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NEW WORLD ORDER- DOCUMENTARY

May 29th 2009 10:10
THE FOLLOWING IS TAKEN FROM RUSSIA TODAY!

IN CASE YOU WONDERING WHAT THE NEW DOCUMENTARY NEW WORLD ORDER IS ALL ABOUT...HERE'S A QUICK REVIEW

MY PERSONAL RATING IS THAT, IT IS WORTH A WATCH FOLLOWED BY SOME PERSONAL RESEARCH TO CHECK THE FACTS PRESENTED IN THE DOCUMENTARY.

A new American documentary is putting forward the suggestion the insanely rich and evil of this world are trying to gain total control. The film says they want to manipulate people through fear and the power of money.

“The New World Order is a crime syndicate, established by the ruling elite, the richest people in the world, the one percent that controls over 80 percent of the world’s wealth. These are the people who want to set up a one-world government so they can have more power in less people’s hands,” author Luke Rudkowski says.


The “New World Order” is also a controversial new film that goes behind the scenes of the American anti-globalization movement.

It’s a documentary focusing on those fighting what they claim is a secret group of a wealthy elite that effectively runs the world.

Rudkowski says he’s a fighter for truth.

“We are not crazy people, we are people who just want the truth from our government, and it shows our struggle to get the message across to the American people. It also shows our success, how we have been right all this time, and how we’re getting more and more popular,” Rudkowski explains

Radio talk show host Alex Jones is the main character in the film.

“The hottest thing in the world right now is the people discovering the new world order. I mean, finally the Associated Press and other major U.S. newspapers, and British papers had to admit that global elites are meeting in secret to chart the future of the world. It’s not just the enemy of people in other nations, it is the enemy of all free humanity,” Jones says.


Alex Jones and Luke Rudkowski are often criticized and labeled ‘conspiracy theorists.' The film itself also got a dose of criticism.

‘Tiresome,' ‘Tedious documentary,' ‘Paranoid and delusional’ – these are just some of the reactions of the New York Times to the film. But all publicity is good publicity – and the fact of the matter is that even the mainstream is now paying attention and reacting to talk about the New World Order.

Directors Andrew Neel and Luke Meyer both say they sought to remain objective and independent from the claims made in the film – and be as fair as possible.

“What we really wanted people to do is just to see these people as human beings, listen to what they were saying, and interpret that for themselves, and then go out and find out more about what they were saying. And then either agree or disagree with it. I support people who try to penetrate that barrier between that which we are told, and that which really is,” Neel says.

“They are a group of people, who are not willing to accept the status quo, what the generally accepted story is. Myself and Andrew as well have a strong interest in hearing about people who are willing to take that jump,” Meyer says.

The people featured in the film say it will bring the truth about the New World Order one step closer to being understood by the American public and the world.
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INTRODUCTION

The advent of globalization has resulted in economies around the world being interdependent on one another. This interdependence to a greater extent has enabled a reduction in trade barriers that earlier existed between countries. In addition, it also paved a way for foreign direct investments in under developed and developing economies. Eventually the world today is a globalized economy that responds to the same impulses (Williamson 1998). Such is increasingly observed in the global financial markets that are mainly reliant on the US Dollar as a global currency for international transactions (a necessity for international trade). Accordingly, mismanagement of economic policy or finance related instruments, products or services in one country is capable of creating a ripple effect in the economy of another country ; depending upon its economic dependency on the latter. A Globalized world promulgates businesses that are Trans international. The idea of belonging to a separate business sector and hence having little to no concern of other sectoral implications no more existed.
With globalization, deregulation became then the norm of the day. Governments had little to no control over businesses activities (O'Sullivan and Steven 2003). This especially had major positive implications on finance lending institutions which could now provide a greater supply of credit to investors and other business/individuals alike (For an interest and fee).
Following the dot com bubble burst in the year 2000-2001 (Ian 2004) and the 9/11 attacks on the World trade centre, the then President (Dr Greenspan) of the Federal reserve in the United States; responsible for interest rate regulation (which indirectly regulates worldwide interest rates) kept interest rates low to as much as 1% in January 2001 (Chris 2007) fearing investor sentiment. While a low interest rate boosted overall economic growth and consumer spending it also increased credited debt. Financial businesses had a greater opportunity to provide monetary support to the ultimate consumer and businesses, since it was cheap to do so. With the passage of time and low interest rates continuing, major financial institutions right from private to commercial banks, Hedge funds, private equity firms and mortgage lenders were actively involved in credit lending. Simultaneously, the rising markets inflated their assets value and the use, demand and available supply for leveraged money (borrowed money to invest) encouraged businesses (Peston 2008) to undertake risky deals with a view of significant short term profits.
As the old phrase goes “What goes up, must come down”; finally has come to realization. In this report I make an attempt to identify the issues, causes and future potential facing two financial institutions - Fannie Mae and Lehman Brothers that went from financial sector power houses to bankruptcy in weeks.

