September 11 Commission Report - Gnostic Liberation Front

emergency, suspending key provisions of the Federal Reserve Act and driving the
‘ten-year special rate’ to almost zero.
• Certain key unknown figures in the Federal Reserve may have ‘conspired’ with
key unknown figures at the Bank of New York to create a situation where $240
billion in illegal securities created in 1991 as part of an official covert operation to
overthrow the Soviet Union, could be cleared without publicly acknowledging
their existence.
• These securities, originally managed by Cantor Fitzgerald, were cleared and
settled in the aftermath of September 11 th through the BoNY. The $100 billion
account balance bubble reported by the Wall Street Journal as being experienced
in the BoNY was tip of a three day operation, when these securities were moved
from off-balance-sheet to the balance sheet. (The off-balance-sheet process is
described by banking advisor to the US Presidents Earl Cocke, who admitted
under sworn testimony to managing Project Hammer funds – the suspected source
of these illegal securities.)
• By reducing the ‘ten-year special rate’ to almost zero, the Fed structurally
increased the number of refinancing (Repo) settlement fails. Under the umbrella
of this artificially created statistical bump of fails, the high level of fails due to the
laundering of the $240 billion was able to be processed unnoticed.
• The cover for this bubble is found in the footnotes to the BoNY annual and
quarterly reports, which report that the BoNY took over $330 billion of
commercial securities business from U.S. Trust between June and October of
2001, although the assets under control of U.S. Trust in 2000 were reported by
two sources as $80 or $86 billion. [Charles Schwab Shells Out for U.S. Trust,
Nick Paumgarten, The New York Observer, January 23, 2000; Schwab to Pay
$2.73 Billion For U.S. Trust, New York Times, Patrick McGeehan, January 14,
2000]
Federal Reserve Management of the Aftermath of September 11
There were two key disruptions reported in the financial markets:
1) Excessive account balances in a few banks reportedly contributing to an increase in
the account balance in a wide array of banks which required a massive infusion of
credit to stabilize the Federal Reserve system. These accumulations started appearing
on September 12 th and ran through the 18 th, . They resulted in the addition of $300
billion to the US monetary supply, which initiated the on-set of the sub-prime market.
2) A reported excessive number of fails in securities settling requiring the lifting of
controls on settlements. There were two reasons reported for these fails:
• Missing trade data due to loss of communications and data;
• Refinancing (Repo) settlements had lost any financial incentive to avoid fails
because the special rate for 10 year notes was dropped to almost zero.
The first wave of fails is attributed to the BoNY situation.
“In the absence of complete information on deliveries into and out of its account at BoNY on
September 11, and as a result of its assumption of settlement fails on the starting legs of blind-
THE SEPTEMBER 11 COMMISSION REPORT Page 373