SECRET BANKING ELITE: WHERE THE REAL DECISIONS ARE MADE

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Notable Quotes:

“The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential.”

“big banks influence the rules governing derivatives through a variety of industry groups. The banks’ latest point of influence are clearinghouses like ICE Trust, which holds the monthly meetings with the nine bankers in New York.”

“The banks also required ICE to provide market data exclusively to Markit, a little-known company that plays a pivotal role in derivatives. Backed by Goldman, JPMorgan and several other banks, Markit provides crucial information about derivatives, like prices.”

“None of the three clearinghouses would divulge the members of their risk committees when asked by a reporter. But two people with direct knowledge of ICE’s committee said the bank members are:

  • Thomas J. Benison of JPMorgan Chase & Company;
  • James J. Hill of Morgan Stanley;
  • Athanassios Diplas of Deutsche Bank;
  • Paul Hamill of UBS;
  • Paul Mitrokostas of Barclays;
  • Andy Hubbard of Credit Suisse;
  • Oliver Frankel of Goldman Sachs;
  • Ali Balali of Bank of America; and
  • Biswarup Chatterjee of Citigroup.”

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EDITOR’S ANALYSIS: For those of us tracking the strategies employed in courtrooms across the country and various foreclosure tactics, it has been obvious that there has been a single governing hand that is controlling the action. Hidden under the rubric of a risk control committee, this group actually makes all key decisions that affect the largest segment of the marketplace and thus the rest of the markets. These banks are operating for themselves, not in the interests of performing the service that Wall Street was always intended to do — create increasingly fluid access to the capital markets for businesses to innovate, start, grow, finance and merge.

They operate without any regulation. Quite the contrary. The decisions from this group actually effect both legislation that is proposed and passed and the rules and regulations of agencies that are supposed to be acting as referees to make sure the players don’t run amok. They dictate to government rather than the other way around and they create the strategies affect every individual in this country and many other countries. They are in essence a single virtual bank acting as though they are separate, each with profit centers that are strictly controlled by this elite group.

The upcoming WikiLeaks disclosures may have some references to this group which is comprised of the largest banks in the world and which exclude other large banks from membership, like Bank of New York/Mellon. Together they control the direction of the recession and how power is exercised by governments and central bankers around the world. That is because together they control nominal wealth many times the total currency in the world and “market value” that is roughly equal, at a minimum, to 2/3 of the GDP of the entire world.

We are at a crossroad whether we want to admit it or not. Either we simply give up and let bankers rule the world, or we stop them, disassemble them and bring them down to a size where they can be and are in fact regulated. But the choice is not up to government which now is owned by them as well. The choice is entirely up to the people — all the people — who ultimately, for the moment, have the power to dismiss the exercise of this kind of ultra vires power and bring things back to normal. Whatever we do, we are headed for turbulent times. The only real question is whether those turbulent times will be leading us down a path of abandoning our nation of laws or whether it will be as Teddy Roosevelt did, devoted to taking back the power for the people, by the people.

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A Secretive Banking Elite Rules Trading in Derivatives

By LOUISE STORY

On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan.

The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential.

Drawn from giants like JPMorgan Chase, Goldman Sachs and Morgan Stanley, the bankers form a powerful committee that helps oversee trading in derivatives, instruments which, like insurance, are used to hedge risk.

In theory, this group exists to safeguard the integrity of the multitrillion-dollar market. In practice, it also defends the dominance of the big banks.

The banks in this group, which is affiliated with a new derivatives clearinghouse, have fought to block other banks from entering the market, and they are also trying to thwart efforts to make full information on prices and fees freely available.

Banks’ influence over this market, and over clearinghouses like the one this select group advises, has costly implications for businesses large and small, like Dan Singer’s home heating-oil company in Westchester County, north of New York City.

This fall, many of Mr. Singer’s customers purchased fixed-rate plans to lock in winter heating oil at around $3 a gallon. While that price was above the prevailing $2.80 a gallon then, the contracts will protect homeowners if bitterly cold weather pushes the price higher.

But Mr. Singer wonders if his company, Robison Oil, should be getting a better deal. He uses derivatives like swaps and options to create his fixed plans. But he has no idea how much lower his prices — and his customers’ prices — could be, he says, because banks don’t disclose fees associated with the derivatives.

“At the end of the day, I don’t know if I got a fair price, or what they’re charging me,” Mr. Singer said.

Derivatives shift risk from one party to another, and they offer many benefits, like enabling Mr. Singer to sell his fixed plans without having to bear all the risk that oil prices could suddenly rise. Derivatives are also big business on Wall Street. Banks collect many billions of dollars annually in undisclosed fees associated with these instruments — an amount that almost certainly would be lower if there were more competition and transparent prices.