FANNIE MAE- a situational overview

Fannie Mae was charted by the US government by the passage of a law in the year 1938 (Great depression) as a part of a deal by the then President, Roosevelt. Under the law, Fannie Mae would function as a private entity but will remain government sponsored. The role of Fannie Mae as a business entity in return would be to enable Americans to finance the purchase of homes to stimulate economic growth and maintain liquidity in the housing market (Engdahl 2008). Since then the main business activity of Fannie Mae as a government sponsored entity (GST) has been that of a credit (mortgage) lender to American citizens wanting to own houses.
Its mortgage investments are financed primarily by issuing debt securities to investors (Fannie Mae 2009). These debt securities which include bonds, preferred stock, collateralized securities and other financial instruments are created by pooling in numerous loans as a package and selling them to investors (securitization) with a view of providing them a return on their investment.
In early 2004 several law suites filed against Fannie Mae were indications of a financial deceit within the company (Federal National Mortgage Association 2005). This was soon followed by reports involving accounting problems, including earnings manipulation as indicated in the CRS report for Congress (2005). Fannie Mae is known to have overstated its earnings by $10.6 billion in between 1994 to 2004 (Benner 2008).With the housing market then booming the confidence in returns on mortgage investments was high. However, future market growth estimates by Fannie Mae were severely faltered. This in addition to severe defaulting by debtors led to its realization towards an official bankruptcy in mid 2008 (Benner 2008).

FANNIE MAE- issues leading to bankruptcy

The business nature and strategy of Fannie Mae is based on the issuing of debt securities. Following the 9/11 attacks, the United States of America was (is) waging a war on foreign soil. Any war in general is a drain on economic resources at disposal to a government. For Ex: the January 1991 plunge in US stocks, in anticipation of the Gulf war (Share Select 2007).The federal reserves decision to keep interest rates at low during the period could be considered as a major political move by the then Bush (Jr) administration to continue with a sustainable economic growth. Fannie Mae in special had an indirect responsibility towards the government (being government sponsored) in ensuring that the American people continue to have a positive outlook on the economy. A good way (temporary though) of achieving this was to provide credit affordable housing; portraying a false picture of individual sustainability among the American public.
This ploy from a business point of view is good as long as debtors repay their loans. In other words, the return of principal with interest is determined by the ability of the final borrower to repay the loan. Should in case they default both investor principal investment and returns on investment are jeopardized. Such was the case for Fannie Mae, where individuals failed to repay their debt.
Due to the excessive availability of cheap debt, investors were very keen on mortgage backed securities. Considering the demand for their securities Fannie Mae began to focus on credit unworthy customers; providing them an opportunity to own a house on credit with very little to no documentation (Clark 2008). In fact businesses such as Fannie Mae and their brokers, conducted marketing campaigns to lure individuals towards housing credit. Since the loans/mortgages were packaged and sold as securities to investors, the investors bore the ultimate risk in case of a default. Investors on the other hand used leveraged money to purchase mortgage securities. In addition, excessive deregulation enabled major investor firms to repackage these mortgage securities and sell them to other investors (Peston 2008); thus extending the credit chain from consumer to originator and beyond.
The fact that Fannie Mae was a government sponsored entity enabled it to obtain up to $2.25 billion directly from the Treasury (at very low interest rates) exempted from state, local taxes and other Securities and Exchange Commission (SEC) fees. The mortgage securities sold by Fannie, including those of credit unworthy customers were given “AAA” ratings by the market and regulatory agencies (Benner 2008). Consequently, the securities sold by Fannie were guaranteed government backing. The use of credited money to fill the demand for their securities did not account for the inflated value of their assets; accordingly assets borrowed against had a lower value to cash borrowed. By the end of 2008 the fair value of Fannie Mae’s assets dropped 66% and may reach negative in the 2008-2009 quarter (Engdahl 2008).
The bankruptcy of Fannie Mae to a greater extent is also due to inappropriate managerial performance. Management at Fannie failed to recognize the basics of financial business involving debtor and creditor relations and the importance of credit worthiness, before sanctioning a loan. These factors in combination with market frenzies and managerial greed are mainly responsible for the bankruptcy of Fannie Mae.

