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This Repor t ma y b e f o r w a r de d a s y o u l i ke w it h o u t c h a r g e . I t i s pr ovi d e d a s a P u b l ic Servic e a t t h i s t i m e w i t h o u t c o s t . T h e c o n t e n t s a n d d e s i g n s o f s y s t e ms a r e i n f act copyri g h t e d . A t a f ut u r e d a t e , a bo o k w i l l be r el ea s e d Th e G eometry of T i m e. T h e c hart s a r e o f t e n r e p r o d u c t i o n s o f a n e a rl i er pub l i ca t i o n f r o m 1 9 8 6 a l s o t o b e s o o n republ i s h ed Th e G re ate st B u ll M a r k e t I n Hi s t o r y c o v e r i n g f r o m 1 9 00 u p t o t he 19 8 0 s . A ddit i o n a l u p d a t i n g i s un d e r wa y t o c o m p l e t e t h e C e n t u r y a n d i n t o t h e c u r r e n t t i m e , p rovi d i n g a m o nt h t o m o nt h h i s t o r y o f t he f i na n c i a l d e v e l o p ment o f W e s t e r n S o c i e t y .

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M any peopl e h a v e w r i t t e n a s k i n g a b o u t G o l d man Sachs an d i t s co n s p i r a c y t o contro l t h e F in a n c i a l M a r k e t s . I ha v e e v e n b e e n a s k e d whet he r I bel i e v e t h a t t he att empt t o a s s a s s i n a t e m e o f N a y 1 0 t h , 2 0 0 7 , w a s c o n n e c t e d t o G o l d man Sachs'? Let m e expl ai n t h i s su b j e c t v e r y c a r e f u l l y . I r eal i ze t h a t t he r e i s a st o r m c l o u d b rewing w i t h c o n s p i r a c y s t o r i e s w i t h G o l d man Sachs a t t h e c e n t e r . T h ese t h e o r i e s . a re no t p e r h a p s a b s o l u t e l y c o r r e c t , b u t t he y a r e n o t f ar o f f ei t he r . The Februar y e d i t i o n o f ~o l i o Maga z i n e ra n a n o u t l i ne o f t he Go l d m an S achs' " c o n s p i r a c y " w r i t t e n b y N a t t h e w Mal o ne . I t r epo r t e d e i g h t ( 8 ) e s s e n t i a l

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I d i f f e r , w h a t I w a s i nv e s t i g a t i n g w a s a g r o u p o f h o u s e s a n d i n d i v i d u a l s w h o w er e

manipul at e markets . Goldman Sachs perhaps i s i s l e a de r n o doubt

f or t h e y c o n t r o l w h a t o t h e r s c a n no t p o l i t i c s ! B u t t h e c o r e e l e m ent t h a t i s at i ssue i s t h a t w e d o n o t l i v e i n a wo r l d t h a t w e t hi n k w e d o . I h a v e b e e n b e h i n d t he c u r t a i n . I w as i nvi t e d t o j o i n t h i s " c l u b " ex p e c t i n g m e t o b r i n g b i l l i on s o f d oll a r s f r o m J a p an . I w a s a s k e d t o b r i n g $ 1 0 b i l l i on b a c k i n " 1 9 98 . T ha t m e e t i n g w as wit h D o v S c h l e i n p r e s i d e n t o f R e p u b l i c N a t i o n a l B a n k . T o p u t t h i s i n per s p e c t i v e , R epubli c N a t i o n a l B a n k wa s s o l d t o H o n g K on g Shanghai B an k C or p ( " H SBC") f o r a b o u t $ 10 bi l l i o n. S o t h e s e w er e t h e d a y s w hen a b i l l i on r ea l l y w a s a l ot of m o n e y t h e o ld d ay s when t h e p r i m e r e s i d e n t i a l st r e e t i n Lon d o n b y t h e P a r k w a s s t i l l kno w n a s mi l l i o n a r e ' s r o w , n x n p are d t o t o d a y i t i s Bi l l i ona r e ' s R o w . S o i n m o d er n t e r m s , I was a s ke d t o b r i n g o v e r n e a r l y a $ 1 0 0 b i l l i on i n t od a y ' s m o ney t h a t t h e b a n k e r s c ould h av e f u n ; w i t h of f er i n g o n l y a A A A g u a r a n t e e f r o m a c o n s o r t i u m . I dec l i n e d . I e x p l a i n e d t h a t I wo u l d h a v e t o p e r s o n a l l y g u a r a n t e e s u c h a p r o j e c t b y m y w o r d , a nd I w o u l d n o t d o t ha t . T h e y w a n t e d t o g r a b t h e c~ i t i e s o f Ru ss i a , a n d t h e y a s a g r o u p , d i d n o t be l i e v e i n a n a l y s i s t h e y b e l i e v e d i n a b s o l u t e c o n t r o l . I must p r a i s e Po r t f o l i o M a gazine a n d M at t h e w M alo ne f o r ha v i n g t h e c o u r a g e t o e ven ru n t h i s st or y . Y o u w i l l nev e r s e e t h i s ev e n h i n t e d a t i n t he m a j o r N e wspaper s . You have n o i d e a t h a t b e h i n d t h e c u r t a i n , t h e r e i s al so n o f r ee p r e s s , f or t he U S Att o r n e y w i l l cal l and a s k f o r f avo r s . I t i s l i ke t r yi ng t o n e g o t i a t e w i t h a c ri mi na l p o i n t i n g a s h o t g u n i n y o u r f ac e . H e w h o h a s t h e p o w er , m a kes t h e r u l e s . T he Execut i v e w i l l no t t o l er a t e a f r ee p r e s s t h a t w o u l d e v e r e x p o s e t h em . L oo k a t t he c as e o f t h e N e w Yor k T i me s j o u r n a l i s t Jud i t h N il l e r t hr o w n i n t o c o n t e mpt a n d h eld i n p r i s o n u n t i l . s h e wa s w i l l i ng t o t e st i f y an d t u r n o v e r t h e w h i s l e r bl o w e r s a gains t t h e G o v e r nment . D o y o u r e a l l y t h i nk t h e r e c a n b e a n y r e m a i n i n g f r e e p r e s s a fte r t ha t ? Who w i l l n o w r e v e a l t h e t r u t h t o t he m e d i a ? I f t hey d o , t he j ou r n a l i st can be t o r t u r e d u n t i l t h ey t e st i f y aga i n s t yo u . W ha t t h a t c a s e d i d , w a s t u r n o u t t he li g h t o n A me r i c a n l i b e r t y f or e v e r . W e w i l l nev e r k n o w t h e t r u t h , be c a us e a n yone w ho pr i n t s i t , ca n n o w b e i m p r i s o n e d .

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The courage t o e v e n p r i n t t ' a i. s t = or y b y Po r t f o l i o M a g azine i s r em a r k a b l e . I c an onl y h o p e t h a t t he sp i r i t o f i nde p e n dence w i l l n ot di e . W e n e e d d e s p e r a t e l y t o r e s t o r e t h e f r e e p r e s s . I n t he i n st a n t m a t t e r , y o u a r e n o t l i k el y t o se e t h i s s tor y i n a m a j o r n e w s paper f o r t w o r e a s on s ( 1 ) i t exp o s e s t h e t r u t h a b o u t t h e g a me is r i g g e d , a n d ( 2 ) Go l d man Sachsi s a po w e r f u l f or ce t ha t no t m r e l y co n t r o l s t he e g overnment i n s o m an y w a ys , b u t t h e y c a n d i c t a t e t h e f a t e o f a ne w s p aper b y t h e r evenue and b y i m p l i c a t i o n w i t h t he cr i m i n a l p r o s e c u t o r i a l p o w e r s . In t h e f i n a n c i a l i nd u s t r y , j ust t o get an i n t er v i e w a t . Gol drnanSachs was l i k e appearin g b e f o r e Go d h i m s e l f . T h e i m a g e s pu n a r o un d t h e f i r m w a s o n e t h a t s o mehow Goldman Sachs w as j u s t a l wa y s b e t t e r t ha n e v e r y o n e e l s e , an d w a s s o m eone so s m art , they wer e a l w ay s a b l e t o o n e - u p e v e r y on e e l s e . Go l d man Sachsg ot t h e b i gg e s t d e a l s , was abl e t o g r o o m i t s e m p l o y ee s f o r t op l ev e l go v e r n ment j o b s s e c u r i n g p o l i t i ca l c ontro l b o t h i n t he U n i t e d S t a t e s a s w e l l as E u r o p e . T h e y p a i d t h e h i g h e s t b o n u s d eals t h a t a m a z i n g l y a r e n e v e r c r i t i ci s e d e v e n i n t h i s at m o s phere . I t i s a pop u l a r view t h at Go l d man Sachs i s l i ke a cun n i n g c a t t ha t al wa y s l a n d s o n i t s f e et , si mp l y b ecause i t h a s d e v e l o p e d a n u n f a i r ad v a n t a g e w i t h r e g u l a t o r s a n d p o l i t i ci a n s a l i ke . As Portf o l i o M a gazine re p o r t e d , w h e n t h e i r al um n i w e r e a s k e d a b o ut t h e C o n spir a c y , " some di d n ' t a p p r e c i a t e t h e j ok e . G o l d man s ai d t h a t s u c h c l a i m s a r e l ud i c r o u s . " Nobody would e x p ect Go l d man Sachsto a d m it w h a t t he y h a v e b e e n d o i n g . W hat w e m ust u nderst a nd , i s w h y ! Goldman Sachs is n o t i n t er es t e d i n co n t r o l l i ng t h e wo r l d , j u st t he wo r l d ec o n o my p ull i n g t h e s t r i n g s b e h i n d t h e s c e n e s . We s h o ul d n o t e x p e c t t h e S E C no r t h e U S A t t o r n e y t o admi t t h e y l o o k t h e o t h e r way. Al l w e c a n d o i s ex a m i n e t h e e v i d e n ce , f o r t hos e invol ve d wo ul d n e v e r a d mi t a n y t h i n g . T h e w h ol e Sh e rman Anti- T r u st A ct w a s b a s ed o n preci s el y t h i s so r t o f act i v i t y . Ne v e r h a s a n y on e r e a l l y f ou n d a c o r p o r a t i o n g u i l t y in t h e e s s e nc e o f . what t h e An t i Trust Act w a s s u p p ose t o p r e v e n t . Th e t h e o r y t h a t c orpor a t i o n s c o u l d b a n d t o g e t h e r t o m a n i p u l a t e m a r k e t s o r i nd u s t r i e s , w o u l d b e a b u s t unless t h e y i n c l u d e d members o f g o v e r n ment . T h e o n l y w a y t o s u c c ee d i s b y c o n t r o ll i ng t he p o l i t i c a l po w e r s . U n f o r t u n a t e l y , w e d o no t l i ve i n a r ea l de m o c r a cy , f o r w e d o not e l e c t t he t r ea s u r e r , h e ad o f t h e F e d e r a l R e s e r v e , S EC, o r A tt o r n e y G e ner a l . T hese ar e p o s i t i o n s t h a t a re t he s p o i l s o f po l i t i cs t ha t c a n b e b o u gh t l i k e a ho o k e r .

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The all eged Goldman Sachs Conspiracy as r e ported by Po rtfo lio M agazine l a s t February, c e nt ered around eight ( 8 ) p r~ poi nt s . (1) Hank Paulson let Be ar S t e m s c o l l a p s e, a nd be absorbed by J .P Morgan at a mere $10 per share.
a) Rumors wer e b) Conspi r a c y bi l l i o n Truth t h a t t r ad e r s a t Go l d m an Sachsw ere s h o r t i n g t h e st o c k o f

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wa s t h a t Go l d man Sachsa nd o t h e r f i r m r e t a i n e d a " gr u d g e " s

against Bear S t e ms si n ce 1 998 when Bear r e f u sed to j o i n i n t h e $ 3 . 6

b a i l o u t o f Lon g - T I E Ca p i t a l M a n agement.

Bear Stems. was not p art o f t h e I n v e s tment Bank "c l u b" a nd t h us f o u ght i n
c ompeti t i o n a ttacked i n a g a i n s t t h e o r g a n i z e d mar ke t m a n i p u l a t i o n s . T h i s w i l l b e exp l a i n e d

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b e l o w , bu t t h e s t o c k of Be ar S t e ms w as aggressively b e i n g

a n e f f o r t t hat ap p e a r s t o f or c e i t s col l ap s e .

