The Torture Archives

The Torture Archive, an ongoing project of the National Security Archive, is assembling at a single location documents from wide-ranging sources on United States government policy toward rendition, detainees, interrogation, and torture. In the aftermath of the September 11, 2001 attacks, and the George W. Bush administration’s subsequent launching of its “Global War on Terror”, the Afghanistan war, and the invasion of Iraq, rumors circulated of disappearances, abusive treatment of prisoners, “extraordinary renditions”, and “black site” (secret) prisons. Human rights and civil liberties organizations, investigative journalists, and congressional committees, including, notably, the American Civil Liberties Union (ACLU), the Center for Constitutional Rights, the International Committee of the Red Cross, the Senate Armed Services Committee, and the Associated Press; and reporters for The New Yorker, the Washington Post, Newsweek, Salon, and the New York Times began to investigate. In early 2004 leaked photographs revealed the degradation of prisoners and their captors at the U.S. prison facility at Abu Ghraib, Iraq, shocking both the American public and the international community. Subsequent Freedom of Information Act requests, lawsuits, and public pressure compelled the U.S. government to release thousands of records documenting abusive detainee policy. Many of these records are already available on various websites, but using them is difficult because of their diverse locations. The Archive project is consolidating the documents and cataloging them, while also providing full-text searching, in order to facilitate public access.

The Archive currently includes records disclosed through the American Civil Liberties Union’s successful lawsuits against the Department of Defense and other federal agencies, and almost 20,000 pages of documents produced by the Combatant Status Review Board (CSRT) and the Administrative Review Board (ARB). The latter entities were created by the Defense Department in response to a Supreme Court ruling, and scathing internal and external criticism of detainee policy, to determine whether prisoners were, and continue to be, “enemy combatants” — a term coined by the Bush administration for those judged to have committed or supported hostilities against the United States or its allies.

Information in the Archive can be searched by title; creator, such as the Defense or State Department or the Federal Bureau of Investigation; recipient, such as the U.S. Army Criminal Investigation Command; individual, such as former secretary of state Colin Powell; organization, such as the International Committee of the Red Cross or the contractor CACI International; date; document type, such as memorandum, court-martial record, email, medical record, or sworn statement); and document, listed by date. As indicated, full-text searching is available. For the records obtained by the ACLU, document descriptions include notes prepared by its lawyers and staff, often summarizing content. The “individual” browse option can be used to retrieve documents on detainees whose cases are discussed in the ARB and CSRT records. Document descriptions for these records also display internment serial numbers (ISN), which were assigned to each prisoner by the Defense Department.

Preliminary work on the Archive was carried out in association with Washington Media Associates, which produced the documentary film Torturing Democracy in 2008. The website project would not have been possible without support from the Open Society Institute, the JEHT Foundation, the American Civil Liberties Union, and the staff of the Washington Research Libraries Consortium. The National Security Archive is deeply grateful for their assistance.

A B C D E F G H I J-K L M N O P Q R S T U V-W Y 0-9

Abu Ghraib Detainee Abuse, 2004-05-17

Abu Ghraib Interrogator Notes; Annex 207: Formica Report: Article 15-6 Investigation of CJSOTF-AP and 5th SF Group Detention; Withheld from Release], 2004-02-01

Abu Ghraib Interrogator Notes; Annex 208: Formica Report: Article 15-6 Investigation of CJSOTF-AP and 5th SF Group Detention; Withheld from Release], 2004-02-07

Abu Ghraib Medical Screening; Annex 170: Formica Report: Article 15-6 Investigation of CJSOTF-AP and 5th SF Group Detention; Withheld from Release], 2004-11-08

Abu Ghraib Prison Case, 2004-09-23

Abu Ghruyab Bullet Report, 2004-07-12

Abu Ghurayb Prison (AGP) Matter, 2004-06-03

Abuse at Abu G [Ghraib], 2004-05-14

Abuse at Abu G[hraib], 2004-05-13

Abuse Complaint by Detainee #[Excised], 2002-02-14

Abuse Investigation, 2004-06-25

Abuse of Detainee], 2003-12-22

Abuse of Detainee during Medical Exam], 2002-02-11

Abuse of Detainees at Abu Ghraib], 2004-05-17

Abuse of Detainees at Abu Ghraib Detention Facility; Annex to Fay/Jones/Kern Report: Investigation of Intelligence Activities at Abu Ghraib], 2004-05-27

Abuse of Detainees Witnessed at Abu Ghraib Detention Facility; Annex to Fay/Jones/Kern Report: Investigation of Intelligence Activities at Abu Ghraib], 2004-05-11

Abuse of Prisoners at Abu Ghraib Detention Facility; Annex to Fay/Jones/Kern Report: Investigation of Intelligence Activities at Abu Ghraib], 2005-05-25

ACA GTMO [Guantánamo] EXSUM and Talking Points, 2004-06-08

ACA Operational Assistance Visit JTF-GTMO, 2004-05-27

Accident Claims Form 04-I5A-T040], 2003-07-16

Account of Personnel Behavior toward Detainees at Abu Ghraib Prison; Handwritten; Pages Missing], 2003-05-21

Account of Prisoner Abuse Incident at Abu Ghraib Detention Facility Involving Father and 17-Year-Old Son; Annex to Fay/Jones/Kern Report: Investigation of Intelligence Activities at Abu Ghraib], 2004-05-13

Account of Visits to Abu Ghraib Detention Facility; Annex to Fay/Jones/Kern Report: Investigation of Intelligence Activities at Abu Ghraib], 2004-05-29

Accounts of Prisoner Abuse at Abu Ghraib Detention Facility; Annex to Fay/Jones/Kern Report: Investigation of Intelligence Activities at Abu Ghraib], 2004-05-1

Accounts of Prisoner Abuse at Abu Ghraib Detention Facility; Annex to Fay/Jones/Kern Report: Investigation of Intelligence Activities at Abu Ghraib; Handwritten; Attached to Rights Warning Procedure/Waiver Certificate], 2004-06-04

ACIL–Pre-meeting for Presenters, 2004-05-17

ACIL–Pre-meeting for Presenters, 2004-05-17

ACIL–Pre-meeting for Presenters, 2004-05-18

Acknowledgement of Receipt for Administrative Reprimand, 2003-07-21

Acknowledgement of Receipt of Diplomatic Note regarding Treatment of Guantánamo Detainee], 2003-12-03

ACLU, et al., v. Department of Defense, et al., 2005-04-06

ACLU, et al., v. Department of Defense, et al., No. 04 Civ. 4151 (AKH), 2005-08-09

ACLU, et al. v. Department of Defense, et al., No. 04-CV-4151 (S.D.N.Y.), 2004-10-15

ACLU Litigation concerning Treatment of Detainees–Deadline, 2004-09-28

ACLU Litigation Matter concerning Treatment of Detainees–Deadline, 2004-09-28

Actions Taken for Attempted Murder Charges; Includes Memoranda, Agent’s Investigation Reports, Document Withdrawal Records, Translation of Statement, Sworn Statements, Agent’s Investigation Summaries, Email Correspondence, and Other Supporting Materials], 2004-09-22

Action Taken for Aggravated Assault and Conspiracy Charges; Includes Other Charges, Criminal Investigative Command Report of Investigation, and Investigative Summary], 2005-03-05

Action Taken for Aggravated Assault and Other Charges; Includes Report of Investigation, Agent’s Investigation Reports, Crime Scene Sketch,
Evidence/Property Custody Document, CID Form 66, Investigative Plan, Agent’s Activity Summaries, Investigative Worksheets, Handwritten Notes, and Email Correspondence]
, 2004-09-27

Action Taken for Assault Charges; Includes Document Withdrawal Record, Investigative Worksheets, Agent’s Activity Summaries, Initial Investigation Report, Sworn Statements, Agent’s Investigation Reports, and Final Investigation Report], 2004-01-21

Action Taken for Assault, Conspiracy, and Other Charges; Includes Final Investigation Report, Agent’s Investigation Reports, Sworn Statements, CID Form 66, Agent’s Activity Summaries, Investigative Worksheets, Handwritten Notes, and Email Correspondence], 2004-03-31

Action Taken for Burglary, Assault, and Other Charges; Includes Report of Investigation, Agent’s Investigative Report, Sworn Statements, and Crime Scene Sketches], 2004-01-04

Action Taken for Conspiracy, Murder, and Other Charges; Includes Report of Investigation, Agent’s Investigation Reports, Document Withdrawal Records, Sworn Statements, Crime Scene Sketches, Crime Lab Examination Requests, Firearms Division Report, Imaging and Technical Support Division Report, Photographs, Serology/DNA Division Report, Evidence/Property Custody Documents, Agent’s Activity Summaries, Investigative Worksheets, and Other Supporting Materials], 2004-03-08

Action Taken for Failure to Obey Orders, Larceny, Assault, and Other Charges; Includes Agent’s Investigation Reports, Email Correspondence, Investigative Worksheets, Document Withdrawal Records, Agent’s Activity Summaries, Initial Report of Investigation, Sworn Statements, Consent to Search Forms, and Other Supporting Materials], 2004-01-27

Action Taken for Larceny and Other Charges; Includes Detainee Receipt, Document Withdrawal Records, Sworn Statements, Agent’s Activity Summaries, CID Form 66, Initial Report, Agent’s Investigation Reports, and Other Supporting Materials], 2004-02-26

Action Taken for Reckless Endangerment and Other Charges; Includes Sworn Statements, Investigative Worksheets, Agent’s Activity Summaries, Document Withdrawal Records, Sketches, and Other Supporting Materials], 2003-06-10

Action Taken on Charges of Willful Dereliction of Duty, Cruelty and Maltreatment, Assault, Conduct Unbecoming, Obstruction of Justice, and Reckless Endangerment; Includes Initial Report, Agent’s Investigation Report, Sworn Statements, Rights Waivers, Memoranda, and Copies of Photographs], 2004-02-09

