The Cody Word
  • October 14, 2008 02:28 PM EDT by Cody Willard

    What Paulson, Ben, and The Illuminati Bankers Actually Said Behind Those Closed Doors

    I had a spy fly on the wall at the big explicit Illuminati meeting yesterday between Paulson, Ben, and the nine biggest surviving banks in the country.

    And so let's actually picture the discussion in that room. The very CEOs who drove these giant banks into insolvency are sitting around with their former partners/co-workers/friends from the Treasury and the bookish Fed heads. These guys lock themselves in a room to discuss how best to divvy up the $700 billion blank check that the socialist Republicans and Democrats in power just handed them.

    I can hear it now:

    CitiGroup (C) CEO Vikram Pandit, "Guys, first and foremost, we need to protect the taxpayers and stabilize the financial markets."

    Treasury Paulson, "Yeah, exactly. So here's what we're thinking -- I'll take the $250 billion installment that we just got from the taxpayers and we'll give it to you guys in exchange for some notes that would probably go up in value if you guys don't blow yourselves up too quickly over the next few years again. Do you think you can stay solvent for a few more years? You could try lending the money out, I've read in some papers that Ben wrote that lending via fractional reserve banking -- lending out many more times the amount of capital that we give you, in hopes you don't have another run on your bank -- can even make you some money."

    JP Morgan (JPM) CEO James Dimon, "Yes, I think giving us the money for nothing -- not even making us trade in all this junk that's made us insolvent is definitely the best way to protect the taxpayer up front...oh, and of course to stabilize the banking industry. Yes, give me the money and everything will be much better for everybody in the world."

    Well Fargo (WFC) CEO Richard Kovacevich, "Yes, that logic makes sense to me. Give my bank's shareholders money for some of those preferred share thingees and then the system will be fine. Tell them, Ben."

    Fed chief, Ben Bernanke, looking up from his Spiderman comic book neatly folded inside of his giant text book in the same way he's been tricking his students and before that his teachers for years, "Well, if we do nothing, I think the world will fall apart since nobody in America is creative or entrepreneur anymore. And if we create money out of thin air and just give it to the banking industry, then we hurt nobody. Indeed, we can erase the Gotham banking industry's trillions of dollars of losses and pretend that it never happened. Nobody will be hurt and everybody in society will benefit if we give these guys $250 billion for free -- yeah don't even bother punishing the shareholders who got to divvy up trillions of dollars of false profits in the good times. That will hurt society. Pain is bad. Money is good."

    Paulson, dictating to his secretary, a sultry 30-something who's penchant for black leather boots and off-beat outfits make her hot despite her lazy left eye, "Take this down and let's send this out to public. They are gonna be pumped that we figured out that just giving the money to the very banks and people who created this crisis and not punishing any executives or shareholders is the best way to fix it. Confidence, here we come!

    "The minimum subscription amount available to a participating institution is 1 percent of risk-weighted assets. The maximum subscription amount is the lesser of $25 billion or 3 percent of risk-weighted assets. Treasury will fund the senior preferred shares purchased under the program by year-end 2008. Institutions interested in participating in the program should contact their primary federal regulator for specific enrollment details."

    Paulson drops the lemon he always requires in his Diet Coke on his tie and loses his thought for a moment. He repeats the last line, "Institutions interested in participating in the program should contact their primary federal regulator for specific enrollment details."

    One of his aides steps up, hands him a piece of paper and whispers in his ear. Paulson says, "Ah, dammit fellas, he's right. I gotta pretend that you can't get paid tens of millions of dollars a year as an executive running these banks while giving you free tax payer money. Let's add this little gobbledygook in there and we'll just work around it later, okay?

    "The financial institution must meet certain standards, including: (1) ensuring that incentive compensation for senior executives does not encourage unnecessary and excessive risks that threaten the value of the financial institution; (2) required clawback of any bonus or incentive compensation paid to a senior executive based on statements of earnings, gains or other criteria that are later proven to be materially inaccurate; (3) prohibition on the financial institution from making any golden parachute payment to a senior executive based on the Internal Revenue Code provision; and (4) agreement not to deduct for tax purposes executive compensation in excess of $500,000 for each senior executive. Treasury has issued interim final rules for these executive compensation standards."

