As if we weren’t doing enough ourselves to strain the system, there’s this. Washington Times:
Evidence outlined in a Pentagon contractor report suggests that financial subversion carried out by unknown parties, such as terrorists or hostile nations, contributed to the 2008 economic crash by covertly using vulnerabilities in the U.S. financial system.
The unclassified 2009 report “Economic Warfare: Risks and Responses” by financial analyst Kevin D. Freeman, a copy of which was obtained by The Washington Times, states that “a three-phased attack was planned and is in the process against the United States economy.”
While economic analysts and a final report from the federal government’s Financial Crisis Inquiry Commission blame the crash on such economic factors as high-risk mortgage lending practices and poor federal regulation and supervision, the Pentagon contractor adds a new element: “outside forces,” a factor the commission did not examine.
“There is sufficient justification to question whether outside forces triggered, capitalized upon or magnified the economic difficulties of 2008,” the report says, explaining that those domestic economic factors would have caused a “normal downturn” but not the “near collapse” of the global economic system that took place.
Suspects include financial enemies in Middle Eastern states, Islamic terrorists, hostile members of the Chinese military, or government and organized crime groups in Russia, Venezuela or Iran. Chinese military officials publicly have suggested using economic warfare against the U.S.
Wait, no mention of Soros?
Then I call bullshit.
(thanks to geoffb)
I don’t know how you can suspect poor, poor George Soros who is a victim—A VICTIM, I TELL YOU—of “the Orwellian power of the right wing in this country today.”
And of Glenn Beck. Especially Glenn Beck.
“This is the equivalent of box cutters on an airplane,” Mr. Freeman said.
In what sense? That it’s asymmetric warfare? Or the little thing with the big effect?
Because if congress hadn’t mandated the subprime loans, we wouldn’t have been vulnerable to economic sabotage, just as the box cutters would have been of little effect if we didn’t have outdated hijacking protocols.
Me, I think every third passenger should be required to carry a weapon, and then where’s your jihad now?
I’m shocked. Shocked. Hell, GS was in on it.
We had this here in the spring.
“by financial analyst Kevin D. Freeman,”
he was on beck’s show today on gbtv and will be on tomorrow
Wasn’t sure what he’s suspecting the saboteurs of doing: were they involved in engineering the sub-prime loan thing in the first place? Did they encourage the Wall Street shenanigans?
Or did they just see a termite-ridden structure and give it a shove with their foots?
But what about BOOOOOOOSH!!!!?
I think this is one of those things that’s been hiding in plain sight for years. I’ve read numerous articles in financial publications that alluded to market manipulation within the US, withour naming names of course. It’ll all come out in the wash.
Maybe Bob Woodward can interview some tycoon on his deathbed and write a book about it.
Motionview. Until you said that I’d wondered why it read as familiar and hadn’t noticed the publication date of Feb. 2011.
The good news would be that it was Soros. On a sphincter-tightening scale, I’d guess Russia, then China, then Abdullah.
“On a sphincter-tightening scale, I’d guess Russia, then China, then Abdullah.”
freeman on gbtv went: islamic terrorist, abdullah, russia, china. @6 economic warfare like what we did to the soviets.
Is the US Congress considered an “outside force” in this analysis?
A number of years ago, I spent a night shift riding around with a certain capitol city’s police force as part of a leadership program. What struck me the most was how few police there really were. If there was an incident, they all showed up with lights flashing and sirens blaring, giving the illusion of massive force. In reality, that was it; there were no more police cars.
There really is a very thin blue line separating civilization from barbarism. It doesn’t take much to push just a little bit to tip the first domino; look what happens in a blackout. There have to be any number of actors, national, individual or terrorist, that are trying to nudge us.
With respect to JG and PW:
Total bullshit, infused with a serving of right-wing paranoia. A bad day for Gertz and a worse day for the truth.
Financial Terrorism, heh, if people only had a clue:
“There are two ways to conquer and enslave a nation. One is by sword. The other is by debt.” – John Adams
“Total bullshit, infused with a serving of right-wing paranoia.”
that’s a nice assertion. any proof that these allegations are incorrect?
Total bullshit, infused with a serving of right-wing paranoia.
Because nations don’t try to screw with each other’s financial systems as War By Other Means, right?
I don’t know if the specific allegations referenced in this article are true or not, but it’s stupid to believe that foreign interests keep well away from trying to crash our economy through sabotage or subterfuge.
How so, Roddy? You’re a knowledgable guy.
I’m kind of with Roddy here. You can’t just make accusations and then tell me I have to disprove them. Unless you want to get on board the Bilderberg Bus you need some prrof for accusations like this. Perhaps it’s true, but I see nothing here but accusations of the same category as those that brought us the TSA. Do we really want that for the financial world as well?
