<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN">
<HTML><HEAD>
<META content="text/html; charset=ISO-8859-1" http-equiv=content-type>
<META name=GENERATOR content="MSHTML 8.00.6001.23515">
<STYLE></STYLE>
</HEAD>
<BODY bgColor=#ffffff text=#000000>
<DIV> </DIV>
<DIV style="FONT: 10pt arial">----- Original Message -----
<DIV style="BACKGROUND: #e4e4e4; font-color: black"><B>From:</B> <A
title=astridjb@comcast.net href="mailto:astridjb@comcast.net">Astrid Berkson</A>
</DIV>
<DIV><B>To:</B> <A title=undisclosed-recipients:
href="mailto:undisclosed-recipients:">undisclosed-recipients:</A> </DIV>
<DIV><B>Sent:</B> Saturday, August 24, 2013 11:06 AM</DIV>
<DIV><B>Subject:</B> [CentralILJwJ] palast</DIV></DIV>
<DIV><BR></DIV>
<DIV class=txtimg><BR>
<H1 class=txttitle>Confidential Memo at the Heart of the Global Financial
Crisis</H1>
<P class=txtauthor>By Greg Palast, Vice Magazine</P>
<P class=date>24 August 13</P>
<P> </P>
<P><IMG border=0 src="cid:87DC5F92544D4A37A77BD3488FF59BC6@owneryr3fp4mcb">hen a
little birdie dropped the End Game memo through my window, its content was so
explosive, so sick and plain evil, I just couldn't believe it.</P>
<P class=indent>The Memo confirmed every conspiracy freak's fantasy: that in the
late 1990s, the top US Treasury officials secretly conspired with a small cabal
of banker big-shots to rip apart financial regulation across the planet. When
you see <STRONG>26.3 percent</STRONG> unemployment in Spain, desperation and
hunger in <STRONG>Greece</STRONG>, riots in Indonesia and Detroit in bankruptcy,
go back to this End Game memo, the genesis of the blood and tears.</P>
<P class=indent>The Treasury official playing the bankers' secret End Game was
<STRONG>Larry Summers</STRONG>. Today, Summers is Barack Obama's leading choice
for Chairman of the US Federal Reserve, the world's central bank. If <STRONG>the
confidential memo</STRONG> is authentic, then Summers shouldn't be serving on
the Fed, he should be serving hard time in some dungeon reserved for the
criminally insane of the finance world.</P>
<P class=indent>The memo is authentic.</P>
<P class=indent>I had to fly to Geneva to get confirmation and wangle a meeting
with the Secretary General of the World Trade Organisation, <STRONG>Pascal
Lamy</STRONG>. Lamy, the Generalissimo of Globalisation, told me,</P>
<BLOCKQUOTE><EM>"The WTO was not created as some dark cabal of multinationals
secretly cooking plots against the people... We don't have cigar-smoking,
rich, crazy bankers negotiating."</EM></BLOCKQUOTE>
<P class=indent>Then I showed him the memo.</P>
<BLOCKQUOTE><EM>It begins with Larry Summers' flunky, <STRONG>Timothy
Geithner</STRONG>, reminding his boss to call the Bank bigshots to order their
lobbyist armies to march:</EM></BLOCKQUOTE>
<P class=indent>"As we enter the end-game of the WTO financial services
negotiations, I believe it would be a good idea for you to touch base with the
CEOs…"</P>
<P class=indent>To avoid Summers having to call his office to get the phone
numbers (which, under US law, would have to appear on public logs), Geithner
listed the private lines of what were then the five most powerful CEOs on the
planet. And here they are:</P>
<P class=indent>Goldman Sachs: <STRONG>John Corzine</STRONG> (212)902-8281</P>
<P class=indent>Merrill Lynch: <STRONG>David Kamanski</STRONG> (212)449-6868</P>
<P class=indent>Bank of America: <STRONG>David Coulter</STRONG>
(415)622-2255</P>
<P class=indent>Citibank: <STRONG>John Reed</STRONG> (212)559-2732</P>
<P class=indent>Chase Manhattan: <STRONG>Walter Shipley</STRONG>
(212)270-1380</P>
<P class=indent>Lamy was right: They don't smoke cigars. Go ahead and dial them.
