wpe50.jpg (1913 bytes)    TigerSoft News Service    9/18/2008      www.tigersoft.com    
             Revised 9/21/2008 - see also http://www.tigersoft.com/Tiger-Blogs/September19-2008/index.html

                                                                   October 23rd, 2008 - Follow-Up
Greenspan Admits He Was Wrong to Trust Bankers and Oppose Their Regulation.

Monopoly Finance Capitalism Is Out of Control

Cleaning Up after De-Regulation:  A Dirty Job Neither Obama nor McCain Faces Squarely.

The Greenspan "De-Regulation" of Banking,
      by Abolishing The Glass-Steagall Act of 1933,
      Has Directly Led to The 2007-2008 Bear Market.

                It was precisely because banks that loaned money to homeowners
           could after 1999, as brokers, turn around and bundle their mortgages and
           sell them by the billions to big investors, that the banks got themselves
           grotesquely over-extended with leverage, had every incentive to make
           imprudent loans and conceal the real riskiness of their mortgages from
           everyone, their shareholders and regulators and all the investors in this
          "toxic" paper.
                Now the taxpayer is being asked to bailout these same banks.  The
           cost may easily reach trillions of dollars, if housing prices continue to fall.
           If the US Government bails out the banks and buys all this toxic paper,
           the US Dollar will be badly hurt, because of how much this increases
           the national debt.   Interest rates will rise, as the US Treasury seeks to
           find lenders for this huge sum.  And next year, when the economy is
           apt to be weaker still, there will be nothing left in the US Treasury
           for a badly needed expansionary plan of public works investments or
           much less a national health plan which is favored by 62% of all
           Americans.  The impoverization of the US Treasury seems to be
           the hdden agenda which is so central to Paulson's plan to give banks
           $700,000,000,000 more than has already been set aside for them,
           more than $500,000,000,000.   Congress will now be raising the limitation
           on the US National Debt to nearly $12 trillion.  The total net worth of
           all assets in the US is now about $55 trillion.  The US will never be the|

                Because both political parties are to blame for abolishing the law
           (the Glass-Seagall Act of 1933) that before 2000 prevented commercial
           bankers from also becoming brokers, neither Obama nor McCain are
           educating the public or addressing the underlying problems of the US
           financial system now.    So, the underlying problem of giving banks
           too much power without controls or limitations will likely get worse.
           The mutual complicity of Dens and Repubs is going to cost US
           taxpayers trillions of dollars before all the dust settles.   They should
           immediately seek to bring back Glass-Steagall and admit De-Regulation
           was an abysmal failure.   Instead, they are permitting Bank of America
           to buy Merrill Lynch, making all the conflicts of interest much worse.

           And today, 9-21-2008, the Federal reserve has made things worse
          by allowing investment bankers, Goldman Sachs and Morgan Stanley,
          to become commercial bankers. 

              If ever there was any doubt about the centripetal forces governing
            monopolistic finance capitalism, they are gone now.  We are controlled
            by Wall Street now. And neither political party can escape finance
            capitalism's power.   They control the US government and we all seem
            helpless, because both Obama's and McCain's advisors were behind
            the deregulation in 1999.   Sadly, you will wait in vain for an
            in depth, penetrating discussion of these forces on TV or in the
            mass print media.   The corporate media is too tied in are they with
            monopolistic finance capital to challenge its power.

               The contradictions inherent in unregulated monopolistic finance
             capitalism are all to apparent.  Bear Stearns went bankrupt and
             the US Treasury paid $30 billion to JP Morgan to honor its debts.
             13 US banks have failed this year.  The US FDIC must pay these banks'
             depositors what the banlks lost.  Mortgage giants, Fannie Mae
             and Freddie Mac had to be nationalized.  Business Week estimated
             on July 28, 2008 that this will cost all Americans at least a trillion dollars.
             Bear Stearns filed for bankruptcy. Insurance giant AIG had to be
             nationalized.   Merrill Lynch was sold for a pittance to Bank of America.
             And the US Treasury Secretary is scrambling for $700,000,000,000
             to buy the banks' worthless mortgages.   All the while, the Federal
             Reserve was already allowing the biggest banks to borrow as much
             as $350 billion from their Special Discount Window, having only
             to put up any mortgages they wished.  We wait in vain for the

             corporate media to challenge the trillions in federal bailouts, despite
             the cost to taxpayers for generations.

