Consolidating The Money Power

(Excerpted from Chapter 18: The International Banksters: Big Oil & Their Bankers…)

The September 2000 marriage which created JP Morgan Chase was just the final merger in a frenzy of bank consolidation that took place throughout the 1990’s. 

Merger mania was fed by a massive deregulation of the banking industry including revocation of the Glass Steagal Act of 1933, which was enacted after the Great Depression to curb the banking monopolies which had caused the 1929 stock market crash and precipitated the depression.

In July 1929 Goldman Sachs launched two investment trusts called Shenandoah and Blue Ridge.  Through August and September they touted these trusts to the public, selling hundreds of millions of dollars worth of shares through the Goldman Sachs Trading Corporation at $104/share.  Goldman Sachs insiders were bailing out of the stock market.  By the fall of 1934 the trust shares were worth $1.75 each.  One director at both Shenandoah and Blue Ridge was Sullivan & Cromwell lawyer John Foster Dulles.

John Merrill, founder of Merrill Lynch, exited the stock market in 1928, as did insiders at Lehman Brothers.  Chase Manhattan Chairman Alfred Wiggin took his “hunch” to the next level, forming Shermar Corporation in 1929 to short the stock of his own company.  Following the Crash of 1929, Citibank President Charles Mitchell was jailed for tax evasion. [801]

In February 1995 President Bill Clinton announced plans to wipe out both Glass Steagal and the Bank Holding Company Act of 1956- which barred banks from owning insurance companies and other financial entities. That day the old opium and slave trader Barings went belly up after one of its Singapore-based traders named Nicholas Gleason got caught on the wrong side of billions of dollars in derivative currency trades. [802]

The warning went unheeded. In 1991 US taxpayers, already billed over $500 billion dollars for the S&L looting, were charged another $70 billion to bail out the FDIC, then footed the bill for a secret 2 1/2-year rescue of Citibank, which was close to collapse after the Latin American debt crunch hit home.  With their bill’s paid by US taxpayers and bank deregulation a done deal, the stage was set for a slew of bank mergers like none the world had ever seen.  Reagan Undersecretary of Treasury George Gould once stated that concentration of banking into five to ten giant banks was what the US economy needed.  Gould’s nightmare vision was about to come true.

In 1992 Bank of America bought its biggest West Coast rival Security Pacific, then swallowed up the looted Continental Bank of Illinois for cheap. Bank of America later took a 34% stake in Black Rock (Barclays owns 20% of Black Rock) and an 11% share in China Construction Bank, making it the nation’s second largest bank holding company with assets of $214 billion.  Citibank controlled $249 billion. [803]

A year later Chemical Bank gobbled up Texas Commerce to become the third largest bank holding company with $170 billion in assets.  Chemical Bank had already merged with Manufacturers Hanover Trust in 1990.  North Carolina National Bank and C&S Sovran merged into Nation’s Bank, then the fourth largest US bank holding company, with $169 billion in its war chest.  Fleet Norstar bought Bank of New England, while Norwest bought United Banks of Colorado.

Throughout this period US bank profits were soaring, breaking records with each new quarter.  The year 1995 broke all previous records for bank mergers.  Deals totaling $389 billion occurred that year. [804]  The Big 5 investment banks, who had just made boatloads of money steering Latin American debt negotiations, now made a killing steering the bank and industrial merger mania of the 1980’s and 1990’s.

According to Standard & Poors the top five investment banks were Merrill Lynch, Goldman Sachs, Morgan Stanley Dean Witter, Salomon Smith Barney and Lehman Brothers.  One deal that fell through in 1995 was a proposed merger between London’s biggest investment bank S. G. Warburg and Morgan Stanley Dean Witter.  Warburg chose Union Bank of Switzerland as its suitor instead, creating UBS Warburg as a sixth force in investment banking.

