Category: Aggregated

Anticipating Glass-Steagall restoration to be introduced into the 114th Congress, financial columnist Pam Martens wrote an excellent, Jan. 12 column destroying the primary lie deployed against Glass-Steagall during the past three years. And, Martens revealed that when she first exposed this lie in 2012 in letters to the New York Times, which had published the lie in a column by its financial reporter Andrew Ross Sorkin, the Times refused to retract, or to print a word from her.

Sorkin first circulated the sophistry that “since Lehman, Bear Stearns, Merrill Lynch and AIG were not commercial banks, Glass-Steagall was irrelevant to how the 2007-08 crash could have been avoided.” That lie became Tim Geithner’s line in browbeating Congress against restoring Glass-Steagall; Obama’s line; and the line of the neocon American Enterprise Institute’s Peter Wallison, which was used to confuse Republicans. Now it is repeated in a new book by a radical Keynesian economist which is being given great play and is momentarily No. 1 on the non-fiction best-seller list — Hall of Mirrors, by UC Berkeley economics professor Barry Eichengreen.

Martens’s facts, which the Times refused to print and “experts” like Professor Eichengreen prefer to overlook, are worth presenting in detail:

“Lehman Brothers owned two FDIC insured banks, Lehman Brothers Bank FSB and Lehman Brothers Commercial Bank. Together, they held $17.2 billion in assets as of June 30, 2008, 75 days before Lehman went belly up. Lehman Brothers Bank FSB is where Lehman handled its mortgage loan originations. When the FDIC approved the Lehman Brothers Commercial Bank application in 2005, it specifically noted that the FDIC insured bank ‘anticipates acting as a derivatives intermediary’…”

“Merrill Lynch also owned three FDIC insured banks. At an FDIC symposium held at the National Press Club in 2003, Merrill Senior VP, John Qua, explained the banking side of Merrill as follows: ‘Merrill Lynch conducts banking in the United States through two depository institutions — Merrill Lynch Bank USA, a Utah industrial loan corporation; and Merrill Lynch Bank and Trust, a New Jersey state non-member bank. We also own a federal savings bank that offers personal trust services to our clients’….”

“Bear Stearns owned Bear Stearns Bank Ireland, which is now part of JPMorgan and called JPMorgan Bank (Dublin) PLC. According to JPMorgan,… “It has also been added to the JPMorgan Jumbo issuance programs to issue structured securities for distribution outside the United States.”

“AIG owned, in 2008 at the time of the crisis, the FDIC insured AIG Federal Savings Bank. On June 30, 2008, it held $1 billion in assets. AIG also owned 71 U.S.-based insurance entities and 176 other financial services companies throughout the world, including AIG Financial Products which blew up the whole company selling credit default derivatives.” [AIG’s cross-ownerships would have been barred by both Glass-Steagall and the 1956 Bank Holding Company Act, which was also gutted by the 1999 Gramm-Leach-Bliley Act, which repealed Glass-Steagall.-ed.]

“AIG’s annuities … represent a significant source of income to retirees. Had AIG been allowed to fail, state guaranty funds for insurance products could have been wiped out….”

As to our situation today, Martens notes: “According to the Office of the Comptroller of the Currency which oversees national banks, as of December 31, 2011, inside the insured banks — not their broker-dealer components — were the following derivative holdings: $70.1 trillion at JPMorgan Chase; $52.1 trillion at Citibank; $50.1 trillion at Bank of America; $44.2 trillion at Goldman Sachs Bank USA.”

Eric Denécé, a director of the French Center for Intelligence Research (Centre Français de Recherche sur Renseignment, CF2R) think tank, in his latest editorial, apropos last week’s attacks, says that one of the best hopes for combatting terrorism comes to the trans-Atlantic sector from Egypt: “In the face of the obscurantism of mindless terrorists, indoctrinated and manipulated by radical and sectarian imams, serious reason for hope comes to us from Egypt. In effect, President [Abdel Fattah] el-Sisi’s stance needs to be brought to light, his action welcomed and his initiatives supported.”