It will be a very sad day when the Democrats Pelosi, Reed and
              Obama join the Republicans Bush, Paulson and McCain to take $700
              billion from Americans of all classes and regions and give it to the
              very bankers that have brought about the collapse of the American
              economy.    The public opposition to this bailout gift has been
              widespread, load and very vocal.  This is not democracy.  There is
              not even any pretense.  This is pure plutocracy

by William Schmidt, Ph.D.   (Columbia University)
wpe4F.jpg (33251 bytes)  

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 wpeF7.jpg (25355 bytes)                   

The Greenspan "De-Regulation" of Banking,
        by Abolishing The Glass-Steagall Act of 1933
Directly Led to The 2007-2008 Bear Market.

by William Schmidt, Ph.D.          

Greenspan more than anyone else in Wall Street set the stage for the terrible state
              of finance and business in September 2008.  He did this by permitting a reckless housing
              bubble and avoiding review and regulation of banks and the housing market.  Without
              any challenge or investigation, he sat back and  permitted the heavily over-leveraged use
              of all manner of esoteric and opaque housing market instruments and mortgage derivatives.
              These were created by the commercial and investment banks to get rich quick.  Instead,
               it has severely threatened the health of the American economy.  These were the institutions
               the Federal Reserve was supposed to regulate.  Instead, the FED permitted zero-down housing
               loans!   Greenspan's FED created a housing boom and bubble but walked away from
               regulating it.  He wore ideological blinders and simply wanted to make money for his
               cronies on Wall Street.  At first, he dogmatically espoused a highly ideological stance of
               de-regulation.   Without legal authority, he created massive loopholes in the Glass-Steagall
               Act which was enacted specifically to prevent commercial banks from getting into the business
               of buying and selling stocks or offering mortgage derivatives to investors.   When that was
               accomplished, and then ratified ex post facto by Congress, he set forth on a course of complete

                  Greenspan Admits He Was Terribly Wrong        

                         After the Crash of 2008, Greenspan finally admitted he had been wrong to favor de-regulation
               of banks.  On October 23, 2008, he admitted to Congress that he was wrong to have trusted the
               most powerful bankers to  act in their long run self-interest and that of their share holders.  He
"I made a mistake in presuming that the self-interests of organizations,
                           specifically banks and others, were such as that they were best capable of protecting
                           their own shareholders and their equity in the firms

                          What he should have said was that multi-million dollar bonuses determined the
                self-interests of Banking CEOs and Hedge Fund Managers.   To make big short-term profits,
                they lied, obfuscated and hid the truth from investors and shareholders.  They recklessly used
                leverage.   They knowingly gave shareholders and creditors misleading financial information
               and credit reports to exaggerate short-term profits and procure obscene bonuses for themselves.
               They cared little about the consequences to millions whose life-savings and jobs were destroyed
                in the process.  

What’s remarkable about this is    wpeF7.jpg (2752 bytes)
               that same erroneous belief is
THE key pillar of all free market ideology.
Without it,
               the entire edifice supporting the market worship fetish of the Libertarians, the Austrian
               School, and most economists collapses into rubble, just as our financial system has
It’s hard to accept that economists could really believe such nonsense;
                I suspect that much of their religious attitude toward markets stemmed from their
                regular paychecks from corporations benefiting from such dumb, unsupported beliefs." 
Blue and Red colors in the original for emphasis. 
                      Stephen Zarlenga, American Monetary Insitute - http://www.monetary.org.  )

