Financial Meltdown on Wall Street
"A measure of wheat for a penny [literally
- denarius, a Greek coin which represented a
WHOLE DAYS wages], and three measures of barley for
a penny; and see thou hurt not the oil and the wine."
NOTE: The meaning
of this lyric is that the condition of man during
this era (i.e., the "end of days") will
be reduced to such that he will have to labor a
whole day simply to buy a loaf of bread or three
measures of barley. But the second part of the lyric
[i.e., "... and see thou hurt not the oil and
the wine ..."] means that the "hard times"
of this period will not extend to the elites. This
is the common interpretation - the one subscribed
to by Ryrie, Pentecost, Ironside, Gaebelein, etc.
One of the most distressing dynamics of today's world
is the speed at which the world is being divided between
a small elite of wealthy "worthies" and a huge
population of indigent "worker-serfs" - and it is
important to note here that the division of the earth's
population in this fashion is occurring not only in the
so-called "Developing World," but in the so-called
We stand at the edge of a precipice.
In the following article, Professor Michel
Chossudovsky of the University of Ottawa points
out just how inexorable this process has become, and how
rapidly it is taking hold of the world. The fact is, the
world that permitted Christians in the United States to
live comfortably "in this life" and "in this world" while
others starved is passing away. As a result, we Christian
stand at the edge of a precipice. It's just a matter of
time before many of us fall off the edge into the horror
of penury and destitution - precipitating a panic for
which most of us are ill prepared. How we as Christians
react to this panic will determine our future, both now
and in the world to come - either to honor or to dishonor.
Two paths lay open before us: one path leads into
apostasy; the other leads to a transformed life. The path
we choose will reveal us for what we really are - children
of this world, or children of the kingdom heaven. Unbelievers
will be looking at us to see how we react to the turmoil
If we panic and join the mob in its stampede for an
easy way out - for renewed financial security - then we
will be led straight into the arms of the "coming
in rags -
rejoicing in the Lord.
But if we can say with the prophet Habakkuk:
"Though the fig tree may not blossom, Nor fruit
be on the vines; Though the labor of the olive may fail,
And the fields yield no food; Though the flock be cut
off from the fold, And there be no herd in the stalls
"YET I WILL REJOICE IN THE LORD, I WILL JOY
IN THE GOD OF MY SALVATION." (Habakkuk 3:17-18)
- then we will be the kind of testimony the world
(and unbelievers) are secretly looking for; people who
are so in love with the Lord that there is no longer any
duplicity in their witness before the world. There is
no longer any self-serving in their testimony; no attempt
to serve both God and mammon - they follow Christ now
wherever He goes, be it into fire, death, torture, or
economic ruin. Their love for Jesus no longer permits
any separation from Him Who now is the ABSOLUTE object
of their love and desire.
Again we say, the Lord is looking for such to follow
Him - those who will follow Him long after the "things"
are gone, the crowds have left, the popularity faded;
when the clothes are tattered and torn, there is no longer
any food on the table, and persecution rages all around.
These are the disciples of Jesus - with such people one
can repose trust and friendship; true love is here to
It is in this kind of love that the TRUE church will
be "revealed," and "disclosed" (Romans
8:19) It is this kind of love that will expose the hypocrites
for who they really are. It is this kind of love which
will separate the wheat from the tares. And it is only
in tribulation that this love is truly revealed in all
of is splendor and beauty - the kind that will produce
"The Great Harvest of the Lamb."
We are at the crossroads of the most serious economic crisis
in world history.
The economic crisis has by no means
reached its climax, as some economists have predicted.
The crisis is deepening, with the risk of seriously disrupting
the structures of international trade and investment.
The Nature of the Economic Crisis
In contrast to Roosevelt's New Deal, adopted at the height
of the Great Depression, the macroeconomic policy agenda of
the US government does not constitute a solution to the crisis.
In fact, quite the opposite: it directly contributes to the
concentration and centralization of financial wealth, which
in turn undermines the real economy.
The crisis did not commence with the 2008 meltdown of financial
markets. It is deeply rooted in major transformations in the
global economy and financial architecture which unfolded in
several stages since the early 1980s. The September-October
2008 stock market crash was the outcome of a process of financial
deregulation and macroeconomic reform.
