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It looks like a normal nice day. But Jim, a big investor, decides to start selling because he feels bearish. Maybe he came across a black cat on the way to work. Who knows? Bill and Sarah take notice. When they don't know what's going on, they don't stick around to find out who's the Paxi. So they start selling too. More investors notice and more selling follows. The result, prices keep falling, consumers lose wealth and confidence, businesses stop hiring, demand evaporates, and suddenly the whole economy is in shambles. Selling in fear of a weak economy impacted the environment and became a self fulfilling prophecy. This is why financial markets are prone to booms and busts that don't have to start with a crisis, but can cause one.

The speaker says, “You are going to see a crack in the bond market. Okay? It is going to happen. And I tell this to my regulators, some of whom are in this room, I'm telling you what's gonna happen, and you're gonna panic. I'm not gonna panic. We'll be fine. We'll probably make more money, and then some of my friends will tell me that we're that we cause we like crises because it's good for JPMorgan Chase.”

BlackRock, State Street, and Vanguard allegedly own 88% of S&P firms, which the speaker argues negates the idea of a true equity market or land of opportunity. The speaker claims these three are essentially one company. The speaker asserts that investors, including Blackstone, bought up 26% of affordable homes in 2023, according to Redfin. This began with foreclosures after the 2008 subprime mortgage crisis, during which banks received a $29 trillion bailout, according to Bard College's Levy Institute. The speaker suggests banks targeted those in debt with subprime mortgages, leading to foreclosures. The speaker laments the shift from independent stores to chain stores.

The Fed operates on behalf of a few Wall Street banks, acting as a pump to strip mine wealth and equity from the American middle class. Companies and financial institutions used to make investments based on factory visits, management teams, production, financial figures, bank books, and inventory. Now, Wall Street only focuses on the Fed's next move. The country has been financialized, and industry has left for China through outsourcing.

Speaker 1: Well, the intersection with the global financial crisis specifically is a wild story that to be truly told, you need to put the evidence on screen as well. But the short version is that he had a company called Liquid Funding Limited that was domiciled in The Bahamas that was partially owned by Bear Stearns. And Bear Stearns, you know, is where he had come up for a long time. And Liquid Funding Limited was selling CDOs, the same types of CDOs that eventually caused the global financial crisis. It was capitalized at, I believe, dollars 100,000,000 and allowed to sell $20,000,000,000 with a B of CDOs. Speaker 1: And I actually just was looking at that statistic earlier today because this is the craziest story. And that little CDO factory that Jeffrey Epstein was running tied into Bear Stearns. And if you recall, Bear Stearns was one of the, you know, the first to collapse, right? That shut down in the months directly preceding Bear Stearns starting to collapse. And Jeffrey Epstein redeemed all of those CDOs, all of those assets. Speaker 1: The terms are I don't know the technical terms for what he did. But basically, he made a run on the bank on those exact assets that were the exact problem. And he was tied into the exact bank that was financially distressed. And then he wound that whole company, Liquid Funding Limited, up and disappeared. And later, JPMorgan, the bank that he later worked with after, you know, Bear Stearns was his early banking career, and then he later was doing all of his money laundering and banking and referring of people at JPMorgan, They came in, swooped up Bear Stearns for pennies on the dollar. Speaker 1: They also later spun Liquid Funding Limited back up. There's a whole There's a very overt financial paper trail that Jeffrey Epstein was better acquainted with the problem than almost anyone in the world because he was deeply enmeshed in Bear Stearns and knew the leadership of Bear Stearns very well. And he understood CDOs, he was selling CDOs. And then he just so happens to wind his whole shop up and close it down and redeem it all right at the moment when things are about to go bust. So, that's a wild rabbit hole, and it's very interesting. Speaker 0: I mean, what is that? I mean, that suggests Well, it doesn't suggest it's like direct evidence of, if I'm assuming we can verify what you're saying, that the biggest events in the world are actually not quite as organic or accidental as we're led to believe and that, you know, this is like puppet master stuff. Mean, it is. I don't know what to say. I don't want this to be true, Speaker 1: but Speaker 0: that's what it looks

There is a pool of $50,000,000 in subprime loans. The market for insuring mortgage bonds is 20 times bigger than actual mortgages. If the mortgage bonds were the match, CDOs were kerosene soaked rags, then synthetic CDOs were the atomic bomb. Mark Baum realized the world economy might collapse at that moment in a restaurant.

The Fed operates as a pump on behalf of Wall Street banks, strip-mining wealth from the American middle class. Companies and financial institutions used to invest based on factory visits, management, production, and financial figures. Now, Wall Street only focuses on the Fed's next move. The country has been financialized, and industry has been outsourced to China.

In the early 1900s, influential banking families like the Rockefellers, Morgans, Warburgs, and Rothschilds wanted to create another central bank in the US. To sway public opinion, JP Morgan spread rumors of a bank's insolvency, causing mass withdrawals and a chain reaction of bankruptcies. The Federal Reserve (Fed) also played a role in economic collapses, increasing and decreasing the money supply to manipulate the market. In the 1920s, the Fed's actions led to the stock market crash and the collapse of thousands of banks, allowing international bankers to consolidate their power. The video also includes controversial statements about Jews and their alleged influence in Germany.