                SEC Chairman Cox Must Have Been in Cahoots with Bearish Hedge Funds
                        All Greenspan's surrendering to big banks was exactly matched by SEC Chariman Cox's
                surrendering to big brokerages, hedge funds and mutual funds.   Like Greenspan, Cox
                was driven by a mean mix of right-wing ideology and old-boys' cronyism.  As a result,
                Cox largely repudiated his charge, the regulation of the securities business.  The hen house
                was always full of foxes with farmer Cox in charge.  Under Cox, insider trading has
                became rampant and common place.  TigerSoft has documented many cases of this.  Under Cox.
                all the New Deal restrictions on short selling and bear raiders were lifted with the same dire
               consequences for the stock market, business and jobs in America.  TigerSoft has documented
                and decried this.  

                         Ideological de-regulation and cronyism has made insiders rich, but impoverished
                millions who were not in the loop and still don;t understand what happened to their money
                or homes.  Shame on Greenpan. Shame on Phil Graham.  Shame on Robert Rubin.   And
                shame on McCain and Obama for not talking about the need for the restoration of

        Bank of America's September 2008 buy out of Merrill Lynch is in complete
               defiance of all  that was learned by those who crafted Glass Steagall.  It bodes
               ill for America.   It is said that Bank of America drafted this Summer's
               Emergency Housing Bill.  BoA is now the nexus of American political, financial
               and economic power.   Watch its stock.  Its rise means democracy in America
               is declining.  Predictably neither McCain nor Obama is saying a word to question
               this step back to the 1890s.
                         Seventy nine years ago, the US stock market crashed.  In several
              down-waves the Dow Jones average fell from 381.20 on 9/3/1929 to a
              41.80 on 7/7/1932.   One in five banks failed.  Thousands failed.  Life
              savings were wiped out.   Bankers were called "banksters", not only for
              foreclosing on hapless farmers, builders and homeowners.  But also
              for themselves gambling on the stock market and then not being able to
              pay back depositors.  In the 19th and early 20th century bankers and
              stock brokers often worked for the same company.

              wpeF7.jpg (4629 bytes)

                       As a result of the public hostility towards bankers, President Franklin
              Roosevelt signed a law that restricted commercial banks' ability to buy and
              sell stocks.   This was the Glass-Steagall Act.  It also created the 
              Federal Deposit Insurance Corporation (FDIC).   The arguments
              for the separation of commercial banking from brokerage and investment
              banking can be summarized:

1.The granting of credit (lending) must be separated from the use of credit (investing).because it
                  creates conflicts of interests and abuses. 

                  2. Depository institutions possess enormous financial power, by virtue of their control of other
                  people’s money.  Those powers must be limited to ensure banking soundness and competition
                  in the market for funds, whether loans or investments.

                   3. Securities activities are inherently risky and can and do sometimes lead to enormous losses.
                   Such losses will surely threaten the integrity of deposits. In turn, the Government insures deposits
                   and could be required to pay large sums if depository institutions were to collapse as the result of
                   securities losses.

                    4. Depository institutions are supposed to be managed to limit risk. Their managers are not
                    conditioned to operate prudently in more speculative securities businesses.  

                         In the 1950s, Congress again put limits on commercial banks and
               prohibited them from owning insurance companies.  They were not allowed
               to buy banks in another state.  But then the tide started receding.  In the
               1960s banks were allowed to enter the municipal bond field.  And in the
               1970s some brokerages began to offer credit cards and check-writing.

                                  Reagan, De-Regulation and One-Stop Banking

                      Starting in 1986, Reagan's Federal Reserve started picking apart the
                Glass-Steagall Act.  They re-interpreted Glass-Steagall as baring commercial
                banks from being "principally engaged" in securities business, deciding that
                banks can have up to 3% of their gross revenues from investment banking.
                Previously, banks were not allowed to trade any equities. 

