This document was distributed to Commerce Department employees after Ron Brown's mysterious death in 1996. Brown had threatened to bring down Clinton officials before his plane crashed in Croatia.
This document was distributed to Commerce Department employees after Ron Brown's mysterious death in 1996. Brown had threatened to bring down Clinton officials before his plane crashed in Croatia.
This document was distributed to Commerce Department employees after Ron Brown's mysterious death in 1996. Brown had threatened to bring down Clinton officials before his plane crashed in Croatia.
The Wall Street Underground
‘The Wall Street Underzround, Inc,
122 E. Clift Road
Burnsville MN 55337
~Anotefrom Nick: As-you are well aware, this iss.
amount of research that went into the three primary st
une. 1996
Vol.2.No. LL
12.895.5323
tue of the WSU was delayed. The reason is the immense
. From a political standpoint, this is the most important piece
Tye done since "The Impeached President" several years ago. From an economic standpoint, there are two major pieces in
this newsletter. One is an actionlog, that was the best format for me to communicate to you economic events I expect to
unfold. Second is the piece about the pending grain crisis and the subsequent inflation, Please pay close attention. ‘The
bond market IS crashing. It led the stock market up and it will lead the stock market down,
irst D
An interim report on the death of Commerce Secretary Ron Brown.
tipi Ai ik. .
4.1996: Captain Amir Schic lands a twin-engine corpo-
rate jet carrying the Croatian Prime Minister and the
American Ambassador. It is one of five planes to land
routinely on Runway 12 in the hour preceding the
scheduled 3:00 P.M. arrival of IFOR-21, the Boeing T-43A
carrying Ron Brown and his upbeat entourage of American
industrial deal-makers.
tipi Ait rs Businessmen begin to
straggle into the lobby, a few carrying umbrellas to ward
off the very light to moderate rain. ‘They're early because
they're anxious to greet the 35 Americans who at this
‘moment are taking off from Tuzla, Bosnia, 130 miles to
the northeast.
Outside, a perfect breeze blows at 14 mph from east 10
west. Itis perfect because at 120 degrees from the north, it
is only one degree off from being an exact headwind for
the landing pattern of IFOR-21. Contrary to some U.S.
news reports, itis not a dark and stormy night. It is the
middle of the afternoon,
Maintenance Chief Niko Jerkuic, 46, nervously fiddles
with the dials on his VOR (VHF Omnidirectional Radio)
beacon. The VOR is the only instrument that can guide the
IFOR-21 safely to the runway. Jerkuic re-checks his
terrain map again and again. In a couple of hours, he will
be arich man, the two American operatives tel hi, if he
can quietly send IFOR-21 into Sveti Ivan (St. John’s Hill),
‘one of the highest mountains in the area at 2400 feet.
(On the other hand, if he miscalculates...well, the
Americans did not look like men who would forgive
‘Someone who botches an assignment as serious as this one.
All Jerkuic knows is that there is someone on board the
lane who is very dangerous to the American President,
and it ishis job to make sure the plane never lands,
He glances out at some broken clouds around 400 feet
above. They will have no effect. He will have to depend
on the main cloud cover at 2000 feet. Sveti Ivan rises
almost 400 feet into this overcast. Jerkuic calculates he
will have to alter the signal by a full ten degrees,.to send
the plane that far off course into the mountains.
Money or no money, he begins to wonder if he's doing
the right thing. He's seen so much bloodshed in the years
of the Bosnian War, what's a little more?
Cilipi Airport, 2:48 PML: Captain Schic climbs to the
‘control tower to give IFOR-21 a friendly radio greeting
and reassurance that all is well. He describes the Ciliy
weather: visibility cight kilometers (5 miles), winds still at
14 mph, all flights arriving normally. Flying at about
10,000 feet and 40+ miles away, IFOR-21 Co-captains
Ashley I. Davis, 35, and Tim Shafer, 33, thank Schic for
his words of welcome, Because there is no airport radar,
the control tower will not be able to track IFOR~21 as she
approaches the airport
‘These conditions are later described by Newsweek and
others as "the worst storm in ten years” with "visibility just
100 yards." (Their portrayal of the weather is flatly
denied by Aviation Week and Space Technology.)
Adri z a
IFOR-21 reports in to Cilipi routinely. It is the last time
their voice is heard.
is ia 2: The main regional radar
station loses IFOR-21 from its screen, as the plane de-
scends below the cloud cover.Kolocen Island, 2:54 P.M,i IFOR-21 is dead on
course as it passes directly over Cilipi's first beacon, 11.8,
miles from the airport. It then locks onto Jerkuic’s beam,
which is supposed to guide the plane to the runway. But
Jerkuic has mis-set the beam at 119 degrees instead of 109
degrees. This will lead it directly into the mountain range
(and the deaths of all passengers) .
Aboard an AWACS Plane, 2:56 P.M.: The U.S. Air
Force plane keeping track of all air traffic in the arca loses
track of IFOR-21, just as it passes over Dubrovnik. Being
the military version of a Boeing 737-200, IFOR-21 is not,
casily Jost. But because itis less than a mile off course at
this point, no one on the AWACS plane notes any
problem.
Srebreno, Croatia, 2:57 P.M.: Villagers hear a plane
roaring past unusually low and close.
Plat, Croatia, 2:58 P.M.: Villagers Ana and Miho
Dunlica rush outside and see IFOR-21 plunging "like a
ghost out of the clouds.”
Yelji Do, Croatia, 2:58 P.M,: Everyone in this tiny
collection of stone huts at the base of Sveti Ivan hears a
plane go directly overhead in the clouds, then rev its
engines mightily for one instant.
‘Aboard the plane, the klaxon of its ground-proximity
waming device suddenly blares, jolting pilot Davis. But
the two-to-three seconds of warning are far too little. The
plane's left wingtip touches ground, spinning it directly
into the rocky hillside, making an earth-shaking explosion.
‘There is the cackling hiss of a huge fireball as the plane
and its large load of fuel burn. ‘Then a dead silence in the
mist. The tail section remains quite intact, but the rest of
TFOR-21 is all over the hill, making later identification of
‘many of the passengers impossible. The nose of the
fuselage is just a blackish smudge in the ground.
AIL 35 people are dead except for stewardess Shelly
Kelly, who is riding in the tail. She sustains only minor
cuts and bruises.
Cilipi. 3:18 P.M.: U.S. authorities are notified that
IFOR-21 is down, location unknown. However, they are 10
suffer 11 1/2 hours of pre-planned confusion before
arriving at the scene. One prominent report verifies that
pieces of the wreckage have been spotted floating in the
Adriatic, A later report says a CIA trawler has retrieved
some pieces.
News reports say an attempt is made on the life of Ron
Brown's law partner, Tommy Boggs, by an unknown
assailant in a staged car accident in Capetown. Later,
Boggs refuses tot talk about the attempt. Allegations have
2
been made that Boggs was culpable in many of Brown's
activities.
Cilipi, later that afternoon: Niko Jerkuic goes home
to collect his reward, but the reward is not waiting for him.
It comes three days later: a bullet through the chest,
administered just shortly before he is scheduled to be
grilled by the U.S. Air Force accident investigation team,
‘The hit squad wraps his hand around the gun and
departs. The Americans do not want a live witness who
‘could spill the beans later. Like many of the Whitewater
dead, Jerkuic is immediately labeled a suicide, even
though there's no evidence -- and a chest wound is a rare
cause ~ especially with a large caliber pistol (unusual in
Europe).
‘The quick official reason given for bachelor Jerkuic's,
death is despondence over romantic troubles with his
girlfriend, Ihave been unable to find any verification for
this. Instead, I have found that neighbors and friends all
agree Jerkwic was NOT depressed. He had survived the
years of the Bosnian War. He was excited that life was
finally getting better.
