dominos go down in a cascade of cross-defaults

[seeing clearly]

Alex James:

Again, it’s with great sadness that I have to share these hidden news headlines, but unfortunately, this is the reality of the World we were born in. For the latest/previous unreported headlines that you may have missed, please visit http://tinyurl.com/33c9yr (nearly 3,400 informative postings).


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"We hang the petty thieves and appoint the great ones to public office." Aesop



As I have been saying all along, like many others, and as explained in The Hidden History of Money & Usury http://www.lulu.com/content/165077 and many other books, the financial system imposed on us and through which we are enslaved by the World’s Transatlantic Feudal Ruling Elite is a Babylonian Gigantic Fraud…..


Highlights from Ellen Brown, J.D.:


“Derivatives are financial instruments that …. derive their value from something else…. they are just bets. You can “hedge your bet” that something you own will go up by placing a side bet that it will go down. “Hedge funds” hedge bets in the derivatives market. Bets can be placed on anything, from the price of tea inChina to the movements of specific markets.


“The point everyone misses,” wrote economist Robert Chapman a decade ago, “is that buying derivatives is not investing. It is gambling, insurance and high stakes bookmaking. Derivatives create nothing.”1 They not only create nothing, but they serve to enrich non-producers at the expense of the people who do create real goods and services. In congressional hearings in the early 1990s, derivatives trading was challenged as being an illegal form of gambling. But the practice was legitimized by Fed Chairman Alan Greenspan, who not only lent legal and regulatory support to the trade but actively promoted derivatives as a way to improve “risk management.” Partly, this was to boost the flagging profits of the banks; and at the larger banks and dealers, it worked. But the cost was an increase in risk to the financial system as a whole.2


“We the taxpayers are on the hook for the Fed’s “enhanced liquidity facilities,”


Since then, derivative trades have grown exponentially, until now they are larger than the entire global economy. The Bank for International Settlements recently reported that total derivatives trades exceeded one quadrillion dollars – that’s 1,000 trillion dollars.3 How is that figure even possible? The gross domestic product of all the countries in the world is only about 60 trillion dollars. The answer is that gamblers can bet as much as they want. They can bet money they don’t have, and that is where the huge increase in risk comes in.


Credit default swaps (CDS) are the most widely traded form of credit derivative. CDS are bets between two parties on whether or not a company will default on its bonds. In a typical default swap, the “protection buyer” gets a large payoff from the “protection seller” if the company defaults within a certain period of time, while the “protection seller” collects periodic payments from the “protection buyer” for assuming the risk of default. CDS thus resemble insurance policies, but there is no requirement to actually hold any asset or suffer any loss, so CDS are widely used just to increase profits by gambling on market changes. In one blogger’s example, a hedge fund could sit back and collect $320,000 a year in premiums just for selling “protection” on a risky BBB junk bond. The premiums are “free” money – free until the bond actually goes into default, when the hedge fund could be on the hook for $100 million in claims.


And there’s the catch: what if the hedge fund doesn’t have the $100 million? The fund’s corporate shell or limited partnership is put into bankruptcy; but both parties are claiming the derivative as an asset on their books, which they now have to write down. Players who have “hedged their bets” by betting both ways cannot collect on their winning bets; and that means they cannot afford to pay their losing bets, causing a domino chain reaction and therefore other players to also default on their bets.



The dominos go down in a cascade of cross-defaults that infects the whole banking industry and jeopardizes the global pyramid scheme. The potential for this sort of nuclear reaction was what prompted billionaire investor Warren Buffett to call derivatives “weapons of financial mass destruction.” It is also why the banking system cannot let a major derivatives player go down, and it is the banking system that calls the shots. The Federal Reserve is literally owned by a conglomerate of banks; and Hank Paulson, who heads the U.S. Treasury, entered that position through the revolving door of investment bank Goldman Sachs, where he was formerly CEO.


