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Economic “Terrorism” Contributed to/or Caused Crash of ’08?

COMMENT: A Pen­ta­gon report on the eco­nom­ic crash of ’08 cites the pos­si­bil­i­ty of eco­nom­ic ter­ror­ism as a con­tribut­ing cause to the melt­down of ’08. (The report does come from the Uni­fi­ca­tion Church-owned Wash­ing­ton Times, so spin must be fac­tored into the analy­sis in this par­tic­u­lar arti­cle.)

Cit­ing pos­si­ble cul­prits, the report (or the arti­cle’s reportage on it) does not men­tion the Under­ground Reich. In this regard, one should exam­ine FTR #‘s 671 and 690, both of which exam­ine the pos­si­ble role of the Bor­mann cap­i­tal net­work in the finan­cial melt­down.

FTR #327 high­lights the prob­a­ble role of that net­work in the mar­ket manip­u­la­tion atten­dant on the assas­si­na­tion of Pres­i­dent Kennedy and the 9/11 attacks.

Might the analy­sis pre­sent­ed in the arti­cle have been basi­cal­ly accu­rate, but attrib­uted to the wrong con­spir­a­to­r­i­al enti­ty?

“Finan­cial Ter­ror­ism Sus­pect­ed in 2008 Finan­cial Crash” by Bill Gertz; The Wash­ing­ton Times; 2/28/2011.

EXCERPT: Evi­dence out­lined in a Pen­ta­gon con­trac­tor report sug­gests that finan­cial sub­ver­sion car­ried out by unknown par­ties, such as ter­ror­ists or hos­tile nations, con­tributed to the 2008 eco­nom­ic crash by covert­ly using vul­ner­a­bil­i­ties in the U.S. finan­cial sys­tem.

The unclas­si­fied 2009 report “Eco­nom­ic War­fare: Risks and Respons­es” by finan­cial ana­lyst Kevin D. Free­man, a copy of which was obtained by The Wash­ing­ton Times, states that “a three-phased attack was planned and is in the process against the Unit­ed States econ­o­my.”

While eco­nom­ic ana­lysts and a final report from the fed­er­al gov­ern­men­t’s Finan­cial Cri­sis Inquiry Com­mis­sion blame the crash on such eco­nom­ic fac­tors as high-risk mort­gage lend­ing prac­tices and poor fed­er­al reg­u­la­tion and super­vi­sion, the Pen­ta­gon con­trac­tor adds a new ele­ment: “out­side forces,” a fac­tor the com­mis­sion did not exam­ine.

“There is suf­fi­cient jus­ti­fi­ca­tion to ques­tion whether out­side forces trig­gered, cap­i­tal­ized upon or mag­ni­fied the eco­nom­ic dif­fi­cul­ties of 2008,” the report says, explain­ing that those domes­tic eco­nom­ic fac­tors would have caused a “nor­mal down­turn” but not the “near col­lapse” of the glob­al eco­nom­ic sys­tem that took place. . . .


One comment for “Economic “Terrorism” Contributed to/or Caused Crash of ’08?”

  1. This isn’t a recipe for dis­as­ter or any­thing...nope:

    One big order, thou­sands of small ones, seen behind oil tum­ble

    By Jea­nine Prezioso and David Shep­pard

    NEW YORK, Sept 18 | Wed Sep 19, 2012 4:59am IST

    (Reuters) — A sin­gle large sell order in the bench­mark Euro­pean Brent oil mar­ket, fol­lowed by an abrupt U‑turn among high-fre­quen­cy traders, may have caused one of the most abrupt price routs ever, bro­kers and ana­lysts said on Tues­day.

    As the dust set­tled on Mon­day’s four-minute, near­ly $4 plunge, oth­er pos­si­ble caus­es such as an erro­neous “fat fin­ger” trade, a com­put­er pro­gram run amok or a broad, rumor-dri­ven sell-off were set aside in favor of a com­bi­na­tion of one big trade — poten­tial­ly as much as 12 mil­lion bar­rels worth some $1.4 bil­lion — and tens of thou­sands of com­put­er­ized orders.

    “There was most like­ly a large fun­da­men­tal sell­er in the mar­ket yes­ter­day,” said Eric Scott Hun­sad­er, Chief Exec­u­tive of Nanex, a trad­ing con­sul­tan­cy that reg­u­lar­ly con­ducts detailed foren­sic analy­sis of errat­ic mar­ket activ­i­ty.

    But assum­ing a sin­gle sell­er got the ball rolling low­er, it was algo­rith­mic traders that almost cer­tain­ly extend­ed and inten­si­fied the decline, caus­ing a 20-fold spike in vol­ume as risk lim­its or auto­mat­ed price trig­gers fueled sell­ing.

    Prices fell mod­er­ate­ly at first, with Brent crude drop­ping by just 98 cents over the first three min­utes. But the sell-off inten­si­fied over 46 sec­onds after 13:53:56 p.m., at which point mar­ket-mak­ers may have been forced to liq­ui­date.

    “We can see from look­ing at the tick data that ini­tial­ly the High Fre­quen­cy mar­ket mak­ers were will­ing to absorb their posi­tion around $98 a bar­rel in U.S. crude,” said Hun­sad­er, who exam­ined detailed trad­ing data in the NYMEX mar­ket.

    Sep­a­rate­ly, sev­er­al bro­ker sources said the sell-off orig­i­nat­ed in the Brent mar­ket.

    “This cre­at­ed what the CFTC has described in the past as a ‘hot pota­to’ event, where the posi­tion was rapid­ly passed on in a way that looks very sim­i­lar to the equi­ty mar­ket ‘flash crash’ in May 2010.”

    Talk of more nefar­i­ous caus­es was deemed high­ly unlike­ly. High-fre­quen­cy firms rarely ini­ti­ate big one-off trades. A mis­tak­en trade exe­cu­tion would like­ly have pro­voked an imme­di­ate rebound as the sell­er scram­bled to buy back posi­tions.

    “Based upon our ini­tial review, it does not appear that a fat fin­ger is the like­ly cause of the oil price dive yes­ter­day,” CFTC com­mis­sion­er Bart Chilton said in an inter­view. “We have been por­ing over the data.”

    BUT WHY?

    What remains unclear, and may not be known for weeks if ever, was who placed the first order that might have set the rout in motion — and why.

    Was it a hedge fund in dis­tress, or one that had sim­ply changed its view on prices? An oil trade that spilled over into oth­er com­modi­ties, which also fell, or a cross-asset macro-trade? Why would any­one choose one of the most sub­dued peri­ods of the trad­ing day to exe­cute such a mam­moth deal?

    Find­ing the root cause is hard­er now than before.

    Unlike five years ago, when the con­stant human chat­ter of the New York oil trad­ing pit would like­ly have pin­point­ed a cul­prit in short order, oil mar­kets are now trad­ed almost whol­ly elec­tron­i­cal­ly, fur­ther dis­guis­ing the par­tic­i­pants of a noto­ri­ous­ly secre­tive and opaque mar­ket­place.


    Regard­less of the cause, some fear that the grow­ing role of com­put­er-dri­ven traders — now esti­mat­ed to account for half or more of oil mar­ket liq­uid­i­ty — might make these events more com­mon.

    “This rais­es a larg­er ques­tions about whether these mar­kets con­tin­ue to ful­fill the fun­da­men­tal pur­pose — hedge risk and price dis­cov­ery,” said the CFTC’s Chilton.

    Posted by Pterrafractyl | September 19, 2012, 12:52 pm

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