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Did The US Government Sanction The Liquidation Of Lehman Brothers?

Tyler Durden's picture




 

Yesterday we described in extensive detail just how on September 10, 2008, by way of a glaringly erroneous margin call, either purposefully or by accident JP Morgan managed to extract over $250 million in variation margin cash from Lehman, which may well have been the catalyst for the end of Dick Fuld's megabank as it precipitated several other multi-billion margin calls from both JPM and other banks, ultimate;y leading to Lehman's liquidation filing five days later.

JPM naturally pleaded innocence and attributed everything to an error committed by an unnamed back-office margin clerk: after all, a mandated hit on a competitor would be not only illegal, but also would involve conspiracy reaching to the highest echelons of government, as Hank Paulson (and to a lesser extent Bernanke) would have had to bless the launch of a raid as brazen as one taking down one of America's largest investment banks from within the US.

Needless to say, anyone who accused the US government of engaging in this level of criminal activity would be immediately branded a conspiracy theorist and ostracized from polite social circles in perpetuity.

But what if said "speculation" emerged not from the depths of some fringe tin-foil operation, but from the sovereign wealth fund of the United Arab Emirates, the Abu Dhabi Investment Council, one of the world's largest sovereign wealth investors and petrodollar recyclers. Surely they can't be branded tin foil? After all they are "very serious people" who manage hundreds of billions.

We ask for the simple reason that this is precisely what happened, as we learn courtesy of Wikileaks-leaked cable 08ABUDHABI1287, UAE VIEWS ON GLOBAL FINANCIAL TURMOIL, describing the meeting of then Treasury Deputy Secretary Kimmitt and Ambassador Olson with officials from the highest branches of Abu Dhabi's top financial organizations.

S E C R E T ABU DHABI 001287
TREASURY FOR D/S KIMMITT, U/S LEVEY, U/S MCCORMICK
NSC FOR DPRICE
STATE FOR EB
 
E.O. 12958: DNG: CO 11/10/2032
TAGS: AE ECON IR
SUBJECT: UAE VIEWS ON GLOBAL FINANCIAL TURMOIL
 
Classified By: Ambassador Olson for reasons 1.4 b and d.
 
¶1. (C) Summary. On 27 and 28 October 2008, Treasury Deputy Secretary Kimmitt and Ambassador Olson met with officials from the UAE Central Bank, UAE Ministry of Finance and Abu Dhabi sovereign wealth funds. Kimmitt discussed the USG response to the global financial turmoil and prospects for the U.S. economy, solicited input on the regional implications, stressed U.S. commitment to open investment principles, encouraged continued vigilence with respect to Iran, and assured that transition planning was underway at the Treasury Department to ensure a smooth handoff to the next administration. End Summary.
 
Lehman Collapse Rattles Abu Dhabi
---------------------------------
 
¶2. (C) D/S KIMMITT DESCRIBED U.S. STEPS TO PRESERVE STABILITY IN THE FINANCIAL SECTOR. ABU DHABI INVESTMENT COUNCIL (ADIC) OFFICIALS QUESTIONED KIMMITT ABOUT THE USG DECISION TO ALLOW THE FAILURE OF U.S. INVESTMENT BANK LEHMAN BROTHERS. ADIC MANAGING DIRECTOR KHALIFA AL KINDI REPEATED SPECULATION THAT LEHMAN'S COLLAPSE WAS PART OF A DEAL WITH THE U.S. CONGRESS, PAVING THE WAY FOR THE $770 BILLION EESA PACKAGE. KIMMITT EXPLAINED THAT THERE WAS NO BUYER FOR LEHMAN AS THERE WAS FOR BEAR STEARNS, AND THAT AT THE TIME TREASURY LACKED THE AUTHORITY TO INJECT CAPITAL OR TAKE OTHER STEPS. (COMMENT: ADIC'S DIRECT AND SUSTAINED QUESTIONING ON THE LEHMAN BROTHER'S COLLAPSE SUGGESTS THAT THE SWF LIKELY SUSTAINED LOSSES FROM HOLDING LEHMAN DEBT INSTRUMENTS. END NOTE.)

Curiously, both "explanations" are wrong, as by now everyone knows that Barclays was an interested buyer in Lehman and would have engaged in a wholesale transaction had it gotten the guaranteed blessings of either the US government or the crown (instead of simply buying just the North American brokerage out of bankruptcy a few short days after the Chapter 7 filing), and furthermore we know that the US Treasury had every authority to inject capital and take "other steps" as confirmed by the subsequent bailouts of AIG and, to a lesser extent, Citigroup.

After all: the US was just getting warmed up.

So why use lies as justification for the inaction that did indeed "pave way" for Hank Paulson's theatrical demand for a blank check in Congress justified by a three page term sheet? Could it be that it is precisely because the US government did indeed sanction the "hit" on Lehman, and JPM's escalating rounds of margin calls was the "weapon" used to take out the offending bank?

Alas, with such "in-depth investigative journalism" as Andrew Sorkin's very much retroactively pseudo-fictional "TBTF" narrative of events, one will never know what really happened in those days before Lehman's collapse unleashed the biggest bank profit bonanza and money printing, wealth transfer orgy in history.

 

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Mon, 03/04/2013 - 20:32 | 3299432 swissaustrian
swissaustrian's picture

How many DDoS attacks have been launched on ZH lately?

Mon, 03/04/2013 - 20:36 | 3299446 Lost Wages
Lost Wages's picture

BREAKING: Goldman Sachs, Citibank and JP Morgan warn of possibility of intense cyberattacks against anti-authoritarian financial blogs, obviously coming from Chinese military sources and not financed or condoned by the banks themselves. However, said cyberattacks may bleed over to banking system and erase your account balance, purely by accident of course, and not planned by anyone including the banks. Any money losses will be handled with same efficiency as MF Global scandal and are backed by the full faith and credit of the FDIC.