There’s plenty to be upset about without haveing to lurch towards conspiracy moonbattery.
Oh, no. I was sincerely asking since Roddy is a financial reporter. I just wanted an insider take on it.
No worries geoffb, happy to be full of right-wing paranoid bullshit ahead of the curve.
And I want to be clear – I don’t think this is some grand conspiracy. I think some enemy saw an opening develop from “natural causes”, probed to see if a little tip would push us over, and withdrew when the Bush Treasury department fought back.
“You can’t just make accusations and then tell me I have to disprove them. ”
georgie s has experience in this field? georgie s has a track record.
So now George Soros is the boogie man to be blamed for everything your fevered imagination can dream up? Please.
Again, there are more than enough reasons to be upset with George Soros without having to invent any. If you have any evidence I would be happy to look more carefully at your assertion. If not, well, never mind.
I agree completely. I would rather be full of paranoid bullshit than be a complacent fool. Too many people cry bullshit at every mention of theories like this.
Having said that, I think that the only financial terrorism that happened was sourced directly from the Federal government. The terrorists were led by the likes of Barney Frank. They terrorized banks into making bad loans, and looked the other way while the banks papered over their bad investments with even more bad investments.
I think a good financial terrorist would have to be able to manipulate the markets on a massive scale, and that would take a significant amount of wealth, more than most terrorist countries have. If all that paper hadn’t been worthless (or, more appropriately, impossible to value) then the worst of it wouldn’t have happened. One cannot trash sound finances easily.
Someone with billions of dollars can play around on the edges, but crashing a whole system is something else entirely.
So, if we are to be worried about financial terrorism (which I think we should at least be concerned about) then the solution is to keep the markets sound by distorting them as little as possible.
go newt
If the topic is the intentionsl crashing of economies, and Soros doesn’t cross your mind, I’d suggest that you’ve hot paid attention to Soros. If you’re drawing definitive conclusions, sans evidence, that’s another matter. I don’t see that here.
#11 very interesting nr.
Roddy, Frank Gaffney says financial professionals are skeptical of Freeman; national security professionals, not so much.
“If you have any evidence I would be happy to look more carefully at your assertion. ”
you discounted it already. so what’s the point.
I should also say, “No offense to Geoffb”…I get that people see things differently around here.
This is beyond silly. The origins of the credit crisis, operationally, began in 2006 with the first reports that “The trade” was over. That was a sub-prime/mid-prime hosuing refinance trade for both Wall Street and home owning dopes. The dopes bot more than they could afford and refi’d into a new loan, terms be damned and/or took equity out; the Street got collateral for the REMIC pool machine (MBS/CMOs et al)
when that happened, the smarter players (99% US) began pullling back and laying out thematic shorts (bets on decline in securities value) on the biggest players in “The trade”: Bear, Lehman, the ratings agencies, the guarantors like AMbac, Fannie Mae/Freddie Mac….all of this was US originated and US bet.
The crisis quickened when US players, seeing the riskier “mortgage credit” sectors of the market slowing down, freaked out when two Bear Stearns HFs levered 90-1, when tits up. As their margin loans were called and NO ONE bid on the collateral (CDOs made of Satan’s loans)…the entire mortgage credit market froze.
The only buyers for anything were in Northern Europe and PRC’s banks. In fact, the PRC’s appetite was insatiable for this structured credit paper. My guess is they bought $100 bn all in, give or take $5bn.
When Bear Stearns collapsed, it was because major US counterparties refused to trade anymore with the company. When Lehman went, 90% of the shorts and 100% of the customers refusing to do business with them were US based.
AIG collapsed because its US segments, run by US idiots, got involved in a series of utterly disastrous trades that forced it post multiples billions of dollars of cash to US counterparties on a monthly basis. Ultimately, a US rating agency cut their rating and that forced billions more in collateral calls they did not have.
In every case above, the institutions had raised billions of dollars in financing from overseas institutions–sovereign wealth funds were especially ripe for the plucking.
This paper was a poorly conceived attempt to blame a US problem on overseas shortsellers. Hell, I even know the CEO who helped influence the guy.
Bottom line, it was a funding crisis brought about by US failures of policy and gaps in US common sense. The foreigners were the useful idiots here.
Or, of course, you can read my book. http://www.amazon.com/Fatal-Risk-Cautionary-Corporate-Suicide/dp/0470889802
Ron Paul: “We’re still in Iraq”
Jesus.
Dicentra,
Our economy was so utterly levered and skewed to the most extreme elements of the financial sector that our enemy, was in effect, us.