We are dealing with a long-term process of economic and
financial restructuring. In its earlier phase, starting
in the 1980s during the Reagan-Thatcher era, local and regional
level enterprises, family farms and small businesses were displaced
and destroyed. In turn, the merger and acquisition boom of the
1990s led to the concurrent consolidation of large corporate
entities both in the real economy as well as in banking and
International commodity trade has plummeted. Bankruptcies are
occurring in all major sectors of activity: agriculture, manufacturing,
telecoms, consumer retail outlets, shopping malls, airlines,
hotels and tourism, not to mention real estate and the construction
What is distinct in this particular phase of the crisis is
the ability of the financial giants – through stock market manipulation
as well as through their overriding control over credit – not
only to create havoc in the production of goods and services,
but also to undermine and destroy large and well established
This crisis is far more serious than the Great Depression.
All major sectors of the global economy are affected. Factories
are closed down. Assembly lines are at a standstill. Unemployment
is rampant. Wages have collapsed. Entire populations are precipitated
into abysmal poverty. Livelihoods are destroyed. Public services
are disrupted or privatized. The repercussions on people's lives
in North America and around the world are dramatic.
The Financial Meltdown
The subprime residential mortgage crisis leading to millions
of people losing their homes reached its climax in the last
days of August 2008, when financial institutions reported billions
of dollars in losses.
economy: A House of Cards
Friday, September 12, 2008, Lehman Brothers faced collapse
in weekend negotiations behind closed doors on Wall Street.
Black Monday descended on September 15, 2008. Following the
filing for Chapter 11 Bankruptcy by Lehman on Monday morning,
the Dow Jones industrial average declined by 504 points (4.4
percent), its largest drop since September 17, 2001, when trading
resumed on Wall Street after the 9/11 attacks.
The following day, it was the turn of AIG, the insurance conglomerate.
On the evening of September 16, the government "granted an $85
billion loan to AIG in exchange for a controlling 79.9% equity
share of the company".
The financial slide proceeded unabated throughout September.
Barely two weeks later, on Monday, September 29, the Dow Jones
plummeted by 778 points, its largest one-day drop in the history
of the New York Stock Exchange. This followed the rejection
by the U.S. House of Representatives of the government's 700
billion dollar bailout plan, which was slated to come to the
rescue of the banks affected by the subprime mortgage crisis.
In a single day, 1.2 trillion dollars had seemingly evaporated.
The world's stock markets are interconnected around the clock
through instant computer link-up. Instability on Wall Street
immediately spills over into the European and Asian stock markets,
thereby rapidly permeating the entire financial system.
Speculative Onslaught on Black
Monday, September 29, 2008
There was something disturbing about the Black Monday, September
29, 2008 collapse of Wall Street, following the decision of
the U.S. House of Representatives. Did this paper money "vanish
into thin air" as claimed by financial analysts, or was it
"appropriated" by institutional speculators in one of the largest
transfers of money wealth in American history?
There was prior knowledge on how the Congressional vote would
proceed. President Bush's speeches had intimated that a collapse
would occur. There was also an expectation that the market would
crumble if the proposed 700 billion dollar bailout were to be
rejected by the U.S. Congress.
Speculators, including major financial institutions, had already
positioned themselves. Powerful financial actors with prior
knowledge and access to privileged information prior to the
House's rejection of the bill made billions in speculative trade
on Black Monday when the market crumbled. And then on Tuesday,
September 30, they made billions when the market rebounded,
with the Dow jumping up by 485 points, a 4.68 percent increase,
compensating in part for Monday's decline. Those financial actors
who had foreknowledge and/or who had the ability to influence
the vote in the U.S. Congress also made billions of dollars.
Ironically, almost twice as much money was wiped out from the
U.S. stock market on Black Monday, September 29 (1.2 trillion
dollars) than the value of the government's bank bailout under
the Troubled Assets Relief Program (TARP) (700 billion dollars).
Even before the opening bell, Monday looked ugly. But by the
time that bell sounded again on the New York Stock Exchange,
seven and a half frantic hours later, $1.2 trillion had vanished
from the U.S. stock market.
This money did not vanish. It was confiscated from the pockets
of people who had invested their lifelong savings in the stock
While public opinion celebrated the refusal of the U.S. Congress
to accept the Bush administration's bailout, the decision of
the legislature had fed the speculative onslaught.
Political uncertainty regarding the proposed bailout constituted
ammunition for the speculators.
In a bitter irony, the Wall Street banks are "double dippers";
they are the recipients of the bank bailout. And at the same
time they made money speculating first on the rejection by the
U.S. Congress and subsequently on the later adoption of the
bank bailout legislation.
On October 1, Wachovia Bank was taken over by Wells Fargo,
overriding a competing bid from Citigroup. The deal was sealed
with the support of Warren Buffett, the richest man in the world,
according to Forbes, and a major shareholder of Wells Fargo.
