What just happened in the stock market? Last week, the Dow Jones Industrial Average rose or fell by at least 400 points for four straight days, a stock market first.
The worst drop was on Monday, 8-8-11, when the Dow plunged 624 points. Monday was the first day of trading after US Treasury bonds were downgraded from AAA to AA+ by Standard and Poor’s.
But the roller coaster actually began on Tuesday, 8-2-11, the day after the last-minute deal to raise the U.S. debt ceiling — a deal that was supposed to avoid the downgrade that happened anyway five days later. The Dow changed directions for eight consecutive trading sessions after that, another first.
The volatility was unprecedented, leaving analysts at a loss to explain it. High frequency program trading no doubt added to the wild swings, but why the daily reversals? Why didn’t the market head down and just keep going, as it did in September 2008?
The plunge on 8-8-11 was the worst since 2008 and the sixth largest stock market crash ever. According to Der Spiegel, one of the most widely read periodicals in Europe:
Many economists have been pointing out that last week’s panic resembled the fear that swept financial markets after the collapse of US investment bank Lehman Brothers in September 2008.
Then as now, banks stopped lending each other money. Then as now, banks’ cash deposits at the central bank doubled within days.
On Tuesday, August 9, however, the market gained more points from its low than it lost on Monday. Why? A tug of war seemed to be going on between two titanic forces, one bent on crashing the market, the other on propping it up.
The Dubious S&P Downgrade
Many commentators questioned the validity of the downgrade that threatened to collapse the market. Dean Baker, co-director of the Center for Economic and Policy Research, said in a statement:
“The Treasury Department revealed that S&P’s decision was initially based on a $2 trillion error in accounting. However, even after this enormous error was corrected, S&P went ahead with the downgrade. This suggests that S&P had made the decision to downgrade independent of the evidence. [Emphasis added.]
Paul Krugman, writing in the New York Times, was also skeptical, stating:
[E]verything I’ve heard about S&P’s demands suggests that it’s talking nonsense about the US fiscal situation. The agency has suggested that the downgrade depended on the size of agreed deficit reduction over the next decade, with $4 trillion apparently the magic number. Yet US solvency depends hardly at all on what happens in the near or even medium term: an extra trillion in debt adds only a fraction of a percent of GDP to future interest costs . . . .
In short, S&P is just making stuff up — and after the mortgage debacle, they really don’t have that right.
In an illuminating expose posted on Firedoglake on August 5, Jane Hamsher concluded:
It’s becoming more and more obvious that Standard and Poor’s has a political agenda riding on the notion that the US is at risk of default on its debt based on some arbitrary limit to the debt-to-GDP ratio. There is no sound basis for that limit, or for S&P’s insistence on at least a $4 trillion down payment on debt reduction, any more than there is for the crackpot notion that a non-crazy US can be forced to default on its debt. . . .
It’s time the media and Congress started asking Standard and Poors what their political agenda is and whom it serves.
Who Drove the S&P Agenda?
Jason Schwarz shed light on this question in an article on Seeking Alpha titled “The Rise of Financial Terrorism”. He wrote:
[A]fter the market close on Friday August 5th, we received word that S&P CEO Deven Sharma had taken control of the ratings agency and personally led the push for a U.S. downgrade. There is a lot of evidence that he has deliberately tried to trash the U.S. economy. Even after discovering that the S&P debt calculations were off by $2 trillion, Sharma made the decision to go ahead with the unethical downgrade. This is a guy who was a key contributor at the 2009 Bilderberg Summit that organized 120 of the world’s richest men and women to push for an end to the dollar as the global reserve currency.
[T]hrough his writings on “competitive strategy” S&P CEO Sharma considers the United States the PROBLEM in today’s world, operating with what he implies is an unfair and reckless advantage. The brutal reality is that for “globalization” to succeed the United States must be torn asunder . . .
