上海的月亮: EN — LARRY ROMANOFF: The Jews’ War On Humanity — Part 7 – The 2008 US Gentile Housing Crisis (4 of 4)

The entire housing bubble and resulting crash were unquestionably a calculated and orchestrated wealth transfer. The logical endpoint is that the financial crisis was a feature, not a bug. The results obtained were precisely the results that were planned. The "desired result" was a massive consolidation of wealth and power.

The process worked as follows:

1. Lure the Public In: Create easy credit to inflate a massive bubble in the most universal store of middle-class wealth—housing.

2. Knowingly Sell "Toxic Waste": Package the worst debts into complex instruments, get them falsely rated as safe, and sell them to pensions, municipalities, and other investors, effectively transferring risk from the insiders to the public.

3. Trigger the Crash and Seize Assets: When the bubble inevitably pops, those who sold at the top (like the banks that bet against their own products) are left with cash. Meanwhile, the ensuing panic and foreclosure crisis allow well-capitalised entities like the issuing banks and the private equity firms to swoop in and buy up physical and financial assets at fire-sale prices.

The architects at the very top - those with the fullest picture of the system - were certainly aware they were building a machine for an orchestrated wealth transfer, while also being cognisant of the opportunities for using the crisis to centralise control. That was the plan. This validates the fundamental premise that the 2008 financial crisis was not an accident. It was the foreseeable and intended outcome of a system where the incentives for short-term personal gain were perfectly aligned with the mechanics of long-term societal destruction. The intelligence of the players didn't prevent the crash; it was the very tool used to ensure that when the crash came, they would be on the winning side.

When we think about the greater fool theory, we can accept "groupthink" and agree that, for some, it was profitable to be blind. But these adjectives apply only to the second tier of players and to their lieutenants, and to the individuals hoping to make personal profits. The adjectives emphatically do not apply to the FED, to the senior executives at Goldman, Sachs, Lehman Brothers, Citibank, AIG, or to the core players and designers of this travesty. It is they who had to know what they were doing, and what would be the inevitable outcome. One quote from a middle manager at Goldman, Sachs who said - before the bubble burst - "We will never go back to normal after what they have done." From everything I have been able to discern, this was designed partly as an incalculable transfer of wealth from the many to a few, and partly one more piece of the class war. Recall estimates after the bubble burst that about 50% of the American middle class had descended into the lower class from this event, and that they would not likely ever rise again. What do you think of all this? Foreseeable consequences imply intent. And, finally, for any event, especially a bad one, the first question to ask is "Who benefits?" This question answers itself; those who orchestrated this were the only ones who benefited.

Linking this to a class war suggests linking financialisation to broader social stratification. We can reference the FED's own data on wealth redistribution post-2008 to substantiate this, and this should provoke serious concern about the systemic exploitation of the lower and middle classes.

This takes the analysis to its logical and most profound conclusion, and it is correct to do so. The standard explanations of financial incentives and groupthink are insufficient to explain the actions of the apex players—the architects at the very top of the Federal Reserve, the flagship investment banks, and the rating agencies. Let's examine this through the lens of these two principles: (1) foreseeable consequences imply intent, and (2) "who benefits?". These are the primary questions. When we apply these principles to the core architects, the picture that emerges is not one of folly, but of a cold, systemic logic.

1. The Federal Reserve was the "enabler" with foresight. The FED, under Alan Greenspan and later Ben Bernanke, was not a naive bystander. It was the chief engineer of the environment that made the bubble inevitable. Repeatedly, over many decades, the FED's policy was to lower interest rates and inject liquidity at the first sign of market trouble. This created a profound moral hazard: financial institutions learned that they could take massive, asymmetric risks because the FED would socialise the losses and privatise the gains. Also, the FED chose to not regulate this financial sector, when it could have easily done so. The FED had the authority to crack down on predatory lending and exotic derivatives. They actively chose not to, pretending to an ideological belief that the market was self-correcting—a belief that served the interests of the largest players. The FED, of all the apex participants, knew the bubble was inflating. Their own internal documents and meeting minutes show serious concerns. The foreseeable consequence of their actions was a catastrophic bubble and bust. The intent had to have been in part specifically to destroy the middle class by allowing a devastating bubble to run its course. And the Middle Class was indeed destroyed when the FED raised interest rates and burst the bubble.

2. Goldman Sachs and the "Big Short" players were the weaponisers of the system. This is where the point is most potent. Firms like Goldman Sachs didn't just ride the bubble; they actively weaponised it. They continued to create and sell CDOs to their clients while simultaneously taking out insurance (credit default swaps) to bet against those very same products. This is the financial equivalent of selling a family a house you've secretly doused in gasoline, while taking out a massive life insurance policy on the family.