                     In the Spring of 1987, Citigroup, JP Morgan and Bankers Trust pressure
                the Federal Reserve to allow banks to handle several underwriting
                businesses, including commercial paper, municipal revenue bonds, and
                mortgage-backed securities.  Chairman Volcker, who was out-voted, was
                not moved, and expressed "fear that lenders will recklessly lower loan
                standards in pursuit of lucrative securities offerings and market bad loans
                to the public".
The Fed then said it would raise the limit on banks' securities
                revenue from 5% to 10 percent of gross revenues.  In August 1987, Alan
                Greenspan   -- formerly a director of J.P. Morgan and a proponent of
                banking deregulation -- became chairman of the Federal Reserve Board.
                In January 1989, the Fed Board approves an application by J.P. Morgan,
                Chase Manhattan, Bankers Trust, and Citicorp "to expand the Glass-Steagall
                loophole to include dealing in debt and equity securities in addition to
                municipal securities and commercial paper. This marks a large expansion of
                the activities considered permissible under Glass-Steagall.
http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html )

                          Greenspan De-Regulates without Congressional Action

                      In December 1996, with the support of Chairman Alan Greenspan, the
                Federal Reserve Board issues a precedent-shattering decision permitting
                bank holding companies to own investment bank affiliates with up to 25
of their business in securities underwriting (up from 10 percent).
                This expansion of the loophole created by the Fed's 1987 reinterpretation of
                Section 20 of Glass-Steagall effectively renders Glass-Steagall obsolete.

                Virtually any bank holding company wanting to engage in securities business
                 would be able to stay under the 25 percent limit on revenue.  Further, it
                 states that the risks of underwriting had proven to be "manageable," and
                 says banks would have the right to acquire securities firms outright. 

                 "In 1997, Bankers Trust (now owned by Deutsche Bank) buys the
                 investment bank Alex. Brown & Co., becoming the first U.S. bank to
                 acquire a securities firm."  The Fed allows it.

                          The Role of Citibank  in the Demise of Glass-Steagall
                                      Quoted from PBS' Frontline.
On April 6, 1998, Weill and Reed announce a $70 billion stock swap merging Travelers (which owned the investment house Salomon Smith Barney) and Citicorp (the parent of Citibank), to create Citigroup Inc., the world's largest financial services company, in what was the biggest corporate merger in history.

The transaction would have to work around regulations in the Glass-Steagall and Bank Holding Company acts governing the industry, which were implemented precisely to prevent this type of company: a combination of insurance underwriting, securities underwriting, and commercial banking. The merger effectively gives regulators and lawmakers three options: end these restrictions, scuttle the deal, or force the merged company to cut back on its consumer offerings by divesting any business that fails to comply with the law.

Weill meets with Alan Greenspan and other Federal Reserve officials before the announcement to sound them out on the merger, and later tells the Washington Post that Greenspan had indicated a "positive response." In their proposal, Weill and Reed are careful to structure the merger so that it conforms to the precedents set by the Fed in its interpretations of Glass-Steagall and the Bank Holding Company Act.

Unless Congress changed the laws and relaxed the restrictions, Citigroup would have two years to divest itself of the Travelers insurance business (with the possibility of three one-year extensions granted by the Fed) and any other part of the business that did not conform with the regulations. Citigroup is prepared to make that promise on the assumption that Congress would finally change the law -- something it had been trying to do for 20 years -- before the company would have to divest itself of anything.

Citicorp and Travelers quietly lobby banking regulators and government officials for their support. In late March and early April, Weill makes three heads-up calls to Washington: to Fed Chairman Greenspan, Treasury Secretary Robert Rubin, and President Clinton. On April 5, the day before the announcement, Weill and Reed make a ceremonial call on Clinton to brief him on the upcoming announcement.

The Fed gives its approval to the Citicorp-Travelers merger on Sept. 23. The Fed's press release indicates that "the Board's approval is subject to the conditions that Travelers and the combined organization, Citigroup, Inc., take all actions necessary to conform the activities and investments of Travelers and all its subsidiaries to the requirements of the Bank Holding Company Act in a manner acceptable to the Board, including divestiture as necessary, within two years of consummation of the proposal. ... The Board's approval also is subject to the condition that Travelers and Citigroup conform the activities of its companies to the requirements of the Glass-Steagall Act."