(2) CEO of Me r r i l l Lyn c h J o h n T h ai n w a s o n c e c o - P r e s i d en t a t Go l d m an Sachs. T hain i n t h e m i d d l e o f ch a o s , s o l d M e r r i l l Lyn c h t o B a n k o f A m e r i c a f o r an act ua l p r e m i u m when day s l a t e r Le h a enw as bought f o r ~ es by Barcl ay s o f B ri t ai n . a ) t h e c o n s p i r a c y t h e o r y w a s t h a t t o pr ot e c t a f or m e r G o l d man c o - p r e s i d e n t , t he f o r c e s b e h i n d t h e ~ in m oved G e i t h n e r a n d P a u l s o n t o u r g e B a n k of Ameri c a t o b u y M e r r i l l

Truth:
I t i s unl i ke l y t h a t t hi s con s p i r a c y t o sel l - o f f M e r ri l l was d e s i g n e d t o protec t t h e r e p u t a t i o n o f Go l d m an Sachs r o f Jo h n T h a i n . T h e r e w a s e x p o s u r e o i nt e r - r e l a t e d a n d M e r r i l l Lyn c h w a s t h e b i g g e s t r e t a i l cl i ent ba s e . (3) AI G Bai l o ut o f $8 5 b i l l i on , wa s l at e r r ai se d t o $1 2 3 b i l l i on . I t was Ha n k Paulson who i n s t a l l e d w h o , E d L i d d y a s AI D ' s ne w C EO who ju s t ha p p e n ed to be a n o t he r V i c e C h a i r man of G o l d man Sachs.. a) t h e C o n s p i r a c y t h e o r y c l a i m s t h a t r e s c u i n g AIG w as n e c essary t o pr o t e c t Goldman Sachs w ho had $ 20 b i l l i on ex p o s u re i t sel f t o A I G. Truth: AIG b ail o u t w a s q u i t e si m p l e , t he y w e r e o n e o f t he f oun d i n g m ~ s of t he manipu l a t i o n c l u b . G r e t c h e n Mor genson o f t h e N e w Yor k T i me s r e p o r t e d t h a t it wa s J . P . M o r ga n who t o o k t h e w h o l e i d e a t o AI G a b o ut c r e a t i n g t h e C D S product. AI G p a r t i c i pa t e d i n nu m e ro us m anket m anip u l a t i o n s f r a m L o n don, f o r t hat o p e r a t i o n w a s s e t u p o u ts i d e o f t h e U n i t e d S t a t e s t o e n s u r e p r i v a c y f r o m r egul a t o r s . (4) The Pa u ls on $ 700 B i l l i o n B a i l o u t p a c k a ge e n ded up e x t o r t i n g f r am C o ngre s s a vast a mount o f m o ne y f a r b e y o n d wha t t h e b a n k s n e eded, a s a l a st d i t ch eff or t t o gr a b w h i l e P a u l s o n wa s t h e r e . O n l y $ 2 5 0 b i l l i on w a s d r a w n d o wn of whi c h $ 1 0 b i l l i on w a s g i v e n t o Go l d m an Sachs, b u t P a u l s o n r e f u s e d t o give o n l y $ 6 b i l l i on t o Le h llenB m t h e r s , be c a u se Goldmanw anted t h e i r

c lient s , 3

a ) Di c k F u l d , C E O o f L e tmnan Brot h e r s , w a s a s k e d b y C o n g r es s why A I G w as bai l e d o u t b u t n o t Le h n an ? He r e s p onded: " U n t i l t he d a y t h e y p ut me i n t h e g r o u n d , I wi l l won d e r . "

L etman had a l w ay s b een a f i er c e c o mpet i t o r t o G o l d man Sachs . T h e c h a n c e to pu t t h e m ou t o f bu s i n e s s wa s f a r t oo t e m p t i n g . G o l d man Sachs t h r o u g h Hank P aulson , a c h i e v e d i t s g o a l a n d t o o k o n e s t e p c l o s e r t o el i m in a t i n g t h e v e r y c ompeti t i o n t h e y d i sl i k e d s o m u ch . T h e d r e a m a t G o l d man Sachs was a l w ay s t o b e th e d o mi nan t f o r c e n o m a t t e r h o w t h a t h a d t o b e a c h i e v e d f r o m t h e r u m or s t hat p o u r e d o u t o f t h a t f i r m.

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t h e m t o t a k e d e p o s i t s t h a t a r e n o w F DI C i n s u r e d .

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a ) Lehman was the f i r s t t o a p p r o a c h t h e F e d e r a l R e s e r v e w i t h t h i s i dea , b ut was r e s o undl y r e j e c t e d . T ruth I t i s a~ zi ng t h a t t he F e d e r a l R e s e r v e wc ul d r e j e c t L e 1manye t s u p p o r t G oldman Sac?m and Morgan St a n l e y wh o d r e amed up t h e s e n i g h t m are s a n d s o l d them to A I G t o u s e t h e i r A A A r a t i n g a n d n a me a s a m a j o r i n s u r a n c e c c lnpany. Why d id G o l d m an and Morgan n e ed t o b e c c xne FDIC i n s u r e d? T h ey w ere h u ge i n and th e a v e r a g e mat u r i t y w a s a t b e s t 3 0 d a y s . B o t h G o l d man and Mor gan needed l ong term capi t a l t o pl a y w i t h . W h a t t h e y n e e ded wer e b an k d e p o s i t s f r o m t h e a verage p e r so n t o k e e p t h e g a me g o i n g . T h e b u s i n e s s model wa s c h a n g i n g , a n d t hey sa w t h e l i gh t , a n d s t o l e t he i d e a f r o m h d m a n . (6) Out l a w i n g S h o r t - S e l l i n g : O n S e p t ember 1 9 t h , 2 0 0 8 , t h e S E C Commissioner C hris t o p her Co x a n nounced a one month b a n o n s h o r t - s e l l i ng f i na n c i a l

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i s t r u e t h a t b o t h B ear S t e m s and Letman Brothers l o n g

c omplai ne d t o r e g u l a t o r s t h a t " t r ad e r s " w e r e s h o r t i n g t he i r st oc k s t r y i n g t o cr e a t e a p a n i c . T h e S E C p r o t e c t e d G o l dman Sachs an d t h e k e y manipul a t i o n " c l u b " y e t w h e n t h e s h a r e p r i c e s o f G o l d man Sachs f e l l by 20% in j u s t t hr e e d a y s , t h e S E C a c t e d t o p r o t e c t t he g o l d e n c h i l d . Truth T here i s n o e x p l a n a t i o n a s t o w h y t h e S E C woul d n e ve r a c t w h e n t h e s o u r c e of s h o r t - s e l l i ng w a s f r o m G o l dman Sachs o r f r i en d s . T h e SEC does no t i n any way pro t e c t t h e m a r k e t s . T h e y p r o s e c ut e a l ot of sm a ll - t i m e o f f e n d er s t o creat e t h e i m a g e t h a t t h e y h a v e t e e t h , b u t t he y a r e a s c o r r u p t a s a n y t h i r d world B a nana Republ i c . T h e y d o n o t a u d i t a n y o f t h e b i g ho u s e s , a n d y i e l d t o t h e i r d e s ir e s . E v e n Hank P a u l s o n when h e wa s h ead o f G o l d man Sacks a r g u e d for g r e a t e r l ev e r a g e t o s t a y c o mpet i t i v e w i t h o v e r s e a s . Who w as u s i n g t h e l everage o v e r s e as ? Coul d i t ha v e b e e n G o l dman ~ , Mor ga n S t a n l e y a n d o f c ourse A I G?

(7) Bai l i n g Out C i t i g r o up : Yes i t

w a s t r u e t h a t e ven a f t e r a $ 2 0 b i l l i o n

i nj e c t i o n f o r C it i gr o u p , t he i r st o c k f e l l by 6 0 %i n a si ng l e w e e k . T h i s l ed t o a n o t h e r $ 2 5 b i l l i on p a c k ag e an d t h e n t h e g o v e r n nen t a ~ to add more i f t he i r l o ss e s e x c e e ded $2 9 b i l l i on . a ) Who was t h e C i t i g r o u p a d v i s o r ? R o b er t R u b i n , f or m e r U S T r e a s ur y S e c .

a nd another Gorman chairman wNo was paid $62 mi l l i o n i n f e e s

b etween 2004 and 2 0 0 7 .

Cit i g r o u p was t o o b i g t o f ai l , but t hey h a d R o b er t R u b i n a s t he i r w h it e k night . T h e c o n s p i r a c y t h e o r i e s t h a t cl a i m t h i s w a s t o h e l p R u b i n , a r e a b i t f ar - f et c h e d .

(8) Qbama was the golden ManchurianCandidateof

Go l dman Sachs,is p e r h aps

a bi t o v e r t he t o p . I t i s t r ue t ha t t he e m p l o y ee s a t Go l d man Sachswere among the l a r g e s t d o n o r s t o O b ama as r e p o r t e d b y Po r t f o l i o $ 8 8 4 , 0 0 0 . a) t h e R umor was t h a t Go l d man Sachsm anipu l a t e s O b ama and i s o n i t s wa y to b ecorre ot s o w n s u p er power . Truth: Goldman Sachs did n o t o n l y ba c k O b ama. Y ou w i l l see t he y su p p o r t e d M cCain as well . T h e y k n o w how t o p l a y p o l i t i cs ve r y w e l l . Go d m an Sachs w orks v e r y l hard a t c o n t r o l l i ng g o v e r nment . T h e y g r o o m t h e i r o w n f o r po s i t i o n s w i t h i n t he e xecut i v e b r a n c h . Y e t d o n ' t f or g e t N e w J e r s e y G over no r J o n C o r z i n e . A l s o ' d o n ot f o r a m o ment t h i n k t h i s i s l i mi t e d t o t he U n i t e d S t a t e s . W e a l s o s e e t h e World Bank ru n b y R o b e rt Zo e l l i ck , wh o w a s a m a n aging d i r e c t o r o f Gol d m an Sachs. W fin d M a r i o D r a g h ai , w h o i s l ea d i n g t h e E u r o p ean Un i o n r e s p o nse t o t h e cr i si s i s e yet a n o t h e r ..Vice P r e s i d e n t o f Go l d m an Sachsp r e v i o u s l y . Ha n k P a u l s o n , a p p o i n t e d a 35-year o l d Go l d man Sachsv i c e p r e s i d e n t N e e l K a s h k a ri t o hea d t h e $7 0 0 b i l l i on Troubled Assets R e l i e f P r o g r a n ( TARP) . The Goldman Sachs p owerbase i s ev e n o n b oth s i d e s o f t h e A t l an t i c , a n d w e f i n d t h a t t he M e r r i l L yn c h C EO John Th ai n w a s also a f o r m e r c o - p r e s i d e n t o f Go l d m an Sachsand t h e h e a d o f Wa c hovia R o bert S t e e l was a f o r mer Go l d man V i c e C h a i r m a n. T h i s a m a z i n g g r o u p o f po l i t i cal con n e c t i o n s

runs deep i nt o
questi o n

t h e wor k i ngs a t t h e In t e r n atio nal Monetary Funda s well.

T he real

i s ; H o w Can a T r e a s ur y S e c r e t a r y s t i l l have st o c k i n Go l d m an Sachs'2

P5- <~~r gg +gal QgK.~

For a t l ea s t t he l a s t 2 5 y e a r s , t he r e h a s b e e n a g r o u p o f " pr o f e s s i o n a l " s o c a l l ed t rader s t h a t h a v e n o t r ea l l y be e n i n t e r e s t e d i n t r adi n g , b u t i n m a n i p u l a t io n . P e r h a p s it b e ga n w i t h t h e A g r i c u l tu r a l m a r k e t s . L i k e t h e m o v i e Tr a d i n g P l a c es w i t h E d d i e M u r p h y t hat c e n t e r e d o n c o mmodit y b r o k er s wh o w er e l o o k i n g t o g e t ac c e s s t o a n a g r i c u l t u r a l r epor t f r o m G ove n m n t t hat w o u l d m ove mark e t s , t he r e w a s s a me o f t h a t go i n g o n . B u t t here w er e o t h e r s w h o a c t u a l l y m a n i p u l a t e d t h e i nv e n t o r i e s b y m o v i n g p r o d uc t f r o m o n e w arehouse t o a n o t h e r . N o t a l l wa r e h o u ses w er e w i t h i n t h e o f f i ci a l exc h a ng e i n v e n t o r y . T heref o r e , m o v i n g p r o d uc t i n a n d o u t o f t he w a r e h o use c o u l d m a n i p u l a t e m a r k et s o n a s hort term basi s s i n c e t h e a v e r a g e t r a d e r s t e n d e d t o r e l y up o n f u n d amental n e ws . T h e a dvent o f t e c h n i c a l a n a l y s i s w a s t h e e a r l y 1 9 7 0 s . I t w a s a l o st a r t af t er t he 1 9 2 9 c oll a p s e . T he manipu l a t i o n s o f t h i s so r t do m i n a t e d t h e 1 9 7 0 s a n d 1 9 8 0s . T h er e w er e e v e n e xpansions i n t o t he t ax a r e n a . G catanodity t r a d e r s i n v e n t e d t a x s t r a d d l e s w h e r eb y o n e c ould bu y s a y g o l d i n D e c ~ an d sel l gol d i n M a r c h t h e n e x t y e a r s i m u l t a n e o u s l y when gol d wa s c l e a r l y d e c li n i n g . T h i s w o u l d e n a b l e t h e l o s s i n t he D e c ~ cont r act t o a f f o r d a t ax d e d u c t i o n w h i l e t h e p ro f i t of f set t i ng t h e l o s s w a s t h e n m oved f o r w a r d i nt o t h e M a r c h c o n t r a c t f or t he n e x t y e a r . T h u s , a f i ct i ou s l o s s c o u l d b e t a k e n i n o ne year , p u s h i n g o f f t he pr o f i t i n t o t he n e x t y e a r , a v o id i n g t a x a t io n . T h e I R S t h e n f i g u r e d o u t w h a t w a s g o i n g o n a n d p u t a st o p t o t ha t t r i ck . T he 1980s, h o wever , b r o u gh t h o me a n e w i n v e n t i o n d es k t o p c o mput e r s . W h i l e I had gone t o a c o m puter e n g i n e e r i n g s c h o o l b a c k i n t he 1 9 6 0 s when t h e y s t i l l f i l l ed a