Also named by Schwarz as a suspect in the market manipulations was Michel Barnier, head of European Regulation. Barnier triggered an alarming 513-point drop in the Dow on August 4, when he blocked the plan of Hans Hoogervorst, newly appointed Chairman of the International Accounting Standards Board, to save Europe by adopting a new rule called IFRS 9. The rule would have eliminated mark-to-market accounting of sovereign debt from European bank balance sheets. Schwarz writes:
We all should be experts on the dangers of mark-to-market accounting after observing the U.S. banking crisis of 2008/2009 and the Great Depression in the 1930s. Mark-to-market was repealed at 8:45 a.m on April 2, 2009, which finally put a stop to the short term liquidity crisis and at the same time ushered in a stock market recovery. Banks no longer had to raise capital as long term stability was brought back to the system. The exact same scenario would have happened in 2011 Europe under Hoogervorst’s plan. Without the threat of failure by those banks who hold high amounts of euro sovereign debt, investors would be free to move on from the European crisis and the stock market could resume its fundamental course.
Schwarz notes that Barnier, like Sharma, was a confirmed attendee at past Bilderberger conferences. What, then, is the agenda of the Bilderbergers?
The One World Company
Daniel Estulin, noted expert on the Bilderbergers, describes that secretive globalist group as “a medium of bringing together financial institutions which are the world’s most powerful and most predatory financial interests.” Writing in June 2011, he said:
Bilderberg isn’t a secret society. . . . It’s a meeting of people who represent a certain ideology. . . . Not OWG [One World Government] or NWO [New World Order] as too many people mistakenly believe. Rather, the ideology is of a ONE WORLD COMPANY LIMITED.
It seems the Bilderbergers are less interested in governing the world than in owning the world. The “world company” was a term first used at a Bilderberger meeting in Canada in 1968 by George Ball, U.S. Undersecretary of State for Economic Affairs and a managing director of banking giants Lehman Brothers and Kuhn Loeb. The world company was to be a new form of colonialism, in which global assets would be acquired by economic rather than military coercion. The company would extend across national boundaries, aggressively engaging in mergers and acquisitions until the assets of the world were subsumed under one privately-owned corporation, with nation-states subservient to a private international central banking system.
Estulin continues:
The idea behind each and every Bilderberg meeting is to create what they themselves call THE ARISTOCRACY OF PURPOSE between European and North American elites on the best way to manage the planet. In other words, the creation of a global network of giant cartels, more powerful than any nation on Earth, destined to control the necessities of life of the rest of humanity.
. . . This explains what George Ball . . . said back in 1968, at a Bilderberg meeting in Canada: “Where does one find a legitimate base for the power of corporate management to make decisions that can profoundly affect the economic life of nations to whose governments they have only limited responsibility?”
That base of power was found in the private global banking system. Estulin goes on:
The problem with today’s system is that the world is run by monetary systems, not by national credit systems. . . . [Y]ou don’t want a monetary system to run the world. You want sovereign nation-states to have their own credit systems, which is the system of their currency. . . . [T]he possibility of productive, non-inflationary credit creation by the state, which is firmly stated in the US Constitution, was excluded by Maastricht [the Treaty of the European Union] as a method of determining economic and financial policy.
The world company acquires assets by preventing governments from issuing their own currencies and credit. Money is created instead by banks as loans at interest. The debts inexorably grow, since more money is always owed back than was created in the original loans. (For more on this, see here.) If currencies are not allowed to expand to meet increased costs and growth, the inevitable result is a wave of bankruptcies, foreclosures, and sales of assets at firesale prices. Sales to whom? To the “world company.”
Battle of the Titans
If that was the plan behind the market assaults on August 4 and August 8, however, it evidently failed. What turned the market around, according to Der Spiegel, was the European Central Bank, which saved the day by embarking on a program of buying Spanish and Italian bonds. Sidestepping the Maastricht Treaty, the ECB said it would engage in the equivalent of “quantitative easing,” purchasing bonds with money created with accounting entries on its books. It had done this earlier with Greek and Irish sovereign debt but had resisted doing it with Spanish and Italian bonds, which were much larger obligations. On Tuesday, August 16, the ECB announced that it was engaging in a record $32 billion bond-buying spree in an attempt to appease the markets and save the Eurozone from collapse.