Following the merger announcement on April 6, 1998, Weill immediately plunges into a public-relations and lobbying campaign for the repeal of Glass-Steagall and passage of new financial services legislation (what becomes the Financial Services Modernization Act of 1999). One week before the Citibank-Travelers deal was announced, Congress had shelved its latest effort to repeal Glass-Steagall. Weill cranks up a new effort to revive bill.

Weill and Reed have to act quickly for both business and political reasons. Fears that the necessary regulatory changes would not happen in time had caused the share prices of both companies to fall. The House Republican leadership indicates that it wants to enact the measure in the current session of Congress. While the Clinton administration generally supported Glass-Steagall "modernization," but there are concerns that mid-term elections in the fall could bring in Democrats less sympathetic to changing the laws.

In May 1998, the House passes legislation by a vote of 214 to 213 that allows for the merging of banks, securities firms, and insurance companies into huge financial conglomerates. And in September, the Senate Banking Committee votes 16-2 to approve a compromise bank overhaul bill. Despite this new momentum, Congress is yet again unable to pass final legislation before the end of its session.

As the push for new legislation heats up, lobbyists quip that raising the issue of financial modernization really signals the start of a fresh round of political fund-raising. Indeed, in the 1997-98 election cycle, the finance, insurance, and real estate industries (known as the FIRE sector), spends more than $200 million on lobbying and makes more than $150 million in political donations. Campaign contributions are targeted to members of Congressional banking committees and other committees with direct jurisdiction over financial services legislation.

After 12 attempts in 25 years, Congress finally repeals Glass-Steagall, rewarding financial companies for more than 20 years and $300 million worth of lobbying efforts. Supporters hail the change as the long-overdue demise of a Depression-era relic.

On Oct. 21, with the House-Senate conference committee deadlocked after marathon negotiations, the main sticking point is partisan bickering over the bill's effect on the Community Reinvestment Act, which sets rules for lending to poor communities. Sandy Weill calls President Clinton in the evening to try to break the deadlock after Senator Phil Grham, chairman of the Banking Committee, warned Citigroup lobbyist Roger Levy that Weill has to get White House moving on the bill or he would shut down the House-Senate conference. Serious negotiations resume, and a deal is announced at 2:45 a.m. on Oct. 22. Whether Weill made any difference in precipitating a deal is unclear.

On Oct. 22, Weill and John Reed issue a statement congratulating Congress and President Clinton, including 19 administration officials and lawmakers by name. The House and Senate approve a final version of the bill on Nov. 4, and Clinton signs it into law later that month.

Just days after the administration (including the Treasury Department) agrees to support the repeal, Treasury Secretary Robert Rubin, the former co-chairman of a major Wall Street investment bank, Goldman Sachs, raises eyebrows by accepting a top job at Citigroup as Weill's chief lieutenant. The previous year, Weill had called Secretary Rubin to give him advance notice of the upcoming merger announcement. When Weill told Rubin he had some important news, the secretary reportedly quipped, "You're buying the government?"

                  (Source: http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html )

                       In 1998, banking giant Citicorp was allowed to merge with Travelers
                Insurance, which was also an investment giant.  At the merger announcement,
                Travelers CEO Sanford Weill appealed to Congress to undo the
                Depression-era restrictions on banking in order to help American
                financial companies compete overseas.  (Source:
http://www.pbs.org/newshour/bb/business/july-dec99/bankreform_11-3.html  )