“Government’s takeover of Fannie Mae and Freddie Mac was not actually a bailout of the mortgage giants. It was a bailout of the financial derivatives industry, which was faced with a $1.4 trillion “event of default” that could have bankrupted Wall Street and much of the rest of the financial world. To explain the enormous risk involved, Amerman posits a scenario in which the mortgage giants are not bailed out by the government. When they default on the $5 trillion in bonds and mortgage-backed securities they own or guarantee, settlements are immediately triggered on $1.4 trillion in credit default swaps entered into by major financial firms, which have promised to make good on Fannie/Freddie defaulted bonds in return for very lucrative fee income and multi-million dollar bonuses. The value of the vulnerable bonds plummets by 70%, causing $1 trillion (70% of $1.4 trillion) to be due to the “protection buyers.” This is more money, however, than the already-strapped financial institutions have to spare. The CDS sellers are highly leveraged themselves, which means they depend on huge day-to-day lines of credit just to stay afloat. When their creditors see the trillion dollar hit coming, they pull their financing, leaving the strapped institutions with massive portfolios of illiquid assets. The dreaded cascade of cross-defaults begins, until nearly every major investment bank and commercial bank is unable to meet its obligations. This triggers another massive round of CDS events, going to $10 trillion, then $20 trillion. The financial centers become insolvent, the markets have to be shut down, and when they open months later, the stock market has been crushed. The federal government and the financiers pulling its strings naturally feel compelled to step in to prevent such a disaster, even though this rewards the profligate speculators at the expense of the Fannie/Freddie shareholders who will get wiped out. Amerman concludes:


“[I]t’s the best game in town. Take a huge amount of risk, be paid exceedingly well for it and if you screw up -- you have absolute proof that the government will come in and bail you out at the expense of the rest of the population (who did not share in your profits in the first place).”4


Kohler quoted the September 14 newsletter of Professor Nouriel Roubini, who has a popular website called Global EconoMonitor. Roubini warned:


“What we are facing now is the beginning of the unravelling and collapse of the entire shadow financial system, a system of institutions (broker dealers, hedge funds, private equity funds, SIVs, conduits, etc.) that look like banks (as they borrow short, are highly leveraged and lend and invest long and in illiquid ways) and thus are highly vulnerable to bank-like runs; but unlike banks they are not properly regulated and supervised, they don’t have access to deposit insurance and don’t have access to the lender of last resort support of the central bank.”

The risk posed to the system was evidently too great. On September 16, while Barclay’s Bank was offering to buy the banking divisions of Lehman Brothers, the Federal Reserve agreed to bail out AIG in return for 80% of its stock. Why the Federal Reserve instead of the U.S. Treasury? Perhaps because the Treasury would take too much heat for putting yet more taxpayer money on the line. The Federal Reserve could do it quietly through its “Open Market Operations,” the ruse by which it “monetizes” government debt, turning Treasury bills (government I.O.U.s) into dollars. The taxpayers would still have to pick up the tab, but the Federal Reserve would not have to get approval from Congress first.


We may soon hear that “the credit market is frozen” – that there is no money to keep homeowners in their homes, workers gainfully employed, or infrastructure maintained. But this is not true. The underlying source of all money is government credit – our own public credit. We don’t need to borrow it from the Chinese or the Saudis or private banks. The government can issue its own credit – the “full faith and credit of the United States.” That was the model followed by the Pennsylvania colonists in the eighteenth century, and it worked brilliantly well. Before the provincial government came up with this plan, the Pennsylvania economy was languishing. There was little gold to conduct trade, and the British bankers were charging 8% interest to borrow what was available. The government solved the credit problem by issuing and lending its own paper scrip. A publicly-owned bank lent the money to farmers at 5% interest. The money was returned to the government, preventing inflation; and the interest paid the government’s expenses, replacing taxes. During the period the system was in place, the economy flourished, prices remained stable, and the Pennsylvania colonists paid no taxes at all. (For more on this, see E. Brown, “Sustainable Energy Development: How Costs Can Be Cut in Half,” webofdebt.com/articles, November 5, 2007.)



Today’s credit crisis is very similar to that facing Herbert Hoover and Franklin Roosevelt in the 1930s. In 1932, President Hoover set up the Reconstruction Finance Corporation (RFC) as a federally-owned bank that would bail out commercial banks by extending loans to them, much as the privately-owned Federal Reserve is doing today. But like today, Hoover’s ploy failed. The banks did not need more loans; they were already drowning in debt. They needed customers with money to spend and invest. President Roosevelt used Hoover’s new government-owned lending facility to extend loans where they were needed most – for housing, agriculture and industry. Many new federal agencies were set up and funded by the RFC, including the HOLC (Home Owners Loan Corporation) and Fannie Mae (the Federal National Mortgage Association, which was then a government-owned agency). In the 1940s, the RFC went into overdrive funding the infrastructure necessary for the U.S. to participate in World War II, setting the country up with the infrastructure it needed to become the world’s industrial leader after the war.