LEHMAN BROTHERS- a situational overview


Lehman Brothers was America’s third largest Wall Street investment bank. Established in the year 1844 by Henry Lehman; is often described as an American financial pillar stone that defined the American brand of Capitalism (Geisst 2001). Its main business activity as an investment bank included trading securities and managing mergers and acquisitions. Lehman’s business spans as a diversified global financial service network including the subsidiaries: Lehman Brothers Inc, Neuberg Berman Inc., Aurora Loan services, SIB Mortgage Corporation, Lehman Brothers bank, FSB; and Crossroads Group (Lehman Brothers 2009).
The beginning of 2000 (following the repeal of the Glass-Steagall act by Congress in November, 1999) marked an unprecedented inflow of cash into the US economy that kept interest rates record low (Barry 2001). The enormous availability of cash in addition to cheap credit due to low interest rates caused Lehman Brothers to join in the investment race of the then so popular Mortgage backed securities. Considering the global expanse of Lehman Brothers, it was capable of spreading these high risk security investments to other countries via its subsidiaries that used securitization to repackage mortgage loans from the US.
In short there exist a common link to the bankruptcy of Lehman and Fannie- the excessive securitization of poor quality mortgage backed securities. The general view of such aggressive securitization by Lehman and other investment firms was with a futuristic expectation that property prices will continue to rise and return on investment were backed by their high (inflated) assets value. However, even with property prices rising, the average income of Americans was in fact dropping between 2005 and 2006 (DeNavas-Walt, Proctor et al. 2007). This was a clear indication of credit defaults on way; let alone those involving subprime credits. The management of Lehman failed to realize and put forward a fool proof strategy that could withstand a situation of credit defaults. Instead the business continued to expand rapidly with its mortgage related activities pooling in funds from investors globally.
Consequently, on September 15, 2008 Lehman Brothers filed for bankruptcy to repay a $613 billion debt to over 100000 unsecured creditors involving $156 billion in investment bonds, close to $17 million to Japanese banks; unpaid notes from lenders in Australia, Taiwan, Singapore, Korea and Norway; excluding loans from other American institutions (Lowitt 2008)

LEHMAN BROTHERS- issues leading to bankruptcy

The credit crunch alone cannot be the sole blame for the bankruptcy of Lehman Brothers. The management of Lehman has a greater degree of justification to do. A fault in business strategy led by a blind assumption that mortgages made would be paid off by consumers was the start to its downfall. Following the drop in real estate prices Lehman Brothers was slow to react to the need for a new strategy. Management preferred to ignore any hardcore reality fearing a back slash in its stock prices and hence a panic among its investors. This false show of market strength came to an end when the middleman between Lehman and its clients; JP Morgan Chase demanded an additional $5 billion in collateral on September 11, 2008- in view of its falling real estate value (Elstrom 2008). Thus, began the saga to Lehman’s bankruptcy within days.
As an investment banking company the business was involved in both trading securities as well as making recommendations to investors. Reports have suggested that the business has used its stock analyst ratings to boost its investment banking activities. This is indicative by classifieds (Morgenson 2009) that show the bonuses of stock analysts at Lehman being linked to investment banking business they generated; a breach of the US Securities and Exchange Commission (SEC).Lehman analysts were creating a surplus demand for their securities by falsification of their security ratings and price targets. To the investor this was an internal dealing unobservable unlike the then increasing security value which was potentially lucrative. Such deals written by Lehman analysts and brokers failed to improve their position and aggravated investor sentiment during the collapse of the real estate market and hence mortgage backed securities in the US.