Just how much derivatives trading costs ordinary Americans is uncertain. The size and reach of this market has grown rapidly over the past two decades. Pension funds today use derivatives to hedge investments. States and cities use them to try to hold down borrowing costs. Airlines use them to secure steady fuel prices. Food companies use them to lock in prices of commodities like wheat or beef.

The marketplace as it functions now “adds up to higher costs to all Americans,” said Gary Gensler, the chairman of the Commodity Futures Trading Commission, which regulates most derivatives. More oversight of the banks in this market is needed, he said.

But big banks influence the rules governing derivatives through a variety of industry groups. The banks’ latest point of influence are clearinghouses like ICE Trust, which holds the monthly meetings with the nine bankers in New York.

Under the Dodd-Frank financial overhaul, many derivatives will be traded via such clearinghouses. Mr. Gensler wants to lessen banks’ control over these new institutions. But Republican lawmakers, many of whom received large campaign contributions from bankers who want to influence how the derivatives rules are written, say they plan to push back against much of the coming reform. On Thursday, the commission canceled a vote over a proposal to make prices more transparent, raising speculation that Mr. Gensler did not have enough support from his fellow commissioners.

The Department of Justice is looking into derivatives, too. The department’s antitrust unit is actively investigating “the possibility of anticompetitive practices in the credit derivatives clearing, trading and information services industries,” according to a department spokeswoman.

Indeed, the derivatives market today reminds some experts of the Nasdaq stock market in the 1990s. Back then, the Justice Department discovered that Nasdaq market makers were secretly colluding to protect their own profits. Following that scandal, reforms and electronic trading systems cut Nasdaq stock trading costs to 1/20th of their former level — an enormous savings for investors.

“When you limit participation in the governance of an entity to a few like-minded institutions or individuals who have an interest in keeping competitors out, you have the potential for bad things to happen. It’s antitrust 101,” said Robert E. Litan, who helped oversee the Justice Department’s Nasdaq investigation as deputy assistant attorney general and is now a fellow at the Kauffman Foundation. “The history of derivatives trading is it has grown up as a very concentrated industry, and old habits are hard to break.”

Representatives from the nine banks that dominate the market declined to comment on the Department of Justice investigation.

Clearing involves keeping track of trades and providing a central repository for money backing those wagers. A spokeswoman for Deutsche Bank, which is among the most influential of the group, said this system will reduce the risks in the market. She said that Deutsche is focused on ensuring this process is put in place without disrupting the marketplace.

The Deutsche spokeswoman also said the banks’ role in this process has been a success, saying in a statement that the effort “is one of the best examples of public-private partnerships.”

Established, But Can’t Get In

The Bank of New York Mellon’s origins go back to 1784, when it was founded by Alexander Hamilton. Today, it provides administrative services on more than $23 trillion of institutional money.

Recently, the bank has been seeking to enter the inner circle of the derivatives market, but so far, it has been rebuffed.

Bank of New York officials say they have been thwarted by competitors who control important committees at the new clearinghouses, which were set up in the wake of the financial crisis.

Bank of New York Mellon has been trying to become a so-called clearing member since early this year. But three of the four main clearinghouses told the bank that its derivatives operation has too little capital, and thus potentially poses too much risk to the overall market.

The bank dismisses that explanation as absurd. “We are not a nobody,” said Sanjay Kannambadi, chief executive of BNY Mellon Clearing, a subsidiary created to get into the business. “But we don’t qualify. We certainly think that’s kind of crazy.”

The real reason the bank is being shut out, he said, is that rivals want to preserve their profit margins, and they are the ones who helped write the membership rules.

Mr. Kannambadi said Bank of New York’s clients asked it to enter the derivatives business because they believe they are being charged too much by big banks. Its entry could lower fees. Others that have yet to gain full entry to the derivatives trading club are the State Street Corporation, and small brokerage firms like MF Global and Newedge.

The criteria seem arbitrary, said Marcus Katz, a senior vice president at Newedge, which is owned by two big French banks.

“It appears that the membership criteria were set so that a certain group of market participants could meet that, and everyone else would have to jump through hoops,” Mr. Katz said.

The one new derivatives clearinghouse that has welcomed Newedge, Bank of New York and the others — Nasdaq — has been avoided by the big derivatives banks.

Only the Insiders Know

How did big banks come to have such influence that they can decide who can compete with them?

Ironically, this development grew in part out of worries during the height of the financial crisis in 2008. A major concern during the meltdown was that no one — not even government regulators — fully understood the size and interconnections of the derivatives market, especially the market in credit default swaps, which insure against defaults of companies or mortgages bonds. The panic led to the need to bail out the American International Group, for instance, which had C.D.S. contracts with many large banks.

