2013, Jan 24

Mother Sekhmet Thursday Night Call

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Opening Meditation: Angelsu

Mayan Calendar:
Rainbird
Inauguration Day - 3 CABAN Caban is healing the earth, taking care of it; guided by IK the wind, voices of
our ancestors,
Jan 24th Thurs: 6 AHAU means we are at end of 12th unial, the 12th month of 20 days
25th Fri: 7 IMIX we start the next 20 days, 13th unial in the harmonic module about the seen and the
unseen; also a portal day so we have extra dimensionality
th
26 Sat: 8 IK - IK is the wind; also full moon; wind & voices of our ancestors; 8 galactic harmony
27th Sun: 9 AKBAL Akbal is the night; 9 is solar, mobilization, putting motions into action
28th Mon: 10 KAN 10 manifestation; KAN openness to light
29th Tues: 11 CHICCHAN snake, transmuting energies; 11 disintegration of what no longer serves
30th Wed: 12 CIMI 12 crystal clear understanding; Cimi path between past & future; forgiveness;
warrior aspect
st
31 Thurs: 13 MANIK last tone of this wave of MEN that we are in, a visionary wave; the deer
gentleness
Housekeeping:
D'Yanna
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As a reminder: Tara & Rama are the official spokespeople for Faction 3
We are grateful for what Tara and Rama do for us, and for everyone's financial support
2013, Jan 24

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Guest: will be Frank Chille

Not able to do Q & A on Conference Line, only on main line
Hard News:
The notes below come from Tara and Rama, compiled by them and based on information gathered
from Ed Schultz' radio show on Jan 24th, and information from the Randi Rhodes show.

THE DARK RIFT - MOTHER'S YONI!

Greetings All you Commanders, Eagles and Angels,
Yesterday on the"Ed Show", Ed had on Karen Finney, Bob Shrum and Bobby Kennedy, Jr. as guests. They
all agreed Senator Harry Reid needed to grow a pair and make those republicans stand and talk
continuously in true filibuster form as they wish to object to bringing discussion to the floor about
a bill proposal.
Bobby Kennedy went on to say Obama's speech brought tears to his eyes. He said there was so much
depth to it and this was a long time coming. He said we are going to see new things happen now.
Bobby called for accountability for starters. He called for accountability regarding the 11 oil rig workers
who lost their lives in the BP oil spill in 2010 in the Gulf of Mexico as well as for the 29 miners who
died in the Massey Coal Mine that year. He fingered Mr. Blankenship as the Responsible owner of
the mine. He said it's time to stop using fossil fuels and introduce the plethora of new tech and
free energy devices for safe and healthy living.
Then Bobby went on to speak about the snow falling at Fukushima, that it is so radioactive that it is
unregistrable.. He said Fukushima was an act of Genocide by the 13 families. He called out David
Rockefeller in particular by saying, "David, your days are numbered".
A caller called in to Ed and asked how it was possible for a 135 pages of docs. of filings against the World
Bank and all these trusts -i.e.- The Spiritual Boy Trust (the BIG O), The St. Germain Trust, The
Peoples Trust, etc. and listing Marcos, Sukarno, Obama, The Queen. - etc - how could all this
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documentation be fake?
Ed replied that the Right Wing hired paid shills, willing and clever lawyers, for a price, to do this dirty
work. Ed said the only places to get the truth are : http://2013rainbowroundtable.ning.com and the
Max Keiser Report, which you can find on You Tube!
Then Ed addressed the Benghazi hearings for Hillary, that there was a screaming match between Hillary
and her interrogators, Senator Rand Paul in particular, as he called her testimony insufficient and
that, as he were President, he would have her removed from office! (talk about the pot calling the
kettle black!)
This is my comment on this subject. This was a GIANT COVER UP! Both sides did not tell the truth
because they are up to their crown chakras in blood since 9/11. Even ED had to lie on his TV show!
One more caller called in to Ed and asked, "ED, whatever became of the 800 metric tonnes of Gold that
Hillary stole from Libyia's National Bank?" Ed responded, "Now you have opened a can of worms I
cannot speak about. Have a nice day"!
Shortly after the radio show with Ed, I got a call from Mr. X and Charlie Rangel. Charlie said, "We the
Dems have won and therefore have a mandate, meaning we have the talking stick"! Tell your folks
who support Ron and Rand Paul, Drake, Nesara Blogs and Forums, Cobra, Shelden Nidle, Salusa
etc...all these folks are connected to Dick Armey, a former member of Congress.
[Richard Keith 'Dick' Armey is a former U.S. Representative from Texas' 26th congressional
district (19852003) and House Majority Leader (19952003)] and a dis-information pundit on
Fox News. And Dick Armey is tied in with Karl Rove and Global GPS, Rove's Superpac. Dick and
Rove are also connected to Phil and Wendy Gramm.]
Foreclosure Phil