The RFC was a government-owned bank that sidestepped the privately-owned Federal Reserve; but unlike the Pennsylvania provincial government, which originated the money it lent, the RFC had to borrow the money first. The RFC was funded by issuing government bonds and relending the proceeds. Then as now, new money entered the money supply chiefly in the form of private bank loans. In a “fractional reserve” banking system, banks are allowed to lend their “reserves” many times over, effectively multiplying the amount of money in circulation. Today a system of public banks might be set up on the model of the RFC to fund productive endeavors – industry, agriculture, housing, energy -- but we could go a step further than the RFC and give the new public banks the power to create credit themselves, just as the Pennsylvania government did and as private banks do now. At the rate banks are going into FDIC receivership, the federal government will soon own a string of banks, which it might as well put to productive use. Establishing a new RFC might be an easier move politically than trying to nationalize the Federal Reserve, but that is what should properly, logically be done. If we the taxpayers are putting up the money for the Fed to own the world’s largest insurance company, we should own the Fed.

Proposals for reforming the banking system are not even on the radar screen of Prime Time politics today; but the current system is collapsing at train-wreck speed, and the “change” called for in Washington may soon be taking a direction undreamt of a few years ago. We need to stop funding the culprits who brought us this debacle at our expense. We need a public banking system that makes a cost-effective credit mechanism available for homeowners, manufacturing, renewable energy, and infrastructure; and the first step to making it cost-effective is to strip out the swarms of gamblers, fraudsters and profiteers now gaming the system.

Now some headlines:


Russian Participants in Debate on 9/11 Truth To be Televised Friday evening in Moscow as well as "ZERO" on Russian TV Prime Time

Video of Alex Jones explaining how the Two Party System is a Fraud: both sides work for the same Elites

Videos on WW III by the Feudal/Fascist British-Isreal World Federation Movement

The justification of war in Iraq is built on a series of outrageous lies!

Video/Transcript Vladimir Bukovsky: The European Union (& the US) are being Feudally morphed into the New Soviet Union

The Free Bees Music Video on 9/11 Is a Lie from War is a Crime.....

An important matter for all of us regarding the sex abuse scandals in the Catholic Church (and in the Republican Party.....)

U.S. Government Mandates HPV Vaccine For New US Residents...although this vaccine is causing deaths

Check out Churches for Middle East Peace

JOKE OF THE CENTURY: Bush says he's working hard on economic turmoil, his accomplishments benefit a few chosen ones and wars, death, destruction, torture, etc. for the millions

Petition and Videos: We The People Oppose anti-Patriot HR Bill 1955 - S Bill 1959 Petition

Mega-War Criminal Ariel Sharon also assassinated 3 witnesses, the Butcher of Sabra and Shatilla?

Cartoons illustrate FANNIE & FREDDIE bailout: Banksters & their friends fleecing the flock

U.S. Rep. Denis Kucinich Urges Congress to Bring War Criminal Bush to Justice

Laura Booth (Tony Blair's sister-in-law): Gaza a Concentration Camp, Worse Than Darfur

Watch 3 Minutes of Truth on MSNBC: Fed printing money to bail out Wall Street Friends causes dilution of money and inflation

Greed and the Pyramid-Ponzi scheme, the 100th Letter: its the derivatives stupid! criminal racket in which a chosen few earn tega money at the cost of millions of others (a lot of tax money is thrown away )

A library of truth info about Zionists, "god's chosen people": Why doesn't the media expose these impostors?

China accuses US of financial WMD; "Who'll Bail Out Uncle Sam?"; CIA is World's Biggest Sponsor of Terrorism; Russia ratchets up US tensions with arms sales to Iran and Venezuela;

Weapons of financial mass destruction: DERIVATIVES BETS; Owners of Fed, i.e. major banks, just bought World's largest insurance company with our money! its the best gambling game in town.....

Please sign this "end the siege" petition originating from Gaza and forward as widely as possible

Video: Playboy's sextival convention in Israel and the gullible goyims are the "meats" for this lucrative market!!!!

Goldman Sach Rakes in Profits in Credit Crisis; Treasury Secretary Henry Paulson is former CEO of Goldman Sach; other former Goldman executives in US Gov/World B ank

Zionist Crimes continue in Palestine, killing Palestinian children, women, men, the elderly: 1 in 9 children in Gaza suffer from malnourishment, stunted growth. 70 per cent under one year old are anaemic

It WASN'T and IS NOT The Arabs, Stupid! Its the Zionist Cabal originally written by Edgar Steele

Naomi Klein on the Rise of Disaster based Capitalism @ Lethbridge Sept 22, Regina Sept 23, Wolfville Sept 25, Halifax Sept 26, Toronto Sept 29

War crimes conference: Planning for the prosecution of high level Neocon/Zionist War Criminals

Canadians for Justice/Peace in ME: Zionist Occupation on Trial / Occupation Israelienne en poursuite judiciaire

