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FTR #327 Were We Controlled?

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Con­tin­u­ing the analy­sis of the 9/11/2001 ter­ror­ist blitzkrieg, this pro­gram ana­lyzes the sus­pi­cious stock mar­ket action in the days pre­ced­ing the attacks.

1. The pro­gram begins with dis­cus­sion of alleged­ly sus­pi­cious insid­er trad­ing in the stocks of the par­ent com­pa­nies of Unit­ed Air Lines and Amer­i­can Air Lines in the days imme­di­ate­ly pre­ced­ing the attack. (“Air­line Stock Deals Under U.S. Probe” by Chris­t­ian Berthelsen; San Fran­cis­co Chron­i­cle; 9/18/2001; pp. A1-A9.)

2. Activ­i­ty in the trad­ing of United’s stock was 25 times its nor­mal lev­el accord­ing to Options Clear­ing­house Cor­po­ra­tion. (Ibid.; p. A9.)

3. Two online bro­ker­age com­pa­nies (TD Water­house and NFS, a sub­sidiary of Fideli­ty of Boston) are assist­ing with the inves­ti­ga­tion. (“Bro­kers Help Probe” by Chris­t­ian Berthelsen; San Fran­cis­co Chron­i­cle; 9/21/2001; pp. B1-B4.)

4. The Chica­go Board Options Exchange is help­ing with the deal. (“New Scruti­ny of Air­lines Options Deals” by Chris­t­ian Berthelsen; San Fran­cis­co Chron­i­cle; 9/19/2001; pp. D1—D3.)

5. Next, the pro­gram high­lights a rumor of alleged­ly sus­pi­cious action in the stock of a com­pa­ny con­trolled by Can­tor Fitzger­ald, a bond firm that was dev­as­tat­ed in the attack. (“Pos­si­bly Sus­pi­cious Trad­ing Alerts U.S., Ger­man Offi­cials” by Floyd Nor­ris and Edmund L. Andrews [New York Times]; San Jose Mer­cury News; 9/17/2001; p. 4C.)

6. Some Ger­man ana­lysts believe that trad­ing of stock in big insur­ance com­pa­nies was sus­pi­cious as well. (Idem.)

7. In addi­tion to the trans­ac­tions not­ed above, Ger­man mar­ket ana­lysts detect­ed what they believed to be unusu­al and note­wor­thy action in oil and gold options. (“Sus­pi­cious Trad­ing Seen in Attacks” by William Droz­di­ak [Wash­ing­ton Post]; San Jose Mer­cury News; 9/23/2001; p. 4A.)

8. An analy­sis by the San Fran­cis­co Chron­i­cle found that short sell­ing in the stocks of Unit­ed and Amer­i­can Air Lines “out­paced the rise in short sell­ing for all stocks on the New York Stock Exchange—or oth­er major air­line stocks as a group on the Big Board.” (“Data Shows Heavy Airline—Stock Short Sell­ing” by Chris­t­ian Berthelsen; San Fran­cis­co Chron­i­cle; 9/22/2001; pp. C1—C2.)

9a. The air­line indus­try found itself fac­ing a severe cri­sis as a result of sig­nif­i­cant changes in insur­ance cov­er­age in the wake of the 9/11 attacks. (“Air­line Chaos Looms as Insur­ers Can­cel War Cov­er” by the inter­na­tion­al staff; Finan­cial Times; 9/21/2001; p. 1.)

9b. Ernest Back­es is arguably Europe’s top expert on mon­ey laun­der­ing. He is of the opin­ion that the prof­its from the short sell­ing went into the Swiss accounts of an orga­ni­za­tion found­ed by the late Fran­cois Genoud. The orga­ni­za­tion referred to is the Bank Al-Taqwa, as Back­es made clear in an e‑mail sent to Mr. Emory.

Finan­cial expert Ernest Back­es of Lux­em­bourg has [stud­ied] white-col­lar crime in the field of bank­ing for many years. Accord­ing to him, there are indi­ca­tions of unusu­al trans­ac­tions with which the groups [asso­ci­ated with] bin Laden could have earned mon­ey. ‘You can, for exam­ple, exam­ine whether, with­in a cer­tain time peri­od there’s been an attack against the secu­ri­ties of a giv­en air­line com­pany. Since these secu­ri­ties are safe in a ‘clear­ing sys­tem,’ you can’t get an over­all view, who the own­er was at a giv­en time.’ . . . Accord­ing to Back­es’ infor­ma­tion, the trail leads to Switzer­land, to the accounts of an orga­ni­za­tion that ws found­ed by the late lawyer Fran­cois Genoud and evi­dently still sur­vives. Says Back­es, ‘One of the grounds for accu­sa­tion is that this Swiss attor­ney had the clos­est con­nec­tions with the Bin Laden fam­ily, that he was an advi­sor to the fam­ily, one of its invest­ment bankers. It’s known for cer­tain, that he sup­ported ter­ror­ism and was the estate execu­tor for Hitler and part of the ter­ror milieu.’ [Empha­sis added].”