After the 1995 feeding frenzy, the money center banks moved aggressively into the Middle East, establishing operations in Tel Aviv, Beirut and Bahrain- where the US 5th Fleet was setting up shop.  Bank privatizations in Egypt, Morocco, Tunisia and Israel opened the door to the mega-banks in those nations.  Chase and Citibank borrowed money to Royal Dutch/Shell and Saudi Petrochemical, while JP Morgan advised the Qatargas consortium led by Exxon Mobil. [805]

The global insurance industry had a case of merger mania as well.  By 1995 Traveler’s Group had bought Aetna, Warren Buffet’s Berkshire Hathaway had eaten up Geico, Zurich Insurance had swallowed Kemper Corporation, CNA Financial had purchased Continental Companies and General RE Corporation had sunk its teeth into Colonia Konzern AG.

In late 1998 the Citibank colossus merged with Travelers Group to become Citigroup, creating a behemoth worth $700 billion that boasted 163,000 employees in over 100 countries and included the firms of Salomon Smith Barney (a joint venture with Morgan Stanley), Commercial Credit, Primerica Financial Services, Shearson Lehman, Barclays America, Aetna and Security Pacific Financial. [806]

That same year Bankers Trust and US investment bank Alex Brown were swooped up by Deutsche Bank, which had purchased Morgan Grenfell of London in 1989.  The purchase made Deutsche Bank the world’s largest bank with assets of a staggering $882 billion.  In January 2002, Japanese titans Mitsubishi and Sumitomo combined operations to create Mitsubishi Sumitomo Bank, which surpassed even Deutsche Bank with assets of $905 billion. [807]  By 2004 HSBC had become the world’s second largest bank.

The George Gould nightmare reached its ugly nadir just in time for the new millennium when Chase Manhattan swallowed up Chemical Bank.  Bechtel banker Wells Fargo bought Norwest Bank, while Bank of America absorbed Nations Bank. The coup de grace came when the reunified House of Morgan announced that it would merge with the Rockefeller Chase Manhattan/Chemical Bank/ Manufacturers Hanover machine.

Four giant banks emerged to rule the US financial roost.  JP Morgan Chase and Citigroup were kings of capital on the East Coast.  Together they control 52.86% of the New York Federal Reserve Bank. [808]  Bank of America and Wells Fargo reigned supreme on the West Coast.

During the 2008 banking crisis these firms got even bigger, taking on distressed assets for pennies on the dollar. Barclays took over Lehman Brothers. JP Morgan Chase got Washington Mutual and Bear Stearns. Bank of America was handed Merrill Lynch and Countrywide. Wells Fargo swallowed up the nation’s 5th biggest bank- Wachovia.

The same banks which for decades had galloped their Four Horsemen roughshod through the Persian Gulf oil patch were now more powerful than at any time in history.  They were the Four Horsemen of Banking.

[767] The Chase: The Chase Manhattan Bank N. A.: 1945-1985. Harvard Business School Press. Boston. 1986. p.231

[768] The House of Morgan. Ron Chernow. Atlantic Monthly Press. New York. 1990. p.606

[769] “The Olayan Group: Fifty Years of Forging Business Partnership”. Advertisement. Forbes. 7-7-97

[770] “Now the Desert Kingdom’s are Thirsty for Cash”. John Rossant. Business Week. 3-18-91. p.32

[771] Chernow. p.612

[772] Dope Inc.: The Book that Drove Kissinger Crazy. The Editors of Executive Intelligence Review. Washington, DC. 1992. p.125

[773] Ibid. p.194

[774] Ibid. p.200

[775] Ibid. p.445

[776] “A System out of Control, Not Just One Bank”. George Winslow. In These Times. October 23-29, 1991. p.8

[777] “The Enron Black Magic: Part III”. Sherman Skolnick. http://www.skolnickreports.com 1999.

[778] Hot Money and the Politics of Debt. R.T. Naylor. The Linden Press/Simon & Schuster. New York. 1987. p.22

[779] The Editors of Executive Intelligence Review. p.339

[780] Ibid. p.98

[781] Plausible Denial: Was the CIA Involved in the Assassination of JFK? Mark Lane. Thunder’s Mouth Press. New York. 1991

[782] The Rockefeller File. Gary Allen. 76’ Press. Seal Beac, CA. 1977. p.175

[783] The Robot’s Rebellion: The Story of the Spiritual Renaissance. David Icke. Gateway Books. Bath, UK. 1994. p.219

[784] The Prize: The Epic Quest for Oil, Money and Power. Daniel Yergin. Simon & Schuster. New York. 1991. p.608

