Big Banks “Bought” Congress … So Credit Derivatives Are Bigger than Ever

The Causes of the 2008 Crisis Have Never Been Addressed

We’ve noted for years that Washington never reined in the risky derivatives which helped cause the 2008 crash … and so the big banks hold more derivatives than ever.

We’ve also noted that the financial services industry has bought and sold Congress.

Indeed, Washington never fixed the causes of the 2008 financial crisis.

Yesterday, Janet Tavakoli gave a good overview of the problem to CBC:

We threw money at the banks, and it all came back to Washington in the form of campaign contributions.

And we changed our campaign contribution law sot hat corporations could be considered people.  And banks hired the relatives of people who work in Congress.

So they pretty much bought Congress. So we can’t really rely on them for reform.


The low rates – and the changes we made to accounting rules – benefited the banks, and helped them to gloss over all of these problems on their balance sheets, which were never solved.

And in addition, it helped the people who were in financial engineering – the financiers – to do leveraged buy-outs, all debt-based, where basically they were raising debts to pay themselves huge dividends.

And all of the low rates enabled that kind of activity and that kind of leveraging up again.

And it shows that “made in the USA” … the complete irresponsibility of the in the financial forum.

And we will pay the price. It’s hard to say when. But when you see this kind of leverage and this kind of opacity, it doesn’t end well.


There aren’t better internal controls [at the big banks].  And they have a bigger, more opaque, more complex market with more players.

Posted in Business / Economics, Politics / World News | 1 Comment

Sutton’s Theory of Elite Action

Preface by Washington’s Blog:  While we frequently write about the deeper currents underlying world events -  we know nothing about Anthony Sutton.

But reader and guest poster D. Senti has a sent us a well-written piece summarizing Sutton’s theories … and their possible application to the ISIS jihad in the Middle East.

Given that the first time we’ve heard Sutton’s theories is right now – when we read Mr. Senti’s post – count us as agnostic about the whole thing. However, this has enough of the “ring of truth” about it that we are amenable to considering the possibility.

Guest post by D. Senti.


Antony Sutton is likely a familiar figure to those who peruse this site. For those who haven’t had the privilege to hear of him, Sutton was a well-respected establishment scholar for a time. He was a research Fellow of the Hoover Institution at Stanford as well as a professor of economics. His career would have been unexceptional, were it not for two particular quirks: he chose to research the elite, and he was honest.

Beginning with his analysis of Western involvement in the creation and support of the Soviet Union, he minced no words in accusing the most powerful families, bankers, and corporations of assisting Communism, Nazism, Socialism, and their own power over that of America’s self-interest. And more than that, he was exceedingly careful. He did not make accusations lightly, did not let his ideological views cloud his careful research methods, and was never afraid to say he didn’t know the answers when he lacked the resources to support a claim. In some ways, he is a “founding father” of the modern anti-statist movement.

All of this, of course, made him persona non grata to the establishment, who admonished him frequently to back off lest his career suffer. He chose to leave the Hoover Institution in 1973, to continue his work unmolested, and published a number of books on the actions of elite families that sold quite well. His book on the Skull and Bones, which he considered his most important work, was a scathing indictment of the families at the heart and height of power; Sutton openly accused them of conspiracy, of playing the right and left against each other for their own gain, and of instigating war for the benefit of both their ambitions and the military-industrial complex.


And what was the drive behind this? Was it blind power for power’s sake? If Sutton and others can say definitively that these families and organizations do not act based upon a left or right-wing ideology, then how could it be anything beyond self-interest? Yet Sutton had an answer to this:

“Left” and “right” are artificial devices to bring about change, and the extremes of political left and political right are vital elements in a process of controlled change. The answer to this seeming political puzzle lies in Hegelian logic. Remember that both Marx and Hitler, the extremes of “left” and “right” presented as textbook enemies, evolved out of the same philosophical system: Hegelianism.

The dialectical process did not originate with Marx as Marxists claim, but with Fichte and Hegel in late 18th and early 19th century Germany… This conflict of opposites is essential to bring about change. Today this process can be identified in the literature of the Trilateral Commission where “change” is promoted and “conflict management” is termed the means to bring about this change.