FANNIE MAE AND LEHMAN BROTHERS- the global impact

Financial institutions have a complex manner of functioning. They lend and borrow not only from investors but also from one another. As a result, their balance sheet statements may not always reflect the true condition of the business. With the inflow of the US dollar from international investors into the US economy; created a state of euphoria among American financial institutions. Being a currency of global trade, American financial institutions saw this as an opportunity to increase their market value/ business sales. In addition, the political and economic situation in the US demanded a need to accelerate the nation’s growth.
The bankruptcy of Fannie Mae and Lehman Brothers had a direct impact on its US consumer base. Considering that a substantial amount of investments were made from oversea markets, it is obvious that banks/financial institutions (and their clients) from various countries promoting and selling securities backed by American investment firms experienced a considerable amount of concern, based upon their exposure to American mortgage backed securities.
The Australian economy did experience an impact from the bankruptcy of Fannie Mae and Lehman Brothers. In Australia, the Australia and New Zealand Bank (ANZ), National Australian Bank (NAB) and Australian National Bank (ANB) are known to have a total estimated amount in claim of US$ 47,882,398 from Lehman Brothers (Lowitt 2008). This excludes any investments made by individual Australian investors and financial institutions. Superannuation funds in Australia were the worst to suffer. The pension funds from 54 listed companies were with unfunded liabilities after the collapse of Lehman Brothers (Ryan 2009).
Similarly, Hong Kong had an exposure of HK$ 12.7 billion involving HSBC Bank; by a mini bond issue from Lehman Brothers that allowed investors to contribute as little as HK$ 40,000 (Chalk, Sayles et al. 2008). Until today the global economic impact of the US financial crisis have yet not completely manifested. There have been severe social implications in the United States such as the number of sheltered homeless (government funded shelters), according to the Homeless assessment report to congress (2007) included 30.3% of individuals between the ages of 31 to 50 of the US population; and is worsening. Globally there has been no related social implication reported in main stream media in other countries, but economies that have been solely dependent on the US economy such as Japan and South Korea could very soon be experiencing a social crisis of their own.
Australian businesses that are reliant on US spending will experience a contraction in sales (Harrison 2008) and it is necessary to build markets in growing economies such as Brazil, Russia, India and China (BRIC nations). From an investors point of view the US will no more be the ultimate investment destination as the shift of wealth from the US to its competitors in world markets continue.

