Click on the photo or enclosed links and watch 55 minutes of PBS at its best ~ THE WARNING / How Greenspan, Summers & Rubin conspired to silence Derivatives whistleblower Brooksley Born.
Frontline shows how Congress was warned back in 1998 by Brooksley Born, chairman of the Commodity Futures Trading Commission, of the imminent dangers of the OTC derivative crap shoot which was an unregulated financial bonanza for Wall Street and in particular LTCM ~ the generally acknowledged rock star of derivative trading. All the major banks wanted part of this unregulated action ! Long Term Capital Management ( LTCM ) was a hedge fund located in Greenwich, Connecticut . The founders included two Nobel Prize-winning economists ~ which put some velvet on LTCM's collar of unregulated trading.
PBS shows how LTCM had a derivative meltdown in 2007 and 14 Wall Street banks put up $ 3.5 trillion dollars to bail it out but this dark unregulated market rightfully caught the attention of a deeply concerned Brooksley Born.
PBS details how Born was stonewalled by Greenspan, Ruben & Summers, and so she then took her concerns to congress ~ where she was also ignored as Greenspan, Ruben & Summers routinely dismissed her concerns before Senators and Congressman who were already bought by and beholden to the vast financial lobby and had no interest in shutting down the golden OTC derivative goose.
Born then produced a document called the Concept Release which strongly warned that the complete lack of regulation on OTC derivatives was setting up the economy for fraud leading to the possibility of a financial crash. While Born tried to shed light on what was referred to as a 'dark market' she was again blocked every step of the way and warned by the likes of Greenspan, Ruben & Summers not to release the Concept Document.
She released it anyway and eventually congress killed the messenger by taking away her power. Born resigned and the last two years of the Clinton administration were totally unregulated setting the stage for further excesses in the Bush administration until the $595 trillion dollar ( yes, I said trillion ) derivative market exploded in 2007 ~ 10 years after the initial tremor at LTCM in 1997.
Please watch this riveting PBS expose and remember that many of the principles involved in this saga of unregulated greed are holding key financial positions in the Obama Administration and that includes Tim Geithner and Larry Summers ~ and that the OTC Derivative market is still alive and unregulated. Also note that Brooksley Born still sees the continuing danger of a financial crisis and disaster.
And Eugene Robinson, Washington Post, correctly writes that it's almost too late to stop their Getaway Car ~ " Slashing executive salaries, bonuses and perks at the seven bailed-out companies that gorged most gluttonously at the public trough is emotionally satisfying, but it shouldn't be. It's like arresting jaywalkers while ignoring the bank robbery that's happening in broad daylight down the block .... All this is just a sideshow. The main event is the limited, far-too-modest attempt by the Obama administration and Congress to curb the irresponsible Wall Street practices that led to the financial meltdown ~ and, if unaddressed, will lead inexorably to the next crisis." http://www.truthout.org/1024096
As bank failures soar to 106 ~ the Oligarchy ( The financial powerful elite few ) are still in full control and only the truth and transparency will begin to crack that bubble of denial. PBS's The Warning is a major step in that direction.
Allen L Roland
