Wall Street's Naked Swindle

Wall Street's Naked Swindle

www.rollingstone.com

The attack spiked on September 9th, when there were over 1 million undelivered shares in Lehman. On September 10th, there were 5,877,649 failed trades. The day after, there were an astonishing 22,625,385 fails. The next day: 32,877,794. Then, on September 15th, the price of Lehman Brothers stock fell to 21 cents, and the company declared bankruptcy.

(visit the link for the full news article)

This is an excellent article, and I wanted to share it with the ATS group. I recommend that everyone who cares about the markets and the economy read this story.

Clearly our economic woes are a matter of a vast and wide spread abuse of the stock markets, that has turned investment into a gambling operation where no one knows the rules, and swindling is the name of the game.

Until this is fixed, I would recommend that anyone who isn't playing this game as an insider, pull their money out of the markets now while they can. If you have a large amount of money in the stock market in your 401k plan, now would be the time to pull, because all indications are that this is a completely false market run.

Until the crooks are tracked down, and arrested, and rules are put into place to prevent these types of scams, it will just be a matter of when will they do it again, because they most certainly will.




www.rollingstone.com
(visit the link for the full news article)

Here is another quote from the article, which is 8 pages long.

"The world consumes 85 million barrels of oil per day, but it's not uncommon to trade 1 billion barrels per day on the various commodities exchanges," says White. "So you've got 12 paper barrels trading for every physical barrel."

The same is true for mortgages. When lenders couldn't find enough dope addicts to lend mansions to, some simply went ahead and started selling the same mortgages over and over to different investors. There are now a growing number of cases of such double-selling of mortgages: "It makes Bernie Madoff seem like chump change," says April Charney, a legal-aid attorney based in Florida. Just like in the stock market, where short-sellers delivered IOUs instead of real shares, traders of mortgage-backed securities sometimes conclude deals by transferring "lost-note affidavits" — basically a "my dog ate the mortgage" note — instead of the actual mortgage. A paper presented at the American Bankruptcy Institute earlier this year reports that up to a third of all notes for mortgage-backed securities may have been "misplaced or lost" — meaning they're backed by IOUs instead of actual mortgages.

People talk about how the dollar is just phony money, well guess what, stocks and derivatives are even worse. How much phony wealth is created by 12 barrels of oil?

Personally, I think Obama's presidency will be judged by what he does to clean up corruption in our nations banking/investment markets, because that is where everything has gone completely astray. Even health care is a result of crooked financial dealings. If Obama fails to enforce the laws, or establish laws to prevent rampant fraud against corruption, then in 2012, our economy will still be in ruins. and Obama can then expect to lose, but I doubt if the republicans can deliver a credible candidate. For the first time since 1860, a third party candidate will have a chance.

When the banking and finance system start taking a 40% bite out of the economy, as ours is currently doing, then that economy can not survive. A market system thrives on the exchange of goods and services, not on betting at the craps table.

The US missed its chance on September 15th, 2008 for a "reset" of its currency by a national bankruptcy that could only be stopped in the last minute through
blocking accounts for some hours and immediately raising the guarantee of
each individual´s cash balance to 250,000 $ to take the fear out of the market
and to stop bank runs.

Of course, these transactions were clandestine then.

Later, congressman Paul Kanjorski admitted on YouTube on February 10th,
2009 to this near miss of a national $-default.

Until 11:00 h on September 15th already 550,000,000,000 $ had been
withdrawn from bank accounts. They expected a further 5,5 trillion $ to
be moved out of accounts, which caused the US government to act up
fast on this debacle.

Bankruptcy of the US was threatening already some years ago, when
Bush/Greenspan advocated the contraction of debts for housing,
thus postponing the crash by some more years. This bubble has not
spent itself yet, another is on its way, too : the credit card bubble.

The question is : Currency reform or prolonged agony ?

Our system of paying interest on credit and debit is a Ponzi-scheme or a
chain-letter. It will exhaust itself mathematically every 60 to 90 years
based on the average rate of interest in that period.