Crash site, 7:20 P.M.: Four hours and 20 minutes
afier the crash, the first Croatian Special Forces search
party arrives on the scene. They find only stewardess
Kelly surviving. They call for a helicopter to evacuate her
to the hospital. When it arrives, Kelly is able to get on.
board without assistance from the medics.
But Kelly never completes the short hop. She dies en
route. According to multiple reports given to jour-
nalis(/editor Joe L. Jordan, an autopsy later reveals a neat,
‘hee-inch incision aver her main femoral artery. Italso 7
other cuts and bruises.
is creates in your mind a horrifying scene in the back
of the chopper, as one Special Forces operative holds
down the struggling woman and muffles her screams,
while another slices her leg.
Further autopsies of other passengers probably will not
‘be made. Clinton ordered the cremation of all victims ~
it’s hard o perform autopsies on ashes.All this, of course, cries for an
explanation of why anyone would be so
ager to kill Ron Brown that they would
take 34 innocent Americans along with
him. I will address this in a moment.
But first let me describe the current state
of thinking on the cause of the crash,
Confusion or Cover-up?
Ever since the crash, most reporters and officials have
refused t0 even consider the possibility of foul play. Some
of them are merely following orders. But most have
instinctively fled from the highly disturbing possibility
that Ron Brown was assassinated by people close to his
‘own President.
‘They are confronted with the brutal impossibility of
two experienced pilots following a VOR beam into a
mountain 1.6 miles of course. So they all shrug their
shoulders in bewilderment, None of their theories have
come even close to explaining how a beacon that is,
accurate to within two feet at the landing point could lead
the plane so far astray. But they have tried:
* The Air Force's official explanation is that the pilots
set the compass on the airplane 10 degrees off course. That
is absurd, Besides having an electric compass, the plane
was also equipped with a magnetic compass. Pilots
routinely set their compasses right before takeoff. If the
compass was sct off 10 degrees, they could not have been,
con course when they passed the first beacon, 11.8 miles
from the airport. Instead they would have been miles and.
ails off course at this point. To make this explanation
‘even more absurd, the plane was flying on the VOR signal,
not the compass. That explains the half-truth. Yes, the
plane was flying 10 degrees off course, but it was because
the VOR beam had been tampered with
* One desperate explanation was that a nasty crosswind
"blew" the plane sideways. Not credible. This wind would
require a wind 90 degrees off the actual wind.
* Most of the press and officialdom have blamed poor
visibility. To do this, they have taken the ferocity of the
rainstorm later that afternoon and evening -- and moved it
back in time to the crash hour. But records show the
weather from 2:54 pm to 2:58 pm was simply not that bad.
twas well above the minimum required for landing. And
VHF beacons NEVER get blown off course by the wind.
* Pilot fatigue and strain? Not likely on a 45-minute
flight,
* Equipment malfunction on a rickety old plane?
IFOR-21 was the number two plane in the White House
fleet -- in essence, Air Force 2. Ithad carried Hillary and
Chelsea Clinton and Defense Secretary William Perry just
the week before. Everything about the flight was checked-
out and rehearsed a week in advance.
* Lightning or other troubles causing the pilots to lose
track of the beam? No, they were both drilled in the
standard procedure for Cilipi: if you lose the beam or miss
the airport, you immediately veer TO THE RIGHT AND
UP 10 make sure you avoid Sveti Ivan. Indisputably, the
pilots thought they were following the beacon, Otherwise,
they would have executed the standard right tum within
seconds. Plus, their landing gear was locked down. They
‘expected to land at any moment.
In sum, none of the “official” explanations to date hold
any water, And all of them ignore the glaring fact that
IFOR-2 did not simply stray off path atthe last moment.
By all accounts, she went straight as an arrow to her doom,
the moment she left the Kolocep Island beacon and picked
up the Cilipi beacon.The problem had to be the Cilipi
beacon, which was broadcast to cause the plane to fly 10
degrees too far north.
And even worse...
Could the problem have been that technician Niko
Jerkuic had let his equipment become run-down? No.
‘Thousands of landings had taken place while his equip-
‘ment was running. Some, just minutes before IFOR-21.
To transmit a VOR beacon that's ten degrees off, has got to
be done intentionally.
Yes, that VOR system is old and antiquated. But the
fact is, millions of flights land successfully all around the
USS. every year, using the same old, antiquated equipment.
A magnetic compass is old and antiquated. Columbus
sailed to the new world with one. But to this day, every
ship and plane in the world uses the same old, antiquated
‘magnetic compass. They use them because they work.
Obviously, this explanation could do double duty, by
aiding the suicide theory. In this scenario, Jerkuic simply
felt so bad about his shoddy work that he shot himself.
Unfortunately for the theory, you can't just accidentally
‘bump a knob and make the whole VOR apparatus line up
planes with Sveti Ivan. It takes a sustained effor, from an
‘expert technician,
Plus, the same beacon had guided other planes safely
onto the runway, just before IFOR-21. So Jerkuic had to
have made his adjustment at the last minute,
Alternative scenario: It is very possible ~- and a bit
simpler -- that Jerkuic simply shut his beacon down. At
the same moment, 2 decoy beacon would have been tumed
on by a fellow operative sitting on Sveti Ivan. A decoy
beacon easily fits in a jeep. Thisis an old, old trick.
The question arises: could not the whole issue be
resolved by a quick review of the tapes at the control
tower? They probably could ~ if ihe tapes had not sud-
denly disappeared.‘sid couldn't the air traffic controller shed some light,
‘on things? Certainly. But now he, too, has "committed
suicide” -- which, by the way, is a rare event for such a
cause in Croatian culture.
repeat: No official anywhere is facing these facts. As
result, their "explanations" are laced with words like
“mysterious” and "unknown" and "inexplicably" and
“unfortunate.”
‘The chief investigator for Pratt & Whitney happened to
‘be at the Paris Air Show on April 3, Pratt & Whitney
always sends an investigator when a plane powered by
their engines has a mishap. So the man called his boss in
America, and said in effect, "We just had a crash in
Croatia. I think I'd beter get down there." The response
was "Go pack.’
But as the investigator was packing at his hotel, his
boss called back. "DON'T go,” he told the astonished
employee. "There's not going to be a safety investigation.”
For the first time in its history, the Air Force had
canceled the safety investigation of a crash on friendly
soil. There would only be a quick token legal investi-
gation, designed to enable a committee to blame the pilots
and some Air Force brass, and go home.
At this time, it's an open question whether the black
boxes will play a role. Within hours after the crash, the
Croatian Ministry of Transport announced they had the
black boxes. One and a half days after the crash, Croatian
TV (plus Russian and French TV) announced the FDR
(flight data recorder) and the CVR (cockpit voice recorder)
‘were safely in the hands of the U.S. Marines. They said
that soon, "the cause of the crash will be assessed to find
out what happened.” The U.S. European command in
Stuttgart, Germany, also stated that a black box was
aboard.
Later, the Pentagon brass stoutly denied all this. They
said there were NO black boxes aboard. They claimed the
actual recovered boxes were designed to hold soda pop
and toilet paper. (In fact, the black boxes are painted
bright orange, so investigators can more easily find and
identify them. The Croats, who feel they can tell areel of
tape from a roll of toilet paper, are keeping mum.)
It is hard to imagine that America's #2 VIP plane had
xno black box. And a veteran Air Force mechanic, who
claims to have worked on just about every T-43A in the
USAF, tells me he never saw one without a black box.
Why would anyone want to.
murder Ron Brown?
By all accounts, Ron Brown was a charming fellow
who worked very hard and effectively to promote U.S.
business. Why, then, would anyone want to kill him? And
who would have the resources to do it by bringing down
the #2 airplane in the White House fleet?
‘The answer, in brief, is that Ron Brown was going to
prison --no if's, and's or but's about it. Also Bill Clinton's
presidency was surely going down with him, And the
resident could not allow that.
To anyone who has followed the story closely, this
conclusion is inescapable. Brown was up to his neck in
‘numerous major scandals: Whitewater, the Denver airport
Mensa, the Keating Five, Lillian Madsen and her
Haitian prostitutes, etc. Small wonder that 22
‘congressmen wrote Clinton in February 1995, demanding
he fire Brown,
At the time of his murder, Brown was under inves-
tigation by:
* a special prosecutor in the Justice Department;
* the FDIC;
* the Congressional Reform and Oversight
Committee;
* the FBI;
* the Energy Department;
* the Senate Judiciary Committee;
* and even his own Commerce Department
Inspector General.
But in case you missed the piecemeal accounts in the
papers, here is an extremely condensed summary of 11 of
Brown's woes. As I'll show below, many of them were
shortly going to become Bill Clinton's woes:
1, How did North Viet Nam recently get the U.S. to
Grop its trade embargo against them so suddenly? Easy.
Asa leading Vietnamese businessman and official re-
vealed to the press, the Communist government paid
Brown $700,000 to do it. The money went into a Sin-
gapore bank account, the embargo fell, and Clinton
squashed a fecble FBI attempt to investigate. He and
Brown also neutralized a federal grand jury probe later.
2. Brown sold plane seats on other trade trips besides
the one to Bosnia/Croatia. Companies making big
contributions to the Democratic Party or the Clinton
Victory Fund could buy access and tax break or regulatory
favors.
3. The 1-23-95 U.S. News & World Report broke the
news that Brown had bought a $360,000 townhouse for his
girlfriend, Lillian Madsen, a prominent political player and
whorehouse madam from Haiti
4, Brown used to receive $12,500 a month as the P.R.
agent for Baby Doc Duvalier, the much-loathed dictator of
Haiti, Brown received this money for nearly five years,
while he was a member of the Democratic National
Committee. Brown also managed Baby Doc's $50 million
investment fund, most or all of which is now in Viet Nam.
firms. z
5. Brown was a key board member of Chemfix, aLouisiana "waste management" corporation that landed a
{$210 million contract with New York City in 1990, with
Brown's help. That was despite the fact that Chemfix had
{wo other contracts with other municipalities cancelled
because of its inability to perform. Brown got company
stock at 24% of market value, making him millions. New
York mayor David Dinkins got to host the Democratic
Convention. A typical Ron Brown win/win deal.
6, Brown founded Capital/Pebsco, which fresh out of
the box -- got a contract with Washington D.C. mayor
Marion Barry to handle the city's pension funds, Not a bed
start for anew company with no investing experience.
7. Ina deal that has left CIA peéple livid, Brown
okayed the sale of a new U.S. gas turbine engine to China,
China will use the engines in its cruise missiles.
McDonnell Douglas developed the turbine as a military
engine. But Brown arbitrarily reclassified it as “civilian.”
That let China build a fleet of missiles, using U.S. engines
and technology, which they can point at (who else?) the
US.
8. Brown irked Congress and most of Europe by acting
as point man for Clinton to bring Iranian influence and
‘weapons into the Bosnian War. That broke the US.~
endorsed arms embargo. The money for the arms most
likely came from Commerce and Agriculture, slush fund
money channeled to U.S. manufacturers; from there to
USS.-friendly nations and firms overseas; and from there to
Iran,
‘The arms included helicopter gunships, big artillery,
stinger missiles, land mines, anti-aircraft guns, anti-tank
‘weapons, grenade launchers, and other quality weapons.
Most of the arms will stay on the European scene for
decades to come, keeping the area destabilized. As one
eading munitions dealer put it:
"Iran/Contra was slingshots and cap guns compared to
the quantities and size of arms given the Croatian Serbs”
That is why the Croatian Muslims enthusiastically
hosted Brown's planeload of executives. They felt grati-
tude for the free arms, as well as a desire 10 do deals.
9. Brown was the partner of a Democratic fund-raiser
named Nolanda Hill. Hill paid Brown $500,000 for his
‘50% interest in First International, Inc., a company that
never made any profits. Most glaringly, Brown never
invested a cent in First International.
First Intemational owned Corridor Broadcasting,
which had defaulted on massive government loans of $40
million. The loans were passed on to the FDIC, which was
unsuccessful in collecting anything from Hill, Yet at the
same time, First Intemational was making large
Contributions to the Democratic Party, and paying
hundreds of thousands of dollars to Brown, through shell
corporations,
These payments to Brown -- three checks for $45,000
each -- were the core of Representative Clinger's evidence
that forced Janet Reno to hire Daniel Pearson as special
investigator of Brown's crimes. They were cashier's
checks, all cut the same day in 1993, with sequential
humbers. Yet supposedly, the money came from three
Contributors, acting independently. Brown never disclosed
or paid any taxes on these amounts.
10. By personally delivering a warning letter signed by
Clinton, Brown was able to force a bargain deal with the
Saudis for $6 billion in American military aircraft and
hardware, To get the planes, the Saudis also had to accept a
fat $4 billion phone contract with AT&T: otherwise, they
would get no aircraft.
Also part of the deal: AT&T had a multi-million dollar
side agreement with Brown's First International, which
was hited as a “consultant” (sce above). And the Demo-
cratic National Committee and the Clinton campaign fund
were beneficiaries.
This is how big business is done in Clinton's America.
11. The last nail in Brown's coffin was pounded in four
days before his crash, FBI and IRS agents subpoenaed as,
‘many as 20 witnesses for a serious new grand jury probe of
Brown in Washington. It seems that an Oklahoma gas
Company called Dynamic Energy Resources gave Brown's
son Michael $500,000 in stock, a $160,000 cash payment,
and exclusive country club memberships. Former Dynamic
president Stewart Price told a Tulsa grand jury that the
‘money was to be routed to Ron Brown, who was expected
to “fix” a big lawsuit for Dynamic.
There is little chance you heard about this death-knell,
‘grand jury case. Radio station KTOK in Oklahoma
Teported it on March 28, 1996; the Washingion Times
made it a front-page story on March 29. But then a lock
‘was put on the story. The AP and New York Times wire
+ ~ Services blocked any further release of the information.
Welcome to the new world order.
-_.. Final proof: the 2-8-96 Washington Post reported
Brown had retained top legal gun Reid Weingarten, a
former high official in the Justice Department, as his
criminal attorney. You don't pay his price ($750 an hour)
unless you know a criminal indictment is coming, and
you're probably going to jai *
Janet Reno appointed Daniel Pearson as Brown's
special prosecutor earlicr this year. She gave him blanket,
permission to investigate anything. That's when Brown
~ angrily demanded that Clinton force her to withdraw
Pearson. But Reno couldn't do that. She had been backed
into a comer by Rep. William F. Clinger, Jr. chairman of
the House Government Reform and Oversight Commitee.
Clinger had copies of Brown's First International checks,
plus other incriminating documents,
‘When Clinton said he couldn't comply, Brown went
ballistic. His fatal mistake -- according to Brown confi-
dants who requested anonymity -- was telling Clinton he
wasn't going 10 take the rap. He wasn't going to let his
wife and son take the rap, either. (Both had received
hundreds of thousands in under-the-table payments
themselves.) He was going to finger Bill and Hillary
instead. That would have sunk Bill's reelection campaignon the spot.
Dead man walking
‘From that point on, Brown was dead. Like Vince
Foster before him, he knew too much, He knew where all
the money went for the payoffs, bribes, scams, money
Taundering, cover-ups, participation fees, hush money and
side deals -- all the way from one-man operations to vast,
multinational trade weaty fixes.
‘The phony suicide fakeout used on Foster could not be
repeated, of course, But an airplane crash is always
viewed as an accident. So agents were sent -- not directly
by Clinton, but through a White House staffer -- to a
standing network of high-level killers, sometimes called
the "Octopus." If the frequently stormy weather at Cil
had not cooperated, there would always be another trip --
somewhere, somehow -- and soon.
If the preceding data were widely know, America
would realize Bill Clinton is by far the most dangerous
‘man ever to live in the White House. His complex
personality certainly has a genial side. But a clear overall
picture of this man must include the brutal nature of the hit
team that carries out his muttered wishes, and looks after
his political fortunes.
This is not simply the rag-tag "Arkansas mafia” that
followed Clinton to Washington, It is a small but ex-
tremely well-organized network of pro-establishment
heavy hitters and their ground-level operatives. With a
few changes of face, they have been on the scene since the _
1970's. They are a diverse band of high-level thugs who
are the muscle squad of the establishment.
If you are a member of Congréss, I urge you to assign
‘your most trusted staff members to investigate these
crimes, Start with a conversation with Daniel Pearson. He
is still willing to share his information.
Till now, I've taken you up through events that started
in 1978. Now I'm going to take you on a trip into the
future. 1 use information from highly-placed sources.
Inside information and insights that years in the business
have given me. Tm going to tell you why Bill Clinton's
crimes are important to you.
The events I describe below are fictional, But at some
point they (or something very similar to them) will
happen. The only issue is when, and the specific sequence
of the events. Let me take you on a journey, to show you
how the political/economic world really works.
I know you will be spellbound. This story puts
together all the little pieces you've heard about, in an
intricate mosaic. It paints a frightening but realistic
picture.
T want to leave you with one thought. In every great
crisis, there is great opportunity. When vast sums of
money are lost by most people, the few who have posi-
tioned themselves correctly make extraordinary amounts
of money. During the Great Depression, the vast majority
of Americans lost all they had. The few who were
positioned correctly made fortunes. The key is knowledge
of what the future holds, and the courage to put that
knowledge to work.
Go ahead and enter with me into the exciting logical
conclusion of the events you've scen earlier.
Nick
‘Nate: To keep the lawyers happy, I have to tell you
these events are fictitious. But I'm sure you're able to read.
between the lines. You may have heard some of what
you're about to read here. But I think you will enjoy the
‘overview, and how the pieces you've always known -- the
suspicions you've always had -- come together to tell you
the complete story.
Ive been in this business over 20 years. I can tell you
for a fact that markets ARE manipulated and controlled.
‘The masses always end up losing money in the markets.
Disclaimer: the following piece is entirely fictitious.
But itis based on events that have already taken place
and others that should soon occur. Please draw whatever
conclusions you like as to the guilt or innocence of the
parties involved. Also, some people may find some of the
language offensive. But if anything, we have grossly
understated the way top politicians, traders and Wall Street
ower-brokers really talk, when the camera is not on them.
March 18, 1996, Oval Office, White House: Janct
Reno puts an urgent call in to Bill Clinton. She tells him
the Special Investigator has irrefutable evidence that Ron
Brown committed criminal fraud on his Federal Disclosure
Forms. Brown is going to jail. Clinton hangs up the
phone. He buzzes George Stephanopolous for an
emergency mecting of his key trusted advisors.
a.m, March 19, 1996: Clinton informs his two most
tuusted advisors that Ron Brown is going to prison. Reno
can no longer protect him. Stephanopolous screams, "I
told you not to trust that damn Brown. He's too greedy.”
inion: "Someone will have to tell Brown Tcan't
cover for him. He's going to have to take the rap.”
Patsy Thomasson says, “Tl tell him.”
"Make sure you do it out of the White House, in asecure place.”
"Do I promise him the usual? You know, cash, take
care of his family, presidential pardon after things cool
down?”
“Promise him anything, Just get him to shut up and go
peaceably."
‘Washington beltway, 3 days later: A limousine from
the White House motor pool speeds around the beltway.
Inside are Patsy Thomasson and Ron Brown. Thomasson
is telling Brown they can't protect him any longer. Reno is
going to have to prosecute him,
Brown gets enraged. "What are you talking about? We
‘were all in this together. I set up the offshore corporations
Tike you told me to, I funnelled the money into the secret
accounts.”
“Yes, you did," Patsy says, "but you got too greedy. I
‘old you you were pushing this too far. You had to go and
put your wife and son on the payroll.”
Ron Brown then says, "I won't go down alone. You
protect me. I want to talk to the president."
“You know how itis with this kind of thing, Ron. Just
let itcool aliule, Resign, fight the charges, we'll try and
fix itso you don't do any time.”
“hail time,” yells Brown, "What about my wife and
son?"
Patsy says, "Well, you all took the money. They've got
you. You can probably make a deal,"
Ron Brown loses it. “Im not going down alone. 1
raised the money that put Clinton in office. He owes me. I
‘made us all rich. I put the money in the secret bank
accounts, the corporations. You all owe me. He's the
president of the United States. He can make this go away.
He has in the past."
“But Ron, i's different this time, They've got you on
the Fed Disclosures. You didn't declare the income, It's an
‘open and shut case.”
“Idon't care. You tell him I'm not going down alone.
Tm gonna tell everything Lknow. The payoffs, the slush
funds, the offshore bank accounts, the bribes, everything,”
All of a sudden, Pasty tums her steely blue eyes on
Brown. She smiles and says, "You'e right, Ron. I'l talk
tohim. Til get something done for you. I'l all be o.k."
‘The Whit. val Office, 4 .
‘Thomasson enters Clinton's office, and Clinton dismisses
all his bodyguards and attaches. He switches on his white
sound and magnetic field generator. In case Patsy or
anyone else is trying to record the conversation, this will
stop them.
"Well Patsy, how did it go?"
“Bad,” she says. "He's not going to play ball. He
threatened to tell everything. He's dangerous. His whole
family is involved. Mr. President, he's already hired
criminal defense counsel. He's scared.”
Clinton gets outraged. “I never did like the son of a
says Clinton, "He's stupid. When I offered him the
Secretary of Commerce job, he didn't even know what the
Commerce Department was.”
"Yes, know. But we needed a bag man, someone to
raise the money,” says Patsy. "We had to reward him for
getting Jesse Jackson on board for the last election."
“Patsy, we don't have any choice now.”
“Tunderstand, Mr. President."
Clinton gets up, tums and says “An accident this time,
Patsy. The suicides aren't working.”
“Yes, Mr. President.”
“Oh, and Patsy, make sure you get all ihe sensitive
documents out of his office without incident this time. We
don't need a repeat of the Vince Foster fiasco."
“No problem, Mr. President. We're a lot better at this,
sort of thing now."
April 3.1996. Ron Brown's plane crashes into Sveti
Ivan Mountain. The White House is notified immediately,
but holds off all press announcements for 90 minutes.
During that time, Clinton administration officials enter
Ron Brown's office at the Commerce Department and.
Femove two boxes of sensitive documents. The White
‘House and the press then proclaim Brown's death "a tragic
accident."
‘When the news finally is released, the
announces that Ron Brown's plane crashed in the Adriatic
‘Sea, some 19 miles away from the real crash site. It's also
falsely reported that wreckage was found in the Adriatic
Sea. Because of this, the press does not reach the crash
‘until 11 hours later. This gives enough time to make sure
the crash site is sanitized, with no survivors or black boxes
to show what really happened.
lity May ik
Kesigns. Jeff Vinik, world's most celebrated fund manager,
who traded Fidelity's Magellan Fund, world’s biggest
fund, is forced to resign. Fidelity can no longer cover the
massive bond losses he's taking.
In what's supposed to be a stock market mutual fund,
half of his 10 biggest investments (including the top 3) are
in heavily-leveraged, derivative based bonds.
Bond market continues its plunge. Interest rates ~ that
‘were under 6% ~- have now soared back up to over 7%.
People who bought bonds -- including Fidelity Magellan
Fund ~ are losing a fortune.
May. 23, meeting at Fidelity Magellan's Boston
headquarters. Present are Fidelity’s CEO, the secretive
‘Ned Johnson, and the new fund manager for Fidelity
Magellan, Robert Stansky.