    Interim Assistant Secretary of the Treasury for Financial Stability, Neel Kashkari pulls his shirt down from off of his head where he had been zenning out pipes up saying, "Hey, if we call the nine firms that would be insolvent without this program 'healthy', I bet that might help get confidence back into the system."

    Nine large financial institutions already have agreed to participate in this program, moving quickly and collectively to signal the importance of the program for the system. These healthy institutions have voluntarily agreed to participate on the same terms that will be available to small and medium-sized banks and thrifts across the nation.

    So we've gone from saying we were going to extract maximum pain on those who took risks of ownership of shares (shareholders) in any financial institutions that took in tax dollars in the bail out plan to simply handing them the money.

    The WSJ reports today that: "Some of the big banks were unhappy about the government taking equity stakes, but acquiesced under pressure from Mr. Paulson in a meeting Monday."

    I happen to have read the actual TARP bailout bill, and it had this little section in it:

    NECESSARY ACTIONS.—The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation, the following:

    Designating financial institutions as financial agents of the Federal Government, and such institutions shall perform all such reasonable duties related to this Act as financial agents of the Federal Government as may be required.

    Can't imagine there weren't any threats of nationalization to the banks that "were unhappy about the government taking equity stakes, but acquiesced under pressure from Mr. Paulson in a meeting Monday." Nah, surely not. I'm sure that just because Hank Putin/Paulson has the right to deem any bank an instant financial agent of the US -- whether justified or even if just because Mr. Paulson doesn't like it's name -- yeah, I'm sure he'd never actually use that as a political and profit-seeking tool for him and his cronies. Right? Right? Hello, is this thing working?

    Feeling better about the outlook for economy and the credit crisis now? No, not so much?

Dave

Someone working for Fox News talking about the Illuminati? How could that be possible?

October 24, 2008 at 7:53 pm

Deborah Greene

Will Congress initiate it's so-called taxpayer protection oversight transparency committee questioning? They allowed Pres. Bush and Sec. Paulson scam them with a non-existent plan (or hidden agenda) and now these thugs are holding a gun to the head of the bank CEOs. So where do they get these preferred stocks? What happens to Wells Fargo ESOP? What happened to transparency? Do we have a Republic? Or, have we been under a dictatorship of Illuminati? Who is their next President? Congress needs to invoke the Constitution. Let the chips fall where they may. We can handle it. Throw the thugs out.

October 16, 2008 at 1:08 pm

Dave Young

Last week we were at Cdn.96¢ on the US dollar. The IMF and the World Fed of Banks announced that Canadian banks are THE most stable, the most true asset backed, the least leveraged with the lowest loans risk of ANY banks anywhere in the world. In other words the Canadian economy is THE most stable anywhere. Within 30 hours our currency tanked 14¢ on the US dollar. It doesn't make any sense. Everything is being manipulated and choreographed. The derivatives market made a few people and lots of banks an ENORMOUS amount of money. We now "owe" that system the equivalent of the GDP of the entire planet in losses ... around $60 TRILLION. These are insurance policies that they wrote on the the same assets over and over and over and over again. In the real world, writing duplicate insurance policies on the same asset is called FRAUD. When bankers do it WE owe them when the market goes down. When the market goes up they take in billions. These are all imaginary asset bubbles. They are NOTHING! Yet the world has to repay the banking system because it is showing a $60,000,000,000,000 LOSS on their books. The message has been clear. Pay off OUR debts or we'll have no choice but to allow the financial world to collapse completely. Why can't governments simply declare the derivative losses as fraudulent and hence null and void. The sub prime disaster would work itself out in 6 months. The enormous derivatives losses will drive us into a depression the likes of which can only terminate with massive global conflicts to take our minds off our troubles. China will experience 300++ million workers out of a job and many, unlike 80 years ago, can not just go back to their farms. They are going to be pissed, hungry and looking for somebody to blame!!! And that's just China! The big banks associated with the Federal Reserve in the US have dumped around 30 MILLION OUNCES of GOLD on the market to cover some of their "shorts" and temporary losses. This, again, isn't real gold. They are gold certificates only. Gold has dried up in the world. Demand is still growing, production is down in many areas and gold remains constant on the markets. It should be flying right now. Because the banks have dumped so much "gold" (paper) on the market it is barely above $800 most days! Reverse that manipulation by the banks. Say the gold miners started printing US dollars to drive the price of the dollar down. Clearly illegal. Called counterfeit. Frowned upon by police and governments everywhere. If the miners did it they'd get arrested. The banks do that same thing to the miners and gold producers and investors and ... nada ... nothing. Perfectly fine. Tell me this isn't all BS. Tell me this isn't all manipulated by a few to consolidate their assets and to hell with the rest of the world and our pithy little lives. We need to bring back the guillotine!!!!