Originally posted by poet1b

Personally, I think Obama's presidency will be judged by what he does to clean up corruption in our nations banking/investment markets, because that is where everything has gone completely astray. Even health care is a result of crooked financial dealings. If Obama fails to enforce the laws, or establish laws to prevent rampant fraud against corruption, then in 2012, our economy will still be in ruins. and Obama can then expect to lose, but I doubt if the republicans can deliver a credible candidate. For the first time since 1860, a third party candidate will have a chance.

When the banking and finance system start taking a 40% bite out of the economy, as ours is currently doing, then that economy can not survive. A market system thrives on the exchange of goods and services, not on betting at the craps table.

I agree with you on all points here poet1b

First, thank you for such a wonderful contribution... evidently much too large of an article to get much attention here even though the puts on Bear being mentioned were a HOT topic on ATS back in March of 08

I knew about short selling, but had no idea about phantom stocks

What an amazingly educational article... several times I had to check to make sure I was indeed reading rolling stone...

Thanks again!

Originally posted by Udo Hohnekamp Lux.
Our system of paying interest on credit and debit is a Ponzi-scheme or a
chain-letter. It will exhaust itself mathematically every 60 to 90 years
based on the average rate of interest in that period.

That 60-90yr period of economic cycling seems to tie-in with the 'Longwave Theory' pioneered by Nikolai Kondratyev

Introduction to Long Wave Theory

Kondratyev produced ground breaking theories interrelating economics and politics, taking into consideration such events as war, discoveries, public opinion, and weather as integral parts of a long-term economic life-cycle. Within a market system, Kondratyev proposed economic trends tend to generate harmonics with a periodicity of approximately 53 years. These harmonics are systemic.

Graphic explanation of the 'seasonal' economic cycles :



We've only recently entered the 'winter' cycle, and according to Kondratyev's theory, is the period that has seen civil/world wars and innumerable conflicts as the balance of social/political/economic power re-adjusts for the new growth in the 'spring' cycle

reply to post by Taikonaut


I could see such a cycle could exist, but I don't think it can be called a natural cycle, as being that when you research the great depression, most of it was created by lax enforcement of the laws that keep the system somewhat in balance, and that is what we have seen being repeated.

Then again, where is the historical balance that demonstrates this cycle?

Boom bust cycles were very rapid following the start of the industrial revolution not long after the civil war. From the end of the Great Depression up until now, we have not seen as large of a economic downturn as we are now witnessing, which is think can clearly be shown to be linked to the de-regulation of the banking industry that was instigated by Newt and the republican congress in the mid nineties which lead to the dot com stock boom and bust, followed by several other phony manipulations of the stock market, and the housing market.

The current situation isn't any different that the S&L fiasco in the eighties once again a result of deregulation which lead to wide spread corruption.

The idea that business will self regulate itself is absurd.

There is no such thing as a free market.

Attempts to create a free market type of economy is what creates these boom bust cycles.

reply to post by HunkaHunka


Thanks Hunka, appreciate the attention.

Yes, what a surprise that such an article would only appear in a magazine like Rolling Stone, which is an music orientated magazine.

It seems that people do not want to know the truth.

Here is an excellent article that I think should be getting far more attention.

www.latimes.com...

James Monroe, a president for our times?

As Barack Obama tries to address soaring rates of unemployment and home foreclosure, he would do well to bone up on a predecessor, James Monroe. In 1819, at a time when mortgage foreclosures had forced thousands of Americans from their homes and unemployment had soared to 16.8%, President Monroe presented a plan to Congress for restoring the nation's economy.

At the time, tens of thousands of Americans were streaming westward across the Appalachian Mountains to buy federal land at $2 an acre, borrowing more than they could ever repay. As land prices soared, banks lent every penny they had and more -- no questions asked. Many banks issued their own colorful bank notes -- backed by no-one-knew-what. One Rhode Island bank with a capitalization of only $45 issued bank notes with a total face value of $800,000.

With demand for land all but insatiable, speculators rushed to borrow bank notes as fast as banks could print them and buy land to resell to gullible would-be settlers, who expected to repay loans from crops they hoped to plant on the properties. The frenzy was so great that purchasers never checked whether the speculators actually owned the lands they sold or whether they sold the same lands multiple times.

Monroe ordered his secretary of the Treasury to disburse millions of dollars from the Bank of the United States -- the 19th century equivalent of the Federal Reserve -- to help states build and expand the national infrastructure. Monroe put tens of thousands of Americans back to work building a vast network of roads, turnpikes and canals that linked every region of the nation with outlets to the sea and shipping routes to other continents.