Denécé continues: “The same day that the weekly Charlie Hebdo was attacked and members of its editorial board massacred, another event of considerable weight—totally unknown about in France—took place in Egypt. President el-Sisi cut short his state visit to Kuwait in order to celebrate Coptic Christmas in Cairo [on Jan. 7].

“This is the first time in the history of Egypt — a state that has always been led by Sunnis — that the head of state had attended a Coptic Midnight Mass. Neither Mubarak, during his 30-year reign, nor his predecessors (Sadat, Nasser, nor King Farouk) had shown such consideration for the Christians of Egypt, who make up more than 20% of the population. On the contrary, the country’s leaders had always treated them as second-class citizens.

“President el-Sisi’s approach is exceptional and marks a true break in the wake of the bloody interlude that Egypt suffered under the regime of the Muslim Brotherhood. At the same time, it is an expression of great courage, of great humanity, and a remarkable sense of policy.

“Some days earlier, on the occasion of the New Year, the Egyptian head of state gave an astounding speech — which also went unnoticed in France — on the necessary challenging of certain Islamic texts.

“On Jan. 1st, at Cairo’s Al-Azhar University (the highest religious authority in the Sunni world), he stated that murders committed in the name of Islam were intolerable. He proposed, before millions of television viewers, that the texts written after the Koran — that is, the hadith and the sunnah — be reviewed by religious clergy in order to make them no longer serve as the basis for terrorist acts. Furthermore, he confirmed that it is inconceivable that 1.6 billion Muslims would want to kill the rest of the 7 billion people on the planet in order to live according to their religion.

“A former director of military intelligence, profoundly attached to his country, faithful to his Muslim creed, President el-Sisi, like most of his co-religionists, is aghast at the violence committed in the name of Islam by Daesh [isis], al-Qaeda, and the Muslim Brotherhood, and the number of victims in their wake. Because of their barbarism, these groups are in the process of provoking a profound debate within and throughout Muslim world, for a massive number of believers are disgusted by this tendency and reject this obscurantist reading of Islam.

“We should welcome the initiatives of the Egyptian head of state, insofar as he appears to be one of those rare men capable of pushing the boundaries in both the Middle East and within the Arab-Muslim world. His compatriots are not mistaken when they characterize him as the ‘Egyptian de Gaulle.’ We must also firmly support his first steps, since obviously all the extremists and radicals that Islam includes are staunchly opposed to him and henceforth treat him as an apostate.”

Starts LIVE at 12 noon Eastern. To even those who have tried to deny the reality of the situation, the hopeless bankruptcy of the London-Wall Street trans-Atlantic financial system is rapidly becoming undeniable. What is less understood is the bankruptcy of the scientific and cultural axioms underlying and associated with this dying British imperial system — typified by the religious-like worship of the second “law” of thermodynamics. This week LaRouche’s scientific and political associate Bruce Director will join a discussion about the fraud of the second law, and the true nature of our anti-entropic universe. 

As reported by the media, the meeting of the four foreign ministers (France, Germany, Russia, Ukraine) in Berlin, last night, produced no concrete results except an agreement to meet again sometime next week. Germany’s Frank-Walter Steinmeier said that there is still a long way to go, that they will look for additional options to get progress in the talks, that at this point, a meeting of the respective four heads of state and government in Astana would make no sense but that they continue to prepare for it. Steinmeier spoke of partially “quite differing views” without going into detail.

It is reported that Ukrainian President Poroshenko yesterday made an otherwise unspecified offer to grant eastern Ukraine the status of a special economic zone, whose close relations with Russia would be acknowledged, but that elections would have to be held again in eastern Ukraine, this time under Kiev election laws. On paper, however, eastern Ukraine regions have a certain degree of autonomy already—but that is not respected at all by the government of “Yats,” who continues to sabotage all diplomatic efforts, as he did last Thursday, Jan. 8, in Berlin, when he claimed that the Soviet Union was the one that started World War II against Germany and Ukraine. That provocation has led to some back and forth between the foreign ministries of Russia and Germany since.