America’s Bankrupt Banks: Inside the Meltdown (Full Version)

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On Thursday, Sept. 18, 2008, the astonished leadership of the U.S. Congress was told in a private session by the chairman of the Federal Reserve that the American economy was in grave danger of a complete meltdown within a matter of days. “There was literally a pause in that room where the oxygen left,” says Sen. Christopher Dodd (D-Conn.).

As the housing bubble burst and trillions of dollars’ worth of toxic mortgages began to go bad in 2007, fear spread through the massive firms that form the heart of Wall Street. By the spring of 2008, burdened by billions of dollars of bad mortgages, the investment bank Bear Stearns was the subject of rumors that it would soon fail.

“Rumors are such that they can just plain put you out of business,” Bear Stearns’ former CEO Alan “Ace” Greenberg tells FRONTLINE.

The company’s stock had dropped from $171 to $57 a share, and it was hours from declaring bankruptcy. Federal Reserve Chairman Ben Bernanke acted. “It was clear that this had to be contained. There was no doubt in his mind,” says Bernanke’s colleague, economist Mark Gertler.

Bernanke, a former economics professor from Princeton, specialized in studying the Great Depression. “He more than anybody else appreciated what would happen if it got out of control,” Gertler explains.

To stabilize the markets, Bernanke engineered a shotgun marriage between Bear Sterns and the commercial bank JPMorgan, with a promise that the federal government would use $30 billion to cover Bear Stearns’ questionable assets tied to toxic mortgages. It was an unprecedented effort to stop the contagion of fear that seemed to be threatening the rest of Wall Street.

While publicly supportive of the deal, Treasury Secretary Henry Paulson, a former Wall Street executive with Goldman Sachs, was uncomfortable with government interference in the markets. That summer, he issued a warning to his former colleagues not to expect future government bailouts, saying he was concerned about a legal concept known as moral hazard.

Within months, however, Paulson would witness the virtual collapse of the giant mortgage companies Fannie Mae and Freddie Mac and preside over their takeover by the federal government.

The episode sent shockwaves through the economy as confidence in Wall Street began to evaporate. Within days, in September 2008, another investment bank, Lehman Brothers, was on the brink of collapse. Once again, there were calls for Bernanke and Paulson to bail out the Wall Street giant. But Paulson was under intense political pressure from conservative Republicans in Washington to invoke moral hazard and let the company fail.

“You had a conservative secretary of the Treasury and conservative administration. There was right-wing criticism over Bear Stearns,” says Congressman Barney Frank (D-Mass.), chairman of the House Financial Services Committee.

Paulson pushed Lehman’s CEO Dick Fuld to find a buyer for his ailing company. But no company would buy Lehman unless the government offered a deal similar to the one Bear Stearns had received. Paulson refused, and Lehman Brothers declared bankruptcy.

FRONTLINE then chronicles the disaster that followed. Within 24 hours, the stock market crashed, and credit markets around the world froze. “We’re no longer talking about mortgages,” says economist Gertler. “We’re talking about car loans, loans to small businesses, commercial paper borrowing by large banks. This is like a disease spreading.”

“I think that the secretary of the Treasury could not fully comprehend what that linkage was and the extent to which this would materialize into problems,” says former Lehman board member Henry Kaufman.

Paulson was thunderstruck. “This is the utter nightmare of an economic policy-maker,” Nobel Prize-winning economist Paul Krugman tells FRONTLINE. “You may have just made the decision that destroyed the world. Absolutely terrifying moment.”

In response, Paulson and Bernanke would propose — and Congress would eventually pass — a $700 billion bailout plan. FRONTLINE goes inside the deliberations surrounding the passage of the legislation and examines its unsuccessful implementation.

“Many Americans still don’t understand what has happened to the economy,” FRONTLINE producer/director Michael Kirk says. “How did it all go so bad so quickly? Who is responsible? How effective has the response from Washington and Wall Street been? Those are the questions at the heart of Inside the Meltdown.”

 

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Spinning Terror (Full Version)

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A Dispatches report on how politicians and journalists are spinning the war on terror and using it to justify all kinds of outrageous actions.

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6 comments to Spinning Terror (Full Version)

  • RLee

    KESHE FOUNDATION. If my enemy had the resources for free energy, free clean water, free transportation, and free improved medical services, and I stood to lose trillions of dollars of profit – would I be willing to commit billions of dollars to destroy you? Yeah, probably. That’s what the whole Iran issue is about. Check out Keshe Foundation.