(“Insid­er Trad­ing Pri­or to the Ter­ror Attacks in the US?: Spec­u­lat­ing on Terror—Who Prof­ited from the Attacks?” by Rolf Bovi­er & Pierre Matthias; Bay­erische Rund­funk Online (BR-Online); 9/25/2001.)

9c. The stun­ning vol­ume of the sus­pi­cious trades was detailed in an arti­cle in the right-wing Nation­al Review, although the author [pre­dictably] pulls his punch­es at the end of the arti­cle. Note that there was a lot of sus­pi­cious trad­ing in the Stan­dard & Poor’s 500 put options. Stan­dard & Poor’s is owned by the McGraw fam­i­ly, who are gen­er­a­tions-long allies [4] of the Bush fam­i­ly.

Were the Sep­tem­ber 11 hijack­ers insid­er traders as well as mur­der­ers? The 9/11 Commission’s report has belat­edly put paid to the rumor that Osama bin Laden and his accom­plices spec­u­lated in the stocks and options of vul­ner­a­ble com­pa­nies in the weeks before the attacks. The poten­tial prof­its gar­nered from such manip­u­la­tion would have been in the mil­lions.

Truth to tell, if one looked at the trad­ing fig­ures — espe­cially with the ben­e­fit of hind­sight — for ear­ly Sep­tem­ber, there was a lot to be sus­pi­cious about.

Trad­ing in AMR — the tick­er for Amer­i­can Air­lines’ par­ent — rang alarm bells, espe­cially in regard to fre­netic put-option activ­ity before Sep­tem­ber 11. A put, in brief, is a con­tract to sell a cer­tain num­ber of shares at a pre­vi­ously agreed upon “strike” price some­time in the future. The price of the put depends on a num­ber of fac­tors, not least of which is the price of the under­ly­ing secu­rity. Cau­tious investors buy puts as insur­ance if they believe a stock they hold might fall, while spec­u­la­tors exploit their high volatil­ity and rel­a­tively low cost to lever­age prof­its if the stock does dive. (A call option is the same, but in reverse, and is ori­ented towards the bull­ish).

Some 4,516 put con­tracts — which could be poten­tially lever­aged into con­trol­ling more than 450,000 shares of AMR — trad­ed hands the after­noon before the attacks (com­pared to 748 calls). Thus, about 85 per­cent of the day’s options activ­ity involved puts — a mas­sive imbal­ance rarely seen. When the mar­kets opened for the first time after Sep­tem­ber 11, AMR plum­meted by 39 per­cent, which would work out to be $4 mil­lion prof­it for the hold­er or hold­ers of those puts (assum­ing the “insid­ers” had bought 4,000 of the con­tracts). Put it this way, on Sep­tem­ber 10, 2001, some­body, some­where, was very, very bear­ish about AMR’s near-term prospects.

Deriv­a­tives trad­ing in UAL (Unit­ed Airlines’s par­ent) on the Chica­go Board Options Exchange (CBOE) on Sep­tem­ber 6 (and into the next day) exhib­ited iden­ti­cal char­ac­ter­is­tics: 4,744 puts on UAL, com­pared to just 396 calls. By Sep­tem­ber 10, short inter­est (essen­tially, a wager that a stock’s price will fall) in UAL jumped by 40 per­cent over its lev­el of a month pre­vi­ously. As for AMR, its short inter­est increased by 20 per­cent.

The deep­er we delve into the murky world of futures the dark­er the pic­ture appar­ently becomes . . . One hedge-fund man­ager whis­pered to the New York Times that he’d heard that major short-sell­ing had been hap­pen­ing in eSpeed (ESPD), the elec­tronic bond-trad­ing net­work con­trolled by Can­tor Fitzger­ald (whose offices were high up in 1 World Trade Cen­ter). There was prob­a­bly some­thing to this rumor. Between August 7 and Fri­day, Sep­tem­ber 7, ESPD fell by $5.85 (or 42 per­cent) to $7.95.

Or what about the zeal­ous buy­ing of 17,955 short-term S&P 500 index puts at 1,050 points — the “strike price,” essen­tially — on Mon­day, Sep­tem­ber 10, 2001? Those investors were gam­bling that the S&P, which closed at 1,092.54 at 4pm that day, would fall by at least 42 points by Sep­tem­ber 21, when the options were sched­uled to expire. With­out such a sig­nif­i­cant decline, the options would be worth­less. (Hey, options trad­ing is high­ly risky, but poten­tially very prof­itable). More eerie stuff turned up in Britain and Ger­many. In Lon­don, inves­ti­ga­tors detect­ed what seemed to be huge bets on a decline in air­line stocks, while in the lat­ter, the price of Munich Re, a rein­sur­ance com­pany that would be hit by claims result­ing from the attacks, plum­meted amid a surge of puts-buy­ing. . . .