r oom. I n t e g r a t e d C i r c u i t s w e r e b o r n i n t he 1 9 6 0 s a n d i t bec a me c l e a r t h a t t he s e h u g e c omputers t h a t h a d a l r e a d y s h r u n k d own f r o m a f o o t b a l l f i e l d r un n i n g o n v a c u m t u b e s w ith t h e i n v e n t i o n o f t r an s i s t o r s , t he c h i p s a l l o w e d u s t o s e e t h a t a de s k t o p w o u l d b e possi b l e . T h e p r o b l e m s t r a n g el y w a s not b u i l d i n g t h e ' c omputer . T h e q u e s t i o n w a s ; W woul d s o meone do w i t h i t ? T h e v i si o n o f j ust bu i l d t he b a s e b al l f i e l d i n t he hat m iddle o f t he c o r n fi e l d a n d t h e y w i l l com e , w a s n o t e x a c t l y b u s i n e s s p o l i c y . T h e r e w as no on e who c o ul d f o r e s e e M i c r o s o f t . .T h e a n swer .was, b u i l d i t , and s o meone e l s e would f i g u r e o u t h o w t o u s e i t . I BM a decade l a t e r , cr eat e d t he d e s k t o p c o mput er . D u r i n g t h e l a t e 1 9 7 0 s , t h e r e were companies c r e a t i n g w o r d p r o c e s s or s u s i n g 8 " f l op p y d i s k s l i ke 3 M C o r p . B u t i t w as IBM t ha t s a w t h e f u t u r e a n d g a v e i t a sho t . T h e f i r st de s k t o p c o mput er s t h a t were th e t o p - o f - t h e - l i n e w e r e a b ou t $ 6 , 0 0 0 i n t h e e a r l y 19 8 0 s . N e v e r t h e l e s s , t hi s a ll o wed much more s o p h i s t i c a t i o n t h a t w a s s o a ke d u p b y t h e I n v e s t ment B a n k s . The pro b l e m wi t h t h e m o d e l i n g e m p l o yed b y t h e , I n v e s t ment B a n ks , w a s t h e l i m it e d s cope of d a t a . T h e y t u r n e d mor e t o p ro f e s s i o n a l m a t h g e n i u s t ype s w h o l a c k e d t h e experi e nc e i n t r ad i n g . T h i s b l e n d i n g wa s a d i s a s t e r a n d c o n t r i b u t e d g r e a t l y t o t he C rash o f 1 9 8 7 . M o d el s u s e d b y t h e i n d u s t r y w e r e s h o r t - t e r m . E v e n t o d a y , m os t s y s t e ms o ff e r i n g s c r e e n s a n d c h a r t i n g f o r st oc k s a n d c ommodit i e s , o n l y n o w o r o v i d e a n y long- t e r m c h a r t s b a c k a s f a r a s 1 9 8 0 . I f yo u r d a t a b a s e i s t h i s sh o r t , t he n n o m o del w il l e v e r b e a b l e t o c o m p r ehend, n o l e s s f o r e c a s t , a n e v e n t l i ke a G r e a t D e p r e s s i o n . T he model i n g o n d e r i v a t i v e s w a s f a r t oo s h o r t- si g h t e d t o s e e t h e l on g - t e r m t r e n d s . T he mind- se t o f t he I nv e s t ment B a nk er s wa s s t i l l capt i va t e d b y t h e 1 9 7 0 s an d t h e e ff o r t s t o r i g t he g a me . L i k e L e o n a Hel msle y wa s q u o t e d s a y i n g t h a t t ax e s w e r e f o r l i t t l e p e o p l e , t he I n v e s t ment B a nk er s v i e w " s p e c u l a t i o n " w a s a l s o f o r l i t t l e p l aye r s . T he sur e b e t w a s t h e k e y t o co n s i s t e n t s u c c e s s . D uring t h e l a t e 1 9 7 0 s , t h e s i l v e r m a r k e t w a s c l a i m e d t o b e " co r n e r e d " b y t h e H u n t Brothe r s . T h a t w a s f a r f r o m t r u e , f or w h a t t h e y f ai l ed t o un d e r s t a n d , w a s t h a t t he a tt i t u d e o f t he m a j o r b r o k e r a g e h o u ses was no t t h a t y o u w e r e a p u r e t r a d e r - c u s t o mer , b ut s omeone t o . p i c k - o f f f or pr o f i t . Dur i n g t h e 1 9 8 0 s , I h ad t o t a k e o n s o me hedgi n g proj e ct s t h a t w e r e a w esome. One was i n p l at i n u m . When yo u a r e t h e l ar g e s t t r ad e r i n a narro w mark et , t h e y w a t c h e v e r y t h i n g y o u d o . I f I was t o sel l , t hey a s s ume t h e w hole l o t i s bei n g s o l d a n d j u m p i n f r on t . Y o u s u d d e nl y f i nd y o u r s e l f t r ap p e d . I w a s a wi t n es s t o t h e H u n t c o l l a p s e . T h e y c o u l d n ' t g e t o u t of t he m a r k e t a t a n y p r i ce . T he deal er s w e r e s e l l i ng i n f r on t o f t he m t a k i n g s h o r t p o s it i o n s l oo k i n g t o b u y b a c k when th e Hu nt s w e r e i n a st a t e o f pan i c d u m p in g a t a n y p r i ce . I l e a r n e d e a r l y o n t h a t t o pr of e s s i o n a l l y h e d g e , o n e h a d t o n a v i g a t e t h e b r o k e r s . T he onl y wa y t o d e a l w i t h t he m , wa s t o p l a y o n e - o f f - a g a i n s t - a n o t h e r , u s e r e l a t e d m arkets t o c o n f u s e a n d h i d e y o u r s t r a t e g y , o r e l se f a l l pr ey t o t he I nv e s t ment B a nk e r s . I n o t h e r w o r d s , i f you h a d a l ar g e p o s i t i o n o f go l d t h a t y o u w a n t e d t o s el l , you g o t o a b r o k e r a s k i n g f o r a m a r k e t i n si l ve r . H e g i v e s y o u a q u o t e , a n d y o u t h e n b u y t akin g what w i l l bec o me an i n t e n t i o n a l l os s . Y o u g o b a c k t o t he s a me b r o ke r a n d n o w a sk f o r a q u o t e o n t h e r e a l m a r k e t y o u a r e t r yi n g t o se l l g o l d . H e w i l l ant i ci pa t e you i n t e n d t o b u y b e c a use o f t h e si l ve r , shi f t i ng t he q u o t e s t o pi ck - u p e x t r a p r o f i t a ssuming yo u a r e a b u y e r . W hen yo u s e l l t he g o l d , y o u j u s t g o t a h i gh e r b i d , y o u a r e out o f t h e p o s i t i o n , a n d h e i s scr a m b l i n g t o c o v e r w i t h o t h e r b ro k e r s . I f you h i t al l t he b r o k er s t h e s a me way a t p r e c i s e l y t h sa m e t i m e . t h e y a r e a l l no w s h o r t , a n d a r e t r apped t r y i n g t o g e t o u t sel l i ng ba c k g ol d t h a t t h e y j u s t b ou g h t f r o m y o u . T hese games ar e a t t i m e s n e c e s s ar y i n t he c a s h m a r k e t s b e c a use t h e b r o k e r s t h e m s elves a r e n o t sa t i sf i e d w i t h j u s t m a k i n g a r e a l m a r k e t . T h e y n e e d t o c r e a t e a n e d g e . So when you ar e t h e 8 0 0 p o un d g o r r i l l a , you n e e d d e f e n s i v e m easur es . I t he l p s t o u nderst an d t h e m e t ho d t o t h e m a dness o f t h e g a me .

The market m a n i p u l a t i o n s t h a t r eal l y be g a n b a c k i n t h e 7 0 ' s w i t h f or c e , b e c a me i nt er mi xe d a m ong t h e I n v e s t ment B a n k er s w i t h t ec h n o l o g y . We b e gan t o s e e g r o u p i n g o f h o uses b y t h e l at e r 19 8 0 s a n d e a r l y 1 9 9 0 s . P e r h ap s a t f i r st , t hey w e r e l o o k i n g f or a n o t he r H u n t . T h e y n e e ded t o s e l l so m e b i l l i on a r e o n t h e v i r t u e s o f cor n e r i n g

and manipulat i n g a market .

The f i r s t r e a l coo r d i n a t e d s c h eme began back i n 1 9 9 3 t h a t I cou l d v e ri f y . The t arget m a r ke t w a s s i l ve r , a n d t h e c e n t r a l pl ay e r , br o k e r - d e a l e r , w a s P h i l l i ps B ro t h e r s w ho were a b i g c c arnedit y o u tf i t . i n C o n n e c t i c u t , p i c k e d u p b y S o l cxnan Brot h er s w h o was l a t e r a b s o r b e d a s w e l l . Th i s w a s k n own as Ph i B ro o f t h e sa m e f a me r e l a t i n g t o M are Ri c h . PhiBro h a d a h u g e c l i en t wh o t h e y w e r e a c t i n g f o r t o bu y u p t he si l v er ma r k e t in 1 9 93 . T h i s w a s a n a g g r e s s i v e p r o f e s s i o n a l st r at e g y . T h e G cwmnodity Futures T r a d i n g Camnission co u ld e a s i l y se e w h e re t h e b u y i n g w a s c e n t e r e d i n r ea l f o r ce . Th e y w e nt t o

PhiBro descending to k now who their c l i e n t

w a s. Ph i l o re f u s e d to g i v e u p t h e n ame.

The CFXC ordered Ph i l o to j u st ge t ou t o f t he m r k e t . Th e y d i d . Th e y j u s t du r r tped a e veryt h i n g a t t he m a r k e t w i p i n g o u t s m a l l i nve s t o r s i n t he bl i nk o f an e y e . The CPTC j u st w a l k e d a w ay. H ad t h i s be e n S ilver Manipul a t i o n of 1993

a small b r o ker o r ing a complaint

money manager, he would a g a i nst a major h ouse. The

have been c r i m i n a l l y p r o s e c u t e d . B u t t h e CFTC is n ot or i ou s f o r ne v e r e v e n o n c e b r i n g sources I r e l i ed u p o n , g a v e me t h e n a me o f t h e c l i e n t Warren B u f f e t t . Ba s e d u p o n t hi s i n f o r m a t i o n a n d b e l i e f , w h e n h i s n a m e c ame up agai n i n 1 9 9 7 , i t w a s n o t a sh o c k . N everth e l e s s , t h i s i nc i d e n t s e t i n m o t i o n t h e o r i gi n s o f ,o u r c u r r e n t d e b a c l e . I t i s why AI G se t u p i t s f i nan c i a l d i vi si o n i n L ondon, ou t o f t he w a y o f U S r e g u l a t o r s a n d t he f r e e dom t o mani p u l a t e w h a t e ve r m a r k e t s t hey d e s i r e d . M o v i n g t o L o n d on , wa s c a u s e d by t h i s CF TCf a i l u r e t o r egu l a t e .

Manipul a t i o n s b e gan t o s p r e a d l i ke w il df i r e . R h o d i u m , p l a t i n u m , s i l ve r , B ri t i sh p ound, J a p anese y en , a n d e v e n t he R u s s i a n b o n d mar ke t j u s t t o m e n t i o n a f e w . T h e y b e g a n t o move i n p a c k s , o n e t o c o v e r u p a m a n i p u l a t i o n b y m a k i n g i t a~ t o be a br o ad

m arket move, and second, t o

bu y s t r e n gt h i n n umbers. Yes, t h e y even t a c k le d oi l a n d

while o i l sho u l d h a v e gone up to about $ 1 0 0 f o r 2 0 0 7 , t h e y h a d t h e i r a n a l y s t s t o u t l i ke those at . Goldman Sachs t h at o i l wa s he a d ed t o $3 0 0 . T h e t r i ck i s a l wa y s o v e r shoot t h e

target t o

c r e at e s ucki ng-i n power.

