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Frontline On Financial Fraud

Tyler Durden's picture


In one of the most complete documentaries undertaken on the financial crisis, PBS Frontline's "Money, Power, & Wall Street" series stretches from the origins of the credit derivative business with a bikini-clad pool-side Blythe Masters and her JPMorgan colleagues to the scary (but absolutely true) fact that the financial crisis never ended. The four-part series (of which we present the first two below) continues tonight at 730ET and the entire set of 20 in-depth interviews with the various players (from Sheila Bair to Rodgin Cohen with a smattering of Jared Bernstein and Dick Fisher in between)  can be found here. A must-watch series from beginning to end to get a grasp of how we got here (despite what Chairman Greenspan told us all this morning), where exactly we are now (in spite of today's FTMFW ISM print), and what we can expect in the next few years.

The chapter-headings alone generate enough insight into the documentary's depth and we will post the remaining two episodes tomorrow as soon as they are released.

Episode 1

Chapter 1 - A Brave New World of Banking

A group of young bankers make history with the creation of the credit default swap market

Chapter 2: Funding The American Dream

The Wall Street and mortgage lobbies successfully defeat attempts to regulate derivatives

Chapter 3: Marching Towards The Cliff

JPMorgan reassesses, pulls back from the mortgage market but other banks can't get enough

Chapter 4: The Unraveling Begins

When the housing bubble burst, CDS bring the global economy to its knees

Episode 2


Chapter 1 - Systemic Risk

Bear Stearns collapses; regulators fear its effects on the financial system

Chapter 2 - The Summer Of Assurances

The financial crisis becomes increasingly obvious, but there's no decisive action

Chapter 3 - The Decision To Let Lehman Fail

Paulson bet the markets would take care of themselves but would soon learn he was wrong

Chapter 4 - AIG Gets A Bailout

A decision by Geithner means billions of US Government dollars flows to Wall Street

Chapter 5 - A Turning Point?

Paulson decides on a dramatic use of the TARP money: capital injections to the banks.


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Tue, 05/01/2012 - 17:36 | 2389437 bob_dabolina
bob_dabolina's picture

There is also an excellent interview segment with one of the pioneers of Credit Derivatives as part of this series. She's hot too.

Tue, 05/01/2012 - 17:42 | 2389451 Gene Parmesan
Gene Parmesan's picture

This post is partially misleading.

Tue, 05/01/2012 - 18:03 | 2389461 bob_dabolina
bob_dabolina's picture

I think she's attractive.  It doesn't even look like she's wearing makeup.

Compare someone like this to someone like Abby Jospeh Cohen.

Come on man, you know you'd sniff her butt.

Tue, 05/01/2012 - 18:23 | 2389531 Bay of Pigs
Bay of Pigs's picture

They should all have been arrested and prosecuted. What they have done is treasonous.

Tue, 05/01/2012 - 18:55 | 2389586 bobola
bobola's picture

They are capitalists.

Made truckloads of money selling toxicity to the sheeple.

No different than the tobacco or the fast food industries. 

You buy toxic waste, you pay the price...

Criminal is the Heart Attack grill in Las Vegas.

Now that is the worst of the worst........


Tue, 05/01/2012 - 22:19 | 2389996 AldousHuxley
AldousHuxley's picture

wall st. is subsidized from US dollar's reserve status.

they are the ultimate socialists while claiming capitalism on bonuses earned.


greed blinds. sheeple got sucked into the scam via their own greed.

Tue, 05/01/2012 - 22:16 | 2389979 PersonalRespons...
PersonalResponsibility's picture

Can't believe I voted against the majority on this site... wow.

Yes that down-vote was me.  I just don't find a small (relative) company at fault for trying to work within a fake currency.  You make a bad bet, you lose.  You make sure you understand the game or don't play.  The criminal is the one that steals by force.  You play a shell game and lose, you had better wise up.  I don't think the one making the game is at fault.  If you lose and then pull a gun on someone to take their money to pay for your loss... then you should be arrested and tried.  I'll leave it at that.  The matrix is more than one layer deep.


Tue, 05/01/2012 - 23:14 | 2390144 Seer
Seer's picture

"You play a shell game and lose, you had better wise up.  I don't think the one making the game is at fault.  If you lose and then pull a gun on someone to take their money to pay for your loss... then you should be arrested and tried.'

And if the Shell Game is rated AAA?

Listen, I'm sure that at one point you thought things were legit; but now that you know that they weren't you're lambasting people for not understanding?  Hindsight...

Oh, and if THEY pull a gun on you?  Yeah, you missed the part where, essentially, everything was about putting guns to peoples' heads.  You think that the good guys would have survived had they too not cheated?  If you're unable to lie about big returns then the money would have vacated your business.  And this is the sad part, many companies (that we now view as fucked up) essentially had guns to their heads; and in order to not get shot they in return had to hold guns to the heads of customers (lie to them).

THE Shell Game is much bigger than perhaps you might think.  It's all based on perpetual growth on a finite planet: as soon as I understood this all-too-obvious mathematical fact I could see the actual Matrix.

Tue, 05/01/2012 - 23:43 | 2390203 PersonalRespons...
PersonalResponsibility's picture

"Listen, I'm sure that at one point you thought things were legit"

Yes, I really did and lived my life by that belief.  And, I've seen people lie in real Bricks an Mortar businesses, and it only brings pain to employees and loss of money.

I think you're wrong though on our finite planet because we are not limited to our planet.  I'd agree with you if time were limited.  I don't think it is.  We don't actually understand time.  Do we even know what gravity really is?  Maybe we never will, maybe given enough time we will.  We can have perpetual growth, we just can't move too quickly.  

"And if the Shell Game is rated AAA?"

If I put a up $1 billion for an investment, let alone $16B, I'd better know what the hell I'm investing in.

As you stated, someone was pointing a gun to someone that was pointing the gun to someone and so on.  We need to go after who is holding the first gun.  I guess, sadly enough, we'll always be going after the fall guy.

I don't think the shell game is bigger than I think.  I just hope technology buys us enough time in my lifetime to bring down the one with the first gun.  For that matter, I hope it will happen at least sometime in the future.

