Sunday, June 28, 2009

Timothy Geithner

Is Timothy Geithner a fool or a very wise and calculated nemesis?

On October 15, 2003, Timothy Geithner was appointed President of the Federal Reserve Bank of New York. He replaced William McDonough who had been the President for ten years when Geithner assumed the position.

McDonough is currently Vice Chairman and Special Advisor to the Chairman at Merrill Lynch Co., (owned by BOA) responsible for assisting senior management in the company's business development efforts with governments and financial institutions. Stepping back in time, in 1998 we witnessed under McDonough’s watch (at the Fed) the first collapse of the Credit Default Swaps (CDS), a derivative.

Long-Term Capital Management's use of these derivatives and leverage required a massive $3.6 billion hedge fund bailout organized by McDonough, and the New York Federal Reserve Bank. After the fiasco rocked the markets, the administration of Bill Clinton was on the spot. Would it push for tighter regulation of this new form of investment vehicle? Would it rein in the derivatives markets? Would it do anything? The answer was a resounding – “NO”. Clinton advisors Alan Greenspan and Arthur Levitt then the Chairpersons of the Federal Reserve and the Securities and Exchange Commission, respectively, and Clinton's Treasury secretary, Robert Rubin, all counseled against interfering. Interestingly, no action was taken. Instead, Clinton under the same counsel rescinded major protections of Glass-Steigel allowing these derivatives to be more fully and freely marketed by the Banks.

Five years later, in 2003, enter Timothy Geithner now President of the Federal Reserve Bank of New York. With full knowledge of the 1998 collapse of these derivatives and understanding how they work, and the massive bailout that had recently been required, and as an economist, Geithner completely understood the potential risks of allowing this derivative to be marketed freely without restriction or accountability; nevertheless, Geithner aids Greenspan and Wall Street Banks to promote them.

Now Greenspan we already know was a fool disguised as a wise man - his insidious undermining of Glass Steigle and having been a student of historical economics, knowing both its necessity and how well it served to restrain the Bankers from again taking this country into the throngs of depression - first waters down its application, then promotes its repeal. However, Geithner was at the time relatively unknown to the majority of Americans, Geithner and Greenspan had a common demon “The Counsel on Foreign Relations” both are deeply involved in this august body.

Alan Greenspan
Greenspan has served as a Corporate Director for: Aluminum Company of America (Alcoa), Automatic Data Processing Inc., Capital Cities/ABC Inc. (News and entertainment), General Foods Inc., J. P. Morgan Co. Inc., Morgan Guarantee Trust Company of New York (Banking interests), Mobile Corporation(Oil), and The Pittston Company (now knows as Brink’s).

He was a director of the Council on Foreign Relations between 1982 and 1988. He also served as a member of the “influential” Washington-based financial advisory body, the Group of Thirty in 1984. This group currently advocates for the government to enhance the role of the Central Bank (the Federal Reserve). Obama is following their lead and legislation in this regard is currently being considered and is sure to pass Congress.

The Group of Thirty (G30) is an international body of leading financiers and academics that aims to deepen understanding of economic and financial issues and to examine consequences of decisions made in the public and private sectors related to these issues.

Topical areas within the interest of the group include: Foreign Exchange, Currency, etc, International Capital Markets, International financial institutions, Central Banks and supervision of financial services and markets, and Macroeconomic issues such as product and labor markets, etc.

The group consists of thirty members and includes the heads of major private banks and central banks, as well as members from academia and international institutions. It holds two full meetings each year and organizes seminars, symposia, and study groups.

G30 created the defining principles for the reinsurance market, Derivatives, known as Credit Default Swaps.

Geoffrey Bell (a Banker and current executive secretary of the organization) founded the Group of Thirty in 1978 at the initiative of the Rockefeller Foundation, which also provided initial funding for the body.

Its first chairperson was Johannes Witteveen, Finance Minister of the Netherlands and the former managing director of the International Monetary Fund. Its current chairperson of trustees is Paul Volker, Chairman of the Federal Reserve from August 1979 to August 1987.

Timothy Geithner
Geithner worked for Kissinger and Associates (a Consulting Group) in Washington D. C., from in 1985 to1988 then joined the International Affairs division of the U. S. Treasury Department.

He was deputy assistant secretary for international monetary and financial policy (1995–1996), senior deputy assistant secretary for international affairs (1996-1997), assistant secretary for international affairs (1997–1998).

Timothy Geithner’s relationship with the infamous Henry Kissinger

Who is Kissinger really?