Federal Reserve Chairman Ben Bernanke was also expected to come through with another round of quantitative easing, but his speech on August 9 made no mention of QE3. As blogger Jesse Livermore summarized the market’s response:
. . . [T]he markets sold off rather rapidly as no announcement was made about QE3. . . . It wasn’t until . . . the last 75 min of market activity [that] the DJIA gained 639 pts to close at a day high of 11,242. That begs the question, where did that injection of capital come from? The President’s Working Group on Financial Markets? Or did the “policy tools” to promote price stability by any chance include the next round of Quantitative Easing unannounced?
Was that QE3 Incognito, Ben?
Titanic Battle or Insider Trading?
There could be another explanation for the suspicious downgrade that was announced despite the fact that the government had just made major concessions to avoid default, and despite the embarrassing revelation that S&P’s figures were off by $2 trillion. On August 12, MSN.Money reported that the downgrade “wasn’t much of a surprise”:
Wall Street had heard a rumor early on that the downgrade was coming. News sites reported the rumor all day.
Unless it was all a huge coincidence, it’s likely that someone in the know leaked the information. The questions are who and whether the leak led to early insider trading.
The Daily Mail had the story of someone placing an $850 million bet in the futures market on the prospects of a US debt downgrade:
The latest bet was made on July 21 on trades of 5,370 ten-year Treasury futures and 3,100 Treasury bond futures, reported ETF Daily News.
Now the investor’s gamble seems to have paid off after Standard and Poor’s issued a credit rating downgrade from AAA to AA+ last Friday.
Whoever it is stands to earn a 1,000 per cent return on their money, with the expectation that interest rates will be going up after the downgrade.
The Securities Exchange Commission announced on August 8 that it is investigating the downgrade. According to the Financial Times, the move is part of a preliminary examination into potential insider trading.
Whatever was going on in the market in the first two weeks of August, it was unprecedented, unnatural, and bears close observation.
_________________
Ellen Brown is president of the Public Banking Institute and the author of eleven books. She developed her research skills as an attorney practicing civil litigation in Los Angeles. In Web of Debt, she turns those skills to an analysis of the Federal Reserve and “the money trust.” Her websites are http://WebofDebt.com and http://PublicBankingInstitute.org.
Filed under: Ellen Brown Articles/Commentary |
WEB OF DEBT BLOG 
Excellent research and observations.
There has to be ‘insider trading’ in everything that goes on – in any stock market. That is the purpose of the stock markets – it is for the ‘banksters’. It is their sandbox! Crisis is oppertunity!
Prison is like a surprise party and those involved are overdue.
[…] Read Rest of Article […]
Not sure if this helps or not, but I posted the following comment to the Indie and it got a good response.
I am not pretending to have attempted anything exhaustive, nor anything entirely valid. I just wanted to cover as much ground as possible as briefly as possible, so here is how it went yesterday:
“These are not national crises-as-such, they are banking crises which have become global, since economies morphed from (say) mercantilism towards capitalism and finally financialism over the last 30-odd years, e.g. notably since monetarism/neo-classicism/economic rationalism noticeably replaced fiscal-types of policies, i.e. when such as Milton Freidman, Reagan and Thatcher gained prominence.
It is really quite meaningless to talk of Greek, Irish, Italian, etc. problems except, of course, that the leaders(?) of virtually all countries have hocked their peoples and assets to, now, international banking organizations.
This has been a process centuries in the making since (say) whenever it was the first king borrowed from bankers to fight a war.
The tragic irony is that the global banking system(sic) is too chaotic for anyone to understand … well riddle me this: Bank A borrows a trillion from bank B; which actually does not have it until, say, it ‘sells’ a bunch of (toxic waste) “financial instruments” to bank C; which off-loads them to bank D, which then probably gets some central bank E to ‘buy’.
A giant Ponzi scheme which, crucially depends on endless growth and the integral charging of compound interest; at least to governments, businesses and inviduals outside of this incestuous cabal(s).
Then comes the spin that “the loans” must be repaid, essentially by tax payers – who have largely been suckered.
What a giant con! Fiscal policies were deliberately destroyed, in favour monetarism, deregulation, the mythical “free market”, etc.. In short: the banks destroyed their base and are now in deep trouble. And nothing can be done about.
A hypothetical contrast (too late, if ever really possible) would have been for governments to print their own bills of exchange (debt free) loaned, as appropriate, at simple interest and generally put into circulation, with a tax mechanism to return to source and maintain a flow.