I t wa s d u r i n g t h e 1 9 9 0 s t h a t t h e g r o u p b e ga n t o b e c a l l e d b e h i n d c l o s e d d o o r s , the "B i l l i o n a r e ' s C l u b . " Fo r s h o r t , t he wo r d "c l u b " w a s e n t i r e l y su f f i c i ent . Th e y r el i e d u p o n t h e w e l l kn o w n f a c t e v e n a mong t h o s e t h a t c o v e r e d t h e . pr o s ec u t i o n s o f the CFTC a nd t h e S e c u r i t i e s an d E x c h a nge Camnissi a n ( " S E C"), a n d a d m it t e d t o m e p ersonal l y , t h a t ne i ~ t he SEC n o r t h e C F TC woul d b r i n g c h a r g e s a g a i n s t t h e b i g New York h o u ses . J u s t a s y o u s a w t h e r e w e r e w h i s t l e bl o w e r s o n Madof f t h a t t h e S E C would neve r i n v e s t i g a t e , h a d t h o s e w h i s t l e b l o w e r s b e e n a "c l u b " member, t h e S E C and CFXC w ould t h e n p r o s e c u te w h oever t h e " cl ub " ha n d ed t h e m M ichael M i l k e n a t D r e x e l B u r n h am i s a c l a s s i c e x a mple . D r e x e l w a s a P h i l a d e l p h i a f i r m o r i g i n a l l y , n o t N e w Y o r k . M i l k e n c r e a t e d t h e j u n k b o n d mar ke t a n d wa s t r u l y a b ri l l i a n t v i si o n a r y . B u t D r e x e l c r e a t e d a m a r k e t t h o s e i n N e w Y or k w a n t e d d e s p er a t e l y . T he way t o g e t t h a t m a r k e t , w a s t o i n st i ga t e t h e p o w er s o f g o v e r n nm t t o t ake d o w n a ~ t i t or .
7

D rexel wa s n o t p a r t of t he "cl ub " of "w i t e s h o e" m embers. D r e x e l e m b a rk ed o n h c reat i n g a n e w mar ke t b a s e d u po n d eb t p o p u l a r l y cal l ed " j u n k b o n d s " t h a t w e r e t h u s focused upon p r o f i t , r at h e r t h a n t h e e q u i t a b l e m o de l e m p l o ye d b y e v e n t h e " cl u b " a nd th e F e d e ra l R e s e r v e . T h er e w er e c o mpanie s w i t h g r e a t p o t e n t i a l , b ut co u l d n o t q ual i f y u s i n g c o l l at e r a l o t h e r t h a n i n t e l l e c t u a l p r o p e r t y s o to-speak. A l c o a A l u m i n u m was perhaps a c l a s s i c e x a mpl e o f t he p ro b l e m . T h e i n v e n t o r o f a l um i n u m went t o al l t he b a nks,' s howing h i s d i s c o v e r y , b u t n o t a si n g l e b a n k w o ul d l e n d m oney . T h e l a s t bank he went t o w a s t h a t o f A n d r e w Mel l o n ( 1 8 55 1937). Mel l o n p e r s o n a l l y ca l l e d t he i nvento r i n t o h i s of f i ce . H e t o l d h i m h i s b a n k c o u l d n o t l e n d h i m a n y money . H e t h e n i nf o r med h i m , h e w o ul d d o s o p e r s o n a l l y . T h e F e d model p r e v e nt s i n n o v a t i o n , t he v e r y s ource o f e c o n omi c g r o w t h . W Ni l k e n d i d a t D re x e l w a s p e r h ap s t h e m os t i n n o v a t i v e a d vancement i n t h e hat h is t o r y o f b a n k i n g s o t o s p e a k . H e c r e a t e d a m a r k e t f o r i nn o v a t i o n t h a t d i d n o t ex i st , and th e " c l u b " f e l t t hey w e r e l e f t beh i n d . T h e y c o n s p i r e d a s a l w a y s w i t h t ho s e i n p ower a t t h e D e p a r t ment o f Ju s t i c e t o br i ng d o w n c ompet i t o r s . T h e s e g o v e r nment l a w y e r s a re t h e p e o pl e wh o d i c t a t e t h e f a t e o f nat i o n s t h r o u g h t h e i r o w n p e r s o na l g r e e d a n d sel f - i n te r e s t o f f u r t he r i n g th ei r car ee r . Th e y a r e r es p o n s i b l e f o r so mu c h e c o n omic d amage tha t f a r m o r e i n n o v a t i o n h a s l e f t t he nat i o n t h a n m any s u s pe ct . T h e y w er e t h e sole r e a so n f o r b r e a k i n g u p A T &T, a n d t r i e d v e r y h a r d t o d e s t r o y N i c r o s o f t . T h e y d i d destro y D r e xe l B u r n h am, an d t h a t w a s c e r t a i n l y n o t i n t he p u b l i c i nt er e s t . T he S&L Cr i s i s w a s u s e d a s t h e e x c u s e t o d e s t r o y D r e x e l . T o s e t t he r ec o r d s tr a i g h t , J a mes Baker c a me up w i t h t h e i d e a o f cr ea t i n g a G - 5 , b a c k i n 19 8 5 . T h e w hole i d e a wa s t o m a n i p u l a t e t h e d o ll a r d o w n b y 4 0 % so t h e y c o u l d i nc r e a s e U S e x p o r t s . I p e r s o n a l l y w r o t e t o t he W h i t e H o us e wa r n i n g t h a t t h i s w a s c r a z y , w o u l d l e a d t o excessiv e v o l a t i l i t y , t hat w o u l d e n d i n a cr as h . B e r y l S p r in k l e , C h i e f E c o n o mi c A dvisor t o R o n a l d R e agan, w r o t e b a c k . H e e x p l a i n e d t h a t P ri n c e t o n E c onomics wa s t he o nl y f i r m w i t h v o l at i l i t y m o d e l s a n d u n t i l o t he r s c o n c u r r e d , t h e y c o u l d n o t r el y o n l y u p o n o n e model . W hen t h e 1 9 8 7 C r as h h i t , w e w e r e u r g e d t o i m m e d i a t e l yp r o v i d e o ur a n a l y s i s s i n c e n o w e v e r y on e a g r e ed , " v o l a t i l i t y i s t h e nu m b er o n e p r o b l e m ." T h e 1 987 Crash t o o k p l a c e b e c a use o f t h e G - 5 , a n d t h e f ai l u r e t o un d e r s t a n d t h e o f f se t o f t h e C a p i t a l A c c o un t a g a i n s t t h e C u r r e n t A c c o u nt . T h e m or e f o r e i g n i n v e s t ment t h a t poured i n t o t h e U n i t e d S t a t e s , g o e s t h r o u g h t h e C a p i t a l A c c o s t , but t he pr of i t s i n the f o r m o f i nt er e s t a n d d i v i d e n d s g o t h r o u g h t h e C u r r e n t A c c o un t c o n f u s i n q m any that t h e p r o b l e m is t r ad e t h a t wi l l r esul t i n decl i ni ng sa l e s a n d do m e s t i c j ob s . They f o r g o t , t h e J a p a n ese ha d b o ugh t a l m os t 3 3 -o of t h e N a t i o n a l D e b t , r e a l est at e , a nd st o c k s . M a n i p u l a t i n g t h e d o l l a r d o w n 4 0-o se t - o f f a m a s s i v e s e ll i ng o f U S a s s e t s t hat r e s u l t e d i n t he 1 9 8 7 C r a sh . When t r a d e r s c a l l t he i r br o k e r a s k i n g w h y t h e D o w w as down 500 p o i n t s , t he a n s wer wa s " I do n ' t kno w ! " I t w a s a cu r r e n c y i n d u c e d C r a s h caused by t h e f o r m a t i o n o f t he G 5. The ~ r at s gai ni n g c o n t r o l of C o n g r e s s , w a n t e d mor e t a x e s f r o m t h e r i ch . They a l t e r e d t h e a m o r t i z a t i o n o f r e a l est at e . T h e y c r e a t e d t h e S & L C r i s i s f or t hey destr o yed t h e i n v e s t ment t r e n d i n t h a t sec t o r t h a t cr ea t e d a o n e - way marke t t o j u st s ell . P r o p e r t y v a l u e s c r a s h e d an d t h e n t h e i r i nsa n e r e g u l a t i o n s o f t he S & L i n d u s t r y more-or - l e s s r e q u i r e d t h a t t h e y l e n d i n t o t he l oc a l m a r k e t w i t h t he f o c u s o f r ea l estat e u s i n g t h e c o l l at e r a l eq u i t y m o d e l . S u d d e n l y , t h e S & L s h a d p o r t f o l i os t h a t t he t axes wi ped out and t h e m ark to-the market a c c o u n t i n g r e n d e r e d many i n s o l v e n t . T he Government p r o s e c u t e d t w o p e o pl e t r y i n g t o bl a m e t h e m f o r t he i r o w n m i s t a k e s . Charle s K e a t i n g b e c ame f amous f o r h i s S & L w en t b r o k e d e f a u l t i n g o n b o n d s t h a t t h e prosecut i o n t h e o r y w a s h e k n e w 7 y e a r s i n ad v a n c e t h a t h e w o u l d d e f a u l t a n d t h u s i t w as a c r i m i n a l f r au d . K e a t i n g s p e n t s o me t i m e i n j ai l , but h i s con v i c t i o n w a s l at e r quie t l y o v e r r u l e d and a.newpr osecu t i o n w a s b l o c k e d a s b e i n g p o l i t i ca l . T h e o t h e r h i gh p rof i l e b e c ame Ni l k e n , t ar g e t e d b e c a us e many S&Ls p u r c h ased j u n k b o nd s t h a t d e c li ne d wit h t h e 1 9 8 7 C r a sh . T h e "c l u b " s u p p o r t e d t h e d e s t r u c t i o n o f Dr e x e l t o t ake t he m a r k e t t hey c r e a t e d , a n d m y s o u r c e s r e p o r t e d e v e n i n s t i g a t e d i t .

T he t h e or y u s e d t o d e s t r o y D r e x e l o n b e h a l f of t he N e w Y or k i n s t i t ut i on s , w a s t o f l i p i ns i d e t r ad i n g u p s i d e d o wn . U n f o r t u n a t e l y , t he J u d i c i a r y p r o t e c t s n o b od y a n d w il l al l ow t h e E x e c u t i v e t o c i r cu mvent t h e l a w a s i f i t wer e a d i ct a t o r s h i p . T h e i nsi d e t r a d i n g i ss u e e merged f r o m t h e G r ea t D e p r e s s i o n . T h e c r i m e wa s t h a t a di r ec t o r o f a c o mpany k new i t w a s b r o k e . H e t h e n s o l d a l l hi s st o c k o n i n s i d e i n f o r m a t i o n , a n d delayed h i s a c ti o n o f m a k i n g a p u b l i c a n n o u ncement. R udolf J u l i a n i f l i pp e d i t al l o n i t s hea d . S u d d e n l y , i f t wo p e o p l e d e c i d e d t o t ake-ove r a n o t h e r c o mpany, t h e c r i m e b e came t ha t a t h i r d pe r s o n wa s d e f r a u ded ou t o f t he same oppor t u n i t y t o m a k e money. N o o n e l o s t m o n ey . T h e c o u r t s s h o u l d h a v e a p p l i e d t he s t r i c t con s t r u c t i o n , b u t a c c o modated t h e w i l l o f pr o s e c u t o r s d e s t r o y i n g o v e r 50,000 j o b s i n t he p ro c e s s . O f f i c e m a nager s a t D r e x e l c a m e i n t o t r ad i n g - r o oms and j ust t o l d t he p e o p l e t o g o h o me . T h er e wa s n o c o mpany any more . N e ve r h a d i n s i d e r t r a d i n g e v e r b e e n u s e d i n r e v e r s e . B e c a use yo u c a n no t w i n w h e n t h e c o u r t s a r e n o t r eal b u t c o n t r o ll e d b y t h e s a me employer , e v e r y o n e wa s f o r c e d t o p l e a d . T h e r e wa s o n e e xcept i o n . A s m a l l t i m e r w e n t t o t r i a l , and t he j u ry a c q u i t e d h i m . T he Club i s p r o b a b l y t h e m os t p o w er f u l f or c e b e h i n d t h e c u r t a i n . T h e r e h a v e b e e n c onspir ac y t h e o r i e s a b o u t s e c r e t g r o u p s ; b u t t h e y work t o g t h e r l i k e A n t i Trust gr o ups t j ust r i g t h e f i na n c i a l m a r k e t s . T h e y d o n o t a s p i r e t o con t r o l a l l gov e r n ments . T h e y e volved i n t o p r o f e s s i o n a l m a r k e t m a n i p u l a t o r s t h a t l ed t o bo t h t h e 1 9 9 8 L on g T e r m C apita l M a n agement c r is i s , a n d n o w t h e c u r r e n t c r i si s t hat be g a n f r o m t h e v e r y s a me s ource . E v e n Gr e t c he n Morganson o f t h e N e w Yor k T i me s t r a c e d t h e i d e a f o r t he C r e d i t D efaul t S w aps t o J . P . M o r g a n S t a n l e y , w h o t o o k t h e i d e a t o A I G i n L o n d o n . The Club ha s b ee n u n t o u chabl e b e c ause t h e y c a n h i r e g o v e r n ment a t t o r n e y s d i r e c tl y , o r " r e c ommend" a l a r g e l a w f i r m w h o r e l i e s o n t he i r bus i n e s s h i r e o n e a s a f av o r . I n C ongress, a p o li t i ci an c a n no t g o i m medi a t e l y w o r k f o r a l obb y i s t . T h e r e a r e n o s u c h e thi ca l r es t r a i n t s o n g o v e r nment a t t o r n e y s wh o t r u l y cr o n t r o l f ar m o r e t h a n a n y o ne h as been w i l l i ng t o ex p o s e . W e kept t r a c k o f w h a t t h " c l ub " w a s d o i n g a n d w a r n e d ou r c l i nt s w h e n e ve r t h e i r anti c s w e r e c o n f l i ct i n g . O n e o f t he b i g o n e s t h a t b l e w t h e l i d of f , w a s a g a i n s i l ver . I n 1 9 97 , I w a r n e d t h a t si l v e r w a s g o i n g t o r i se f r o m $ 4 t o $ 7 ' b e t ween Sept ~ and J anuary 1 9 98 . I w a s e v e n i n v i t e d t o j o i n t he m , a n d t o l d t o st op f i gh t i n g , a n d p u t o u t f als e f o r e c a s t s . I decl i ne d . T h e i r st r at e g y b e c ame i n s a n e . A t f i r s t , a f r i end o f m i n e w h o ha d b ee n p r i m e M i n i s t e r T h a t c h e r ' s e c o n omi c a d v i s o r b ecame a bo ar d member o f A I G i n L o n d on . H e c a l l e d o n e d a y a n d a s k e d i f he co u l d d r o p i n t o P r i n c e t o n t h e n e x t m o r n i n g w hen h e a r r i v e d f r o m L o n don . I na t u r a l l y sa i d O K . T o my sur p r i s e , h e a r r i v e d w i t h t h e h e a d t r a d e r f r o m A I G L o ndon who t h e n p r o c e eded t o t r y t o c o n v i n c e m e t o s t o p t al ki n g a b o u t t h e m a n i p u l a t i o n s . I t o l d h i m I w o u l d n o t ever r e v e a l a n y n a mes, a n d t h e g o v e r nment d i d n ' t ca r e a n y way . T hings go t i ns a n e t h e r e a f t e r . A n a n a l y s t o n t h e p a y r o l l of Ph i B r o h a d a m a i n c ontact a t t he W a l l S tr e e t J o u r n a l . T h e y d e c i d e d t o sl a n d e r m e a n d g e t t h e p r e s s t o t a r g e t m e c l a i m i n g I w a s t r y i n g t o m a n i p u l a t e t h e m a r k e t . I t w a s a n i nt e r e s t i n g s tr a t e g y , b u t o n e I car e d n o t h i n g a b ou t s i n c e I w a s p r i m a r i l y a i ns t i t ut i on a l a n d corpor at e a d v i s o r , a n d t h e y w e r e n o t r ea l l y i nt er e s t e d i n si l v er . The j o u r n a l i s t f r om t h e W al l S tr e e t J o u r n a l c al l e d m e . H e a c c u sed me o f t hi s n onsense and we a r g u ed . I t g ot qui t e h e a t e d . H e s a i d i f si l ver w a s b e i n g m a n i p u l a t e d , t hen g i v e h i m t h e n a me . I t ol d h i m h e w o u l d n ' t b el i e v e m e a n yway. H e d emanded t h e n ame and so I sa i d f i ne , g o a h e a d , l e t m e g e e y o u p r i n t i t , kno w i n g h e n e v e r w o u l d . The name I g a v e h i m was Warren B u f f e t t . H e l au g h ed . T o l d m e e v e r y on e k new Buf f e t t d i d n ot t r a d e c ommodit i e s . I t ol d hi m t h a t w a s h o w much h e k n e w. T he Wall S t r e e t J o u r n a l p u b l i s h e d t h e a r t i c l e . T h e L o n don newspapers w er e f e d stor i e s b y t h e " C l u b " t h a t I w as n o w t h e l ar g e s t si l ve r t r ad e r i n t he w o r l d . T h is 9

