as a result of the plan advocated by Brady's firm.
Nick Brady got the job he presently occupies by heading up a study of the October, 1987 stock
market crash, the results of which Brady announced on a cold Friday afternoon in January, 1988,
just after the New York stock market had taken another 150 point dive.
The study of tTreasury insiders billed as the "Presidential Task Force on Market Mechanisms." At the center ofhe October, 1988 "market break" was produced by a group of Wall Street and (^)
the report's attention was the relation between the New York Stock Exchange, American Stock
Exchange, and NASDAC over-the-counter stock trading, on the one hand, and the future, options,
and index trading carried on at the Chicago Board of Trade, Chicago Board Options Exchange, and
Chicago Mercantile Exchange. The Brady group earbitrage and portfolio insurance strategies on the behavior of the markets that led to the crash. Thexamined the impact of program trading, index (^)
Brady report recommended the centralization of all market oversight in a single federal agency, the
unification of clearing systems, consistent margins, and the installation of circuit breaker
mechanisms. That, at least, was the public content of the report.
The real purpose of the Brady report was to create a series of drugged and manipulated markets
using funds from the Federal Reserve and other sources. The Brady group realized that if the
Chicago futures price of a stock or stock index could be artifically inflated, this would be of great
assistance in propping up the value of the underlying stock in New York. The Brady group focussed
on the Major Market Index of 20 sroughly corresponded to the principal stocks of the Dow Jones Industrial Average. As long as thetock futures traded on the Chicago Board of Trade, which (^)
MMI was trading at a higher price than the DJIA, the program traders and index arbitrageurs would
tend to sell the MMI and buy the underlying stock in New York in order to lock in their
stockjobbing profits. The great advantage of this system was first of all that some tens of millions of
dollars in Chicago could generate some hundreds of millions of dollars of demand in New York. Inaddition, the margin requirements for borrowing money for use to buy futures in Chicago were
much less stringent than the requirements for margin buying of stocks in New York. Liquidity for
this operation could be drawn from banks and other institutions loyal to the Bush-Baker-Brady
power cartel, with full backup and assistance from the district banks of the Federal Reserve.
The Brady "drugged market" mechanisms, with the refinements they have acquired since 1988, are
a key factor behind the Dow Jones Industrials' seeming defiance of the law of gravity in attainting a
new all time high well above the 3000 mark during 1991.
Brady's exercise was nothing new: during the collapse of the Earl of Oxford's South Sea bubble in1720, the South Sea Company attemp]ted to support the astronomically inflated price of its shares
by becoming a buyer of its own stock until its cash and credit reserves were exhausted. Such
manuevers can indeed delay the onset of the final collapse for some period of time, but they
guarantee that when the panic, crash and bankruptcy finally become overwhelming, the aggregate
damage to society will be far greater than if the crash had been allowed to occur according to itsown spontaneous dynamic. For this reason, a large part of the fearful price that is being exacted
from the American people as the depression unfolds in its full fury is a result of the Bush-Brady
measures to postpone the inevitable reckoning beyond the 1988 election.
One important case study of tpacking industry. In February 1981, whe impact of Bush's Task Force on Regulatory Relief is the meat-hen Reagan gave Bush "line" authority for deregulation, he
promulgated Executive Order 12291, which established the principle that federal regulations "be
based upon adequate evidence that their potential benefits to society are greater than their potential
costs to society." In practice, that meant that Bush threw health and safety standards out the window
in order to ingratiate himself with entrepreneurs. In March 1981, Bush wrote to businessmen and