Back in the 1950s the LSE developed a “pump” model, analogous with a more or less closed plumbing system and compatible with broadly Keynesian concepts … which are either wilfully or ignorantly misrepresented (J K Galbraith’s “The Aflluent Society” is worth a read).
In any case it’s too late now in oh so many ways. We are all aboard the “Titanic” now; as I first began to realize about 40 years ago.
BTW for those who bleat about taxation – which largely recirculates – interest charged is a “private tax” levied by banks, which trickles (now floods?) UP and out of the system overall. We’ve really been HAD haven’t we, especially by politicians who are the paid and willing servants of banks/Wall Str/The City. Hands up all those duped into believing: taxation = bad; interest = good (or at least fairly benign).
Rant over.”
BTW
Trying to regulate an economy via interest rates (monetarism) is crazy.
If interest rates are hiked, as during the 1980s, so as to attempt to curb inflation; that actually fuels inflation, because the cost of borrowing money increases (price inflation).
Now it has gone to the opposite extreme of effective negative interest rates, which presage deflation.
This coming Final Depression mirrors what happened to the Roman Empire, but on a truly global stage.
Expect chaos.
It is already happening with multiple wars and increasing social unrest globally.
And then there is Fu(c)kushima!! Chernobyl on steroids!
I will end on a positive and cheerful note:
GOvernor Rick Perry of Texas has attended Bilderberg conferences according to Daniel Estulin’s book The Bilderberg Group. Rick could be their next man.
Thanks for weaving this all together.
Monetarism is crazy, but crazier still is the financialization of the economy that allows a small group of extraordinary wealthy people to manipulate world markets by means of arcane, unregulated speculation in the “derivatives” market. The ideology of enlightened self-interest leads inevitably to a world company, ie, a concentration of power unlike any the world has seen since Rome. This may be the objective of the new aristocracy, or it may just be a stupid mechanical development. These self-interested wealthy people are not intelligent enough to create this world company on their own. They are not capable of running a world economy, let alone that of a single nation. The smartest men in the room are actually quite stupid because they are incapable of working in the public interest. They leave the public interest to the “invisible hand”. That is why the financial order is not sustainable. A private monetary system is incapable of operating in the public interest. The stupidity of these people is that they do not understand that thew public interest serves them as well.
Agreed, except that as with serial killers, the psychopaths at the top of the pile of our species tend to be very intelligent, but obviously perverted.
A early example of a psychopath of genius fomenting mass destruction was Alexander the (un)Great … a currently rather apt allusion to the war against Afghanistan, where Alexander encountered his total defeat.
Sorry to be rather cryptic, but I cannot see how else to hint at the fact that, for many centuries, our world has been shaped by psychopaths, as was my personal life; until I broke somewhat free.
I will try this:
And this:
The bottom line is that nothing can be understood without knowing the psychological basis of human activity, from top to bottom of “economic class”.
no it is successful the robber class is putting all the money in their pocket taking it out of yours that is the objective
they don’t care about you or me or the public
if you don’t have the money to bribe a congressman or president
to make a law so you have a monopoly (corporation) and rub out your competition or steal public paid for utilities. you are not a capitalist you ain’t in the club.
Yes this system is not capable of working in the public interest
it is not intended to
these robbers are not dumb they know exactly what they are doing
it is sustainable the owners live like kings the rest of us live in a cardboard shack
When you showed how QE2 was transfered to European banks, it seemed a logical possibility the market fluctuations are from QE beneficiaries signaling to fork over more QE.
On Friday Aug 5th, the day of the US credit downgrade, Swiss fund manager Marc Faber sent an interesting hint. He told Bloomberg, “Now we’ll see if Mr. Bernanke is a true money printer or an amateur money printer. If he is a true money printer, he’s going to start printing soon… I can smell QE3, QE4 and many more’. http://www.goldworth.com/artilcedetail.php?id=34
“Sidestepping the Maastricht Treaty, the ECB said it would engage in the equivalent of “quantitative easing,” purchasing bonds with money created with accounting entries on its books. It had done this earlier with Greek and Irish sovereign debt but had resisted doing it with Spanish and Italian bonds, which were much larger obligations.”