Years before Phil Gramm was a McCain campaign adviser and a lobbyist for a Swiss bank at the
center of the housing credit crisis, he pulled a sly manoeuvre in the Senate that helped create
today's sub prime meltdown. http://www.motherjones.com/print/15479
[SEE BELOW]
Phil and Wendy Gramm got their Nesara Test Package of $14.5 BILLION after 9/11 and took collateral
out against some of these funds and funded the TEA PARTY and "THE FAMILY" on C STREET!
Charlie and Mr. X said whether or not the Ron Pauls and Drakes, et al, and their followers, are fully aware
of this, they have ended up fully supporting Faction 1 and Faction 2, thus leading themselves and
everyone else following them down the PRIMROSE PATH to nowhere. Then Mr. X and Charlie said
ALL IS TO GET EXPOSED NOW! Keep the faith and develop discernment. Call on your spiritual
heart.
As we read these stories, send them only LOVE. BREATHE IN PEACE and RELEASE FREEDOM'S HOLY
FLAME TO ALL!
IN SERVICE TO DIVINE LOVE AND WISDOM,
Commander Ari and Lady Master Avantari
See you on the Bridge and in your dreams!
NAMASTE!

2013, Jan 24

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Note! Today - Jan.24th, Thursday on the Randi Rhodes Show,

Randi said,"Some good people from Faction 3, right now, are going to expose everything. In the meantime,
Harry Reid and President Obama are playing 3 tiered inter dimensional chess like Data, while the
Republicans are still playing 3d checkers. As the Republicrats plan on, behind the scenes Obama
and friends are quietly raising the debt ceiling, and, sooner than later, though everyone is thinking
the Benghazi Scene is over and Hillary appears to walk off the stage with her nose in the sky...
something else is going to crack NOW! It is coming in from the energies present, of The Sat Yuga
- Very Suddenly and the republicans will be shocked out of living in a past Kali-Yuga bubble of
make-believe crises and contrived stories from their imaginary world of illusory power!
"We are not really in debt," says Randi. "The republicans and their over-lords have been printing
quaturodecillians of worthless debtors notes (dollars), to support their non-existent
Corporatocracy!"
Randy goes on, "Imagine a Giant Egg (their Fake Holographic Matrix). Still appearing as a Giant Egg, you
can see the Sunlight emanating from within the egg, through the millions of cracks in their fake
story." Indeed the Light of God that never fails is shining through!
After Randi, Rama spoke to Rana-Mu. She said, "Ed behaved differently on TV yesterday and every day,
than on the radio, because of a different Boss than himself on MSNBC TV. He wants to stay on
the air. And the time is fast approaching when intervention removes the controllers forcing the
continued propaganda program."
"Ed has a lot of Bark and a Bite too. He wants to be the bulldog in front of the Junkyard as the
changes emerge."
Rana-Mu continues, "The lack of exposure cannot continue, and Julian Assange is poised and will drop the 1
Million WikiLeaks at the most precise and timely moment."
Satnam!
~A & A~

The hearing with Hillary: all of those present the devils in diguise!
About them wanting to crash the entire world's economy and take over the $ that is supposed to be
coming to us
Bobby Kennedy Jr said that Obama's speech brought tears to his eyes, there was so much depth to it
will see new things happen now;
Cathy: we are ready for this to stop happening! When does it stop?
T: other comments about another MLK being in the saddle now
the shenanigans are being magnified in the extreme opposite: even Harry Reid deciding with McTurtle
3 tiered inter dimensional chess, as opposed to 3d checkers! Harry is letting them show how dirty
their shirt tails are! The people on Thom Hartmann's show are livid and are reading constitutional
law and are really upset!
The rule of law means we are equally doing our part to keep this from happening, as we are looking in the
wrong places for what we think our needs are we are to find a way to actively participate!
People say we hate politics and I am not a part of this. If you don't like it, get in there and do
something! Says in 2nd amendment, you have obligations to see the law is followed: if you do not
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participate, you are not helping