Action Taken on Cruelty, Assault, and Other Charges; Includes Final Report of Investigation, Agent’s Investigation Reports, Sworn Statements, and Agent’s Activity Summary], 2004-02-09

Action Taken on Obstruction of Justice Charges], 2004-08-23

Action Taken on Obstruction of Justice Charges], 2004-06-23

Action Taken on Obstruction of Justice, Theft, Assault, and Other Charges], 2005-04-19

Action Taken on Robbery and Malingering Charges; Includes Final Report of Investigation, Agent’s Investigation Reports, Sworn Statements,Initial Report, CID Form 66, Agent’s Activity Summaries, Interview Worksheet, Email Correspondence, and Memoranda], 2004-09-17

Action Taken on Robbery and Obstructing Justice Charges], 2004-05-06

Action Taken on Robbery Charges], 2004-05-06

Activation of the Multi National Corps-Iraq, 2004-05-15

Activists Express Concern over Gitmo [Guantánamo] Transfer, 2003-03-07

Additional Initial Statements of Detainees at Abu Ghraib Detention Facility; Formica Report: Article 15-6 Investigation of CJSOTF-AP and 5th SF Group Detention], 2004-11-08

Add on 101st Airborne Division; Handwritten], (Date Unknown)

Add on 10th Mountain; Handwritten], (Date Unknown)

Address of Louise Arbour U.N. High Commissioner for Human Rights to the Biennial Conference of the International Commission of Jurists (Berlin): Security under the Rule of Law, 2004-08-27

Administrative Reprimand, 2003-07-21

Admin Law Control Sheet, 2003-09-06

Admin. Law Control Sheet, 2003-09-20

Advance Directives, 2005-04-01

Afghan Detainees, 2004-03-12

Afghan Human Rights Chief [Excised], 2004-05-19

Afghan Human Rights Chief [Excised], 2004-05-19

Afghanistan: Abuses by U.S. Forces, 2004-03-08

Afghanistan, 2004-11-09

After Action Report Joint Task Force Guantánamo Bay (JTF-GTMO) Training Evolution, 2003-01-15

ALCID Memorandum 012-04, Chapter 5, CID Regulation 195-1, Criminal Investigation Operational Procedures, 15 January 2004, 2004-06-07

ALCID Memorandum 015-02, Chapter 4 (Administration of Investigations), CID Regulation 195-1, Criminal Investigation Operational Procedures, 1 January 2002, 2002-04-03

ALCITF Memorandum 004-02, Interrogation Procedures, 2002-12-16

Aligning Operations at Abu Ghraib Detention Facility with Guantánamo Bay Procedures; Annex to Fay/Jones/Kern Report: Investigation of Intelligence Activities at Abu Ghraib], 2004-05-19

Allegation of Detainee Abuse, 2004-08-31

Allegation of Detainee Abuse, 2004-06-07

Allegation of Mistreatment, 2003-11-14

Allegations of Abuse at Guantánamo Bay since January 2002 That Have Been Reported through the CSRT Process, 2004-07-07

Allegations of Abuse of Detained Iraqi Family; Annex 224: Formica Report: Article 15-6 Investigation of CJSOTF-AP and 5th SF Group Detention], 2004-10-12

Allegations of Abuse of Detained Iraqi Family; Annex 225: Formica Report: Article 15-6 Investigation of CJSOTF-AP and 5th SF Group Detention], 2004-10-12

Allegations of Abuse of Detained Iraqi Family; Annex 226: Formica Report: Article 15-6 Investigation of CJSOTF-AP and 5th SF Group Detention], 2004-10-12

Allegations of Abuse of Detained Iraqi Family: Annex 228: Formica Report: Article 15-6 Investigation of CJSOTF-AP and 5th SF Group Detention], 2004-10-13

Allegations of Detainee Abuse, 2004-08-02

Allegations of Detainee Abuse; Annex 117: Formica Report: Article 15-6 Investigation of CJSOTF-AP and 5th SF Group Detention; Attached to Memorandum for Record Dated August 7, 2004], 2004-06-24

Allegations of Detainee Abuse; Annex 222: Formica Report: Article 15-6 Investigation of CJSOTF-AP and 5th SF Group Detention], 2004-10-12

Allegations of Detainee Abuse; Annex 227: Formica Report: Article 15-6 Investigation of CJSOTF-AP and 5th SF Group Detention], 2004-10-12

Allegations of Detainee Abuse at Abu Ghraib Detention Facility], 2004-03-18

Allegations of Detainee Abuse in Iraq and Afghanistan, 2004-04-02

Allegations of Detainee Abuse in Iraq and Afghanistan, 2004-03-07

Allegations of Mistreatment of Detainees at Abu Ghraib], 2004-06-25

Allegations of “Mock Executions”, 2003-06-23

Allegations of Torture regarding [Excised], 2004-12-11

Alleged Assault of Iraqi Prisoners of War], 2003-10-08

Alleged Detainee Abuse as Reported by Detainee 7400, 2004-06-04

Alleged Detainee Abuse by TF 62-6 Personnel, 2004-06-25

Alleged New Photos of Detainee Abuse (Iraq), 2004-05-19

All Posts Cable, 2004-02-19

Al Thayiar Fedayeen Cell Raid on 27 Apr. 04, 2004-04-27

Ambassador Engages Arab Military Officers, 2003-07-19

Ambassador Prosper Discusses Iraqi War Crimes, Guantánamo, 2003-09-11

Ambassador’s Jan. 22 Discussion of Detainees with MFA State Secretary Pleuger, 2002-01-24

Amended Petition for Relief under the Detainee Treatment Act of 2005, and, in the Alternative, for Writ of Habeas Corpus, 2008-02-21

American Bar Association, Section of Individual Rights and Responsibilities, Report to the House of Delegates, 2003-04-26

Amnesty International Member’s Concern about Abu Ghraib Detainee Mohammad Jassem ‘Abd al-Issawi], 2004-06-09

AMS-ASIL HR & IHL & [GTMO], 2004-07-16

Anal Fissure: Medline Plus Encyclopedia Entry; Annex 181: Formica Report: Article 15-6 Investigation of CJSOTF-AP and 5th SF Group Detention; Includes Page 2 of 2 Only], 2004-06-18

Anna Lindh on GTMO [Guantánamo] Detainee, 2002-10-31

Annex 183: Formica Report: Article 15-6 Investigation of CJSOTF-AP and 5th SF Group Detention; Withheld from Release], 2004-11-08

Annex 187: Formica Report: Article 15-6 Investigation of CJSOTF-AP and 5th SF Group Detention; Heavily Excised], 2004-11-08

Annex 89: Formica Report: Article 15-6 Investigation of CJSOTF-AP and 5th SF Group Detention; Completely Excised], 2004-11-08

Annexes to the Taguba Report; Taguba Report: Article 15-6 Investigation of the 800th Military Police Brigade], 2004-03-13

Annex: Summary of Allegations, 2002-09-02

Another Status Update (18JUL), 2004-07-18

Appeal from the United States District Court for the Central District of California, A. Howard Matz, District Judge, Presiding, Argued and Submitted August 11, 2003, San Francisco, California, Filed December 18, 2003, 2003-12-18

Appendix 1 to Annex E: Enemy Prisoners of War, Civilian Internees, and Other Detained Persons, 2004-04-01

Appendix 2: Excerpts from ICRC Press Statements on USG Detention Policies, 2004-05-13

Appendix 4 to Annex C to Combined Joint Task Force 7 Operation Order 04-01; Annex 9: Formica Report: Article 15-6 Investigation of CJSOTF-AP and 5th SF Group Detention; Withheld from Release], 2004-11-08

Appendix: Annex List, 2004-11-08

Application of 18 USC 2340-2340A to Certain Techniques That May Be Used in the Interrogation of a High Value al Qaeda Detainee, 2005-05-10

Application of 18 USC 2340-2340A to the Combined Use of Certain Techniques in the Interrogation of High Value al Qaeda Detainees, 2005-05-10

Application of Geneva Conventions in Iraq Conflict and in the War on Terrorism, 2003-03-27

Application of Geneva Conventions, 2003-03-25

Application of Geneva Conventions, 2003-03-25

Application of Interrogation Methods Used at Guantánamo Bay Detention Center to Abu Ghraib Detention Facility Operations; Annex to Fay/Jones/Kern Report: Investigation of Intelligence Activities at Abu Ghraib], 2004-05-21

Application of Interrogation Methods Used at Guantánamo Bay Detention Facility to Abu Ghraib Detention Facility Operations; Annex to Fay/Jones/Kern Report: Investigation of Intelligence Activities at Abu Ghraib], 2004-05-24

Application of Treaties and Laws to al Qaeda and Taliban Detainees, 2002-01-09

Application of Treaties and Laws to al Qaeda and Taliban Detainees, 2002-01-22

Application of United States Obligations under Article 16 of the Convention against Torture to Certain Techniques That May Be Used in the Interrogation of High Value al Qaeda Detainees, 2005-05-30

Appointment as a 15-6 Investigating Officer, 2003-08-25

Appointment as Investigating Officer, 2004-06-08

Appointment of Investigating Officer, 2004-12-29

Appointment of Investigating Officer, 2003-09-22

Appointment of Investigating Officer, 2003-08-16

Appointment of Investigating Officer, 2004-01-14

Appointment of Investigating Officer, 2003-08-01

Appointment of Senior Investigating Officer, 2005-02-28

Appointment of Senior Investigating Officer–Supplemental Instruction #2, 2005-06-02

Appointment of Senior Investigating Officer–Supplemental Instructions, 2005-05-05

Appointment Order, 2004-05-06

Appointment Request: Mr. Jakob Kellenberger, President, International Committee of the Red Cross (ICRC), between January 12-16, 2003-12-11

Appointment Request: Mr. Jakob Kellenberger, President, International Committee of the Red Cross (ICRC), between January 12-16, 2003-12-11