In the midst of the turmoil, regulators ordered banks to speed up plans — long in the making — to set up a clearinghouse to handle derivatives trading. The intent was to reduce risk and increase stability in the market.

Two established exchanges that trade commodities and futures, the InterContinentalExchange, or ICE, and the Chicago Mercantile Exchange, set up clearinghouses, and, so did Nasdaq.

Each of these new clearinghouses had to persuade big banks to join their efforts, and they doled out membership on their risk committees, which is where trading rules are written, as an incentive.

None of the three clearinghouses would divulge the members of their risk committees when asked by a reporter. But two people with direct knowledge of ICE’s committee said the bank members are: Thomas J. Benison of JPMorgan Chase & Company; James J. Hill of Morgan Stanley; Athanassios Diplas of Deutsche Bank; Paul Hamill of UBS; Paul Mitrokostas of Barclays; Andy Hubbard of Credit Suisse; Oliver Frankel of Goldman Sachs; Ali Balali of Bank of America; and Biswarup Chatterjee of Citigroup.

Through representatives, these bankers declined to discuss the committee or the derivatives market. Some of the spokesmen noted that the bankers have expertise that helps the clearinghouse.

Many of these same people hold influential positions at other clearinghouses, or on committees at the powerful International Swaps and Derivatives Association, which helps govern the market.

Critics have called these banks the “derivatives dealers club,” and they warn that the club is unlikely to give up ground easily.

“The revenue these dealers make on derivatives is very large and so the incentive they have to protect those revenues is extremely large,” said Darrell Duffie, a professor at the Graduate School of Business at Stanford University, who studied the derivatives market earlier this year with Federal Reserve researchers. “It will be hard for the dealers to keep their market share if everybody who can prove their creditworthiness is allowed into the clearinghouses. So they are making arguments that others shouldn’t be allowed in.”

Perhaps no business in finance is as profitable today as derivatives. Not making loans. Not offering credit cards. Not advising on mergers and acquisitions. Not managing money for the wealthy.

The precise amount that banks make trading derivatives isn’t known, but there is anecdotal evidence of their profitability. Former bank traders who spoke on condition of anonymity because of confidentiality agreements with their former employers said their banks typically earned $25,000 for providing $25 million of insurance against the risk that a corporation might default on its debt via the swaps market. These traders turn over millions of dollars in these trades every day, and credit default swaps are just one of many kinds of derivatives.

The secrecy surrounding derivatives trading is a key factor enabling banks to make such large profits.

If an investor trades shares of Google or Coca-Cola or any other company on a stock exchange, the price — and the commission, or fee — are known. Electronic trading has made this information available to anyone with a computer, while also increasing competition — and sharply lowering the cost of trading. Even corporate bonds have become more transparent recently. Trading costs dropped there almost immediately after prices became more visible in 2002.

Not so with derivatives. For many, there is no central exchange, like the New York Stock Exchange or Nasdaq, where the prices of derivatives are listed. Instead, when a company or an investor wants to buy a derivative contract for, say, oil or wheat or securitized mortgages, an order is placed with a trader at a bank. The trader matches that order with someone selling the same type of derivative.

Banks explain that many derivatives trades have to work this way because they are often customized, unlike shares of stock. One share of Google is the same as any other. But the terms of an oil derivatives contract can vary greatly.

And the profits on most derivatives are masked. In most cases, buyers are told only what they have to pay for the derivative contract, say $25 million. That amount is more than the seller gets, but how much more — $5,000, $25,000 or $50,000 more — is unknown. That’s because the seller also is told only the amount he will receive. The difference between the two is the bank’s fee and profit. So, the bigger the difference, the better for the bank — and the worse for the customers.

It would be like a real estate agent selling a house, but the buyer knowing only what he paid and the seller knowing only what he received. The agent would pocket the difference as his fee, rather than disclose it. Moreover, only the real estate agent — and neither buyer nor seller — would have easy access to the prices paid recently for other homes on the same block.

An Electronic Exchange?

Two years ago, Kenneth C. Griffin, owner of the giant hedge fund Citadel Group, which is based in Chicago, proposed open pricing for commonly traded derivatives, by quoting their prices electronically. Citadel oversees $11 billion in assets, so saving even a few percentage points in costs on each trade could add up to tens or even hundreds of millions of dollars a year.

But Mr. Griffin’s proposal for an electronic exchange quickly ran into opposition, and what happened is a window into how banks have fiercely fought competition and open pricing. To get a transparent exchange going, Citadel offered the use of its technological prowess for a joint venture with the Chicago Mercantile Exchange, which is best-known as a trading outpost for contracts on commodities like coffee and cotton. The goal was to set up a clearinghouse as well as an electronic trading system that would display prices for credit default swaps.

Big banks that handle most derivatives trades, including Citadel’s, didn’t like Citadel’s idea. Electronic trading might connect customers directly with each other, cutting out the banks as middlemen.