Addition: Abolishing the ability to create money out of thin air (close to the first gun maybe) would be a first barrier to fraud.  Let's start with that. 

Tue, 05/01/2012 - 23:25 | 2390170 theTribster
theTribster's picture

treasonous is the right word! Treason of the highest order and greatest magnitude, we all know what that means - get the blindfollds ready.

Tue, 05/01/2012 - 18:53 | 2389588 Max Fischer
Max Fischer's picture


Come on man, you know you'd sniff her butt...

From their proclivity to bury their most prized possessions in the backyard (shiny metal, food, bones, etc.), to their mating and courtship habits, libertarians are remarkably similar to the canis lupus familiaris.



Tue, 05/01/2012 - 18:56 | 2389591 Calmyourself
Calmyourself's picture

Snark is not high art Max..

Tue, 05/01/2012 - 20:32 | 2389595 Max Fischer
Max Fischer's picture



You wanna picture of the Rothko in front of me?


Tue, 05/01/2012 - 21:51 | 2389813 Pegasus Muse
Tue, 05/01/2012 - 19:07 | 2389606 Bizaro World
Bizaro World's picture

Present a better alternative MF....socialism? Yeah, worked great for Europe.  Communism? Yeah worked great unless you were one of +100M dead comrades, chinese, cambodians, etc. Though I disagree with some liberatarians' choices as it does not fit my belief system, at least they don't want to F---ing kill you.


Thu, 05/03/2012 - 14:20 | 2392852 Ranger4564
Ranger4564's picture

How many died because of the self indulgent imperialist capitalist state you cherish?


All i can say is everyone always seems to be solving the wrong problem.  So you can start working on the correct problem, the problem is, how do we produce enough to satisfy the needs and wants of everyone.  Capitalism does a fairly good job, but it fails miserably in other ways... for example, it provides exceedingly well for those chosen recipients, but it abuses the life out of those chosen to be the providers.  It literally transfers wealth from the poor to the rich.  There is a reason everyone is not rich even if the majority of the world is now capitalist. There is no way a capitalist system can make everyone prosperous.  In capitalism, it really is the haves and the have mores.  Only, the have mores always set the price, so the haves never actually have enough.


Instead of defending a system that in inherently a failure because it never even aims to satisfy all of humanity, why not work out a solution that would?  Why justify this crappy system just because you were not born on the other side of the planet on the losing end of the transaction?  Imagine you were an African or Asian or Middle Easterner, participating in this socio-economic mechanism.  I mean, living there, being of that ethnicity.  What resources does an African child have to prepare to compete against a kid from the Western countries?  What about the kids in Indonesia, Thailand, South America, etc.


What happened in the communist / socialist nations in the last century was also misguided because they were not well designed to serve the people, they were well designed to control the people.  These kinds of things are also present in capitalist society... do you see prosperity in England, or do you see an oppressive control mechanism?  How about present day US?  If there is so much fucking amazingness in capitalism, why is there 15-25% unemployment?  Why are we in a recession?  Why wasn't capitalism able to stop the fraud?  Why is it still so fucking difficult to acknowledge the nightmare and the criminality?  Why are the bankers in these videos still oblivious?  How is this system even tolerable let alone desirable or defensible?

Tue, 05/01/2012 - 17:42 | 2389452 phungus_mungus
phungus_mungus's picture

The redhead with the big tits in the Snortees ad is quite distractingly hot... 

Tue, 05/01/2012 - 17:54 | 2389474 smlbizman
smlbizman's picture


Tue, 05/01/2012 - 18:31 | 2389551 poor fella
poor fella's picture

Oh, thought only I got that one, and was special somehow... damn Internets!

Tue, 05/01/2012 - 19:49 | 2389685 Temporalist
Temporalist's picture

Also podcast:

Lessons Not Learned at MF Global

Corzine...nobody's heard from him have they?

Tue, 05/01/2012 - 19:53 | 2389694 CPL
CPL's picture

She's hot too.


No.  Horsey looking acresses with faces that you dig a hole with must stop now.  I understood that we are only using women that look like zooey deschanel now.  This horse faced freak show must stop.


Nurse...Take a letter...

Tue, 05/01/2012 - 20:07 | 2389728 WonderDawg
WonderDawg's picture

She's Office Hot, for sure. Drives me crazy the way she keeps her head tilted the whole freaking time. Straighten your neck, chica, you're giving me vertigo.

Tue, 05/01/2012 - 20:07 | 2389729 Buck Johnson
Buck Johnson's picture

I can't wait to watch this all the way through, it goes to show you what people where saying.  And that is this problem was never cured, it was just bandaged over.

Tue, 05/01/2012 - 17:37 | 2389438 Seasmoke
Seasmoke's picture

Very Very Weak !!!

Tue, 05/01/2012 - 18:25 | 2389534 Winston Smith 2009
Winston Smith 2009's picture

If you mean their criticisms were weak, I agree.  Two big problems in the first two parts of the documentary - they totally glossed over the significance of the repeal of Glass-Steagall and didn't critically analyze the "experts" claims that it would have been the end of the world if Paulson hadn't given up on his moral hazard avoidance and they hadn't bailed out AIG.

Tue, 05/01/2012 - 20:07 | 2389616 Fluffybunny
Fluffybunny's picture

For comparison, the U.S. is the only nation that had something like Glass-Steagall that restricted Commercial and Investment banks from joining under one umbrella.

How in the world could Glass Steagal's partial repeal have had any significance, especially negative ones, in the 07-08 events or those leading up to it?

Tue, 05/01/2012 - 20:13 | 2389737 WonderDawg
WonderDawg's picture

Glass-Steagall kept banks from creating credit to speculate with. It would have kept the commercial banking system separate from the insane risks that the trading desks took, thus the concept of TBTF. The investment firms could have been allowed to fail without creating systemic risk of the magnitude we saw in 2007-2008, which is now even worse. I'm sure there are more reasons, but those are serious enough to answer your question, I think.