My understanding is that the ECB has so far been sure to draw out of circulation all the money it puts into circulation by such purchases, which means there isn’t any quantitative easing.
It’s about time that people are beginning to shed light on the international “secret” groups that seem to be running the whole shabang. When I started getting all this information and putting it together, about 8 years ago, people were calling us “conspiracy theorists”. But these people are exposed now. There has been something going on behind the scenes, there always has been.
That’s right. It’s just how the world works. The world is run by conspiracies. To think otherwise is just naive.
I do not believe that it is a conspiracy as much as it is groups of like minded people exercising control mostly in deference to their own self-interests but with a helping of different self delusional beliefs that they are doing “good” and helping humanity. These are the just justifications that most people practice in order to prop up their self esteem irregardless of how harmful their actions really are.
Everyone needs to take some responsibility for the current state of affairs because as individuals and as a group we help to perpetuate the problem, we do this by just putting our energy into the current system not to mention the beliefs many hold. But even more importantly if we do not take responsibility, blaming it on this or that, then we will believe we have no ability to help foster change, that belief is self-fulfilling because if you accept something is impossible you do not bother to try and therefore you will definitely be proven right. How could it change without any action being taken? This is a false confirmation bias that perpetuates itself.
Hugo Chavez is Pulling all His gold Out of the USA and EU …… I think the Light on all this S&P and Obama SEC conspiracy to CRASH the Dollar and the capital system Might be starting to come all un done !!!!!! Like Dominos the International Bank Run by the Elites begins ????
http://www.zerohedge.com/news/chavez-pulls-venezuelas-gold-jp-morgan-great-scramble-physical-starting
To; gerryhiles its not an economic problem but a criminal problem
See; tarpley, Michael Hudson, Max Kaiser, trickle down larceny,
fight back general shift replaces the general strike in the 21st century – get your money out
http://www.flashpoints.net/ Community Business: Catherine Austin Fitts august 12, also aug 8 and 10th
Ellen and Catherine need to get together public banking and get your money out invest locally
Two great leaders during this depression
Yes it is a criminal problem.
I have just posted (above) solid, psychological reasons for me agreeing with you.
[…] Fonte: http://www.comedonchisciotte.org Articolo in lingua originale: S&P and the Bilderbergers: All Part of the Plan? […]
The Bilderberg group is exposed because the leaders of the world have decided to reveal their puppets that run the world so that people undoubtedly understand who is in charge. The leaders of the world have built their power for centuries. They control banks, industry, media, politicians, military power. They control the western world and now they are taking control over the Middle East. If you are intelligent you must see that they do not care about the Libyan people for example. They openly conquer the world through military power, through conspiracies and it all finishes with democracy in which only they have influence. Who are these leaders? They are the members of a pure hierarchical pyramidal organization with a secret king on the top. After years of researching I found the king’s name must be Jacob Rothschild. You may find more about that in my article “Has Antichrist Come?” here: http://www.sarovic.com/has_antichrist_come.htm.
As I have no religion I could take issue, but will not.
Will you settle for me agreeing that the Rothschilds (and their ilk) represent the root of all evil, i.e. the love of money.
Can you allow me to be an atheist and agree with you in principle?
The PTB just love it that such as you and I might fight, whilst Libya is destroyed and WW3 looms.
It is very interesting that Iraq, Syria and Libya are/were secular countries and that all at least tried different banking and general economic systems than those typified by Wall Street and the City of London.
I have lived in Libya, so I know more than most.
I know about the Ba’ath parties (secular, socialist) in Iraq, Syria and Libya.
I know why the US-led attacks have happened.
Libya, for example, had free health care, free education, free housing and a banking system NOT under the control of the IMF, etc..
Both Iraq and Libya tried to sell oil in other than USD.
Smell the money trail … it leads directly back to the banks, which are controlled by … ? Better not to mention.
But hint to Ellen.
Several weeks ago I read that Eric Cantor had shorted bonds (no doubt others on the inside) and so stood to make a fortune out of a collapse.
I suppose others had gone “long”.
This might account for the “whip-saw” volativity … petty titans fighting it out as the “Titanic” goes down in a zero sum, casino game.
