by Glenn Beck
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Financial Weapons of Mass Destruction 101
SHORT SELLING (or “shorting”) means borrowing shares of a stock and selling them. Of course, since you borrowed shares, you will have to give them back at some point. To do that, you buy the shares back on the open market (which is called “covering”) and pay back the “loan.” If the price of the stock went down after you sold, you would cover at a lower price and make a profit. If the price went up, you would lose money. This is all legal and regulated and helps create a dynamic marketplace.
NAKED SHORTING is the same as regular shorting except that the seller doesn’t have the “inconvenience” of ever actually borrowing shares before selling them. Basically, the investor instructs the broker to sell what he does not have. The buyer is given an IOU that, for all intents and purposes, looks and functions like real shares. Unlike regular short selling, with naked shorting there is no limit to the number of shares you can sell since you are only selling IOUs anyway.
Naked shorting was illegal (and it still is). The rules just aren’t always enforced and the perpetrators aren’t always caught. According to estimates from Susanne Trimbath, a trade settlement expert, somewhere between 30 percent and 70 percent of the decline in Lehman stock during the year it failed was linked to naked short selling.
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CREDIT DEFAULT SWAPS
Imagine some stranger buying fire insurance on your home . . . and then buying a box of matches.
Credit default swaps (CDS) are essentially “side bets” between two parties as to whether or not some other party will default on a debt. Here’s how they work, in very simple terms:
Your friend Steve takes out a personal loan that you’re pretty sure he won’t be able to pay back. You buy a CDS from Susan that will pay you should Steve default. Simple enough, right? Yes, except for three things. First, you are not the one who lent the money to Steve in the first place—you actually have no part in the primary transaction. Second, you can buy as many CDS policies on Steve as you want. You could buy so many, in fact, that at some point it would be in your best interests if Steve defaulted. Which brings us to the third point: What if you could help force Steve’s hand? What if you were his boss and fired him, leaving him unable to pay back his debt?
Wall Street used CDS to hedge against very big companies like Lehman Brothers, Bear Stearns, General Electric, and Citigroup. Some people who were buying CDS were also shorting the stock of those companies, thereby helping to cause, and subsequently profit from, their demise.
How much money would it take to cripple a major company? General Electric CEO Jeff Immelt was quoted as saying that “‘by spending 25 million bucks in a handful of transactions in an unregulated market’ traders in credit default swaps could tank major companies.”
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Can You Spare a Dollar?
If Kevin Freeman is right, the battlefield has shifted from our markets to our currency and Treasury. The goal now seems to be to destroy the value of the U.S. dollar and undermine our credit rating (though we’re doing a pretty good job at that all by ourselves).
In response to the financial market collapse and recession we’ve dramatically increased the national debt while also pumping trillions of dollars into the system. If all of that weren’t enough, the BRIC (Brazil, Russia, India, and China) countries are only too happy to hit us while we’re down. A recent Washington Post report detailed how, during their 2011 summit, they called for “a restructuring of the World War II–era global financial system and an eventual end to the long reign of the U.S. dollar as the world’s reserve currency.”
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No wonder Warren Buffett has called them “financial weapons of mass destruction.”
Drastic measures were taken by the Bush administration in late 2008 to try to stem the tide. The bear raids were essentially over by the end of the year, but the stock market kept falling through March 2009. And while the collapse didn’t put an end to our financial system, it came awfully close.
THE PLAN, PART THREE
After causing a financial crisis, bury a computer virus.
Over the past decade, we have uncovered attempts by foreign hackers to infiltrate our infrastructure and telecommunications systems, NASA, the stock market, and several key utilities. These attacks have really ramped up over the last five years. Security vendor McAfee recently published a report revealing that one group of hackers had penetrated the systems of seventy-two companies and organizations in fourteen countries, stealing “national secrets, business plans and other sensitive information.” More ominously, McAfee reported that “the attackers are likely a single group acting on behalf of a government.”
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The Enemy of My Enemy . . .
In the summer of 2008, Russian operatives allegedly approached the Chinese with a “disruptive scheme” to surgically target the American economy. According to then Treasury secretary Hank Paulson, the Russians proposed to high-level Chinese officials that “together they might sell big chunks of their [Fannie Mae and Freddie Mac] holdings to force the U.S. to use its emergency authorities to prop up these companies.”
The Russians have denied this proposal was made, but they did, in fact, dump over $65 billion worth of these bonds in 2008. Fortunately, the Chinese, who held nearly $500 billion of those bonds, did not sell. If they had joined the Russians, who knows just how much more damage and panic may have been caused to our economy.