Appointment Request: Mr. Jakob Kellenberger, President, International Committee of the Red Cross (ICRC), on May 27 or May 28, 2003-05-08

Apprehension of Mother Deception Memorandum; Enclosure 72: Schmidt-Furlow Report–Investigation into Federal Bureau of Investigation Allegations of Detainee Abuse at Guantánamo Bay Detention Center; Withheld from Release], 2005-04-01

Approval for Interrogation of Naked Detainee; Annex to Fay/Jones/Kern
Report: Investigation of Intelligence Activities at Abu Ghraib]
, 2004-06-10

AR 15-6 Investigation and Reprimand; Attachments Not Included], 2004-05-19

AR 15-6 Investigation, 2004-06-20

AR 15-6 Investigation into the Death of Abu Malik Kenami, 2003-12-28

AR 15-6 Investigation–Legal Review, 2003-09-14

AR 15-6 Investigation–Legal Review, 2003-09-06

AR 15-6 Investigation–Legal Review, 2003-09-07

AR 15-6 Investigation Legal Review, 2004-02-26

AR 15-6 Investigation Legal Review, 2003-10-08

AR 15-6 Investigation–Legal Review, 2003-09-05

AR 15-6 Investigation–Legal Review, 2003-07-26

AR 15-6: Procedures for Investigating Officers and Boards of Officers–Cover Page and Table of Contents; Enclosure 9: Schmidt-Furlow Report–Investigation into Federal Bureau of Investigation Allegations of Detainee Abuse at Guantánamo Bay Detention Center; Document Not Included], 2006-10-02

AR 15-6 Report: GTMO [Guantánamo] Investigation–FBI Allegations of Abuse, 2005-04-01

Arbitrary Detention Inquiry, 2003-01-22

ARCENT CAT [Army Central Command Combined Arms Assessment Team] Initial Impressions Report (IIR), 2002-02-26

Army Accident Investigation and Reporting, 1994-11-01

Army CID [Criminal Investigation Command] Request for Interview, 2004-08-06

Army CID [Criminal Investigation Command] Request for Interview, 2004-07-01

Army CID [Criminal Investigation Command] Request for Interview, 2004-07-01

The Army Corrections System, 2004-04-05

Army Court-Martial Completed in Case of PFC [Excised], 2004-08-05

Army Detainee Responsibilities.ppt, 2004-05-14

Army Investigations into Abuse of Detainees], (Date Unknown)

Army Regulation 15-6: Final Report–Investigation into FBI Allegations of Detainee Abuse at Guantánamo Bay, Cuba Detention Facility, 2005-04-01

Army Reserve 377th MP Company Soldiers–Pending UCMJ Prosecutions/Investigations, 2004-05-05

The Army Reserve Serving with an Army at War: Abu Ghraib Detainee Abuse, 2004-05-17

Article 15-6 Investigation Interview, 2004-02-15

Article 15-6 Investigation of CJSOTF-AP [Combined Joint Special Operations Task Force-Arabian Peninsula] and 5th SF [Special Forces] Group Detention Operations, 2004-11-08

Article 15-6 Investigation of the 800th Military Police Brigade, 2004-07-07

Article 15 Detainee Data Call, 2004-08-02

Article 15 Scheduling/Counseling, 2003-11-10

Article 32 Findings on Abuse of Detainees at Camp Bucca; Includes Chronological Record of Events and Investigating Officer’s Reports; Annex 35: Taguba Report: Article 15-6 Investigation of the 800th Military Police Brigade], 2003-08-26

Article 78 Board: Report of Decision, 2004-06-25

Article 78 Board: Report of Decision, 2004-06-25

Article 78 Board: Report of Decision, 2004-05-15

Article 78 Board: Report of Decision, 2004-05-15

Article 78 Board: Report of Decision, 2004-06-04

Assault and Battery Charges against Member of 2nd Joint Detention Operations Group, Military Police Company, Joint Task Force-Guantánamo; Includes Request for Soldier Move, Staff Judge Advocate Article 15 Processing Sheet, and Article 15 Supporting Documentation], 2004-10-21

Assault on Detainee, 2004-08-24

Assessment and Recommendations regarding Interviewing, Debriefing, Interrogation of al-Qaeda/Taliban Detainees at Guantánamo Bay, Cuba (Gitmo), 2002-02-13

Assessment of Department of Justice Legal Memorandum on Definition of Torture], 2002-08-01

Assessment of Detainee Collection Point Procedures], 2003-04-22

Assessment of Division and Forward Collection Points, 2003-09-15

Assessment of DOD [Department of Defense] Counterterrorism Interrogation and Detention Operations in Iraq, 2003-09-09

Attachment Entitled “Schlesinger Panel New QAv1.doc” Not Included], 2004-06-04

Attorney for Australian Detainee Writes to Ambassador, 2002-04-29

Attorney’s Letter on French Citizens Detained in Guantánamo, 2002-03-26

August 5 Transfer of Detainees to Guantánamo, 2002-08-09

Australian Nationals Detained in Guantánamo, 2002-05-09

Australian Shadow Foreign Minister on the Alliance, the War on Terror, and Pakistan, 2002-02-06

Authority for Use of Military Force to Combat Terrorist Activities
within the United States
, 2001-10-23

Autopsy Examination Report for Detainee], 2004-07-08

Autopsy Examination Report for Detainee], 2004-06-29

Autopsy Examination Report for Iraqi Male Detainee], 2004-05-19


Seize and Liquidate Goldman Sachs

Webster G. Tarpley

April 27, 2010

Today’s Senate hearings, carried on CNBC, Bloomberg, and C-SPAN, represent the first major exposure of the American people to the scandalous frauds of the derivatives casino, including synthetic collateralized debt obligations (synthetic CDOs or CDO²). These are things most people have heard very little about. They begin to open up the shocking reality behind such shopworn euphemisms like “toxic assets,” “exotic instruments,” and “troubled assets.” Reactionaries in general and Republicans in particular have done everything possible to hide the role of derivatives, which must be considered the main cause of the financial panic of September 2008 which brought down Lehman Brothers, Merrill Lynch, and AIG, after felling Bear Stearns in March of the same year. The reactionary legend, repeated yesterday on the Senate floor by financier minion GOP Sen. Gregg of New Hampshire, is that the crisis was caused by poor people taking out subprime mortgages and then defaulting, bringing down the entire Anglo-American banking system and triggering the bailouts. Either that, or too much government spending was too blame.

A mass of kited derivatives blew up in September 2008

This Big Lie has come from such propaganda sources as the Limbaugh Institute of Retarded Reactionary Ranting. But the $1.5 trillion in subprime mortgages were dwarfed by the $15 trillion US residential real estate market, to say nothing of the $1.5 thousand trillion world derivatives bubble. But, starting with Bush-Goldman Sachs Treasury Secretary Henry Paulson, the talk has been of a “housing correction,” not a derivatives panic. It must be pointed out that derivatives are nothing but wagers, bets placed from a distance on securities which themselves are often not mortgages, but rather other derivatives. The bettor buying a synthetic CDO or CDO² does not own the underlying mortgages or mortgage-backed securities, any more than someone who bets on a racehorse owns part of the horse. Blankfein and others tried to portray derivatives as a service to hedgers and end-users, but it’s clear that the vast majority of derivatives involve neither hedgers nor users, but only bettors on both side of the transaction. It is in any case this mass of kited derivatives which blew up in 2008, bringing on the present world economic depression.

Goldman Sachs executives are babbling cretins

The mystique of Goldman Sachs is based in large part on their reputation as the smartest financiers on Wall Street. After today’s hearings, this mystique has permanently dissipated. The Goldman executives babbled. They sounded dumb. They stalled and stammered and went into contortions to avoid giving straight answers to simple questions. They were mendacious and evasive when they did speak. Financial powers around the world will note carefully the refusal of three out of four Goldman executives on one panel to state that they had a duty to defend the interests of their clients. Who will want to do business with such a gang? Goldman Sachs got $10 billion of taxpayer money in low-interest loans under the Bush-Paulson TARP. Part of that money went to pay for obscene bonuses for Goldman executives like the ones on display today. The argument for bonuses is that they must be paid to retain the highly talented personnel, virtual geniuses, who are indispensable for Wall Street speculative success. But these are no geniuses, they are imbeciles. No more bonuses should be paid by banks saved through public money.

Don’t buy any used cars from Lloyd Blankfein

Sleaziest of all was Goldman’s risk-monger in chief, Lloyd Blankfein, who pretended not to know that derivatives are often kept hidden off balance sheet. The morally insane Blankfein testified that his role was to provide the firm’s clients with “the risk they wanted.” Other GS witnesses represented the firm’s role as “distributing risk.” But it turned out that they were manufacturing risk through the very existence and activities of Goldman Sachs, which had the result of pyramiding the total risk of the US financial system into intergalactic space. It is time to regulate much of that unbearable risk out of existence with appropriate regulatory legislation. In the meantime, no sane person would buy a used car from Blankfein. Nor should they believe his assurance that the “recession” has ended.

But when at the end of the day Blankfein finally suggested to Sen. Tester that synthetic CDOs might be outlawed, we should accept his proposal immediately.

Today’s hearings reveal the Goldman Sachs gunslingers and whiz kids as ignorant gangsters and con artists, notable only for their ability to practice massive fraud with impudence. These sleazy mediocrities do not deserve bonuses paid for by taxpayers. Rather, it is time to shut them down and put them in the dock.

If Goldman Sachs had cared about is clients, it would have urgently warned them to unload their subprime risk by late 2006 or thereabouts. Instead, Goldman was busily increasing its clients’ risk by selling them more toxic CDOs out of its own inventory warehouse.

Goldman Sachs: bookies who stack the deck and fix the games

As the philandering Sen. Ensign pointed out, comparing Wall Street to Las Vegas is a slander on the croupiers of Las Vegas, where everyone knows or should know that the game is rigged so that the house always wins. To use the comparison introduced by Sen. McCaskill, Goldman Sachs was operating as the gambling house, or the bookie. At the same time, Goldman was betting for their own account. But much worse was the fact that Goldman was stacking the decks, loading the dice, fixing the games on which the bets were placed, and bribing the umpires.