The elite ascribe to a brand of Hegelianism, where the dialectical process brings about an ideal synthesis out of conflict. Hegel himself had strong statist streaks to his philosophy and approach, and his philosophy could be considered as actualization through contradiction. It bears a striking similarity to the gnostic traditions of chaos bringing about perfection by manifesting opposing forces. As the Enlightenment cults borrowed heavily from Gnosticism, both in their belief in an “enlightened few” and in the universe as self-ascending toward some quasi-divine perfection, it’s fitting that this dialectical process be the mentality of the elite.

Indeed, one could argue that this whole approach is a product of their occult views, instead of merely being adapted to it.

Those who aid this process – who move society toward its final actualization and unity – have a sort of “divine right” to rule by law of nature. This very line of thinking is the inspiration for the Communist Dictatorship of the Proletariat, and their “ends-justify-the-means” thinking for their cause. Sutton again:

“Furthermore, the Illuminati principle that the end justifies the means, a principle that Quigley scores as immoral and used by both The Group and The Order, is rooted in Hegel.”

Moral absolutes, to them, do not exist, except insofar as an action aids the inevitable course of history. To the elites, the inevitable course of history is a final synthesis of all contradicting political ideas: freedom and tyranny, individualism and collectivism, agency and slavery, and so on. It is in their view neither of these things. The final society transcends these things.

What that means in short is simple. If you like any of the things on this list, the elites want them to go away and become merged with their contraries. And this process cannot be theoretical or abstract, no – all of these dialectical philosophers that Sutton mentions, from Hegel to Fichte to Marx to Engels – held that the abstract was meaningless of itself and only the first step in the process. It is the thesis or the abstract, which must be followed by the antithesis or negation, and then from conflict be synthesized or concretized into something greater.

A Model

So each idea, and its contrary, must be manifested really and separately from its contrary, and then forced into conflict. There is no way to “transcend” the Western model without creating a nation that is the antithesis of the Western model. For representation its enemy must substitute dictatorship; for freedom the enemy must enslave; for a theistic system of rights the enemy must have an atheist principle of amoral action. This was the USSR. And it too needed to be opposed in other ways, which necessitated Nazism. The conflict between these two would create a form of purer collectivism and Statism. After this, the Western liberal democracy must confront the collectivist system, and the victor in that conflict subsume the elements of the loser into itself. One could perhaps convincingly argue that China is a manifestation of the synthesis.

This is not completed in any few number of steps, mind you. Anywhere that the elites can create antithesis and conflict, it believes it can “actualize” some element of human society, allowing it to manifest as the synthesis by which the problem is eventually solved. We see this very same approach being taken with Islam today. Everywhere that two groups of people can be brought to struggle against one another, the elites would argue for its merits. And by an astounding coincidence, these same people are positioned to profit immensely from it, both through financial and military systems. No doubt the Statist elements are incorporated into their final ideal vision will put them in positions of great power (especially since Statism is the only real consistent element of their proposed systems, both on the “left” and on the “right”).

They work both sides. They foment the conflict. But they are not seeking a total conflagration, which would undermine their work; only war and conflict on a manageable scale. The development of nuclear weapons makes World War-style conflict very dangerous, so their approach has become regionalized. Until nuclear disarmament can be accomplished, that is.

Sutton proposed this way of thinking as an explanation for the developments of modern history. The elites are not necessarily well-understood, according to him. There are people and groups and organizations whose motives and methods are not known, and perhaps there is even internal dissension between them. But their driving philosophy is clear: perfect the world through opposition and conflict. Promote their goals by a chain of influence, united by a small cadre with a core philosophy. They need not be presidents, premiers and prime ministers. They need only be considered their trusted advisors.

I too am very much inclined to this way of thinking. The operations of the elite are self-interested, but only in the greater sense. They have worked toward consistent goals over timescales that surpass many lifetimes, which is the one thing pure narcissism is incapable of doing. They are selfless in the cause of their own collective selfishness, in a word, which requires some deep belief in the rightness of their cause. Whether the philosophy merely justifies the actions or the actions are driven by the philosophy, I can’t say.