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The intrusions have reached NASA, including our satellite systems, and NASDAQ, whose systems control a major stock market. In fact, some experts, like former counterterrorism czar Richard Clarke, believe that “every major company in the United States has already been penetrated by China.”
These intrusions demonstrate the potential for hackers to take over our communication capabilities and potentially crash our stock market on command. Mike McConnell, former director of national intelligence and former director of the National Security Agency, said, “We know, and there’s good evidence . . . of very deliberate, focused cyber-espionage to capture very valuable research and development information, or innovative ideas, or source code or business plans for their own advantage.”
McConnell is likely talking about the Chinese, but other countries also engage in cyber-espionage—like Russia. Consider, for example, the case of Sergey Aleynikov, a Russian national who walked out the door with Goldman Sachs trading codes in 2009. Aleynikov transferred the codes, worth millions of dollars, to a computer server in Germany and, according to prosecutors, could have then disseminated them to anyone in the world. Aleynikov was convicted of stealing trade secrets, and though the conviction was later overturned, the vulnerability was clearly exposed.
And then there are the groups like Anonymous, which has clearly shown the ability to cause mayhem:
Computer hacking group Anonymous has launched a cyber-attack on the Greek Ministry of Justice website, and warned of plans to target a further 300 ministry and media sites. . . . It is the latest in a series of attacks by the self-styled “hacktivist” group, which has unleashed havoc on several European governments during the past month, and targeted America’s Justice Department in retaliation for the closure of file-sharing website Megaupload.
In a message left on the Greek Justice Ministry’s website, the group threatened to take down “all the media in Greece”:
We know EVERYTHING, We have your PASSWORDS, We are watching YOU. NEXT TARGET WILL BE ALL THE MEDIA IN GREECE. (ertTV, etc)
WE HAVE MOST OF THE MEDIA WEBSITES ADMIN PASSWORDS.
We are Legion. This is JUST the BEGINING [sic].
Do you think these kinds of threats help or hurt the people of Greece as they deal with a historic economic crisis?
We are watching this “checkmate” strategy play out in Greece right now, but it is planned for the United States soon. Maybe sooner than we think, when you consider that George Soros is, as usual, right at the center of America’s vers
ion of the Greek street protests: Occupy Wall Street.
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Sound Familiar?
The final step in the PLA’s “How to Destroy a Superpower” road map? “. . . cause the enemy nation to fall into social panic, street riots, and a political crisis.”
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Soros told Newsweek that Occupy “is an inchoate, leaderless manifestation of protest,” but that it will grow. It has “put on the agenda issues that the institutional left has failed to put on the agenda for a quarter of a century.”
When the interviewer asked Soros if riots on the streets of America are inevitable, he had a hard time containing his enthusiasm. “‘Yes, yes, yes,’ he says, almost gleefully.”
It appears that we have now come full circle. The destruction of America was strategized by the Chinese PLA, which cited George Soros as a model. The plan starts with amassing capital and it ends with riots in the streets. And now, here we are, near the final stages of that plan, and we have who else but George Soros explaining how American riots are inevitable.
BIN LADEN: FINANCIAL TERRORIST?.
Osama bin Laden was fixated on our stock market prior to 9/11. He had such a vast knowledge of it, in fact, that he was even accused of short-selling American stocks prior to the attacks. In the month following 9/11, bin Laden talked about the economic damage his attacks had inflicted:
According to [the Americans’] own admissions, the share of the losses on the Wall Street market reached 16 percent. They said that this number is a record. . . . The gross amount that is traded in that market reaches $4 trillion. So if we multiply 16 percent with $4 trillion to find out the loss that affected the stocks, it reaches $640 billion of losses.
Given how savvy bin Laden was about economics, I wonder, why is it so hard for some people to imagine that al-Qaeda has targeted our economy through bear raids on our stock market? It makes perfect sense.
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“[Bin Laden] said the American economy is like a chain. If you break one—one link of the chain, the whole economy will be brought down. So after [the] September 11 attacks, this operation will ruin the aviation industry, and in turn the whole economy will come down.”
—SAAJID BADAT, A CONVICTED AL-QAEDA TERRORIST WHO MET WITH BIN LADEN SHORTLY AFTER 9/11
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If bin Laden had read the PLA’s Unrestricted Warfare (something that is not at all far-fetched given how extensively he was mentioned in it and given that, by all accounts, bin Laden was something of an egomaniac), then he was aware of the Chinese PLA strategy to take on the West. He would’ve learned, for example, that if he took his fanaticism and combined it with the tactics and money of a financier like George Soros, he would have a “hyper-strategic weapon” capable of defeating the United States. Is there any doubt that he would jump at that kind of opportunity?
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Lawsuit Alert
No, George, I’m not saying that you teamed up with bin Laden. You can call off your dogs now.