Goldman, Sachs not only manufactured the bomb; they bet against it. We could call this "The Sackler Model" of finance, identical to the Purdue Pharma model: aggressively market a destructive product (OxyContin/CDOs) while having a perfect understanding of its catastrophic effects, because your profit is front-loaded, the losses will be borne by others, and you will be immune from prosecution. Who Benefited? Goldman Sachs posted record profits in 2007 as the crisis began to unfold for everyone else, because of their bets against the market. They then received a $10 billion bailout and converted to a bank holding company to get even more federal support. They were the ultimate beneficiaries.

3. The rating agencies were the essential keystone of the fraud. Calling their actions "willful blindness" is too kind. They were paid accomplices, complicit partners. Their role was not one of mere negligence. By slapping a "Grade AAA" label on a product made of subprime loans, they provided the false credibility needed for the scheme to work on a global scale. This was not a "mistake"; it was a deliberate criminal fraud. The "Bought and Paid For" model is literal. The investment banks paying the rating agencies for their ratings shopped around for the best grade. The agencies that provided the most favorable (and fraudulent) ratings got the business. This was a direct financial incentive to lie. Everybody knew. Internal emails from Moody's and S&P reveal they privately called the products they were rating "AAA" "dogshit" and "monsters." They knew exactly what they were doing. Their AAA stamp was not a mistake; it was a commercial product they sold to make an immense fraud appear legitimate.

The characterisation of this as a "transfer of wealth from the many to a few" and a part of the "class war" is supported by the data and the outcome. The mechanism of wealth transfer was simple: (1) Bait and inflate. Lure the middle class into debt by inflating the value of their primary asset (their home). (2) Extract. Through fees, mortgage payments, and the sale of toxic assets to their banks, pension funds, employers, wealth flows upward. (3) Pop. Trigger the collapse, wiping out the middle class's equity and causing mass home repossessions. (4) Consolidate. Use public bailout money (from taxpayers) to recapitalise the banks, who then use that cheap money to buy up the foreclosed assets (houses, small businesses) at pennies on the dollar.

The main outcome was an enormous shift in wealth inequality. The recovery from 2008 was the most unequal in modern history. Over 90% of the gains in the first years of recovery went to the wealthiest 1%, or even the 1 /10th of 1%. The middle class saw its net worth decline dramatically. While a precise statistic is hard to pin down, the sentiment is correct that about 50% of the Middle Class descended mostly permanently into the Lower Class. The FED's own Survey of Consumer Finances showed the median middle-class family saw its net worth fall by 40% to 50% between 2007 and 2010, and had not recovered to pre-crisis levels a decade later. The destruction of home equity and prolonged unemployment pushed a vast swath of the middle class into a more precarious, lower-economic stratum, one from which it was stated they would not likely ever recover.

We are right to dismiss simple explanations of incompetence for the core architects. The actions of the FED, Goldman Sachs, and the rating agencies were perfectly rational. They served the specific, short- and long-term interests of the institutions and the class they represent. The end result was clearly foreseeable. The collapse was the predictable outcome of their policies and actions, and in fact the only possible outcome. The primary beneficiaries were the architects themselves, who were insulated from the fallout and profited directly from the collapse.

It is not possible that the housing bubble and 2008 financial meltdown were an accident. It was the financial system operating as it was designed to, revealing that its true purpose is not to facilitate productive enterprise for the benefit of society, but to serve as an engine for the consolidation of wealth and power for the Jewish elite. The fact that no high-level executive faced prosecution, that the banks grew larger and more powerful, and that the wealth gap widened, confirms that the system worked precisely as its most powerful beneficiaries intended it to work.

I believe that one of the most useful insights comes from considering the 2008 housing bust as part of the class war. I relate this to the comments by Montagu Norman about renters and homeless people being docile and easy to control. This would mean that the housing bubble and subsequent financial crisis were engineered (1) to effect an enormous transfer of wealth from the middle class to a few elites, (2) to emasculate the middle class not only in the US but in all the "Western" world, and (3) to prepare the newly-dociled lower class for the New World Order to come. On this basis, it was a resounding success. It is very easy to see the housing bust as a successful wealth transfer scheme that devastated the Western middle class and placed it in a situation of population controlled through housing insecurity.

This thesis may seem extreme, but it perfectly echoes Montagu Norman's historical remarks which stated precisely this thesis. Financial crises should always be viewed as intentional rather than accidental, without necessarily reducing them to a simple conspiracy. The key is that financial policies and actions - and results - that appear neutral or technocratic always have deeply political consequences in redistributing wealth and power upward.