b ecame al l a j oke t o m e . E v e n t h e C F I C c o u l d l o o k a t po s i t i o n s a n d k n e w I w a s n o t a bi g p l a y e r i n si l ver . T he mist ak e made by t h e " C l u b " b y t ur n i n g o u t t he p r e s s a g a i n s t m e , w a s t h e y a ctua l l y c re a t e d s u c h a w o r l d w i d e s t o r y t h a t t he C F I C wa s f o r c e d t o c a l l m e . T h e y knew I wa s n o t t h e s o u r c e . T h e y a s k e d me , w h er e wa s t h e m a n i p u l a t i o n t a k i n g g l a c e ' ? I t o l d t h e mi t w a s i n L o n d on , o u t o f t he i r j ur i sdi ct i o n. T h e y t o l d m e t h a t t he y c ould p i c k u p t h e p h o n e an d f i n d o u t . I t ol d t he m t h a t t h e y h a d t o m a k e t h a t cl e a r d ecis i o n . I hu n g u p . N e ve r d i d I exp e c t t h a t t h e y w o u l d r e a l l y d o a y t h i n g . A few ho ur s l a t e r , m y p h o n e r a n g . I t w a s a g o o d s o u r c e i n L o n do n who a l s o w a s h elpin g t o m o n t i t o r t he " C l u b " a c ti o n s . H e t o l d m e t h a t t he B a n k o f E n g l a n d h a d c all e d a n i m medi at e meet i n g o f a l l s i l ver br o k e r s i n Lo n d o n i n t h e m o r n i n g . I wa s shocked. Th e C FI C had made t h e c a l l . B u t t he n a g a i n , I had g i v e n t h e m n o n ames so p erhaps i n t h e i r m in d , t h i s w a s f a i r ga m e . W ithi n t h e h o u r , W a r r e n B u f f e t t m ade a p r e s s a n n o uncement. H e a d mi t t e d h e h a d purchased $ 1 b i l l i on w o r t h o f si l ve r , i n Lon d o n . H e d e n i e d h e wa s mani p u l a t i n g t he m arket . C l a i me d t h e s i l v e r w a s a l on g - t e r m i n v e s t ment . E v e r y on e was s h o cked t h a t B uff e t t w a s s u d d e nl y e x p o sed a s a c o mmodit y t r a d e r a f t e r a l l . T h e n e x t d a y , t he W a l l Street J o u r n a l c a l l e d m e . T h e w r i t e r a s k e d " How di d y o u k n o w?" I t o l d h i m i t was m y job t o k n o w ! S i l v e r t he r e a f t e r d e c l i n e d a n d made new l o w s g o i n g i n t o 1 9 9 9 . S o m uch fo r t h e l on g - t e r m i n v e s t ment . Curious e n ough , W a r r e n Buf f et t h a s now been e xposed t o b e h u man. He ha s l o s t a b o u t 5 0 % l i k e e veryone e l s e . B u t t he r e i s t he cur i o u s p u r c h a s e r egardi n g o i l . Buf f e t t i nv e s t e d i n o i l at t he ver y t op a t t h e s a m e t i m e Gol dman Sachs was f o r e c a s t i n g oil w o u l d n e a r l y d o u b l e . T h e b u r n i n g q u e s t i o n i s ; DidBuf f e t t g e t t r ap p e d i n a t t he t op i n oi l a l on w ith t h o s e mani p u l a t i n g o i l t h i s t i me a r o u n d ?
7

W arren Bu f f e t t h a s a d m i t t e d h e w a s " d r e a d w r o ng " i n h i s ri i l pur c h a s e . B u f f e t t had t o p o s t a 6 2 % d e c l i n e i n n e t i nc o me , b u t t he r ev e a l i n g l o s s c o mes f r o m o i l and deri v a t i v e s t h a t h e p u b l i c l y c r i t i ci se d o t h e r s f o r get t i ng i nv o l v e d i n . T h e s o c a l l ed " Oracl e o f O maha" ha d t o e x p l a i n h i s de r i va t i v e l os s e s s u d d enl y c l a i m i n g h e w a s j u s t managing t h e r i s k . Y e t t he o th e r co n t r a d i c t i o n i s t he h u g e p u r c h as e o f C o n o coPhi l l i ps stock when o i l pr i ce s w e r e a t t h e i r hi g h. D o e s t h i s h a v e a n y t h i n g t o d o w i t h h i s ol d contact s a t P h i B r o a t a t i m e t h a t a l l t he " cl u b " m ~ s wer e ser i o u s l y l o n g o i l and h ad t h e i r a n a l y s t s t el l i ng t he p u b l i c i t wou l d st i l l dou b l e ? I t s ca l l e d t a l k i n g y o u r own book. There have b ee n o r g a n i z e d mar ke t m a n i p u l a t i o n s i n se a r c h o f t h a t per f e c t t r ad e b ased upon i n s i d e i n f o r m a t i o n f o r a l ong t i m e . T h e w h ol e i n s i d e i nf o r m a t i o n c r i m e i s b o g us . I t i s one t hi n g f o r a di r ect o r of a co m p any t o s e l l h i s sha r e s b e f o r e h e announces t h e c o mpany i s b r o k e , b u t i t i s a d i f f er e n c e c o n c ep t w hen t h e i ns i d e i n f o i s t o g e t y o u r h a nds on g o v e r nment r e p o r t s o r w a t c h i n g w ha t s o meone e l s e d o e s . T h e r e i s n o 1 0 0% guarante e i n s u c h a s e tt i n g. I n f act , t he m o v i e W al l S tr e e t w i t h M i c h a e l D ouglas p o r t r a y e d i n s i d e i n f o r m a t i o n a s a y o u n g b r o k e r f ol l ow i n g e x e c u t i v e s a r o u n d a nd guessi n g c o r r e c t l y w h a t t h e mer g e r w o u l d b e . S o r r y , t h a t i s not a cr i m e u n l e s s t he p r o s e c u t o r s w an t t o m a k e a n a me f o r t h e m s e l v e s . W hat we ar e t a l ki n g a b o u t i s m u c h m or e c l o s e . t o c o r r u p t i o n t h a n i n s i d e t r ad i n g . T here h av e b een majo r m a n i p u l a t i o n s o f m a r k e t s s u c h a s r h o d i u m and t h e n t h e r e w a s t h e m anipul a t i o n o f P l at i n u m . C o r n e r i n g a s u p p l y i s f a r t o o r i s k y . W ha t t h e " c l u b " d i d w a s t o j o i n f or c e s w i t h R u s s i a n p o l i t i c i an s . T h e d e a l st r u c k w a s t o r e c a l l t he R u s s i a n s upply o f p l a t i n u m t o s u d d e nl y t a k e a n i n v e n t o r y . P l at i n u m s o a r e d i n p r i c e . O f cou r s e 10