Tue, 05/01/2012 - 23:20 | 2390157 Seer
Seer's picture

"Glass-Steagall kept banks from creating credit to speculate with."

And, figure it as a pop-off-valve.  It kept things from getting in to a race condition.  After the repeal it took a while for the data to trigger it, but finally that race condition tripped and, well, the rest is history.

Wed, 05/02/2012 - 12:21 | 2391436 dizzyfingers
dizzyfingers's picture


Founding fathers had the right idea:

Wed, 05/02/2012 - 00:22 | 2390279 Jones79
Jones79's picture

i watched both parts and it seemed that PBS tried to walk a tight rope and never really got into the politics of what was going, or how the banks benefited from the abrupt fear-based hankerings of Hank Paulson plan or the kid gloves of Tim Geithner, which really it should have, since they are both from the same school of thought, and the reason for that thought should have been explored.  nor was Bernanke or the ideology of the Fed in response to the crisis touched on much at all. 

Tue, 05/01/2012 - 18:36 | 2389561 chunga
chunga's picture

Agree 100 percent.

The PBS puff-piece was made for the Kardashian crowd (whatever the fuck a Kardashian is)

Tue, 05/01/2012 - 18:41 | 2389567 poor fella
poor fella's picture

A kardashian is a layer of dried compost you throw over an otherwise fertile area to keep growth at bay for decades.

Tue, 05/01/2012 - 22:08 | 2389953 NidStyles
NidStyles's picture

Kardashian - A family of transvestite whores.


Nid Styles Dictionary circa ~2007.

Tue, 05/01/2012 - 17:37 | 2389440 Tsunami Wave
Tsunami Wave's picture

Meanwhile, the most comprehensive & complete coverage of the credit/real-estate/derivatives/all other aspects of the continual financial crisis have been all captured and tracked by this pretty neat website:

Tue, 05/01/2012 - 17:56 | 2389472 blindfaith
blindfaith's picture



THE ONLY website to tell the truth and nothing but the truth.

I have no TV, LUCKY ME! But hopefully PBS is better than the pathetic NPR.  Eric Holder was on All things Considered" and that worthless Segal wanted to know if the 'folks at the Apple Store' still liked Mr. Holder.  With all this pathetic media clown could have asked Holder, he wastes the PAYING listner's time with this crap.  NO MORE MONEY FROM ME...ask Eric for it NPR.  Diane Rhem is not much better, time to hit the pasture.

Tue, 05/01/2012 - 18:05 | 2389493 ReallySparky
ReallySparky's picture

And today would be a good day for everyone to click on the DONATE button above and give a little donation for the excellent coverage found here!

If you can not donate, due to central planning and Wall Street ect....then you are hearby obligated to click on adds at least a hundred times so that the site will recieve revenue.

Tue, 05/01/2012 - 18:39 | 2389563 poor fella
poor fella's picture

I for one would like to know how the ad-clicking works. Rest assured, when I see Citibank, AT&T, FX, and Cramer(!) ads, I click the LIVING_5H!+ outta them!! Does it do anything?   

They pile up and are easy to close.. but that's the sand dollar I throw back into the sea each day!

Thank you ZH (although it's quite addicting and needs a disclaimer).

Thu, 05/03/2012 - 14:06 | 2394620 Bag Of Meat
Bag Of Meat's picture

Rumor has it you can only donate gold

Tue, 05/01/2012 - 19:12 | 2389617 narnia
narnia's picture

Gotta love those "libertarian" ideas like an easing central bank, FDIC insurance, GSEs, massive deficit spending on the federal and state level, government infrastructure, public schools, etc.  

It was just a libertarian paradise because of the Gramm-Leach-Bliley Act. PBS = shallow. 

Tue, 05/01/2012 - 17:38 | 2389441 Sudden Debt
Sudden Debt's picture

I'm selling these buckets with special sand in which you can put your head in and that help you forget and ignore stuff!

At your own risk off course. And I wouldn't do it for more than 2 minutes... But that's up to you!

ONLY 599,99$!!!
AND IF YOU BUY 2 IT'S ONLY 2699,99$ !!!!

Tue, 05/01/2012 - 17:55 | 2389477 smlbizman
smlbizman's picture

do i get lids....and is there more...

Tue, 05/01/2012 - 19:30 | 2389643 Atomizer
Atomizer's picture

Just contact the local Cleveland FBI CHS operative. You can purchase C4 and non-working IED's at a fraction of that cost. Turning sand into glass can become your MSM cultivated motive.

/sarc. We can only laugh at the desperation churned out on TV everyday.

Tue, 05/01/2012 - 17:38 | 2389445 SilverDoctors
SilverDoctors's picture

Watched the interview of Blythe last week.  Very telling that she is suddenly making numerous public interviews.
Think it is coincidental that JPM just converted their entire customer silver book to the in eligible for delivery requests?
Smells like The Morgue is on the ropes!

Tue, 05/01/2012 - 17:42 | 2389453 eatthebanksters
eatthebanksters's picture

One could only hope...

Tue, 05/01/2012 - 18:58 | 2389578 poor fella
poor fella's picture

Her and Myron Scholes! Heard two radio clips within a week, a story about LTCM, and then he was on Bloomberg this morning!  wtf - as well as trotting out greenspam's corpse.

"We MEANT WELL!! Really, we did! It had NOTHING to do with money, praise, and power!"

BM's nothing but a ho-cake.

Tue, 05/01/2012 - 21:13 | 2389848 Gringo Viejo
Gringo Viejo's picture

411 silver contracts (2,055,000) posted for delivery on Wednesday, May 2, 2012. The noose tightens.

Tue, 05/01/2012 - 21:42 | 2389882 Papasmurf
Papasmurf's picture

Wall of worry

Tue, 05/01/2012 - 17:38 | 2389447 q99x2
q99x2's picture

I think I need a new computer either that or it is suffering from too much derivatives exposure.

Tue, 05/01/2012 - 17:40 | 2389450 eatthebanksters
eatthebanksters's picture

Yves Smith presented a critical review of the series in her 'Naked Capitalism' Blog.  She appropriately called out Frontline for their lack of depth on the subject of derivatives.  She went on to explain that because of their simplified storytelling the real truth of the crisis does not come out n the documentary. I think it was last Wednesday's edition of Naked Capitalsm. 