                     On November 12, 1999, the key provision that prohibited banks from
               owning financial companies was repealed by the Republican Party led by
               Lindsay Graham.  Gramm-Leach-Bliley Act   President Clinton signed the
               bill as part of his 1999 Budget Compromise with the de-regulatory Republican
               Congress.   He was heavily influenced by the self-serving advise of
               his Treasury Secretary, Robert Rubin.
The Media Moguls, the Bankers, and the CFR   Rubin, it should be noted, went
               back to work for Citibank in 2001 and was marked as a key insider seller
               by TigerSoft in December 2007.   Clinton would do what earlier Democrats
               would not: give bankers all but unlimited power, until their house of
               cards fell apart.  Note that it cannot be said that Clinton's signature here made
               Citibank.   As you can see from the chart below, the 1990s' made that
                        wpe115.jpg (23889 bytes)

                            Republicans after Lincoln have always worked for bankers. Read
                        about how much money Mark Hannah raised in 1896 to promote
                        trusts, combinations between bankers and industries like steel,
                        coal, copper and railroads. 

wpe128.jpg (14634 bytes)
Mark Hannah, Republicans and Monopoly Trusts

    "The first class of multimillionaires had made their fortunes in the Civil War, and during subsequent decades they began to consolidate holdings in a number of industries with national and international reach. Among the most famous were Carnegie Steel and John D. Rockefeller's Standard Oil Company.

    "The Sherman Anti-Trust Act, passed in 1890, was the first important federal measure to limit the power of companies that controlled a high percentage of market share. Ironically, in the 1890s the Act was used primarily to block strikes, since it prevented any 'conspiracy to restrict trade,' and businesses like the Pullman Railcar Company argued that labor unions were such conspiracies. They won the support of state and federal militia to enforce this anti-labor view. At the same time, the Supreme Court ruled in 1895 that many forms of business combination did not constitute "trusts" that restrained interstate trade, and thus could not be prosecuted under federal law. The Interstate Commerce Commission had been created, but it did not yet have the powers it obtained in a later era, and critics considered it ineffectual.

     "Antagonism toward "trusts" and "monopolies" was wide-ranging. Critics of "The Trusts" often targeted silver and gold mines in the West and other large companies whose employees faced hazardous conditions and low wages. Others attacked "The Trusts" and "Wall Street" in the same breath, identifying J. P. Morgan and other financiers as the agents of industrial consolidation. In rural areas, the most dangerous monopolies appeared to be the railroads, which controlled shipping rates along their lines. Railroad magnates like Jay Gould and C. P. Huntington were among the targets of free-silverites ire. Farmers also denounced grain elevators and speculators: the rise of agricultural futures markets, accompanying mechanization of harvesting and processing, caused many farmers to feel increasingly helpless in the face of large institutions beyond their control. In short, denunciation of "The Trusts" symbolized broad fears about the size and power of big business in America.

       "Trusts also became a central issue in the 1896 campaign because of the fundraising activities of Mark Hanna and the Republican National Committee. Hanna collected large sums from leading industrialists, most of whom were terrified at the prospect of a Bryan victory. While such men opposed free silver, their fear of pro-labor and anti-trust legislation probably played a greater role in inspiring their donations. In calling attention to the connections between Republicans and industrialists, Silver Democrats and other anti-McKinleyites were not exaggerating. The Republican National Committee raised and spent (by its own accounting) at least $4,000,000 during the campaign--a staggering sum for the day, assembled largely from major gifts by industrialists and financiers. In addition, some of McKinley's allies, notably Whitelaw Reid of New York, solicited J. P. Morgan's advice in drafting the financial planks of the Republican platform."

Quoted from  http://projects.vassar.edu/1896/trusts.html

                       The Republican-Banker alliance continues with full force with
               Lindsay Graham, a long-time close economic advisor to Sen. McCain,
               one of the Senate's biggest bankers of convicted banker-swindler
               Charles Keating. That's what makes such a joke McCain's 2008 campaign
               promise that he is a maverick who will correct what ails the banking and
               securities' industries.

                      The   banking industry had been seeking the repeal of Glass-Steagall
               since at least the 1980's.  Lindsay Graham was also responsible for the
               de-regulation of  energy futures in what has become known as the Enron
               Amendment.   This permitted Enron to artificially drive up energy prices
               charged Californians in 2001 and  allowed hedge fund speculators in 2007
               and 2008 to drive up crude oil prices from 50 to 145.  

