In the weeks surrounding the anniversary of 9/11, the most terrifying attack on America�s soil, another attack on America�s citizenry is taking place: the systematic looting of the US Treasury to bail out American financial institutions.

After degrading the stock and stealing the floundering Bear Sterns, then handing the institution and its physical building to JP Morgan, the FED and US Treasury, the financial fronts of the US government, decided to bail out Fannie Mae and Freddie Mac. While allowing Lehman Brothers to drown on its own, and Merrill Lynch to scuttle under the wing of the Bank of America, curiously the F & T (Fed and Treasury) saw fit to answer AIG�s call for a $30 billion bridge loan with an $85 billion bailout. This all happened while Morgan Stanley is pow-wowing with Wachovia to merge.

At the root of all this financial disaster, we are told, is bad debt paper, unsecured loans, bad mortgages, irresponsible handing out of monies to unfit borrowers by mortgage companies, banks, and others who should have known better but for their greed, their criminality, and the lack of effective overriding controls. But then lenders made their commissions, their profits, had a heyday with the housing bubble until it burst around them and nobody handed back a buck as the crappy debt paper hit the fan and began to infect the world.

It turns out the banks had no problem passing the debt paper upwards to be collateralized by investment banks into securities, preferred stocks and bonds. And the central banks had no problem sucking it up. The entire financial system took part in this orgy, knowing full well that without protection it could catch the financial AIDS virus that could spell death to our financial system. But they succumbed to their cash-lust against all their well-credentialed wisdom.

Now the Fed is throwing still more money into securing money market funds, whose buck was busted yesterday, yielding 97 cents on the dollar. So your money is safe nowhere, that is without some pig somewhere getting a piece of it; that is whoever is behind this incredible manipulation. Of course, in an election year it behooves the masters of debt, the Bush administration to rush in and now borrow from the US taxpayers, from our Treasury, to bail out these sorry corporate flops. But then borrowing comes natural to Bush & Company.

As Paul Craig Roberts pointed out in his Online Journal article, US economy: rudderless and reeling from direct hits, �Most Americans, including the presidential candidates and the media, are unaware that the US government today, now at this minute, is unable to finance its day-to-day operations and must rely on foreigners to purchase its bonds. The government pays interest to foreigners by selling more bonds, and when the bonds come due, the government redeems the bonds by selling new bonds. The day the foreigners do not buy is the day the American people and their government are brought to reality. This is not the position of a superpower.�

Roberts is the former assistant secretary of the Treasury during President Reagan�s first term; the former associate editor of the Wall Street Journal; and author of numerous books on economics, American government and Washington�s perverse insider mentality.

Returning to AIG�s handout

AIG, unable to raise the $30 billion in the fraternity of the financial community turned to Big Brother, the F & T, who must have for once really scoured AIG�s tangled books to realize that the insurance giant, operating as Michael Ruppert once pointed out in 130 countries, earning $46 billion even back in 2000, was not telling all. Indeed, Bernanke and Paulson must have been clutching their hearts, if not their britches, as the undisclosed layers of debt peeled off like a rotten onion�s. And so the real bridge to nowhere that needed to be built with taxpayer dollars was more like $85 billion. Of course, John McCain was first against and then for it in two consecutive days.

For this bailout, the F & T took 80 percent of AIG�s stock for collateral and at least 8.5 percent interest on earnings. They also asked for its CEO, Robert Willumstad, to get lost, and they brought in CEO Edward Liddy, former chief exec of Allstate. Mr. Liddy, as the Wall Street Journal tells us is best known for �pulling apart empires, having helped dismantle Sears.� He also has the dubious achievement of having �worked under Donald Rumsfeld at drug maker G.G. Searle and Co [who brought you the deadly Aspartame after it was banned for 15 years by the FDA].� Mr. Liddy happens to be on the board at Goldman Sachs, the investment bank Mr. Paulsen headed before becoming Treasury secretary. What a coincidence.

Of course, President Bush approved the $85 billion AIG bailout without the approval of Congress. After all, who needs them. As to AIG�s backstory, which, as Ruppert pointed out, includes affiliations with the OSS/CIA going back to WW II and problems with money-laundering for drug trafficking, let me add this bit of back story for your reading pleasure, 9/11 and the Greenberg Familia. Speaking of terrorism, please read it, links and all.