Sutton’s schema also allows for alternative views to be encompassed into our efforts. Any hope of opposing their efforts requires the broadest possible umbrella to envelope as many people who would be willing to join us. The best example that comes to my mind is, of course, 9/11. Under what I’ve labeled here “Sutton’s Theory of Elite Action,” (or STEA) 9/11 would like Pearl Harbor before it most certainly be attributed to the actions of the elite. But it can be understood in two senses.

The traditional (anti-establishment) view is that people within our government actively assisted or outright ordered and carried out the attack, to excuse actions in the Middle East (for fun and profit, no doubt). This view is tenable under STEA, but the consequences are the same if you think their actions were more subtle. There is no doubt that we funded and supported terrorists in the Middle East. It was just as certain that these jihadists hated us, and that they would try to act against us if possible, and that we did virtually nothing to prevent terrorist action against the US. Any idiot with his eyes open could tell you that would end in tears.

And those tears are exactly what the elite wanted. And if word reached US intelligence agencies that terrorists were about to attack, the message would simply have to be lost in transmission, or downplayed, or ignored. It is the very same tactic used by FDR to get the US into WW2: the Japanese needed American oil no matter the cost; FDR cut off supply to Japan at any price; the Japanese were forced to attack to hopefully gain leverage; FDR ignored reports of an incoming attack. Why send fake Japanese planes to attack Pearl Harbor when a few low-visibility actions can make them do it for you? It’s genius, albeit diabolical.

So it’s enough for people to understand that the elite wanted a 9/11 and acted in such a way to make it happen. How they went about it is just squabbling over details.

Past and Future

The same picture is appearing today with ISIS. Those in power fomented conflict, created the conditions to strengthen jihadists, funded and armed these same people, and then departed for greener pastures. There are only two explanations here that make sense: either our leadership is so mind-numbingly incompetent that they need someone to dress them every morning, or they want this conflict.

Sutton’s Theory of Elite Action could have tentative predictive power in this case. Sutton himself made some missteps, particularly regarding China (though he may just have been a few decades early in his predictions), so it’s by no means certain that their intentions can be understood beforehand. But STEA would predict that this is an effort to create a synthesis out of the divisions in Islamic society. By maximizing the strength of the jihadist element in Islam and forcing them into direct conflict with the Muslims of a more moderate bent (in spite of the Koran’s calls to violence, I might add), they believe they are providing the only true path for synthetic unity in the Middle East. No doubt this synthetic solution would then be positioned as an enemy against some other regional bloc.

The EU is a perfect example. Europe was sorely divided along political and ideological lines. Sutton’s research shows beyond a shadow of a doubt that the three competing ideologies of the 1940s (American-style socialism under FDR, Nazism under Hitler, and Communism under Stalin) were all established and supported by the core banking families, as well as other American and British corporations. Sutton:

World War II was the culmination of the dialectic process created in the 1920s and 1930s. The clash between “left” and “right,” i.e., the Soviet Union and Nazi Germany, led to creation of a synthesis – notably the United Nations, and a start towards regional groupings in the Common Market, COMECON, NATO, UNESCO, Warsaw Pact, SEATO, CENTO, and then the Trilateral Commission. A start towards New World Order.

They built the Soviet factories for armament production, funded and stabilized the Reich, and propped up a fragile, newly-developing US political system. Only two theories here can fit the facts: pure sociopathic self-interest and the dialectical STEA. I believe the first is ruled out by multi-generational action along the same lines.

It is, of course, possible that this situation or others have simply grown beyond their control. That risk is the nature of the beast. But the funny thing about true believers in a cause is that they’re predictable. ISIS is an organization run by men bent on restoring the Caliphate that crucifies their own jihadists for being too moderate and blows up Islamic holy sites. If ever there were a group fit for their dialectical purpose, it’s ISIS. They are absolutely guaranteed to antagonize every Muslim who is not a part of their particular brand of belief, which is exactly what the elite would need to create an Islamic synthesis. They only lacked money and armaments, yet lo and behold! The US government armed them and then abandoned oil-rich Iraq, leaving a vacuum of power. Again, is this unparalleled incompetence or design? There are no other viable options. (And all this is without mentioning how Fed action, among others, created the Arab Spring which plays perfectly into the pre-end times Islamic traditions, which is too much to explain here.)