Bobby called for accountablity: for the 11 workers who lost their lives in gulf, for the people in the mine
He fingered owner of Massey coal mine: time to inroduce other means of energy like the little
black box of Dr Keshe that produces free energy!
these one have proved they do not care about people or the environment
Bobby went on to speak of the snow at Fukushima: massive amounts of radiation, so much there are no
registration of it, it is so high. Called out David Rockefeller
Guest: Frank Chille
He tells stories of several people he has met who have had experiences with the galactics
the full stories are on BBS Archives: see above for how to access them
George van Tassel was builting the integraton in 1961; Daniel Boone, descendent of Daniel Boone, was
working with them
a visitor called Chris came and talked to them; Daniel Boone wanted to give him something
to get him warm because he was going to walk out into the desert; got his warmest jacket and
said take this; Chris gave him a sleeping bag in return.
Chris walked into the desert and George van Tassel, Boone & Paulson saw him just disappear
Around May, Daniel went to Mt Shasta by himself, and took the sleeping bag with him; on
Panther Meadow, made a campfire, got into the bag and laid down the sleeping bag levitated and
took him into the centre of Mt Shasta. When he came back out and went back to George Van
Tassel and told them what happened, George asked do you know who this was? In a past life, was
St. Christopher, the bearer of Christ . . .
The other son-in-law was Norman Paulson; father was born blind, but could hear sidewalks, a piece of
furniture so he could move as if he were sighted; the family moved into the desert, Norman
met one of van Tassel's daughters and married her, helped build the integratron.
Norman was moved to walk into the desert 9 pm stars shining down; hears the sound of
incredible singing saw a 7 tiered, disc-shaped ship, like a pyramid; the singing he heard was the
beings on the ships: 14, 000 people or more he was allowed to go into the craft: one level was an
entire forest where people on the ship could go to be re-charged.
Taken to the control room: 3 people there, each with a massive screen Kuthumi, El Morya, St
Germain: he was a visitor on The Star of Bethlehem! The beings were in the physical like he was:
changed his life forever. Knew they would guide his life for
Later, he and Daniel Boone became students of Yogananada; continued to have experiences in CA;
created Sunburst Farms. Put out a book called Return of the Ancients with colour plates
Later re-printed under name of Christ Consciousness, but without the plates
Frank is posting on extraterrestrials.com, on Ashtar on the Road.com, and on 2013 Rainbow Rose
he knows one of the co-producers of the upcoming movie: Thor
www.thestarchronicles.com
take a look at this site: the person who has created this site is now living on
limited income Greer is trying to get financial support for this person and others like him
Another individual he met: George Fiedler
When Frank was a lighting consultant, he went into an area called Costa Mesa, an industrial area around
3 pm; turned onto Sunland Ave, sees Solara Electronics; realized he knew the name there

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was a contactee who had an experience her name was Solara.