The Fed operates like a pump, benefiting a few Wall Street banks while stripping wealth from the American middle class. In the past, investments were based on evaluating factories and management teams across the country. Now, the focus is solely on the Fed's actions. This shift has led to the financialization of our economy and the outsourcing of industry, with much of it moving to China.

The perception of a housing shortage is wrong, similar to 2005-2008. The pandemic caused a temporary surge in housing demand as people fled cities, mirroring historical trends. However, with a shrinking population, deportations, slowing immigration, and low birth rates, long-term housing demand is questionable. Major homebuilders monopolistically control supply in needed locations and have unique access to financing. New homes purchased, a large proportion financed with teaser rates like in 2004-2006, are now facing rate roll-offs. Homeowners who gambled on Fed rate cuts are seeing mortgage rates increase from 2% to potentially 7%, impairing their spending ability.

Specifically, I set out to buy credit default swaps on subordinated tranches of subprime residential mortgage backed securities. We would ultimately use nine different Wall Street dealer counterparties. To be clear well, first I'd say Lehman and Baer, I avoided for obvious reasons, even back then. Goldman Sachs featured very prominently early on. They were a very anxious crew. To be clear, these credit default swaps that I'm buying would rise in value as mortgages are written off and the value of these tranches fell. Goldman Sachs in the spring of 'seven appeared to us to want to make its trade bigger. They wanted a bigger piece of the big short. A lower price, therefore, would benefit Goldman Sachs, and that's how Wall Street works. Incredibly, it would later be reported that more than $60,000,000,000,000, $60,000,000,000,000 in credit derivatives were in effect at the peak.

In the early 20th century, powerful banking families like the Rockefellers, Morgans, Warburgs, and Rothschilds sought to create a central bank in the US. To sway public opinion, JP Morgan spread rumors of a bank's insolvency, causing mass withdrawals and a chain reaction of bankruptcies. This pattern repeated in 1920, leading to the collapse of over 54 competitive banks. From 1921 to 1929, the Federal Reserve increased the money supply, resulting in extensive loans and the popularity of margin loans in the stock market. In October 1929, financiers called in margin loans, triggering a massive sell-off and bank runs, collapsing over 16,000 banks. The Federal Reserve's contraction of the money supply worsened the depression. Central banks control interest rates and the money supply, and the Federal Reserve bankers aimed to remove the gold standard. Additionally, the video includes anti-Semitic remarks blaming Jews for financial crashes and cultural decadence in Germany.

Ben Bernanke attributed the Great Depression to Jewish leaders at the Federal Reserve. In Germany, the effects of the stock market crash were severe, with prices doubling every 2 days for 20 months. Inflation in 1920-1922 was out of control, leading to people needing suitcases of banknotes to buy goods due to rapidly rising prices.

During the 2008 financial crisis, the government bailed out major firms like Bear Stearns and AIG. They hired BlackRock, led by Larry Fink, to manage the cleanup without competitive bidding, shrouded in secrecy. This made Fink a key figure in the bailout process, despite BlackRock being a major shareholder in the banks receiving assistance. As a result, Fink emerged as a powerful influence in the post-bailout economy.

In 1913, the US Federal Reserve Bank was founded, owned by powerful families like the Rothschilds. The Fed's establishment led to the deaths of opponents and the subsequent control of thousands of banks. World War One began in 1914, and the Fed doubled the money supply, causing lending to increase. In 1920, the money supply shrank, resulting in 5,500 banks going bankrupt. The Fed then increased the money supply again, but on October 23, 1929, the Wall Street Crash occurred. This crash caused worldwide devastation, bankrupting 16,000 non-Fed banks. The Fed further reduced the money supply, leading to starvation. The Rothschilds manipulated the stock market, and anyone who opposed them faced consequences. In 1933, the government seized gold, removing limitations on the cabal's control. The Wall Street crash also affected Germany, leading to a deep depression and high unemployment rates. Hitler used the chaos to gain power and restrict personal liberties.

The Morgan family faced issues with the SEC due to concerns that J.P. Morgan held excessive power. He bailed out America in 1895 and 1907, leading the government to believe that one individual shouldn't wield such influence. Consequently, the Federal Reserve was created, modeled after Europe's Central Bank. However, JPMorgan was not, and still is not, part of the Federal Reserve. The Federal Reserve consists of twelve reserve banks from the United States with elected and selected officials.