So STEA could perhaps make the following prediction: the Middle East is about to see the regional equivalent of World War II. And the timing could not be more fortuitous. The (alleged) actions of Iran have spooked enough countries into pursuing their own nuclear ambitions, which would render the Middle East too volatile for dialectical synthesis. If they were going to act, it had to be now.

If I had to summarize Sutton’s Theory of Elite Action in a paragraph, I would explain it just so:

The powerful elite families, consisting of bankers, a few powerful businessmen, and second-level politicians, have an end goal of a unified Statist society. They operate through a chain of influence and a number of closed-door organizations to impose their ideas on society by controlling key positions of power. Using the dialectic method of Hegel, Marx, Fichte and Engels, they foment conflict by funding and arming antithetical organizations to create a synthetic unity, as seen in the EU. This process will continue – thesis, antithesis, synthesis – on greater scales until a one world Statist system is established, or they are stopped.

To many this may seem simple and even obvious. But the ideological framework provided by Sutton allows us to understand the actions of the elite with greater precision. I’ve posted this, above all, in hopes of facilitating discussion and opening up a wider, more welcoming umbrella for anti-Statists to gather under. The above has been proposed and extensively researched by Sutton (and others) to the degree that most honest parties should see its truth. If they don’t, I think they must be either ill-informed (and likely new to the cause) or believe our leaders to be spectacularly incompetent.

(All quotes are taken from Antony Sutton’s “America’s Secret Establishment: An Introduction to the Order of Skull and Bones“) [And see this interview.]

Posted in Politics / World News | 10 Comments

Former Mafia Boss Who Did a Lot of Business with Wall Street: Buy Physical Gold and Silver, Because Wall Street Steals Your Money

Crime Boss: Wall Street Has No Ethics

The Colombo crime family’s former boss – Michael Franzese – says even he doesn’t trust Wall Street.

Franzese – played by Joseph Bono in the 1990 Martin Scorsese movie “GoodFellas” – spent 10 years in prison after he was convicted on federal racketeering charges.

When he was 35, Franzese ranked No. 8 on Fortune Magazine’s list of the 50 most wealthy and powerful mafia bosses (44 of those on the list are now dead, and three are doing life in prison without parole). He reportedly raked in up to $8 million a week.  Franzese is the only surviving high-ranking member of a major crime family to publicly walk away and refuse protective custody.

Franzese told CNBC:

I did a lot of things at times with people on Wall Street….


A lot of [Wall Street] guys are shady and they did shady things with me and I don’t trust them. And I don’t like other people that I don’t know really well taking care of my money. I think that I can do it better.


No matter what, it’s [i.e. physical gold and silver] always going to have a value.


Unlike stocks, where in our country, you go to sleep, everyone tells you everything is wonderful, you wake up and everything is gone.

Other crooks – like Bernie Madoff – have confirmed that the big banks are crooked.

Wall Street learned some of its cons from the Mafia. And some Mafioso conquered Wall Street. But as some of the biggest organized crime kingpins have noted, Wall Street is the big time (mob boss Meyer Lansky – after hearing about Wall Street banking – reportedly said: “I’m in the wrong business”).

Wall Street is committing massive crimes on a systematic basis. And Wall Street banks are the biggest looters around.

Wall Street cons include charging “storage fees” to store gold bullion … without even buying or storing any gold, raiding allocated gold accounts and pledging the same gold to numerous people.

Physical gold is different from paper gold.

Note: We are not investment advisers, and this does not constitute investment advice.

Posted in Business / Economics, Politics / World News | 4 Comments

War Journalist’s First Arrest Happens in Ferguson Speech Crackdown

Ferguson, Obama

Crackdown on Dissent in Ferguson

Veteran international war journalist Ansgar Graw has reported in Georgia, the Gaza Strip, the Soviet Union, Afghanistan, Iraq, Vietnam, China, and Cuba, but has never once been arrested.