So the banks responded in the fall of 2008 by pairing with ICE, one of the Chicago Mercantile Exchange’s rivals, which was setting up its own clearinghouse. The banks attached a number of conditions on that partnership, which came in the form of a merger between ICE’s clearinghouse and a nascent clearinghouse that the banks were establishing. These conditions gave the banks significant power at ICE’s clearinghouse, according to two people with knowledge of the deal. For instance, the banks insisted that ICE install the chief executive of their effort as the head of the joint effort. That executive, Dirk Pruis, left after about a year and now works at Goldman Sachs. Through a spokesman, he declined to comment.

The banks also refused to allow the deal with ICE to close until the clearinghouse’s rulebook was established, with provisions in the banks’ favor. Key among those were the membership rules, which required members to hold large amounts of capital in derivatives units, a condition that was prohibitive even for some large banks like the Bank of New York.

The banks also required ICE to provide market data exclusively to Markit, a little-known company that plays a pivotal role in derivatives. Backed by Goldman, JPMorgan and several other banks, Markit provides crucial information about derivatives, like prices.

Kevin Gould, who is the president of Markit and was involved in the clearinghouse merger, said the banks were simply being prudent and wanted rules that protected the market and themselves.

“The one thing I know the banks are concerned about is their risk capital,” he said. “You really are going to get some comfort that the way the entity operates isn’t going to put you at undue risk.”

Even though the banks were working with ICE, Citadel and the C.M.E. continued to move forward with their exchange. They, too, needed to work with Markit, because it owns the rights to certain derivatives indexes. But Markit put them in a tough spot by basically insisting that every trade involve at least one bank, since the banks are the main parties that have licenses with Markit.

This demand from Markit effectively secured a permanent role for the big derivatives banks since Citadel and the C.M.E. could not move forward without Markit’s agreement. And so, essentially boxed in, they agreed to the terms, according to the two people with knowledge of the matter. (A spokesman for C.M.E. said last week that the exchange did not cave to Markit’s terms.)

Still, even after that deal was complete, the Chicago Mercantile Exchange soon had second thoughts about working with Citadel and about introducing electronic screens at all. The C.M.E. backed out of the deal in mid-2009, ending Mr. Griffin’s dream of a new, electronic trading system.

With Citadel out of the picture, the banks agreed to join the Chicago Mercantile Exchange’s clearinghouse effort. The exchange set up a risk committee that, like ICE’s committee, was mainly populated by bankers.

It remains unclear why the C.M.E. ended its electronic trading initiative. Two people with knowledge of the Chicago Mercantile Exchange’s clearinghouse said the banks refused to get involved unless the exchange dropped Citadel and the entire plan for electronic trading.

Kim Taylor, the president of Chicago Mercantile Exchange’s clearing division, said “the market” simply wasn’t interested in Mr. Griffin’s idea.

Critics now say the banks have an edge because they have had early control of the new clearinghouses’ risk committees. Ms. Taylor at the Chicago Mercantile Exchange said the people on those committees are supposed to look out for the interest of the broad market, rather than their own narrow interests. She likened the banks’ role to that of Washington lawmakers who look out for the interests of the nation, not just their constituencies.

“It’s not like the sort of representation where if I’m elected to be the representative from the state of Illinois, I go there to represent the state of Illinois,” Ms. Taylor said in an interview.

Officials at ICE, meantime, said they solicit views from customers through a committee that is separate from the bank-dominated risk committee.

“We spent and we still continue to spend a lot of time on thinking about governance,” said Peter Barsoom, the chief operating officer of ICE Trust. “We want to be sure that we have all the right stakeholders appropriately represented.”

Mr. Griffin said last week that customers have so far paid the price for not yet having electronic trading. He puts the toll, by a rough estimate, in the tens of billions of dollars, saying that electronic trading would remove much of this “economic rent the dealers enjoy from a market that is so opaque.”

“It’s a stunning amount of money,” Mr. Griffin said. “The key players today in the derivatives market are very apprehensive about whether or not they will be winners or losers as we move towards more transparent, fairer markets, and since they’re not sure if they’ll be winners or losers, their basic instinct is to resist change.”

In, Out and Around Henhouse

The result of the maneuvering of the past couple years is that big banks dominate the risk committees of not one, but two of the most prominent new clearinghouses in the United States.

That puts them in a pivotal position to determine how derivatives are traded.

Under the Dodd-Frank bill, the clearinghouses were given broad authority. The risk committees there will help decide what prices will be charged for clearing trades, on top of fees banks collect for matching buyers and sellers, and how much money customers must put up as collateral to cover potential losses.

Perhaps more important, the risk committees will recommend which derivatives should be handled through clearinghouses, and which should be exempt.