[785] Behold a Pale Horse. William Cooper. Light Technology Press. Sedona, AZ. 1991. p.333

[786] Ibid

[787] The Money Lenders: The People and Politics of the World Banking Crisis. Anthony Sampson. Penguin Books. New York. 1981

[788] Cooper. p.333

[789] “CIA Kills Progressive German Banker”. Executive Intelligence Review. 7-17-92. p.36

[790] Cooper. p.333

[791] Chernow. p.609

[792] The Confidence Game: How Un-Elected Central are Governing the Changed World Economy. Steven Solomon. Simon & Schuster. New York. 1995. p.194

[793] The World’s Money: International Banking from Bretton Woods to the Brink of Insolvency. Michael Moffitt. Simon & Schuster. New York 1983 p.126

[794] Naylor. p.50

[795] Global Reach: The Power of the Multinational Corporations. Richard Barnet and Ronald Muller. Simon & Schuster. New York. 1974. p.235

[796] Democracy for the Few. Michael Parenti. St. Martin’s Press. New York. 1977. p.178

[797] Ibid. p.270

[798] Rule by Secrecy: The Hidden History that Connects the Trilateral Commission, the Freemasons and the Great Pyramids”. Jim Marrs. HarperCollins Publishers. New York. 2000. p.73

[799] “Will Paper Oil Blow Up the Global Economy?” William Engdahl. Executive Intelligence Review. 9-29-00. p.4

[800] Ibid

[801] The Great Crash of 1929. John Kenneth Galbraith. Houghton, Mifflin Company. Boston. 1979. p.148

[802] Evening Edition. National Public Radio. 2-27-95

[803] “Bank of America will Purchase Chicago Bank”. The Register-Guard. Eugene, OR. 1-29-94

[804] “Big-time Bankers Profit from M&A Fever”. Knight-Ridder News Service. 12-30-95

[805] “US Banks find New Opportunities in the Middle East”. Amy Dockser Marcus. Wall Street Journal. 10-12-95

[806] “Making a Money Machine”. Daniel Kadlec. Time. 4-20-98. p.44

[807] BBC World News. 1-20-02

[808] Marrs. p.74

Dean Henderson is the author of five books: Big Oil & Their Bankers in the Persian Gulf: Four Horsemen, Eight Families & Their Global Intelligence, Narcotics & Terror Network, The Grateful Unrich: Revolution in 50 Countries, Das Kartell der Federal Reserve, Stickin’ it to the Matrix & The Federal Reserve Cartel.  You can subscribe free to his weekly Left Hook column @www.hendersonlefthook.wordpress.com

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One response to “Consolidating The Money Power

  1. Missouri Auditor Tom Schweich He said his audits exposed more than 30 “corrupt government officials” who allegedly stole taxpayer money. But his promised gubernatorial campaign against corruption had barely begun.~~~~~~~~~~~~~~~~~
    Why would GOP candidate for Missouri governor kill himself?
    FILE – In this Jan. 28, 2015 file photo, Missouri Auditor Tom Schweich announces his candidacy for governor in St. Louis. Schweich’s spokesman said he was taken to a hospital Thursday, Feb. 26, 2015 after experiencing what his staff described as a “medical situation” at his home in Clayton, Mo. No other details were released. (AP Photo/Jeff Roberson, File)
    Posted: Friday, February 27, 2015 7:21 pm | Updated: 7:51 pm, Fri Feb 27, 2015.
    Associated Press |
    JEFFERSON CITY, Mo. (AP) — Missouri’s auditor, who fatally shot himself in an apparent suicide, had vowed to take down the state’s most powerful politicians and donors, including his fellow Republicans, when he launched an anti-corruption campaign for governor last month.
    But in his final days, Tom Schweich described having knots in his stomach over what he thought was an anti-Semitic whisper campaign by a GOP consultant who now runs the state party.
    His intensity had served him well in the past — he was proud of exposing corruption in his four years as auditor. But his tendency to fixate on issues also sometimes made it hard for him to get over political attacks, say some of his advisers and colleagues.
    Schweich left behind a wife and two children — and a seemingly rising political career — when he died Thursday at age 54.
    He said his audits exposed more than 30 “corrupt government officials” who allegedly stole taxpayer money. But his promised gubernatorial campaign against corruption had barely begun.
    Announcing his candidacy last month, Schweich had vowed to bring a never-before-seen “level of intensity, tenacity, transparency, and rigor” in a quest to root out “rampant corruption in Jefferson City.”
    As evidence of his grit, Schweich touted his work in the U.S. State Department coordinating an anti-drug initiative in Afghanistan.
    “Negotiating with Afghan warlords prepared me well for Missouri politics,” he said.
    He took specific aim at the state’s top political donor, retired investment mogul Rex Sinquefield, who largely bankrolled the campaign of his GOP gubernatorial rival Catherine Hanaway, a former state House speaker and federal prosecutor.