Of course, Mr. Greenberg had to step down as CEO of AIG in 2005. As Wikepedia tells us, �By the mid-2000s AIG had become embroiled in a series of fraud investigations conducted by the Securities and Exchange Commission, U.S. Justice Department, and New York State Attorney General�s Office. Greenberg was ousted amid an accounting scandal in February 2005. The New York Attorney General�s investigation led to a $1.6 billion fine for AIG and criminal charges for some of its executives.

�Greenberg was succeeded as CEO by Martin J. Sullivan, who had begun his career at AIG as a clerk in its London office in 1970. On June 15, 2008, under intense pressure due to financial losses and a falling stock price, Martin Sullivan resigned from the CEO position. He was replaced by Robert B. Willumstad, who has served as Chairman of the Board of Directors of the Company since 2006. Willumstad was forced to step down and was replaced by Edward M. Liddy on September 17, 2008.�

Actually, on 9/11/08, trying to reassure New York City voters about our fiscal fitness, Mayor Mike Bloomberg suggested that perhaps Warren Buffet should step in and help with the original bridge loan. A billionaire businessman, Mayor Bloomberg thought it was not a good idea for the government to be bailing out AIG, even when the price tag was only $30 billion. So how did it become so important in the interim?

Well, we were told that since AIG was really an international player its infected debt paper could reap financial havoc around the world. For example, the Times reported, �AIG had $20 billion of subprime mortgages marked at 69 cents on the dollar and $24 billion in Alt-A securities values at 67 cents on the dollar,� similar to the kinds of debt Lehman was carrying.

The Times also said, �AIG has also been under pressure from the derivatives contracts that its London-based financial products unit sold in connection with complex debt securities, making them more attractive to buyers. The swaps also gave speculators an opportunity to bet on the debt securities� overall creditworthiness, which have declined in response to the turmoil in the housing markets.�

The bottom line, �because the debt securities covered by the swaps are so complex and opaque [italics mine], it has been hard for investors to verity AIG�s numbers on their own, and investors have grown impatient as AIG reported big losses they did not expect in the last two quarters.� That�s Times-talk for they were crooks, covering up the real numbers in a web of deceit, which is traditionally their specialty. Though we don�t have Hank Greenberg to kick around anymore, we should, because he created this house of cards during his CEO tenure.

Enter the Securities and Exchange Commission

Somewhere in Sleepy Hollow, word got to the SEC and its chairman, Christopher Cox, that financial explosions were occurring in New York and that the towers of finance were being hit, exploding, and falling from what, short selling? Is that what it was? Of course, Commissioner Cox roused himself on Friday and banned �all short selling,� for �temporary emergency action to prohibit short selling in financial companies to protect the integrity and quality of the securities market and strengthen investor confidence. The UK and FSA took similar action yesterday.�

A reader from the financial world wrote to me that, �The bear raids on the banks and brokers were NOT a case of piling on by US based hedge funds. And from what he [a learned colleague] was seeing and hearing about in terms of order flow, the vast majority of the financial short selling the past week or so were being done overseas. It appears that the lion�s share of shorting was coming out of overseas bourses such as London and Dubai. It may not be a coincidence that the financial short selling ban is both here and in London.�

He added, �There is another coincidence: the huge increase in shorting of the financials occurred on the anniversary of 9/11. And on top of that, the same institutions attacked on 9/11/01 were the ones suffering in recent days.� He went on to explain, �Short sales require a locate (shares to borrow) and then a subsequent delivery. It should take less than 3 days to deliver the borrowed shares, but instead delivery is often delayed indefinitely. Failure to deliver leads to a margin, which can be as high as 9-15 percent . . .

�If you want to know who to blame for the past 5 years of naked shorting, you only have two places to look: the financial brokers themselves, and the nonfeasance of a feckless SEC.� And so what goes around comes around.

But now you know. We�re under attack. Even my conservative broker said, �Somebody is making money on this.� That is just the way certain individuals made millions on 9/11, having foreknowledge of the coming event, by betting on Morgan Stanley (located in the North Tower), United and American Airlines� stock to tank, and by betting on defense industry stocks to zoom up. The real revelation here is that the market and its so-called protective systems are offering us about as much protection from foreign and domestic attack as NORAD�s air-defense system did on 9/11. America once more is under fire.

As on that day, Cheney was in the White House bunker directing activities, and Bush was stranded somewhere listening to some school children read a goat story. And above them, some financial elites were pulling the strings to pull down the American economy and make us less than a banana republic for their continued picking. Seven years later, hardly anything has changed.