I did, and sure enough, got a cheery personal hello from Reed - cheery until I
revealed I wasn't Larry Summers. (Note: The other numbers were swiftly
disconnected. And Corzine can't be reached while he faces criminal charges.)</P>
<P class=indent>It's not the little cabal of confabs held by Summers and the
banksters that's so troubling. The horror is in the purpose of the "end game"
itself.</P>
<P class=indent>Let me explain:</P>
<P class=indent>The year was 1997. US Treasury Secretary Robert Rubin was
pushing hard to <STRONG>de-regulate banks</STRONG>. That required, first, repeal
of the <STRONG>Glass-Steagall Act</STRONG> to dismantle the barrier between
commercial banks and investment banks. It was like replacing bank vaults with
roulette wheels.</P>
<P class=indent>Second, the banks wanted the right to play a new high-risk game:
"<STRONG>derivatives trading</STRONG>". JP Morgan alone would soon carry $88
trillion of these pseudo-securities on its books as "assets".</P>
<P class=indent>Deputy Treasury Secretary Summers (soon to replace Rubin as
Secretary) body-blocked any attempt to control derivatives.</P>
<P class=indent>But what was the use of turning US banks into derivatives
casinos if money would flee to nations with safer banking laws?</P>
<P class=indent>The answer conceived by the Big Bank Five: eliminate controls on
banks in every nation on the planet - in one single move. It was as brilliant as
it was insanely dangerous.</P>
<P class=indent>How could they pull off this mad caper? The bankers' and
Summers' game was to use the Financial Services Agreement (or FSA), an abstruse
and benign addendum to the international trade agreements policed by the World
Trade Organisation.</P>
<P class=indent>Until the bankers began their play, the WTO agreements dealt
simply with trade in goods - that is, my cars for your bananas. The new rules
devised by Summers and the banks would force all nations to accept trade in
"bads" - toxic assets like financial derivatives.</P>
<P class=indent>Until the bankers' re-draft of the FSA, each nation controlled
and chartered the banks within their own borders. The new rules of the game
would force every nation to open their markets to Citibank, JP Morgan and their
derivatives "products".</P>
<P class=indent>And all 156 nations in the WTO would have to smash down their
own Glass-Steagall divisions between commercial savings banks and the investment
banks that gamble with derivatives.</P>
<P class=indent>The job of turning the FSA into the bankers' battering ram was
given to Geithner, who was named Ambassador to the World Trade Organisation.</P>
<P class=indent><STRONG>Bankers Go Bananas </STRONG></P>
<P class=indent>Why in the world would any nation agree to let its banking
system be boarded and seized by financial pirates like JP Morgan?</P>
<P class=indent>The answer, in the case of Ecuador, was bananas. Ecuador was
truly a banana republic. The yellow fruit was that nation's life-and-death
source of hard currency. If it refused to sign the new FSA, Ecuador could feed
its bananas to the monkeys and go back into bankruptcy. Ecuador signed.</P>
<P class=indent>And so on - with every single nation bullied into signing.</P>
<P class=indent>Every nation but one, I should say. Brazil's new President,
Inacio Lula da Silva, refused. In retaliation, Brazil was threatened with a
virtual embargo of its products by the European Union's Trade Commissioner, one
Peter Mandelson, according to <STRONG>another confidential memo</STRONG> I got
my hands on. But Lula's refusenik stance paid off for Brazil which, alone among
Western nations, survived and thrived during the 2007-9 bank crisis.</P>
<P class=indent>China signed - but got its pound of flesh in return. It opened
its banking sector a crack in return for access and control of the US auto parts
and other markets. (Swiftly, two million US jobs shifted to China.)</P>
<P class=indent>The new FSA pulled the lid off the Pandora's box of worldwide
derivatives trade. Among the notorious transactions legalised: Goldman Sachs
(where Treasury Secretary Rubin had been co-chairman) worked a secret
euro-derivatives swap with Greece which, ultimately, destroyed that nation.
Ecuador, its own banking sector de-regulated and demolished, exploded into
riots. Argentina had to sell off its oil companies (to the Spanish) and water
systems (to Enron) while its teachers hunted for food in garbage cans. Then,
Bankers Gone Wild in the Eurozone dove head-first into derivatives pools without
knowing how to swim - and the continent is now being sold off in tiny, cheap
pieces to Germany.</P>
<P class=indent>Of course, it was not just threats that sold the FSA, but
temptation as well. After all, every evil starts with one bite of an apple
offered by a snake. The apple: the gleaming piles of lucre hidden in the FSA for
local elites. The snake was named Larry.</P>
<P class=indent>Does all this evil and pain flow from a single memo? Of course
not: the evil was The Game itself, as played by the banker clique. The memo only
revealed their game-plan for checkmate.</P>
<P class=indent>And the memo reveals a lot about Summers and Obama.</P>
<P class=indent>While billions of sorry souls are still hurting from worldwide
banker-made disaster, Rubin and Summers didn't do too badly. Rubin's
deregulation of banks had permitted the creation of a financial monstrosity
called "Citigroup". Within weeks of leaving office, Rubin was named director,
then Chairman of Citigroup - which went bankrupt while managing to pay Rubin a
total of <STRONG>$126 million</STRONG>.</P>
<P class=indent>Then Rubin took on another post: as key campaign benefactor to a
young State Senator, Barack Obama. Only days after his election as President,
Obama, at Rubin's insistence, gave Summers the odd post of US "Economics Tsar"
and made Geithner his Tsarina (that is, Secretary of Treasury). In 2010, Summers
gave up his royalist robes to return to "consulting" for Citibank and other
creatures of bank deregulation whose payments have <STRONG>raised Summers' net
worth by $31 million</STRONG> since the "end-game" memo.</P>
<P class=indent>That Obama would, at Robert Rubin's demand, now choose Summers
to run the Federal Reserve Board means that, unfortunately, we are far from the
end of the game.</P></DIV><PRE class=moz-signature cols="72">--
Life is like a roll of toilet paper.
The closer it gets to the end, the faster it goes.
</PRE></BODY></HTML>