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It’s also interesting, if not exactly conclusive, that when bin Laden was killed by SEAL Team 6, a “strategy concept” for an attack on Europe’s economy was discovered inside his compound. According to the report, the document did not list “concrete targets” (meaning that this was not about sending bombers into a stock market), but no other information was given. Unsurprisingly, it doesn’t look as though anyone in the mainstream media has been interested enough in that report to bother following up.
Whether this document means that al-Qaeda was close to executing an economic attack is not clear, but what is clear is that we’ve been pretty slow to catch on. While bin Laden always saw this as an economic war, and himself as a financial terrorist, we’ve always seen it as a conventional war—one that would be fought in a very conventional way. As Foreign Policy magazine put it, “[I]t is not apparent that American planners clearly saw the link between al-Qaeda’s war and the U.S. economy even after bin Laden boasted of it on the world stage.”
Wait, doesn’t that sound a bit like the Chinese commentary from Unrestricted Warfare?
However, the Americans have not been able to get their act together in this area. This is because proposing a new concept of weapons does not require relying on the springboard of new technology; it just demands lucid and incisive thinking. However, this is not a strong point for Americans, who are slaves to technology in their thinking.
Do we really want to be the country that, once again, looks back and asks How could this have happened? Wouldn’t it be much better to connect the dots, imagine the unimaginable, and take whatever precautions are necessary to ensure that our economy—a great source of our strength—does not become the source of our collapse?
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The Myth of the Cave-Dwellers
I hear it all the time. These people live in caves in Third World countries; I’m really supposed to believe that they can bring down the most sophisticated financial system in the history of the world?
In a word: yes.
First, the whole premise is pretty naïve. These are, after all, the same “ignorant cave dwellers” who were able to breach airport security in multiple cities, take over multiple aircraft, inflict massive damage on the Pentagon, and bring down the World Trade Center. You’ll excuse me if I’m ready to give them a little bit of credit in terms of their intelligence, patience, and ability to plan.
The reality is that many of those who hate America have university degrees from some of the best-known schools in the world. A study by Peter Bergen and Swati Pandey at the New America Foundation found that “two-thirds of the 25 hijackers and planners involved in 9/11 had attended college” and that of the seventy-five terrorists the authors investigated, two had earned Ph.D. degrees and two others were working on theirs.
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There are plenty of people who would’ve called you a fear-mongering conspiracy theorist before 9/11 if you’d suggested that terrorists were plotting to destroy the World Trade Center using commercial planes as missiles. Those same people are all too happy to launch those same insults now when it comes to the prospect of economic terrorism.
I have an idea. Let’s stop listening to those people and instead start listening to the only things that we should really trust: our own instincts and common sense.
“So you, too, want to own a little home of your own? You, too, have dreamed of a vine covered cottage . . . roses, green shutters . . . a fireplace . . . a well kept dog on a well kept lawn. A home of your own. That, probably more than anything else, is the American dream.”
—Associated Press, 1947
POLITICIANS really seem to enjoy dropping the phrase “the American Dream” on us during election time.
Guess what? They support it. So do I. And why shouldn’t I—I’ve lived it, or at least my definition of it.
I’m a baker’s son from a small town in western Washington State. I never graduated from college. I was a Top 40 morning deejay for years. Yet, here I am, doing what I love, making a good living—and living a good life. If that’s not “the American Dream,” I don’t know what is.
Do you?
There is no shortage of people trying to tell us what they think the Dream should be, or trying to claim the phrase as their own. To the Occupy Wall Street crowd, for instance, “the American Dream” usually means a free college education, free birth control, a guaranteed job, and free housing. To the Tea Party, it usually means the opposite—nothing free and no guarantees, but equality of opportunity for everyone.
Some seem to think that we’ve lost the American Dream somewhere along the way. President Obama’s book The Audacity of Hope, for example, sports the subtitle “Thoughts on Reclaiming the American Dream.” But if we’re reclaiming something, wouldn’t it be helpful to know what it is and who’s taken it?
Of course—but those questions are much easier to ask than they are to answer. And that’s the whole point—the “American Dream” itself is a big lie; a marketing slogan
to sell a vision for America that is solely based on the political rhetoric of whichever party or politician or activist group wants to harness it.
But that wasn’t always the case. In fact, decades ago, when the term was first coined, it wasn’t about ideology or material things at all—it was about the embodiment of an idea.
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American Dream 2.0
Occupy supporters will often make the claim that they are simply trying to get back the equality of opportunity that has allegedly gone missing in America. But, if you dig deeper, you find out quickly that they really don’t just want opportunity, they want guarantees. Take, for example, this post from Occupy supporter Madonna Gauding:
