The masters of the world

The masters of the world

An exclusive club of a few thousand people, not elected democratically decide the fate of entire populations, able to manipulate the financial markets and to impose itself on the policy and the States. Who they are, how they act and what goals have bankers that drive the games central bank and live on the shoulders of the middle class? And how to get out? The proposal from the book of Luca Ciarrocca.

Megabanche con i piedi di argilla

A bank is a place where they lend you an umbrella when the sun is shining and I'll ask for it back when it begins to rain.
Robert Frost

Capitalism on the brink of implosion
Mid-September 2008 The world is on the brink of the abyss. Outbreak of the great global crisis, the worst in the last eighty years. We still talk about why the apocalypse could happen again. In the same terms. Another «cigno nero» as it is called, according to the theory epistemologist Nassim Nicholas Taleb, a rare and unpredictable event that upsets the order of things. Almost nothing has changed with respect to those terrible days. Indeed, the scenario is worse. He missed a breath. For accuracy three hours. At the time no one had tools to understand, everything happened so frantic, but today we know. United States, Europe, the BRIC (Brazil, Russia, India, China), the entire block of developed economies, from Tokyo to London, from New York to Singapore, he was one hundred and eighty minutes to watch the implosion. Then everything would burst, exploded, leaving only rubble and devastation. As in a catastrophic third world war.

The great crisis was staged on the screens of more than 300,000 Bloomberg terminals on five continents. The Sherpas in the service of the oligarchy that leads the world - corporations, banks, hedge funds, speculators - they were going to change the fate of billions of people. The prices were collapsing, the terrible virus «tossico» of illiquidity and insolvency which had attacked the banks in the world was going to explode.

It happened September 18, 2008, the event that only a few other times in economic history had such an impact: a great flight of capital from deposits of American banks (bank run) for a total of 5.5 trillion dollars. Lehman Brothers went bankrupt four days ago, Wall Street had lost -30 per cent in a few weeks, and now the equivalent of a third of the gross domestic product of the United States was evaporating from bank deposits. No queues at the counters, all electronic. Another three hours at that pace of capital flight, a witness later a Member of Congress, «e capitalism as we know it would finito».

The apocalypse was avoided because the government presented the first draft of a bailout of the banks. It was enough to stop at the last minute escape from the doors. In those days of September in Washington rumors absurd, the atmosphere in which he lived the superpower on the brink of a Great Depression was from a state of war. Some Members (all Republicans) wanted martial law, a measure ever approved in modern times which provides for the suspension of civil rights and the death penalty. Capitalism is collapsing and the scenario of a seizure of power by the generals in the Pentagon directly under the control of the White House became real. Like in a Hollywood movie.
The secret meeting of bankers
Not long after, October 13, 2008, in Washington was summoned to a political summit-banking emergency. The goal was not changed to avoid the collapse of the American economy. The scenario remained to the state of belligerency Stock Exchange in free fall, unemployment rising rapidly, four million people out of work in two months, the collapse in global GDP for the first time since the Second World War, after decades of development. It was in this climate that a small group of banksters, the heads of the largest banks in the United States (all shareholders «di peso» of the central bank, the Federal Reserve), were «comandati» by Treasury Secretary Henry Paulson «Hank» (ex CEO of Goldman Sachs) for a top secret summit off the radar of the media. Meet at nine in the morning, at 1500 Pennsylvania Avenue, home of the Department of the Treasury, a few tens of meters from the White House.

Pulled faces for the sleepless nights, dresses or blue grigioscuri ordinance, nine of the banksters most influential of Western capitalism, their lenders on the brink of bankruptcy, came in dribs and drabs in the building where they would have decided the fate of the economy world. The neoclassical architecture of the building, the large statue of Alexander Hamilton, the first US Treasury Secretary in 1789, gave solemnity to the moment.

The boss of Bank of America, Bank of New York Mellon, Citigroup, Goldman Sachs, JPMorgan Chase, Merrill Lynch, Morgan Stanley, State Street and Wells Fargo banker Paulson were welcomed by former colleague, now minister in the administration of George W. Bush, the chairman of the Federal Reserve, Ben Bernanke, and the powerful head of the Federal Reserve Bank of New York, Tim Geithner (who a few months later, with the victory of Barack Obama in the presidential elections of 4 November 2008, would take the place of the Paulson summit of the Department of the Treasury).
The tension was palpable, the news from the financial markets continuing to deteriorate. A day in the capital, as much as 17 September 2001, when Wall Street reopened after many days of closure following the attack on the Twin Towers.

The bank run and the market crisis had a «questione safety nazionale». So he considered President Bush. In contradiction to the principles of the free market to which, for a Republican, was always so rude, appealed. The White House, with the director of the Treasury former banker, was about to give way to a historic intervention of the state to save from death the banking system.

America to its knees, as though under a tremendous and unexpected military attack by a fierce enemy, preparing his defense through an maxipiano bank rescue. With taxpayers' money. He could have done any government statist or socialist.

"Here, sign '
Working day and night, the lawyers had prepared the Treasury bailout plan that the nine bankers would have to subscribe. Hank Paulson was very brisk, even brusque. Go straight to the point it was a must, out war raged. Each of them was given a single sheet of paper, a few lines, and no notes attached zero. It said that their respective banks accept the sale of their shares to the government of the United States. The minister, without wasting time, he said: «Ecco, firmate».

And the powerful CEO obeyed. In just a few seconds, and the soft coup was accomplished, the major American banks were safe. The government in Washington came into force in the capital of banking giants on the brink of bankruptcy. The system would not have collapsed, capitalism had won another battle, albeit with infamy, using public money of unsuspecting taxpayers. A dozen people, nine bankers, plus the heads of the Fed and the Treasury, October 13, 2008 that they had rewritten the economic history.

The agreement provided for the purchase of preferred shares by the government. That is, in practice, the United States Treasury to the banks lent money to an initial annual interest rate of 5 percent (much lower than that of the market, even though it was expected to go up to 9 percent after five years) for a period of time «perpetuo». The banks would not have to repay the loan, if they wanted to.

It was then a former banker at Goldman Sachs to create the monster that still dominates us and blackmails. In a jolt resulted in the emergence and survival instinct, just before the inevitable implosion of the system, Paulson, the highest political authority and monetary policy of the United States, under the direction of the Federal Reserve, with an unprecedented decided to save American capitalism and world rushing to the rescue of a super network of banks that were supposed to bring almost all the books in court. They were born the «Tbtf» (Too Big To Fail), a financial Frankenstein that continues to do damage, direct and collateral, of colossal proportions, which we all pay the consequences.

Since September of 2008, therefore, the banks, even if poorly managed, debt, and full of toxic assets have become large «troppo for fallire». For over five years, the abnormal creature and a monument to inefficiency, to risk, to moral hazard, all'antieconomicita, subservience to the powers and - let's face it - the sleep of reason. A juggernaut that mocks the patrol extremist supporters of the free market, for which it would have been better, in those days to apocalypse, the American banking system to collapse, leaving fail institutions now compromised. Darwinism in economics, even at the cost of altering forever the scenario and power relations. You could reset and start over. Instead TBTF and today the true means by which the banksters thrive and enrich themselves with impunity, while ordinary people suffer. A totem medieval rid of.


Luca Ciarrocca is a journalist who has lived and worked for many years in New York, where in 1999 he founded Wall Street Italy, site independent of economics, finance, politics and news. In 1997 he won the prize for journalism Premiolino. He published the book Investire in tempo di guerra .