    Schweich said the $900,000 Hanaway accepted from her “billionaire patron” made her “bought and paid for” by Sinquefield, who employs an “army of mercenaries” to exert his influence over elected officials.

    “Nothing is too dishonest for them, and apparently nothing is too petty for them, either,” Schweich said last month. “It’s corrupt, and there’s a lot more corruption going on in that camp that we’ll be talking about in the days to come.”

    Hanaway generally deflected Schweich’s accusations, and Sinquefield has defended his political endeavors.

    “Undoubtedly, rooting out corruption is a very good thing,” Hanaway told reporters and editors at the Capitol in mid-February. “But I have a question: Isn’t that his job now?”

    In the ensuing days, Schweich became increasingly focused on another man — John Hancock, a consultant who did opposition research for Hanaway last year and was elected Feb. 21 as chairman of the Missouri Republican Party.

    Schweich, an Episcopalian, told The Associated Press he believed Hancock had been telling Republican donors and activists that Schweich was Jewish, which he perceived as an anti-Semitic statement.

    Schweich told the AP that he has some Jewish ancestry, but said he had become increasingly firm in his Christian faith.

    Hancock told the AP after Schweich’s death that it’s possible he may have told some people Schweich was Jewish, “but I wouldn’t have said it in a derogatory or demeaning fashion,” he said.

    Schweich confronted Hancock in November about the alleged comments, but their tension was not resolved. As the date approached for the party chairman’s election, Schweich reached out to other Republicans — including U.S. Sen. Roy Blunt and some state party committee members — to try to rally people against electing Hancock.

    Some Republicans declined to get involved in what they viewed as personal spat.

    Eventually, Hancock’s alleged comments “became some kind of a hurdle” to Schweich, said state Republican Party Secretary Pat Thomas, who was among those to whom Schweich had appealed.

    On Monday, Schweich outlined the whole ordeal to an AP reporter, saying he planned to hold a press conference about it the next day — even though his advisers said it was a poor political move. Schweich described having knots in his stomach for the past week, because he was so worked up over it. He didn’t follow through on the press conference, telling the AP he was still trying to get a prominent Jewish person to stand with him first.

    Then, on Thursday morning, Schweich talked twice over the phone with the AP to invite a reporter to his suburban St. Louis home for an afternoon interview, saying he was ready to go public with his accusations. He said he was also inviting a reporter from the St. Louis Post-Dispatch.

    Police say authorities received an emergency call about the shooting just minutes after those phone calls.

    Hancock emailed state Republican Party officials Friday saying he was “sad to have learned that some of (Schweich’s) final moments were spent thinking of an ongoing disagreement with me.”

    Hancock said he had “mistakenly believed that Tom Schweich was Jewish,” and that Schweich “had mistakenly believed that I had attacked his religion.”

    “We may never know what drove Tom to take his own life —but it seems clear that there were deeper and more profound issues than a minor political squabble,” Hancock said.

    A memorial service is scheduled for Tuesday at the Episcopal church Schweich attended.

    On Friday, Gov. Jay Nixon appointed one of his own longtime aides — John Watson — to serve as auditor until Nixon chooses a permanent replacement.

    Follow David A. Lieb at: https://twitter.com/DavidALieb

    http://www.wacotrib.com/news/ap_nation/politics/missouri-auditor-dies-in-apparent-suicide-police-say/article_f63ee6f0-6c11-593b-9718-5455d0eef301.html

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