Kissinger was Study Director in Nuclear Weapons and Foreign Policy at the Council on Foreign Relations (1955-1956) where he has remained active, he also was a frequent guest at the White House and deeply involved in the planning stages for the Iraq war. Kissinger favored the maintenance of friendly diplomatic relationships with right-wing military dictatorships, and was involved with the CIA in Operation Condor to develop and support right-wing military dictatorships in the Southern Cone and elsewhere in Latin America, e.g. Argentina, Bolivia, Brazil, Chile, Paraguay and Uruguay.

When Chilean Socialist, Salvador Allende, was elected President by a plurality in 1970, it caused serious concern in Washington, this was due to his openly socialist and pro-Cuban politics.

The Nixon Administration authorized the CIA to instigate a military coup that would prevent Allende's inauguration, but the plan was not successful. The CIA's plans to impede Allende's investiture as President of Chile were known as "Track I" and "Track II".

Track I sought to prevent Allende from assuming power via so-called "parliamentary trickery", while under the Track II initiative, the CIA tried to convince key Chilean military officers to carry out a coup.

Kissinger was instrumental in the formation of these plans, and was involved in what turned into the murder of a Chilean General, Rene Schneider, who was opposed to and stood in the way of a military coup. After which, the CIA directly instigated by Kissinger, provided formation and education for the military officers directly involved in the coup against Allende, and funding for the mass anti-government strikes in 1972 and 1973 in an attempt to undermine the Chilean economy. During this period, Kissinger made several controversial statements regarding Chile's government, stating "the issues are much too important for the Chilean voters to be left to decide for themselves" and "I don't see why we need to stand by and watch a country go Communist due to the irresponsibility of its people."

These remarks sparked outrage among many commentators, who considered them patronizing and disparaging of both Chile's sovereignty and democracy.

In September 1973, Allende allegedly committed suicide during a military coup launched by Army Commander-in-Chief Augusto Pinochet, who became President. A document released by the CIA in 2000 titled "CIA Activities in Chile" revealed that the CIA actively supported the military junta after the overthrow of Allende (but fails to mention their involvement in the coup).

The CIA made many of Pinochet's officers paid contacts of the CIA or US military, even though many were known to be involved in notorious human rights abuses (which has never seemed to bother US political figures).

“Operation Condor” was a 1970s plan by seven South American dictatorships to wipe out leftist opposition in Latin America with behind-the-scenes support from Washington. The judges in Spain and France want to question Kissinger about the torture and illegal execution of French and Spanish citizens after the 1973 military coup in Chile.

How it all began: in late 1975, Operation Condor -- named after Chile's national bird -- was a joint operation of right-wing South American military dictatorships, working closely with U.S.-based Cuban and other anticommunist extremists on cross-border assassinations of political dissidents as far away as Europe.

Operation Condor is the code name for the collection, exchange and storage of intelligence concerning leftists, communists and Marxists, which was established between the cooperating services in South America in order to eliminate Marxist terrorists and their activities in the area. In addition, Operation Condor provided for joint operations against terrorist targets in member countries. Chile was the center for Operation Condor, and included Argentina, Bolivia, Paraguay and Uruguay. Brazil has also tentatively agreed to supply input for Operation Condor.

A third and more secret phase of Operation Condor involves the formation of special teams from member countries to travel anywhere in the world to non-member countries to carry out sanctions, including assassinations, against terrorists or supporters of terrorist organizations from Operation Condor member countries.

For example, should a terrorist or a supporter of a terrorist organization from a member country be located in a European country, a special team from Operation Condor would be dispatched to locate and survey the target. When the location and surveillance operation had terminated, a second team from Operation Condor would be dispatched to carry out the actual sanction against the target. Special teams would be issued false documentation from member countries that were a part of Operation Condor.

Details of Operation Condor were not fully exposed until 1992 when José Fernández, a Paraguayan judge, discovered what became known as the "terror archives", detailing the fate of thousands of Latin Americans secretly kidnapped, tortured and killed by the security services of Argentina, Bolivia, Brazil, Chili, Paraguay, and Uruguay. The archives provided details of 50,000 people murdered, 30,000 who "disappeared" and 400,000 imprisoned.

It was in May 2001, that Kissinger began to be hounded for his role and alleged scheming in the geopolitical arena; a French judge served Kissinger a summons to answer questions about the death of French citizens during the Pinochet Regime, as well as his knowledge and involvement in the CIA "Operation Condor." Kissinger refused to appear or to take part. He chose to return to the U.S. that night, rather than respond to foreign inquiries and face the probability of serious sanctions himself.

Later Kissinger was about to fly to London when he discovered that a Spanish judge and a French magistrate were both requesting permission from Britain to question him about ‘Operation Condor.’

In another action, human rights lawyers have filed a criminal complaint against Kissinger and other American officials, accusing them of helping organize the covert regional program of political repression -Operation Condor-. As part of that plan, right-wing military dictatorships in Argentina, Bolivia, Brazil, Chile, Paraguay and Uruguay coordinated efforts throughout the 1970's to kidnap and kill thousands of their exiled political opponents. The US government is currently protecting Kissinger.

