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Saturday, September 03, 2011

Inside dope

I should have written about this earlier, but better late than never. This piece in Antifascist Calling offers a little-known view of the Standard & Poors downgrade of the U.S.:
It now appears that insiders at Standard and Poor's or the Treasury Department, take your pick, may have leaked information to privileged clients on the recent U.S. credit downgrade, with confirmation coming from a surprising source.

Last week, AntiSec cyber-guerrillas (a loose alliance amongst individuals affiliated with LulzSec and Anonymous) released a 1GB cache of emails filched from security contractor Vanguard Defense Industries (VDI).
VDI makes UAVs. Killer drones. (I'll betcha that many "UFO" sightings can be credited to tests of VDI products -- but that's a post for another time, and perhaps another blogger.)

A VP at VDI is named Richard T. Garcia. (I'm tempted to call him RTG, but this post already has way too many TLAs.) On April 25, he wrote an email to an associate. Garcia said that a contact at Merrill Lynch had
"advised that Standard and Poors, may lower the credit rating of the US Government which could cause a run on US Banks that will affect the Federal Reserve. They give the US Govt. 2 years to correct the current situation, which they believe both the Republican and Democratic solutions do not do enough and both parties may make this a political situation for the 2012 Presidential election and never come up with a answer to correct the situation within the two years set by Standard and Poors. She did not see any real Cyber issue that could change the situation."
On Wall Street, there were plenty of rumors about an imminent downgrade just before Standard and Poors did what it did. Obviously, someone knew something. But the Garcia email occurred four months before the downgrade, and it projected a scenario across the span of two years.

That scenario includes a run on U.S. banks. Something to think about.

Even if Standard & Poors revealed insider knowledge, would it have broken the law? Antifascist seems to doubt it. However, this August 9 piece in Naked Capitalism (a post which also notes evidence of "inside dope") cites an SEC regulation which would indicate that the law was, in fact, broken.
Disclosing news of a ratings decision is required under SEC rules to be made publicly. All the discussion with favored parties is clear regulatory violation.
Okay. So why isn't Garcia's contact at Merrill Lynch being dragged before a congressional oversight committee?

That contact, incidentally, is a woman named Cindy Cook, of Austin, TX. She is a "wealth management adviser." You may want to click on that link so you can see the face of the lady who knows before anyone else what fresh Hells await us. Cindy, if you're reading this -- care to tell the readers how you came to know all that stuff? Can we have some more details about the run on U.S. banks that you're predicting? And since you manage wealth, let me run this by you: Having just found an extra four quarters under the bed, I need to decide which to go for -- the McChicken or the McDouble. Whaddya think?

As we have noted in earlier posts, the same rating agency that downgraded the United States also gave AAA ratings to weirdo financial instruments backed by crap mortgages.
According to congressional testimony by an SEC whistleblower, which sparked an investigation by that agency's Inspector General, the commission's enforcement division, under orders from higher-ups, who went on to secure well-paid positions with the firms they were charged to regulate, shredded a mountain of incriminating evidence detailing wrongdoing by some of the world's top financial firms.

How many files, called "Matters Under Investigation" or MUI were destroyed? According to whistleblower Darcy Flynn, the SEC's enforcement division "disappeared" some 18,000 files, including those of convicted fraudster Bernie Madoff, accused swindler, suspected CIA banker and drug money launderer R. Allen Stanford, as well as accusations that top-tier Wall Street investment banks such as J.P. Morgan Chase had engaged in insider trading.

Taibbi writes that "under a deal the SEC worked out with the National Archives and Records Administration, all of the agency's records--'including case files relating to preliminary investigations'--are supposed to be maintained for at least 25 years. But the SEC, using history-altering practices that for once actually deserve the overused and usually hysterical term 'Orwellian,' devised an elaborate and possibly illegal system under which staffers were directed to dispose of the documents from any preliminary inquiry that did not receive approval from senior staff to become a full-blown, formal investigation."
And that kind of evidence destruction is illegal. Definitely.

Then again, it's sort of like running a stop sign. You need to worry about the way the law reads only if a cop sees you do it.

By the way: Don't tell me that there are no secrets in Washington. Do you think that Garcia or Cindy Cook would have disclosed what they knew if the email had not come to light?
Comments:
Hmmm ... blond looks like a former cheerleader ... why hasn't the print and broadcast media picked up on this Cindy Cook?

Where's the tingle leg bog trotter when you need him?
 
Mike, you and I are on the same wavelength. I think Cindy deserves to be famous. Whaddya think -- maybe I should write a song about her?
 
I have no doubt you are correct. But really who needed anything other than their own eyes and mind to see this coming way ahead of any announcement because that's when you can make big money from it. I'm not playing but I could see it coming.

Partly because Greenspan was my economics teacher when I was a Randian. He really did teach me how to read this stuff when he was on the other side.

What do I think will happen next? And Im not psychic either.

We are in for a long depression, one decade probably two.

We will keep getting told how things are getting better and provide stats to prove it. For those who have never thought statistically it will be enough to convince them to give them hope for a few more weeks or months.

The US is going to go through a complete economic restructuring. Public Works are going on now with roads, bridges that are really OK (around here at least) because there is stimulus money out there that has been given and spent foolishly. Foolishly as a logical person would judge, but not so foolish from the gummit POV.

You see the splashy road stuff that detours us, confronts us every time we drive somewhere is Deterrence. Even when you know better, when you drive by and see all that humming, traffic, workers, you cannot help but feel things are under control even as you laugh at the stupidity of not putting the money etc into passenger trains and better public transportation.

So that part of it is strategic and it is working, even on those of us who know better. Rather clever I think. Useless but clever.

What we all have to and must understand that nothing now is done for any real reason except to put "floating sign" out there for us to see and or hear.

PLease read Zizek.
 
After some thought, why not what you do best, a comic about Cindy.

I remember the zombie brain eaters comic starring the bloggers at Kos and etc.

Or a Youtube upload?
 
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