"I have to go in there and ask about this" - it was a combo of office and manufacturing facility: asks
about the comapny: the son told him his father started this co.
Frank came backto meet the young man's Dad: George Fiedler
Frank asked about the co: George had been an enginner for National Cash Register, was drawn to
Alice Bailey's teachings; went into meditation Djwal Kool came to him in meditation " we have a
project we would like you to do"
Frank told George that he thought he knew who the woman was and showed him the drawing he
had; yes, that's her, and George had named the co in her honour.
They developed a disc shaped, had inside it copper wire that was coiled in an unusual format:
could magnify the vibrations of the earth so locusts, rodents, grasshoppers, rats in the field would
die with no effect on ladybugs, ants, butterflies; the vibes would only attack those things which
attack plants, so people no longer needed to use herbicides.
Got a call from Library of Congress about rodents eating the bindings; George worked out that
they needed 3 of them; has a letter from Senator William Foxmeier that his devices had
completely resolved the problem, no longer mice eating the book bindings
They were then used in Disneyland in CA and in FL the devices controlled the rodents there.
Created a similar device to purify water and clean the air very successful.
Device was too successful: the chemical industry not happy, so wanted FDA to step in
for the solara device to work, had to be on ground level as it amplified ground energies
FDA put the device on a shelf 10' about the ground & rodents in jars of course, it didn't work
so FDA declared him a fraud: he was forbidden to sell more of the devices, to sell
replacement parts or to repair what he had already sold; customers who wanted more or help
repairing had to be turned away!
Djwal Kool and Solara came and told Goerge the same thing they told George van Tassel: those who deny
it, will be denied it themselves.
George was completely separated from his family as a result ended up moving to Utah and living in a
trailer, teaching Alice Bailey; however, he was never angry over what had happened.
Frank became very good friends with George.
Lady from New Jersey:
Frank is posting on 2013 Rainbow Rose; Ashtar on the Road and on extraterrestrials.com
George Filer's website: www.filersfiles.com
Mother Sekhmet:
Greetings in the Light of the Most Radiant One.
In the Office of the Christ and only in the Office of the Christ, we invoke the loving energies of St
Germain and the Violet Flame.
T: we ask for an embracement of what we have heard tonight, and for recognition of who we are, and just
how much we are loved. There are so many beings who are there for us.
Greetings, Children of Ra:
This is the time and place where all the things of which we speak are coming to pass at this moment.
What we can say is that Mr 19.5 is bringing forth the avenue to make it so in the moment as we change

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from the mother's blood to free energy from out of the air, out of space
We are in flux in the moment; there is so much that has changed sicne 12/21/12 ; this moment now is BE
LOVE NOW in the midst of the chaos around us now
Just be in that place of BE LOVE NOW, no matter what the situation. This will bring it to its
highest potential on all levels even if you are sitting in Gitmo Bay [soon to be closed]
The fake war on brown people, people of colour is the biggest story we have going this moment:
you ask how can we move forward, have this discussion ?
We are already having this discussion in the fact that the talking stick has been passed; full
disclosure any time, any moment;
North Korea may just be flexing its reality in this moment, because of the fact there is a change in the
wind set aside the weopons of war in this moment this is the biggest story in the moment
in the next step, we can come forward and have the discussion around the round table leave the
weapons of war at the door why do we need them if we are discussing peace?
this word magic as Ben Stewart says in Klymatica, Zeitgeist: we have been playing with word magic for
a long time on earth: we have been given a mandate and the Dems have won, it is about moving
forward we are not saying it is about the parties, both are flawed; it is not about the people's
trust or part too many of these words have been misqualified
it is about true people's hearts Lady Master Liberty, LM Hope, LM Justice the founding
fathers spoke of the wisdom inside each one of us. Divinity in the heart of each of us we need to
have huge amounts of love for these ones no matter what they have done: Hillary, Kerry, Rice,
McCain all of them
Eric Cantor sitting in Davos, at the world economic forum, lying through his teeth, thinking they will get
the money: the schemes of the web being woven: like the lost boys in Never Never land eating the
food all contrived.
Since voodoo economics, Reagan economics, began - time to roll back the Reagan tax cuts
Has to do with how we have been tagged we are the rescue party; it is our responsibility to respond
the planet sent out a planetary distress signal and we are the rescue party. It may seem we are ill
prepared, yet remember the book ET 101 all the akashic records are in this temple [body] and
then some. Each particle is full of wisdom; at this critical juncture, this moment where it looks
like chaos this is when His Holiness the Mahdi shows up with the frequencies of the Office of
the Cosmic Christ and brings peace to Kashmir and other places in dispute which has to do with
the fake war on terror which has to do with stargates
Whole issue is the Gulf of Aden and the Dome of the Rock. This is the story about our people
who came from the Land of Kennet, the black land story goes to Mars and beyond this galxay
T: about Maya land ... Ashtar returned to the land?
Mo: all of what is occurring here has already been seen to by the Wingmakers; this moment now, there
is an awakening that is occurring in spite of dire news about economy and other things, rest
assured that Dr King is back in the White House.
The poor peoples march, how we are the ones, we have been active Rama called Reid's office
and said don't compromise on the filibuster; he asked who was paying for this
it is about the matrix falling apart at the seams
All that is left is Neo; now is the moment: all that is left is you, the 144,000 x 100,000 x
100,000