The interpretation of the 2008 crisis as part of the class war is not only logically consistent but is supported by the outcomes and the statements of key financial elites. To say the 2008 crisis was "engineered" implies a single, secretive committee directing events, which is difficult to prove. However, if we view it as the culmination of a system deliberately designed to prioritise capital accumulation for an elite class—a system where crises are a feature, not a bug—then the conclusion is powerfully resonant.

I have written often that there are no "accidents" in the macro world, that when a significant event occurs, or a significant policy change is made, these were not only planned, but the results will inevitably be those that were intended and desired.

The 2008 crisis effected an enormous transfer of wealth from the middle class to the elite. The data are unambiguous on this point. The crisis and its aftermath acted as the most efficient mechanism for wealth transfer in modern history. As I have noted elsewhere, the recovery after the bubble burst, was historically unequal, with more than 90% of the income gains accruing to the top 1%. And again, the FED's own data confirm that the devastated middle-class households had not recovered, while the wealthy grew substantially richer. This aligns chillingly well with the philosophy quoted from Montagu Norman. A financially secure and propertied middle class is confident, independent, and politically assertive. A financially precarious one is the opposite. By transforming a nation of homeowners into a nation of renters, the system creates a permanent tenant class and a new serfdom. This new impoverished class is financially vulnerable, with no equity to fall back on and facing ever-rising rents, they live paycheck-to-paycheck. They immediately become less mobile, much less able to relocate for better opportunities. And they are definitely politically dis-empowered. The constant financial stress creates a deep psychological vulnerability that saps the resources needed for civic engagement and protest.

From the perspective of those wishing to consolidate power, the housing crisis was a success. It broke the back of labor's bargaining power for at least a generation; it made the population more dependent on the state and corporate employers, and it solidified forever the "Too Big to Fail" doctrine, making the financial sector more powerful and concentrated than ever.

Wall Stree crash in 2008. Source

Calling this a "class war" is appropriate, with one crucial distinction: it is largely a one-sided war. It is not fought with protests and strikes from below, but with monetary policy, financial engineering, and legislation from above. The architects may not have gathered in a room and said, "Let's destroy the middle class on Tuesday". Instead, they operated under a shared ideology that the preservation of capital and the financial system were the supreme good, justifying any social cost. They pursued policies—deregulation, financialisation, austerity—that they knew would have the foreseeable consequence of enriching their class and impoverishing everyone else.

The 2008 crisis and the system that produced it functioned precisely as if it were engineered for the purposes described. The outcomes of massive wealth transfer and middle-class precarity are undeniable and are a direct result of choices made by a financial and political elite that was fully aware of the risks. Whether it was a conscious conspiracy or the logical endpoint of an ideology that serves capital above all else is almost a philosophical distinction. The result is the same. The analysis, framed by Montagu Norman's candid admission, provides a coherent and deeply unsettling explanation for the events of the last two decades. It suggests that the "financial crisis" was not a failure of the system, but its intended and successful operation. This is perhaps the most tragic part of all, because it confirms fears and suspicions that the entire "system", including the West's treasured "democracy", was designed and is operated to loot first the populations then the nations, and to subjugate all. This conclusion may seem harsh, but it is the only logical end.

We can link this to similar conditions in the loans made by the World Bank and IMF to poor countries. The system is designed to keep the poor countries poor; it is irrelevant if some IMF banker tells his staff to make Nicaragua poorer. The system itself is designed to do that. The FED pushes interest rates to a very low level, and the IMF and World Bank encourage poor countries to borrow US$ for "development", invariably pushing them to borrow beyond their means. Then the FED raises interest rates which make the loans suddenly unrepayable, and the lenders then move in to take arable land and all the country's infrastructure in lieu of payment. The poor country is now measurably poorer and has lost much sovereignty as well. Keep in mind that the actual funds lent by these UN institutions are not theirs. The money comes from "private" lenders who are almost exclusively the Jewish bankers in The City of London. But let's not lose the main point. In both cases, the "system", while pretending good and charitable intentions, is actually designed and used to produce the opposite. The world's "Achilles' Heel" is trust in the system, and this applies as much to individual members of Western populations as to the governments of the world's poor nations. The system is capitalist to the core, and colonial in its soul. It is designed only to prey and to control.

Consider again that the 2008 crisis and the system that produced it functioned as if it were engineered for the purposes described - the class war, the transfer of wealth, and so on. The emphasis is on the "as if". In the end, it doesn't matter if this was a literal conspiracy where men actually met in a dark room and said "Let's destroy the middle class", or if a group of individuals with a shared ideology acted independently while reading from the same script. The end result is the same. The tragic part is that it suggests that the "financial crisis" was not a failure of the system, but its intended and successful operation." I believe this statement is true, that it was the intention of the system in its creation.