Tue, 05/01/2012 - 17:50 | 2389469 dick cheneys ghost
dick cheneys ghost's picture

Agrred..........these bankers should have been interviewed from the grey-bar motel....

Tue, 05/01/2012 - 17:54 | 2389475 xcehn
xcehn's picture

PBS whitewash was the overwhelming consensus. I watched the first hour of the opening segment and realised it was a piece of corporate revisionism.

Tue, 05/01/2012 - 19:05 | 2389604 lizzy36
lizzy36's picture

As i said above, Yves is a tad sour.

Perhaps Frontline figured the knowledge was imputed from its previous special on the topic 2010:

Or its previous examination from 2009: Inside the Meltdown

This is a FOUR hour series. If it touched on everything YVES wanted it to, it would be a 60 hour series.

What comes out in the documentary is that the essence of the crisis was caused by de-regulation, no regulation, and the people in charge like Paulson, Bernanke, and Geithner were completely useless, and generally 10 steps behind the crisis as it was evolving. How Wall Street and The Government are at times one in the same entity. Who is looking out for Main Street is always the question.

Does that sound like a "white wash" to you.

Does the special say....Blankfein or Dimon is to blame, lets get'em. NO. But perhaps that is the point.

Perhaps there is so much diffusion of responsibility here. So many who looked (and our looking the other way), from the person taking a loan they lied to get and had no hope in hell of ever paying back, all the way to Bernanke, Geithner and Paulson. The only reason, nothing has changed is because, the status quo doesn't want it to, and the other 80% haven't demanded it change.

I know that if another Bernie Madoff came along, promising, demonstrating 10%-15%,20% returns, that could not be replicated or reversed engineered, that he/she could rais $100's of millions tomorrow. Despite the fact that great probablity this was just another ponzi scheme.

SO despite all Yves bitching, perhaps the greatest thing these 4 hours demonstrate is that it is almost impossible to pin down all the causes of the crisis (granted there are some huge macro ones) because in the end almost everyone participated in helping bring about the crisis.

Tue, 05/01/2012 - 20:22 | 2389755 WonderDawg
WonderDawg's picture

You make some good points, Lizzy. I watched the first two hours, and will watch the last two tonight. In the first two, I thought they were informative but, and I said this in a post here afterward, they treated the rating agencies with kid gloves. Maybe they'll do more in the last two hours, we'll see. Overall, I thought it was probably good for someone who never really understood the crisis, or who didn't have an in-depth knowledge of the financial system (not that I do, but probably moreso than the average Joe).

Wed, 05/02/2012 - 06:32 | 2390514 NidStyles
NidStyles's picture

De-regulation wasn't the problem. The problem is the Fed system itself. The whole thing is fucking broken.

Wed, 05/02/2012 - 01:44 | 2390228 Pitchman
Pitchman's picture

eatthebanksters - leaves an incredibly bad taste

I will have to catch Yves piece.

It is incredible to watch a piece of news and know that the biggest part of the news is what is left out; very frustrating.  No mention of FASB 157, Repo 105 and then having Barney Frwank, Maxine Waters and Chris Dodd pointing fingers was almost to much to take.  They even made Blyth Masters look presentable, which must have taken a large part of their budget.

Janet Tavakoli did an interview that takes a hard look at what — and who — caused the financial crisis.  It is a supplement to the Frontline Whitewash.


Frontline's Whitewash: Money, Power, and Wall Street & Finding the Culprits

She did a great piece back in 2010:

Janet Tavakoli On The "Biggest Fraud In The History Of Capital Markets

Wed, 05/02/2012 - 04:31 | 2390452 Clashfan
Clashfan's picture

Thanks for the links, Pitchman. The links in the comment threads on ZH are the main reason why I have spent so much time on here for several years. Rock on!

Tue, 05/01/2012 - 17:51 | 2389464 evolutionx
evolutionx's picture
Top TEn Sovereign Risk Monitor



 Country CDS CPD (%)

Greece 6953.28 90.64  

Cyprus 1135.00 62.72  

Portugal 990.40 57.46

Argentina 966.26 50.26

Pakistan 864.93 46.10

Venezuela 775.42 43.10

Ukraine 800.00 42.84

Ireland 574.00 39.21

Illinois/State of 214.05 36.77

Egypt 610.00   34.79

Tue, 05/01/2012 - 18:02 | 2389487 blindfaith
blindfaith's picture


How is any of that Sovereign?  Illinois, oh now I get it.

Tue, 05/01/2012 - 17:49 | 2389468 SKY85hawk
SKY85hawk's picture


The videos w/b much more interesting in the Ransqwak screen c/b minimized or moved aside!


Tue, 05/01/2012 - 18:01 | 2389485 Stackers
Stackers's picture

Well, it didnt take PBS 3 mins before they reinforced the myth that the money the banks lend out is our money, instead of the fractional reserve printing press credit debt that it is.

Tue, 05/01/2012 - 18:01 | 2389486 European American
European American's picture

Sorry in advance for the off topic, somewhat, I know, although "Fraud" may be involved (I think), but could someone please explain how gold, selling for around $1660 an ounce at the moment, could be advertised at $1400 (buy it now) an ounce? There's got to be a catch here, but for the life of me, I can't see/find it. 

Kilo of gold for $45K?!?! ... on ebay.

A "sold it" tag is on the primary photo and in the description it reads "We have two (2) bars available - please see our other auctions"

"As of this auction posting: The current Gold price as of this posting was: $1225.24 per ounce"

Tue, 05/01/2012 - 18:11 | 2389505 tallen
tallen's picture

Look at his feedback. It's a fraud.

If it's too good to be true. IT IS. SAME APPLIES for everything in life. Some nigerian scamster has probably hijacked his account and listing it.

Tue, 05/01/2012 - 18:06 | 2389499 falak pema
falak pema's picture

Part 1 : Greenspan and Clinton are clearly the two main government sector agents of banksta strategy; no regulation of CDS OTC business, repeal of Gl-St.