As Ensign put it in a rare moment of lucidity, the subprime mortgage was bad. But the collapse of subprime would not have had anything like its actual destructive effect on the US economy if it had not been compounded by the mass of synthetic derivatives that were piled on top of subprime.

No national or social purpose served by Goldman Sachs and toxic derivatives bets

The broader issue raised by today’s hearing is: what human purpose is served by the existence of Goldman Sachs, which concocts toxic synthetic CDOs for the purpose of allowing speculators, who are often lied to and duped, to bet for or against them. Goldman Sachs can only be described as a speculative parasite which promotes the activities of other speculative parasites, such as the John Paulson hedge fund at the expense of the public and of its other clients. It was a crime to inject $10 billion of Treasury money into Goldman Sachs. It was another crime for the Fed to lend Goldman untold billions (just how many billions Bernanke still refuses to disclose) to keep them afloat and enable more predatory profits. These crimes must stop, and the public money must be clawed back. Most important, it is time to shut down the derivatives rackets.

Goldman got $12.5 billion from taxpayers for AIG credit default swaps

Useful questions from GOP Sen. Coburn pointed to another kind of derivative: the infamous credit default swap (CDS). These CDS are what brought down AIG, whose London hedge fund had issues $3 trillion in derivatives. When the government bailed out AIG, part of that $180 billion of taxpayer money was used for payouts to the CDS counterparties of AIG, biggest among them Goldman, which got $12.5 billion from the US taxpayer. That was 100 cents on the dollar on a mass of toxic CDS. Coburn wanted to know why Goldman got all their money back, while GM bondholders took a bath as GM went bankrupt. That was, of course, a matter of Goldman’s political clout through GS alum Henry Paulson and Obama Car Czar Steve “The Rat” Rattner, backed up by the historic preponderance of finance capital over industrial capital in this country since Andrew Carnegie sold out to JP Morgan over a century ago.

Derivatives and zombie banks: the toll

Thanks to Goldman Sachs, the other Wall Street zombie banks, and their derivatives, the financial panic of 2008 has turned into a world economic depression of unimaginable proportions. The unemployed and underemployed in the US alone are surely in excess of 20 million. Five to six million home foreclosures are already done or in the pipeline, throwing tens of millions of Americans out of their homes. World trade has been seriously impacted. The budgets of California, New York, Illinois, and many other states are in crisis, with massive layoffs of teachers and other state employees. An entire generation is being destroyed. Now, Greek bonds are trading at junk levels under the attack of speculative predators including Soros, Greenlight Capital, SAC, and the protagonists of today’s hearings – Paulson and Co and Goldman Sachs itself. The attack on Greece and the euro represents the leading edge of the second wave of the depression, which is now arriving in much the same way that the second wave of the 1930s depression was unleashed by the Vienna Kreditanstalt bankruptcy in May of 1931, about 79 years ago and just a year and a half into that depression.

The goal of the Republicans is to portray themselves as stern judges of Wall Street, even as they line up in a unanimous phalanx to protect the finance jackals from any meaningful regulation whatsoever — as seen in yesterday’s vote to block cloture on derivatives re-regulation and reform. The goal of the Democrats is to expose the sociopathic evil of Goldman Sachs and the rest of Wall Street while preening themselves as defenders of the public interest, without however banning credit default swaps, banning synthetic CDOs, and imposing a Wall Street sales tax on all remaining derivatives and asset transactions.

To this degree, today’s hearings are being conducted in bad faith by both major parties. However, the dynamic of the resulting spectacle has the result of educating and mobilizing public opinion against the predatory practices which are the essence of Wall Street, even a year and a half after the banking panic of September 2008 and the monster bailout of zombie banks which soon followed. What is required is a new edition of the anti-banker sentiment set off by the Senate Banking Committee hearings conducted from January 1933 to May 1934 by committee counsel Ferdinand Pecora, which unmasked the corruption of Wall Street. Persons of good will need to get active now to push this process as far as possible while these social dynamics are working. It is time to hit the zombie banks, the hedge funds, and their derivatives as hard as possible, before the second wave of the depression hits. The program necessary to fight the depression and break the strangle-hold of Wall Street on the US economy and political system is given on my web site.

Mitch McConnell on the bailout: “Harry, I think we need to do this, we should try to do this, and we can do this.”

During a break the senators filed out, and the GOP reactionary lockstep once again blocked cloture for a final debate on the Wall Street reform bill, weak as it is. Many activists of the Tea Party naively believe that they have been fighting for a year and a half that they have been fighting to take back the Republican Party. If that is what they believe, today’s second cloture vote proves that they have gotten nowhere in their efforts. Despite their charades, the GOP are the bodyguards of the Wall Street predators. Tea baggers who think they can break the Wall Street grip on the Republicans are pathetic dupes, and they need to wake up, pronto.

When Paulson went to the leaders of Congress to demand a $700 billion bailout for Goldman and his Wall Street cronies, GOP Senate majority leader Mitch McConnell was “deeply frightened” by the apocalyptic briefing delivered by Paulson and Bernanke. When Democratic Majority Leader Harry Reid started talking about how difficult it would be to get so much money in a hurry, McConnell urged an immediate bailout, saying: “Harry, I think we need to do this, we should try to do this, and we can do this.” (Andrew Ross Sorkin, Too Big to Fail [New York: Viking, 2009], p. 442) The GOP was the original party of the bailout, and they have not repented, as best seen through the continuance of McConnell, one of the key midwives of the bailout, as Republican Senate Majority Leader. This is the same McConnell who went to Wall Street recently to meet with zombie bankers and hedge fund hyenas, pledging to block derivatives reforms in exchange for big bucks contributed to the GOP’s campaign coffers. Tea baggers who think the GOP has changed or is moving to their side are sadly deluded.

Today, the market fetishism of the crackpot Austrian school has taken a severe blow. Now that Blankfein‘s public image has been soiled by Goldman’s scurrilous and scatological emails, the time is ripe for the radical reform of derivatives and the zombie banks. This is a matter of national survival.

Now that Goldman Sachs is masquerading as a bank holding company, it is subject to FDIC rules. If Goldman’s derivative hoard is marked to market, it is bankrupt. The FDIC should therefore seize Goldman and liquidate it under chapter 7 of the US Code. Sheila Bair should not wait for Friday.

Frauds And Scandals Follow The Collapse Of The Financial System

The collapse of the financial system is under way, a giant debt that will never be repaid, deliberate destruction of the economy, bailouts a part of the manipulation of the markets, More creative forms of destruction for the economy, Wall street a criminal enterprise, Goldman CEO visits the White House, often, another giant Ponzi in Florida…

As the world faces an ongoing sovereign debt debacle we see an attempt to defuse an oncoming scandal involving Goldman Sachs, Paulson and perhaps others.

The collapse of the fiat money system is underway and each day picks up momentum. The only question is how long it can survive? In the interim we are faced with inflation and perhaps hyperinflation as the privately owned Federal Reserve and other central banks add stimulus and money and credit into their financial systems.

America’s system of finance and economy has been deliberately destroyed via regulation, illegal immigration and free trade, globalization, offshoring and outsourcing. We wrote about these issues and tactics as long ago as 1967. Taxes on both individuals and corporations are still onerous, the exception being the rich who pay far less than their fair share. By the way taxes will increase in the future and government may in the future attempt to take away your retirement plans and replace them with guaranteed annuities. We ask how can a bankrupt government guarantee anything? America and the rest of the world are realizing that you cannot live beyond your means indefinitely. The resultant poverty that eventually results is accompanied by the theft of wealth by inflation, subtly and secretly.

We have witnessed over the past few years a long line of frauds that usually accompany the collapse of a system. They are accompanied by government malfeasance and the arrogance of those who defraud the system with impunity. How can any nation survive if their currency and their bonds are worthless?

Someone’s loss is someone else’s gain and in this turmoil you can do two things. One is to protect your assets and the other is to capitalize on your knowledge. Do not allow the elitists to take your hard earned savings. It is our belief that 60% of sovereign debt will never be repaid.

The government is injecting a minimum of $1.5 trillion into the economy each year, as the Fed is adding at least $1 trillion. We are facing an end to stimulus and further Fed injections. If that happens it will thrust the US economy into a great dark pit a year from now. Then the insolvency of banking, Wall Street and government will become very apparent. What government has done is lie about everything, especially the amount of money they have thrust into the economy, via bailouts of the entire financial sphere and the manipulation of markets.

If they had not done what they did the system would have collapsed long ago. What they have done has only delayed the inevitable. As we look back 50 years all we have seen is one crisis after another. There has never really been a meaningful recovery. The result is that Keynesian economics has had American economy on a roller coaster going nowhere. We have wasted opportunities and have destroyed our financial and economic structure to provide for the enrichment of the elitists who from behind the scenes control our economy and the world economy. G-20 debt is staggering, never mind US debt and worse yet, it is unpayable. The so-called recovery we are having is a sad joke. We have just had an interlude in an inflationary depression. The next phase is higher taxation and even more government control. Need we remind you that fascism is government by regulation and this is what we have in America today. Its evolution is a subtle, secret, strangling process. If only people would read the history of Europe during the late 1920s and throughout the 1930s and 40s, you would truly understand what is in process. You must remember Hitler was created at Versailles. Illuminists in the US, UK and across Europe financed both Hitler and Mussolini. Both did not have a clue they were being set up. This is the same thing that is happening in America today and in other countries as well.

We face one round after another of creative destruction. That is why we have real unemployment of 22-1/8%, almost as bad as during the 1930s. Banks are only selectively lending, so as a result the economy cannot grow. Inflation is 8%; wages are static, so buying power has been crippled. This predicament should be called corporatist fascism or socialism for the elitists and as a result 92% of small business polled said they see no recovery for 14 to 18 months. How can those who hire 80% of workers create new jobs – they cannot and won’t. That means there can be no sustained recovery.