October 16, 2008 at 11:44 am

Tim M, Florida

Hey Cody; If you really want to know the truth, watch this documentary made in 1996. The last hour will blow you away. http://video.google.com/videoplay?docid=7757684583209015812&q=&hl=en

October 15, 2008 at 8:37 pm

GlobalismIsHere

Free Markets ? is that like ? hey, no policing ? how long would products stay on the shelves if no one prosecuted theft ?

October 15, 2008 at 1:53 pm

Glenn

Time to drop the F-bomb, Cody. Fascism. Hitler and Mussolini would be proud of Bush and his cronies. Naomi Wolf in her book The End of America, A Letter to a Young Patriot does a nice job of examining the ten steps towards fascism that countries take and where the U.S. is on each. Will Obomba try to nationalize certain aspects of our means of production? Most certainly. Will McWar seek to expand the role of the executive branch(he is calling himself a Teddy Roosevelt Republican now)? Yes. We will be fighting hard against socialism that we fail to defend against fascism - government partnerships with industry cartels. Prime example - the Fed. Dan@7:35AM, above, good point. We are getting a chance to live through the same circumstances that occured in the 1910s. You know the owners of the FRS(the banks owning capital stock in the Fed - names not publicized) are getting a nice look at the books of all member banks and preparing to eliminate the competition. Look for the House of Morgan to come out of this very nicely.

October 15, 2008 at 11:58 am

Grant

Lay off the Illuminati bit. Several of the most prominent members of the Continental Congress (you know, the ones that signed the Declaration of Independence and that other document that President Bush refers to as just a peice of paper,) were known Free Masons. Those who laid the framework for this great nation are not to blame for the situation we are facing.

October 15, 2008 at 11:45 am

Peter

OK Cody, know you know the banking Illuminati is real and not a joke, its time to let everybody else know. Watching Fox Biz & others push this Fed lie is really getting quite old now. Grow a backbone America throw the bankers out!!!, PLEASE take your country back, or move to France!!

October 15, 2008 at 9:22 am

Dan

Take a gander at the FED's own data on short-term/overnight loans, especially the 30 day loan rate. The rates are not spiking past historical trend. They are just not falling as much as the FED would like, but then the FED's policy is loose money (where is the missing in action M3 money supply component?), and smart financial people are not going to play the FED's game this time around. This really is a situation where the government, along with most news tv channels, intentionally caused a massive private investor panic to ram through the bailout bill with very little public discussion. What has happened since the bailout bill, oops I mean rescue bill, shows that the US taxpayer was hoodwinked.

October 15, 2008 at 7:29 am

John

Cody, great article. Too bad that none of the actors in reality would even take the time to read how "We the people" feel. Too bad we all can't just stop paying our mortgages and taxes due to liquidity issues. Then they would understand! Our only hope is that at some point all the presses break down. Remember depression-1. Beaucoup money just lost everwhere and WW2 was not far away. Think the Washington political playbook has this recurring option in it? Can only wonder who they would make us hate to start it?