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  • RLee

    The vast majority of Americans “ARE NOT” the United States Government. “WE THE PEOPLE” of the United States “DO NOT” condone nation building; “We The People” of America “Do Not Condone” the killing of unarmed civilians by illegal DRONE attacks; attacks that are blatant violations of the Geneva Convention for which the Hague Court MUST nake a ruling on asap or all citizens of the world could be labeled terorists; and will be summarily warranted for execution without prejudice.

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  • I quite agree, RLee. And if you don’t mind my blowing my horn, my fourth novel, City on the Ledge, which takes place in Quito, Ecuador, has just that theme: that American foreign policy ought to reflect the values of American people, but it doesn’t, not by a long shot.

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  • Right, they use fear to promote more wars for Israel, in which American soldiers fight and die. Who controls American Foreign Policy? AIPAC. Who created Israel, in 1948? Rothschilds. Who created the OSS/CIA? Rockefellers. What are the Rockefellers? Rothschild, ‘globalist’ agents. Their CIA created ‘Al-Qaeda’, as the bogey-man excuse, to invade foreign countries, that don’t have a central bank, and aren’t “playing along”, with Western International Central Bankers. You know, the guys who orchestrated the 2007 Mortgage Loan ‘Crisis’, so they could give THEMSELVES TRILLIONS of $$, at American Taxpayers’ expense (of course), which all led to the early 2009 ‘global’ economic ‘downturn’ (depression). Now, all they talk about, is the looming ‘Fiscal Cliff’. Look, it’s all a huge charade. The people of the U.S. DO NOT OWE ANY OF THE TRILLIONS THAT THE INTERNATIONAL CENTRAL BANKERS CREATED OUT OF THIN AIR, THEN GAVE TO THEMSELVES, IN A BAILOUT, IN LATE 2008, to be paid back by American Taxpayers, to keep them in perpetual DEBT-SLAVERY, while the Bankers get off, scot-free, with NO JAIL-TIME, for all of their fraud! Only the U.S. Treasury, per the U.S. Constitution, has the authority, to print/coin, U.S. Currency, DEBT-AND-INTEREST-FREE.

    Bankers Destroy Global Economy by Design to Consolidate Power
    http://www.truthistreason.net/bankers-destroy-global-economy-by-design-to-consolidate-power/comment-page-1#comment-26822

    They are behind the “War on Drugs” FRAUD, the “War on Terrorism” FRAUD, and the ‘AGW’, or ‘global warming’, or “Gee, I wonder what the hell they’ll call it next: CLIMATE CHANGE?” FRAUD. They are behind it all, folks. WAKE THE F#@$ UP!
    (NOTE: The CIA owns and operates the global drug trade. U.S. Soldiers guard the poppy fields! The CIA was created by the International Central Bankers. The Bankers LAUNDER the drug trade profits! Get it? Yet?) The FBI creates “terrorist” patsies, then sets them up, with bombs, and plans, and, right at the last minute, before the patsies can carry out the FBI-created plan, the same FBI agents step in, to “foil” the plan, so they can make a big MEDIA (Main Stream Media) expose, that makes STUPID SHEEPLE AMERICANS afraid of the ‘Al-Qaeda’ or non-existent “terrorist” bogeyman, that gives the government the excuse to create freedom-stealing agencies, like DHS, TSA, etc. It’s all SLAVERY, folks, brought to you, by the International Central Bankers, and their bought-and-paid-for U.S. CON-gress.

    The great global warming swindle – Full version
    http://www.youtube.com/watch?v=YtevF4B4RtQ&feature=player_embedded

    Club of Rome Report, 1993 – Global Warming Quotation [Pause video at 1:12, and READ!]

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  • THAT is why we have all this talk about ‘gun control’. It’s not about guns. It’s about control. OVER YOU!

    Who are the International Central Bankers? “JEWS”! (Actually, KHAZARS!) What did they create, out-of-thin-air, in 1948? IS~RA~EL. Who Controls American Foreign Policy? AIPAC. Get it? Yet? The total totalitarian global takeover, begins with complicity by AMERICANS, fighting more wars for Israel, advocating more ‘gun control’, doing NOTHING to eliminate the ‘Fed’ (‘Federal’ ‘Reserve’), buying and eating GMO’s, and supporting those who make them, and believing ANYTHING you hear, on ABC/CBS/NBC/CNN/FOX!!!

    C’MON WAKE UP!

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  • READ THE ARTICLE AND COMMENTS, ON THIS PAGE:

    After Gun Control: A Chilling Historical Perspective
    http://fromthetrenchesworldreport.com/after-gun-control-a-chilling-historical-perspective/28762/#comment-178348

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