Goldman Sachs and Morgan Stanley Survive! On The Back of Taxpayer Deposits?

Now let me state from the outset – I don’t claim to be a financial wizard, but I find it curious that in order for the last of our country’s investment banks to survive they must become – well – regular banks.

If somehow we haven’t gotten it thus far – AMERICA IS IN FINANCIAL CRISIS!  The scope of the crisis is truly unknown to the average citizen and while I am no doomsayer – it is not over.

The borderline unethical financial practices of these institutions are the root cause of their demise.  When you loan money to people who can’t practically pay it back in the interest of profits – you are, in my opinion, acting without sound business ethics.  But here’s the deal – if it were you or I, we would be conviced of some fraud or conspiracy.  That would mean jail time.  But when your crime (yes I said crime) is so large that it shakes the foundation of our financial markets – you get bailed out and make no mistake the Fed’s action today (on a Sunday) is a bail out.

Think about it – over the course of the past three weeks our government in one form or another has spent up to nearly 1 TRILLION of our taxpayer dollars to shore up our financial institutions so that we would not experience another GREAT DEPRESSION.  Wise or not remains to be seen.  All I report on here are the facts.

Goldman Sachs and Morgan Stanley are the remaining two investment backs surviving.  Lehman Brothers filed for bankruptcy and will be sold to Barclays and Merrill Lynch was purchased by Bank of America.  Fascinating that little NCNB (former North Carolina National Bank) became Bank of America and now is the largest bank in the US with the Merrill acquisition.  Who said the South would not rise again.  But I digress.

According to a report by CNN:

The Fed announced that it had approved the request of the two investment banks. The change in status will allow them to create commercial banks that will be able to take deposits, bolstering the resources of both institutions.

It is clear that this change of status is designed to use “deposit” as a means of leverage giving them a stable source of funding.  The question is – who would want to deposit funds into either institution.

Answer:  In the surprise announcement late Sunday, the central bank said that to provide increase funding support to Goldman (GS, Fortune 500) and Morgan (MS, Fortune 500) during the transition period, they would be allowed to get short-term loans from the Federal Reserve Bank of New York against various types of collateral.

So let me get this straight in my mind – the federal reserve is going to make loans to both Goldman and Morgan giving them cash to offset their poor loan portfolio making them appear to be safe.  To me that is like paint a rotten fence with white paint and calling it new.  This is nothing more than a disguised bail out.

According to MSNBC: After the collapse of Bear Stearns and its forced sale to JP Morgan Chase last March, the Fed used powers it had been granted during the Great Depression to extend its emergency loans to investment banks as well as commercial banks. However, that extension was granted on a temporary basis.

But as commercial banks, Goldman Sachs and Morgan Stanley will have permanent access to emergency loans from the Fed, the same privilege that other commercial banks enjoy.

So here are some questions to ponder – and feel free to respond!

Question 1: Should the Fed have taken the actions to allow Goldman and Morgan to survive by allowing “normal” banking deposits?

Question 2: Do you feel that the actions by the “investment banks” have been ethical or unethical?  Why?

Question 3: With the massive actions taken over the course of the past three or so weeks, do you feel more or less confident in our nations economy?

As a business ethics speaker, I can say that there has never been a time in my lifetime that demands more thought, focus and ethical consideration of actions taken than now.  Business is good and business done with right ethical intention can grow and prosper.  But, as I say in practically every presentation I make – Every choice has a consequence.  Now we are reaping the consequences of choices made – not so long ago.

For all our sakes let’s hope that we can weather the economic storm ahead.

Your comments are welcome!

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2 Responses to Goldman Sachs and Morgan Stanley Survive! On The Back of Taxpayer Deposits?

  1. Dusan G. says:

    You did not mentioned that both, Goldman and Morgan are owner of FED! To remind there are 12 banks who own FED. Lehman Brothers was one of owners too.