Mon, 03/04/2013 - 20:49 | 3299479 Tijuana Donkey Show
Tijuana Donkey Show's picture

BREAKING: In addition, these cyberattacks may impact boat motors and boat stability, if guns or gold is on the boat at the time of the attack. In addition, the attacks may render GPS worthless, causing exact locations of said accidents to remain unidentified. 

Mon, 03/04/2013 - 21:26 | 3299572 Pinto Currency
Pinto Currency's picture

 

Perhaps the US Gov is captive of a few major banks. 

In that case the US Gov would not approve the hit but simply acuiesced.

Mon, 03/04/2013 - 22:14 | 3299667 Antifaschistische
Antifaschistische's picture

"an error so profound one wonders if this was not a premeditated "hit" on one bank by another bank."

Seriously, "one wonders"....seriously?  "wonders"   seriously?   I want to meet the person that really "wonders" if the vipers of Wall Street routinely conspire to bring an organization, or a government, or a world leader, or a lowly congressman from Texas, etc. down.  I have no "wonder" at all.

Mon, 03/04/2013 - 22:31 | 3299712 francis_sawyer
francis_sawyer's picture

When the 'evil episcopalians' decide that the time is right, THEY will sanction the liquidation of the US government...

Mon, 03/04/2013 - 22:51 | 3299771 James_Cole
James_Cole's picture

In related news, prosecutors in the Bradley Manning case today decided to pursue the longest possible sentence against him for "aiding the enemy" - life.

Manning, for those not aware, was the one who leaked the cables + other stuff.

Let this be a lesson - if you ever come across information that would encourage folks to question the integrity of their gov, bury it quickly!

Tue, 03/05/2013 - 00:40 | 3299977 NotApplicable
NotApplicable's picture

Add to this the fact that one of Bernanke's defenses after bailing out Bear in response to question "who are you going to bail out next?" was "We aren't afraid to let anyone fail."

Tue, 03/05/2013 - 01:24 | 3300043 YBNguy
YBNguy's picture

RIP Ken Lay

Tue, 03/05/2013 - 07:56 | 3300275 overmedicatedun...
overmedicatedundersexed's picture

one wonders if chris cox was some how forced to testify on his in action in the fall of 2008, while the markets crashed..head of SEC, yet never shown in the public spot light...what tales he might tell..he holds the keys to this mystery..has anyone seen chris cox, most likely living in corzine's guest house.

Mon, 03/04/2013 - 20:56 | 3299501 Bingfa
Bingfa's picture

Seriously, there will be a huge cyber push in the coming months

The more the EU breaks down. That's why they're creating the illusion everything's fine here.

                               If you think the illusion was hysterical before.....wait, full court press.

Mon, 03/04/2013 - 22:22 | 3299687 fudge
fudge's picture

from 2012

http://www.weeklystandard.com/blogs/un-seek-control-internet_664018.html

http://www.huffingtonpost.ca/2012/12/03/un-control-internet_n_2229623.html

The denials were every where , but I can't see any other way to keep the sheep in fold.

Bloggers and smart phones are every where.

 

Mon, 03/04/2013 - 22:51 | 3299773 Bingfa
Bingfa's picture

They will never keep the Matrix intact without censoring the internet. Never

I think your right, Guns and Internet will both be dealt with by the UN...in time.

UN small arms treaty vote in late March, read all the rhetoric about how they plan to work around the 2nd amendment

Obama got a plan. I say he crushes the US then hands sovereignty to the UN. NWO- agenda 21

Mon, 03/04/2013 - 23:22 | 3299844 Totentänzerlied
Totentänzerlied's picture

No. There is no need to censor those who censor themselves, much less those who speak but don't act.

Mon, 03/04/2013 - 23:27 | 3299854 Bingfa
Bingfa's picture

Internet is already underway

Guns.... might get a little messy

Wed, 03/06/2013 - 00:54 | 3303796 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

Shut the net and it all goes down, gov't, banks, corps, supply chains, whatever else you can think of.  

 

Find a doctor, you're not thinking straight.

Mon, 03/04/2013 - 22:07 | 3299653 monkeyboy
monkeyboy's picture

We ARE so fucked!

Mon, 03/04/2013 - 21:10 | 3299541 sgt_doom
sgt_doom's picture

Oh, come on already!!!!!

Everyone knows by this time that a bear run on Lehman's by JPMorgan Chase, Goldman Sachs and Deutsche Bank took place.

Why is this really news????

Mon, 03/04/2013 - 20:31 | 3299433 Careless Whisper
Careless Whisper's picture

US gov = JP Morgan   Are you starting to get it?

Mon, 03/04/2013 - 20:51 | 3299442 Xibalba
Xibalba's picture

BLYTHE MASTERS: 'We have no short position in silver, just hold one on behalf of our client'

http://www.zerohedge.com/news/blythe-masters-blogosphere-silver-manipula...

 

Mon, 03/04/2013 - 21:06 | 3299533 tom a taxpayer
tom a taxpayer's picture

Hank Paulson, Sec Treasury at time of Lehman's demise, has an alibi…he was bird watching in Central Park.

http://www.newyorker.com/talk/2011/12/12/111212ta_talk_widdicombe

Mon, 03/04/2013 - 21:48 | 3299592 Pinto Currency
Pinto Currency's picture

 

Where does Blythe explain how they sell 300 million oz. of silver futures in 4 nanoseconds as a hedge to ensure their client gets lower silver prices.

 

Mon, 03/04/2013 - 22:20 | 3299681 fourchan
fourchan's picture

hank paulson won best actor that year right?

the fickle finger of fate, in his case, is indeed crooked.

 

we the people paid him 400 million for the perfomance.