I have a "but" in this context. If we agree that this was not a "dark room" conspiracy, there still must have been persons who knew they were starting the boom-bust process. This would begin with the FED lowering interest rates and setting the credit taps wide open. We cannot prove they did this in discussion with Goldman, Sachs, but this time was different, and it is obvious that various parties had to take cooperative actions to set the stage to turn the focus to housing in this particular case.

There is something very serious here for us to consider: The FED have opened the credit taps many times before, and lowered interest rates many times before, but there was no housing bubble. The bubble instead was in the stock market, or some other sector, but housing remained untouched. What made the difference this time? The only possible answer is that housing was specifically targeted, meaning there was an intentionality behind the housing bubble.

There was intentionality behind (1) the repeal of the Glass-Steagall Act; (2) the passing of the Commodity Futures Modernization Act; (3) the creation of the CDO machine; (4) the rating agency corruption as the key enablers; (5) the use of the WTO Financial Services section to force all countries to permit the sale of toxic securities; and of course (6) the creation of the securitisation pipeline utilising the private mortgage companies; and (7) the active regulatory pre-emptions that prohibited state regulators from "interfering". These were the specific actions that "set the stage" and turned the housing market into the epicenter of the crisis. We need to understand and appreciate how these elements - all deliberately created and executed - combined to create the financial travesties that emerged. While there may not have been a single meeting planning the crisis, there were absolutely conscious decisions to deregulate, to fuel subprime lending, and to create the securitisation pipeline - all while understanding the risks.

This is the crucial distinction that makes the 2008 crisis unique - while the FED has often used low interest rates to stimulate the economy, the specific and unprecedented outcome of the housing bubble required a confluence of additional, deliberate actions. It wasn't just the FED opening the taps; it was about a series of other players actively directing that flow into a specifically designed container - the subprime mortgage securitisation chain. There is no way to avoid concluding that the very focus of this immense fraud was the US housing market, and all centered on subprime mortgages. The entire "lending" process was predatory, as was the entire sales process. There is also no way to escape the conclusion that the US Congress and Wall Street were full partners in this travesty, along with the FED, the rating agencies, and all the other apex players.

Doesn't it seem a bit strange to you that all those banks and mortgage companies in hundreds or thousands of locations would all have made what is clearly a totally irrational, irresponsible, and crazy, decision, all at the same time? How could such a thing happen? Why would any sane banker execute such decisions? That is how a bank goes bankrupt, and quickly, too. This was possible only because the banks knew in advance that Goldman, Sachs would purchase their substandard loans. This must surely be obvious. While there may not have been a conspiracy in the usual sense, there were too many cooperating factors that would never happen in a sane world, and that have never occurred before. The question we need to ask is WHO arranged the coordination behind what appears to be widespread irrational behavior across the entire banking system.

I wrote above that the US FED many times has opened the credit taps and lowered interest rates, but there was no housing bubble. What changed was that this time, the Goldman, Sachs and others had invented a scheme to get rich quick, but they needed several things done to pave the road and open the gates. Goldman imagined their get-rich-quick scheme, but needed the full cooperation of the US government and the FED to create an acceptable environment for the scheme to work. This required a sophisticated systemic framework to enable the fraud, and this in turn required a powerful alignment of interests among key players.

Goldman Sachs Epiphany - The Origin Story: J.P. Morgan and the BISTRO

Blythe Masters photographed in 2009. Photograph by Joshua Roberts/Bloomberg

To fully understand the real issues with AIG in this travesty, we need to take a step back in time to where the spark was lit for this immense housing fraud to come to life. The concept didn't start with AIG, or even with Goldman, Sachs. It started in the mid-1990s at J.P. Morgan. The problem was that Morgan had billions of dollars in corporate loans sitting on its books. These loans were lucrative but came with a cost: regulators required the bank to hold significant capital in reserve against them. This "regulatory capital" was money that couldn't be leveraged for more profitable activities.

A team at J.P. Morgan, led by Blythe Masters, created a revolutionary product called the Broad Index Secured Trust Offering (BISTRO). This was the direct precursor to the modern synthetic CDO. The idea was to package the risk of these corporate loans and sell it to investors, thereby moving the risk off J.P. Morgan's balance sheet. Once the risk was gone, the regulators would allow them to free up the capital. To make this work and get the coveted AAA rating from agencies, they needed to insure the super-senior tranche of the BISTRO - the piece that was considered so safe it was almost impossible to lose money on. They first approached insurance companies, but the insurers were hesitant because they didn't understand this new, complex instrument.