  2. Bill Houser says:

    9/11 and the Greenberg Familia
    By Jerry Mazza
    Online Journal Associate Editor

    Sep 29, 2006, 01:06

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    Democratic Underground Demopedia reports in Who Killed John O’Neill that at the time of 9/11, AIG, the world’s largest insurance company, and subsidiaries Marsh McLennan, ACE and Kroll, were run by the Greenberg family. With Council on Foreign Relations (CFR) member Maurice “Hank” Greenberg as the AIG godfather, the Familia’s tentacles curled around the heart of the tragedy.

    Hank’s son Jeffrey, a CFR member as well, was chairman of Marsh & McLennan, situated on floors throughout the North Tower of the World Trade Center as well as the top floors of the South Tower. Marsh also had ties to the CIA. Son Evan Greenberg, a CFR member, was CEO of ACE Limited, situated in Tower 7, which also contained AIG subsidiary Kroll, closely related to the CIA, also with an office in Tower 7.

    Tower 7 also contained offices of the FBI, Department of Defense, IRS (which contained prodigious amounts of corporate tax fraud corporate, including Enron’s), US Secret Service, Securities & Exchange Commission (with more stock fraud records), and Citibank’s Salomon Smith Barney, the Mayor’s Office of Emergency Management and many other financial institutions.

    Greenberg’s cousin, Alan “Ace” Greenberg, was former CEO of Bear Sterns, where the Bush family, Cheney family George Schultz, James Baker, et al, did business. It is the leading brokerage firm of the great and all-powerful Bush Familia.

    Also reported by Democratic Underground, AIG’s Kroll “provided protection services,” among other things, to high level Americans at home and abroad. Kroll had military teams in their company and merged with Armor Holdings on August 23, 2001, adding Defence Systems Limited, another private military corporation, to their operation, and an ex-KGB team called Alpha Firm earlier acquired by Defense Systems Limited. These four teams could have been used on 9/11, part of a “corporatizing” of black ops in tandem with military teams.

    According to whistleblower Richard Grove, who worked as a senior manager for SilverStream Software on Marsh and AIG accounts, Kroll also managed the Enron fraud once Kenneth Lay stepped down.

    Marsh, immediately after 9/11, established a specialized terrorism team called Marsh Crisis Consultancy (led by L. Paul Bremer III), adding the teams Control Risks Group, a British ex-SAS team and Versar, bio-terrorism and homeland defense team. These players could have known each other from 9/11, bringing in new assignments and profits.

    Democratic Underground also reports, AIG allegedly was laundering drug money, and was involved in the Afghanistan oil and gas pipelines. Greenberg and the Adnan Khasshogi family allegedly benefited from the Afghanistan narcotics trade and interests in the oil and gas pipelines, as well.

    Greenberg’s Law Firm Connections to Bush

    According to http://www.sourcewatch.org, the Greenbergs were and are connected to the Bush Familia via their Miami-based law firm Greenberg Traurig, LLP, a 1,350-lawyer, full-service international firm. Here are a few connects . . .

    1) G-T represented George W. Bush in the Bush-Gore 2000 Florida election vote recount.

    2) They personally represent Florida Governor Jeb Bush.

    3) They hired son of Supreme Court Justice Antonin Scalia on Election Day 2000 — after which Justice Scalia cast one of the 5 to 4 deciding votes that placed Bush in the White House.

    4) They partially funded/sponsored a delegation to Israel by House-Senate Armed Services Committee members and government contractors to witness and be briefed on interrogations resistance procedures and torture techniques.

    5) The firm has prominent administrative positions in Massachusetts 9/11 Fund, which also involves Bush family banking house Brown Brothers Harriman (the same BBH involved with Prescott Bush’s bankrolling the Nazis in World War II).

    6) Traurig Greenberg works with 9-11 victims on planning their US government “hushmail/bribery estates.” That is, to receive the money, the victim’s family must sign an agreement never to sue the government for any reason. Victim-wife Ellen Mariani is currently being legally harassed for not signing and for holding the Bush government’s feet to the fire.