Mon, 03/04/2013 - 22:43 | 3299751 H E D G E H O G
H E D G E H O G's picture

hopefully, that "fickle finger of fate" winds up on a trigger somewhere, sometime, just dreamin'..........................

Mon, 03/04/2013 - 21:06 | 3299510 prains
prains's picture

Now you start to see the hand of Cheney has been buried so far the American ass he's been combing their hair for years.

 

Where is the guy today????

 

Cheney; "serving wench !! bring forth the libations ! we must now sacrifice another virgin ! bwaaaaa haaaaaaa haaa"

 

 

Mon, 03/04/2013 - 22:53 | 3299777 GtownSLV
GtownSLV's picture

If Cheney were in banking he'd have destroyed the world a dozen times over, fortunately for us all, he's only in oil and politcis.

Tue, 03/05/2013 - 12:31 | 3301021 prains
prains's picture

You need to readjust your jock strap he's in ALL of it. it's all the SAME THING (politics/oil/banking) run and controlled by the same oligarchs and cheney wants so desperately to be one of them it hurts.

 

"IT puts the lotion on ITS skin" 

 

hurts

Mon, 03/04/2013 - 21:08 | 3299535 johngaltfla
johngaltfla's picture

and by extension....

 

JP Morgan is the Fed which IS the US Government.

 

Of course, payback for LTCM played a HUGE role in this action.

Mon, 03/04/2013 - 21:18 | 3299555 Bingfa
Bingfa's picture

It's all a huge interconnected farcical chess game

One where they didn't use their pawns efficiently.

 

Mon, 03/04/2013 - 22:27 | 3299702 centerline
centerline's picture

We are pawns.

Mon, 03/04/2013 - 22:35 | 3299726 Bingfa
Bingfa's picture

That's what I meant, they have no use for us now. They pushed Globalization and it killed the pawns.

Ever played computer chess and both sides have a queen and a pawn?  They got no moves left.

Mon, 03/04/2013 - 22:55 | 3299781 chubbyjjfong
chubbyjjfong's picture

The power of the pawn lies within its weakness.

Tue, 03/05/2013 - 00:23 | 3299947 GMadScientist
GMadScientist's picture

I thought it was the potential to transition into being the most powerful piece on the board.

Tue, 03/05/2013 - 00:40 | 3299978 Quit Your Bitchin
Quit Your Bitchin's picture

Mongo was a pawn.

Tue, 03/05/2013 - 01:20 | 3300038 DaveyJones
DaveyJones's picture

we're prawns      and were food for other sea creatures

Mon, 03/04/2013 - 21:23 | 3299566 logicalman
logicalman's picture

If you receive a gift of White House Cufflinks, you know who's got your back.

Mon, 03/04/2013 - 20:35 | 3299434 Xibalba
Xibalba's picture

 

MF GLOBAL? 

 

Mon, 03/04/2013 - 22:12 | 3299663 LeisureSmith
LeisureSmith's picture

Speaking of MF Global. Just for fun i smacked John Corzine's face on John Gotti's body.... and it turned out like i'd imagine Ben Bernake would look if he had been juicing since high school and had a more "hands on" job in the syndicate. Strange. http://www.flickr.com/photos/79201873@N08/8516177015/in/photostream

Mon, 03/04/2013 - 20:32 | 3299435 Lost Wages
Lost Wages's picture

Let's hope the truth doesn't take too long to come out. Usually the truth about this kind of thing isn't revealed for another 50 years.

Mon, 03/04/2013 - 21:33 | 3299579 Omen IV
Omen IV's picture

"Could it be that it is precisely because the US government did indeed sanction the "hit" on Lehman, and JPM's escalating rounds of margin calls was the "weapon" used to take out the offending bank?"

for those interested in an exact parallel - read the last third of the book - The AIG Story by Hank Greenberg former CEO

he was taken out forcibly from the managment after building the company from scratch from the 60's to the largest Insurance carrier in the world - with rigid controls on Risk managment which all went away on his termination

the rest you  know - a Lone Gunman - Cassano managed the entire CDS desk in London (former Drexel) and took on ONE WAY risk that cannot be justified by anyone  - never would have happened or allowed on Greenberg watch

and Paulson nukes AIG for GS.... and for cover the rest of the banks on fraudulent CDO's put to AIG that cant stand the light of day and the Fed intervenes in stopping the california and federal lawsuit filed against the banks  on behalf of stockholders of which Greenberg was one of the largest

these "hits" were preplanned and executed from high level - follow the breadcrumbs

the similiarity in circumstances is breathtaking !

 

 

 

Tue, 03/05/2013 - 00:51 | 3299994 McMolotov
McMolotov's picture

Let's hope the truth doesn't take too long to come out. Usually the truth about this kind of thing isn't revealed for another 50 years.

Yeah, I'm glad this is the year we'll finally know with certainty what really went down with Kennedy 50 years ago. Wait a minute...

Mon, 03/04/2013 - 20:33 | 3299436 Bear
Bear's picture

Does anything 'happen' without saction? What?

Tue, 03/05/2013 - 00:23 | 3299949 GMadScientist
GMadScientist's picture

Weather.

Tue, 03/05/2013 - 00:52 | 3299997 McMolotov
McMolotov's picture

HAAAAAAAAAAAAAAAAARP!!!!!!!!!!!!

Mon, 03/04/2013 - 20:33 | 3299437 kito
kito's picture

they shouldve sanctioned not only the liquidation of lehman, but also aig, citi, goldman, and every other leech institution that is draining this country and europe of its lifeblood...............

Mon, 03/04/2013 - 20:40 | 3299454 Kirk2NCC1701
Kirk2NCC1701's picture

Yes.  And if they'd left only JPM standing, it would have prevented the circular finger-pointing, as we'd only have one 'king-ape', the 90,000 lb JPM gorilla to deal with.   And we've all seen the ending to that king-ape movie before.  ;-)

Mon, 03/04/2013 - 21:01 | 3299522 booboo
booboo's picture

There will only be one "Gorilla" on Wall Street and his name is Dick Fuld and.....whats that? Bankrupt? Ribs got cold? nevermind.