Now, under the boot of the man who Pulitzer winning journalist James Risen calls “the greatest enemy to press freedom in a generation” – Barack “We Tortured Some Folks” Obama - Graw has been arrested for doing journalism.

Graw was in Ferguson reporting on Obama’s violent crackdown on freedom of speech, assembly, and dissent, the purpose of which is, in the words of another journalist who was arrested for reporting in Ferguson, “solely [to] intimidat[e] reporters in order to prevent them from working”.

Dozens of journalists and countless residents, including a state senator, have been arrested and/or gassed, and the state is blocking press aircraft from entering the area.

Graw here remarks on how his experience trying to do journalism in the USA has been an illusions-give-way-to-reality moment for him, shattering the make-believe, propaganda myth of “good” America, specifically the police, that he, like hundreds of millions of others, had been duped into believing:

to be handcuffed and snarled at aggressively by the police, and to see a prison from the inside, I had to travel to Ferguson, Missouri in the United States of America. My childlike trust of the US police, who I defended passionately against critics as friends and helpers, in spite of their often rough actions and lack of transparency, is gone.

We should all learn from Graw’s example and be honest enough with ourselves to accept that “childlike” is exactly what our propaganda-based notions about the United States are, and “childlike” is what the United States, and all authoritarian governments, would love for the people they control and leech off of to be.

Barry Grey sums up Obama’s vicious crackdown on dissent in Ferguson:

The state of Missouri, with the full backing of the Obama administration, has responded to continuing protests against the police murder of Michael Brown, an unarmed African American teenager, by imposing de facto martial law on the largely working class city of Ferguson.

Residents have been stripped of the constitutionally guaranteed right to assemble, reporters have been arrested or banished in violation of freedom of the press, police checkpoints have been set up at major intersections. A massive force of military vehicles, helicopters, sound cannon, flash grenades, tear gas, SWAT teams wielding assault weapons and local cops backed by National Guard troops has been deployed to intimidate, terrorize and crush social protest.

William Blum here points out one of the ways in which the myth of the USA’s moral superiority is implanted.

Obama illegally sent covert agents to Cuba to try to bring about the overthrow of the government.  His regime told the US agents:

“Although there is never total certainty, trust that the authorities will not try to harm you physically, only frighten you. Remember that the Cuban government prefers to avoid negative media reports abroad, so a beaten foreigner is not convenient for them.”

Blum observes:

It’s most ironic. The US government could not say as much about most of their allies [like Israel], who frequently make use of physical abuse. Indeed, the statement could not be made in regard to almost any American police force. But it’s this Cuba that doesn’t beat or torture detainees that is the enemy to be reformed and punished without mercy … 55 years and counting.

When countries the USA wants to destabilize, terrorize, and destroy, like Cuba, are caught engaging in non-violent governance, it is not because they are good.  They are really bad, they just want to look good.

However, when the USA engages in non-violent tactics, that is not because we are merely trying to look good, but because we actually are good.  See the difference?  It’s very scientific.

But there’s more, and this is crucial:

When the USA engages in ultra-violent tactics that surpass anything Cuba has ever done or will ever do – America is by far the most violent and war-like society on Earth – that is also because we are good.


When we use non-violence, that’s because we are good, and when we use violence, that’s also because we are good.

Anything we do is good because we did it, and everything they do is bad because they did it.  Doesn’t matter what any of these “things” are.  Here’s all you have to know:

Us = Always good

Them = Always bad

Graw was never arrested in Gaza or by any other government on which he reported not because those groups are good.  They are bad.  They just didn’t want to both look bad and be bad.  They want to be bad but look good.  Bad guys are sneaky that way.

Not us, though.

We are good.  Therefore, everything we do looks good, which is why we arrested Graw.  Well… maybe that doesn’t look good, but it doesn’t matter.  Remember, since we are good, even if something we do doesn’t look good, it still is good.