This leads us to the frauds on Wall Street and banking. We have pointed out for some time that Wall Street and banking had turned into a criminal enterprise. They always skated down the edge, but nothing like what we have seen over the past 20 years. Having been in the brokerage industry for 28 years and around it for 50 years we have been in a position to observe it closely. Today it’s massively rife with criminality. The exposure of Lehman’s crimes in hearings has been unprecedented. We wonder how many other firms did the same thing and their actions were covered up by the Fed and the SEC, as well as the CFTC? They are still underestimating debt levels by 40 to 50 percent, which means their focus reports are useless. The spirit of honesty and integrity still doesn’t exist. They are essentially keeping two sets of books and that makes their financial statements useless and fraudulent.

That doesn’t bother the SEC, the BIS, the FASB, the Treasury or the Fed; they supervise the lawbreaking. Debt levels are massively understated by keeping two sets of books and by marking-to-model, fantasy, not to market. All of this is a result of the termination of the Glass Steagal Act. It is all fraud, even if the government sanctions it. They are all acting in concert to screw the investor and the public. These people are all criminals. The excuse is that they are too big to fail. It is all fraud no matter which way you cut it. This is a criminal syndicate that should legally be out of business – bankrupt. They are all being bailed out, but we do not see the public being bailed out. The bailout of banking, Wall Street and insurance is still in process and there is no end in sight. There are two sets of laws. One for the Illuminists/elitist and another for us. Congress won’t do anything about it because most of them have been paid off. That is what campaign contributions and lobbying are all about. We espoused these views in university almost 60 years ago, and the only reason our views were tolerated was that we had two uncles who were professors at the university.

Taxes will rise substantially this year and next year because your representatives and senators know the government is broke. Among other things the medical reform bill is a tax bill as well.

Government is the problem but they are really useful idiots. The real power lies with the Illuminist behind the scenes. The financial sector is broke and it is unfixable. They know that and they are trying to stretch out the problem as far as possible to pick the right date to pull the deflationary plug.

If all this weren’t bad enough the Dodd bill in the Senate would create a permanent bailout mechanism that would create more risky behavior that would lead to perpetual bailouts for the financial industries. This is not financial reform, it is more corporatist fascism. To show you how bought and paid for Senate Banking Committee members are, the bill was voted out in 22 minutes with no amendments and no debate allowed. That is not democracy in action. The bill will now be rushed to the floor and passed.

The bill would also create a $50 billion bailout slush fund controlled by the FDIC and a new FDIC tax would be implemented on banks, which, of course, would be passed onto the public in higher banking costs.

The bill would also bail out creditors of companies. The slush fund would cover that as well. They call this riskless investment for corporate America and any bills would be picked up by the banks and passed on to Americans. We will then have hundreds or thousands of AIGs and GM’s. You ask yourself where does this all end? Read the history of the late1920s and into the 1930s of Italy and Germany and you will find out.

As the Senate and the House do the work of the bankers the bond market is in the process of sinking as yields rise. Higher rates, which we predicted last November, will become reality by the end of the year. A move by the US 10-year note from 3.20% to 4.5% or 5% will be the kiss of death for the mortgage industry. The 10-year yields 3.79% and the 30-year fixed rate mortgage is 5.07%. If 10’s go to 4.5%, mortgages will rise to 5.80% and a 5% ten-year note would work out to a 6.3% 30-year.

An increase in rates from 5.07% to 6.07% would add 19% to the total cost of a home, which means that any long-term recovery in housing is out of the question and that residential values would have to fall further as fewer and fewer people could qualify for loans. In fact, all loans would become more expensive, such as for business, credit cards, auto loans, etc. That 1% will increase debt service for the government by about $150 billion a year. This frankly presents the best of all worlds. If foreigners, such as the Chinese, Japanese or Russians became aggressive US bond sellers rates would climb considerably higher, inflicting even more damage to the economy and to US debt.

Most of you do not remember but mortgage rates hit about 18% in 1981, as official inflation hit 14-1/2%. Gold peaked out at $850, some six months earlier. On today’s mortgages that would triple payments on new mortgages and resets. As happened in 1981 the real estate market came to a standstill. Such an event would come when existing household debt is considerably higher. Debt today is already near 90% of GDP. Government debt is colossal, growing every minute and it is unpayable.

The bond market is going down and yields are going up and that is not good. The rise in interest rates has historically brought about higher gold and silver prices, because higher rates bring higher inflation. As we have said over and over again the only safe and profitable place to be is in gold and silver related assets. The storm is now just getting underway.

The MBA Mortgage Purchase Applications Index is 10.1%. The refi index was up to 15.8% versus 9.0% the prior week. The 30-year fixed rate mortgage was 5.04% and the 15’s were 4.34%.

The Treasury will sell $128 billion in notes next week, which is unprecedented. Talk about crowding out.

Governments worldwide will probably issue $4.5 trillion in debt this year, which is triple the 5-year average for industrial nations. Forty-five percent of that debt will be issued by the US.

We are told Russia and China are selling Treasuries and buying gold.

The US commercial paper market rose $1.5 billion to about $1.076 trillion this week.

Our sources within the banking industry tell us that 3-5 bank, First Source, Horizon and several others are in trouble. These are banks that refused TARP money. They have been told to expect an audit and that no further support can ever be expected from the Fed again. Auditors have already hit some of these banks and threatened them. One bank was told they were under capitalized and they were not. They arranged an additional line of credit with another bank and the Fed backed off. This criminal extortion is part of the move to eventual bank nationalization. The industry is hanging by a thread, as huge interest rate increases loom. The system lives on virtual money and that can only end up in real trouble. Again, do not hold CDs, annuities or cash value life policies, especially large balances. Not only banks will go under, but also so will insurance companies.

McClatchy: While Goldman Sachs’ lawyers negotiated with the Securities and Exchange Commission over potentially explosive civil fraud charges, Goldman’s chief executive visited the White House at least four times.

White House logs show that Chief Executive Lloyd Blankfein traveled to Washington for at least two events with President Barack Obama, whose 2008 presidential campaign received $994,795 in donations from Goldman’s political action committee, its employees and their relatives. He also met twice with Obama’s top economic adviser, Larry Summers.

Lawrence Jacobs, a University of Minnesota political scientist, said that “almost everything that the White House has done has been haunted by the personnel and the money of Goldman. as well as the suspicion that the White House, particularly early on, was pulling its punches out of deference to Goldman and its war chest.

“There’s now kind of a magnifying glass on the administration for any sign of interference or conversations with the regulators and the judiciary,” Jacobs said.

Goldman Sachs was both an underwriter and an investor in Lloyds Banking Group’s vast refinancing deal late last year, the FT has learned, highlighting the potential conflicts of interest at the heart of the investment bank’s business model.

According to four people involved in the capital raising, Goldman – a dealer manager on the debt portion of the £23.5bn transaction – demanded last-minute changes to the structure of a deal it was underwriting. This had the effect of benefiting its position as a bond investor.

A Goldman director tipped off Galleon’s Raj Rajaratnam about a $5 billion investment in Goldman by Berkshire Hathaway before a public announcement.

The revelation marks a significant turn in the government’s case against Rajaratnam, the hedge-fund titan at the center of the largest insider-trading case in a generation.

After the SEC tagged Goldman, we opined that Bubblevision, or for that many virtually all pundits and media types, did not mention Buffett’s association with Goldman or how Buffett demanded and got heads after the Salomon-Treasury Auction rigging scandal. Maybe now someone will ask Warren about Goldie.

Buffett spokesman, Thomas Murphy surfaced last night, to say Buffett has ‘great confidence’ in Goldie.

U.S. mortgage applications bounced from three-month lows last week as potential buyers locked in lower borrowing costs before the federal tax credit expires, the Mortgage Bankers Association said on Wednesday.

Thirty-year mortgage rates dropped to hover around 5 percent, stoking home loan demand after applications slid for two straight weeks.

Refinancing picked up by 15.8 percent to represent 60 percent of all applications last week. Demand for loans to buy a home increased 10.1 percent to send the industry group’s total applications index up 13.6 percent on a seasonally adjusted basis.

“Purchase applications continued to increase coming out of the Easter holiday, as we approach the end of the homebuyer tax credit, and are up modestly over last month,” said Michael Fratantoni, MBA’s vice president of research and economics.

Falling Treasury yields, used as a peg for mortgage rates, helped reduce the average 30-year loan rate by 0.13 percentage point to
5.04 percent.

The rate was up to 5.31 percent two weeks earlier, the highest since August 2009, and remains above the record low of 4.61
percent set in March of last year.

Harsh winter weather sapped housing demand in the first months of the year. The initial wave of the homebuyer tax credit, extended and broadened late last year, were seen having robbed some of this year’s demand.

But some signs have emerged that buyers are surfacing to lock in the credit while they can. If they qualify for the incentives of up to $8,000, they need to have home contracts signed by the end of April and close loans by June 30.

Permits to build houses, for example, in April shot up to the highest level since October 2008.

At best, though, housing is widely seen hovering around current weak levels at least through the year. The market still needs to work through a record stockpile of foreclosed properties, which RealtyTrac forecasts could drag into 2013.

Jack Pritchard, Charlotte, North Carolina-based co-founder of, sees rising mortgage rates later this year and the expiration of the tax credits cutting into home sales and refinancing.

“The spring housing season, even with the tax credit, would be considered stable — but stable at the bottom,” he said.

“You’ve got a consumer trying to time the ultimate bottom in real estate prices and you still have extremely tight credit standards for consumers to qualify,” Pritchard added.

FOX Business Network has expanded its quest for documents from the Federal Reserve in order to shed light on which financial firms borrowed funds during the financial crisis.