The US media silence on a French judge's summoning Kissinger to testify on Operation Condor is not a surprise considering that the CIA controls the US Media. However, the question remains unanswered; can the US demand others to cooperate with UN tribunals while it protects Kissinger from having to cooperate with other forums of international justice?

In 2002, Timothy Geithner left the Treasury to join the Council on Foreign Relations as a Senior Fellow in the International Economics department. He was director of the Policy Development and Review Department (2001-2003) at the International Monetary Fund.

Arthur Levitt
Levitt was the twenty-fifth and longest-serving Chairman of the United States Securities and Exchange Commission (SEC) from 1993 to 2001. Since May 2001, he has been employed as a senior adviser at the Carlyle Group, the war profiteering organization headed by George HW Bush and other CIA assets. The Carlyle Group and the CIA control CBS.

Robert Edward Rubin
Rubin served as the 70th United States Secretary of the Treasury during both the first and second Clinton Administrations. Before his government service, he spent 26 years at Goldman Sachs. His most prominent post-government role was as Director and Senior Counselor of Citigroup, where he performed ongoing advisory and representational roles for the firm. From November to December 2007, he served temporarily as Chairman of Citigroup. On January 9, 2009, Citigroup announced his resignation, after having been criticized for his performance. He received more than $126 million in cash and stock during his eight years at Citigroup. He was the fifth chairperson of the Counsel on Foreign relations

Causalities of Greenspan, Levitt, Rubin, and Geithner’s Economic Policy
Bear Sterns, (BSC) a casualty of its own mismanagement plus malfeasance from the Fed, is itself a party to over 900,000 CDS contracts, which upon the mortgage meltdown, initially sub-prime loans, began the collapse of the financial industry and the volume of foreclosures caused its demise. BSC was subsequently take over by J P Morgan (JPM).

Last year, on April 16, 2008, the International Swaps and Derivatives Association announced that outstanding contracts regarding Credit Default Swaps (CDS) now total $62 trillion, up from $34.5 trillion a year ago, and are probably closer to $90 trillion today.

Washington Mutual, also taken over by JPM, was one of more than 1000 companies included in the CDX (North America Investment Grade Index), the most actively traded contract in the credit swaps market. The exact number of contracts held by Washington Mutual has not been reported by the Depository Trust & Clearing Corp. which runs a central registry for credit-default swaps, but the actual value of these instruments has been confirmed recently to exceed $90 billion dollars.Lehman Bros CDS obligation was $72 billion. Again, no actual number of contracts has been disclosed.

With the Bank and Wall Street failures mounting, the government has pledged some $14 trillion dollars to bail out the banks, leaving the inevitable question, why did Geithner, Greenspan, Rubin and Levitt promote these debt obligations?

In addition, why has Obama retained Geithner’s services to clean up the mess Geithner created in the first instance?

The CDS is basically a bet between two parties on whether or not a company or a product will default. It is a third party speculation on the outcome of the CDO. (Credit Default Obligation). The original design is no more than insurance to cover a financial fixed income product in case of its default. Then, if anything changes, such as a company declaring bankruptcy or a debt being downgraded, it will trigger a claim.

Currently, the outstanding notional amount of all credit default swaps is about $62 trillion, more than the entire asset base of the “global” banking system.

Scary? You bet!

Credit default swaps are not normal insurance policies, as such, they escape the reserve requirements that an insurance company would be required to maintain. Each side or party can trade them to make a quick profit (spread) but only if there is a willing counterparty.

Commonly, after the original CDS contract is engaged, each side of the original two parties will try to engage another party to further hedge their bet and earn a small spread. Soon there are layers of layers of counterparties involved, with total notional amount increasing several fold, and no one knows whom they are, or whom they are dealing with.

You cannot monitor this risk since you do not know who your offset bettor down the CDS chain is, and whether he is even able to pay if you win. It is a form of big investor gambling.

This kind of entanglement has never been seen before in the usually highly regulated insurance industry. This is why they are traded in the OTC (over the counter) derivative markets which bypasses all government regulations.

This mess is what has forced the collapse of the entire banking system.

Now another question, what is to be gained by the collapse of the entire global banking system?

How about: consolidation and expansion. Look at the number of bank failures and those who took them over, example JPM took over Washington Mutual and Bear Sterns, Bank of America took over Countrywide and Merrill Lynch. The result may be only (4) large banking operations left that will be “too large to allow to fail.”

Of course, there is also a consideration now on the table, a global banking system. This was planned: the question to be answered is why? In the long term, we will discover the plan but perhaps only after it is fully implemented.