October 15, 2008 at 7:07 am

Priakor

Cody, what happen to you? You are making sense now, but I remember the time when you were telling people that Dow will go up as high as 15,000 until the end of the year, and I was wondering what you were smoking...BTW tonight's happy hour you just took them down, they are ridiculous in their support for the nationalization..how come no one told them that the alternative of not doing anything and having the markets to act could be better, and the opposite can now just make it worse? Yes, the airlines are an example but a small one, today we have mortgages, insurance and banks plus more to come..there is no coming back from this...

October 14, 2008 at 11:38 pm

Scotty

The biggest joke: Oil at $78.00 Someone should tell Iran and Russia their core product is virtually worthless. Second biggest joke: Exxon at $79.00. Trillion dollars could go a long way to solving this problem.

October 14, 2008 at 10:39 pm

Austyn

Good to see we have an ally at the top. Hey btw, I suggest changing your terminology from Illuminati to maybe New World Order minions or something... They have not called themselves that for a while, and NWO is a more accurate description... plus it's less fringe.

October 14, 2008 at 10:37 pm

Scotty

The real problem: I wouldn't do business with these 9 banks if they were the last 9 banks on earth, unless I'm forced to, which wouldn't surprise me. Hope the government is prepared to change the names. Unless it's all socialism, capitalism will win in the long run.

October 14, 2008 at 10:33 pm

Lemmy's Ghost

If our president didn't have balls of cotton he would have told the assembled lot to begin lending the free monopoly money to qualified borrowers immediately ! The consequence of remaining stingy would be declaring the banking CEO's Enemy Combatants and forcing them to become tenants of "Club Gitmo" until their undergarment of choice is Depends!!!

October 14, 2008 at 8:11 pm

RWC

Whats really scary is all the articles on the web about Banks needing money to settle massive credit default swaps on October 21 due to Lehmans demise . Can we ask where is all this money a month from now?

October 14, 2008 at 8:10 pm

TJF

Cody, You forgot the part where Hank and Ben broke into their Beavis and Butthead "Great Cornholio" routine. Priceless...

October 14, 2008 at 7:35 pm

Ken

Cavuto, Ramsey, watch out! I love watching you guys, but Cody has the stage!

October 14, 2008 at 6:49 pm

Ken

Awsome piece! Tell it like it is!

October 14, 2008 at 6:38 pm

Ellen Weeks

you need a "print this" icon for your page...worth printing and sharing!

October 14, 2008 at 6:09 pm

Steve

Cody, Cody, Cody, what are you doing? Using words to tell the truth. Watch out though. It will not be long before the BHO (aka KGB) will be taking your keyboard away along with all our freedoms of speech, unless of course you submit to the socialist government. Excellent thoughts! p.s. With all due respect I have enjoyed Happy Hour much more now that Gomez is on vacation or whatever. She really does not appear to have a clue about the financial world. Checking her bio, I now understand why I felt that way. She has zero education in the financial world. You need your own show. Not meant to offend Ms.Gomez. Just offering my thoughts.

October 14, 2008 at 6:00 pm

Orlando

Sad but true ,.. Anybody have a hanky?

October 14, 2008 at 5:56 pm

6ftrabbit

Actually, I don't mind being gang raped as long as I get kissed. But I ain't been kissed yet.

October 14, 2008 at 5:43 pm

Marcus

Everyone should check out this interview by Jim Willie, talks about a lot of things you never hear about, International Banks of Settlement, Central bank of Central Bankers: http://www.contraryinvestorscafe.com/broadcast.php?media=141

October 14, 2008 at 5:40 pm

bigcountry13

Dude, you got skills!!!

October 14, 2008 at 5:21 pm

about this blog

  • Cody Willard is an anchor on the FOX Business Network. Willard is also the principal of an investment management company. He was a long-time featured columnist for the Financial Times and TheStreet.com as well as a regular featured economist and stock picker on CNBC's ''Kudlow & Company."

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