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Financial Meltdown on Wall Street
(by Michel Chossudovsky)

Excerpt from Chapter 1

We are at the crossroads of the most serious economic crisis in world history.

The economic crisis has by no means reached its climax, as some economists have predicted.

The crisis is deepening, with the risk of seriously disrupting the structures of international trade and investment.


The Nature of the Economic Crisis

In contrast to Roosevelt’s New Deal, adopted at the height of the Great Depression, the macroeconomic policy agenda of the Obama administration does not constitute a solution to the crisis. In fact, quite the opposite: it directly contributes to the concentration and centralization of financial wealth, which in turn undermines the real economy.

The crisis did not commence with the 2008 meltdown of financial markets. It is deeply rooted in major transformations in the global economy and financial architecture which unfolded in several stages since the early 1980s. The September-October 2008 stock market crash was the outcome of a process of financial deregulation and macroeconomic reform.

We are dealing with a long-term process of economic and financial restructuring. In its earlier phase, starting in the 1980s during the Reagan-Thatcher era, local and regional level enterprises, family farms and small businesses were displaced and destroyed. In turn, the merger and acquisition boom of the 1990s led to the concurrent consolidation of large corporate entities both in the real economy as well as in banking and financial services.

International commodity trade has plummeted. Bankruptcies are occurring in all major sectors of activity: agriculture, manufacturing, telecoms, consumer retail outlets, shopping malls, airlines, hotels and tourism, not to mention real estate and the construction industry.

What is distinct in this particular phase of the crisis is the ability of the financial giants – through stock market manipulation as well as through their overriding control over credit – not only to create havoc in the production of goods and services, but also to undermine and destroy large and well established business corporations.

This crisis is far more serious than the Great Depression. All major sectors of the global economy are affected. Factories are closed down. Assembly lines are at a standstill. Unemployment is rampant. Wages have collapsed. Entire populations are precipitated into abysmal poverty. Livelihoods are destroyed. Public services are disrupted or privatized. The repercussions on people’s lives in North America and around the world are dramatic.

The Financial Meltdown

The subprime residential mortgage crisis leading to millions of people losing their homes reached its climax in the last days of August 2008, when financial institutions reported billions of dollars in losses.

Friday, September 12, 2008, Lehman Brothers faced collapse in weekend negotiations behind closed doors on Wall Street. Black Monday descended on September 15, 2008. Following the filing for Chapter 11 Bankruptcy by Lehman on Monday morning, the Dow Jones industrial average declined by 504 points (4.4 percent), its largest drop since September 17, 2001, when trading resumed on Wall Street after the 9/11 attacks.

The following day, it was the turn of AIG, the insurance conglomerate. On the evening of September 16, the Bush administration “granted an $85 billion loan to AIG in exchange for a controlling 79.9% equity share of the company”.[1]

The financial slide proceeded unabated throughout September. Barely two weeks later, on Monday, September 29, the Dow Jones plummeted by 778 points, its largest one-day drop in the history of the New York Stock Exchange. This followed the rejection by the U.S. House of Representatives of the Bush administration’s 700 billion dollar bailout plan, which was slated to come to the rescue of the banks affected by the subprime mortgage crisis. In a single day, 1.2 trillion dollars had seemingly evaporated.

The world’s stock markets are interconnected around the clock through instant computer link-up. Instability on Wall Street immediately spills over into the European and Asian stock markets, thereby rapidly permeating the entire financial system.


Speculative Onslaught on Black Monday, September 29, 2008

There was something disturbing about the Black Monday, September 29, 2008 collapse of Wall Street, following the decision of the U.S. House of Representatives. Did this paper money “vanish into thin air” as claimed by financial analysts, or was it “appropriated” by institutional speculators in one of the largest transfers of money wealth in American history?

There was prior knowledge on how the Congressional vote would proceed. President Bush’s speeches had intimated that a collapse would occur. There was also an expectation that the market would crumble if the proposed 700 billion dollar bailout were to be rejected by the U.S. Congress.

Speculators, including major financial institutions, had already positioned themselves. Powerful financial actors with prior knowledge and access to privileged information prior to the House’s rejection of the bill made billions in speculative trade on Black Monday when the market crumbled. And thenon Tuesday, September 30, they made billions when themarket rebounded, with the Dow jumping up by 485 points, a 4.68 percent increase, compensating in part for Monday’s decline. Those financial actors who had foreknowledge and/or who had the ability to influence the vote in the U.S. Congress also made billions of dollars.