    7) Bush still owes the Greenberg Traurig firm nearly $1 million for work done by dozens of lawyers and paralegals, leaving questions why a Republican candidate would hire a Democratic lawyer from a Democratic firm. See Greenberg Traurig link above for more scandals.

    Greenberg’s Relationship to Larry Silverstein

    On July 24, 2001, six weeks before 9/11, Larry Silverstein took control of the lease of all the WTC buildings. This followed the Port Authority decision on April 26.

    According to democraticunderground.com, the three companies who originally insured the WTC were AIG, Marsh and ACE, all run as mentioned by the Greenbergs at the time. They then sold stakes of the original contract to their competition, a technique called reinsuring.

    Once the Towers came down, the reinsurers got caught holding the bag. This would inextricably tie the Greenbergs to Silverstein and the larger conspiracy of 9/11. If they had no foreknowledge of events to occur, why would the Greenbergs have unloaded so many stakes in their contract?

    According to Michel Chossudovsky in Financial Bonanza behind the 9/11 Tragedy, “On October 17, 2000, eleven months before 9/11, Blackstone Real Estate Advisors, of The Blackstone Group, L.P, purchased, from Teachers Insurance and Annuity Association, the participating mortgage secured by World Trade Center, Building 7.1.” [Blackstone in 2000 also purchased a 50 percent stake in Universal Studios, producers of the myth-perpetuating Flight 93.]

    “April 26, 2001 the Port Authority leased the WTC for 99 years to Silverstein Properties and Westfield America Inc.

    “The transaction was authorised by Port Authority Chairman Lewis M. Eisenberg. This transfer from the New York and New Jersey Port Authority was tantamount to the privatisation of the WTC Complex. The official press release described it as ‘the richest real estate prize in New York City history.’ The retail space underneath the complex was leased to Westfield America Inc.

    “On 24 July 2001, 6 weeks prior to 9/11 Silverstein took control of the lease of the WTC following the Port Authority decision on April 26.

    “Silverstein and Frank Lowy, CEO of Westefield Inc. took control of the 10.6 million-square-foot WTC complex.

    “Lowy leased the shopping concourse called the Mall at the WTC, which comprised about 427,000 square feet of retail space.”

    “Explicitly included in the agreement was that Silverstein and Westfield ‘were given the right to rebuild the structures if they were destroyed.’’

    “In this transaction, Silverstein signed a rental contract for the WTC over 99 years amounting to 3.2 billion dollars in installments to be made to the Port Authority: 800 million covered fees including a down payment of the order of 100 million dollars. Of this amount, Silverstein put in 14 million dollars of his own money. The annual payment on the lease was of the order of 115 million dollars.

    “In the wake of the WTC attacks, Silverstein is suing for some $7.1 billion in insurance money, double the amount of the value of the 99 year lease.” In fact, some $5 billion was actually returned, given the multiple court-case protests of the insurers.

    “The mortgaging of the WTC was handled by The Blackstone Group, headed by Peter J. Peterson, current head of the Council on Foreign Relations (CFR). The Blackstone Group also bought a piece of Kroll in 1993 at the very same time AIG took over majority control. Henry Kissinger sits on the board of the Blackstone Group.”

    By his own admission Silverstein had Tower 7 pulled by controlled internal demolition eight hours after the first two hits. No plane hit Tower 7. There were two small fires in it that were under control. In fact, it takes weeks, months to set up a building to be pulled. So his order to “pull it” catches him in a huge lie. Tower 7 may have been the nexus of the operations. That may have been the real reason to pull it. In fact, it may have been set up weeks in advance with Towers 1 and 2 for demolition. Ironically, Tower 7 is the only tower that has been rebuilt, and more opulently than its predecessor, although tenancy is about 18 percent.