CONCLUSION

On declaring bankruptcy, the US government had a choice to intervene and bailout both Fannie Mae and Lehman Brothers using tax payer’s money. After a complete (hopefully!)assessment the US government decided to bailout Fannie Mae while Lehman Brothers was sentenced to liquidation.
The bailout of Fannie Mae could be considered to some extent as an obligation that the government had, considering that Fannie was a government sponsored entity (GST). It failed to address the risky investments and decisions made by Fannie’s management. There exists conflicting information between free press and main stream media concerning the US government bailout strategy. Considerable amount of attention is being drawn towards the Federal Reserve and the US government in engineering the market melt down to cater to a new world order of economic policy (Jones 2009). The role of Fannie is indicative since about 25%-30% of the American economy is dependant on the housing industry (Stathis 2008). For a non skeptic the bailout of Fannie was a necessity to inject liquidity into the housing sector and stimulate buying.
Security rating agencies such as the Standard and Poor, Fitch and Moody’s failed to act in a non bias manner; as financial indicators of the credit worthiness of a debt security. This in fact was a major reason for investors being misguided into investments. One reason for such rash judgment in ratings is due to the strong urge by managers (greed) to maximize short term profits (Wutkowski and Youngla 2008) (charge a high fee for their ratings), causing them to loose focus.
Lehman Brothers on the other hand were unfortunate not to receive a bailout from the US government. The business was required to liquidate and disperse funds among its stakeholders and investors. The failure of Lehman Brothers to obtain a bailout from the US government has drawn attention from anti lobbyist groups, claiming the then US Treasury Secretary (Bush Jr era), Henry Paulson Jr, an ex CEO of Goldman Sachs was acting on behalf of the business (AIG was Goldman Sachs largest trading partner) which stood to loose $20 billion in a bankruptcy of AIG (Engdahl 2008). Being in the insurance business AIG had links to major global financial institutions via the issuing of an investment insurance called credit default swaps (McClatchy 2008). A bankruptcy to liquidation scenario for AIG could have resulted in a sudden global financial meltdown. The close timing between their bankruptcies could have been a cause for the US government making a choice to bail out AIG and not Lehman Brothers.
The current global financial crisis is not a single doing of financial institutions, business or governments. It is a resultant of a collective effort by global economies to aggressively expand their markets and enhance profits. While, during the process numerous businesses and individuals managed to a mass abnormal quantities of wealth, the economic and social condition of the common man has/will worsen in the coming days.
The need for financial regulation to keep up with financial innovation in both local and international markets along with the availability of credit to consumers and business alike, are serious issues to be considered for the future. It is rather difficult to draw a conclusion from current financial events, involving the lessons learnt to avoid a similar collapse in the future since the complete consequences have yet not unfolded. The recent G20 summit in London which pledged $1.1 trillion as a global economic stimulus package (Webster and Franklin 2009) has propped the stock market. However, increasing liquidity in the market by pumping cash into the system is a temporary solution and does not solve the core issue facing the financial markets. What leaders and economic advisors need to understand is that the problem is not low liquidity in the markets but rather insolvency in the markets. Flooding the markets with cash (printing money) has a high degree of future risk. On the economy stabilizing, hyper inflation will be the new upshot of the day!

BIBLIOGRAPHY

Barry, G. (2001, 5 January). "Surprise cut in US interest rates highlights alarm over sinking economy." Retrieved 18 April, 2009, from

Benner, K. (2008, 14 July). "The $5 trillion mess." Mortgage Meltdown Retrieved 13 April, 2009, from

Chalk, R., P. Sayles, et al. (2008). An overview of the Lehman Brothers minibonds saga. Financial services market developments, Freshfields Bruckhaus Deringer: 5.
Chris, M. (2007). "U.S. Fed Interest Rate Cut Will Do Little to Stoke Economy." Daily Reckoning Retrieved 13 April, 2009, from

Clark, J. (2008, 29 September 2008). "Why the Mortgage-backed Security Went the Way of the Dinosaur." How can mortgage-backed securities bring down the U.S. economy? Retrieved 13 April, 2009, from

DeNavas-Walt, C., B. D. Proctor, et al. (2007). Income, Poverty, and Health Insurance Coverage in the United States: 2006. U. S. D. o. Commerce. Washington, DC,, U.S. CENSUS BUREAU: 78.
Elstrom, P. (2008). The Two Faces of Lehman's Fall. BusinessWeek. New York.
Engdahl, F. W. (2008, 15 July). "The Financial Tsunami." The Financial Sense Editorials, from

Federal National Mortgage Association. (2005, 25 Febuary). "Fannie Mae - A United States Government Sponsored Enterprise and a Complex, Securitized, Unregulated "Bank"." Retrieved 13 April, 2009, from

Fannie Mae (2009, 7 May 2008). "About Fannie mae." Retrieved 13 April, 2009, from
Fannie Mae.
Geisst, C. R. (2001). The Last Partnerships: Inside the Great Wall Street Dynasties, McGraw-Hill.
Harrison, M. (2008). "Will Fannie Mae and Freddie Mac Impact Australian Business Owners?" Retrieved 18 April, 2009, from