Tons of Drugs dumped into our water system by US hospitals

Ralph Forbes: At least 151 Congressmen Dervie Profits from Wars: Blood Money Stains The Hands Of More Than 25% Of Members Of The U.S. Congress

Treacheries of the self-Chosen Ones: Censored Putin interview on Ossetia; Anti-Zionist Jews Expose the Zionists; Prof. Mearsimer Explains Zionist Treachey in America

Remembering the 1982 Sabra & Shatilla Massacres of thousands of Palestinians orchestrated by Zionist Ariel Sharon


Dr. Ernst Iskenius presentation on increases in child cancer & leukemia within 50KM of nuclear power plants


Jonathan Cook describes the Zionist Plan for Jaffa ethnic cleansing; US Backed Right-Wing Chile/Allende Type Coup in Bolivia


Videos: Dick Cheney Laughs about the NAU Deception; CFR Welcome to Fascism and how they Control the Media; Lou Dobbs on the North American Union


YouTube's Mass Censorship is what Lieberman wanted: Senate Bill 1959 MARTIAL LAW, POLICE STATE,NAU,NAFTA,SPP,EXECUTIVE ORDERS, HR1955


Pastor Charles Carlson: US "Evangelical Zionist Christian subculture" illegal supporter of Israel


Dr. Aafia's son, captured when he was 6 years old, held imprisoned for 6 years! now finally released


Anti-Neocon Congresman Ron Paul predicted collapse of Fannie and Freddie 5 years ago September 2003, here is the article


McCain flip-flops again, now Suddenly Embraces Regulation After Many Years of Opposition


Zionists Order 1000 Bunker Buster Bombs: Why? I guess its to attack Iran


US Intel admits Georgia Invaded first: New UN Chair Calls Georgia Aggressor and violated the UN Charter when it invaded South Ossetia


Congressman Conyers et al. to investigate Ron Suskind's allegations that Bush Forged Evidence against Saddam


Pakistan's Taliban Are CIA operatives, Country finally Realizes, U.S. is stung by Pakistan discovering who is


Photographs showing that 9/11 was an inside job


Sarah Palin a Zionist of European Jewish ancestry from Lithuania, & more deceptions exposed........Sarah Palin's Answers: Very Troubling by Chuck Baldwin


Paul Craig Roberts on how the taxpayers are being fleeced for the benefit of the very few


Al-Qaeda/Qaida is a CIA-sponsored myth and is not the all powerful group as portrayed by the Neocon Zionists.


RFID "Smart Cards" in a Surveillance Society can be deployed to threaten privacy and civil liberties: tags implanted in physical objects or human beings


Selling Virginity on E-bay Logical Choice for Brainwashed Feminist


Pharisee Watch: Covering up Fleecing of the Flock by the Banklords; Is end finally coming for Zionist Created "Christian Zionism"?; Jewish Witnesses for Peace

Dr. Henry Makow: Is the Illuminati Provoking Economic Collapse?


http://www.wariscrime.com/ Neocon/Zionist Wars are Organized Crimes by the Mother of All Mafias Syndicates


Bail out at Taxpayers' Expense by Fed/Bernanke who are just taking care of their feudal globalist buddies at the international banks and private capital funds


One Dollar DVD Project additons: Jesse Ventura Body Slams the Controlled Media; The War on Terror is a Fraud; 9/11 Vendetta, etc.


Outrageous: Financial Barons get bailed out again while the little tax payers foot the bill


Youtube removes thousands of Truth Videos, e.g. The Fed creates inflation, etc.


How much has the war in Afghanistan really cost to Canadians? over $6 Billion so far


Jewish Voice for Peace: Support the International Campaign to End the Siege of Gaza


The Unspeakable Truth of 9/11 or the 'dots' you are not supposed to connect...


Congressman Robert Wexler: Moving Forward on Impeachment


9/11 Documentary: The Great Deception: the real GOD is Gold-Oil-Drugs


Video: 9/11 The Myth and the Reality : Dr. David Ray Griffin


A collection of valuable video documentaries


Documentaries/Books by Willam Thoma on 9/11, Chemtrails, etc


Afghan Drug Trade booming under protection of US/NATO forces transported on US planes


Documentaries on 9/11 and government lies


Dr. Makow: The Decadent Babylonian Judeo-Masonic Roots of "Modern Culture"


Pharisee Watch: The Crucifixion of the Palestinian Peoples (and all gentiles......

Opportunity to test judges' unaccountability at the Judicial Conference on September 15-17


Jewish Voice for Peace: End the Siege of Gaza, its sowing the seeds of further hatred and violence


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