t he l o n g p o s i t i o n s w e r e a l r e a d y l a i d i n bef o r e t h e a n n o uncement . R u s s i a h a d n e v e r b efor e r e c a l l e d i t s en t i r e su p p l y t o t a k e a n i nv e n t o r y . N e v e r t h e l e s s , i t wor k e d . T h e y were abl e t o f or c e p l at i n u m u p f o r t he a u t o - i n d u s t r y w e r e b u y e r s . A t t he t o p, t he "club" s o l d t he i r l ong po s i t i on s , r ev e r s e d i n t o sh o r t pos i t i on s , an d t h e n i n st r uc t e d t he Russi an - t o en d t h e i n v e n t o r y . p l at i n u m c r a s h ed . E v e n F or d M o t o r C ompany s ued o v e r t hat o n e . The f i r s t m a j o r f ai l u r e w a s 1 9 9 8 t he Lo ng T erm Capital M a n agenent.ba i l o u t . I t has been wi d e l y r e p o r t e d t h a t t hi s w a s a f ai l ur e o f t h e i r de r i v at i v e t r ad i n g . T h a t i s only p a r t i a l l y co r r ec t . T h e d e r i v a t i v e s w er e no t t he ca u s e o f t he ch a o t i c ev e n t , b ut merely t h e d o m i n o i n a c o m p l i c a t e d c h a i n . T h e r e a l t ar g e t w a s R u s s i a . T h e "c l u b " w a s d eeply i n v o l v e d w i t h R u s s i a a n d s a w t h i s a s a n o p p o r t u n i t y t h a t w a s p e r h a p s a o n c e i n a l i f et i m e . Y ou wil l r eca l l t hat R u s s i a w a s b o r r o w i n g h e a v i l y f r o m t h e I n t e r n a t i o n a l M o n e t a r y Fund ( " I M F " ) . T h e i nt e r e s t r at e s w e r e e x c e p t i o n a l l y hi g h f or sho r t - t e r m p a p er . I was again a p p r o a ched t o j o i n t h e "cl u b " an d w as i n v i t e d t o W s h i n g t o n , D C w here E dmond a Safra o f R e p u b l i c N a t io n a l B a n k h a d r e n t e d t h e e n ti r e N a t io n a l G a l le r y f o r a par t y he pai d f o r i n h on o r o f t he IMF . E v e r y o ne w as t h e r e . B o t h c u r r e n t an d p a s t po l i t i ci ans a nd di g n a t e r i e s , r i g h t d o w n t o P a u l V o l k e r . They were t r yi n g p e r s i s t e n t l y t o g e t m e t o j o i n t he "cl ub " f o r i t wa s no t j u st money, t h e y w e r e t r yi n g d e s p e r a t e l y t o g e t m e t o j o i n t o t o ut t h e i r i de a s . Y o u m u st u nderst a nd . P r i n c e t o n E c o nomics wa s r e n owned f o r o u r i nd e p e ndence . We p r o v i d e d k e y r esearch t o g o v e r n ments , b u t m o s t l y i n t i m e s o f cr i si s . W e n e v e r c h a r g e d f o r o u r s ervi c es , b u t al w a y s c o n t r i b u t e d o u r t i m e a s a p u b l i c se r v i c e . T h e p r i m a r y r e a s o n f or t h i s g e n e r o u s i t y , w a s s e l f - p r e s e r v a t i o n . O n c e y o u a c c ep t g o v e r nment f u n d s , y o u s uddenly f i n d r e q u e s t s a t t a c h e d . S u dden l y , y o u a r e a s k e d t o g e n e r a t e r e p o r t s t ha t support p r e determined o u t c omes. Yo u a r e q u i c k l y t ur n e d i n t o a E co n an ic P r o s t i t u t e . This i s w h y w he n t h e E u r o p ean Unio n wa s f o r m i n g , a r e q u e s t f o r a del e g a t i o n t o att en d a n i n s t i t ut i on a l l ect u r e i n Lo n d o n wa s r e c e i v e d . When t h e A s i a n C r i s i s hi t , I was r e q u e s t e d t o f l y t o Be i j i ng t o m e e t w i t h t he C e n t r a l B a n k . C h i n a d i d n o t pa y a nythi n g , w e w o ul d n e v e r a c c e p t a n y f u n d s f r o m a n y Government . T h i s w a s t h e p r i m a r y reason f o r o u r st el l ar r ep u t a t i o n , b u t i t was al s o a t ar g e t t o des t r o y t h e m e s s en ger, w hen t h e r e s u l t ca n n o t b e c o n t r o l l ed . Government ha s n o t b e e n t h e o n l y o n e wh o wa nt s t o c o n t r o l f or e c a s t i n g . A s e a r l y as 1983 I w a s i n v i t e d t o G e n ev a wher e t h e Ga on f a m i l y h e l d a hu g e . party f o r m e a n d w as t r y i n g t o i m p r e s s me b y i nt r o d u c i n g me t o t h e m o ve r & s h a k er s o f E u r o p e . T h e y had of f e r e d m e $ 5 m i l l i on t o u s e m y n ame t o c r e a t e "A r m strong" F i n a n c i a l o r br o k e r a g e o f somethi n g l i k e t ha t . I h esi t a t e d , c o n f u s e d wh y s omeone woul d o f f e r m e s o m uc h t o jus t u s e m y n ame. I w a s i n vi t e d t o t he g ra n d o p e n i n g o f He r a l d S q u are i n N e w Y o r k that I w a s l e d t o b el i e v e w a s o wned an d b u i l t b y t h e Ga o n f a m i l y . For t h o s e wh o a r e n o t E u r o p e an , y o u may no t k n o w who t h e Ga on f a m i l y w a s . T h e y owned th e H i l t o n H o t e l C h a i n i n E u r o p e k n own as No ga H i l t o n . T h e y h a d a l s o o w n ed t h e N iger i a n o i l r ese r v e s b e f o r e t h e c o u p a n d n a t i o n a l i z a t i o n . I t wa s t h e N i g e r i a n i ss u e that c a u se d t h e GA ONfamily t o t ak e i n si l ent par t ne r s . T o sh o w h ow " c onspira c y " t heor i e s a r e n o t a l w a y s n u t s , t he e v e n t s t h a t f o l l ow e d wa s l i k e r e c e i v i n g a s h o c k t r e at ment . It t u r n e d o u t t h a t He r a l d S q u are i n N e w Y o rk w as r e a l l y t he pr o p e r t y o f t he renoun Fer d i n an d Mar co s who was p r e s i d e n t o f ph i l l i pp i n e s b e t w een 1 965 an d 1 98 6 who lost p o wer j u s t as t he Hn nm d c C o n f i d e n ce Model sh i f t e d f r om a Pu b l i c to a P ri va t e Wave c ausing a r e v o l u t i o n r i gh t on t i m . Th e o t h e r si l en t par t ne r w a s t h e h e a d o f e Libya Mu ammar Muhammad al Quaddafi. W h en Marcos f l e d t h e Ph i l i ppi n e s , t he FB I w as hel p i n g t o s e a r c h t h e w o r l d f or m is s i n g g o l d r e s e r v e s . I had l o n g b e e n v i e w e d a s an e x p er t o n g o l d af t e r t h e m o de l a c c u r a t e p i c k t h e p r e c i s e d a y f o r t he 1 9 8 0 11

a t $ 87 5 o n J a n u ar y 2 1 s t , 1 9 8 0 . A d d i n g t o t he c o i n c i d e n ce , I w a s o n t h e l i st o f i nv i t e s f o r t h e gr a n d o p e n i n g o f H e r a l d S q u a r e . I f t hi s w a s n o t e n o u gh , s u d d e n l y w hen th e FB I c a me k n oc k i n g o n my d oo r c i t i ng t he s e l i nk s , I t o l d t he m I d i d no t k now Marcos, n o r d i d I eve r a d v i s e h i m o f t he P h il l i ppi n e s . T h e y t h e n p o i n t e d o ut Marcos ha d p u r c h as e a h o u s e i n P ri n c e t o n , N e w J e r s e y . Conspir ac y t h e o r i e s a r e w h a t t h e F B I a n d g o v e ~ t r el y on . I t i s har d t o convince t h e m t o t h e c o n t r a r y . W ha t t h e G ao n e x p e r i e n c e t a u g h t m e , n o t h i n g i s a lways what i t see m s . We ha d a c l i e n t i n G e n e va , G r a i n e d ex , w h o I bel i e v e d w a s a major g r a i n d e a l e r c o mmon t o Geneva . I t t ur n e d o u t t h e y w e r e a f r o n t f or t he KGB. I s o o n r e a l i z e d , t h i n g s w e r e d i f f er e n t b e h i n d t h e c u r t a i n .

E dmond Safr a o f R e p u b l i c N a t io n a l B a n k , h a s a l w a y s b een one o f t h o s e n e b u l o u s b a n k er s w h ose r e p u t a t i o n w a s i n a c o n s t a n t s t a t e o f f l ux . Th e r e w e r e r u m or s t h a t h e even ass i s t e d t h e C I A i n t he R e a gan y e ar s w i t h I r an Contra l a u n d e r i n g o f m n e y. T h i s ha s n e v e r b e e n s u b s t a n o t i a t e d , b u t h i s r i gh t ha n d m an , a . Mr . Z u c k er , s e e ms t o h ave been c a ught u p i n t he w h o l e m e s s . Y es, P r i n c e t o n E c onomics d i d b u s i n e s s w i t h R e p u b l i c N ationa l B a n k t o m y r e g r e t . B u t t h e y h a d a A A r a t i n g a n d w ere to o c h ea p t o t r y t o co m p et e w i t h s i n J a p a n . T h e Edmond Safra p roblem about d e a l i n g w i t h G o l d man Sachs, t h e y t r y t o st ea l not mer el y y o u i cl i ent s , but t h e v e r y b u s i n e s s p l a n i t se l f . O n e c a n no t d e a l w i t h t hose who ar e c o n s t a n t l y t r y i n g t o d e f r a u d y o u n o m a t t e r w h a t .
3

E dmonds Safra wa s n o t o n e o f t he r an k s o f G o l d man Sachs , b u t h e w a s c l e a r l y o n e o f t h e m ai n p l a y e r s i n t he " cl u b " a n d I b el i e v e h i s d e a t h , o r bet t e r p u t h i s pl ai n a ssassi n a t i o n , w a s r e t a l i at i o n f o r l o t of ques t i o n a b l e d e a l i n g s . T h r o u g h Republ i c I was s o l i ci t e d s e v e r a l t i m e s t o j oi n t he " cl u b " a n d w a s t o l d s p e c i fi cal l y t o st op f i g h t i n g t h e m . T h e " c l u b " w a s s o w e l l st r uc t u r e d , t h e y h e l d l i t t er al l y t he ke y s t o g overnment r e g u l a t i o n . N o o n e w o ul d e v e r q u e s t i o n t h e m , a n d n e v e r w o ul d t h e p r e s s u tte r a si ng l e w o r d . T o w i e l d s u c h p o wer wa s t r u l y a w e some. Bu t w e c l a s h e d f o r o n e p rimary r e s o n I b e l i e v e d i n f or e c a s t i n g a n d mode l i n g . they b e l i e v e d i n co n t r o l a nd dominat i o n . Based upon s o l i d i n f o r m a t i o n a n d b e l i e f , E d m ond Sa fr a w a s d e e pl y i n v o l v e d i n a bol d p l o t t o con t r o l t he g o v e r n ment o f R u s s i a . B o r r i s Y e lt si n , f or m e r h e a d o f R ussia , w a s c o n v i n c e d t o t a k e $ 7 b i l l i on f r o m t h e I M F l o a n s t o R u s s i a . T w o f r i en d s o f 8 ' b l on d w e r e i n v o l v e d , B a r i s n o f s k y a n d G a z i n s k y . O n e o wned a l l t he m e d i a i n R u s s i a and th e o t h e r w a s a p a r t n e r w i t h Y e lt si n ' s d a u g h t e r i n t he n a t i o n a l ai r l i ne . T he scam was t o s e t u p a c o m pany i n G e n eva t o p r e t e n d i t w a s d o i n g t h e r e f u r b

i shin g o f t he K r e m l i n . $ 7 b i l l i on w a s w i r e d , a n d R e pu b l i c st e e r e d t h e w i r e t hr o u g h t he Bank o f N e w Y o r k . T h e r u mor wa s t h a t M r . Z u c ke r o r g a n i z e d t h i s o n e f o r S a fr a . e US At t o r n e . As soon a s t h e w i r e t o o k p l a c e , R e p u b l i c N a t i o n a l B a n k c o n t a c t e d t h e or ney and a l l e g e d t h a t B a n k o f N e w Y o r k , a h a t e d r i v a l , w a s d e e p l y i nv o l v e d i n a $7 bi l l i on m oney l a u nder i n g s c a m . Th e F ed s r a n i n , a n d t h e b i g g e s t m o ney l a u n d e r i n g c a s e w a s c reat ed . 12

Once Republi c g o t t he F e d s t o g o a f t e r Ba n k of N ew York ( n o t a m m ber o f t he e "club" ), t h e y t h e n t u r n e d t o Ye l t s i n , i nst r uc t e d h i m t h a t t he y w o u l d p r o t e c t hi m, b ut h e wa s n o t t o r un a g a i n , a n d t o a p p o i n t ei t h e r B a r is n o f s k y o r G a z i n s k y a s t h e n ew head o f R u s s i a . Y e l t si n , r eal i zi n g h e h a d b e e n s e t u p , su r p r i si n g l y t ur n e d t o f ormer KGB head Pu t i n , w h o p r o m i se d t o c l e a n u p t h e a f f a i r i f he w a s a p p o i n t e d a s t he new head o f R u s s i a . T o t h e s h o c k o f t he w o r l d , Y e lt si n , w h o w a s p r e p a r i n g f o r r e- e l e c t i o n ; st e p p e d d o wn , - an d t h i s - i s h o w P u t i n r ea l l y ca m e t o p o w e r . A lmost o v e r n i g h t , B a r i s n o f s k y a n d G a z i n sk y f l e d . T h e i r ass e t s w e r e c o n f i s c a t e d . O n December 3 r d , 1 9 9 9 , E dmond Safr a wa s a s s a s s i n a t e d . A l l h i s bod y g u a rd s w er e g i v e n t he n i g h t o f f . M o n a c od i d n ' t r es p o n d t o a n a l a r m a t S a f ra ' s a p a r t m en t f o r n e a r ly 3 hours , a n d i n t he e n d , t h e y c h a r g e d c r i m i n a l l y h i s m a l e n u r s e wh o s p en t 6 y e a r s i n p r i s o n f o r st ar t i ng t he f i r e t o t r y t o pr et e n d t o s a v e h i s b o s s . N e a r l y 6 ye a r s l at er , a t r u l y a m a z i n g e v en t t o o k p l a c e . T h e c r i m i n a l c h a r g e s w er e d r o p p ed , t h e s entence was v a c a t e d , a n d t h e h i g h c o u r t m e r e l y s t a t e d t h a t t he j ud g e a n d t h e p r o s e cutor c o l l u d e d t o d e n y h i m a f a i r t r i al . H wa s p u t o n a pl a n e a n d s e n t h o me. Ne ver e would s uc h a r e s u l t t ak e p l a c e i n a Fe d e r a l A m e r i c a n c o u r t . T h e y j u s t ca n n o t b r i ng t hemselves t o r u l e a g a i n s t t he g o v e r n ment v e r y o f t e n . I n a h i gh p ro f i l e ca s e , i t i s t he ol d P u r i t a n v i e w i t i s b et t er t o ad m i t n o w r o n g , k i l l t hem a l l , and l et G o d t h e n sort i t out . I t wa s A u gus t 1 9 9 9 when Republi c b a n ged o n t h e d o o r o f t he U S A t t o r n e y t o t ur n i n Bank o f N e w Y o r k . A g a i n , a f t e r ne a r l y 6 ye a r s , t he t w o b r o k e r s a t B a n k o f N e w Y o r k w ere se n t e n ced t o n o j a i l t i m e, L u c y E d wards an d h e r h u s b a nd . When t h e j u d g e a s k e d w ho was t h e $ 7 b i l l i on f or , t hey r e s p o nded , i t w a s a r an s o m fo r s o me r i c h R u s s i a n b usinessman. Th e j u d g e a s ke d n o mor e q u e s t i o n s . T h e Amer i c a n c o u r t s w i l l h i de t he t r ut h m or e so t ha n a rl y o t h e r c o u n t r y