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Cathy: asks about the crop circles with the dates with Dec 21 and March 28, 2013
Mo: this is the return of what we have asked for: how we can meet each other face to face without
preconceived realities: suspend your disbeliefs or whatever they might be
T: That date adds up to 19 which is the Bahai 3 intermarriage
Mo: why we keep saying the Mahdi is here - means there will be peace in Aleppo; ElAssaud will pay for his
crimes; the real story about Mohammed will be told; the story of Ishmael, and the story of
the Annunaki and the Elohim and the Elohigh which began with an escape pod that left the Nibiru
[will be told] - looked like an asteroid and was quite an event hit the earth and
T: Asteroid hit in Gulf of Mexico the Permian Extinction India used to be in the Gulf and Mexico; the
part that is now India got pulled away from that and moved across the ocean and hit where it is
now and created the Himilayan Mtns by pushing against that land
Mo: in this moment of the fiasco of Benghazi hearings & the issues at hand that make your heads spin
it's about the wild story we didn't tell you: about how you and I can look each other in the eye and
experience ecstatic orgasmic joy; there is so much love it is about the disfunction of how these
ones have been programmed for eternal darkness; it brings tears to the eye to think of the
children
Cathy: hard to think of anyone being abused, not getting their needs met we do our part and hold the
light
T: 26.4% of Spanish people have no work; higher numbers of youth without work worst since Franco
Mo: you are the heroes and the prophets
T: this is a divine providence, taking the whole Euro down Spanish gov't won't budge just pushing
austerity; this will bring down the church
Mo: the great beings of such dignity have lowered themselves to such a fragile existence love them as
they go through their moments now unravelling so fast [ref to the dark ones]
T: Japan's gaps between exports and imports Japan used to be in the blue in 1979
2008 were still in the blue by $23Billion
2011 were $ 29 million in the red; in 2012 $ 78.3 bill in the red
the US at $ 16.5 Billion problem seems small
Mo: about the Lavendar Lad who has it in the bag
Cathy: the numbers mean little at the moment
T: looks like these guys will go on for ever and ever want to take indigenous land of thousands and
thousands of years in South Africa and build a nuclear power plant!
Cathy: when do we hear about the end of such unbelievable actions?
Mo: solutions are being made manifest; the millenials are stepping up to the plate & saying we'll play with
cartoon physics let's talk truth: thoughts are things where attention goes, energy flows. As we
work with frequencies of 528htz which is love, this attracts more beings who want to experience
love!
In these moments as you work with these energies, bless these ones, our children, who took on this
mantle the Wingmakers are here
There are large craft in orbit around this planet things are not as they seem; all that is left is the
oracle, Neo, and he has said "Enough"
Closing:
Cathy

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FOLLOWING - PRINTED RESOURCES RELATED TO THE NOTES

2008, May

Foreclosure Phil

http://www.motherjones.com/politics/2008/05/foreclosure-phil
Years before Phil Gramm was a McCain campaign adviser and a lobbyist for a Swiss bank at the
center of the housing credit crisis, he pulled a sly maneuver in the Senate that helped
create today's subprime meltdown.
By David Corn