Epstein recalls his path from Wall Street trader to philanthropist funding cutting-edge science, and in parallel, his views on money, complexity, and the limits of understanding complex systems. - Santa Fe Institute and complexity: Epstein describes founding Santa Fe Institute as part of an effort to study complexity mathematically. He explains that, in the late 1980s–early 1990s, he funded the institute after Los Alamos and other physics centers were losing scientists. The aim was to see if “these areas of strange things can be described by some form of mathematics.” Langdon, Murray Gell-Mann, and Chris Langdon are mentioned in connection with Santa Fe and related complex-systems work, including artificial life and biosphere studies. Epstein stresses that the goal was to develop tools to understand complex systems rather than to force them into traditional machine-like models. - Transition from prestige to numbers: Epstein explains how the world shifted from valuing reputation to valuing calculable metrics. He notes that by the mid-1970s on Wall Street, “the most important parts of business were really now going to calculations.” He contrasts reputational measures (like being Rockefeller) with the need to understand the financial underpinnings of institutions through numbers, not just status. - Trilateral Commission and Rockefeller board: Epstein recounts being invited to join the Rockefeller board due to financial expertise as the university expanded, and his interactions with figures like David Rockefeller. He describes the trilateral commission—comprising leaders from North America, Europe, and Asia—asking him to join when he was in his early 30s. He even recounts jokingly listing “Jeffrey Epstein, comma, just a good kid” on the application, a detail he raises to illustrate how financial insight was valued in these elite circles. - Money, assets, and liabilities: Epstein emphasizes a recurring theme: leaders often misunderstand money and its mechanics. He distinguishes how individuals perceive assets and debt (feeling wealthier when assets rise vs. debt) from how banks’ assets are defined (what they are owed by others). He explains fractional reserve banking simply: with one dollar held, a bank can lend out nine, highlighting how this system relies on confidence and liquidity rather than physical cash on hand. - Inflation, central banking, and complexity: He connects inflation to fractional reserve concepts and describes how the banking system has to be understood as a network of interdependent pieces. He argues that most world leaders lack deep financial literacy, and even bankers can be unaware of systemic dynamics. He uses examples of the Liquidity and the blood-flow analogy to explain why liquidity is vital to prevent system collapse. He notes that the “central banks” live with the fear of runs on the bank, not only inflation. - The 2008 crisis and personal circumstances: Epstein recounts being in jail in West Palm Beach in 2008 during the Lehman Brothers bankruptcy and the Bear Stearns episode. He describes solitary confinement, a brown jumpsuit marked “trustee” (spelled incorrectly), Almond Joy bars, and two phones for collecting calls. He describes making collect calls to Bear Stearns’ Jimmy Cayne and to a JPMorgan contact about Bear Stearns and the broader crisis. He recounts learning about Lehman’s collapse from these conversations and witnessing the “greatest financial crisis in world history” unfold from prison. - The systemic nature of crisis and derivatives: The interview touches the debate over causes of the crisis, with Epstein arguing that derivatives were not the fundamental cause; rather, “these are system collapses.” He explains that the crisis involved a complex set of interactions—subprime lending, guarantees by Fannie Mae and Freddie Mac, accounting rule changes, and debt instruments—that collectively stressed the financial system. He notes that government actions often altered incentives, such as guaranteeing subprime loans, which shifted risk to the banking system. - Subprime lending and moral hazard: Epstein discusses how politicians, particularly Bill Clinton, promoted home ownership as a political weapon to gain votes, encouraging banks to lend to subprime borrowers with federal guarantees. He describes the accounting changes that required banks to mark down asset values differently under stress tests, further stressing confidence in the system. He suggests that the combination of policy incentives and financial instruments created conditions ripe for a systemic crisis, though he cautions against single-cause explanations. - On understanding and predictability: A recurring thread is the gap between mathematical models and real-world outcomes. Epstein emphasizes that even the world’s smartest people cannot predict complex systems with precision. He discusses the notion of “measurement” in science, arguing that “measure” is often used loosely in finance and markets. He argues that complexity makes full understanding difficult or impossible, comparing it to the limitations of Newtonian physics when faced with quantum-scale phenomena and other unexplainables. - Newton, Leibniz, and the evolution of science: The conversation travels back to foundational figures—Newton, Leibniz, and their roles in calculus and physics. Epstein presents Newton as enabling precise predictions in the physical world through laws describing motion, gravity, and planetary dynamics, while recognizing that later theories (quantum mechanics, chaos, complexity) reveal limits to complete predictability. He notes that Newton bridged geometry and physics, and that later scientists separated mathematics from philosophy, which contributed to rifts in understanding. - The soul, life, and science: The dialogue turns philosophical, with Epstein discussing the soul, life, and consciousness as phenomena difficult to quantify. He references thinkers like Schrodinger and Leibniz, and he suggests that life and consciousness may resist straightforward mathematical descriptions. He argues that a new science may need to incorporate intuition and non-mechanical ways of knowing, acknowledging that while mathematics can describe much of the physical world, aspects like life and the soul resist easy quantification. - Funding, ethics, and money’s sources: The discussion ends with questions about the ethics of funding scientific research and the sources of Epstein’s wealth. He defends his philanthropy, arguing that money can fund important work (like eradicating polio) regardless of its source, while acknowledging that people may have concerns about where money comes from. He asserts that his funding priorities include exploring unexplainable phenomena with mathematical or computational approaches while recognizing the limitations of those methods. - Closing reflections: The exchange often returns to the tension between measurement, predictability, and intuition. Epstein emphasizes the ongoing search for tools to understand complex systems, recognizing that the most meaningful questions may lie beyond current mathematical reach and may require new frameworks, interdisciplinary collaboration, and openness to non-traditional ways of knowing.