Regulators will have the final say. But banks, which lobbied heavily to limit derivatives regulation in the Dodd-Frank bill, are likely to argue that few types of derivatives should have to go through clearinghouses. Critics contend that the bankers will try to keep many types of derivatives away from the clearinghouses, since clearinghouses represent a step towards broad electronic trading that could decimate profits.

The banks already have a head start. Even a newly proposed rule to limit the banks’ influence over clearing allows them to retain majorities on risk committees. It remains unclear whether regulators creating the new rules — on topics like transparency and possible electronic trading — will drastically change derivatives trading, or leave the bankers with great control.

One former regulator warned against deferring to the banks. Theo Lubke, who until this fall oversaw the derivatives reforms at the Federal Reserve Bank of New York, said banks do not always think of the market as a whole as they help write rules.

“Fundamentally, the banks are not good at self-regulation,” Mr. Lubke said in a panel last March at Columbia University. “That’s not their expertise, that’s not their primary interest.”

25 Responses

  1. deb Wynn you are absolutely correct. I have been preaching the same doctrine while was doing my MBA in the late eighties. The professors and others thought I was crazy . Over the last ten years I can only chuckle at our stupidity.

  2. deb Wynn

    Great post.

  3. Ian – and others

    We know the truth here — question is —- how do we tackle as a group???

    When we will get a say?? Who will stand up for us as a whole??

    Cannot sue DOJs — for failure to do job. So — who can we sue — and who would be willing to take this on???

    Cover-ups continue.

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  5. Economic War Explained
    Posted on January 4, 2011 by Foreclosureblues
    Economic War
    Yesterday, January 03, 2011, 9:00:24 PM | Michael

    Most Americans have no idea what an “economic war” is, and even fewer realize that economic warfare is being waged against the United States right now. For generations, it has been drummed into our heads that “free trade” is always a good thing and that truly free trade will always benefit both sides in the long run. None of our universities teach that trade can actually also be used as a brutally effective weapon of warfare and that economic warfare can bring down entire societies. Nowhere in the mainstream media will you even get a hint that other nations are purposely trying to damage the U.S. economy for their own benefit. But in a world where a “shooting war” with the United States is virtually unthinkable, those that wish to damage the U.S. must resort to other means to accomplish their goals.

    The American people need to wake up and stop being so naive. The truth is that much of the rest of the world absolutely hates our guts. They resent our dominance and they are tired of us imposing our will on the rest of the globe. For generations, Americans have been taught to view themselves as “the good guys”, but the sad fact of the matter is that most of the rest of the world does not view us as “the good guys” anymore.

    In fact, there are quite a few nations out there that would actively like to do us harm.

    So if they can’t shoot at us, then how can they harm us?

    Well, they can try to destroy us financially and economically.

    Today, major exporting nations around the globe are draining the United States of wealth, they are stealing our industries and they are feeding our national debt addiction.

    For some of these nations, they may not actively want to destroy our economy, but they sure do want to steal what we have got. They are more than happy to keep trading with us as long as they keep getting wealthier and their national economic infrastructure continues to get built up. The fact that their economies are getting stronger at the expense of the U.S. economy is not really a huge concern for nations in this category.

    However, there are also quite a few nations that do actively wish to do harm to the United States. If trading with the United States will cause the U.S. to become poorer and to go into more debt, then that is a tool that they can use to reduce the power and influence of the Americans in the world.

    Is this something that really happens? Yes. Do yourself a favor some time and read some economic articles and research papers from the other side of the world. In some of these countries they are not afraid to openly talk about economic war.

    So what are some of the goals of economic warfare?

    Well, when it comes to the United States, the goal is to induce big corporations (or even entire industries) to leave the U.S. and set up shop somewhere else. The idea is that the economic infrastructure of the United States will decline while the economic infrastructure of the “attacking nation” will be built up. The jobs and wealth creation that once were a benefit to America will now benefit someone else.

    Another goal is to transfer wealth from the target country (the United States) to the attacking country. Each month the United States buys tens of billions of dollars more stuff from the rest of the world than they buy from us. Each month we send them big chunks of our national wealth and they send us oil and cheap plastic trinkets which we greedily consume. As this continues month after month after month, the rest of the world is getting richer while the United States is becoming poorer.

    In a desperate attempt to maintain our standard of living, our federal government, our state governments and even our local governments are going into insane amounts of debt. Debt is another tool of economic warfare. As we continue to borrow trillions of dollars from the rest of the world, the ability of the United States to exert power and control over those nations diminishes.

    The eventual goal of waging economic warfare against the United States is to make us so impoverished and so far in debt that our entire financial system crashes. If the U.S. experiences a “financial armageddon”, it will greatly reduce America’s place in the world. It could ultimately lead to the collapse of the U.S. government. Other nations (or organizations) that wish to have more power would then be able to fill the void that would be created.