Mon, 03/04/2013 - 21:08 | 3299536 disabledvet
disabledvet's picture

amen to that. "they're all a bunch of criminals." at least one died. "it appears the cause of death was murder, sir." "oh. well, 'parting is such sweet sorrow.'" http://www.youtube.com/watch?v=grMo5-2Y5oc

Mon, 03/04/2013 - 20:34 | 3299440 Bay of Pigs
Bay of Pigs's picture

Yes, the US Govt (US Treasury) most certainly did have a role in flushing Lehman along with JPM and the FED itself.

All the pieces of the puzzle are coming together just as ZH has maintained all along. Well done Tyler(s).

Mon, 03/04/2013 - 20:41 | 3299452 buzzsaw99
buzzsaw99's picture

+1 People talk about the fed and jpm as if they are separate entities. They aren't. The "fed" raised rates, the "jpm" issued margin calls, unconnected banks cratered. No conspiracy, just ebb and flow like they have been doing from the beginning.

Mon, 03/04/2013 - 20:48 | 3299475 Haole
Haole's picture

Amazing how greyed the distinctions have become between politics, show business, finance, piracy, propaganda, rape and pillage...

Mon, 03/04/2013 - 20:50 | 3299481 Tijuana Donkey Show
Tijuana Donkey Show's picture

No, just now it's actually apparent. 

Mon, 03/04/2013 - 22:57 | 3299785 seek
seek's picture

Greying distinctions between politics, finance, and propaganda is the hallmark of fascism.

Mon, 03/04/2013 - 20:35 | 3299441 fonzannoon
fonzannoon's picture

who's next. That's what I want to know.

Mon, 03/04/2013 - 20:37 | 3299448 Bay of Pigs
Bay of Pigs's picture

Deutsche Bank?

Mon, 03/04/2013 - 20:41 | 3299462 fonzannoon
fonzannoon's picture

I know ekm thinks so. DB is a monster. I don't know. That would be a big deal. My money is on the banks being fine and the rest of us going broke.

Mon, 03/04/2013 - 20:53 | 3299484 ekm
ekm's picture

My logic is based on MFG.

MFG was loaded up with italian bonds and thrown into the JPM's altar for slaughter.

 

I've heard many times that DB Securities (DBs primary dealer arm) has been buying spanish bonds, a looooooooot of them.

Taking a page from Taleb, turkey is being groomed for thanksgiving day.

 

Attrocious rumor are for:

Deutsche bank (primary dealer arm), Royal bank of scotland securities (primary dealer arm), Merryll Lynch. It has to be small, all previous 3, bear stearns, lehman, MFG were small.

Mon, 03/04/2013 - 21:00 | 3299515 AssFire
AssFire's picture

In my humble opinion:

It is time ekm receives contributor's status.

 

Mon, 03/04/2013 - 21:02 | 3299524 ekm
ekm's picture

Thx a lot, but I'm just lucky.

I have plenty of time in my hands to read about this stuff and a structure started getting built in my mind.

 

It is all conjecture based on a lot of reading and I rely on ZH to dig out written proof, like this one.

Mon, 03/04/2013 - 21:04 | 3299529 CH1
CH1's picture

It is time ekm receives contributor's status.

Who is ekm?

Mon, 03/04/2013 - 21:44 | 3299613 CH1
CH1's picture

Wow, five down arrows before ekm shows up, as an answering to the question.

It's getting so a fella can't ask questions round these parts.

Mon, 03/04/2013 - 21:49 | 3299622 ekm
ekm's picture

I never get offended. No problem with it.

I am just addicted to finance, spend countless of hours reading and watching, finance and military news.

Mon, 03/04/2013 - 22:49 | 3299769 H E D G E H O G
H E D G E H O G's picture

make that six :)

Mon, 03/04/2013 - 21:54 | 3299610 ekm
ekm's picture

http://www.bloomberg.com/video/67392126-harvey-miller-interview-about-cr...

 

AssFire

Click above. That's when I started thinking about Lehman being a sacrificial lamb.

Mon, 03/04/2013 - 22:17 | 3299674 Boozer
Boozer's picture

I second the motion.

Mon, 03/04/2013 - 22:21 | 3299685 Boozer
Boozer's picture

ekm contributor status - I second the motion.

Mon, 03/04/2013 - 21:23 | 3299567 Cabreado
Cabreado's picture

"It has to be small, all previous 3, bear stearns, lehman, MFG were small."

But they've had time to prepare for a change in strategy...

Mon, 03/04/2013 - 22:45 | 3299757 thedrickster
thedrickster's picture

Maybe the playbook will change this time around. One of Japan's big 4 perhaps?

Mon, 03/04/2013 - 20:53 | 3299493 swissaustrian
swissaustrian's picture

DB is to Germany what JPM is to the US. War on DB means war on Germany. Just like war on UBS meant war on Switzerland.

Mon, 03/04/2013 - 21:15 | 3299498 ekm
ekm's picture

I am talking about DB Securities, not DB itself

http://www.newyorkfed.org/markets/pridealers_current.html

 

Even JP Morgan is not a primary dealer. They have created JP Morgan Securities to be as primary dealer.

http://www.jpmorgansecurities.com/pages/am/securities/home

 

Question: Does it make a difference? Is the parent company protected from harm? I haven't gotten to that point yet.

 

 

Mon, 03/04/2013 - 21:38 | 3299596 swissaustrian
swissaustrian's picture

Lehman was a primary dealer until 2008-09-22: http://articles.marketwatch.com/2008-09-22/news/30866096_1_dealers-lehma...

I know that you're imagining the different case, though: Parent healthy, subsidiary bankrupt.

