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Webster Tarpley: Geithner Rebuffed in His Bid to Defend Derivatives in Berlin

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posted on May, 30 2010 @ 06:21 AM
Webster Tarpley has written an article dated May 28, 2010 entitled "Wall Street Operative Geithner Rebuffed in Berlin on Mission to Make World Safe for Derivatives."

The concluding paragraph is:

As for the hedge fund hyenas, they are adamant about their intention to bring the crisis currently impacting the southern tier of the euro back home to the United States. In his New York Times article “Easy Money, Hard Truths,” David Einhorn, a leading hedge fund operator involved in the infamous February 8, 2010 Manhattan planning session for the current assault on Europe, is categorical in his forecast that the European crisis will happen here as well. To spare the American people endless and useless misery, it is imperative that we mobilize every legal and regulatory tool in the New Deal armory to put the hedge fund predators out of business while banning or taxing derivatives. The goal must be to prevent a needless national bankruptcy of this country and preserve the present constitutional system of representative government from the chaos and anarchy the speculators are eager to visit upon us.

Watch Webster explain the big picture in this video:

posted on May, 30 2010 @ 12:22 PM
Tarpley has been seriously disingenous here.

We have, since the creation of the Federal Reserve, centralized economic planning in this country. We cannot blame a Free Market system, that hasn't existed for 97 years, for all the failures of the individuals whom we vested control of our wealth.

The notion that the economy is deregulated is bull# of the lowest kind. We have crony capitalism, which means the regulations we face today are designed to make the little guy fail and the Big Boys get to reap the rewards of that failure. It's favoritism, it is institutionalized corruption, it stems from government itself as it flirts with corporatism.

To support the Chinese model, with 38 million people living in squalor, is ridiculous. But our circumstance in this country, especially when you take into account the unemployed and those on foodstamps, is a product of following this corrupt model. Tarpley should do more homework.

Edit to add:

I do agree with him on derivatives.

[edit on 30-5-2010 by projectvxn]

posted on May, 30 2010 @ 02:48 PM

Originally posted by projectvxn
The notion that the economy is deregulated is bull# of the lowest kind.

I believe he is referring to derivatives here.

Originally posted by projectvxn
To support the Chinese model. . .

I believe he was talking about productive activity as opposed to investing in financial instruments such as derivatives.

Webster has lots of ideas about what needs to be done:

posted on May, 30 2010 @ 05:53 PM
reply to post by Mary Rose

OTC derivatives should be forced onto a public exchange or abolished altogether. As I said, I agree with him on derivatives. But I disagree with the notion that government should do the things he's advocating as a means of economic growth. The government will wind up going broke trying to maintain the infrastructure. It is the reason the New Deal policies stretched the depression until after WW2.

If it hadn't been for the devastation the world suffered Americans would have been drowning in debt and the US would have collapsed. The Marshall Plan was the only good thing to come out of that and it wasn't part of the New Deal.

[edit on 30-5-2010 by projectvxn]

posted on May, 30 2010 @ 06:14 PM

Originally posted by projectvxn
The government will wind up going broke. . .

We also need monetary reform. I like Ellen Brown's ideas:

posted on May, 30 2010 @ 06:45 PM
reply to post by projectvxn

You're exactly right friend.. The economy is, for the most part, highly regulated.. too regulated in fact I would say (stifles growth and employment, not to mention chases corporations over seas)..

The only aspect of the economy NOT regulated was the Derivatives market.. one single aspect of the economy, which happened to be the most enormous monetary wise..

But even in it's self the deregulation of regulation for the benefit of a very select few individuals (in the grand scheme of things) and specific corporations, cannot in fact even be called deregulation, for the deregulation or regulation for such targeted reasons is indeed the regulation of access to such lucrative wealth, left completely unchecked and mismanaged and allowed, for the sake of greed, fear and ignorance, to grow far beyond proportion to the actual economy.

It was, by all means of the definition, a total monetary Coup d'Eta .. The Federal Reserve serves it's purpose, that's one thing, I understand the "Purpose" behind it -- detach politics with economics, and allow economic institutions to regulate the monetary policy .. else with each election comes a major swing in policy, and thus the economy becomes far more volatile (as was the case before the Reserve) .. However when CEO's of major banking institutions can convince the Federal Reserve to look the other way, even ASSIST in this fraud .. then it's safe to say the Federal Reserve is no longer politically impartial, it serves the Plutocracy exclusively, and our monetary policy is bent to favor the elite wealth of domestic and foreign institutions over the well being of the country in general.