    So what are the tools of economic warfare?

    One is currency manipulation. By keeping national currencies at an artificially low level, major exporting nations make their own exports much more attractive, thus stimulating job growth and wealth creation in their own nations.

    Another tool of economic war is government subsidization of industries. Virtually all governments do this to some degree these days, but some take it much farther than others.

    For example, there are some governments in Asia that will openly pump huge piles of government money into industries that are considered to be of “national interest”. There is simply no way that western industries can compete on an equal footing against that kind of unfair advantage.

    In the United States, companies face one of the highest overall tax rates in the world, they face mountains of ridiculous regulations and they have to provide health care and retirement benefits for their employees. But in other areas of the world the government takes care of health care for everyone, regulations are much less strict and corporate tax rates are much lower.

    Is it any wonder why so many U.S. companies are having such a hard time today?

    Another weapon of economic warfare is technology theft.

    U.S. companies spend billions upon billions of dollars developing new technology that gets “stolen” one way or another by many foreign governments.

    For example, there is one major Asian nation that offers huge tax incentives and kickbacks to big companies to get them to come over and set up shop there. But these companies are also required to train and hire local workers and they must agree to certain “technology disclosures”.

    Well, after a time the host nation sets us their own “domestic competitors” using the technology that they have acquired from the foreign company. Then the “domestic competitors” are tremendously subsidized and are given huge advantages that the original foreign company simply cannot compete with. Eventually the “domestic competitors” become the dominant players in the market.

    This is happening over and over and over. Companies are shutting down operations in the United States and are opening up facilities in other nations where the labor is much cheaper, where regulations are not nearly as suffocating and where taxes are much lower. However, once these other nations learn the technology and are able to set up “domestic competitors”, the original companies are learning that maybe it wasn’t such a sweet deal they were being offered after all.

    As the U.S. is being stripped of industry and is being deindustrialized, the American middle class is being absolutely devastated. Since the year 2000, we have lost 10% of our middle class jobs. In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs. Sadly, the millions of jobs that have been sent overseas are never coming back.

    Meanwhile, our national wealth is being drained from our bank accounts. Back in 1985, the U.S. trade deficit with one particular Asian nation was just 6 million dollars for the entire year. But for this past August alone, the trade deficit with that same nation was over 28 billion (that’s billion with a “b”) dollars.

    In other words, the U.S. trade deficit with that one Asian nation in August was more than 4,600 times larger than the U.S. trade deficit with that Asian nation was for the entire year of 1985.

    So how are we maintaining our high standard of living if we are shipping all of our wealth overseas?

    Well, what we are doing is going back to all those nations where we have sent our wealth and we are begging them to loan it back to us.

    Our federal government now owes trillions of dollars to major exporting nations. Our state governments also owe insane amounts of money to major exporting nations. We are in debt up to our eyeballs and it gets worse every single year.

    Meanwhile, our national economic infrastructure is being absolutely ripped to shreds….

    *Back in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, only 9 percent of the jobs in the United States are manufacturing jobs.

    *The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

    *Since 2001, over 42,000 U.S. factories have closed down for good.

    *As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time that less than 12 million Americans were employed in manufacturing was in 1941.

    *Manufacturing employment in the U.S. computer industry was actually lower in 2010 than it was in 1975.

    The sad truth is that the U.S. is being dominated even in very high-tech industries. The major exporting nations are becoming rich by creating wealth and we are becoming poor by voraciously consuming wealth.

    Unfortunately, some of the major exporting nations that we have a massively imbalanced trade relationship with are doing this to us on purpose. They see our weakness and the are taking advantage of it. They believe that it is in their own national interests to make the United States weaker.

    Sadly, a very significant percentage of those that will read this article will not believe it. Most Americans have been so brainwashed when it comes to trade that they could never even conceive that it could possibly be used as a weapon of economic war.

    But the truth is that there are even many prominent Americans that openly talk of weakening the U.S. economy and of reducing the standard of living of the U.S. middle class so that we can be more easily merged into the emerging global economic system.

    It is time to wake up. The United States is under economic attack.

    More jobs are going to leave the United States this month. More factories are going to leave the United States this month. Tens of billions more dollars of our national wealth is going to be transferred out of the country this month. Our federal, state and local governments are all going to go into more debt to foreigners this month.

    Month after month after month this goes on. It is being done by design.

    Perhaps when the entire U.S. financial system collapses the American people will finally begin to understand. The truth is that the greatest threats to our national security are not some impoverished goat herders hiding out in caves in Afghanistan. Rather, the cold, hard reality of the situation is that our national economic infrastructure is being ripped apart and stolen right in front of our eyes and we have become so dumbed-down that we don’t even understand what is happening.