Ironically, almost twice as much money was wiped out from the U.S. stock market on Black Monday, September 29 (1.2 trillion dollars) than the value of the Bush administration’s bank bailout under the Troubled Assets Relief Program (TARP) (700 billion dollars).

Even before the opening bell, Monday looked ugly. But by the time that bell sounded again on the New York Stock Exchange, seven and a half frantic hours later, $1.2 trillion had vanished from the U.S. stock market.[2]

This money did not vanish. It was confiscated from the pockets of people who had invested their lifelong savings in the stock market.

While public opinion celebrated the refusal of the U.S. Congress to accept the Bush administration’s bailout, the decision of the legislature had fed the speculative onslaught.

Political uncertainty regarding the proposed bailout constituted ammunition for the speculators.

In a bitter irony, the Wall Street banks are “double dippers”; they are the recipients of the bank bailout. And at the same time they made money speculating first on the rejection by the U.S. Congress and subsequently on the later adoption of the bank bailout legislation.

On October 1, Wachovia Bank was taken over by Wells Fargo, overriding a competing bid from Citigroup. The deal was sealed with the support of Warren Buffett, the richest man in the world, according to Forbes, and a major shareholder of Wells Fargo.[3]

The first week in October 2008 represented a crucial turning point. The Dow Jones fell by 21 percent over the week, with Thursday, October 9 suffering its biggest fall since Black Monday, October 19, 1987. The S&P 500 index lost 22 percent of its value. The entire western banking landscape was in disarray. Iceland’s banking system was destabilized and the country was put in receivership. The Reykjavik government gave the green light for the forced bankruptcy of the entire banking system.

Following a pledge by G7 finance ministers and central bank governors on the weekend of October 10-11 to prevent further bank collapses, the world’s stock markets rebounded on October 13. The G7 had committed itself to “taking all necessary steps to unfreeze credit and money markets”. The Dow increased by 936 points (eleven percent) at the close of trading on October 13, its largest one day increase since 1933.4 Most European exchanges had “recovered”, with the Paris CAC index rebounding by an astounding 8.8 percent at the close of trading.

This short-lived “recovery” was part of the speculative game. Two days later, on October 15, Black Wednesday, the Dow Jones plummeted by 7.9 percent.

The sequence of a “one day collapse” followed by a “one day surge” and recovery, followed by another “one day collapse” a few days later, is part of the process of financial manipulation. Day to day instability and swings in stock market values are the source of large windfall profits accruing to “institutional speculators” and hedge funds.

Financial Warfare: The Powers of Deception

The September-October 2008 financial meltdown was not the consequence of a cyclical downturn of economic activity. It was the result of a complex process of financial manipulation, which included speculative trade in derivatives.

Financial manipulation has a direct bearing on the workings of the market. It potentially triggers instability in market transactions. This snowballing instability then becomes cumulative, leading to an overall slide of market values.

Inside information, high level political connections and foreknowledge of key policy announcements are crucial instruments in the conduct of large-scale speculative operations.

“Financial intelligence” and the powers of deceit were the driving forces behind the 2008 financial meltdown. Covert undercover financial operations were waged. Those powerful financial institutions, which had the ability to drive the market up at an opportune moment and then drive it down, had placed their bets accordingly. As a result, they reaped billions of dollars in windfall gains both on the upturn as well as on the downturn.

In contrast, for those who had put their faith in the free market, lifelong savings were erased in one fell swoop, appropriated by the shadow banking system. The crash of financial markets had led to a massive concentration of financial wealth.

The weapons used on Wall Street are prior knowledge and inside information, the ability to manipulate with the capacity to predict results and the spreading of misleading or false information on economic occurrences and market trends. These various procedures are best described as the powers of deception that financial institutions routinely use to mislead investors.

The art of deception is also directed against their banking competitors, who are betting in the derivatives and futures markets, stocks, currencies and commodities. Those who have access to privileged information (political, intelligence, military, scientific, etc.) will invariably have the upper hand in the conduct of these highly leveraged speculative transactions, which are the source of tremendous financial gains. The CIA has its own financial institutions on Wall Street.

In turn, the corridors of private and offshore banking enable financial institutions to transfer their profits with ease from one location to another. This procedure is also used as a safety net that protects the interests of key financial actors including CEOs and major shareholders of troubled financial institutions. Companies can be divested from within and large amounts of money can be moved out at an opportune moment, prior to the company’s demise on the stock market (e.g. Lehman, Merrill Lynch and AIG, not to mention Bernhard Madoff).