The network filed its new suit this afternoon in New York requesting documents from the Federal Reserve Board of Governors that will name each financial institution that borrowed from the various emergency lending facilities from November 1, 2008 through March 1, 2010. FOX Business originally sued the Fed for those documents but for a time period that ended on November 1, 2008.

The network scored a major victory in the original suit when the second circuit court of appeals ruled that the Fed had to turn over the requested documents. The Federal Reserve is expected to ask the court to reconsider the case and has said it is willing to take the case to the Supreme Court if necessary to protect the identity of the firms which received billions in taxpayer-backed guarantees.

The new suit expands the date through 2010 to learn which firms continued to seek emergency lending after the initial crisis had passed. FOX Business is also attempting to learn how much each individual institution received.

The U.S. Federal Reserve said on Wednesday it transferred a record $47.4 billion to the U.S. Treasury in 2009 as a result of its programs to help the economy and financial firms during the financial crisis.

The increase in income was primarily due to interest earnings on mortgage-backed securities issued by government supported mortgage finance agencies, the Fed said.

Some of the data in the Fed’s 2009 annual financial statement revises estimates released in January.

The 12 Fed regional banks are required to transfer their profits to the Treasury after paying dividends to member banks and retaining some of their surplus.

Fed officials said the U.S. central bank’s payment to the Treasury in 2009 was a $15.7 billion, or 50 percent, increase over 2008. The previous record was $34.6 billion in 2007, and the pre-crisis level was around $20 billion, Fed officials told reporters.

The Fed took unprecedented actions to prop up the economy during the storm but has been under fire from lawmakers on Capitol Hill over financial firm bailouts and regulatory lapses.

The credit risk on the Fed’s balance sheet is down sharply as its loans have decreased and Treasury and government-sponsored mortgage finance agency securities make up a larger share of the central bank’s assets, a Fed official said.

Financial reforms are a top priority for President Barack Obama, and news that the U.S. central bank has been profitable for taxpayers may strengthen the Fed’s hand as lawmakers decide whether to enhance its powers over banks.

A Senate committee on Wednesday approved a bill aimed at reforming the derivatives market, moving the Senate one step closer to passing sweeping regulation over the $450 trillion derivatives market.

The Senate Agriculture Committee approved the legislation by a vote of 13 to 8, with one Republican, Charles Grassley, breaking ranks to vote with Democrats.

The measure, part of the Democrats push to crack down on Wall Street, is expected to be merged into a broader bill from the Senate Banking Committee. A full Senate debate is expected by next week.

Its passage through the committee was a first test of how strongly Democrats are willing to push reform and how easily Republicans may be prepared to play ball.

Regulators charged a Miami Beach, Florida, philanthropist with fraud for allegedly running a $900 million Ponzi scheme, the Securities and Exchange Commission said on Wednesday.

Nevin K. Shapiro, a major donor to the University of Miami’s sports program, sold investors securities that he claimed would fund his Capitol Investments firm’s grocery business and touted returns as high as 26 percent annually, the SEC said.

Instead, Shapiro repurposed funds, making extravagant donations to charities and running a Ponzi scheme where he used funds from new investors to pay the principal and interest to earlier investors, the SEC said.

The 41-year-old Shapiro surrendered to authorities Wednesday morning in New Jersey, his lawyer said. According to the SEC, Shapiro used at least $38 million of investor funds to finance other business activities and a lavish lifestyle, including a $5 million home in Miami Beach, expensive clothes and season tickets to sporting events.

To raise funds, Shapiro attracted investors through word of mouth from friends and business associates, and reassured investors by boasting of his wealth, the SEC said.

When investors questioned Shapiro, he showed them fabricated invoices and purchase orders for nonexistent sales, the SEC said.

Existing home sales increased by 6.8%, good for a total of 5.35 million units, in March, thereby reversing three months of declining sales. This growth beats market forecasts of a more modest 5.6% increase. ??In related data, the US housing price index fell 0.2% in February. This marks the third consecutive month of falling home prices.

The Producer Price Index for the US grew 0.7% in March, beating forecasts of a 0.5% rise over February’s 0.6% decline.

Year-over-year, the PPI increased 6.0% in March compared to February’s annual 4.4% boost. This growth is in line with expectations. ??The PPI excluding food and energy prices rose an expected 0.1% in March, thereby matching February’s rate. ??Year-over-year, the PPI excluding food and energy increased as forecast by 0.9% in March, slightly down from February’s 1.0% growth.

February Housing Price Index declines 0.2% MoM in March vs a 0.6% decline in February

The number of Americans filing claims for unemployment benefits fell last week as the rebounding economy prompted companies to make fewer job cuts.

Initial jobless applications dropped by 24,000 to 456,000 in the week ended April 17, the Labor Department said today in Washington. The number of people receiving unemployment insurance and those getting extended benefits also fell.

Employers enjoying improved sales and profits may be gaining confidence in the economy and retaining staff. A transition from less firing to consistent job growth will ensure the recovery from the deepest recession since the 1930s is sustained.

“The state of the job market is firming,” said John Herrmann, a senior fixed-income strategist at State Street Global Markets LLC in Boston, who forecast claims would fall to 458,000. Companies are “actually retaining headcount and growing.”

Economists anticipated claims would fall to 450,000 from a previously reported 484,000 the prior week, according to the median of 47 projections in a Bloomberg News survey. Estimates ranged from 430,000 to 480,000.

Sales of U.S. previously owned homes rose in March for the first time in four months as buyers took advantage of a government tax credit and the weather improved. Purchases climbed 6.8 percent to a 5.35 million annual rate, exceeding the median forecast of economists surveyed by Bloomberg News, data from the National Association of Realtors showed today in Washington. New applications for jobless benefits declined and producer prices rose, Labor Department reports showed.

A homebuyer incentive worth as much as $8,000 for contracts closed by the end of June may provide a short-term boost to the industry that helped trigger the worst recession since the 1930s. Housing’s outlook for the second half of the year will be linked to a rebound in hiring, indicating a recovery will probably take years to develop as foreclosures climb.

Bob Chapman on The International
Posted: April 24 2010

Fight the Derivatives Cancer with a Wall Street Sales Tax, Plus Bans on Hedge Funds, Credit Default Swaps, and Synthetic CDOs

Webster, April 24, 2010

The Obama administration has been posturing this week about the life and death issue of Wall Street reform. Obama’s predicament is that of a Wall Street puppet who has been put into the White House thanks among other things to almost $1 million of contributions from the infamous Goldman Sachs – but who now needs to make a show of fighting his own Wall Street patrons for political reasons. Of course, Obama’s health-care reform was largely a bailout of insurance companies, which are themselves a key part of Wall Street. But Obama is now pretending to quarrel with Wall Street to shore up his waning credibility, partly because many House Democrats are desperately seeking anti-banker, economic populist street creds in order to avoid defeat in November. So far, the results have been largely feckless and inadequate.

The urgent problem raised by all this is the $1.5 quadrillion derivatives bubble. The financial crisis which struck the United States and the world in September and October 2008 was in fact a world a derivatives panic. This panic marked the first phase of a world economic depression caused by derivatives speculation. The second phase of this depression, which is now beginning, can also be attributed in large part to derivatives, since derivatives are the main tool being used in the speculative attacks on Greece, Spain, Portugal, Italy, Ireland, and other nations, building up towards a chaotic collapse of the euro.

Derivatives are the Cause of the World Depression of Our Time

Far from being some arcane or marginal activity, financial derivatives have come to represent the principal business of the financier oligarchy in Wall Street, the City of London, Frankfurt, and other money centers. A concerted effort has been made by politicians and the news media to hide and camouflage the central role played by derivative speculation in the economic disasters of recent years. Journalists and public relations types have done everything possible to avoid even mentioning derivatives, coining phrases like “toxic assets,” “exotic instruments,” and – most notably – “troubled assets,” as in Troubled Assets Relief Program or TARP, aka the monstrous $800 billion bailout of Wall Street speculators which was enacted in October 2008 with the support of Bush, Henry Paulson, John McCain, Sarah Palin, and the Obama Democrats. Continue reading Fight the Derivatives Cancer with a Wall Street Sales Tax, Plus Bans on Hedge Funds, Credit Default Swaps, and Synthetic CDOs

EPIC FAIL: Fox News hit piece against 9/11 truth and Jesse Ventura inadvertently reveals a shocking truth; WTC leaseholder was “on the phone with his insurance carrier to see if they would authorize the controlled demolition of the building”

Silverstein Wanted To Demolish Building 7 On 9/11Paul Joseph Watson

Preface from Alex Jones: To truly grasp the magnitude of this story, you really have to read the entire article. Immediately after the “pull it” controversy, debunkers claimed there was no plan to conduct a controlled demolition of the building. Now the fact that officials were considering blowing up the building is established, Silverstein’s consistent denial that this took place is a huge smoking gun. How did Silverstein expect to demolish the building safely when such a process takes weeks or even months to properly set up, even without the additional chaos surrounding WTC 7 on 9/11? How could explosives have been correctly placed on such short notice inside a burning building that had already been evacuated – unless the explosives were already in place? This new revelation is astounding and it needs to be investigated immediately.

A Fox News hit piece against Jesse Ventura and the 9/11 truth movement written by former Washington D.C. prosecutor Jeffrey Scott Shapiro inadvertently reveals a shocking truth, that World Trade Center leaseholder Larry Silverstein, who collected nearly $500 million dollars in insurance as a result of the collapse of Building 7, a 47-story structure that was not hit by a plane but collapsed within seven seconds on September 11, was on the phone to his insurance carrier attempting to convince them that the building should be brought down via controlled demolition.

Writing for Fox News, Jeffrey Scott Shapiro states, “I was working as a journalist for Gannett News at Ground Zero that day, and I remember very clearly what I saw and heard.”

“Shortly before the building collapsed, several NYPD officers and Con-Edison workers told me that Larry Silverstein, the property developer of One World Financial Center was on the phone with his insurance carrier to see if they would authorize the controlled demolition of the building — since its foundation was already unstable and expected to fall.”