    If you want to see “the future of America”, just tour some of the formerly great industrial centers of the upper Midwest some time. Ask yourself why “the greatest economy on earth” has so many abandoned factories and boarded-up homes. There are many decaying communities across America right now that are so depressing that the moment you enter them you get the sense that all of the hope has been sucked right out of them.

    The U.S. economy is under attack and it is dying. We are being looted and pillaged from coast to coast. This is really happening.

    So what do you think about all of this? Please feel free to leave a comment with your opinion below….

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  6. brian davies- it would appear to me that Randall S. Miller, atty. for the movant, has his hands full,thanks to you- he is right now, probably:
    *dreaming of another line of work
    *screaming at his wife or kids due to stress,which is due to his unlawful behavior
    *considering therapy
    *cancelling next year’s law school reunion

    Keep the pressure on and keep us posted. Best wishes,Ian Sopko

  7. America is is in deep sh###t

  8. http://www.scribd.com/doc/40259202/Occ-Amended-Complaint-10-26-10

    ONEWEST MOVANT AND DEBTOR OBJECTION TO IT

  9. ANONYMOUS

    Phil Gramm and Bill Clinton are nothing but usurious bastards who need to be tarred and feathered then branded with 666 on their foreheads then put on a ship to Nigeria with nothing but bread and water for at least the next 5 years.

  10. b davies:

    I think you posted it before, but do you have the link to your opposition to the M4ROS that was denied?

  11. The Support Needed to make Available the Financial Support Needed in TODAY’S Housing Market.
    By M.Soliman

    Here we have the support we needed that offered last year this time- you be the judge – (Show me the money)

    US Bancorp (NYSE: USB) announced today that its lead bank, U.S. Bank National Association, was selected by Fannie Mae and Freddie Mac to act as administrator and closing agent for the Temporary Credit and Liquidity program and the New Issuance Bond program for Housing Finance Agencies (HFAs).

    U.S. Bancorp| USB In its role as closing agent, U.S. Bank provided operational support in the closing of more than 100 HFA bond issues, and as administrator, will perform various administrative and operational functions to support these ongoing programs.

    This initiative will enable HFAs to continue to make available the financial support needed in today’s housing market.

    The HFA’s will accomplish this by providing low interest rate mortgages and by expanding resources for low and middle income borrowers to purchase or rent homes that are affordable over the long term.

    Both programs were designed and implemented by the U.S. Treasury, Federal Housing Finance Agency, U.S. Department of Housing and Urban Development, Fannie Mae and Freddie Mac to provide greatly needed financial support to state and local HFAs.

    expert.witness@live.com

  12. This reminds me of the Movie The Godfather. Where the Head Mobsters Would meet in upstate New York or something like that.

  13. ANONYMOUS- speaking of bankruptcy attorneys, there is a new heading in Max Gardner’s website titled securitized loans or securitizations,or similar,with a short video which is pretty good- it wasn’t there the last time I perused his site. As to your comments, we all know that the Trusts are nonexistent, sort of reminds me of my business incorporation in ’86, I was confused when I realized that the corporation was just a bunch of papers in a box, with some annual filings and fees sent to the state each year. And up to that point in my life, I was in awe when people spoke of corporations, estates,trusts,etc. It was then, and is now, an illusory curtain of deceit, to keep the masses at bay,cowering behind a lack of knowledge,afraid to speak up. How’s that for creative writing?! Keep the details coming.

  14. http://www.scribd.com/doc/46232980/Deutsche-Bank-Response-to-Subpoena-01-03-2011-re-davies-central-district-california-case-no-6-10-bk-37900-td-and-ap-6-11-ap-01001

    THIS WAS THE SUPOENA RESPONSE BY DEUTSCHE BANK.

    NOTICE THE CLOSING DOC SCREEN PUT INTO THE DOCS TWICE. FUNNY MERS AND OPTEUM HAVE DIFFERENT DOCUMENTS.

  15. b davies

    Think you are onto something very important as related to bankruptcy. Your research and hard work — may very well be the beginning of a good new year!!!!

    Also trying to open the minds of bankruptcy attorneys — to your thoughts– and mine — and hope they will stop worrying just about where they will get their hair done next. (seems to be a concern of many attorneys). Ha- Ha.

    Happy New Year — b davies.

  16. Neil

    The nitty gritty. Still — deregulation by any name. Congress ALLOWED this to happen. Thank Phil Gramm and Bill Clinton (and successors).

    The issue in court that is NOT being decided is whether or not derivatives are “part” of the original trust — that is, cash flows passed directly to certificate holders in the original trust. They are NOT.