And then nobody could stop the gravy train which generated margins ten times higher than normal deals.

Tue, 05/01/2012 - 18:28 | 2389504 JW n FL
JW n FL's picture



It is a Shame that ZeroHedge is being killed off.   Tellingly, there are clips of Brooksley Born, but no mention of her failed effort to regulate CDS. It is instead presented as a benign product that JP Morgan understood (did they sponsor this broadcast? Blythe Masters gets a big promo) and no one else did:  
  Zero was to dangerous to let go on un-checked..      
The Warning - Brooksley Born Arrives on the Scene (2 of 6)
 If you take the time to look at how many other stories have been re-writen for history..   Ex-FBI Director Freeh comes to mind!   He never said Bonuses!   he said Performance Based Incentives!   but.. Bonuses! are the Key word and Key Search..   MF Global Executive Bonuses (key words being searched, see global trends   20 personal results. 100,000 other results (0.50 seconds)  my personal search results will not pull up the new white washed result for the Key Word Search.   But the point being that the Sheepeople who will search this later in history will only find that Freeh said no Bonus monies.   Not that it was his idea and a couple of Senators stood up and said NO! becuase their Owners got screwed!   Unlike the Koch Brothers who were cashed out a few days before the crash..     The White washing will continue until the BULK of what is left is crap.   America the Great!   The Victors Write History!        
Tue, 05/01/2012 - 18:32 | 2389547 Bay of Pigs
Bay of Pigs's picture

Greenspan, Rubin and Summers shut her down.

She was the ONLY person looking out for the American people on that issue. You know, an actual REGULATOR.

Nothing has been fixed to this very day, 12 years later.

Tue, 05/01/2012 - 18:35 | 2389557 JW n FL
JW n FL's picture



It is a Shame that ZeroHedge is being killed off.

Tellingly, there are clips of Brooksley Born, but no mention of her failed effort to regulate CDS. It is instead presented as a benign product that JP Morgan understood (did they sponsor this broadcast? Blythe Masters gets a big promo) and no one else did:


Zero was to dangerous to let go on un-checked..


The Warning - Brooksley Born Arrives on the Scene (2 of 6)


If you take the time to look at how many other stories have been re-written for history.. Ex-FBI Director Freeh comes to mind!


He never said Bonuses!


he DID! say “Performance Based Incentives”


but.. Bonuses! are the Key word and Key Search..

“MF Global Executive Bonuses” key words to be searched, see global trends 20 personal results. 100,000 other results (0.50 seconds)

my personal search results will not pull up the new white washed result for the Key Word Search.


But the point being that the Sheepeople who will search this later in history will only find that Freeh said no Bonus monies.

Not that it was his idea and a couple of Senators stood up and said NO! because their Owners got screwed!


Unlike the Koch Brothers who were cashed out a few days before the crash..


The White washing will continue until the BULK of what is left is crap. America the Great!


The Victors Write History!


This is what is was supposed to look like but I could not edit quick enough!

Wed, 05/02/2012 - 04:42 | 2390458 Clashfan
Clashfan's picture

Thanks, JW, for some terrific links, esp the nakedcapitalism one. And thanks for being a regular who calls out ZH for not being critical enough of such a whitewash job. Criticism keeps a site like this healthy and up to snuff. No site needs a bunch of yes men on the threads.

I, for one, appreciate the info. I won't watch PBS and don't have cable, but apparently I'm not missing much.

Tue, 05/01/2012 - 18:43 | 2389570 lizzy36
lizzy36's picture

You know what.....Yves has had some great commentary.

But she is an overly sour woman, who generally lacks humor and gets lost in the trees instead of seeing the forest. She is probably highly pissed because PBS didn't seek her out for her grand insights into all of these issues.

This is a FOUR hour documentary series. It is meant for general TV watching. NOT for people with Ph.d's in financial engineering.

If this story was told to Yves satisfaction it would take about 60 hours and require 3 degrees.

Btw, since PBS already covered derivatives and Brooksley Borns attempt to have CDS regulated is its own ONE hour Frontline special, perhaps Frontline figured the knowledge was imputed. Of course Yves didn't actully point that out.

Further, when i watched the first two hours (btw, with commentary on twitter from neil barofsky) what i got was 1) how useless and behind the 8 ball the government and the fed were (especially geithner) 2) how the AIG bailout was based on a 3 page term sheet from JPM (as tyler said JPM is the behind the scences master and GS executes) 3) that Obama was a Wall Street insider from the get go. Having daily briefings from various Wall Street CEO's when he was candidate Obama (what was the quid pro quo for that). 4) McCain was a super idiot when it came to the economy - he was exposed as such, how this is a suprise to anyone is what is shocking. Is it not playing politics to expose a POTUS candidate as basically lacking the skill set of a 4th grader when it comes to economic matters. Did his choice of a running mate show him to be a man who cared about substance? 4) finally, how nothing has changed.

Is the series perfect. NO nothing is. How can the crisis be boiled down to 4 hours and touch on everything nevermind explore a single topic indepth.

But if one look beneath the surfuce, there is alot of good stuff here. Especially for people who are watching at home, don't read ZH daily and are NOT involved in capital markets. 

So tonight, I will be watching. I will also be following ZH and Barofsky twitter feeds for additional insight. 

Tue, 05/01/2012 - 19:23 | 2389635 Muppet Pimp
Muppet Pimp's picture

This was more in depth than anything on MSM up to this point.  My wife hates listening to anything related to finance but she actually gave up whatever reality show was on to watch at my suggestion and said she got a lot out of it.  That is saying something, she just glazes over if I try to explain anything.  Good primer on what happened for the layperson.  After watching it a couple times one could get a week headstart on their ZHeducation.

Tue, 05/01/2012 - 20:20 | 2389750 myshadow
myshadow's picture

The quid  quo pro was, and is, immunity for the MOTU.  Every phone call made the President an accessory.

He, as late as last november, said his first priority was a 'robust and vital, banking sector.  He said there was nothing 'illegal' done.