The reason for my rambling: Because the products are born in such an insidious manor, because it benefited only a few people who misappropriated their power, because they are to confusing for the Government to understand, and because they often carry massive conflicts of interest.. most derivatives should be voided out, deleted, destroyed, and put behind us. Anyone who put their wealth into such products will loose it, and institution dependent on it, will die. Though I don't ever expect the members of Congress to actually do anything about. They don't even understand what's going on .. they are mostly civil lawyers and ambulance chasers, not economist, men of renowned intellect, or have the faintest idea of what it means to truly serve their country above themselves.

posted on May, 30 2010 @ 07:40 PM
reply to post by Rockpuck

Actually derivatives are tightly regulated, just not the OTC Derivatives. I am guessing you meant that anyway. I guess the term OTC pretty much signifies this but anyway. Ever tried trading a OTC Penny stock..? lol Never know what you are getting into.

posted on Jun, 1 2010 @ 07:08 AM

Originally posted by Mary Rose
Webster Tarpley has written an article dated May 28, 2010 entitled "Wall Street Operative Geithner Rebuffed in Berlin on Mission to Make World Safe for Derivatives."

The next to the last paragraph is:

Geithner has also talked about stress tests for European banks. It should be recalled that the stress tests for US banks carried on last year under Geithner’s supervision were worse than useless, since they systematically excluded from consideration the main cause for bank insolvency in the current era – off-balance-sheet toxic derivatives. This blatant mockery should not be repeated in Europe.

[edit on 6/1/2010 by Mary Rose]

posted on Jun, 1 2010 @ 08:20 AM
reply to post by Mary Rose

I find it funny you keep making threads and posts about derivatives and it is apparent you don't know anything about them.

Educate yourself here. This should keep you busy for days. The CME is where most of the worlds active derivatives trade. You seem to have quite a big misconception.

OTC Derivatives have been largely publicized for no good reason other than our government trying to lay blame on someone else than themselves. See GS hearings a couple months ago. OTC Derivatives didn't cause anything to happen that wasn't going to happen with lax govt. policy with their hands in all pockets.

It has obviously worked because there are people like you that go on and on about nothing in reality when you really have absolutely no clue what you are talking about. Then you see these big numbers in media, when in reality they represent anything but. You can manipulate numbers in many ways to fit an agenda. The media has done this well in the past and continues to do so. A good example would be the endless amounts of posts on this website pertaining to numbers like 1,543 Trillion Derivative bubbles etc.. god what a joke.

So anyway, all I am saying is actually learn what a regulated derivative is first, then go from there. You are clueless, but it's OK, because there is a wealth of information just starting with the link I posted.

Good luck on your educational journey.

posted on Jun, 1 2010 @ 12:17 PM
reply to post by GreenBicMan

I agree entirely. While I do feel that the OTC derivatives market dangerously overleveraged, it is not enough to say that these instruments are the problem. Because they're not. Many of them are, but it is only a direct result of government playing favorites and not enforcing their own rules.

If the gov had actually been doing their jobs we wouldn't be having this discussion.

[edit on 1-6-2010 by projectvxn]

[edit on 1-6-2010 by projectvxn]

posted on Jun, 1 2010 @ 01:10 PM
reply to post by projectvxn

haha - touche

This is quite simply the govt. #up - and now the govt. is being the govt. and having to blame someone other than themselves of course.

All these OTC DER. are is INSTITUTIONAL INSURANCE and they have nothing to do with "main street". It is such a joke but once more they have proved to be able to fool 95% of America.

I can't say I can put the blame on most people bc if you are not educated on the subject I guess I could see how you could fall for this nonsense.

The thing they keep pimping are these ridiculous numbers that make the public go "oooohhh! see how bad these are!!" Except there is one important point - they aren't true. Jesus...

While if anyone bothered to watch the GS hearing and see how incompetent our elected rep's think we are it is enough to make your head spin.

All it takes is your own research for 20 minutes on the subject to see this is just the same game being played by congress once again. But don't expect more than 2% of America to figure it out. The people that think they aren't "sheeple" most definitely are indeed. That is the irony here.

EDIT _ btw you are a moderator? when did that happen?

[edit on 1-6-2010 by GreenBicMan]

posted on Jun, 1 2010 @ 03:15 PM
I'd like to take a moment to compare regulated and unregulated derivatives.

Take futures or options as an example of a regulated derivative. Both are traded on a central exchange where the bid, ask, and open interest are available for anyone who wants to trade in them. Leverage is regulated through margin requirements.

What gets me about OTC derivatives isn't the fact that they exist. I feel that in most cases if someone wants to speculate on something someone will (and probably should) create a product that allows it. The problem is that there is no transparency (bid/ask/OI) or margin requirement in these OTC instruments. A ton of these OTC derivatives are on the books of "bailed out" institutions at par.

