Open forum: More from ‘Inside Job’ | BrainerdDispatch.com | Brainerd, Minnesota

Open forum: More from ‘Inside Job’

Posted: April 14, 2011 - 4:28pm

The world’s largest recession continued: In 2001 investment banks lost $5 trillion dollars when their bubble burst and Internet stock fell because they promoted stock in companies they new would fail. 

This information comes from the documentary “Inside Job.”

Analysts were paid on how much business they brought in, regardless of their rating status. In 2001 the 10 largest banking firms were fined a total of $1.4 billion. AIG, the world’s largest investment company, was selling huge quantities of derivatives called credit default swaps in order to bet against CDOs (Collateralized Debt Obligation) papers. They didn’t win. CD swaps were unregulated so they didn’t have to put money aside to cover potential losses, they paid employees huge bonuses when contracts were signed. AIG Financial products division in London issued $500 billion dollars worth of credit default swaps during the bubble, many for CDOs backed by subprime mortgages. Their employees made $3.5 billion dollars between 2000-07. Joseph Cassano, head of AIG, made $315 million. Cassano said it’s hard to see anyone losing $1 in a transaction.

Billionaire Warren Buffet called derivatives “Weapons of Mass Destruction.” Using derivatives, bankers could bet on the rise and fall of oil market prices or the weather! Derivatives are a $50 trillion dollar unregulated market. In 2005 World Bankers met in Jackson Hole, Wyo., called the most elite banking conference in the world. Greenspan, Ben Bernanke, Larry Summer and Tim Geitner were some of the important players. Raghuram Rajan, chair of the International Monetary System, said World Financial Development, is making the world riskier. Richard Fuld, CEO of Lehman Brothers in bankruptcy proceedings, revealed six large jets, one helicopter, a Park Avenue mansion and many multi-million dollar homes! Many bankers have been accused of using Spiritual Mathematics.

Marv Begin

Fort Ripley