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It wa s a l s o R e pub l i c N a t i o n a l B a n k t h a t st ar t e d t h e c a s e a g a i n s t P r i n c e t o n Economics a nd mysel f . Th e y l i ed t o t he U S A t t o r n e y , S E C a nd C FTC te l l i ng t h e m t h a t we were managing money and h i d i n g l o s s e s . What t h e y f a i l e d t o ex p l a i n , i t was t he i r o wn st af f t h a t w e r e i l l ega l l y t r ad i n g i n t he a c c o u n t s . O n A u g us t 2 9 t h , 1 9 9 9 , I w e n t t o l o c a l c o u n s e l R i c h a r d A l t m a n who s en t a n e m ai l t o D o v S c h l i e n , P r e s i d e n t o f R e p ubli c N a t i o n a l B a n k g i v i n g t h e m 1 w eek t o r e t u r n m i s s i n g f u n d s or we w o u l d f i l e s uit e . B y t h e e n d o f t h a t w e e k , t h e U S A t t o r n e y wa s s t o r m i n g t h e o f f i ce , t aki n g a s m uch as t h e y c o u l d , i ncl u d i n g a c o mpute r o n w h i c h I di d pe r s o n a l c o mpute r m o de l i n g . R epubli c h a s i ss u e d s e v e r a l h u n d r e d Ne t A s s e t V a l u e L e t t e r s t o Pr i n c e t o n , c o n f i r m i n g w hen fu nd s a r r i v e d o r h o w much wer e i n a c c o u n t s . T h e y w er e o n f i l e a n d a u d i t e d b y R epubli c b e g i n n i n g i n 1 9 9 5 u p t o 1 9 9 9 . T o e s c ap e t h e s e , t h e y t o l d t he U S A t t o r n e y t hey wer e f a l s e t o es c a p e l i a b i l i t y . B ut i f t hey w e r e f al s e , w h y w o ul d t h e y a c t u a l l y b e on f i l e wi t h i n R e p u b l i c ? T he government a r r e s t e d me w i t h o u t e v e r s p e a k i n g t o a si ng l e n o t e h o l d e r . T h e y admitt e d t h e r e w a s n o d e f a u l t . Th e y a l s o a d m i t t e d t h a t t he n o t e s w e r e "u n s ecured" m eaning t h a t t h e y w e r e n o t t he a c c o u nt s o f a n y cl i en t . T h e n o t e s w e r e i s s u e d f o r ( 1 ) purchasin g p r e - e x i s t i n g p o r t f o l i o s o f Ja p a n es e s t o c k s a s p a r t of a bai l - ou t p lan wher eby t h e f a c e v a l u e o f t he n o t e o w ed , w a s n o t t h e n e t as s e t v a l u e w h e n soldg bu t t h e o r i gi n a l p u r c h a s e p r i c e o f t he p o rt f ol i o . T h e a l l eg a t i o n s o f t he G overnment made n o s e ns e i n s o f a r a s t h e a c c o u n t i n g r e p o r t e d b y t h e n o t e h o l d e r was al ways t h e f a c e v a l u e , n o t n e t as s e t v a l u e b e c a use t h i s w a s a b a il o u t no d i f f e r e n t t h a n b u y i n g d e p r e c i a t e d m o r t g a ges f r o m b a nk s t o d a y ; a n d ( 2 ) w e i ss u e d f i xe d r a t e n o t e s p a y i n g 3 - 4 - . i n J a p a n ese y en , r e p a y a bl e i n y e n , a n d a g a i n , n o t r a d i n g w i t h s u c h f u n d s w o ul d b e t h e p r o p e r t y o f a no t e h o l d e r . H e n c e , t h e c l e a r a ll e g a t i o n s w er e f a l s e t h e s e w er e n o t m a nagi n g money f o r i nv e s t ment p u r p o s e s w ith p r o f i t s or l oss e s f l o w i n g b a c k t o t he n o t e h o l d e r . 13

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I was r a i s e d t o b e li e v e i n t he U n i t e d S t a t e s , t h a t w e w e r e a h o n es t a n d d e c e n t c ountry , t h e b e a c o n o f l i be r t y t o t he w o r l d. T h e n y o u s t e p b e h i n d t h e c u r t a i n a n d . y ou see a per v a s i v e w h o l e s al e c o r r u p t i o n . J u s ti c e S e t e v en s w r o t e , "d i s p o s i n g o f . .....lawyers i s a . s t e p .i n t h e . . di r e c t i o n . o f ...a.t o t a l i t ar i a n f o r m o f g o v e r n ae n t u " W a l t e r v Nat'1 A s s ' n o f R a d i a t i o n S u r v i v o r s , 47 8 U S 3 0 5 , 3 7 1 ( 1 9 8 5 ) . I nd e e d, t h i s i s t he ver y objec t i v e o f t he g o v e r n ment t o w i n a t a l l cos t s a n d c o v e r - u p a l l m ist a k e s . T h i s i s w hy not o n l y i s A m e r i c a t h e l ar g e s t p e n a l . . c o l on y i n t he w o r l d e v e n e x c e e d i n g R u s s i a and China c ombined , A mer i c a h a s r i s e n s i n c e 1 9 8 7 f r o m a 7 2 % conv i c t i o n r a t e t o 99% e xceeding t h e w o r s t t yr a n i c a l i nst i t u t i o n s i n hi st o r y l i ke t he S t a r C h amber , S p a n i s h I nqui s i t i o n , H it l e r , a n d w e a r e n e a r l y t i ed w i t h Jo s e p h S t a l i n . P ro s e c u t o r s a r e v e r y p roud i n n e v e r l o s i n g , f or t he y c a n n o t s e e b e y on d t h e i r o w n s e l f - i nt e r e s t t h a t w h a t t hey h av e d on e i s d e s t r o y e v e r y t h i n g t h a t m a d e u s a g r e a t n a t i o n . Part o f w h a t w e c a l l Du e P r o c e ss of L a w i s b e i n g s e r v e d s o y o u a r e gi v e n n o t i c e o f a n a c t i o n t o de f e n d a g a i n s t . I n t he ca s e o f pr i nc e t o n E c o nomics , t h e r e w a s n e v e r a ny se r v i c e . T h e SEC and CFTC i n s i s t e d u p o n n o l a w y e r s , a n d t h e n a p p o i n t e d t h e i r ow n

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r eveale d t h a t j u st pe r h a p s t h i s ca s e h a d s o met h i n g t o d o w i t h o t h e r t h a n f r a u d . I n an email , Ta n c r e d S chia voni o f O' M e l v e ny 5 M y e r s , L L P , t o Ch a r l e s H e c k, c o u n s el o f M arti n We i s s , h e i n si s t e d t h a t n o w I h a d t o t ur n o v e r t h e s o u r c e c o d e o f t he m o d e l . " So t ha t t h e r e i s no m i s u n d e r s t a n d i n g , w e a r e going t o a s k t h e C o u r t di r e c t t ha t a n y c o mpen s atio n p a y a bl e t o . A r m s t r o n g , S r . b y . Weis s b e d eposi t e d i n t o a f r oz e n e s c r o w a c c ount p e n d i n g a det er mi n a t i o n o f t i t l e and c o m p l i a n c e r e l e v a n t port i o n s o f t he P I . I n par t , we a r e d o i n g t hi s b ecause Armst r on g Sr . h a s r e f u s e d t o t u r n o v e r t he uncompil e d s o u r c e c o d e f o r t he m o de l t h a t i s b eing l i c e n s e d . W i t h o u t t h e u n c o mpi l e d s o u r c e c ode, n o o n e c a n r e p a i r t he m o de l o t h e r t ha n A rmstrong . A c c o r d i n g l y , i t l ook s l i ke A r m s t r o n g s tr u c t u r e d t h e ' co n s u l t i n g ' ag r e e ment t o b e n e f i t i ndi r e c t l y f r o m a c o r p o r a t e a s s e t t h a t h e h a s w ithhe l d . A mong o t h e r t h i n g s , w e a r e c o n c e r n e d a bout l e a v i n g h i m i n a po s i t i on t o co n s t a n t l y b lackmail W e i s s wh o h av e n o o t h e r c h o i c e b u t t o t ur n t o A r m s t r o n g . .t o mai n t a i n t h e s o f t w a r e a s l ong a s i t r em a i n s m i s s i n g . "

Tancred Schiavoni

Never woul d t h e G o v e r nment e v e r a d mi t t h a t t he y w e r e h o l d i n g m e p u b l i c l y u nt i l they f o r c e d me t o t u rn o v e r t he m o de l t o t h e m . I al so b e li e v e , t h a t Al a n C o hen ga ve every s t i t c h o f pr o g r a m in g mat e r i a l s h e c o u l d u n c o ve r t o Go l d m an Sachs. O f c o u r s e , neit he r w o ul d e v e r a d mi t t o t hat on e . M r . W e i s s m ade i t cl ea r , t he y d i d n o t r eq u i r e t he s o u r c e c o de , a n d t h a t a co m p l i e d v e r s i o n o f t he m o de l h a d b e e n r u n n i n g w e l l f or years an d d i d n o t r eq u i r e r ou t i n e r e p a i rs . Alan Cohen and Ta ncred S chia voni t h r e a t e n ed our London lawyers w i t h c o n t e m pt, a n d p ut b o r de r w a t c h e s o n a l l par t n e r s j u s t i n ca s e t h e y t r i ed t o co m e t o t h e U n i t e d S t a t e s t o a s s er t t he i r pr op e r t y r i ght s . L e t o n e p e r s o n e n t e r t h e U n i t e d S t a t e s , a n d t h e y w ere pr e p are d t o h a v e t h e m a r r e s t e d a n d t h r o w n i n p r i s o n w i t h o u t t r i al f or p er h a p s l i f e u n d e r t h e p r e t e n s e o f c o n t e m pt . T h i s i s t he r e a l A m e r i c a m os t p e o p l e d o n o t s e e n or d o t h e y e v e n b e l i e v e i s po s s i b l e . I n a l et t er dat e d J a n u ar y 2 5 , 2 0 0 2 f r o m on e o f o ur London p a r t n e r s , h e q u o t e d t h e v i e w o f o u r L o n d o n c o unse l w h o s a i d h e " h o p e d h e n ever ha d t o d e a l w i t h s u c h u n p r i n c i p l e d p e o p l e a g a i n . " T h i s d y n a mi c d u o , h a v e b e e n s o oppres s i v e , o n e c a n no t e v e n i m a g i n e t h a t t h e y w o u l d b e l i e v e i n G o d f o r t h e y c a r e n othi ng , a n d w i l l ar g u e a g a i n s t e v e r y C o n s t i t ut i o n a l r i g h t sh i f t i n g t he b u r d e n t o a ci t i z e n t o p r o v e t h e r e i s ev e n a C o n s t i t ut i on . H ow is i t pos s i b l e t o pr et e n d p u b l i c l y t h a t t he r e i s a f r au d w h e n t h e r e w a s n o t rad i n g f o r a n y t hi r d pa r t y , a n d h o w c a n t h e y p r e t e n d t h e m o de l i s a f r au d , y e t w h e n t he c u r t a i n i s do w n , d e mand t h a t s o u r c e c o d e a s w e l l ? B y s t a c k i n g c o u r t s w i t h f or m e r p rosecut o r s , t he r e i s j u st no h o p e o f e v e r obt ai n i n g a f a i r t r i a l . The r e a r e n o r i g ht s t o l i b er t y o r pr o p e r t y w h e n t h e G o v e r nment i s y o u r a d v e r s a r y . T o p r e t e n d t h a t t hey ar e s o f a i r , j ust i ce , a n d m a gnanimous. in f r o n t o f t he cur t ai n , a n d s o e v i l w h e n you ste p b e h i n d i t , i s cer a t i n l y n o t t he A m e r i c a t h e g e n e r a l p u b l i c be l i e v e s i n . W hen I wa s t h r o w n i n j a i l on ci vi l cont e mp t o n J a n u ar y 1 4 t h , 2 0 0 0 , i t w a s f or a n al l e g e d f a i l u r e t o t u r n o v e r $ 1 . 3 m i l l i on o u t of an a l l eg e d $ 3 b i l l i on . Th i s w a s so n o r b wh en f r i en d s wer e w i l l i ng t o p u t up t he w h o l e $ 1 . 3 m i l l i on i n ca s h f o r bail , Co h enand Sc hi a vcei ob j e c t e d a n d p r e v a i l e d . I wa s d e n i e d b a i l a t any pr i ce t hat c o u l d m ean o n l y o n e t h i n g i t ne v e r w a s a b ou t m oney , i t w a s a b o u t s h u t ti ng own Pri n c e t OA Economics a t a l l cost s . 15