In bankruptcy law, the parent usually shares the fate of the subsidiaries if there was something like a patronage declaration (I don't know the exact English term for it). There are court cases where the parent was liable for the subsidiary even for causing the impression (!) of co-liability. We had a famous case of that here in Switzerland when Swissair went bankrupt.

Mon, 03/04/2013 - 21:47 | 3299620 ekm
ekm's picture

There have been many changes in US law about bankrupties that have gone unnoticed. That's how Corzine did what he did. He had very good legal advise, otherwise he wouldn't do it. He's not stupid.

 

I remember extremely well after MFG collapsed, people were wondering what the law was about, particularly on bloomberg law segment, but ONLY 1 OR 2 LAWYERS GOT IT RIGHT, THE REST CAME UP TO BE IGNORANT OF THE SILENT LAW CHANGES.

 

I cannot believe for one second, that here in Canada, the federal gov allowed RBC and BMO and Scotiabank to have branches as primary dealers in 2011, without cutting a (secret???) deal with US authorities that if those branches go shit, the parent wouldn't.

We have only 6 banks here, man, just 6. They are not allowed to fail by law.

Mon, 03/04/2013 - 22:02 | 3299639 Bingfa
Bingfa's picture

Wasn't those Bankruptcy laws changed back in Bush's second term?

Along with new derivative rules that in hindsight look pretty obvious who they were protecting now?

Mon, 03/04/2013 - 22:07 | 3299651 ekm
ekm's picture

I am looking online for that Bloomberg Law episode about Corzine which said exactly what you are saying, I can't find it.

 

An academic/lawyer said exactly what you wrote. And he emphasized 2 -3 times, it went unnoticed.

Mon, 03/04/2013 - 22:26 | 3299697 Bingfa
Bingfa's picture

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&add...

placed derivative claims in front of depositors in a business failure - including a bank failure.

Which is somewhat the loophole that MF global used?

Mon, 03/04/2013 - 22:40 | 3299740 ekm
Mon, 03/04/2013 - 23:01 | 3299789 Bay of Pigs
Bay of Pigs's picture

Nice work bro....+1

Mon, 03/04/2013 - 23:05 | 3299800 Bingfa
Bingfa's picture

Must protect Derivative exposure.

They knew it could bring the whole thing down. Overnight.

Mon, 03/04/2013 - 22:41 | 3299745 ekm
ekm's picture

I've heard many many economists and lawyers online saying that they were extremely surprised to find out that was the law and they didn't know about it

 

Mon, 03/04/2013 - 23:20 | 3299836 thisandthat
thisandthat's picture

I think people with US bank accounts really need to take a look at the article above - just saying...

Here's the original source: http://market-ticker.org/akcs-www?post=198650

Mon, 03/04/2013 - 22:15 | 3299669 ekm
Mon, 03/04/2013 - 21:20 | 3299556 donsluck
donsluck's picture

...and the NDAA means war on US citizens by their own country.

Mon, 03/04/2013 - 21:00 | 3299516 OpenThePodBayDoorHAL
OpenThePodBayDoorHAL's picture

I think DB is an excellent candidate. The Germans are pissed at the Fed for re-hypothecating all of their gold. The Germans pulling the strings (not at the Merkel level but rather the people who control her) are sick of the postwar Anglo-American story and see the chance to line up with Russia and China for a change.

Mon, 03/04/2013 - 20:44 | 3299470 Haole
Haole's picture

Something in France and/or Spain will blow before that... ;)

Mon, 03/04/2013 - 20:49 | 3299478 ekm
ekm's picture

My "conspiracy" is going ZH-stream.

Mon, 03/04/2013 - 20:34 | 3299443 eatthebanksters
eatthebanksters's picture

I don't think anyone in the US government is smart enough to conspire to do something like this...are they dumb enough to be dragged along by other conspirators?  I'll let Jon Corzine tell you the answer to that one...

Mon, 03/04/2013 - 21:28 | 3299577 logicalman
logicalman's picture

If you believe those evil fucks are stupid, you don't stand a chance.

They are clever, cunning and evil.

This piece of information could save your life.

Mon, 03/04/2013 - 20:46 | 3299450 ebworthen
ebworthen's picture

Nightly Business Report (NBR) from WPBT in Miami and on PBS has been CONSUMED by CNBC.

How sad.

The first episode opened with Bob Pisani showing charts of how great the markets are.

Then on to Warren Buffet yammering agog about the great recovery.

Then poor Susie Gharib having to co-host with Tyler Matheson - and the first interview with a Wells Fargo advisor who of course says the markets are roaring, the recovery is here, and people just have to invest in equities.

They are PURCHASING PERCEPTION.

It is GETTING WORSE.

RUN!!!!  HIDE!!!

(No doubt in my mind the Government helped kill Lehman and crash the markets, they are the bankers Lackey's - we are their slaves)

Mon, 03/04/2013 - 20:47 | 3299474 eatthebanksters
eatthebanksters's picture

Remember the very wise words of Kyle Bass,"The government's job is not to tell you the truth, its job is to maintain confidence."

Nuff said... 

Mon, 03/04/2013 - 21:27 | 3299574 Bastiat
Bastiat's picture

Yep, I've mentioned that to a number of folks.  Started when they dumped old Paul Fungus.  He had a subtle skeptical/ironic attitude, IIRC.  Then they brought in the current cheerleading clown.  It's embarassing.  What kind of medication to you have to take to transition from news person to a propagandist?  Gharab looks frightened behind her mask.  HD reveals alot if you pay attention. 

Mon, 03/04/2013 - 22:04 | 3299637 ebworthen
ebworthen's picture

Agreed.

Tonight the Harvard Professor they interviewed said at the end "Congratulations Susie" and when she replied with a thank you she looked like she'd just swallowed a handfull of worms.