As events unfolded, Merrill Lynch was bought and Lehman Brothers was pushed into bankruptcy. These are not haphazard occurrences. They are the result of manipulation, using highly leveraged speculative operations to achieve their objective, which consists in either displacing or acquiring control over a rival financial institution. The 2008 financial meltdown has nothing to do with free market forces: it is characterized by financial warfare between competing institutional speculators.

The Federal Reserve Bank of New York and its powerful Wall Street stakeholders – which are Wall Street’s largest private banks – have inside information on the conduct of U.S. monetary policy. They are therefore in a position to predict outcomes and hedge their bets in highly leveraged operations on the futures and derivatives markets. They are in an obvious conflict of interest because their prior knowledge of particular decisions by the Federal Reserve Board enables them, as private banking institutions, to make multibillion dollar profits.

Links to U.S. intelligence, the CIA, Homeland Security and the Pentagon are crucial in the conduct of speculative trade, since that allows the speculators to predict events through prior knowledge of foreign policy and/or national security decisions which directly affect financial markets. An example: they purchased “put options” on airline stocks in the days preceding the 9/11 attacks.

 

உனக்கு நாடு இல்லை என்றவனைவிட நமக்கு நாடே இல்லை என்றவனால்தான் நான் எனது நாட்டை விட்டு விரட்டப்பட்டேன்....... 

 


rajaniThiranagama_1.jpg

ராஜினி திரணகம

MBBS(Srilanka)

Phd(Liverpool, UK)

'அதிர்ச்சி ஏற்படுத்தும் சாமர்த்தியம் விடுதலைப்புலிகளின் வலிமை மிகுந்த ஆயுதமாகும்.’ விடுதலைப்புலிகளுடன் நட்பு பூணுவது என்பது வினோதமான சுய தம்பட்டம் அடிக்கும் விவகாரமே. விடுதலைப்புலிகளின் அழைப்பிற்கு உடனே செவிமடுத்து, மாதக்கணக்கில் அவர்களின் குழுக்களில் இருந்து ஆலோசனை வழங்கி, கடிதங்கள் வரைந்து, கூட்டங்களில் பேசித்திரிந்து, அவர்களுக்கு அடிவருடிகளாக இருந்தவர்கள்மீது கூட சூசகமான எச்சரிக்கைகள், காலப்போக்கில் அவர்கள்மீது சந்தேகம் கொண்டு விடப்பட்டன.........'

(முறிந்த பனை நூலில் இருந்து)

(இந் நூலை எழுதிய ராஜினி திரணகம விடுதலைப் புலிகளின் புலனாய்வுப் பிரிவின் முக்கிய உறுப்பினரான பொஸ்கோ என்பவரால் 21-9-1989 அன்று யாழ் பல்கலைக்கழக வாசலில் வைத்து சுட்டு கொல்லப்பட்டார்)

Its capacity to shock was one of the L.T.T.E. smost potent weapons. Friendship with the L.T.T.E.  was a strange and self-flattering affair.In the course of the coming days dire hints were dropped for the benefit of several old friends who had for months sat on committees, given advice, drafted latters, addressed meetings and had placed themselves at the L.T.T.E.’s  beck  and call.

From:  Broken Palmyra

வடபுலத் தலமையின் வடஅமெரிக்க விஜயம்

(சாகரன்)

புலிகளின் முக்கிய புள்ளி ஒருவரின் வாக்கு மூலம்

பிரபாகரனுடன் இறுதி வரை இருந்து முள்ளிவாய்கால் இறுதி சங்காரத்தில் தப்பியவரின் வாக்குமூலம்

 

தமிழகத் தேர்தல் 2011

திமுக, அதிமுக, தமிழக மக்கள் இவர்களில் வெல்லப் போவது யார்?

(சாகரன்)

என் இனிய தாய் நிலமே!

தங்கி நிற்க தனி மரம் தேவை! தோப்பு அல்ல!!

(சாகரன்)

இலங்கையின் 7 வது பாராளுமன்றத் தேர்தல்! நடக்கும் என்றார் நடந்து விட்டது! நடக்காது என்றார் இனி நடந்துவிடுமா?

(சாகரன்)

வெல்லப்போவது யார்.....? பாராளுமன்றத் தேர்தல் 2010

(சாகரன்)

பாராளுமன்றத் தேர்தல் 2010

தேர்தல் விஞ்ஞாபனம்  - பத்மநாபா ஈழமக்கள் புரட்சிகர விடுதலை முன்னணி

1990 முதல் 2009 வரை அட்டைகளின் (புலிகளின்) ஆட்சியில்......