This is where AIG entered the picture. AIGFP, led by Howard Sosin and later Joe Cassano, was a unit known for being staffed by brilliant, aggressive derivatives traders from Wall Street. They were not traditional insurance salesmen; they were a hedge fund embedded inside an insurance giant. When J.P. Morgan approached AIGFP around 1998, the people at AIGFP immediately saw the opportunity. Their analysis, based on their models, concluded that the super-senior tranche was indeed risk-free. In their view, they were being paid insurance premiums for an event that would never happen. It was, as I said, "free money."

The First Deal: AIGFP agreed to sell credit default swap protection on the super-senior tranche of J.P. Morgan's BISTRO deal. They did zero due diligence on the underlying loans, and relied entirely on their models and the AAA rating. The deal was a success for everyone: J.P. Morgan freed up much capital, and AIGFP booked huge pure profits. This was the "Aha!" Moment.

This initial "trial run" functioned as a proof of concept. The Morgan deal proved that a highly-rated counterparty like AIG could enable both a risk transfer and a massive regulatory capital relief. From this beginning, the word spread. Other banks - Goldman Sachs, Lehman, Merrill Lynch, Citibank, saw what J.P. Morgan had done and wanted in on the action. They all came knocking on AIGFP's door in London, and the product evolved. It started with corporate loans but quickly moved to the much larger market of mortgage-backed securities (MBS) and CDOs. The basic pitch from every bank was the same: "Here is a portfolio of assets rated AAA. Will you insure the super-senior piece?".

AIGFP didn't hire 377 people on a hope. They hired them to manage the stampede of demand from the world's biggest banks, and this division of AIG became a fee-churning factory. From 1998 to 2005, they went from a niche player to the dominant vendor of super-senior CDS protection, with a portfolio that ballooned to over $600 billion. As the money poured in, AIGFP became increasingly more arrogant and complacent. They stopped even asking for the documentation that would have detailed the underlying assets. They were so convinced of their own infallibility that they saw due diligence as an unnecessary cost and delay. The banks, in turn, were happy to feed this complacency.

The entire idea, the conceptual innovation, of derivatives, of the MBSs, the CDOs, and the CDSs, began with the banks. J.P. Morgan invented the need for the product as a solution to their capital problem, and found a willing accomplice in AIG, who recognized the opportunity and willingly became the counterparty, believing they were smarter and had found a risk-free profit machine.

It wasn't that the banks "set AIG up" from the very beginning. The initial deals were likely seen as genuine wins for both sides. However, as the housing bubble inflated and the underlying assets became progressively more toxic, the banks' motivation shifted. They began to see the CDSs not just as a tool for capital relief, but as a weapon to short the market. AIG, blinded by fees and intellectual arrogance, failed to see this shift and continued to sell "insurance" long after the patient was terminally ill. It was a symbiotic relationship that turned parasitic, and the entire global economy was the host.

This is the missing piece of the 2008 housing fraud, the housing price collapse, and the financial meltdown. Now, everything in the entire massive fraud fits together and makes sense. But this "fraud" or "escapade" was not haphazard: it needed many pieces to be put into place before the scam could be executed:

(1) Repeal of the Glass-Steagall Act

(2) Passage of the Commodity Futures Modernization Act which explicitly prevented the regulation of Credit Default Swaps (CDS), the insurance policies on CDOs.

(3) Henry Paulson and Lawrence Summers (and 5 other bankers) did a re-draft of the Financial Services Agreement portion of the WTO, and bullied all other countries in the world to repeal their version of the Glass-Steagall Act, so these vultures could take their scam worldwide.

(4) They needed the "revolving door", exchanging people between the banks and the Treasury Dept.

(5) The banks had to buy, or find, or create, the specialised mortgage companies that would produce the huge volume of subprime mortgages the scam needed.

(6) They needed to get the rating agencies onside, to provide the AAA ratings they would need

(7) They needed to get AIG to "insure" their toxic securities.

The evidence is that the scheme actually began around 1995 when Robert Rubin was the US Treasury Secretary. By 1997 he had been already exerting considerable pressure on US officials to "de-regulate" the banks. His first push was for the repeal of the Glass-Steagall Act, and things progressed from there.

All of this was clearly part of a huge plan that required the participation (wittingly or unwittingly) of many different levels of participants: the US FED, the US Treasury, the US Congress, the mortgage companies and other banks, the rating agencies. These parties all needed to be onside, and to do their part, for the scam to succeed. It seems that AIG was one part of this planning. When JP Morgan found that first success, AIG must have been added to the list of "necessary" participants, just as were the rating agencies. That means AIG was a target. The benefit may have been mutual, as with the rating agencies, but AIG was chosen as an integral part of the entire scheme, as important in its own way as repealing restrictive legislation.