The reason that the fat cats don't want any regulation of these things is that if a published bid ask were given they would have to mark these things at a value much less than what they are holding them at on (and off
) their balance sheet.

[edit on 1-6-2010 by jefwane]

posted on Jun, 1 2010 @ 06:55 PM
reply to post by GreenBicMan

Woah there buddy... hold on a sec... before you continue with you're sheeple talk you have some esplainin to do..

OTC Derivatives are the LEAST regulated of all financial instruments. Hell man, their name alone signifies their own detachment from the rest of the market..

Over the Counter Derivatives have the least regulation when it comes, specifically, to the release or explanation of INFORMATION.. because there is no regulation that says one must present such information such as, in the case of a Collateralized Debt Obligation (the product that destroyed America) what is INSIDE the "box" so to speak. The sale was from huge corporations who bundled horrible debts into big packages, then sent agents out to cities, companies, rich folks, charities, churches you name it.. and sell it as gods gift to investors. And people bought it. CDO's are OTC Derivatives. Completely, and utterly, unregulated.

Next. Credit Default Swaps (CDS) .. The product that singlehandedly destroyed the financial institutions. These products were grossly unregulated in that terms were not fully explained to smaller banks who did not originate the product but bought them, or their actual exposure. There was also a MASSIVE loophole that allowed banks to offset their reserves in place of a swap, even thought he swap being an insurance product was not actually a guarantee of deposit. this allowed banks to expand their capital for mortgages, credit cards, car loans etc without taking in new deposits for their own ratio. Next there was the fact that a firm could take out a CDS on someone elses health even though they had absolutely no relation.. GS did this the most.. It's akin to me taking a health insurance policy out on you GBM, then poisoning you're food and watching you die, then going to Vegas to play blackjack with my winnings.

There are numerous types of Derivatives, and I'm not talking about ALL OTC Derivatives.. I'm talking about specific ones.. one's that are valued in the trillions, and are the largest and most dangerous types.. And no, they are NOT regulated, at all.. unless you can show me specifically the laws and codes originated to define, regulate and control the sale, distribution, purchase and claims on CDS's, CDO's and any other derivative like them. Pre-2007.

And again.. I'm not talking about Futures, Options, etc.. things regulated by the SEC, I'm talking about what was done in the shadows.

posted on Jun, 1 2010 @ 11:04 PM
reply to post by Rockpuck

I am not sure I can agree, mainly because none of this was done in the "shadows". Let's take the GS example.

They were the MARKET MAKER buying and selling inventory, the only people that were trading them were PROFESSIONALS & INSTITUTIONS. Hedging their risk.

You would have to imagine if you were a big time player in the California Real Estate Market you would be hedging your exposure. Well, I mean where else are you going to do that?


I could go on and on, but these were marketed exactly for what they were.

Now Congress says to GS - You are in trouble for acting like the principal market maker. When it was so puzzling for more than 4 hours the same old wind bag kept talking about something that was

1) Incorrect

2) Just really dumb

And he just kept raising his voice over and over to get that 15 minute clip on the news so all the puppets would vote for him again in Michigan. I can't remember his name.

But this is the # the media runs with and then they put their spin on it to get weblickz and more headlines read etc..

What is really going on had nothing to do with what happened. And truthfully all that happened was too many people were overlevered. That's it. We had to cleanse and flush them. But representatives need to get elected again, so they waste even more tax dollars trying to make themselves look good WHILE blaming anyone but themselves.

If you can show me proof of any OTC Derivative that was off the books and not on paper I would be really impressed. I mean seriously, these are professionals. These aren't retail players and they really didn't make people take out high interest loans and get overlevered. That stuff happens every day in the markets, but now it just happened to homeowners.

posted on Jun, 2 2010 @ 07:22 PM
reply to post by GreenBicMan

We've discussed how prospectus's have nothing to do with legality or morality in the financial world.. for instance, Bernard Madoff provided all kinds of prospectus's to his clients...... doesn't mean what he was doing was by anymeans legal or moral.

And yes.. the unraveling WAS over leveraging.. how did they over leverage? .. By combining the purchase of debts with the purchase of insurance to void the reserve requirement (do to lack of regulation) freeing capital to purchase or offer further debt without expanding their reserves.

Also whether or not it was "legal" then, it certainly should be illegal now. Again.. not all OTC Derivatives.. just certain ones.

posted on Jun, 2 2010 @ 09:00 PM
reply to post by Rockpuck

Well it would not be in the "shadows" then would it if it had a prospectus? That was my only point. They were not back room deals.

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