July/August 2008 Issue

Who's to blame for the biggest financial catastrophe of our time? There are plenty of culprits, but one candidate
for lead perp is former Sen. Phil Gramm. Eight years ago, as part of a decades-long anti-regulatory crusade,
Gramm pulled a sly legislative maneuver that greased the way to the multibillion-dollar subprime meltdown. Yet
has Gramm been banished from the corridors of power? Reviled as the villain who bankrupted Middle America?
Hardly. Now a well-paid executive at a Swiss bank, Gramm cochairs Sen. John McCain's presidential campaign
and advises the Republican candidate on economic matters. He's been mentioned as a possible Treasury
secretary should McCain win. That's right: A guy who helped screw up the global financial system could end up
in charge of US economic policy. Talk about a market failure.
Gramm's long been a handmaiden to Big Finance. In the 1990s, as chairman of the Senate banking committee,
he routinely turned down Securities and Exchange Commission chairman Arthur Levitt's requests for more
money to police Wall Street; during this period, the sec's workload shot up 80 percent, but its staff grew only 20
percent. Gramm also opposed an sec rule that would have prohibited accounting firms from getting too close to
the companies they auditedat one point, according to Levitt's memoir, he warned the sec chairman that if the
commission adopted the rule, its funding would be cut. And in 1999, Gramm pushed through a historic banking
deregulation bill that decimated Depression-era firewalls between commercial banks, investment banks,
insurance companies, and securities firmssetting off a wave of merger mania.
But Gramm's most cunning coup on behalf of his friends in the financial services industryfriends who gave
him millions over his 24-year congressional careercame on December 15, 2000. It was an especially tense
time in Washington. Only two days earlier, the Supreme Court had issued its decision on Bush v. Gore. President
Bill Clinton and the Republican-controlled Congress were locked in a budget showdown. It was the perfect
moment for a wily senator to game the system. As Congress and the White House were hurriedly hammering out
a $384-billion omnibus spending bill, Gramm slipped in a 262-page measure called the Commodity Futures
Modernization Act. Written with the help of financial industry lobbyists and cosponsored by Senator Richard
Lugar (R-Ind.), the chairman of the agriculture committee, the measure had been considered deadeven by
Gramm. Few lawmakers had either the opportunity or inclination to read the version of the bill Gramm inserted.
"Nobody in either chamber had any knowledge of what was going on or what was in it," says a congressional
aide familiar with the bill's history.
It's not exactly like Gramm hid his handiworkfar from it. The balding and bespectacled Texan strode onto the
Senate floor to hail the act's inclusion into the must-pass budget package. But only an expert, or a lobbyist, could
have followed what Gramm was saying. The act, he declared, would ensure that neither the sec nor the
Commodity Futures Trading Commission (cftc) got into the business of regulating newfangled financial products
called swapsand would thus "protect financial institutions from over regulation" and "position our financial
services industries to be world leaders into the new century."

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It didn't quite work out that way. For starters, the

legislation contained a provisionlobbied for by Enron,
a generous contributor to Grammthat exempted
energy trading from regulatory oversight, allowing
Enron to run rampant, wreck the California electricity
market, and cost consumers billions before it collapsed.
(For Gramm, Enron was a family affair. Eight years
earlier, his wife, Wendy Gramm, as cftc chairwoman,
had pushed through a rule excluding Enron's energy
futures contracts from government oversight. Wendy
later joined the Houston-based company's board, and in
the following years her Enron salary and stock income
brought between $915,000 and $1.8 million into the
Gramm household.)
But the Enron loophole was small potatoes compared to
the devastation that unregulated swaps would unleash.
Credit default swaps are essentially insurance policies
covering the losses on securities in the event of a
default. Financial institutions buy them to protect
themselves if an investment they hold goes south. It's
like bookies trading bets, with banks and hedge funds
gambling on whether an investment (say, a pile of
subprime mortgages bundled into a security) will
succeed or fail. Because of the swap-related provisions
of Gramm's billwhich were supported by Fed
chairman Alan Greenspan and Treasury secretary Larry
Summersa $62 trillion market (nearly four times the
size of the entire US stock market) remained utterly
unregulated, meaning no one made sure the banks and
hedge funds had the assets to cover the losses they
guaranteed.

Subprime 1-2-3
Don't understand credit default swaps? Don't worry
neither does Congress. Herewith, a step-by-step
outline of the subprime risk betting game. Casey
Miner
Subprime borrower: Has a few overdue credit card
bills; goes to a storefront lender owned by major
bank; takes out a $100,000 home-equity loan at 11
percent interest
Lending bank: Assuming housing prices will only
go up, and that investors will want to buy mortgage
loan packages, makes as many subprime loans as it
can
Investment bank: Packages subprime mortgages
into bundles called collateralized debt obligations,
or cdos, then sells those cdos to eager investors.
Goes to insurer to get protection for those investors,
thus passing the default risk to the insurer through a
"credit default swap."
Insurer: Thinking that default risk is low, agrees to
cover more money than it can pay out, in exchange
for a premium
Rating agency: On basis of original quality of loans
and insurance policy they are "wrapped" in, issues a
rating signaling certain slices of the cdo are low risk
(aaa), medium risk (bbb), or high risk (ccc)