    Towers Taken Down for Profit and to Blame Muslims

    Given the involvement of the Greenbergs and Silverstein, and other commercial entities that stood to profit hugely, it is difficult to believe 9/11 occurred at the hands of 19 rag-tag Muslims with box-cutters and the help of their leader, Osama bin Laden, sitting in a cave somewhere in Afghanistan with his laptop and dialysis equipment. The real reasons behind 9/11 were financial greed and the willingness to demonize Muslims for the “Pearl Harbor-type” act that would instigate America to wage a war on terror, pursuing PNAC’s (Project for a New American Century) goal of World Hegemony.

    The latest documentary on the WTC, The 911 Mysteries from 911WeKnow.com, provides highly convincing proof that the buildings were taken down in six fatal steps. They involved the use of high-powered explosives, including thermite and/or thermate, with techniques more advanced than those of traditional controlled-demolition companies, most likely the military’s, given their bunker buster technology. The six steps are . . .

    Pre-collapse sub-basement explosions
    Pre-collapse interior blasts
    Pre-collapse ground level explosions
    Top level collapse initiation
    Mid Collapse Squibs (explosions)
    Final time-delayed rolls (explosions)
    Without all these steps, the Towers could never have free-fallen in 10 seconds, the speed of gravity. Any obstacles or pancaking had to be eliminated otherwise the number of seconds of fall would increase dramatically. The documentary also reminds us that on February 13, 1975 there was a major fire on the 11th floor of the North Tower that did not topple it, though the loss was estimated at over $2 million, no mean event. Check it out.

    It is possible that in 1996, when Securacom took over WTC security and installed a new $8.3 million security system, that the explosives and charges were also put in place. Sitting on the board of Securacom was the director Marvin Bush, George Bush’s younger brother.

    In any case, this is patently the confluence of the military/industrial complex with a healthy dose of Wall Street, earning millions if not billions in put and call options on companies involved with the catastrophe, including airlines on the down (put) side and military suppliers on the up (call) side. In addition, there is the missing gold from the basement of Tower 4, $200 million of which was retrieved, and an untold amount stolen.

    The real bottom line was that the Towers were two financial white elephants. And both Silverstein and Greenberg had to know that. The tenancy was dropping. They were out of date. And most dangerously, they were asbestos bombs, loaded with the dangerous building material when they were completed in 1972-73.

    By law the buildings could not be taken down by internal demolition. And since it would cost a billion dollars or more to take the towers down beam by beam, it would be at great loss to the Port of Authority or its leaseholder. Thus the reasons are obvious to take WTC down in act of terror also a false-flag operation. Remember, the concept for the WTC Towers originated with the Nelson and David Rockefeller, members of the Council on Foreign Relations and among the world’s elites. A “New Pearl Harbor” would serve those interests well.

    Additional Connections to Greenberg

    John O’Neill, mentioned in the first paragraph, was the FBI anti-terror chief who spent years trying to track down bin Laden and “al Qaeda” members. At every point, he was stopped or frustrated by his superiors. Finally, O’Neill parted company with the FBI. Jerome Hauer, who formerly worked for Kroll, got him the job as chief of security at the WTC. On 9/11, O’Neill lost his life in the North Tower.

    Mr. Hauer’s job as Kroll chief was also held by Michael Cherkasky, who came out of the New York County District Attorney’s Office, which also brought us Rudy Giuliani, Elliot Spitzer and Patrick Fitzgerald. Mr. Cherkasky also brought Mr. Spitzer into the NYC County DA’s office. Today Cherkasky is a substantial contributor to Spitzer’s campaign for New York State Governor. Cherkasky was bumped up to head Marsh McLennan in 2004.

    As an aside, there were about 200 electrical engineers working in the World Trade Center around the time. Additionally, AMEC and Tully Construction played a major role in the clean up of Ground Zero and both have specialized controlled demolition companies.

    Lastly, can you believe that one of the Council on Foreign Relations members who engaged President Mahmoud Ahmadinejad of Iran in a debate about the holocaust at CFR’s reception last week was none other than Hank Greenberg, who said he witnessed the Dachau camp as Germany fell? Could it all possibly be payback and then some?

    Jerry Mazza is a freelance writer living in New York. Reach him at gvmaz@verizon.net.

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