case should cause financial professionals considering insider trades in the future to wonder whether law enforcement is listening.
“Greed is not good,” Mr. Bharara said. “This case should be a wake-up call for Wall Street.”
Joseph Demarest Jr., the head of the New York FBI office, said it was clear that “the $20-million in illicit profits come at the expense of the average public investor.”
The Securities and Exchange Commission, which brought separate civil charges, said the scheme generated more than $25-million in illegal profits.
Robert Khuzami, director of enforcement at the SEC, said the charges show Mr. Rajaratnam’s “secret of success was not genius trading strategies.”
“He is not the master of the universe. He is a master of the Rolodex,” Mr. Khuzami said.
Galleon Group said in a statement it was shocked to learn of Mr. Rajaratnam’s arrest at his apartment. “We had no knowledge of the investigation before it was made public and we intend to co-operate fully with the relevant authorities,” the statement said.
The firm added that Galleon “continues to operate and is highly liquid.”
Mr. Rajaratnam, 52, was ranked No. 559 by Forbes magazine this year among the world’s wealthiest billionaires, with a $1.3-billion net worth.
Mr. Rajaratnam – born in Sri Lanka and a graduate of University of Pennsylvania’s Wharton School of Business – has been described as a savvy manager of billions of dollars in technology and health-care hedge funds at Galleon, which he started in 1996. The firm is based in New York City with offices in California, China, Taiwan and India. He lives in New York.
According to a criminal complaint filed in U.S. District Court in Manhattan, Mr. Rajaratnam obtained insider information and then caused the Galleon Technology Funds to execute trades that earned a profit of more than $12.7-million between January, 2006, and July, 2007. Other schemes garnered millions more, authorities said.
A spokesman for Mr. Rajaratnam did not immediately return a phone call for comment Friday.
The timing of the arrests may be explained by a footnote in the complaint against Mr. Rajaratnam. In it, an FBI agent said he had learned that Mr. Rajaratnam had been warned to be careful and that Mr. Rajaratnam, in response, had said that a former employee of the Galleon Group was likely be wearing a “wire.”
The agent said he learned from federal authorities that Mr. Rajaratnam had obtained a plane ticket to fly from Kennedy International Airport to London on Friday and to return to New York from Geneva, Switzerland next Thursday.
Also charged in the scheme are Rajiv Goel, 51, of Los Altos, Calif., a director of strategic investments at Intel Capital, the investment arm of Intel Corp. (INTC-Q20.410.231.14%) ; Anil Kumar, 51, of Santa Clara, Calif., a director at McKinsey & Co. Inc., a global management consulting firm; and Robert Moffat, 53, of Ridgefield, Conn., senior vice-president and group executive at International Business Machines Corp.’s (IBM-N123.061.421.17%) Systems and Technology Group.
The others charged in the case were identified as Danielle Chiesi, 43, of New York City, and Mark Kurland, 60, also of New York City.
According to court papers, Ms. Chiesi worked for New Castle, the equity hedge fund group of Bear Stearns Asset Management Inc. that had assets worth about $1-billion under management. Mr. Kurland is a top executive at New Castle.
Mr. Kumar’s lawyer, Isabelle Kirshner, said of her client prior to his first court appearance: “He’s distraught.”
Kerry Lawrence, an attorney representing Mr. Moffat, said: “He’s shocked by the charges.”
It was not immediately clear who would represent the others in their initial court appearances.
A criminal complaint filed in the case shows that an unidentified person involved in the insider trading scheme began co-operating and authorities obtained wiretaps of conversations between the defendants.
In one conversation about a pending deal that was described in a criminal complaint, Ms. Chiesi is quoted as saying: “I’m dead if this leaks. I really am. … and my career is over. I’ll be like Martha [expletive] Stewart.”
I don’t know why this arsehole mentioned Martha Stewart, she didn’t scam nearly as much money as this idiot did!
But he’s not the only one I’m sure and he’s was clearly ‘thrown under the bus!’
The beginning of the end of the American Federal Empire?
You’ve heard the rumor that Middle Eastern oil producers, plus China, Japan and France have all agreed to start trading oil using a basket of currencies – instead of the dollar – starting in 9 years (see this explanation for why the governments are denying the rumor).
But – whether or not the rumor is true – the world has actually been moving away from the dollar as the preferred method for settling trades for years.
The Wall Street Journal reported yesterday:
China and Russia are working on ways to eventually settle their trade with the Chinese yuan and Russian ruble, senior government officials from the two countries said Tuesday.
In January, it was reported that China had reached a similar arrangement with Brazil:
The Brazilian Central Bank announced it had reached an initial understanding with China for the gradual elimination of the US dollar in bilateral trade operations which in 2009 are estimated to reach 40 billion US dollars.
Indeed, as I pointed out in March 2007, many countries started moving out of the dollars as the basis for international trade settlements, including:
- Venezuela and 12 other Latin American countries as well as Cuba
- Many other countries
As I and many others have argued for years, everyone wants to get out of the dollar, but not all at once. Foreign central banks want to move out of dollars gradually so they are not left holding worthless paper.
But the process actually started a while back.
Yeah I know, we’ve been predicting the ene of the AFE for a while now and it really hasn’t happened yet.
But as the poster noted, this is going to happen over a period of nine years, so it isn’t going to be quick.
Bu$hco initiated the process and the Obamanator is going to manage it.
The left/right paradigm is bullsh*t and is just a cover for the globalists.