Poor thing, and I missed Paul Kangas as well.

It was already going downhill after being bought out by some investment firm in 2010; who then just sold it to CNBC (ick!).

At least we have ZH.

Tue, 03/05/2013 - 01:42 | 3300060 Bastiat
Bastiat's picture

I didn't know any of that history.  Explains everything.  Thanks.

Mon, 03/04/2013 - 20:38 | 3299455 Ineverslice
Ineverslice's picture

 

...it was the Rosato Bros.

Yeah, but who gave the go ahead?

Mon, 03/04/2013 - 20:57 | 3299507 dick cheneys ghost
dick cheneys ghost's picture

''Barzini is dead. So is Phillip Tattaglia. Moe Greene. Stracci. Cuneo. Today I settled all family business so don't tell me that you're innocent. Admit what you did.''

 

This whole thing smells 'godfatherish' to me.........

Mon, 03/04/2013 - 21:11 | 3299542 disabledvet
disabledvet's picture

if only you knew what we've been doing in Afghanistan for the last 12 years...

Mon, 03/04/2013 - 21:32 | 3299588 Mr. Saxby
Mr. Saxby's picture

Enlighten us.

Tue, 03/05/2013 - 00:26 | 3299951 Kirk2NCC1701
Kirk2NCC1701's picture

C'mon, a hint, a clue.

Mon, 03/04/2013 - 20:39 | 3299458 Bunga Bunga
Bunga Bunga's picture

The tunnel has a reason.

Mon, 03/04/2013 - 20:43 | 3299459 bjfish
bjfish's picture

Shi-ite, why not.  The USG actively condones the smashing of PM's, the pumping of stocks, and any other manipulation that suits them, as well as foisting any number of deceptions on the American people.

Did you see their new goon squad cars ... guess when they're ready to go door to door for guns, it willl be in force.

Mon, 03/04/2013 - 21:15 | 3299548 disabledvet
disabledvet's picture

one look at the price says "they've phucked that up too"...save for equities of course. ah, yes..."the cult of equity." behind every corner is a Brave New World...all that is needed is for the Federal Government to sign away all budgetary authority and responsibility and...well, trust me...."you'll love what we've got cooked up. We're RICH!"

Tue, 03/05/2013 - 00:31 | 3299959 Kirk2NCC1701
Kirk2NCC1701's picture

Suspect that hiking, camping and boating will become even more popular.  AS a result, so will accidents -- with things forgotten behind ( I thought you got it!?), stolen or falling overboard.  :-)  W/o BS'ing, those who know me, know that I'm getting pretty forgetful theses days.

Mon, 03/04/2013 - 20:40 | 3299461 Downtoolong
Downtoolong's picture

attributed everything to an error committed by an unnamed back-office margin clerk

Look, they can only get away with blaming it on a rogue trader so many times before the Muppets catch on. 

But, if this much damage can be caused by a margin clerk, imagine what one rogue trader could do. 

Self regulating industry my ass.

 

Mon, 03/04/2013 - 20:42 | 3299467 tony bonn
tony bonn's picture

"...ADIC MANAGING DIRECTOR KHALIFA AL KINDI REPEATED SPECULATION THAT LEHMAN'S COLLAPSE WAS PART OF A DEAL WITH THE U.S...."

this comment by the meeting scribe is utter and absolute horseshit.....al kindi was not "speculating" - he was stating a fact and was indeed very well connected with the information network managing the hit job on lehman....this is the smoking gun!....

now the question is why paulson (nazi) and bush (nazi) wanted to get rid of lehman....lehman was standing in the way of something....

i boil with anger every time i see some powerful plutocrat roll some stupid lackey in the back room under the bus - "oops my bad" , blaming the invisible hand of incompetence and random system "glitches" on all of the foul premeditated murders.

i love zh - this article is the quintessence of pulitzer caliber reporting....

Mon, 03/04/2013 - 22:08 | 3299654 post turtle saver
post turtle saver's picture

Neuberger Berman... George Herbert Walker IV, CEO. Former partner and managing director, Goldman Sachs.

'Nuff said. All in the family.

Tue, 03/05/2013 - 00:19 | 3299941 Edward Fiatski
Edward Fiatski's picture

Lehman brought down the whole world, only for it to be rebuilt again in a specific image and to a specific blueprint.

Good reason, I'd say.

Tue, 03/05/2013 - 02:38 | 3300106 resurger
resurger's picture

Well, they didnt invite dick fuld to the TBTF meeting?

Was he a Christian, Muslim or a Hindu?!

Not a Jewie for sure, hence his firm is the "fall guy"

Tue, 03/05/2013 - 14:11 | 3301373 Thisson
Thisson's picture

You are exceptionally stupid.  What was the name of the firm again?  Oh, that's right - LEHMAN Brothers.  There goes your shitty theory, fucknuts!

Mon, 03/04/2013 - 20:48 | 3299477 The Axe
The Axe's picture

Scapegoat.....Then eat Lehman Flesh....they (goldman) alwayswanted to wreckthem

Mon, 03/04/2013 - 20:51 | 3299485 ebworthen
ebworthen's picture

"...in those days before Lehman's collapse unleashed the biggest bank profit bonanza and money printing, wealth transfer orgy in history."

LOL!

Yes, they needed a sacrificial lamb, some blood and horror, to shove the bailouts down the throats of the taxpayers.

It's all about the wealth transfer orgy - and they will do it again.

HIDE YOUR ASSETS!!!

Mon, 03/04/2013 - 20:57 | 3299502 El Hosel
El Hosel's picture

Hank Paulson biting the head off Lehman with taxpayers money, jamming "the Market" down to the Devel's 666 then riding off into the sunset with hundreds of millions of tax free Goldman Bonus bucks.... Thank you for your Service.