Stansky: "Now listen, I've agreed to clean up your
mess. But it’s gonna be ugly. These bond losses are
unbelievable. The market will not just stand by and let me
Jiquidate without pounding us even further under water."
Johnson: "I don't care. We'll keep this as secret as we‘can, aid give you the usual support. You can unload some
of the losses on our other funds, on our in-house trading
floor. That way you won't have to book heavy losses, at
least on part of the mess. Of course, from a record-keeping
standpoint welll book what profits we can now, and push
losses as far into the future as we can. You know, just like
Barings did, and Sumitomo is. When it comes out, we'll
find some minor desk-clerk trader, and blame it on him.
You know, a "rogue" trader. Well tell them we didn't
know about billions of losses for decades.” (Laughter.)
“Tunderstand. But you guys are being investigated by
everybody. There's lots to find her
"The SEC and those other clowns? They're nothing.
Wee too big. They can't touch us. If they hurt us, they
collapse the market, and then they take the heat. We got
the life savings of three generations here. Remember
Chuysler in 1981? They couldn't let them go down.
Remember Continental, that big bank in Chicago? The
Feds bailed them out, lock stock and barrel. We're 50, 100
times bigger than them. They won't dare come after us.
They have no regulation over the fund industry. But here's
the bottom line you gotta realize. You're being paid
millions to keep the ballin the air. Don't drop the ball.
‘We go down, you go down. We're all in this together.”
Yeah, yeah, Iknow. We buy these stocks back and
forth among each other, all the funds around the country
just bid the market higher and higher. This market can't
ever go down.”
“Listen, kid, don’t get cocky. Eventually the bubble
will burst. Eventually the balloon breaks. Eventually
there's to0 much hot air. But hopefully, by then we're long
gone.” :
“Right, that's why we're taking our money out now.
We've got our money stashed. We don't give a shit, We're
just gonna ride this horse as far as it will let us. When its
legs give out, we'll shoot it in the head and disappear."
May 26, Little Rock Arkansas. Both of Bill Clinton's
‘Whitewater partners -- Jim and Susan McDougal -- are
found guilty of fraudulently obtaining loans from the U.S.
‘Small Business Association, and converting the money to
other uses. These uses include paying off Clinton
campaign debts; making contributions to his campaigns;
providing money to his Whitewater project. Clinton's
former Lieutenant Govemor -- present Governor of
Arkansas Jim Guy Tucker - is also found guilty. He
immediately resigns as governor in disgrace.
i A hurried meeting of
Clinton's trusted advisors. Clinton is raging.
“What the hell's going on? I thought we had that
Tucker and McDougal thing handled. I can't believe they
got convicted, in Arkansas of all places."
“Yes, Mr. President,” Stephanopolous blurts out. "But
the jury was a bunch of these moralistic asses. They
couldn't be bought off. They even prayed about it! Can
you believe that crap?”
*Now what?” says Patsy Thomasson,
"You think the prosecutor can turn Tucker, and get him
to testify against you?” says Stephanopolous.
Clinton: "I don't think s0. Ttold Tucker I'd give him a
full pardon. Cash, whatever he needed. Tucker and I go
back a long way. I've got a lotof dirt on him. It's that
crazy McDougal and his whore wife I'm concerned about.”
"What about the (expletive deleted) press?" says
Hillary. (In contrast to her public image, Hillary is
notorious for having a dirty mouth behind closed doors.)
Stephanopolous: "I got them in the bag. We'll do our
usual spin. You know, ‘it didn't involve the president.
We've got Ferraro on Cross Fire, the reporters on the.
‘Times and Post, They'll all pull for us. We've also got
Sara Fritz at the L.A. Times. If there was a picture of you
murdering Chelsea, Sara would spin it as a good thin
"We have a problem, though,” says Hillary. This is
going to get worse. That other trial is coming up in Little
Rock with those (expletive deleted) bankers. They've got
them nailed. Bill, you should never have taken that damn
cash.”
"Give me a break, Hillary. We were flat broke. You
were bitching to me every other day about how poor we
were. But now things are different. We've got the money
and the power to make things go the way we want.
Damnit, I'm the president of the United States. Make this
go away. Have you got it? Don't let the nickel and dime
‘Whitewater shit get in the way of the important work we've
started.”
May 26, Special Whitewater Prosecutor Ken Starr's
Office, Little Rock AR. Jury verdict has just been re-
leased. Champagne glasses click.
“Congratulations. Great job. Iam really surprised. 1
never thought those Arkansas juries would go against Bill
Clinton, He is ahome boy. The evidence was
‘overwhelming. But Ihave to give them credit. They were
honest Americans, who wanted to know the truth and do
the right thing. It's good to know we still have people like
that left in America.
May 30, 1996, Wall Street. Top investment bankers
‘and Wall Street powerhouses are holding a high-pressure
strategy session.
"What's the word?"
just spoke to Rubin (U.S. Treasury Secretary). He
said there's nothing to worry about. He's leaning heavy on
the Fed, o try and stop them from raising rates in the July
meeting. But he's waming us, the future inflation reports
are going higher, even with all the fixes in. And you know
that wage inflation is shooting up its biggest in years. I's
going 10 zoom with this minimum wage increase.”
“Tknow, know. But we still got that problem at
Fidelity.”
“I thought that problem was solved when we got rid of
Vinik.”"Not even close. [told you not to unload all those
bonds on Fidelity.”
“Hey, don't blame me, Vinik was a willing sucker. We
{old everyone there was no damn inflation. He bought it
hook, line and sinker. We unloaded billions in bonds on
hhim and his buddies. We made a killing.”
*Yes, but you must understand the game has gotten
bigger than that. There's a hell ofa lot of money in those
funds. You guys have to keep in mind how successful
we've been. This mutual fund deal is the greatest stock
‘market scam we've ever had. It's taken 60 years to get the
suckers back in the game en masse. Finally, our wildest
dreams and hopes have come trae. We've got the savings
of America tied up. We can liquidate them any time we
‘want, We got the people convinced mutual funds are the
ONLY investment. We even got them buying mutual
funds for their kids in grammar school, for their
‘etirements!" (Laughter around the room.)
“This is the most successful marketing job ever done.
It's kind of funny. Instead of investing in their productive
lives, their businesses, their future, we've got them giving
their money to us. And they think they are investing for
their retirement!" (More laughter.)
“And that will be their undoing. Guys, we've pushed
this too far. These funds are buying shares of dog-shit
stock at 10 times what they are worth, The fund suckers
are never going to see that money again. Ihave to be
hhonest with you. The flows we've seen into the funds have
exceeded our wildest dreams. We're just going to have to
accelerate our plans quicker."
“You mean the wipcout, the crash?"
"Yes, gentlemen. I'm afraid we cannot hold back the
tidal wave much longer. Besides, this Whitewater thing is
starting to get out of hand, It's the perfect cover."
"What are you hearing out of Boston, Kevi
foliom line is that the bond market has already started
crashing, We told the public yields were going down to
4%, Instead they went up, 107% and more. Even those
Congenital idiots from the Ivy League colleges, who trade
the funds, are starting to figure out inflation is coming on."
"Well boys, le's just flush the toilet on this market.
Afier all, we've made trillions.”
*Can we make it past the election? It would be better
that way."
"I think so, but itl be tough. Depends on how fast the
‘Whitewater skeletons come out of Clinton's closet, and
how long we can keep the Fed from raising rates. That
could tip things.”
Present are Jeff Vinik and a few close friends. Two friends
who are across the room, out of ear-range:
“Frank, I'm really worried about Jeff. He's been
drinking for days. He's really out of it."
“Well, he's a proud guy. He doesn't take defeat well.
“Tknow, I know, but who is this Nick Guarino and the
Wall Street Underground he keeps ranting and raving
about?”