Mass-arrests, violence, and intimidation against journalists and peaceful protesters (as documented by Amnesty International and others), is good, if we do it. 

No matter what point the government reaches in this country, just make sure you always take the side of the government.  That way, you know you’ll always be on the side of good.  You know, good.  Like in American movies.

If the FBI starts openly assassinating (on Hoover’s orders) people like Fred Hampton again, you know whose side to take: the FBI, because they are good.

When Obama protects torturers and aggressors and gives them high-ranking jobs in his regime, then tortures Bradley Manning and gives him 35 years in the world’s biggest dungeon system, you know whose side to take.  The good.  Not Manning.  Manning is bad, or, at best, was confused about what was good and what was bad.  (Hint: Exposing crimes was bad, because they were good crimes.  You know, like torturing folks to death and killing hundreds of thousands of civilians.)

Internationally, when Obama schemes up new ways to block the Chagossians from ever returning to their homeland, Diego Garcia, because Obama prefers to use it as a base for his killing machines and torture centers, you know which is the good side, and it ain’t the impoverished and dispossessed Chagossians, that’s for damn sure.

Sometimes this can seem counter-intuitive, but that’s when it becomes important to put your full on faith in the government that generously allows you a statistically insignificant amount of influence over the policies that dictate your life.

Don’t listen to this bad guy:

A lot of people still think this is some kind of game or signal or spin. They don’t want to believe that Obama wants to crack down on the press and whistleblowers. But he does.

- James Risen

Obama has persecuted more whistleblowers than all presidents combined.

Robert Barsocchini is an American investigative journalist and writer for the film industry.  Click here to join 5,100 people following him and his UK colleague, Dean Robinson, on Twitter.  

Posted in General, Politics / World News | Tagged , , | 4 Comments

“Nazi Safaris in Ukraine: Militiaman Fighting Against Government Forces Speaks Out – ‘Some Are Willing to Pay to Hunt Insurgents’”


“Nazi Safaris in Ukraine: Militiaman Fighting Against Government Forces Speaks Out – ‘Some Are Willing to Pay to Hunt Insurgents’”

Highlights from an interview with an insurgent in southeastern Ukraine.

Posted by Eric Zuesse. Written by Ilja Degtjarov. Original at Global Research, August 19, 2014

“We have here the city of Molodogwardejsk. Although there are no rebels at all, this town has been destroyed from a safe distance with howitzers. For them it is simply to destroy cities and leave a desert.”

“Ukraine executes commands from the West, it has no will of its own. Ukraine is eliminating people who are in the way for the coal and gas production of the Americans. They do not need our people here and destroy them therefore, area-wide. It is not a question of eliminating some of us, it is about to annihilate us comprehensively, using Grad [rocket] launchers, mines, surface-to-surface systems [ballistic missiles].”

“They torture, they kill people, break arms, cut off fingers, chop off heads and see how long you can still walk without a head. Everything you can imagine as horrible at all, they already do.”

“People in the vicinity of Kramatorsk were massacred, their organs have been retrieved; then their bodies were buried with tractors and compacted on top with armored cars. So they are hiding the evidence of their crimes. This also applies to Krasnodon.”

Complete interview-transcript, and video of the complete interview:

Eric Zuesse notes: The United States installed in February the government that is doing this. The complete transcript of the key phone-conversation there is posted here. I recently reported that, “Our Side’s Using Illegal White Phosphorous Firebombs Against the Residents of Donetsk Ukraine.” Barack Obama is serious about wanting to get rid of the people in southeastern Ukraine. U.S. taxpayers are funding this. What Obama campaigned on doing, and what he is actually doing, are as different as night and day. But he gets away with it. Republicans don’t impeach him, because he’s carrying out fascist, that’s to say Republican, policies. Democrats don’t impeach him, because they don’t even care whether he’s just a Republican-in-disguise. So long as Obama continues with his liberal-sounding rhetoric, the label “Democrat” alone is enough to satisfy them.

Posted in Business / Economics, Energy / Environment, General, Politics / World News | Tagged , , , , , , , , , , , , , | 2 Comments