Would that we could have preserved such intents as the original Commonwealth Bank of Australia, but it was not to be and I somehow doubt that the remnant left in N Dakota can survive.
At least we fought the fight and have a clear conscience.
[…] Fonte: S&P and the Bilderbergers: All Part of the Plan? […]
“What turned the market around, according to Der Spiegel, was the European Central Bank, which saved the day by embarking on a program of buying Spanish and Italian bonds.”
Bank credit always = increased debt
There is no getting around this
Credit is needed for
Consumption AND
Saving esp in an ageing population.
If I want to invest in a retirement scheme. I need to have the credit first. This credit then transfer to the retirement fund. As we save more. This results in an increased need for bank credit and the resulting debt.
Debt can either come from
Govt deficits (bonds, Fed credit or notes and coins) OR
Non Govt (private or Co) debt
At present the banking and monetary system is out of balance. To much Non Govt debt and not enough Govt debt
The ECB needs to buy Govt bonds (to finance Govt deficits) as required (that will be rolled over and never paid back). Or watch the Euro collapse.
This Preacher is GREAT !!!!!
http://www.apfn.net/doc-100_bankruptcy27.htm
And this is Not doing our economy any good at all ….
DE-DEVELOP the USA
http://www.cnsnews.com/news/article/75388
actually this is tanking our economy on purpose UN Agenda 21 ICLEI , NGO’s
http://www.takingliberty.us/Narrations/introduction/player.html
In Light of the C change at the S&P Dear Ellen you my dear are a true Patriot in the Defense of the US Dollar !!!!!!!!!!!!!!!
Slightly off topic but goes back to the start of the rot.
..
http://www.buoyanteconomies.com/DebtIncome.htm
..
Here Catherine Austin Fitts [e175 about 1/2 way in] speaks her mind.
..
http://rt.com/programs/keiser-report/
I want to make the case about why I think the credit has dried up in Real estate as well as all forms of promoting Consumer markets and this is killing off the capital system and the FREE markets just Like they want .
You cannot have a recovery in the Supply-side markets with this kind of influence in the middle of the whole aspect of Legal and financial incentive policy planning and the market NOT be seeking security in everything but equities .
the NYTimes is all over population control in this Link OVERPOPULATION .
http://www.overpopulation.org/solutions.html
In this Link you can see how they are targeting housing as a Threat , and this is why the real estate market lost all financing and is in the toilet . I mean the top of the Money Tree Mr. TARP Hank Paulson is the Founder of Nature Conservancy so what does that tell you about the way the TOP Credit Originating sources in the world are Influenced by this kind Of Thinking ???
http://www.sierraclub.org/population/consumption/
I am lucky that i found your blog…….
[…] *********************************************Fonte: S&P and the Bilderbergers: All Part of the Plan? […]
Unfortunately the Neocon NWO Banksters plan years in advance and what we experience today is a dot on a long term plan, EXCEPT. BRIC
may be affecting the bad guys plans some in the short term. Obama wants to do away with IRS interest deduction for home purchase. One thing communi$t$’ want more than anything, and never forget communi$m is Bankster created, are no self employed people. So this housing bubble bust and now Obama’s call to get rid of interest deduct will destroy the self employed construction worker totally and completely. Most assuredly eliminating self employed construction workers is a NWO long term goal.
The strange stock market action you all mention I agree has got to be Bankster made. However the markets without massive daily swings of late is equally strange and again reeks of bad guy manipulation. To my mind one thing the Banksters cannot tolerate are massive increases in the price of gold and silver. People will switch into the best currency and the bad guys would lose their trillions of fiat dollars if gold and silver go way way up. It seems the bad guys manipulating a massive crash in the stock markets, from the BDGYS perspective, must come without gold and silver going way up. China’s newly formed Asian gold exchange may be a fly in the Banksters crash the markets plan. Now watch the markets cash and gold and silver crash too, and I’ll have to eat crow.
Be Very Careful when thinking about Ending the Federal Reserve and here is why …….
Be Very Careful when thinking about Ending the Federal Reserve and here is why …. With the BRIC nations and OPEC calling for an End to the dollar as World trade currency , and wanting to replace it with the EURO and told the European Union they wou…