He was told in no uncertain terms that prosecutions would lead to nothing but economic paralysis and deeper depression.

With the collusion of the bernank these hollow rotton levereged root canals are steadily being recapitolized with a transfer of funds through the fed.  These aren't blood sucking mollusks they are full on sovereign vampires.  In their minds there are 'no crimes' because there are no laws being enforced.

This is the new embodiment of what corruption has become.  It isn't spiggy agnew getting 10K in envelopes anymore.

We now have blow monkies like larry kudlow, hacks like cramer or wingnut blowhards like santelli or kernan, and bimbos like bartrimomo, caruso cabrera, any idiot on FBN or fast fucking money applying republican spin and instructing the muppets how they too, can game the system like the big guys, and call the president a fucking socialist.  A real socialist would have sent every bankster, greenspan and hack corporatist politician who sold out our country to these jackals to gitmo and tortured, revived and tortured, again to remember how they were a part of raping our country.

Tue, 05/01/2012 - 21:09 | 2389817 JW n FL
JW n FL's picture



lizzy36 ,

would your time be bettter spent Banishing the Truth from ZeroHedge?


I am a jew.

I come from a large family of Eastern European Jews.

Some observant, some not.


It is racist, anst-semtic, 3rd reich scapegoating, CRAP.

I believe in free speech. I try and stay out of ignorant, racist, lowest common denominator debates. However, if i believe that the debate has become disrespectful, to Zerohedge and what it stands for, i will have the debate temporarily halted. That is not a threat, it is a statement.


Why dont you have this Debate Halted?


The FACT! that the JEWS are the second largest Lobby! in America??

only behind Wall Street..

The FACT that the Federal Reserve is FULLY FUNDING the central Bank of Israel’s Purchase of U.S. Stocks.. in its NEW Open Market Operations Push??

The Largest LOBBIES!

Get the Most Money back from the Government, Tax Dollars!!


The Federal Reserve, in Loans!!


How about GANGSTERZ!! @ AIPAC??

AIPAC the Registered Foreign Agent?



maybe you can get your little alter ego truth in shunshine out.. so that you can talk to yourself some more?


Taa Taa

Tue, 05/01/2012 - 23:40 | 2390205 lizzy36
lizzy36's picture

I have no clue why you have brought "jews" into the issue.

If you can't handle my right to dissent from your opinion, without bringing some silly blantly misinterpreted "evidence" into comments then perhaps ZH is not for you.

Let me repeat:

I try and stay out of ignorant, racist, lowest common denominator debates. However, if i believe that the debate has become disrespectful, to Zerohedge and what it stands for, i will have the debate temporarily halted. That is not a threat, it is a statement.

This is not to banish any "truth" from ZH. This is so the reputation of the site I adore, and the people who work 24/7 does not suffer harm. Given that I let you speak your ignorance, one would assume I am allowing a great deal of latitude here.

Wed, 05/02/2012 - 04:45 | 2390464 Clashfan
Clashfan's picture

I have to seriously doubt the credibility and purpose of folks who can't (or won't) understand that 911 was an inside job from start to finish.

When folks like that stick up for a mm channel that is criticized for whitewashing another inside job, well...

Wed, 05/02/2012 - 04:48 | 2390466 Clashfan
Clashfan's picture

(bowing humbly to Lizzy)

Oh thank you for letting us dogs have some latitude. We are eternally grateful.

What a gratuity.

Wed, 05/02/2012 - 04:49 | 2390468 Clashfan
Clashfan's picture

"I have no clue." period

There, fixed it for ya.

Tue, 05/01/2012 - 22:05 | 2389948 goforgin
goforgin's picture

Stop dissing Yves, Lizzy. She by far the sharpest economic commentator out there.

Tue, 05/01/2012 - 18:25 | 2389535 Gringo Viejo
Gringo Viejo's picture

IMHO, free market capitalism ceased to exist after the crash of 1987 and the advent of the president's working group on financial markets. This in turn spawned the fascist business model which exists today where Washington and Wall Street are joined at the hip and the people be damned.

Tue, 05/01/2012 - 18:27 | 2389541 Steve Evets
Steve Evets's picture

This and Inside Job are just like describing a car crash by describing the intricacies of internal combustion, while leaving out the fact that the driver was drunk (on liquidity), ran a red light and tried to make a left turn at 90mph.

Tue, 05/01/2012 - 20:34 | 2389779 WonderDawg
WonderDawg's picture

Damn well said.

Tue, 05/01/2012 - 18:29 | 2389544 rosiescenario
rosiescenario's picture

Unfortunately, PBS is not about to ofend too many of its donors. NPR, being paid for by us tax payers, of course just mouths the Obummer line.

Tue, 05/01/2012 - 19:24 | 2389637 Muppet Pimp
Muppet Pimp's picture

That was probably my biggest gripe too.

Tue, 05/01/2012 - 22:00 | 2389929 Cathartes Aura
Cathartes Aura's picture

lots of "foundation" support monies thrown in the path of PBS as well as. . . corporations,

Dow Chemical Reaps Rewards by Funding PBS' 'America Revealed'

NEW YORK - The four-part series America Revealed, airing on PBS stations this month, looks at big-picture economic issues, from agriculture to transportation to manufacturing. The series underwriter? The Dow Chemical Company, whose commercial interests closely track the subjects covered in the PBS series.

The first episode, entitled Food Machine (4/11/12), focused on large-scale agriculture, which is one of the industries in which Dow is a major player. The program featured an extended look at the corn industry, including efforts to control pests. As the program explained, the food industry "needed a game changer" in that fight. And it got one: The "genetically modified organism, better known as a GMO."

This positively portrayed "game changer" just happens to be the very type of product Dow sells. Indeed, Dow is among a handful of companies that dominate the genetic seed market (Pesticide Action Network, 8/10). The company has recently been trying to win approval for a new genetically modified corn that has been nicknamed "Agent Orange" for its resistance to a highly toxic herbicide. Dow's application is opposed by the Natural Resources Defense Council and the Center for Food Safety because of its toxicity, and the likelihood that it will simply create even more resistant weeds (EcoWatch, 4/10/12).