"Oh, that’s the guy he blames for blowing the trade that
wiped him out. He writes that damn WSU newsletter. We
had a good thing going. Jeff was using those mountains of
money in Fidelity to buy bonds, and drop interest rates.
“Everything was going our way. Wall Street was
spreading our line, and those guys on the Internet were
sucked in along with everyone else. Everything was great.
Every financial news commentator was telling the news
like we wanted them to, You know, inflation is dead.
Interest rates are going down.’
"Then along comes this Wall Street Underground guy.
He's gota big readership. More and more traders are
following him. The guy's got a phenomenal record. You
remember, he's the guy who was on the right side of the
Bunker Hunt silver crash. And he's the guy who buried us
in the 1987 crash, the SOB. There's no telling where we
could have gotten mutual funds to today, if that 1987 crash
hhad not set us back. Clinton had him thrown in prison, It
sill didn't stop him.
"Well, the guy's back. They tried for years to get him
to trade for the big guys. He won't do it. He refuses any
kind of fund trading. He's an eccentric. He hates Wall
Street and what he calls their lies. He's one of those.
idealist screwballs. He locked horns with the Clinton
‘group over that big bank that went bust in Arkansas. Ever
since, he's been on some kind of crusade to tell the truth.
He fancies himself the trader for the litle guy.
"Anyway, Jeff was buying bonds. Soros and those
other guys were buying, too, to bid the yield lower. This
Guarino guy was telling his readers to sell. He's been
saying inflation’s coming on, the Fed's going to raise rates,
and all that. He's areal pain in the ass. His readers made a
killing in bonds, while we got wiped out. "eff
believes if this guy hadn't broken this story, we could have
pulled off this bond scam, Can you imagine some asshole
showing every little-dick guy how to trade the market, and
doing it for a lousy $100 a year? Hell get his, T promise
you.
“Clinton is really concerned about him. They say he's
the one man who could bring Clinton down. I figure
they'll uy to silence him, But they have to be careful. He's
got lots of powerful friends. He's got the Whitewater story
written down and documented. They don't want to make a
‘martyr out of him.”
In the background, Jeff Vinik keeps shaking his head,
muttering "Wall Street Underground, that $.0.B.
White House, "That S.0.B. Guarino,” says Clinton. "The
ass sent his Ron Brown story all over the country. Now it's
all over the place. Remember what happened last time?
When he broke the Whitewater story? This is darn
serious. We got a problem here.”
“You got Nolanda Hill to say Ron forced the pilots tofly into a storm, didn't you?” asks Patsy.
“Yeah, but Guarino got hold of the weather reports. He
knows what really happened. Who's giving him this
information?"
“Idon't know,” says Stephanopolous, “but we trans-
ferred the top three Air Force guys out of Bosnia, to try
and plug the leaks and deflect the heat.”
"Can't we stop Guarino?”
“We've tried. We stuck the CFTC and SEC on him, to
tty and stop him from publishing. Nothing. He's clean,
t's just freedom of the press. The guy just publishes. He
doesn't do anything else.”
"We tried to nail him carly on, before he became too
popular, He was riding his bike in California. We missed.
‘We went back at him again, but they killed the wrong guy,
on another bike. Then he disappeared. Now he's a
problem. The guy's too popular. Well figure something
‘out, though.”
“Important thing now is to get out our spin. Have
Brown's widow say she's terribly hurt by these reports,
they're not true. Play the race card,"
"Of course, we've changed the weather reports, to make
itlook like there were bad storms. And Time and
‘Newsweek and all the hacks in our pocket went along with
ur story.”
Anne 18, the home of ex-governor Jim Guy Tucker.
His wife is sobbing. "They're saying you're going to
prison for 20 years. What will I do? Ilove you."
“No honey," says Tucker, “that won't happen. Ican
appeal. Besides, Bill will give me a pardon.”
Wife sobs harder now. “I don't rst him, or his bitch
wife. He may just give you a bullet instead,”
"Don't worry, honey, I'vé got an insurance policy
“Idon't want money. I want you,” she says, sobbing.
"No, Tim not talking about the life insurance policy. Tm
talking about the special prosecutor in Little Rock."
She sobs a litte less. "I told you we should have made
@ deal with them, to tell the trath."
“Honey, you don't realize what these monsters are like.
‘Clinton's a dangerous man.”
Wife starts sobbing even harder. "I know, I know, he's
the one who got you into this thing. Do you really think
Vince committed suicide?"
‘The Fed
raises interest rates 1/4 point. Bond market keeps sliding.
‘The Dow dips further. Gold and silver climb. The dollar
falls. The Wall Street Journal and other news. publications
assure the public the Fed won't raise rates further.
‘The Wall Street Underground wars subscribers that
the Fed will have to make a big move and soon. Sub-
scribers are urged to buy precious metals and prepare
themselves for the coming inflation ~ and the conse-
‘quences its revelation will cause.
Special Whitewater Prosecutor Kenneth Starr’
i i Star, the
Republican appointce, has assembled his entire staff for an
emergency session,
"Lust got some information from prison. There was an
attempt on Web Hubbell's life,” Starr says,
(Hubbell was Hillary's former law partner at the Rose
‘Law Firm -- supposedly Bill's closest friend — and the #2
‘man in the Clinton Justice Department. He was forced to
resign for illegally billing Rose clients. Hillary was part of
this scheme, as was Vince Foster, who was murdered in
1993. Hubbell pled guilty and is now in prison, where
they tried to kill him.)
"My God, no.”
"Yeah, it looks like Bill's up to his old tricks. They
transferred some guy named Tumer out of Leavenworth to
hit Web. We got the guy in isolation, we're sweating him.
It definitely was a put up job.”
“What about Hubbell?”
“His arms were gashed up bad with a shiv. They're
stitching him up now. But he'll be fine. We've moved him
into pc. (protective custody)."
“Will we get his full cooperation?”
“Yes. He's scared shitless of Bill Clinton. He knows
we're the only thing that can keep him alive."
“Are you going to prosecute Hillary? I know we have
enough on her."
“Thaven't decided yet. This is NOT to leave this room."
Knock on the door. A minor aide enters.
“Ljust got a phone call. Tumer was found hung in his
cell.”
“How the hell did that happen?"
"Well, you got to understand that the prison system is
rum by the Justice Department, under Reno, and you know
she'll do whatever Clinton tells her to, We didn't have time
to get this Tuner guy moved."
July 10,1996: Wall Street Underground subscribers
take profits for the third tinte this year on their bond
portfolio, They start shorting the market again,
july 1. Boston MA. Top traders for the family of
(Around the water cooler" is ah expression used by
traders to refer to off-the-record meetings everyone can
deny. ‘That is where they plan their illegal manipulations,
‘most ofien to enrich themselves at the expense of fund
owners.)
“What's up, guys?”
“We're having lots of trouble keeping this market from
dropping. The selling pressure keeps getting bigger.
We're spending billions on every dog-shit stock, buyingbback and forth with each other. But it's not working like it
used to any more. Even the S&P leveraged tricks aren't
working.”
"Yeah, but we're doing 0.k. in our personal accounts.
As long as we never buy shares of stocks in our own funds,
they'll never figure it out. Only buy shares in our buddies’
funds.”
“With all those foreign corporations we set up, they'll
never figure out i's us. Now remember, guys, in the
accounts with our names on them, keep it to normal
trading. Whatever you do, don't buy stocks in froit of
‘your own fund's purchases."
“This is like shooting ducks in a barrel. We're making
millions. It's great, isn't it?”
“That's why we're in this game. To make money.
We're sure not in it to make any profits for the little old
ladies, widows and orphans, and yuppies for retirement."
“Ifonly they knew.” (More laughter.)
“Listen guys, you know eventually this game will be
up. With this bond market dropping, and interest rates
going higher, more and more people are figuring it out.
Besides, did you sce the last issue of the Wall Street
Underground? That S.O.B. detailed what he called Fund
Fraud.”
