2005 Cuomo folds for GSE’s; Greenspan loves derivatives
The players are all lining up like iron filings over a magnet. Manhattan DA Andrew Cuomo agrees to allow GSE’s Fannie and Freddie to use inflated appraisals; “As long as in house appraisers are not used.” Tough guy that Andrew. Who was sending him campaign donations?
Across town Elliot spitzer was doing his job as a DA by charging AIG owner and CFR President Maurice R. Greenberg with accounting fraud. The charge carries a 30 year prison term but Spitzer gets broad sided soon after, so no verdict was reached on Greenberg.
At Goldman Sachs, Harvard Lawyer and CEO, Lloyd Blankfein Adopts Abacus AC1, a computer trading program to short sell Mortgage Backed Securities (MBS) in the coming Real Estate Bubble
At the same time Goldman Sachs is briskly selling Mortgage Backed Securities as AAA investments to all it’s non insider clients. Later, amazingly, the SEC brings charges against Blankfein for this fraud.
Alan Greenspan as Fed chairman, tells congress that derivatives are good as gold. Telling congress in 2005;
“Innovation has brought new products, such as sub prime mortgages and niche credit programs for immigrants.
“With advances in technology, lenders have taken advantage of credit scoring models…
“indeed sub prime mortgages are now 10% of the market, up from only 1% in 1990!”
So Greenspan is now fully onboard with sub prime loans, advanced credit models and is elated that sub prime’s have increased 1000% in only ten years. What happened to the happy – sax playing gold backed dollar enthusiast from the 1960’s. Allen, did they get to you, were you flattered to be the smartest guy around as long as you pushed the Fed line?
Next Alan Greenspan tells congress the Fed can promise payments for Social Security, a marxist/Fed creation, but Alan lets congress know the dollars will be inflated. Well; that was truthful enough, stating in 2005;
“We can guarantee cash benefits as far out and at whatever size you like, but we cannot guarantee their purchasing power.”
Is this the master speaking to the slave or the other way around? Having the Fed run our money is like hiring your next door neighbor run your household finances. And your not too sure the neighbor even likes you, or is ethical. Why don’t we just go directly to the Saudi King for a financing deal. At least they are honest about their dishonesty.
2006 BIS Love – fest
On 27-29 June 2005, the BIS held its fourth Annual Conference on Past and Future of Central Bank cooperation. It was part of the Bank’s 75th anniversary celebrations. Many hundreds of bankers and economists from around the world attend these events. A few names from their list;
The panelists were;Andrew D Crockett (JP Morgan Chase),
Jacques de Larosière (Paribas), Allan Meltzer (Carnegie Mellon University),
Paul Volcker (International Accounting Standards Committee),
Recall that Paul Volker was our Treasury Secretary under Clinton. Now he’s over at the BIS reflecting on the future of central bank cooperation.
From 200 Years of Central Banks by Thomas M. Cole JD