Mon, 03/04/2013 - 21:38 | 3299602 GlobalCtzn
GlobalCtzn's picture

Now kickin' it in Aspen with the pretty people......................

Tue, 03/05/2013 - 00:34 | 3299968 Kirk2NCC1701
Kirk2NCC1701's picture

Where's JB & Treadstone when you really need it?

Mon, 03/04/2013 - 21:35 | 3299595 Miss Expectations
Miss Expectations's picture

Right out of the Free Fall Speed Playbook.

Mon, 03/04/2013 - 20:52 | 3299487 Confundido
Confundido's picture

ZHers...you are so naive....the world lived under and in full acceptance of three Medici popes and you expect people to realize the banksters rule the world???

I mean, back then, they didn't even try to hide the fact that they were Medicis. It's not like the Medicis would have appointed someone on their behalf to run the show, like we see today Monti having been appointed by Goldman....and even then, it took three popes until finally M. Luther made comment about the situation...It's been only less than a decade and the world hasn't even figured out what caused the crisis....don't be so impatient or naive. I don't know which one is worse....

Mon, 03/04/2013 - 21:00 | 3299517 michigan independant
michigan independant's picture

It is not our fault it took 27 for the fourth reich to fall in DC and now it is no better with the Red Sky

Mon, 03/04/2013 - 20:55 | 3299496 WallowaMountainMan
WallowaMountainMan's picture

"one will never know what really happened in those days before Lehman's collapse unleashed the biggest bank profit bonanza and money printing, wealth transfer orgy in history."

'and so, as it is written, so shall it be; not only for this, but also for thee; as the past, as the future, but never as the now, there is no knowing the when, nor knowing the how.'

Larsonism, Vol II

Mon, 03/04/2013 - 20:54 | 3299497 Bon Hagar
Bon Hagar's picture

Not too fluent in finance and its sordid history but I remember Cattle Futures. I recall how in similar big conspiracies, '9/11 Was An Inside Job' bumper stickers and how can so many keep secrets so well yet the media will talk of examinations of foreign finances of terrorist organizations and military MI's-information strategies agains al Qaeda abroad?

Just wondering.

Mon, 03/04/2013 - 20:56 | 3299503 Benjamin Glutton
Benjamin Glutton's picture

welcome to the party....

 

ok, that's not fair....thanks for your unwavering journalistic integrity re. JPMugger!

Mon, 03/04/2013 - 20:59 | 3299511 formadesika3
formadesika3's picture

ZH can you just bring back the Thai singles ad and keep it there? I don't want to see the one with Obama or the guy with the druid beard and least of all the one with Jesus riding the kangaroo.

Mon, 03/04/2013 - 20:59 | 3299512 apberusdisvet
apberusdisvet's picture

I'm sure that at some point we'll discover that the real reason was that Lehman refused to launder drug money for the CIA or to give the appropriate "cut" to JPM personnel.

Mon, 03/04/2013 - 21:00 | 3299514 geotrader
geotrader's picture

For Congress to have been involved...there was a Senator
you might have heard of about that time. They call him Mr Prez nowadays.

Mon, 03/04/2013 - 21:05 | 3299528 highwaytoserfdom
highwaytoserfdom's picture

Couple criminal enterprises support hand in hand... 

 

http://www.occ.treas.gov/topics/capital-markets/financial-markets/tradin...

Mon, 03/04/2013 - 21:07 | 3299534 Umh
Umh's picture

Of course they did. People took advantage of the crisis to implement their agenda. Why did GM bond holders take a bath? Why did AIG get bailed out? Why wasn't it determined that government policy was at fault? Why did JPM get all the money....................

Mon, 03/04/2013 - 21:15 | 3299545 Laser Shark
Laser Shark's picture

I don't know.  I think you give these guys too much credit when you accuse them of massive conspiracies.  Even if someone at JPM was first to realize what was about to happen and pointed the finger at Lehman, that's really no different than someone pointing the finger at Bernie Madoff or Jeff Skilling and declaring the emperor has no clothes.

It's not panicking if you're the first one out the door.

Maybe Paulson didn't like Fuld and didn't mind seeing Lehman go down, but I doubt anyone really fully understood that this could set off a global chain reaction.  These people are too arrogant to think they're in just as much trouble as the other guy.  Paulson probably assumed GS was much more sound.  Also, it was my understanding that the British government wouldn't allow Barclays to buy Lehman.  Everyone had pretty much figured out by that point that everyone's books were full of garbage.

One some level, these people do "believe" in free-market Capitalism, which does call for entities that have failed to be allowed to fail.

Mon, 03/04/2013 - 21:29 | 3299580 Bay of Pigs
Bay of Pigs's picture

That would be wrong. They were flushed to save other banks.

Free markets? LOL. Since when?

Mon, 03/04/2013 - 21:53 | 3299626 Laser Shark
Laser Shark's picture

Didn't say these are free markets - that's why they had to be bailed out.  I said on some level these people believe that failing entities should fail.  Can you not read?

If they had to be flushed, then that means that no one could or would save them.  Congress didn't approve of the bailouts at first.  Treasury and the Fed didn't have the authority to do what they would have needed to do to save Lehman.  Congress had to be scared because they largely believe failing entities should fail.

The markets started to become free (they plunged to realistic values), which scared Congress who then approved and gave Treasury the ability to do whatever it needed to do to stop the chain reaction that was unfolding.

Mon, 03/04/2013 - 22:04 | 3299640 Bay of Pigs
Bay of Pigs's picture

I read just fine. You don't seem to understand what happened back then, or whats happening right now. There will be more sacrificial lambs slaughtered so that JPM can survive and consolidate even more power. They are the FED's main agent in the market.

Does that help?

Mon, 03/04/2013 - 22:33 | 3299724 Laser Shark
Laser Shark's picture

JPM doesn't win by completely collapsing the US economy.  They do help backdoor monetize the US government's debt, just like other large financial institutions.  They are part of propping the system up as long as possible - sure. 