                    The repeal of Glass-Steagall was "the keystone, that provided non
               transparent financial manipulation and use of leverage to revolutionize the
               activities of investment beginning in 1999
".  It led to the amassing of
               "huge fortunes for the investment bankers who designed, marketed and
                oversaw the use of leveraged investments".  "
The repeal enabled leverage
                to be "conceived, deployed and expand, not only in the residential mortgage
                sector, but (in) a host of other sectors as well, such as, municipal bonds, and
                derivatives such as credit default swaps
."  It naturally generated the
                growth of highly speculative and unregulated hedge funds that often
                whip prices of stocks up and down without any consideration being given
                to the deleterious social costs caused, for example when energy prices
                rapidly double or American business must lay off their workers and
                close because of unscrupulous bear raiders who spread false and
                negative rumors.
http://my.opera.com/richardinbellingham/blog/show.dml/1796860 )

                         Banks in this environment made mortgage loans en masse.  Packaged
                 them as investment bankers and sold them as Grade AAA, even though
                 this was not true.  With what they were paid for the mortgage packages,
                 they went out an made still more, lesser quality loans.  In this way, they
                 built up their capital and very highly leveraged their net worth.  The
                 Bush backed Carlye bond fund used 33 to 1 leverage.  Its underlying
                 assets represented only 3% of its portfolio value.  Even a small break in
                 housing prices and a small rise in delinquencies were thus able to bring it
                 down.   Without regulation and transparency, there was every incentive for
                 an investment banker to espouse the view that the mortgages were
                 all sound.  Now, we see the bundled mortgages are not safe.  And without
                 transparency, private buyers avoid them.  The Federal Government
                 is put in the position, by virtue of the dynamics of de-regulation, to be
                 last back-stop.  This will easily cost it a trillion dollars over the next few
                 years.   It will surely have to print much of this money, thus bringing all
                 the dire and attendant consequences runaway inflation brings.

Robert Kutter (Stanford University) testified before Barney Frank's
                 Committee on Banking and Financial Services in Oct 2007 " Since repeal
                 of Glass Stegall (FDR Banking Act) in 1999, after more than a decade of
                 de facto inroads, super banks have been able to re-enact the same kinds
                 of structural conflicts of interest that were endemic in the 1920s - tending
                 to speculators, packaging and securitizing credits and then selling them
                off, wholesale or retail, and extracting fees at every step along the way.
                And, much of this paper is even more opaque to bank examiners than its
                counterparts were in the 1920s. Much of it isn't paper at all, and the whole
                process is supercharged and automated formulas.
(Source: http://my.opera.com/richardinbellingham/blog/show.dml/1796860   )


                                                 How The Deal Was Made
                         "Billionaire Sanford Weill made 'Citigroup' into the most powerful
                   financial institutions since the House of Morgan a century ago.
                   A major trophy of Sanford's is the pen Bill Clinton used to sign the
                   REPEAL of FDR's Banking Act - a move which allowed Weill to
                   create Citigroup. " Sanford Weill called President Clinton to break the
                   deadlock after Senator Phil Gramm, chairman of the Banking Committee,
                   warned Citigroup LOBBYIST Roger Levy that Weill has to get the White
                   House moving on the bill or he would shut down the House-Senate
                   Conference. A deal was announced at 2:45 a.m. Just days after the Clinton
                   administration (including the Treasury Department) agrees to support the
                   REPEAL, Treasury Secretary Robert Rubin, the former co-chairman of a
                   major Wall Street investment bank, Goldman Sachs, raises eyebrows by
                   accepting a top job at Citigroup as Weill's chief lieutenant. The previous
                   year, Weill had called Rubin to give him advance notice of the upcoming
                   merger announcement. When Weill told Rubin he had some important news,
                   the secretary reportedly quipped, "You're buying the government."
Source: Judith Moriarty writes in Foreclosures - The Untold Story  )




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