It is hard to materially effect a $15 trillion economy by placing bets on a handful of institutions. I’m not trying to be flip, but that’s just a fact. As it was, it serves us well to recall that away from Lehman, the US government BAILED all these mofo’s out.
Fannie and Freddie are still sucking billions down; Bank of America is a slug with salt on it. Need I bring up Bear and AIG?
The way to hurt the US economy is by reprising the congresses/administrations of the past 15 years and throwing in some natural resource inflation. Which, come to dwell on it, we still have.
Thanks, Roddy.
“The only buyers for anything were in Northern Europe and PRC’s banks. In fact, the PRC’s appetite was insatiable for this structured credit paper. My guess is they bought $100 bn all in, give or take $5bn.
When Bear Stearns collapsed, it was because major US counterparties refused to trade anymore with the company. When Lehman went, 90% of the shorts and 100% of the customers refusing to do business with them were US based.
AIG collapsed because its US segments, run by US idiots, got involved in a series of utterly disastrous trades that forced it post multiples billions of dollars of cash to US counterparties on a monthly basis. Ultimately, a US rating agency cut their rating and that forced billions more in collateral calls they did not have.
In every case above, the institutions had raised billions of dollars in financing from overseas institutions–sovereign wealth funds were especially ripe for the plucking. ”
yea no avenue for economic mischief there. gotcha.
If I was the US of A, I would have a battalion, no, a division of cyber-space warriors probing the weaknesses of our many potential adversaries. If I was China, etc. the same.
That being said, US of A government policies set us up for this last one.
Motionview,
Look,
I’m sure the guy has some solid point here and there in his body of work. Really, I do.
But there is a frigging roadmap about how to hurt the US economy. We drew it and are paying for it.
By the way, this isn’t new. As early as ’96, once the web clearly was established, Pentagon wargamers were looking at hackers manipulating the SP 500 (via screwing with the weighting in the index and other things) and trying to study the knockon effects to oil prices, the dollar et al.
They concluded VERY PRIVATELY that bad policy effects were 20 times more dangerous than PRC/Russian Federation subsidized hackers.
NR,
you took my point! There was mischief aplenty. Lawsuit fodder out the wazoo.
Indeed, the smartest, slickest bankers in the world flew out of Teterboro on their G5s to Kuwait, Saudi Arabia, Singapore, PRC, Brunei, Dubai, Taipei and other cash rich places and conned them into laying out at least $75 billion for their structually collapsing institutions.
Of course, most of those investments were never sold and wiped out (or diluted upwards of 90%) just months, even weeks, later.
My question to you:
Do you think the guys from Merrill, Citi, AIG et al smiled when they fucked them?
Something is only worth as much as someone else will pay for it. If no one will buy something, it’s worthless.
If I were a banker who had conned someone else out of billions, I would tend to be afraid for my life and the lives of my family.
“But there is a frigging roadmap about how to hurt the US economy”
cra freddie fannie, goldman sacks?
“Do you think the guys from Merrill, Citi, AIG et al smiled when they fucked them?”
dude i don’t know. maybe they were played. by whom for what who knows.
Roddy, no worries, we’ll just have QE3, QE4, … QEn to bail out all those too
bigwell connected to fail until November.Well NR, we’re in for more fun.
A nation that won’t take its pain when it has to is a nation whose good times are imaginary.
We used to know that, as a people and a culture, but no longer.
I wish it was different but its not.
I agree 20:1 bad policy/ bad actors, and with 90% of your # 31. I even know the CEO who helped influence the guy is a new piece of info that might nudge me up towards 95%.
You cover 2006 and 2007 and parts of 2008 above, but what about the liquidity crisis in the money markets in Fall 2008? I am under the impression there was a 48 hour period where the Treasury and the Fed just turned on the number generator and shoveled cash out the door to cover massive withdrawals from money markets. That was when McCain suspend his campaign.
NR, they were played by the US. Paraphrasing Animal House, They fucked up…they trusted the words and assurances of America’s financial elite.
That was the conspiracy of international skullduggery….from us to them.
Charles,
I’m going to get pissed at the sixth or seventh printing…I mean injection of liquidity.
Motionview,
I beleive it to be the CEO of Overstock.com, a man named Patrick Byrne.
Between Auguest 15 and September 15 (Lehman weekend), the NY Fed and the Treasury Department appear to have been less than consistent with respect to their decision making. They wiped out the preferred holders of billions of dollars of Fannie and Freddie stock and then demanded a private investment consortium help rescue them; when no one would step in, because really, who wanted to invest when the Fed changes it mind overnight, they rescued them by effectively forcing them private and began pumping billions into the system by buying their paper.