"That's o.k. Don’t pay any attention to that jerk. Its
just sophisticated investors that listen to him. ‘All the
suckers are reading Barron's, the Wall Street Joumal and
Investor's Daily, listening to CNN, and tuning into the
hhype we put out on the Internet.”
‘These are the top bankers and Wall Street power brokers
who sell stocks to the funds, In essence, the research they
supply the funds entices them to buy stocks at 20-10-50
times camnings -- or in many cases, with no earnings at all.
They are ultimately at the receiving end of the funds'
buying. They generate the market spin mutual funds rade
on. They truly manipulate the markets and the economy.
"Listen guys, we got a problem. This rally has stalled
as you well know. The bond market sucks. Gold and
silver are ready to climb."
“Tthought you guys were sitting on the precious metals.
‘That's key here.”
"We have been. We got the mines to sell forward, with
‘our phony-baloney reports. Funds are shorting the shit out
of the market, But more and more people are starting to
see inflation. We can't keep it under wraps forever.”
“And we got another problem. The U.S. Treasury debt
auctions are not going well. We're still choking on the
inventory we got the last go-around, Rubin got the Federal
Reserve to buy vast amounts of U.S. Treasuries, printing
‘money to cover them, But we can't unload all those
‘Treasuries. The U.S. government is issuing more debt than
the market can swallow at these rates. More and more
people don't want 10 get stuck with this stuff."
"What about the Japanese?’
WW
“Of course, they're buying to try and keep the yen
down, and support the dollar. But there's a limit to how
‘much they are willing to do or lose, Besides, we have
another problem, These damn mutual funds are losing
more and more money. Boys, we might be at the end of
the game. We might have corralled all the money into the
stock market we can get.”
“Yeah, and Guarino from the Wall Street Underground
hhas just done a series of articles on the building inflation
and the mutual fund scams. He's exposed a lot of the true
numbers. And he has his people layering on positions
every time we take the market higher. Boys, it's creating
problems for us. It's taking a lot more money to take this
market higher. Listen, we're talking about willions. If you
have a sharp trader that’s going to take out several hundred
million dollars -- or even a few billion because he's sharp
enough to know what's really going on -- let him do it. It's
ot enough money to worry about."
“Yeah, but now the mutual fund suckers are finally
starting to sit up and take notice. The stock market's
sliding down. The bond market keeps dropping. New
cash flows into mutual funds are starting 10 dry up. And I
know for a fact that Starr can criminally indict Hillary any
time he wants.”
“What about the upcoming Fed meeting? Can we keep
things nailed down?”
i's another problem. If the Fed raises rates a half
point like they should, the cat's out of the bag.”
“I thought we had Greenspan nailed down.”
“Yes and no, It's just not that simple. Clinton's starting
to look a litde shaky in the polls. The Republicans still
haven't confirmed Greenspan yet. Incredible. I can't
remember anything like this. Greenspan should raise rates
point. He may only raise a quarter, or do nothing at all."
"Yeah, it's absurd. Word I get is that there is enormous
pressure on them to tighten. In fact, the market has already
tightened nearly a full point for them.”
"You know, they don’t like to be seen lagging behind
the markets this bad. When that happens, it becomes
obvious to everyone it's political. Number afier number is,
showing building inflation. With Clinton looking weaker
in the polls i's getting harder to get everyone on the Fed
to toe the line. Here's the problem. If they don't raise
rates, and Clinton gets back in, they're fine. But if they
don't raise rates, and the Republicans win, there's going to
be hell to pay."
“What's your bet?”
"Too close to call. Hopefully, they can wait till August.
‘That's when the gig's up.”
August 6, Federal Reserve, 2 weeks before the Au:
gust FOMC meeting. Fed Chairman Alan Greenspan's
most trusted advisors are present,
"What do you think?" says one of the governors.
"We have to raise rates, and significantly," says Alan.
“Inflation is on the rise, rates are going up, wages arehigher and the economy is hot. We have no choice.”
"But Alan, this close to the election?”
"Clinton may not win. This Whitewater mess is
busting out all over. We're better off raising rates now,
before the whole world sces us as politically manipulated.
Remember, we're supposed to be independent.
(Laughter.)
8, White Hi 7 Cli
ing. Clinton
is infuriated that the Fed is going to raise rates.
“Mr. President, I can't keep the troops in line," says
Rubin. "You're falling in the polls. The Republicans have
held up Greenspan's confirmation. And Whitewater is
becoming a bigger issue by the minute.” "You tell
Greenspan there's going to be hell to pay when I get
reelected. And 1 WILL get reelected, with or without his
help.”
"That's unfair. Greenspan has played ball for two years.
He shouldn't have lowered rates the last two times when he
did. But he bowed to your pressures, to get himself
fenominated. And to be honest, you haven't come
through.”
Clinton's nostrils flare. “That's not my problem. It's
those damn Republicans, They held up the confirmations.
You tell Greenspan there will be hell t6 pay if he raises,
rates now.’
Arkansas, Kenneth Starr announces the indictments of
three current White House staffers and two former staffers,
over what's commonly known as Travelgate. :
The bond market sniffs that interest rates are going up,
and continues its plunge. The stock market starts falling in
ceamest, dropping below 5400. *
insiders: "Allright, guys, you got things set for next
week's FDIC meeting?”
“No problem. We got Dobbs and Rukeyser doing their
usual no-inflation tap dance."
“What's the word from the Fed?"
“The fix is in. They're gonna raise rates a full point.”
“How are we set up?”
"Like usual. We got the fund boys buried one more
‘ime, We've convinced those idiots the Fed is going to
leave rates unchanged. I's like taking candy from a baby.”
(Laughter around the room.)
One conservative investment banker pipes up, "I'm
3ervous about this one. This market looks very shaky to
ne, We're pushing this too far. The funds have no cash.
‘Weve got them loaded up with derivatives; it's going to
ost them a fortune. This Whitewater mess is getting
rigger by the minute, And Guarino has his people loaded
or bear. These funds have no excess cash. We could
{rive them under."
12
“Have you lost your balls? We've been playing this for
years. We all know this market's going to collapse
eventually. That's when we really cash in the big bucks.”
"Yes, I know, but I'm thinking about all those people
with their life savings in the funds, the proverbial litle old
Jadies, and millions of investors with their life savings,
hoping they can make it in their retirement years.”
“Screw them. They were given a prospectus. ‘Those
greedy S.0.B.'s are rolling hot dice. They were warned. If
they were stupid enough to believe that easy-money bunk,
“invest for the long haul and buy on dips” they deserve
what they get.”
fa fi
"What's the
fund *
inside word? What have you heard?”
“This shouldn't get out. But our Wall Street contacis
(ell me the Fed isn't going to raise rates."
“That's great, that’s great. Buy up all the usual stocks
you can on tonight's close, Lay in as many bond positions
as you can. Use as many stock and bond derivatives as
you can"
Pipes up one junior trader, fresh out of school, with
pimples on his face, "You know guys, T'm really nervous
about this. The market's been falling. Inflation's been
rising. Were taking some heavy hits, especially on our
leveraged positions. My cash is under 3%. If somethi
‘goes wrong here, I'm in trouble. Tm betting the ranch.’
Other traders: "Where's your balls? If we have any
trouble with this, well just trade back and forth among
‘ourselves, hiding the losses. The way we always do with
the derivatives. We'll dress up the sheets and make
everything look great. We can much easier hide the
derivative losses than the stock. The market will come
back. Italways does. Don't worry.”
ty
attend. Powerful European banking interests have becn
building to @ common market and common currency for
years. They have loaned America vast amounts of money
to finance her ever-growing national and private debt.
They are drooling at the opportunity to knock down the
dollar, and force America into their monetary union,
“The reason I called this meeting is that the U.S. stock
market is a disaster waiting to happen. It may be time to
pull the string."