But, the crisis of 2008 was not deliberate and if it had been allowed to play out, the world economy would have completely collapsed much worse than the Great Depression.

If we had had free markets, the crisis wouldn't have happened.  Of course, the US government would have had to make massive spending cuts long ago and we wouldn't get our daily 10 million barrels of oil imports either.  No one actually wants free markets because that would make the world fair.

Mon, 03/04/2013 - 23:09 | 3299805 Bay of Pigs
Bay of Pigs's picture

Hmmm, the US economy is collapsing and yes, JPM is winning. What am I missing?

Mon, 03/04/2013 - 23:46 | 3299890 Totentänzerlied
Totentänzerlied's picture

JPM's owners win, or believe they will, seeing as they'll be the ones left with the vast majority of secure, valuable, and productive assets.

"the world economy would have completely collapsed much worse than the Great Depression."

No one can say that for sure, and if so, well then it's what needed to happen. Putting it off will only make it worse.

Mon, 03/04/2013 - 21:41 | 3299609 Omen IV
Omen IV's picture

your are very naive!

Mon, 03/04/2013 - 22:04 | 3299642 Laser Shark
Laser Shark's picture

Yeah, I know. It's all the fault of the Jews.

Go look at oil prices from 2007-2008.  If that hadn't happened, the bubble could have kept building.

Mon, 03/04/2013 - 22:06 | 3299649 Bay of Pigs
Bay of Pigs's picture

You've been here 6 weeks and you're talking shit?

 

Mon, 03/04/2013 - 22:24 | 3299692 Laser Shark
Laser Shark's picture

I've been reading ZH since at least 2010.  Even if I had been here for only six weeks, ad hominem attacks are irrelevant.

Mon, 03/04/2013 - 23:05 | 3299798 Bay of Pigs
Bay of Pigs's picture

Okay, no worries. 

Tue, 03/05/2013 - 00:34 | 3299967 GMadScientist
GMadScientist's picture

You think the bubble and the oil prices are independent variables, but they're not.

Mon, 03/04/2013 - 23:41 | 3299881 rosiescenario
rosiescenario's picture

" I think you give these guys too much credit when you accuse them of massive conspiracies."

 

If they can collude to fix the LIBOR on which trillions of $$$ worth of contracts are based, then they can certainly collude to smash Lehman.

 

Incidentally, IMHO the Lehman take down had its basis back when LTC was in trouble and the Fed rounded up all the usual suspects to organize a bailout, but Lehman did not go for it.

Mon, 03/04/2013 - 21:15 | 3299549 Unprepared
Unprepared's picture

It's a bar fight and we are the cleaners.

Mon, 03/04/2013 - 21:37 | 3299600 tom a taxpayer
tom a taxpayer's picture

Bar clean up. Goodfellas.

http://www.youtube.com/watch?v=MHTEImx8BLs

 

Mon, 03/04/2013 - 21:15 | 3299551 Dewey Cheatum Howe
Dewey Cheatum Howe's picture

Good piece of journalism.

I think these days a good definition for journalism would be Orwell's definition of it.

“Journalism is printing what someone else does not want printed: everything else is public relations.”

-George Orwell

 

This piece certainly fits that criteria.

Mon, 03/04/2013 - 21:15 | 3299552 jomama
jomama's picture

not saying it was 'the US government', but in our modern economic absurdly manipulated 'markets', nothing happens on this scale by accident.

Mon, 03/04/2013 - 21:16 | 3299553 MaxMax
MaxMax's picture

When the Hunts had cornered the silver market, the feds did a special variable margin call where the Hunts had to come up with a huge amount of cash in 24 hours else their positions were going to be liquidated.  That's how the feds crashed the price and nearly wiped out the Hunts. 

If you make the mistake of assuming the other side will always play by the rules, you are making a mistake.

Mon, 03/04/2013 - 22:41 | 3299746 GrinandBearit
GrinandBearit's picture

The Hunt's biggest mistake was buying all that paper silver on margin.  Also, they got greedy.

TPTB don't need to play by the rules... they MAKE the rules. 

Tue, 03/05/2013 - 00:42 | 3299980 Kirk2NCC1701
Kirk2NCC1701's picture

Feels about right:  "Badges, rules?  We don't need no stinking badges or rules!"

Mon, 03/04/2013 - 21:20 | 3299559 Moon Pie
Moon Pie's picture

How is it that Andrew Ross Sorkin can write a non-fiction book, have it published, receive scads of awards, have the book adapted, and a movie of it produced and released in LESS than three years!  That NEVER happens in Hollywood...unless you need to create the narrative, steer the message and have big bucks and bigger assholes behind it.  Did anybody think this piece of crap movie would be a money maker? 

TBTF Was an apologist cover up and twisting of history, by the media darling Sorkin, who was likely encouraged to do so.  HOW in the hell could all the facts necessary be gathered in that time?  All the interviews?  All of them confirmed and vetted?  Hell, minor court cases have been going on longer than that! 

What the shit was the rush? 

Rhetorical question.

These grossly fraudulent fiends are here to stay, cause there aint no one gonna take em down.  Get used to it.

 

MoonPie Posit.

 

Mon, 03/04/2013 - 21:43 | 3299611 Omen IV
Omen IV's picture

same with Argo win - why? it wasnt exceptional in any way

curious events for the narrative they are promoting

Tue, 03/05/2013 - 00:11 | 3299563 wtf.gov
wtf.gov's picture

OT: Can anyone explain the large movement in the GJGB? 

http://www.bloomberg.com/quote/GJGB10:IND/chart

Mon, 03/04/2013 - 21:31 | 3299583 optimator
optimator's picture

O.K. Kahli, ya got me.  How much do you want, and please, keep your voice down!

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