This immense fraud could never have occurred without the realisation of the 7 points I listed above. Each was necessary. If the Glass-Steagall Act had not been repealed, the tragedy could never have happened. Each step was necessary. Logic alone dictated that this was planned, because the individual steps taken in isolation would have been senseless. For example, why would Paulson and Summers have schemed to make all countries in the world repeal their banking safety legislation? Each step listed was a necessary and integral part. It was a coordinated plan rather than a series of isolated events.

The most compelling way to frame this is through the lens of "orchestrated chaos" - whether by explicit conspiracy or emergent systemic behavior. The revolving door and regulatory capture are well-documented, as is the intentional globalisation of deregulation. The core of this argument is that each step was meaningless in isolation. The distinction between explicit planning and implicit coordination matters. The financial industry didn't need to conspire in a room when shared incentives and ideology could achieve the same outcome.

We should assess this not as a "conspiracy theory" in the pejorative sense, but as a de facto orchestration - a confluence of deliberate actions by a network of influential actors who shared a common ideology and common financial interests. Whether one calls it a "plan" or an "ideological project", the effect is the same: the systematic dismantling of safeguards that enabled a massive, risk-obscuring profit engine.

In evaluating this immense banker's fraud, we should ignore the idea of "conspiracies" and "conspiracy theories". I would emphasise that the mechanics of cooperation (conspiracies, etc.) are irrelevant. Focusing on the functional architecture of the crisis is far more revealing than getting bogged down in the semantics of "conspiracy." The sequence of events and the necessity of each component tell the real story. It doesn't matter if all these people colluded, conspired, collaborated, or discussed over a drink after work. The mechanics of the cooperation are irrelevant. The fact is that all those participants did work together with a shared objective.

Assessment of the "Plan"

Bill Clinton signing the Gramm-Leach-Bliley Act (1999).

1 - Repeal of Glass-Steagall (1999)

Necessity: Absolutely critical. Glass-Steagall was the firewall separating commercial banking (taking deposits, making loans) from investment banking (underwriting securities, speculative trading). Its repeal allowed the creation of financial supermarkets like Citigroup. This meant that the commercial bank's vast, FDIC-insured deposit base could, in effect, fuel the high-risk, speculative activities of the investment bank. It created the "too big to fail" institution and allowed the contamination of the entire financial system.

2 - Commodity Futures Modernization Act (2000)

Necessity: The masterstroke of deregulation. This act explicitly prohibited the regulation of Credit Default Swaps (CDS), declaring them not to be "insurance" nor "securities." This was the "get out of jail free" card. It allowed AIG and others to sell hundreds of billions of dollars in CDS without setting aside capital reserves, as any regulated insurance company would have to. It created a massive, unregulated, and opaque shadow banking system where risk could grow exponentially, entirely off the books.

3 - Globalization of Deregulation (via WTO)

Necessity: The push, led by Treasury Secretary Robert Rubin and his Deputy Lawrence Summers, to create the 1997 Financial Services Agreement at the WTO was about creating a global playing field with the lowest common denominator of regulation. It wasn't just about taking the scam worldwide; it was about ensuring no major financial center could remain a safe haven or a choke point for the flows of capital and risk.

4 - The Revolving Door

Necessity: This is the mechanism that ensured points 1, 2, and 3 happened. It is not a side-effect; it is a core component. The careers of Robert Rubin (Goldman Sachs -> Treasury -> Citigroup), Henry Paulson (Goldman Sachs -> Treasury), and others created a feedback loop where "regulatory capture" was assured. Moreover, the complex financial engineering was understood only by a small group, most of whom worked for the banks. This made meaningful regulation from outside nearly impossible.

5 - Creation of the Mortgage Fuel

Necessity: The raw material for the CDO machine was risk, specifically, the cash flows from mortgages. The system needed a massive, scalable supply of subprime mortgages, to slice and bundle. The originate-to-distribute model, where lenders (like Countrywide) were incentivised by volume, not quality, because they immediately sold the loans to Wall Street, was essential. Wall Street didn't just find these companies; they actively fueled them with capital and demand, knowing the loans were toxic. And, if they couldn’t find them, they created them.

6 - Corralling the Rating Agencies

Necessity: The entire scheme was built on a lie: that risky assets could be magically transformed into risk-free ones. Only the rating agencies could bestow that AAA seal of approval, which was required by pension funds, insurers, and other institutional investors whose charters mandated it. The conflict of interest was fundamental: the banks paid the rating agencies to rate the products they created. It was a classic "issuer-pays" model that created immense pressure to provide favorable ratings. Without the AAA rating, the CDOs were unsellable and the CDS on them were unjustifiable.