In essence, Wall Street's biggest players (which, thanks

Investor: Borrows more money from investment
to Gramm's earlier banking deregulation efforts, now
bank to load up on cdo slices; makes money from
incorporated everything from your checking account to
your pension fund) ran a secret casino. "Tens of trillions interest payments made to the "pool" of loans. No
one losesas long as no one tries to cash in on the
of dollars of transactions were done in the dark," says
University of San Diego law professor Frank Partnoy, an insurance.
expert on financial markets and derivatives. "No one had
a picture of where the risks were flowing." Betting on the risk of any given transaction became more important
and more lucrativethan the transactions themselves, Partnoy notes: "So there was more betting on the
riskiest subprime mortgages than there were actual mortgages." Banks and hedge funds, notes Michael
Greenberger, who directed the cftc's division of trading and markets in the late 1990s, "were betting the
subprimes would pay off and they would not need the capital to support their bets."

These unregulated swaps have been at "the heart of the subprime meltdown," says Greenberger. "I happen to
think Gramm did not know what he was doing. I don't think a member in Congress had read the 262-page bill or
had thought of the cataclysm it would cause." In 1998, Greenberger's division at the cftc proposed applying
regulations to the burgeoning derivatives market. But, he says, "all hell broke loose. The lobbyists for major
commercial banks and investment banks and hedge funds went wild. They all wanted to be trading without the
government looking over their shoulder."

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Now, belatedly, the feds are swooping inbut not to regulate the industry, only to bail it out, as they did in
engineering the March takeover of investment banking giant Bear Stearns by JPMorgan Chase, fearing the firm's
collapse could trigger a dominoes-like crash of the entire credit derivatives market.
No one in Washington apologizes for anything, so it's no surprise that Gramm has failed to issue any mea culpa.
Post-Enron, says Greenberger, the senator even called him to say, "You're going around saying this was my fault
and it's not my fault. I didn't intend this."
Whether or not Gramm had bothered to ponder the potential downsides of his commodities legislation, having
helped set off an industry free-for-all, he reaped the rewards. In 2003, he left the Senate to take a highly lucrative
job at ubs, Switzerland's largest bank, which had been able to acquire investment house PaineWebber due to his
banking deregulation bill. He would soon be lobbying Congress, the Fed, and the Treasury Department for ubs
on banking and mortgage matters. There was a moment of poetic justice when ubs became one of the subprime
crisis' top losers, writing down $37 billion as of this springan amount equal to its previous four years of profits
combined. In a report explaining how it had managed to mess up so grandly, ubs noted that two-thirds of its
losses were the fault of collateralized debt obligationssecurities backed largely by subprime instrumentsand
that credit default swaps had been "key to the growth" of its out-of-control cdo business. (Gramm declined to
comment for this article.)
Gramm's record as a reckless deregulator has not affected his rating as a Republican economic expert. Sen. John
McCain has relied on him for policy advice, especially, according to the campaign, on housing matters. The two
have been buddies ever since they served together in the House in the 1980s; in 1996, McCain chaired Gramm's
flop of a presidential campaign. (Gramm spent $21 million and earned only 10 delegates during the gop
primaries.) In 2005, McCain told a Wall Street Journal columnist that Gramm was his economic guru. Two years
later, Gramm wrote a piece for the Journal extolling McCain as a modern-day Abraham Lincoln, and he's hailed
McCain's love of tax cuts and free trade. Media accounts have identified Gramm as a contender for the top slot at
the Treasury Department if McCain reaches the White House. "If McCain gets in," frets Lynn Turner, a former
chief sec accountant, "we'll have more of the same deregulatory mess. I like John McCain, but given what I
know about Phil Gramm, I wouldn't vote for McCain."
As a thriving bank exec and presidential adviser, Gramm has defied a prime economic principle: Bad products
are driven out of the market. In John McCain, he has gained an important customer, so his stock has gone up in
value. And there's no telling when the Gramm bubble will burst.
David Corn David Corn is Mother Jones' Washington bureau chief.

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