    Attorneys are getting away with fraud in courts by attaching themselves to the shoe strings of a dissolved trust – by derivatives that are far removed — and by their very function — will not remit cash flows to the original certificate holders and subsequent MBS security holders. Derivatives are derivatives — and not part of the trust — they are CONTRACTS — and NOT securities. But, judges – not the most financially astute — just do not WANT to get it.

    Understand that over the past year to year and half — the distressed debt market (fueled by derivatives) has been frozen. This is because the US Government purchased mezzanine tranches and Credit default swaps with attached collection rights. And, government itself disposes of to distressed debt buyers — it was their purpose.

    Any foreclosure action commenced prior to 2009 – collection rights had already been executed elsewhere — after that — the government did it for the banks. Now hearing that distressed debt buying/hedge funds have recommenced direct buying from banks. Oh — HAPPY DAYS ARE HERE AGAIN — according to those buyers.

    But, as much as I emphasize deregulation as the source of the acts — the problem is NOT deregulation itself — the problem is the criminal activity that escapes investigation by any consumer protection agency — or agency in general – due to a system that has lost checks and prosecution for behavior that abuses the system.

    All in control — perhaps, truly believed that deregulation was regulated by an “honor” system. HAH!! This did not happen. Deregulation allowed a decent system to go haywire — without any consequence of prosecution.

    Who is to blame?? DOJs that ignored complaints that have been filed tor years. DOJs — that really do not know what is going on — do not understand financial engineering and maneuvering— and abuse.

    Time for DOJs — to do their job. We pay them. They are responsible to US. No more hiding — no more not doing your job.

    BofA settled with Fannie/Freddie. Investors are winning — because the SEC is behind them. WHO IS BEHIND THE HOMEOWNER VICTIMS??? Who is supposed to be behind the homeowner victims?? Who has not been been behind the homeowner victims for years???

    Answer — The DOJs.

  17. b davies,
    How’s your case going? How can I get ahold of PAUL NGUYEN, I wanna ask him how he managed to do the same things I did, in the same Court I was and was able to get the same relief I was Denied a few months prior.

  18. Brian Davies- nice piece of work! To a non-lawyer like myself, all the illegalities which you have raised seem to mirror the exact same issues in a standard foreclosure defense, and yet yours is an AP in a bankruptcy proceeding. Am I just thickheaded, or has no one really brought this to the attention of LL readers. That the issues are identical regardless? Anyway, great job.

  19. http://www.scribd.com/doc/46231292/DAVIES-ADVERSARY-COMPLAINT-VS-DEUTSCHE-BANK-NATIONAL-TRUST-COMPANY-AS-TRUSTEE-OF-RAST-2007-A5-PAUL-NGUYEN-RJN-1-RJN-2-FILED-1-2-11-Re-Davies-A

    THIS DOCUMENT IS A COMPILATION OF ALL STATE, UCC, NY TRUST LAWS, PSA, PROSPECUTS, AND REAL ESTATE LAWS—DOCUMENTS THAT I HAVE STUDIED OVER THE LAST 1 YEAR.
    THIS ADVERSARY COMPILED AND SUBMITTED BY GLOBAL CAPITAL LAW, PC OF HUNNINGTON BEACH, CALIFORNIA IS THE BEST. THIS COMPLAINT WITH EXHIBITS COVERS MOST EVERYTHING.

    THIS SHOULD HELP MANY WHO TAKE THE TIME TO UNDERSTAND THE BANKRUPTCY FUNDAMENTAL PROCESS AS PAUL NGUYEN HAS DONE AND DEDICATED HIMSELF TO WORK MANY LONG HOURS TO FIGHT THE FIGHT IN CALIFORNIA. SPECIAL THANKS TO THE DUTCHMAN, DAN E,NEIL G. DENOTOS, DOUG R., JAMES M. AND MANY OTHERS WHO HAVE GIVEN TO HELP ALL OF US.

  20. […] This post was mentioned on Twitter by Anti Bankers. Anti Bankers said: SECRET BANKING ELITE: WHERE THE REAL DECISIONS ARE MADE « Livinglies's Weblog http://t.co/iZkIZRh via @AddThis […]

  21. […] Source Tagged with: . No comments to this post. […]

  22. I would like to suggest that we all save Neil’s excellent and hard work posted on this site, as it might go on the hit list soon. Don’t assume that helpful sites will always be available to browse. I already get many more 404 screens than ever before. I am extremely concerned about the sudden Internet control given to a select few of late. Is it just a coincidence that this is happening at the same time banks are being outed? Just try to imagine where we would be in this war without the Internet.

    Eminent domain and Internet control just seemed to have come out of the blue and were quickly placed and protected in law from Washington. Just before the banking and property rights crisis.

    Where was/is the OUTRAGE!

    At times, I think something is being added to food to stop blood flow to the brain. Or perhaps, venting on the Internet dilutes the outrage to nothing more than mere commentary.

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