In February of 2002 Silverstein Properties won $861 million from Industrial Risk Insurers to rebuild on the site of WTC 7. Silverstein Properties’ estimated investment in WTC 7 was $386 million. This building’s collapse alone resulted in a payout of nearly $500 million, based on the contention that it was an unforeseen accidental event.

“A controlled demolition would have minimized the damage caused by the building’s imminent collapse and potentially save lives. Many law enforcement personnel, firefighters and other journalists were aware of this possible option. There was no secret. There was no conspiracy,” writes Shapiro.

However, obviously aware of how it would impact his insurance claim, Larry Silverstein has consistently denied that there was ever a plan to intentionally demolish Building 7.

In June 2005, Silverstein told New York Post journalist Sam Smith that his infamous “pull it” comment, which has been cited as proof that Silverstein planned to take down the building with explosives, “meant something else”.

In January 2006, Silverstein’s spokesperson Dara McQuillan told the U.S. State Department that the “pull it” comment meant to withdraw firefighters from the building (despite the fact that there were no firefighters inside WTC 7 as we shall later cover). There was no mention whatsoever of any plan to demolish the building before it fell.

Shapiro’s faux pas has unwittingly let the cat out of the bag on the fact that Silverstein was aggressively pushing for the building to be intentionally demolished, a claim that he has always vociferously denied, presumably to safeguard against putting in doubt the massive insurance payout he received on the basis that the collapse was accidental.

For over five years since the infamous PBS documentary was aired in which Silverstein states that the decision was made to “pull” the building, a construction term for controlled demolition, debunkers have attempted to perform all kinds of mental gymnastics in fudging the meaning behind the WTC leaseholder’s comments.

“I remember getting a call from the fire department commander, telling me that they were not sure they were gonna be able to contain the fire, and I said, ‘We’ve had such terrible loss of life, maybe the smartest thing to do is pull it. And they made that decision to pull and we watched the building collapse,” said Silverstein.

Debunkers attempted to claim that Silverstein meant to “pull” the firefighters from the building due to the danger the structure was in, and this explanation was also later claimed by Silverstein’s spokesman, however, both the FEMA report, the New York Times and even Popular Mechanics reported that there were no firefighting actions taken inside WTC 7.

Another clip from the same documentary clearly illustrates that the term “pull” is industry jargon for a controlled demolition.

“While I was talking with a fellow reporter and several NYPD officers, Building 7 suddenly collapsed, and before it hit the ground, not a single sound emanated from the tower area. There were no explosives; I would have heard them. In fact, I remember that in those few seconds, as the building sank to the ground that I was stunned by how quiet it was,” writes Shapiro in his Fox News hit piece.

Shapiro’s contention that the 47-story building simply collapsed into its own footprint within seven seconds without making a sound, a feat only ever witnessed in world history on 9/11 alone, is contradicted by numerous other first-hand eyewitnesses.

Contradicting Shapiro’s claim that the collapse of the building was quiet, NYPD officer Craig Bartmer stated that he clearly heard bombs tear down Building 7 as he ran away from its collapse.

“I walked around it (Building 7). I saw a hole. I didn’t see a hole bad enough to knock a building down, though. Yeah there was definitely fire in the building, but I didn’t hear any… I didn’t hear any creaking, or… I didn’t hear any indication that it was going to come down. And all of a sudden the radios exploded and everyone started screaming ‘get away, get away, get away from it!’… It was at that moment… I looked up, and it was nothing I would ever imagine seeing in my life. The thing started pealing in on itself… Somebody grabbed my shoulder and I started running, and the shit’s hitting the ground behind me, and the whole time you’re hearing “boom, boom, boom, boom, boom.” I think I know an explosion when I hear it… Yeah it had some damage to it, but nothing like what they’re saying… Nothing to account for what we saw… I am shocked at the story we’ve heard about it to be quite honest,” said Bartmer.

EMT Indira Singh, a Senior Consultant for JP Morgan Chase in Information Technology and Risk Management, told the Pacifica show Guns and Butter, “After midday on 9/11 we had to evacuate that because they told us Building 7 was coming down. If you had been there, not being able to see very much just flames everywhere and smoke – it is entirely possible – I do believe that they brought Building 7 down because I heard that they were going to bring it down because it was unstable because of the collateral damage.”

The host asked Singh, “Did they actually use the word “brought down” and who was it that was telling you this?,” to which Singh responded, “The fire department. And they did use the words ‘we’re gonna have to bring it down’ and for us there observing the nature of the devastation it made total sense to us that this was indeed a possibility, given the subsequent controversy over it I don’t know.”

Another EMT named Mike who wished to remain anonymous wrote in a letter to the Loose Change film crew that emergency responders were told Building 7 was about to be “pulled” and that a 20 second radio countdown preceded its collapse.

“There were bright flashes up and down the sides of Building 7, you could see them through the windows…and it collapsed. We all knew it was intentionally pulled… they told us,” he stated.

Following news reports in the days after the attack that Building 7 had collapsed due to fire damage, Mike fully expected this mistake to be corrected after the chaos had subsided, but was astonished when it became part of the official story.

Mike’s report of a countdown preceding the collapse of WTC 7 was backed up by Former Air Force Special Operations for Search and Rescue, Kevin McPadden, who said that he heard the last few seconds of the countdown on a nearby police radio.

In addition, the language used by firefighters and others at ground zero shortly before the building fell strongly indicates that the building was deliberately demolished with explosives, and not that it fell unaided.

“It’s blowin’ boy.” … “Keep your eye on that building, it’ll be coming down soon.” … “The building is about to blow up, move it back.” … “Here we are walking back. There’s a building, about to blow up…”

Photo and video evidence of the collapse of Building 7 shows classic indications of a controlled demolition. The standard ‘crimp’ in the center-left top of the building and the subsequent ’squibs’ of smoke as it collapses clearly represent explosive demolition.

Veteran news anchor Dan Rather shared the view that the building looked like a controlled demolition during news coverage of the event on CBS.

Several news agencies, including the BBC and CNN, reported that the building had already collapsed 26 minutes and as much as over an hour before it actually fell.

Footage broadcast 20 minutes before Building 7 fell shows BBC reporter Jane Standley talking about the collapse of WTC 7 while it remains standing in the live shot behind her head. A Separate BBC broadcast shows reporters discussing the collapse of Building 7 26 minutes before it happened.

Just about every sentence of Shapiro’s hit piece is contradicted by numerous other eyewitnesses, so his feigned righteous indignation in ranting, “I was there. I know what happened, and there is no single credible piece of evidence that implicates the United States of America in the Sept. 11 attacks,” fails to ring true.

However, the most damning aspect of the article is Shapiro’s inadvertent revelation that Larry Silverstein was on the phone to his insurance company pushing for the building to be demolished, which is precisely what happened later in the day, and as innumerable eyewitnesses as well as video footage and physical evidence prove, the collapse of WTC 7 could have been nothing else than a controlled demolition, which would place Silverstein’s $500 million insurance payout in severe jeopardy if ever acknowledged.

Shapiro’s testimony, intended to debunk questions surrounding the official story behind 9/11, has only succeeded in raising more, because it completely contradicts Larry Silverstein’s insistence that he never considered deliberately demolishing WTC 7 with explosives.

More: Silverstein Was Calling Lawyer To Get Double Insurance On WTC On The Evening Of 9/11

Via email……

In response to your excellent new article, “Bombshell: Silverstein Wanted To Demolish Building 7 On 9/11,” I thought you might find the following of use:

Firstly, you can watch a recent CBS interview in which Silverstein claims that he should have been in the WTC on 9/11, but his wife insisted he go to a dermatologist’s appointment, thereby saving his life:

Secondly, it is worth noting that already on the evening of 9/11, Silverstein was calling his lawyers, to see if he could make a double claim on his WTC insurance policy. See this 9/11 Timeline entry:

The key information is from pp. 18-19 of Steven Brill’s book, After: How America Confronted the September 12 Era. Brill wrote:

“Real estate developer Larry Silverstein was on his way to a dermatologist on the morning of the 11th, instead of the Trade Center–the multibillion-dollar complex where he had leveraged a $14 million personal investment in a partnership that owned the leasing rights to the buildings into bragging rights as the complex’s putative owner. Silverstein would tell the author five months later that he was so shocked and sickened by the destruction and by the loss of four of his employees that morning that he did not think he focused on issues like insurance or finances until “perhaps two weeks later.” In fact, according to his own lawyers, by that evening he was on the phone with them worrying whether his effort to shave costs when he’d bought insurance would now come back to hurt him, or whether his insurance policies could be read in a way that would construe the attacks as two separate, insurable incidents rather than one. The difference was roughly $3.55 billion versus $7.1 billion–the kind of gap corporate litigators dream of.”

[End of quote]

If you want to verify this quote for yourself, you can search Brill’s book at

(Just do a search for “Silverstein,” and select the third result from the list.)

The Corbett Report: False Flags don’t Fly

Those who have studied history know that nothing invigorates and empowers an authoritarian regime more than a spectacular act of violence, some sudden and senseless loss of life that allows the autocrat to stand on the smoking rubble and identify himself as the hero. It is at moments like this that the public—still in shock from the horror of the tragedy that has just unfolded before them—can be led into the most ruthless despotism: despotism that now bears the mantle of “security.”

Acts of terror and violence never benefit the average man or woman. They only ever benefit those in positions of power.

This is why Nero fiddled while Rome burned: it gave him a chance to throw the Christians to the lions and rebuild the capital of the Roman Empire in his own image.

This is why Hearst and the warmongers of the emerging American Empire were delighted by the destruction of the U.S.S. Maine in Havana Harbor: it gave them the excuse they needed in order to rouse the public
into supporting the Spanish-American War.