A great new "National Road" linked the Potomac River to the Ohio River and opened the West to large-scale farming, with thousands of tons of grain, furs and other raw materials pouring over the Appalachians to Eastern manufacturers and cargo vessels in Eastern ports. Improvements in the steamboat lowered transportation costs and increased the speed with which goods traveled to market on the Mississippi and Ohio rivers and other waterways. And in one of the most spectacular engineering schemes the world had ever seen, the first 15 miles of the 360-mile-long Erie Canal opened in upper New York state. It eventually linked the Great Lakes with the Hudson River and the Atlantic Ocean and helped make the United States the wealthiest nation on Earth.

Monroe's plan ultimately ended the depression and ushered in the greatest period of prosperity the nation has known. As the economy recovered, government deficits turned into surpluses, and Monroe rejoiced. "At no period of our political existence," he declared, "have we had so much cause to felicitate ourselves at the prosperous and happy condition of our country.

Sorry for the long post, but I think that all of this information needed to be pointed out.

The U.S. government, time and time again has been a catalyst for economic recovery and the creation of long last prosperity.

Being that this history is so well established, why do people continue to ignore these facts.

I hope Obama read this article.

reply to post by poet1b


Once again... I'm right there with you... notice how Monroe spent the money building the architecture of international commerce... enabling American Producers to find International Consumers...

reply to post by HunkaHunka


And the same thing happened again with the building of the railroads, and then the interstate highway system, and the race to the moon.

Government has helped spur each new rebirth of our economy.

this is an abolutely perfect article. it should be required reading on every kindergarten, on every school of the planet.

not only it brings a plethora of information (valid and thoroughly researched) but also it reveals them on an agile layman`s speech.


great stuff, worth every line on all 8 pages

Originally posted by poet1b
reply to post by Taikonaut

 

The idea that business will self regulate itself is absurd.

There is no such thing as a free market.

Attempts to create a free market type of economy is what creates these boom bust cycles.

I think the key phrase here is 'Attempts to create'. The free market is not something that can be created - it just is. The free market must regulate and adjust itself; we don't have a free market. Any attempt to control the free market will fail (as we have seen to date).

IMHO.

reply to post by Thaumaturgus


And paradise is paradise, but we don't live in paradise, because it doesn't exist, just like the elusive free market doesn't exist, it is just another fantasy.

Sadly, that is the same thing the communists say about communism.

Oh this isn't true communism. Oh, this isn't a true free market.

What has been proven is that attempts to create either, or move towards either always end in disaster.

reply to post by poet1b


Yep... that's true. Everytime someone says anything critical about pretty much any economic system, the fundamentalists or other proponents of that system claim that we are critiquing a system which isn't a "pure system" or "orthodox system".

At the end of the day, even a "true free market" will have a bias toward efficiency of profit not an efficiency toward humanity or any other ideals of society. Not the least of the reasons are the power of advertising (i.e. mass mind control).

Now granted, if every tom, dick, and harry could start selling food out of his home kitchen without all the red tape you have to deal with now, individuals would probably be more apt to start local food businesses, and if Farmers didn't have to deal with a fixed market, there might be more individual farmers out there, but still there will be a cream of profit that rises on this utopian system which the financial system, that which is deals in nothing but raw numbers, will siphon off of the system once again.

If controls are not put in place to prevent the market in general from preying on the fundamental aspects of our system, then it will continue to consume itself.

reply to post by HunkaHunka


Thanks for the good points.

I think the only way anything close to a free market could exist, would be outside of a monetary system. If there are banks, there are market controls, and when banks are able to have a level of control over the markets, it is inevitable that the banks will manipulate the market in their favor. This is just plain human nature.

All monetary systems require the establishment of legal entities in which it becomes becomes extremely difficult to establish individual responsibility for the actions taken by the legal entity. This allows individuals to cheat the system, and steal from others with very little chance of being held liable for their crimes. Thus the dance of government regulation of legal entities begins.

With the free market concept you have people who clearly oppose the PTB supporting an economic system that plays into the very hands of the PTB. It is pure madness.