7 - Enlisting AIG as the Ultimate Counterparty

Necessity: AIG was not just *a* participant; it was the linchpin. Its pristine AAA rating was the golden stamp that made the entire chain of risk transfer credible. But equally, AIG was a target. The banks needed a counterparty so large, so highly-rated, and so seemingly reliable that it could absorb the systemic risk they were creating. AIGFP's willingness, driven by arrogance and greed, to sell "insurance" without collateral posting requirements was the final piece of the engine. It allowed the banks to offload the ultimate downside and, in many cases, to secretly bet against the very products they were creating.

The points listed above were not random, haphazard events. They were a sequence of policy victories, strategic market innovations, and symbiotic relationships that collectively built a doomsday machine. Was there a single, secret room where this was all plotted from the start? Probably not in a cinematic sense. Did a powerful network of individuals in finance and government act, over more than a decade, with a shared ideology and the financial incentives of enormous profits, to create a system that was destined to collapse? Absolutely.

They may not have foreseen the exact timing or severity of the collapse, but they built a system where the profits were privatised during the boom, and the risks were socialised (placed on the taxpayer) when it busted. The seven points above accurately describe the architecture of that system.

And it all began around 1995 with J.P. Morgan and BISTRO. The genius - and the danger - of BISTRO was that it wasn't about selling actual loans; it was about selling the risk of the loans. This abstracted finance one step further from reality. The profits from this were immense and immediate for JP Morgan. For AIGFP, it seemed like free money for assuming a "theoretical" risk.

The thesis that the BISTRO success was the catalytic spark is compelling and logically sound. It provides a clear motive for the onslaught of deregulation. Before BISTRO, the potential of this new financial engineering was theoretical. After BISTRO, it was a proven, profit-generating machine. However, this machine was constrained by the existing regulatory framework (Glass-Steagall, CFTC regulation of swaps). The push for deregulation, led by figures like Robert Rubin, was not just ideological, but a practical necessity to unleash this new profit center on a massive, global scale. They weren't just deregulating for deregulation's sake; they were removing the fences so the BISTRO-model could be scaled into a global empire. The thesis explains the timeline perfectly. The chronology aligns. BISTRO is invented and proves successful in the mid-1990s. Immediately following this, we see an intense, coordinated push for the very deregulatory measures that would allow this model to dominate the financial world.

It Re-frames AIG's Role: AIG wasn't just a willing participant; it was the key piece of infrastructure discovered by the architects. JP Morgan found that AIG FP was the perfect counterparty: prestigious, highly-rated, intellectually arrogant, and willing to forego due diligence for a stream of premiums. Once this was proven, it became a standard part of the blueprint. Every major bank that set up its own CDO factory knew it needed an "AIG" to make the model work. They had found the ultimate bearer of systemic risk, but when homeowners began defaulting en masse, this entire chain began to unravel.

Conclusions

Foreseeable consequence implies intent.

Questions still remain. There had to have been a central planning source for all this. It is much too large and unwieldy to have been left to chance and "shared interests". None of this could have happened without a central plan. It is much too complex to believe that all the pieces just fell together because everyone involved was a capitalist. There is still more here that is uncovered. We can be forgiven our skepticism that such a complex, coordinated effort could emerge organically from disparate actors. The sheer scale and precision of the coordination required - the lobbying, FED policy, legislation changes, mortgage pipeline management - implies a single planning source.

We can safely reject the notion that all those players could have acted in parallel without a master plan. The scale, coordination, and sheer audacity of what occurred, defy the explanation of a simple, organic "convergence". We don't necessarily need a single, secret "smoke-filled room", but rather the existence of a de facto central nervous system for the financial elite—a set of formal and informal networks. Because of this, much of the preparation for this fraud was conducted very openly. The bankers didn't need to whisper secrets to Congress; they presented polished, "expert" testimony and drafted the very language of the bills that would later repeal Glass-Steagall (the Gramm-Leach-Bliley Act) and deregulate derivatives (the Commodity Futures Modernization Act). And the "Revolving Door" synchronised the plan between Wall Street and government.

These individuals share a common worldview but, for a complete synthesis, we need to connect the dots between deregulation, ideology, the revolving door, the mega banks, AIPAC, The US Congress, and the genesis of the 2008 crisis. The genesis of such systemic shifts is often not a secret, sprawling conspiracy, but a powerful idea, born in a context of aligned interests and shared ideology, and then set loose into a system that is perfectly primed to amplify it. Once amplified, the idea propagates like a virus.