Ian, P. (2004). "History of the Internet - the Dotcom bubble." Internet History online, from

Jones, A. (2009). The Obama Deception. USA, InfoWars.
Lowitt, I. T. (2008). Certificate of Resolutions. U. S. B. Court. New York, Washington Post.Newsweek.
McClatchy, C. (2008). Why AIG was aided and not Lehman Brothers. Tribune News. Pennsylvania, Reading Eagle Press
Morgenson, G. (2009). "In a Wall St. Hierarchy, Short Shrift to Little Guy." Retrieved 18 April, 2009, from

O'Sullivan, A. and M. S. Steven (2003). Economics: Principles in action. New Jersey, Pearson Prentice Hall.
Peston, R. (2008). Super Rich:The Greed Game. A. Kemp. London, BBC.
Ryan, P. (2009, 14 April). "Black hole looms over defined benefits super funds." Global Financial Crisis Retrieved 19 April, 2009, from

Share Select. (2007). "War and stock markets." The market explained Retrieved 11 April, 2009, from

Stathis, M. (2008, 14 July). "Fannie & Freddie Bailout: Truth or Consequences." The Market Oracle Retrieved 13 April, 2009, from

Webster, P. and M. Franklin (2009). G20 leaders agree to $1.1 trillion economic stimulus. The Australian. Sydney, News Limited.
Williamson, J. (1998). Globalization: The Concept, Causes, and Consequences. Congress of the Sri Lankan Association for the Advancement of Science. Colombo, Peterson Institute of International Economics.
Wutkowski, K. and R. Youngla (2008). Lawmakers Blast Rating Agencies for Role in Financial Crisis. Insurance Journal. San Diego, Wells Publishing Inc.



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A) When you want advice from an expert, ask your question and sit quietly.DO NOT do what MOST PEOPLE DO and start to answer the question or make it a multiple choice.

B) Hang out with BIG THINKERS.People in your environment have a great impact on you.

C) POSITIVE THINKING is NOT merely wishful thinking.It is all about incorporating a sense of optimism into everything you do while also acknowledging the negative.

D) BE PATIENT and wait for your instincts to tell you the best time to make your move.

E) Learn the ART OF FORGETTING.Move on and do not give a though to the bad things that have happened to you. This does NOT mean, you should not learn from your and others mistakes.

F) A failure or setback is not a defeat. Defeat is only a STATE OF MIND. Master your MIND to tame your defeat (italics: own writing).

G) Reward people for the job they do. It is OK to overpay for people who deserve it.

H) Your ATTITUDE is much more important than your IQ

STAY TUNED FOR MORE INTERESTING READS!!

REFERENCE

Think Big and Kick ass in business and Life, Trump and bill Zanker.Harper Collins Publishers.2007
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A) Value Loyalty above everything else


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THE TRUMP WAY

October 20th 2008 01:11
A quick review of the book Think big and kick ass in business and life.


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Genetically modified foods-To eat or not

September 14th 2008 01:51
Biotechnology has proven to be an indispensable tool in modern life. This science has found its application in almost all areas that modernization stands for. These range from military to health and from building infrastructure (biomaterials) to food processing/production. One of the most ancient forms of biotechnology could be traced directly to food processing involving the production of wines, beers and cheese.

With the advent of industrialization and commercialization, this potential science has developed into a cash generating cow for many investors. Today, food processing/production involving biotechnology has become more complex due to better techniques involving genetic engineering and gene manipulation; with a desire to improve the produce quality and quantity. However, this has also drawn severe criticism involving the danger of consuming genetically modified products and their byproducts. Critics argue that the long term effects of the consumption of genetically modified (GM) foods will be catastrophic not only in terms of human and animal health but also in modifying the eco system. Supporting these claims is a handful of scientists who have participated in studies and trials involving GM foods, conducted by companies. According to them, irrespective of the numerous trials being conducted on animals before the entry of a GM food into the market; it will be almost impossible to predict the long term effects GM foods would have on future generations. An effort really not worth the risks


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