“You mean it’s time to topple the U.S, monetary system
once and for all?”
could be. We don't want to move too fast. We'll et
the U.S. stock market crash, fall 3-1o-6 months, then we
‘move in. It won't exactly be a murder. Look at it as a
‘mercy killing.”
“We have to move very carefully. We've been laying
the groundwork for this for many years. Just make surethe greedy Americans speculating in the mutual funds get
the blame for the crash, not us. If we do this right, our
dream of a one-world currency will finally be realized."
"Gentlemen, you've seen
the numbers,” says Alan Greenspan, "We have no choice.
‘We must raise rates. The markets already have gone up.
Inflation is breaking out all over. It's gonna be double last
‘year's or more. The economy is growing at an
unsustainable 3.5% growth rate.
"Our European and Asian friends are very nervous.
Both candidates are promising personal tax rate decreases,
‘The deficit is getting bigger. The dollar is falling. We
have no choice. We must raise rates at least 1/2 percentage
point.”
Sidebar meeting between Greenspan and a trusted aide:
"Alan, do you know what you're doing here?"
“Thave no choice."
"What about Clinton? Remember, you still have not
been confirmed yet.’
"have no choice. Besides, the way the polls are going,
Clinton may not get back in. It's a choice I have to make,
Either way, its lose/lose. If T don't raise rates, I destroy the
dollar quickly. Gold soars, the Fed loses all credibility. If
Clinton gets reelected, the economy is sunk anyway, and I
lose my job."
August 20, Reuters Financial Wire. The Federal
Reserve raised interest rates today 1/2 point, stunning the
markets. Bond yields have soared to 8%. The Dow has
fallea 150 points, to under 5300.
August 20, 1:30 pm, fund managers around the "wa-
tercoolers," “Can you believe this? The Fed raised rates!
‘What the hell are we gonna do? We're getting killed.
‘Those bastards at Goldman/Sachs guaranteed me the Fed
wouldn't do this! I'm losing a shitload more money than
the bond market or indices indicate. I'm deep underwater.”
‘The Dow has now plunged 200 points. The bond
market has crashed 400 points.
Calm down, here's what we do. We'll rade some of
these stocks back and forth between our various funds.
We can show you've booked them in at lower prices. That,
will hide some losses there, On the bonds, we just won't,
book the derivative losses yet."
"But what about my redemptions? The phones are
lighting up. I don't have anywhere near enough cash to
cover them.
“OLK., get those operators to slow down answering
those calls. Let them get some busy signals, When the
people call, have the brokers pretend they expect them to
buy like everyone else, You know how those yuppies are.
‘Tell them we regard this as a buying opportunity. You
know, buying on the dips. Investing for the long haul,
‘They're paid to sell. Get those brokers to sell.
13
"We're drawing on our line of credit atthe banks.
Remember, we pledged all our stocks.”
"You mean we're borrowing money against an ever-
falling stock market -- with collateral that's dropping in
value -- to pay off redemptions?"
“Well we can't very well start selling stocks to get out
of this. If we sell to meet redemptions, the market will
drop even further. I'l be a wipeout. We've got no choice.
We've got to roll the dice."
“Listen, do you realize how far under water we are?
Yeah, but i's no problem. The public doesn't know what
ng. As long as we can show they're making big
ig percentage returns, they won't care.”
"Weill do the same thing we did the last three times the
‘market started to crash this past year. We'll draw cash
against our line of credit on the existing shares of stocks
we hold, First, we will stabilize the markets. Then when
the markets start to calm down next week, well coordinate
our buying. That will overwhelm the shorts and buy.
ourselves another rally. Meanwhile, for your own account,
don't forget 1o buy some of these stocks on next week's
buy list -- $0 you can make a quick killing when you
front-run ahead of the other funds’ buying.”
"Yeah, we did it three times before when the stock
‘market started to crash, We've made millions. Let's do it
again.
Nervous kid with pimples: "What happens if we can't
buy the market up this time? What happens if the selling
‘continues and the market keeps falling? What if the
redemptions continue? You know at some point the
market is going to correct. We're going to have a big down
‘market that starts a serious slide, What if it tums into a
real bear market?”
Everyone tums on him as if he shouted out a four-letter
word ina convent. "Man, you are so out of it. Markets
don't correct anymore. There's no such thing as a bear
‘market, Every time the market tums down a little, we just
buy more. This market's not going to correct. Those days
are over. You believe those old wives tales? What an
idiot.”
“Listen, buddy, if you want to get along around here,
don't even mention bear markets or downtums. Those are
things of the past.’
August 21. meeting of top Wall Streeters that sell
stocks to the funds. Laughter around the room.
"We're making another killing, aren't we boys? These
funds are getting their asses handed to them, with those
dog-shit stocks we sold them. Can you believe anyone so
stupid 10 believe we were really in a deflation?”
“Now, now, be kind. They believe what we teach them
to believe. Come on.”
‘Senior membér speaks up. "Listen, I want you to go
slow here. Don't flush the toilet on them just yet. We need
‘cover, a scapegoat to blame when we collapse this market.
‘We can use our friend from Little Rock's problem as cover.“I-don't want this market collapsing tll well afier the
lection. So ease up on this bond market. Help the funds
hide their big derivative losses. Lay off on the selling a
liule bit. Next week let them have a little rallyback, 50
they can buy more stocks, and make their books look
better. We don’t want to stampede the fund suckers out of
the market just yet. Not when there's still more money to
be gotten from them.
“After we collapse the market this time, and wipe out
another group of suckers, we're not going to be able to get
anyone into stocks for another 30 years. So let's make sure
wwe get all the money we can get.”
Daily): "Now remember, we just have to get through the
weekend. Keep everyone calm. Remind them they're
buying for the long haul. Downturns like this are just
‘opportunities to buy more stocks at better prices. Make
anyone who says a bear market is coming look like an
asshole. Discredit anyone who says this is a down market.
Tell them to buy on the dips, the rally is coming next
week. You'll all look like rocket scientists.
"By the way, our media buyers will be in touch with
you. We're stepping up our advertising; that's print, TV,
everything.”
“Listen, Bob, that's easy for you to say. This is George
Walsh from Reuters Financial Wire here. We're getting
persistent rumors that some funds are in big trouble,
especially with bonds and derivatives. We also understand
redemptions are skyrocketing. And we hear you guys arc
out of cash, and borrowing huge amounts of money against
your line of credit.”
“Now listen, George, don't even start that shit. Do you
want to be responsible for a panic? T'm telling you right
now if we see any of that shit, we're pulling our ads. The
days of bear markets are over. The yuppies are investing,
for their retirement, the long haul.
"We got more money coming in than going out, We
‘monitor our portfolios daily. We're just seeing very minor
losses, since we had such huge profits. It's nothing. The
‘market is just having a minor drawback, a rest. Come on,
you've seen this happen three times in the past year. The
market always come back. This is a buying opportunity.
The smart money is going to average down and buy more.
[Everyone at the meeting knows this is a lie. But this is
the spin the financial media will be giving the public. I's
their marching orders: the line they must peddle if they
‘want to play the game, keep the ad revenue coming, and
keep their jobs.)
August 23 (the next day) the stock market plunges
another 300 points. Bond market continues its slide.
14
Thank god it's a Friday. Wall Street Underground sends
oul an emergency fax to its listed subscribers, and an
emergency Fed Ex letter to the rest of its entire subscriber
base, warning the crash is upon us, its time to short the
market, head for the hills, buy gold.
4, Whit i =
in ill Clin li
Greenspan. Clinton is outraged that the Fed dared raise
interest rates. He has called Greenspan on the carpet for
the 600 point fall in the Dow, that he personally blames on
him,
"Mr. President," says Greenspan, “it's not my job to
make this arificially-high stock market higher. I've tried
to explain to you the market is too high. It's got to come
down. It's frothy. The best we can hope for is for it to