(“Was There Anoth­er 9/11 Attack on Wall Street?” by Alexan­der Rose; Nation­al Review; 7/26/2004.) [5]

9d. There have been stud­ies done [6] since this broad­cast was record­ed that con­firm that there was very unusu­al activ­i­ty [7] in the S & P 500 put options.

10. Most of the sec­ond half of the broad­cast con­sists of analy­sis of a book that high­lights stock mar­ket manip­u­la­tion in con­nec­tion with the assas­si­na­tion of Pres­i­dent Kennedy.

11. A rare 1967 text dis­cuss­es a group of hard­ened inter­na­tion­al crim­i­nals of German/Argentine back­ground, who alleged­ly used sophis­ti­cat­ed mind con­trol tech­niques to assas­si­nate Pres­i­dent Kennedy and col­lapse the com­modi­ties mar­ket on the same day. (Were We Con­trolled? by Lin­coln Lawrence; Copy­right 1967 [HC]; Uni­ver­si­ty Books, Inc.; ISBN 67–15098; pp. 21–23.)

12. The delib­er­ate­ly arranged coin­ci­dence of these two events is believed to have earned the group a half-bil­lion dollars—in 1963, that was worth a lot more than it is today. (Idem.) “The Group” described in the account bears a strong resem­blance to the Bor­mann orga­ni­za­tion [8] fre­quent­ly dis­cussed in these pro­grams.

13. Uti­liz­ing the tech­nique of R.H.I.C./E.D.O.M., the per­pe­tra­tors manip­u­lat­ed Antho­ny (Tino) De Ange­lis, own­er of the Allied Crude Veg­etable Oil Refin­ing Cor­po­ra­tion, order to scan­dal­ize the com­modi­ties mar­ket. (Ibid.; pp. 105–106.)

14. Allied was select­ed because its col­lapse would affect more than fifty banks and because of its con­nec­tion to the Bunge cor­po­ra­tion, an Argen­tine based com­modi­ties trad­ing firm that was among the most impor­tant in the world. (Ibid.; pp. 107–108.)

15. Next, the pro­gram delin­eates a “grain caper” in which between three and five mil­lion dol­lars was net­ted by the con­spir­a­tors. It is believed that this sum con­sti­tut­ed the “walk­ing around” mon­ey by the con­spir­a­tors. (Ibid.; p. 117.)

16. The broad­cast then sets forth details about the Bunge Cor­po­ra­tion, the pow­er­ful com­modi­ties firm that pos­sessed an ultra-mod­ern com­mu­ni­ca­tions net­work that was essen­tial for the split-sec­ond finan­cial manip­u­la­tions nec­es­sary to effect the con­spir­a­cy. (Ibid.; pp. 118–121.)

17. Fol­low­ing dis­cus­sion of Were We Con­trolled, the pro­gram high­lights the fate of the per­son­al­i­ties who brought the sto­ry into print. The book was writ­ten by radio per­son­al­i­ty Art Ford, who was used as a “cutout” by “”Lin­coln Lawrence” (a nom de plume.) (The Man Who Knew Too Much by Dick Rus­sell; Copy­right 1992 [HC]; Car­roll & Graf; ISBN 0–88184-900–6; p. 676.)

18. Mar­tin Scheiman, the lawyer used by “Lawrence” to pay out roy­al­ties was found shot in the head after the book was pub­lished (a sup­posed sui­cide.) (Ibid.; p. 677.) Damon Run­y­on Jr., who wrote the sto­ry up in an unpub­lished arti­cle for the Nation­al Enquir­er also alleged­ly com­mit­ted sui­cide by jump­ing off a bridge. (Idem.)

19. Researcher Mary Fer­rell believed a sim­i­lar­ly grim fate ulti­mate­ly befell “Lawrence” and that Art Ford also felt his life to be in dan­ger. (Ibid.; pp. 677–678.)

20. Next, the pro­gram dis­cuss­es appar­ent links between the Bin Laden orga­ni­za­tion and an under­world milieu in Ciu­dad del Este—an area where Brazil, Argenti­na and Paraguay meet. (“Paraguay Out­post Seen as Hard­lin­er Hide­out” by Thomas Catan; Finan­cial Times; 9/21/2001; p. 8.)

21. Final­ly, the pro­gram con­cludes with an arti­cle about the Repub­li­cans’ block­ing of a bill intro­duced by the Clin­ton admin­is­tra­tion that would have traced the Bin Laden finan­cial con­duits. (“Road­blocks Cit­ed In Efforts to Trace Bin Laden’s Mon­ey” by Tim Wein­er and David Cay John­ston; New York Times ; 9/20/2001; pp. A1-B2.)