This is why Israel attacked the U.S.S. Liberty in 1967 during the Six Day War, strafing and torpedoing it relentlessly for hours in a vain attempt to send it to the bottom: the Israelis believed that the loss of the Liberty
could be blamed on Egypt and draw the Americans into war.

This is why there are hundreds of documented examples of governments staging attacks in order to blame them on their political enemies. In every civilization, in every culture, in every historical period, authoritarians have known that spectacular acts of violence help to further consolidate their own power and control. And sadly, throughout history there have been all too many willing to allow attacks to occur, to pretend that attacks have occurred or even to attack their own population in order to further their political agenda.

To think that such staged provocations and false flag attacks no longer occur would be as unrealistic as believing that human nature itself has changed, that powerful people no longer seek to increase their power, that influence is never used for deceit or manipulation, that lies are no longer told to satisfy greed or slake the thirst for control. It is to believe that our society is immuned from those things that we have seen in every other society in every other era. In short, it is a dangerous delusion.

The people are once again learning the power of this delusion. They are learning the extent to which they have been lied to. They are once again studying their history.

The Russians are learning how the FSB was caught planting bombs in Moscow in the 1990s during a terror scare that swept Putin into power and stirred the public into supporting the Second Chechen War. They are learning how their autocratic ex-President came to power campaigning on the graves of those his old FSB cronies had killed.

The Israelis are learning how Mossad has been caught time and again posing as the very Muslim terrorists they claim to be opposing. They are learning how Israel uses the specter of terror to further extend their blank cheque drawn on American funds to expand their police state at home and maintain their hardline stance,
the world’s sixth-largest nuclear superpower supposedly threatened by the possibility that one of their neighbours may one day obtain a single nuclear weapon.

The British are learning how their SAS officers were caught dressing up as Arabs in Iraq, driving around with trucks full of munitions, shooting at police to stir up ethnic tensions and insure that permanent bases could be built in the region. They are learning how Haroon Aswat, the supposed mastermind behind the 7/7
bombings, was working for British Intelligence.. They are learning how British military intelligence took part in IRA bombings.

The Indians are learning how the Mumbai attack was helped by an U.S. Agent who is cooperating with investigators so that he won’t face questioning by foreign authorities.

The Canadians are learning how their own provincial police dressed up as protestors in 2007 and threatened violence against other police in order to force a crackdown on peaceful protests.

And the Americans are learning that there were multiple bombs found, dismantled and taken out of the Alfred P. Murrah building on April 19, 1995. They are learning that Timothy McVeigh had written a letter to his sister in which he claimed to be in the Special Forces for the U.S. Army. They are learning the bombing was being directed by FBI informants, just as the 1993 World Trade Center bombing was. They are learning about 9/11
and the Gulf of Tonkin and Operation Northwoods and their own Army Counterinsurgency Manuals that teach officers how to commit false flag attacks to blame on their enemies.

In short, the people are learning the truth.

And now we see the same build-up to a false flag event taking place that we saw in 1995. At that time the U.S. had a corporate media desperate to fling mud at anyone concerned by the actions of their government, and it had a government that was desperately unpopular in the face of growing dissatisfaction. Today we see the exact same factors at play.

If anything, the situation today is worse than it was in the run-up to the Oklahoma City Bombing, with media consolidation meaning that groups of concerned citizens like the Oath Keepers are being attacked by the controlled minions on both the left and the right. And now it is not just the militia that is being demonized by
the establishment: it is veterans and gun owners, third party supporters and libertarians, anti-war protestors and human rights campaigners, people who are upset with the government giving trillions to the banks that have engineered our current financial crisis in the first place. In short, everyone is now a potential terrorist, according
to the governmental and media agencies that deign to limit our range of acceptable opinion and control dissent.

Even the word ‘terrorist’ means something more than it did back in 1995, after the false flag anthrax attack allowed the passage of the Patriot Act, after the boogey of Al-CIAda gave the NSA the opportunity to announce that they were collecting everyone’s emails and everyone’s telephone calls, after the former Homeland Security Secretary came out and admitted that the Bush administration had made up terror threats in order to scare the people into supporting the government, now we know what the real definition of terrorism is. It is governments scaring their own populations into line.

But there is something else that’s different now from what it was in 1995. The people are learning something else about terrorism: they are not terrorists for speaking out against their government. They are not terrorists for wanting the government to stop selling their children into servitude to pay bankers their bonuses. They are not terrorists for pointing out that the FBI and the CIA and Mossad and MI6 are behind every major terrorist event.

The people are not terrorists because they do not want to see more death. They do not want more destruction, the spilling of the blood of their fellow citizens is not in their interests. Death and destruction only ever serves the governmental and financial and industrial interests who always grow in power and wealth in the wake of every tragedy. Time and again, the people pay with their lives, and the governments and the banks and the war machine only grows and prospers.

The people do not want terrorism because it does not benefit them. It only benefits the existing power structure.

And this time, if there is another staged event to blame on the government’s enemy of the day, the people will know who to blame.

Related works from The Corbett Report:

You Are Being Prepped

OKC Was an Inside Job

Metal$ Are In The Pits – Trader blows whistle on gold & silver price manipulation

By MICHAEL GRAY, April 11, 2010

There is no silver lining to the activities of JPMorgan Chase and HSBC in the precious-metals market here and in London, says a 40-year veteran of the metal pits.

The banks, which do the Federal Reserve’s bidding in the metals markets, have long been the government’s lead actors in keeping down the prices of gold and silver, according to a former Goldman Sachs trader working at the London Bullion Market Association.

Maguire was scheduled to testify last week before the Commodities Futures Trade Commission, which is looking into the activities of large banks in the metals market, but was knocked off the list at the last moment. So, he went public.

Maguire — in an exclusive interview with The Post — explained JPMorgan’s role in the metals pits in both London and here, and how they can generate a profit either way the market moves.

“JPMorgan acts as an agent for the Federal Reserve; they act to halt the rise of gold and silver against the US dollar. JPMorgan is insulated from potential losses [on their short positions] by the Fed and/or the US taxpayer,” Maguire said.

In the gold pits, Maguire sees HSBC betting against the precious metal’s price without having any skin in the game in the form of a naked short.

“HSBC conducts an ongoing manipulative concentrated naked short position in gold. Silver is much easier to manipulate due to its much smaller [market] size,” Maguire added.

“No one at JPMorgan is familiar with Andrew Maguire,” said Brian Marchiony, a company spokesman. HSBC declined to comment.

Also during the CFTC hearing, Jeff Christian, founder of the commodities firm CPM Group, said that the LBMA, the physical delivery market for gold and silver in the UK, has been using leverage, which is another way to depress the price of gold and silver.

Christian said that the LBMA — the same market Maguire trades in — has leverage of about 100-1 on the gold bars settled on the exchange. In layman’s terms, that means if 100 clients requested their bullion bars be delivered, the exchange could only give one client the precious metal.

The remaining requests would have to be settled for cash equivalent. “That is tantamount to a default on the trade,” says Bill Murphy, chairman of the Gold Antitrust Action committee.

Maguire goes further and calls it a fraud: “If you sell something you do not own, then that is fraud.”

Back in 2007, Morgan Stanley agreed to settle a $4.4-million lawsuit brought by precious-metal clients, who alleged that Morgan offered to buy gold and silver and store it for the investors, but never purchased any metal and still charged them storage fees.

Morgan Stanley denied the charges at the time, but “settled the case to avoid the cost and distractions of continued litigation,” the firm said.

Despite gold’s rise each of the last 10 years, Murphy believes the price of gold today would be closer to $2,300 an ounce if the price just moved with inflation.

Maguire believes the price should be even higher given the fear trade that would have sent prices spiking during the financial crisis in 2008-09.

Both precious metals have seen a recent spike since Maguire’s e-mails became public. Gold has gained 6.5 percent to close at $1,161.55, while silver has spiked 10 percent to $18.38.

According to the e-mails Maguire sent to CFTC regulators, he was spot-on in his expectations of how the precious metals would trade on release of the January jobs report.

This message is to “confirm that the silver manipulation was a great success and played out exactly to plan as predicted yesterday. How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview,” Maguire wrote to a staff investigator after the trading day.

CFTC commissioner Bart Chilton said, “I’m appreciative of the information Mr. Maguire provided and I’m glad it was introduced into the investigation.”

High, low silver

The prices of gold and silver have been allegedly suppressed by JPMorgan Chase and HSBC, according to a London whistleblower.

Andrew Maguire, who laid out the banks’ plan in e-mails to the CFTC prior to trading on the Comex on Feb. 5.

1.) From: Andrew Maguire

To: Ramirez, Eliud [CFTC]

Cc: BChilton [CFTC]

Sent: Wednesday, February 03, 2010 3:18 PM

Subject: Re: Silver today

Thought it may be helpful to your investigation if I gave you the heads up for a manipulative event signaled for Friday, 5th Feb. Scenario 1. The news is bad (employment is worse). This will have a bullish effect on gold and silver as the US dollar weakens and the precious metals draw bids, spiking them higher. This will be sold into within a very short time (1-5 mins) with thousands of new short contracts being added.

Scenario 2. The news is good (employment is better than expected). This will result in a massive short position being instigated almost immediately with no move up. This will not initially be liquidation of long positions but will result in stops being triggered, again targeting key support levels. Kind regards,

2.) From: Andrew Maguire

To: Ramirez, Eliud [CFTC]

Cc: BChilton [CFTC]; GGensler [CFTC]

Sent: Friday, February 05, 2010 3:37 PM

Subject: Fw: Silver today A final e-mail to confirm that the silver manipulation was a great success and played out EXACTLY to plan as predicted yesterday. How would this be possible if the silver market was not in the full control of the parties we discussed in our phone interview? Kind regards,

3.) Andrew T. Maguire

From: Ramirez, Eliud

To: Andrew Maguire

Sent: Tuesday, February 09, 2010 1:29 PM

Subject: RE: Silver today Good afternoon, Mr. Maguire, I have received and reviewed your email communications. Thank you so very much for your observations.