The first week in October 2008 represented a crucial turning
point. The Dow Jones fell by 21 percent over the week, with
Thursday, October 9 suffering its biggest fall since Black Monday,
October 19, 1987. The S&P 500 index lost 22 percent of its
value. The entire western banking landscape was in disarray.
Iceland's banking system was destabilized and the country was
put in receivership. The Reykjavik government gave the green
light for the forced bankruptcy of the entire banking system.
Following a pledge by G7 finance ministers and central bank
governors on the weekend of October 10-11 to prevent further
bank collapses, the world's stock markets rebounded on October
13. The G7 had committed itself to "taking all necessary steps
to unfreeze credit and money markets". The Dow increased by
936 points (eleven percent) at the close of trading on October
13, its largest one day increase since 1933. Most European
exchanges had "recovered", with the Paris CAC index rebounding
by an astounding 8.8 percent at the close of trading.
This short-lived "recovery" was part of the speculative game.
Two days later, on October 15, Black Wednesday, the Dow Jones
plummeted by 7.9 percent.
The sequence of a "one day collapse" followed by a "one day
surge" and recovery, followed by another "one day collapse"
a few days later, is part of the process of financial manipulation.
Day to day instability and swings in stock market values
are the source of large windfall profits accruing to "institutional
speculators" and hedge funds.
Financial Warfare: The Powers of Deception
The September-October 2008 financial meltdown was not the consequence
of a cyclical downturn of economic activity. It was the result
of a complex process of financial manipulation, which included
speculative trade in derivatives.
Financial manipulation has a direct bearing on the workings
of the market. It potentially triggers instability in market
transactions. This snowballing instability then becomes cumulative,
leading to an overall slide of market values.
Inside information, high level political connections and foreknowledge
of key policy announcements are crucial instruments in the conduct
of large-scale speculative operations.
"Financial intelligence" and the powers of deceit were the
driving forces behind the 2008 financial meltdown. Covert
undercover financial operations were waged. Those powerful financial
institutions, which had the ability to drive the market up at
an opportune moment and then drive it down, had placed their
bets accordingly. As a result, they reaped billions of dollars
in windfall gains both on the upturn as well as on the downturn.
In contrast, for those who had put their faith in the free
market, lifelong savings were erased in one fell swoop, appropriated
by the shadow banking system. The crash of financial markets
had led to a massive concentration of financial wealth.
The weapons used on Wall Street are prior knowledge and inside
information, the ability to manipulate with the capacity to
predict results and the spreading of misleading or false information
on economic occurrences and market trends. These various
procedures are best described as the powers of deception that
financial institutions routinely use to mislead investors.
The art of deception is also directed against their banking
competitors, who are betting in the derivatives and futures
markets, stocks, currencies and commodities. Those who have
access to privileged information (political, intelligence, military,
scientific, etc.) will invariably have the upper hand in the
conduct of these highly leveraged speculative transactions,
which are the source of tremendous financial gains. The CIA
has its own financial institutions on Wall Street.
In turn, the corridors of private and offshore banking enable
financial institutions to transfer their profits with ease from
one location to another. This procedure is also used as a safety
net that protects the interests of key financial actors including
CEOs and major shareholders of troubled financial institutions.
Companies can be divested from within and large amounts of money
can be moved out at an opportune moment, prior to the company's
demise on the stock market (e.g. Lehman, Merrill Lynch and AIG,
not to mention Bernhard Madoff).
As events unfolded, Merrill Lynch was bought and Lehman Brothers
was pushed into bankruptcy. These are not haphazard occurrences.
They are the result of manipulation, using highly leveraged
speculative operations to achieve their objective, which consists
in either displacing or acquiring control over a rival financial
institution. The 2008 financial meltdown has nothing to do with
free market forces: it is characterized by financial warfare
between competing institutional speculators.
The Federal Reserve Bank of New York and its powerful Wall
Street stakeholders – which are Wall Street's largest private
banks – have inside information on the conduct of U.S. monetary
policy. They are therefore in a position to predict outcomes
and hedge their bets in highly leveraged operations on the futures
and derivatives markets. They are in an obvious conflict of
interest because their prior knowledge of particular decisions
by the Federal Reserve Board enables them, as private banking
institutions, to make multibillion dollar profits.
Links to U.S. intelligence, the CIA, Homeland Security and
the Pentagon are crucial in the conduct of speculative trade,
since that allows the speculators to predict events through
prior knowledge of foreign policy and/or national security decisions
which directly affect financial markets. An example: they purchased
"put options" on airline stocks in the days preceding the 9/11
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