நடந்த வன்கொடுமைகள்!

 (fpNwrpad;> ehthe;Jiw)

சமரனின் ஒரு கைதியின் வரலாறு

'ஆயுதங்கள் மேல் காதல் கொண்ட மனநோயாளிகள்.' வெகு விரைவில்...

மீசை வைச்ச சிங்களவனும் ஆசை வைச்ச தமிழனும்

(சாகரன்)

இலங்கையில்

'இராணுவ' ஆட்சி வேண்டி நிற்கும் மேற்குலகம்,  துணை செய்யக் காத்திருக்கும்; சரத் பொன்சேகா கூட்டம்

(சாகரன்)

ஜனாதிபதி தேர்தல்

எமது தெரிவு எவ்வாறு அமைய வேண்டும்?

பத்மநாபா ஈபிஆர்எல்எவ்

ஜனாதிபதித் தேர்தல்

ஆணை இட்ட அதிபர் 'கை', வேட்டு வைத்த ஜெனரல் 'துப்பாக்கி'  ..... யார் வெல்வார்கள்?

(சாகரன்)

சம்பந்தரே! உங்களிடம் சில சந்தேகங்கள்

(சேகர்)

அனைத்து இலங்கைத் தமிழர்களும் ஒற்றுமையான இலங்கை தமது தாயகம் என மனப்பூர்வமாக உரிமையோடு உணரும் நிலை ஏற்பட வேண்டும்.

(m. tujuh[g;ngUkhs;)

தொடரும் 60 வருடகால காட்டிக் கொடுப்பு

ஜனாதிபதித் தேர்தலில் தமிழ் மக்கள் பாடம் புகட்டுவார்களா?

 (சாகரன்)

 ஜனவரி இருபத்தாறு!

விரும்பியோ விரும்பாமலோ இரு கட்சிகளுக்குள் ஒன்றை தமிழ் பேசும் மக்கள் தேர்ந்தெடுக்க வேண்டும்.....?

(மோகன்)

2009 விடைபெறுகின்றது! 2010 வரவேற்கின்றது!!

'ஈழத் தமிழ் பேசும் மக்கள் மத்தியில் பாசிசத்தின் உதிர்வும், ஜனநாயகத்தின் எழுச்சியும்'

 (சாகரன்)

சபாஷ் சரியான போட்டி.

மகிந்த  ராஜபக்ஷ & சரத் பொன்சேகா.

(யஹியா வாஸித்)

கூத்தமைப்பு கூத்தாடிகளும் மாற்று தமிழ் அரசியல் தலைமைகளும்!

(சதா. ஜீ.)

தமிழ் பேசும் மக்களின் புதிய அரசியல் தலைமை

மீண்டும் திரும்பும் 35 வருடகால அரசியல் சுழற்சி! தமிழ் பேசும் மக்களுக்கு விடிவு கிட்டுமா?

(சாகரன்)

கப்பலோட்டிய தமிழனும், அகதி (கப்பல்) தமிழனும்

(சாகரன்)

சூரிச் மகாநாடு

(பூட்டிய) இருட்டு அறையில் கறுப்பு பூனையை தேடும் முயற்சி

 (சாகரன்)

பிரிவோம்! சந்திப்போம்!! மீண்டும் சந்திப்போம்! பிரிவோம்!!

(மோகன்)

தமிழ் தேசிய கூட்டமைப்புடன் உறவு

பாம்புக்கு பால் வார்க்கும் பழிச் செயல்

(சாகரன்)

இலங்கை அரசின் முதல் கோணல் முற்றும் கோணலாக மாறும் அபாயம்

(சாகரன்)

ஈழ விடுலைப் போராட்டமும், ஊடகத்துறை தர்மமும்

(சாகரன்)

அடுத்த கட்டமான அதிகாரப்பகிர்வு முன்னேற்றமானது 13வது திருத்தத்திலிருந்து முன்னோக்கி உந்திப் பாயும் ஒரு விடயமே

(அ.வரதராஜப்பெருமாள்)

மலையகம் தந்த பாடம்

வடக்கு கிழக்கு மக்கள் கற்றுக்கொள்வார்களா?  

 (சாகரன்)

ஒரு பிரளயம் கடந்து ஒரு யுகம் முடிந்தது போல் சம்பவங்கள் நடந்து முடிந்துள்ளன.!

(அ.வரதராஜப்பெருமாள்)

 

 

அமைதி சமாதானம் ஜனநாயகம்

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