PBS Responds on Dow-Funded Series

PBS ombud Michael Getler (4/27/12) agrees that the Dow Chemical Corporation's sponsorship of a PBS series violates PBS underwriting guidelines. PBS, unfortunately, stands by its show.

y'know, they can't even be bothered to hide it any more. . . pwnd.

Tue, 05/01/2012 - 18:43 | 2389572 Poetic injustice
Poetic injustice's picture

Failed show. Probably script approved by Bernanke and JP Morgan.

Show about fraud in Real Estate would everything about interior of house and not lawyers/practice.

Tue, 05/01/2012 - 18:45 | 2389576 SubjectivObject
SubjectivObject's picture

The impression of ZeroHedge givining this revisionistic series an unqualified endorsement here is unsettling.

Even ignorant me found it hard to watch given what is left out to ensure the equanimity of the televised electorate.

Wed, 05/02/2012 - 01:23 | 2390329 divide_by_zero
divide_by_zero's picture

+1 PBS(Progressive Broadcast System) did not disapoint once again. A virtual Progressive circle-jerk, NYT reporter Calmes describing the bromance between Geithner and Obama, then an earful from that POS Goolsbee, Podesta etc, etc ,etc, just never stopped, everyone but Soros(though I couldn't watch more than a few minutes). A bleach bath won't get that off.

Tue, 05/01/2012 - 19:06 | 2389581 Paul Atreides
Paul Atreides's picture

For more frontline on financial fraud, Live Coverage of Occupy/99%/Mayday NY City march (now over a mile long estimates 20k+) click here.

Tue, 05/01/2012 - 18:55 | 2389590 Careless Whisper
Careless Whisper's picture

Opening Line: Things started to unravel in late 2006...

Correction: Things started to unravel on August 15, 1971 when the United States came off the gold standard...

Tue, 05/01/2012 - 18:58 | 2389594 Northeaster
Northeaster's picture

I think there's an internet blogging showdown coming soon; Barry, Yves, Karl, et al are criticizing ZH these days, fairly heavily I might add. Ironic since all of them were pretty much on the same page 2 years ago. Yves especially tore this PBS piece to shreds.

Tue, 05/01/2012 - 19:29 | 2389621 lizzy36
lizzy36's picture

Jealousy is a bitch.

Yves gets about 10% the readers ZH does bc she is a sour woman, who lacks humor and goes on and on and on about minute details until she is rendered unreadable.

Barry wants to be part of the status quo so badly it physically hurts him.

Karl who?

You know what is funny....ranking the blogger books on Amazon. Since most of the people are merely shilling for their book deal(s).

Wed, 05/02/2012 - 00:43 | 2390304 blindman
blindman's picture

we've just seen the first half. this is out now.
FRONTLINE Money, Power and Wall Street: Part Four
note: this is really part 3 miss labeled.
and part three on the site is really part 2.
go figure, but this episode is interesting.
as interesting, if not more so, than those other
sites mentioned. some people just hate anything with
the word public in it. again, go figure. and this site
is hanging up horribly.

Tue, 05/01/2012 - 19:15 | 2389623 GlassSteagall
GlassSteagall's picture

All I can say is GlassSteagall

Tue, 05/01/2012 - 20:26 | 2389763 Temporalist
Temporalist's picture

In case you didn't know "just two years after Glass-Steagall was enacted, Mr. Glass helped lead an effort to have it repealed, as “he thought it was a mistake and an overreaction.”"

Tue, 05/01/2012 - 20:51 | 2389807 GlassSteagall
GlassSteagall's picture

Thanks for the link ... more than I ever knew

Tue, 05/01/2012 - 23:13 | 2390141 Goldtoothchimp09
Goldtoothchimp09's picture

take away the anonymity of modern life...

If someone did something like this to our tribe... you'd just take 'em out into the weeds and bash their head in with a blunt object.  Problem solved.

Tue, 05/01/2012 - 20:50 | 2389804 Goldtoothchimp09
Goldtoothchimp09's picture


it's completely unconstitutional - to have a privately owned banking cartel (FED) own the nations currency... all men created equal -- not when they literally own the nation’s currency -- the FED created a privileged class of citizen...the kind that can create unlimited amounts of money for themselves out of thin air with no responsibility to the citizenry or to any elected officials.


Money only gets created from loans from the FED in our debt-based system... therefore, the FED unilaterally decides who gets money, in what amounts, and under what terms.

Ben's money dispensing helicopter hasn't dropped any money to me ... you ??

No ... we only get taxed thru the debasement of our money (inflation tax). Only the bankers get the money. The economy only gets what might 'trickle down' from the bankers and the corporations and the wealthy that the FED funds.  Literally ‘trickle down economics’ on the grandest scale.

It is THE ISSUE of the times - yet the FED has been successful in keeping people in the dark thru obfuscation.

A 'contribution to the IMF' should be called what it is -- money bailout for the bankers.
'Quantitative Easing' should be called what it is -- money bailout for bankers.
'Zero interest rates' should be called what it is -- funding bailout for bankers.

It’s just modern day feudalism.  The serfs pay tribute to the King Bankers for the right to use the King’s currency.


Tue, 05/01/2012 - 22:21 | 2390002 OrestesPenthilu...
OrestesPenthilusQuintard's picture

Grove gave Frontline the story of the decade, and it was too "hot" to do anything with.  All kinds of fraud with SarBox software, a back door that the SEC wound up USING - lol.  Instead we get re-hashed stuff Michael Lewis wrote about 2 years ago.  I've found this podcast to be more worthwhile than much of the 'Frontline' material.

Tue, 05/01/2012 - 23:57 | 2390243 Walt D.
Walt D.'s picture

This was hilarious. The sight of Senators, some of whom did not have the fiancial acumen to balance their own checkbooks in the House Banking Scandal, who are running what has to be the worst managed company in the world (the Federal Government), lecturing Wall Street on why goverment should be regulating them??? 