In one form or another, begining that fall, they intervened in the capital structure of numerous institutions, to varying degrees of ill effect. The NY Fed spent $40 billion buying busted subprime from AIG for example.
My understanding is that one bank, BB&T in NC, refused and threatened to litigate if forced to take the Feds investment.
Our financial leaders did a fairly poor job in both the public and private sectors.
go happynewt
mr. newt did good tonite
Roddy, any chance Hank Paulson played favorites when it came to the lack of consistency in the decision making?
As an aside, I think Hank Paulson deserves to be tossed in jail for the next 30 years. Paulson and Corzine can share a cell together.
No offense taken at all. The main thing that interested me was the idea that no one wanted to look into it at all.
My “conspiracy theory” goes along these lines.
Our progressives today are the legacy of the Soviet Fronts of the 30s and the New Left of the 60s which together reformed as the Community Organizing left of today. One of the main tactics that was used by the Soviets was to push forward on many separate fronts and then reinforce heavily the one or two that showed any success.
This financial crisis has it’s roots in the CRA and the push to hand out loans to those who could never pay them back. Which policies started with Carter and were then heavily reinforced by Clinton and cronies. The banks and investment firms all went where seeking profit and governmental prodding pushed them.
I view this a purposefully done to collapse the US economy and to break us so we were no longer the sole superpower. The timing of when things hit the fan is interesting in that it was perfect in pushing Obama over the previously surging McCain into the Presidency.
There is a similar, IMO, but this time world wide financial mess brewing in Europe. Hugely leveraged and hard to impossible to unwind, loans and investments. Greece and Italy as Lehman and AIG. London’s investment community as Fanny/Freddie with their unlimited rehypothecation rules. No winners to this one.
I didn’t pronounce on this one way or the other. Still, it seems to me useful to point out what a Pentagon study says. From there, make of it what you will. The bit about Soros? A joke.
I make those sometimes.
you know cigarettes have imaginary worth. all the “value” is in the politicians perception.
Our financial leaders did a fairly poor job in both the public and private sectors.
With you there. Let me toss this in the mix:
Here’s a little better source though without the Rep Kanjorski quote.
Blake,
I’ve been playing with that favortism idea for some time. Depending on the minute, I have a different answer.
I suspect, however, he was simply reactive, system oriented and frankly, ill-educated and -briefed on the reality on the ground. His actions in speaking to hedge funds, “off the record” per an excellent Bloomberg News article about two months back, are beyond inexcusable.
Geoffb,
Thanks for being a gentleman. I wrote in haste so thank you for your consideration.
I would differ from your interpretations on a few key points (but really, it’s such a frigging mess that its hard to say anyone’s view is entirely wrong)
1. The elimination of Glass-Steagall led to a consolidation of unprecedented risk in deposit-gathering, Fed-funding institutions…places, it should be granted, that rollbacks in the Interstate Bank acts had led to an equally absurd bank merger spate. They had grown massively, in other words, and searching for ways to justify themselves to shareholders on a quarterly basis, they bought investment banks and levered up their biggest funding cost/interest-earned advantage: mortgages.
2. The CRA is not without its flaws as you note…forcing institutions to lend to people they wouldn’t ordinarily is an idea so stupid only a liberal could dream it up. But there are several Fed studies showing CRA loans defaulted at a measurably lower trajectory than those issued by countrywide, ameriquest, washington mutual et al.
still, what a freak show, no?
I’m curious. Why was Lehman the only MoFO not too big to fail? They forget to pay their baksheesh or something? Hank Paulson burning to get even for some forty year old slight?
just remember georgie s. never ever collapses
link
shut up stupid peeps
JG:
I picked up on that. I worried about my tone to you and to GeoffB. I didn’t want to be seen as making insulting remarks to you since you are both stout fellows that I’d share an ice tea or a trench with anyday.
In peace,
Roddy
58.
Great question. I wish they’d have Bear go. Smaller balance sheet and given everyone else a ton of cold water.
Geithner told us at Fortune that he believed the market “Was prepared at that point.”
So that shows that he was just ALL SORTS of in touch, n’est-ce pas?
meant to say, “I wish they’d have LET Bear go.”
Yeah, it seems they sent the wrong signal by saving BearStearns and then not saving Lehman.
But I’m just a hairy-footed Visigoth, so I don’t know nothing ’bout nothing. Maybe they wanted the Masters of the Universe to fear the fickle hand of fate.
mr boyd: you sound like a sap at this point: buy diamonds.