Whatever i l l eg a l a c t i t t ake s t o w i n , Go hhenand Schiavoni ngaged in b a s e d u p o n e my bel i e f . A l l ci vi l i zed n a t i o n s a g r e e i n 19 9 2 t o p r o h i b i t to r t ur e " a n d o f co u r s e w e know t ha t B u s h a n d C hancy d i d w h a t e ve r t h e y w a n t e d i n C u b a . T h e y f a i l e d t o r es p e c t t hat w h a t e ve r t h e y v i e w e d t h e y c o u l d d o e v e n t o a n a l l eg e d t e r r o r i s t , ot h e r s c o u l d d o th e s ame t o A mer i c a n s o l d i e r s . E i t h e r w e r e s p e c t I nt e r n a t i o n a l L a w , o r w e h a v e n o r i gh t t o d e m and o t h er s d o s o w h e n we c r o s s t h a t s a m e l i n e . Congress e n a c t e d t h e Tj ortu re V i c t i m P ro t e c t i o n A ct i n 199 2 , a n d a c c e p t e d t h e mr l d d e f i n i t i o n o f con s t i t u t e d "t or t u r e " a s t h e d e l i be r a t e c o e r c i o n o f i ndi ct ed p ersons r e g a r d i n g a l l e g e d c r i m e s . T h i s m a t t e r e d n o t t o t he A m e r i c a n Government , n o r to Gohen and Sc h ia voni, f o r t hey p u b l i c l y ha d m e t h r o w n i n t o ce l l s al on g s i d e o f a ll e ge d t e r r o r i st s . F o r m o r e t h a n 7 y e a r s , t h e y a r g u e d t o k e e p m e i n j ai l , even w hen th er e wa s c l e a r l y . n o j u s t i f i cat i o n . I ns t e a d , t h e y d i d t he i r be s t t o m isl e a d

the press,

t h e p u b l i c , a n d t h e c o u r t s t o c o v e r -u p t h ei r s h enanigans. They had si gned

S EC, CFTC, an d t h e U S A t t o r n e y , t o d e p r i v e m e o f a n y a b i l i t y t o pr es e n t a d e f e n s e b y r e f u s i n g t o pr o d u c e a n y d i s c o v e r y , i nc l u d i n g m y o wn f i l es t h e y c o n f i s c a t e d . T h i s d ocument se t i t out pl ai n l y a n d i s pa r t of t he o f f i c i al cou r t r eco r d .

$13(b)

The Receive r a n d t h e J PL s a c k nowledge and a g r e e t h a t t h e y s h a l l not and t h a y s h a l l di r e c t t he i r r e s p e c t i v e a g e nt s a n d r e p r e s e n t a t i v e s n o t t o provi d e a n y n o n - p u b l i c i nf o r m a t i o n r e g a r d i n g G r ou p o r i t s A s s e t s t o M a r t in Armstr o ng , M a r t i n A r ms t r o n g , . J r . , Vi ct o r i a A r m s t r o n g , a n y p e r s o n o r e n ti t y k nown to ' be u nder ~ di r ec t - o r i nd i r e c t c o n t r o l or act i ng i n co n c e r t w it h a n y o f t h e m , a n y o t h e r f o r me r o f f i ce r , di r ec t o r o r e m p l o y e e o f P E I o r P GN, unl es s t h e p r o v i s i o n o f s u c h i n f o r m a t i o n i s ei t h e r ( a ) ag r e e d t o b y t he Rece i v e r a n d t h e J P Ls , ( b ) r e q u i r e d b y a p p l i c a b l e l a w , o r (c ) r e q u i r e d b y or de r o f E i t h e r C o u r t

T his was a b ou t a s u n c o n s t i t u t i o n a l a s y o u c a n g e t . Y e t t he y - s t i l l wou l d n o t o bey t h e C o n s t i t ut i o n o r r ec o g n i z e a n y r i g h t s a t a n y t i m e . W hen Republ i c N a t i o n a l B ank pl e d g u i l t y i n J an u a r y 2 0 0 2 , t h e y a d m i t t e d g u i l t and a g r b e d t o p a y b a c k w h a t was ta k en , $ 6 0 6 m i l l i o n, i n r et u r n f o r abs o l u t e i n a auni . The "cl u b " w a s c a u g h t , b ut s t i l l t he G o v e r n ment wo ul d n o t cr i m i n a l l y pr o s e c u t e a n d o n l y m ad e t h e m pay b a c k

what was missing nothing e l s e . T hi s s h oul d h ave ended the contempt si nce why
should I r em a i n i n pr i s o n i f al l v i ct i m s w e r e m ade whole? Gohen and Sc hia voni t h e n

lied t o

t h e c o ur t c l a i m i n g t h er e were s t i l l h u g e l o s ses t ha t p r e d ated doing business

wit h Repub l i c , ' t h a t w e r e n o t i ncl u d e d , y e t st r a n g e l y , t he r e w a s n o a c t u a l d e s c r i p t i on of an y s u c h f r a u d . B u t o n e e x i s t e d , a s Go b en t o l d t h e co u r t , 'a n d I wa s t h e n h e l d f o r

a nother near 5 y e ar s w i t h out an y i n d i c t ment o r e v en c i v i l c o mpl ain t d e s c r i b i n g t h e

all e ge d c r i m e . T h e r e wa s n o t h i n g a t a l l ! ALAN COHEN: Losses t h a t o c c u r r e d i n t h e Pr u d e n t i a l per i od a n d a t t he perio d a t R e p u b l i c p r i or t o t he f i r st f a l se N A [ V ] l e t t e r [ by Republi c ] a r e n o t e m b r a ced w i t h i n t h e r e s t i t u t i on o f H S BC because

obviously t h e y weren' t

i n t h e p r e deposi t i o n p e r i o d , t h e y weren' t

i nvol ve d i n i t , and i n t he p e ri o d b e f o r e t h e f al s e N A [ V ] t h e r e i s n o as d e s cr i t i on of cr i m i n a l l i ab i l i t .

(Transcri pt ;

1 / 7 / 0 2 , p 17 , L 1 - 4 ) ( 9 9-Civ- 9667)

. Cohen, no w E xecut i v e V i c e P r e s i d e n t o f Go l d m an Sachs, i s i n f or m i n g t h e c o u r t t hat i n h i s op i n i o n t h e r e a r e h u g e l o s s e s n o t i ncl u d e d , b u t t he r e i s no l i st o f a ll e ge d l o s s e s , n o l i st of v i ct i m s , a n d n o c h a r g e s e i t h e r c i v i l l y or cr i mi n a l l y . Y ou may t h i n k t h a t i n A m e r i c a t h e r e h a s t o b e a t l ea s t s o m ec h a r g e b e f o r e w e h o l d

p eople i n j a i l . T h i n k a g a i n .
16

What pr oo f d o I ha v e t h a t Qo h enand Sc hia voni k n e w t h e y w e re l y i n g t o t he co u r t t o k ee p me i n p r i s o n f o r a n o t h e r 5 y e a r s ? T h e U S A t t o r n e y wa s d e e pl y i n v o l v e d a n d . I b e l i e v e d i d t he i r b e s t t o pr ot e c t t h e "cl u b " n o t m e r e l y gi v i n g H S BC and Republi c

Bank absolute in aam.ty f o r t h a t i m p l i e s t h e re m ust h ave been cri m in al c o n duct at t h e

h ighest l e v e l s . o r e l s e w h y e v e n g i v e i r r m n i t y , b ut w h e n l i es a r e t o l d co n s i s t e n t l y

........for....so many years,

t h ey . sl i p , a n d t h e , tr ut h s p r i n g s f o r t h l i k e a weed i n t h e -crack of

a si d ewalk . A s s i a t a n t U S A t t o r n e y Al m m x 3 er S outhwell wa s s o e a g er t o ge t Jud g e M cKenna t o r e c u s e h i m s el f w h e n h e h e ar d t h a t h i s w i f e h a d r e p r e s e n t e d HSBC i n s o me r ea l e s t a t e sett l e ments , th e t r u t h c a m e ou t i n 20 0 5 , m or e t h a n 3 y e a r s l at e r . AL'ESNDER BOUIT5iEU: S o t o b e c l e a r , i n t he ev e n t o f a conv i c t i on , we wil l r eq u e s t , y o u r H o n or , t h a t t he r e b e a n o r d e r o f con t r i bu t i o n r eimbur s i n g u l t i m a t e l y H SBC, who b a s i c a l l y m a d e g oo d an d p a i d o u t

these l o sses fo r

whatever r e asons t hat t h e y d i d . T hey compensated

the v i c t i m s . . . We f r an k l y t hi n k t ha t t her e i s mo n e y a v a i l a b l e , which i s p a r t of t he r e a s o n why Mr . A r m s t r o n g h a s b e e n h e l d i n civi l con t e m p t . . .

(Transcript

6 / 2 4 / 05 , p 1 1-12) (99-Cr-997)

S uddenly , i n 20 0 5 t h e U S A t t o r n e y a d mi t s t h a t t he r e a r e n o o t h e r vi ct i m s a n d t h a t a ny r e s t i t u t i o n t h e y w o u l d w an t t o b e p a i d t o t h e v e r y cr i m i n a l s t h a t t h e y h a d g i v e n

absolute iaanuruty. N ot o n ly w as t h e re no a l l e g ed huge lo s ses p ri o r t o d e a l i n g w i t h

Republi c , b u t t he r e w a s n e ve r a n y s u c h c r i m i n a l o r ci vi l char g e . T h e "c l u b " d i d w h a t i t h a d t o d o t o pr e v e n t m e f r o m e ve r b e i n g r e l e a s e d , r e g a r d l e s s i f t he r e w a s n o t e v e n

an all e ged cr i me.

41

LC k

4f ~

W e are j u s t n o t t he h o n e s t a n d Go d f e a r i n g c o u n t r y w e b e l j . ev e w e a r e . T h e f a c t that e v e r s i n c e t h e Wi l l y Ho r l ton a dver t i s e m ents, t h e Ju d i c i ar y i s so af r a i d of bei ng v iewed a s " l i b e r a l " t ha t t h e e n ti r e C o n s t i t ut i o n h a s b e e n r e d u ce d t o a scr a p o f d u s t.

Even when the "c lub" ge ts caught with t h e ir h a n d i n a c o o k i e - j a r , t he y s t i l l ar e told t o g i v e t h e money back and walk away. The Goldman Sachs Conspiracy a s is n o w
being t a l k e d a b ou t i s f ar br o a d e r t h a n mos t s u s p e c t . O n e mus t a s k ; Ho w does Alan C ohen e nd up runt ~ Pr i x m e t o n Eaancaaics when we were invest i g a t i n g t h e " c l u b " t h a t i n c l u d e d

Gagman Sachs? The answer is s i m ple. T he "c lub" d oes more th an i n f l u e n ce poli t i c i a n s , t hey also cont ro l t h e J u d i c i a r y an d t h e J u s t i c e Department wel l b e y ond anything t h e m ost outrageous conspiracy t h eory can c r eat e .
O n May 10th , 2 0 0 7 , a m u r d e r e r p e n d i n g t r i al w a s a l l o w e d i n m y c e l l . He c a m ei n a nd s t r a n g l e d m e f r o m b e h i n d . A f t e r I pas s e d o u t , h e b e a t m e w i t h a t y p e w r i t e r br e a k i n g

i nto p i e c es . He t hen j umped up and down on my chest t r y i n g

t o c a ve in the bone st r u c t u r e

t o p i e r c e m y h e a r t . H is n a m e was Mr . G e or ge . I n m a t e s y e l l e d f o r t he g u a r d , b u t I was t ol d h e d i d n o t p u s h t h e p a n i c b u t t o n a n d w a i t e d f o r M r. G e o r g e t o f i n i sh a n d h e c a me out p r o u d l y y e l l i ng h e h a d k i l l ed m e . I w a s t a k e n t o B e e kman Hospi t a l . I obvi o u s l y d i d surviv e a f t e r 1 w e e k i n i nt en s i v e c a r e . M r . G e o r g e wa s n e ve r c r i m i n a l l y c h a r g e d . Why? Many people , i n cl u d i n g m y f a m i l y , b l i eve t h i s w a s a n a s s a s s i n a t i o n a t t e mp t t o g e t r i d o f me. O f c o u r s e , w h e n t h e F e d s p r o s e c ut e e v e r y t h i n g , a n d w o ul d n o t p r o s e c u t e t h i s e v e n t , I am mysel f s k e p t i c a l a b o u t w h y i t t oo k p l a c e . I wr i t e t od a y b e c a us e t h e y d o n o t w a n t m e to w r i t e . I have n o d o u b t t h a t t h e y w o ul d k i l l me i f t he y co u l d . S o I so r t of hav e

r esolved myself t o
t here i s

l i v i n g o n l y f o r t h e moment. When you are i n t h e b e l l y o f t h e b e a st ,

17

n o t much e l s e you can do .