The global economic crisis isn't about money - it's about power

Red Chocolate · Mar 23, 2009

ymc said:

Do you think WWIII is near us? That's what saved us from the Great Depression.
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'world wars' are so out of fashion, the undeclared, illegal invasions of countries are the new rage. That's why you're seeing a lot of 'nonparticipants' in the global crisis trying to develop nukes, like Iran. Iran knows that the powers that be want them to collapse financially, and having WMDs is a good insurance policy in case the US tries to invade them.

F.D. Khan · Mar 23, 2009

okierock said:

I just called a contractor to start construction of my 30 year fallout bunker.
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Hope you don't need a mortgage on that bunker. I hear credit is a little tight but if everyone gets bunkers, it could stabilize land/house prices and help with the crisis right??

F.D. Khan · Mar 23, 2009

Pretty good article. Cassano should be portrayed to the world for what he and his group did.

ymc · Mar 23, 2009

F.D. Khan said:

Pretty good article. Cassano should be portrayed to the world for what he and his group did.
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This guy's name should be on the headlines in major papers but he is not. Something is very wrong here.

ymc · Mar 23, 2009

Red Chocolate said:

'world wars' are so out of fashion, the undeclared, illegal invasions of countries are the new rage. That's why you're seeing a lot of 'nonparticipants' in the global crisis trying to develop nukes, like Iran. Iran knows that the powers that be want them to collapse financially, and having WMDs is a good insurance policy in case the US tries to invade them.
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I think when our $ becomes toilet paper that we can't buy any more oil, we will invade Venezuela in the name of "democracy and human rights"...

fredred · Mar 23, 2009

Nolen said:

That was a great read and totally worth the time.

As for the video that blames "too much oversight".... If you read the article, you'll find that AIG was able to operate with almost zero oversight... so how can you blame too much oversight?

The last bits about the Fed throwing around trillions with zero congressional oversight is very scary. The Obama administration has promised to be transparent, and the treasury and the fed would be a good place to start.
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Obama and Congress have little to no actual power over the Fed. Come to think of it, what exactly is the Federal Reserve?

Wakko67 · Mar 23, 2009

ymc said:

This guy's name should be on the headlines in major papers but he is not. Something is very wrong here.
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What do you mean? There is more important news out there like Rihanna and Chris Brown's relationship. Don't you care about the real world?

Thats a long, but very informative read. It is a shame that the people who put us in this mess are not only getting away scott free, we're giving them a ride. This is the ultimate hustle and we're the johns being duped. Greed and corruption had a large part in the falls of Rome and other great powers. I'm hoping we will avoid that. If not.......well I'm not learning Mandarin.

In the end, I agree with Deckard. VIVA SCOLA!!!

Deckard · Mar 23, 2009

Wakko67 said:

What do you mean? There is more important news out there like Rihanna and Chris Brown's relationship. Don't you care about the real world?

Thats a long, but very informative read. It is a shame that the people who put us in this mess are not only getting away scott free, we're giving them a ride. This is the ultimate hustle and we're the johns being duped. Greed and corruption had a large part in the falls of Rome and other great powers. I'm hoping we will avoid that. If not.......well I'm not learning Mandarin.

In the end, I agree with Deckard.

VIVA SCOLA!!!
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Clearly, sir, you are a man of deep intellectual powers.

VIVA SCOLA!!!

pgabriel · Jun 30, 2010

Cassano doesn't think he did anything wrong

WASHINGTON — A former top executive of American International Group acknowledged today that his division tripled the amount of risky investments it insured in the three years leading up to the 2008 financial meltdown.

But Joseph Cassano, chief executive for AIG's key Financial Products division, rebuffed accusations from a special panel investigating the crisis that he relaxed standards to issue more credit default swaps.

AIG received a $182 billion taxpayer bailout - the biggest of the federal rescues - after it nearly collapsed and helped trigger the financial crisis.

"We never diluted our underwriting standards at any point in time," Cassano told the Financial Crisis Inquiry Commission, a bipartisan panel created by Congress, in his first public comments since the crisis.

The Financial Products division sold billions of dollars of credit default swaps, guarantees on mortgage securities that ended up forcing the company to pay out billions after the housing market went bust. That pushed AIG to the brink of failure in September 2008.

The inquiry panel chairman, Phil Angelides, questioned how the world's largest insurer could triple the amount of swaps it issued, from $17 billion in 2005 to $78 billion in 2007, without compromising its standards.

Martin Sullivan, a former CEO of the company, said he wasn't told until several months afterwards in 2007 that the amount had tripled.

The AIG executives and officials of Goldman Sachs Group Inc. were appearing at the hearing focused on derivatives, the complex instruments at the heart of the meltdown. The panel is also examining the relationship between AIG and Goldman, two companies that made some of the riskiest derivative trades leading up to the crisis.

The value of derivatives hinges on an underlying investment or commodity - such as currency rates, oil futures or interest rates. The derivative is designed to reduce the risk of loss from the underlying asset.

After the subprime mortgage bubble burst in 2007, derivatives called credit default swaps, which insured against default of securities tied to the mortgages, collapsed. That brought the downfall of Lehman Brothers and nearly toppled AIG. New York-based AIG got an initial $85 billion infusion from the government in September 2008.

Much of the federal rescue money for AIG went to meet the company's obligations to its Wall Street trading partners on credit default swaps. The biggest beneficiary of the AIG money was Goldman, which received $12.9 billion.

Goldman Sachs profited from its bets against the housing market before the crisis. It continued to ring up huge profits after accepting federal bailout money and other government subsidies. Its dealings in another type of derivative, known as collateralized debt obligations, have brought it harsh scrutiny by a Senate panel and in the case of one $2 billion CDO, civil fraud charges from the Securities and Exchange Commission. Goldman has denied any wrongdoing.

"We did not 'bet against our clients,'" Gary Cohn, Goldman's president and chief operating officer, said in his testimony prepared for the hearing. "During the two years of the financial crisis, Goldman Sachs lost $1.2 billion in its residential mortgage-related business."

A CDO is a pool of securities, tied to mortgages or other types of debt that Wall Street firms packaged and sold to investors at the height of the housing boom. Buyers of CDOs, mostly banks, pension funds and other big investors, made money off the investments if the underlying debt was paid off. But as U.S. homeowners started falling behind on their mortgages and defaulted in droves in 2007, CDO buyers lost billions.

When AIG posted a loss for the fourth quarter of 2007, it pinned the blame on an $11 billion writedown related to the credit default swaps held by the Financial Products. If AIG couldn't make good on its promise to pay off the contracts, regulators feared the consequences would pose a threat to the whole U.S. financial system.

Cassano left AIG in 2008 shortly after the $11 billion loss was reported.

Michael Greenberger, a law professor at the University of Maryland and former federal commodities regulator, said: "The darkness of this huge multitrillion-dollar, unregulated market not only caused, but substantially aggravated, the financial crisis."
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The global economic crisis isn't about money - it's about power

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The global economic crisis isn't about money - it's about power

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