The world is so complex that we all are blind men using touch to describe the elephant. I’m the guy with one leg and one arm and that one’s missing three fingers on the hand. My focus is always on what the radical left has done, put their hand into, in anything that is harmful to this nation. Tunnel vision, but everyone has some form of it. Put enough tunnel views together and some truth may be seen.
One truth I see in my #52 is I have an “at all” brain lesion today.
Roddy, if I ever see you in person I’ll buy you a drink. Until then I’ll buy any book you write.
Our economy was so utterly levered and skewed to the most extreme elements of the financial sector that our enemy, was in effect, us.
I’m quite familiar with the damage that the Known Players did to the system.
That doesn’t mean they were the only ones involved. Doesn’t absolve the current suspects of their guilt. Also doesn’t fully identify who was pulling some of the strings and when.
I definitely don’t know whether this guy is onto something. But to dismiss out-of-hand the possibility that foreign interests don’t do their share of pushing and pulling is absurd.
Of COURSE they’re trying to mess with our financial system. How far they get is yet to be determined.
They concluded VERY PRIVATELY that bad policy effects were 20 times more dangerous than PRC/Russian Federation subsidized hackers.
Well, DOY.
Given how often the Dems are caught laundering foreign contributions, who can say how much of US is really US?
I’ve been having a debate with a friend about the federal debt so I’m farther into the weeds on that subject than I’ve ever been before. Noticed that the Monetized Debt dropped by almost 40% from 2007 to 2008. That would indicate a massive bond sell-off, correct? Or a refusal to buy bonds as older bonds mature? How much impact might that have had–almost $300 billion worth.
Bought your book, Roddy.
When I read “a Pentagon contractor report”, I reach to make sure my wallet is still there….
Caused? No.
Perhaps a situation taken advantage of? Yes.
Soros, Islamists, China, et al will always take advantage of a crisis to make good. So would I (if I had more than a couple of pins to rub together).
I blame Iceland.
Me too RTO.
I’ve been a conspiracy theory buff for years now and I’ve noticed one thing about most, if not all, of them. There is always an “other”, some external force, manipulating the currents of history to reach some end. With the exception of the Grammy’s, and that year I didn’t get that job in Atlanta, most conspiracies are bullshit. In the case of the financial crisis, no conspiracy is needed. Greed caused it. It won’t be the last and it certainly wasn’t the first. We didn’t need any secret cabal of foreign hackers to bring down the system, our financial system has been a giant game of Jenga for years.
I like to think that the major cause of the crisis was social engineering efforts by politicians trying to cement a party’s hold on a voting block that enabled and may have coerced financial services companies to take on really insane levels of risk. But on the other hand, the bigger the risk, the bigger the reward. I can’t blame anyone for wanting to make a buck. Very few of the people involved in the meltdown actually broke the law (which is why I blame Iceland). I’ll give you a f’rinstance; an acquaintance of mine was telling me about the “investment group” he belongs to (he used that term, “investment group”) that hired a consultant to go to the Barret Jackson auction and pick out a collection of the “perfect investment vehicles”. Freakin’ used cars. Sounds stupid to me, but who’s to say they won’t pick the perfect Studebaker and make a couple hundred grand overnight? Even better, my neighbor owns “part” of a racehorse. Both of these guys are lending someone money in the hope that there will be a payoff in the end. If either of these guys could figure out a way to make either of these deals less risky with a better payoff, they would do it. If the trainer or “consultant” could figure out a way to make these guys pay them more for their services, they would do it. If Churchill Downs or Barrett Jackson or Speed Channel could figure out a way to charge more money for their services, they would do it. If that means buying lunch for a couple of congressmen and senators, hell, why not? If the consultant makes a deal with me for my mother’s ’74 Vega and a box of parts so I don’t outbid him on the Boss 302, well, that happens. Sneaky, but not illegal. Eventually, the old car bubble will burst (again) and someone’s going to take a bath, mostly guys like my buddy who don’t know shit about cars, and pooled their money to make a quick buck, the poor sap who does IT for Barret Jackson who went and put a down payment on a $400k house with last year’s bonus, and the local mechanic who spent $15 grand on a rusted out Ford Ranchero to restore.
Whoa… that took way too long.
The false report that banks were “racist” in their lending got what, 1000x, 2000x more reporting than the reports that showed the initial report was BS? And even today, the press won’t admit the truth, won’t go after the people who live off the lie, and continue to fete the corrupt and corrupting people who pushed it.
On Thursday 18 September 2008, there was an electronic bank run which took $550 billion out of the economy over an hour or two. To me, there seems to be at least the realistic possibility that this was economic mal-intent.
freeman on glenn beck radio
link