The solution to incompetent government regulators is more incompetent regulators? (Note that this can be interpreted two ways - more "incompetent regualtors" and "more incompetent" regulators.)

Let us not forget the exploits of Fannie and Freddie, who lost, and are still losing cruise boatloads of money on mortgages pooled by other people.

Also, they did not explain the role of the FED's policy of setting interest rates close to zero and below the rate of inflation. This eliminates risk free or low risk fixed income investments and forces fixed income investors to look elsewhere. This is what created the pool of investors for these new products.

Ultimately it was the credit rating agengies who screwed up royally on the ratings of some of these products. Municipalties in Norway an Iceland thought that since  they were buying AAA rated securities and that they were safe. 

Wed, 05/02/2012 - 00:28 | 2390285 Bansters-in-my-...
Bansters-in-my- feces's picture

Free Jon Corzine......

and more cowbell...!!!

Wed, 05/02/2012 - 01:55 | 2390348 JR
JR's picture

It’s major news and Frontline would take it on…dramatic music, emotional and concerned moderators, flashes of the participants and politicians and bankers and young Wall Street workers. But for the innocent American, watching this passion play, his take would not be outrage; for in the end it was just an explanation of how innocence and aggressiveness had gone wrong.

This is a white wash covering the crimes of JP Morgan Chase; it could have been written by Chase executives.

The ingredients of a cover-up are all there: the music, the confusing messages from all sides, the charges and countercharges and the uncontested lies. A proper report would not have occupied hours of dramatic programming, but could have been summarized in a 10-minute concise allegation.

The owners of the Big Banks, principally in this case JP Morgan Chase, went far beyond their raison d’etre and developed huge side bets on the success of these massively leveraged and unsound loans to "hedge against risk"-- derivatives – in which they put down only a fraction of the amount, fully aware that the American taxpayers would save them from failure, i.e., their losses, when the mounting tidal wave of risk hit the economy. In their casino backrooms they concocted  exotic derivatives that effectively bet on the future direction of interest rates, foreign exchange, commodities and stock indexes.

Instead of a series that tries to explain what happened, a program is needed on why hundreds of these players are not in jail.

John Crudele wrote on Feb. 7, 2002, in the New York Post: “J.P. Morgan Chase’s dabbling in derivatives makes it too big for even the Federal Reserve to bail out.”

Jim Grant of Jim Grant’s Interest Rate Observer wrote before the Derivatives Bubble exploded: “So dominant is Morgan Chase in the derivatives market that its exposure looks like typographical errors.”

In 2005 JP Morgan Chase ranked Number 1 in derivatives exposure at $47,023.3 billion; Citigroup ranked #2 with $22,289.3 billion, and Bank of America #3 with $20,595.2 billion. Wachovia Bank was Number 4 with $3,643.5 billion in derivatives.

John Pugsley, Chairman of the Sovereign Society, wrote of the Fall of the House of Morgan in a 2005 paper on “The Derivatives Time Bomb,” an expose of the most controversial financial instruments ever created: “America’s banks right now are like a bunch of climbers all tied by a rope. J.P. Morgan Chase is at the top of the rope. If it falls, the others will start to topple down the mountain with it – along with the American economy…

“Since Chase Manhattan bid $33 billion for JP Morgan in September 2000 the bank has been on a downward spiral. Its basic premise has not worked. The bank claimed it would provide huge new growth… But instead of striking new profits, the bank has tapped into a seemingly endless well of red ink. Its private equity portfolio has shrunk…it’s lost billions of dollars in high profile bad loans to Enron, K-Mart, Global Crossing, Tyco, Argentina…it’s laid off over 10,000 workers…and closed hundreds of branches…

“What’s more, Morgan Chase has now become the largest gambler in economic history. Its derivatives portfolio now sits…at an amount greater than the size of the entire global economy… Just a 16% loss on its derivative books would be enough to wipe it out. What’s more, that risk keeps rising… Standard & Poor’s has started to lower the giant behemoth’s credit rating… Morgan Chase’s position has become highly precarious. Its stock price has been on a steady slide for over a year…its future does not look bright… And its consistent refusal to talk to anyone but its large investors about their derivatives portfolio is disturbing to say the least….”

That was then. And, now, thanks to corrupt politicians and the robbery of the American taxpayer, there’s a dominant, intimidating, ugly boiler plate CHASE sign on nearly every street corner in America.

Wed, 05/02/2012 - 08:41 | 2390738 heinrich6666
heinrich6666's picture

I stopped watching after ten minutes. Framing the whole thing in terms of complexity -- it all happened because it was too hard for us to understand! -- is more disingenuousness from the controlled media. Obviously, they should have framed the crisis in terms of fraud from the outset. CDOs and other derivatives are not problems in and of themselves. It's only when they are combined with fraud (e.g. robosigning, etc.) that they become a real problem.


You'll never get anything on the corporate media (and yes, PBS is corporate) that comes out and says the social contract is broken.

Wed, 05/02/2012 - 11:25 | 2391269 Walt D.
Walt D.'s picture

By trying to make a distinction between Government and Wall Street, siamese twins joined at the hip, the final episode missed the point.

How did too big to fail get too big to fail in the first place? Congress gets a huge amount of campaign contributions from Wall Street. What would really fall apart if too big to fail was allowed to fail would be the Wall Street funding of elections. This really would be the "end of civilization as we we know it".

Occupy Wall Street should be "Occupy Washington" - this is where the real problem lies - Wall Street is in this sense a derivative problem.

Wed, 05/02/2012 - 12:03 | 2391387 dizzyfingers
dizzyfingers's picture

Walt D.

You couldn't be more right.

Seen online this morning:

THOUGHT FOR THE DAY! "The ideal form of government is democracy tempered with assassination." -- Voltaire
Thu, 05/03/2012 - 07:54 | 2393277 overmedicatedun...
overmedicatedundersexed's picture

ranger dear man, no country has a fair system without "Blind Justice" do not confuse your terms: criminal activity is not capitalism or it? captured government is just so much more likely in central controlled society..

capitalism cannot survive without the rule of law and with the all powerful central government.

Do NOT follow this link or you will be banned from the site!