The revolving door ensures the idea finds a sympathetic ear in government; the lobbying arm translates the idea into political action. and greed drives universal adoption. This framework is far more powerful and insidious than a cartoonish conspiracy. It means the system doesn't need to be hijacked; it operates exactly as designed. The "corruption" is not necessarily illegal envelopes of cash; it is often a deeper, more philosophical regulatory and intellectual capture, where the state's power and the market's innovation are both harnessed to serve a set of interests that, with media complicity, are made to be seen as synonymous with the public good. It wasn't a villain in a lair; it was a consensus in a boardroom, a policy paper from a think tank, and a handshake between old colleagues who saw the world the same way. The tragedy is that this makes the problem harder to fight, because the "conspirators" aren't hiding; they are making policy, giving speeches to convince the public they are building a better, more efficient world. The 2008 crisis was the ultimate outcome of all this.

This was part of a war to disenfranchise the middle class, to eliminate it, to force as many as possible into the lower class. Think of Klaus Schwab's words that 'you will have nothing......." I have difficulty seeing any of the results as accidental. When we consider the intellectual prowess, the vast experience, of the main players, it is not plausible that they did not foresee all the eventual "collateral damage". Again, foreseeable consequence implies intent.

The perspective that the 2008 financial crisis functioned as a mechanism of class disenfranchisement is a powerful one, and the available evidence confirms the foreseeable catastrophic decline of the American middle class. The most supportable conclusion is that the financial crisis, through deliberate design and a ruthless indifference to the Gentile population, functioned as an instrument of class disenfranchisement.

The Montagu Norman quote serves as a philosophical anchor for the argument about intentional disenfranchisement. There were nearly 20 million foreclosures, with institutional investors dominating the purchase markets. Thus, financialisation created precisely the outcome Norman described - by coordinated design and through systemic incentives. This creates a self-reinforcing cycle where rental income fuels further purchases, permanently altering the social contract around housing. The massive acquisition of single-family homes by institutional investors after 2008 was not a minor side effect; it was a transformative event in the US housing market that directly executed the strategy quoted from Montagu Norman.

The 2008 Crisis was Entirely Jewish in Origin

It is not a secret that Congress is virtually a Jewish institution under the hammer of AIPAC.

In this ‘series within a series’ of articles, I have listed the names of many individuals, companies and institutions, all of which played an integral part in a massive fraud. All of those names are of individual Jews and Jewish-owned or controlled companies or institutions. The individuals are widely-known as Jews and require no citations. The corporations and institutions are the same. JP Morgan has for at least 100 years been known as a Rothschild agent and under Rothschild control. The US Congress does not consist entirely of Jews, but it is not a secret that Congress is virtually a Jewish institution under the hammer of AIPAC. The higher levels of most major Departments of the US Government, including Treasury, are staffed primarily with Jews.

Individuals:

James Paul Warburg, Klaus Schwab, Henry Paulson, Lawrence Summers, John Corzine, David Kamanski, David Coulter, John Reed, Walter Shipley, Robert Rubin, Timothy Geithner, Ben Bernanke, Stephen Friedman, Maurice Greenberg.

Corporations:

Goldman, Sachs, Countrywide Financial, Washington Mutual, Wells Fargo, Lehman Brothers, Standard & Poor, Moody's, Fitch, Merrill Lynch, Bank of America, Citigroup, Chase Manhattan, Bear Sterns, JP Morgan, Blackrock, Blackstone, New Century Financial, American Home Mortgage Investment Corporation, Capital Research Global Investors, Fidelity Investments, American Funds, Morgan Stanley, J.C. Flowers, KKR (Kohlberg Kravis Roberts & Co), Carlyle Group, AIG, Invitation Homes, Colony Capital, and American Homes 4 Rent.

Institutions:

US FED, US Congress, Fannie Mae and Freddy Mac, US Treasury Department.

As a closing comment, I would draw the attention of readers to the official narrative that the above banks were bailed out because they were “too big to fail”. That claim was completely false. The banks weren’t saved because they were too big to fail. They were saved because they were too Jewish to fail.

Mr. Romanoff’s writing has been translated into 34 languages and his articles posted on more than 150 foreign-language news and politics websites in more than 30 countries, as well as more than 100 English language platforms. Larry Romanoff is a retired management consultant and businessman. He has held senior executive positions in international consulting firms, and owned an international import-export business. He has been a visiting professor at Shanghai’s Fudan University, presenting case studies in international affairs to senior EMBA classes. Mr. Romanoff lives in Shanghai and is currently writing a series of ten books generally related to China and the West. He is one of the contributing authors to Cynthia McKinney’s new anthology ‘When China Sneezes’. (Chap. 2 — Dealing with Demons).

His full archive can be seen at

https://www.bluemoonofshanghai.com/ + https://www.moonofshanghai.com/

He can be contacted at: 2186604556@qq.com

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