SECTION FOUR

sm
COLUMN 109, SEPTEMBER 1, 2004
(Copyright 2004 The Blacklisted Journalist) 

WHO BET THE 9/11 MARKETS?
SOMETHING THE 9/11
COMMISSION FORGOT TO
THOROUGHLY PROBE?

[The following first appeared in Unity & Struggle.]

WHAT IS A "PUT" OPTION?

A "put option is a contract tat gives the holder the right to sell a specified number of shares of a particular stock, stock index or dollar face value of bonds at a predetermined price---called the "strike price"---on or before the option's expiration date. For this right, the holder (buyer) pays the writer (seller) a premium. The holder profits from the contract if the stock's price drops. If the holder decides to exercise the option (as opposed to selling it), the writer must buy the security. The writer profits when the underlying security's price remains the same, rises or drops by less than the premium received.

* * *

"I saw put-call numbers higher than I've ever seen in 10 years of following the markets, particularly the options markets.  When one sees this type of activity, the first thing one does is ask oneself, 'What is the explanation?  What are people worried about?"
- "John Kinnucan, a principal of Broadband Research.

* * *

Prior to the terrorist attacks, an unusually large amount of put options were placed on the stocks of companies whose business would be severely upset by the attacks, including the parent companies of United and American airlines; Morgan and Stanley; Merrill Lynch; Germany's Munich Re; Switzerland's Swiss Re; AXA of France.  All of these stocks suffered dramatic losses when the markets reopened. Estimates of the profits made from these trades range to as much as $15 billion.
---
The International Policy Institute for Counter-Terrorism, 9/21/01
http://www.ict.org.il/articies/articledet.cfm?articleid=38>;Centre for Research on Globalisation4/21/02http://glob?alresearch,ca/articles/HEN204B.html ;

From the Wilderness 4/22/02                                   http://www.fromthewilderness.com/free/ww3/042202-bushknows.html 

* * *

Reports note the unusual surge in put options and short-selling against airline companies whose planes were used in the 9/11 attacks:

CBS News reported on September 16, 2001: "Sources tell CBS News that the afternoon before the attack, alarm bells were sounding over unusual trading in the US stock options market, an extraordinary number of trades betting that American Airlines' stock price would fall.. ... Sources say they've never seen that kind of imbalance before.  Normally, the numbers are fairly even."           
---CBS News, 9/19/03
http://www.cbsnews.com/stories/2001/09/19/eveningnews/main3ll834.shtml

* * *

The Associated Press reported: "On Sept. 6-7, when there was no significant news or stock price movement involving United, the Chicago exchange handled 4,744 put options for UAL stock, compared with just 396 call options --?(which are) essentially bets that the price will rise." ---Associated Press, 9/18/01
http://cjonline.com/stories/091901/ter-tradingacts.shtml

* * *

According to the San Francisco Chronicle, data released on September 21 revealed that short trading in shares of the parent company of United Airlines during the month of September had risen 40 percent over its previous month's levels, while that of its competitors, excluding American Airlines, only rose 11 percent.  During the same time period, shorting among all other stocks traded on the exchange increased by only one percent.
---San Francisco Chronicle, 9/29/01 http://www.sfgate.com/cgi-bin/article.ogi?file=lchronicle/archive/2001/09/29/MN186128.DTL

* * *

The Associated Press reported: "On Sept. 10, an uneventful day for American, the volume was 748 calls and 4,516 puts, based on a check of option trading records."
---Associated Press, 9/18/01
http://cjonline.com/stories/091901/ter-tradingacts.shtml

* * *

According to the San Francisco Chronicle, data released on September 21 revealed that short trading in shares of the parent company of American Airlines during the month of September had risen 20 percent over its previous month's levels, while that of its competitors, excluding United Airlines, only rose 11 percent.  During the same time period, shorting among all other stocks traded on the exchange increased by only one percent.
---
San Francisco Chronicle, 9/29/01 http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2001/09/29/MN186128.DTL

* * *

On September 10, the volume of trading in AMR put option contracts increased to 60 times the daily average and almost five times the total of all $30 put options traded before September 10.              
---The Age 9/24/01
http://www.theage.com.au/news/world/2001/09/24/FFX3 25EQXRC.html

Bloomberg 9/18/02
http://www.theniodernreligion.com/terror/wtc-unusualtrading.html

* * *

Bloomberg News reported, "Trading in so-called put options, which rise in value when stock prices fall, surged as much as 285 times the previous average volume in AMR [parent company for American Airlines] and UAL during the days before Sept. 11."
---
Newsday 9/23/01
http://www.newsday.com/nybzbund232380730sep23,0,2864727.story

Bloomberg 9/19/02
http://www.suntimes.com/terror/stories/cst-fin-optl9.html

* * *

Brokerage firms through which the trades were conducted:

The Independent of London reported that to "the embarrassment of investigators, it has also emerged that the firm used to buy many of the 'put' options ...on United Airlines stock  was headed until 1998 by 'Buzzy' Krongard, now executive director of the CIA." The paper explained, "Until 1997, Mr Krongard was chairman of Alex Brown Inc, America's oldest investment banking firm.  Alex Brown was acquired by Bankers Trust, which in turn was bought by Deutsche Bank. His last post before resigning to take his senior role in the CIA was to head Bankers Trust, Alex Brown's private client business, dealing with the accounts and investments of wealthy customers around the world."
---Independent, 10/14/01
http://news.independent.co.uk/business/news/story.jsp'story=99402

* * *

On September 29, the San Francisco Chronicle reported that a "source familiar with the [United] trades and market data" identified "Deutsche Banc Alex Brown, the American investment banking arm of German giant Deutsche Bank, as the investment bank used to purchase at least some of the options." The same source told the newspaper, "Investors have yet to collect more than $2.5 million in profits they made trading options in the stock of United Airlines before the Sept. 11 terrorist attacks."
---San Francisco Chronicle, 9/29/01
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/ archive/2001/09/29/MN186128.DTLhttp://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/ archive/2001/09/29/MN186128.DTL

* * *

Tom Flocco, an independent investigative journalist, reported on July 16, 2002, "European reporters found that most of the suspicious pre-attack trades passed through Deutschebank and especially via CIA Executive Director A.B. Krongard's former Alex Brown investment division by means of a procedure called portage, which assures the anonymity of individuals making the transactions.  But Congress has not publicly revealed whether they will call Krongard and other Alex Brown traders to testify in open hearings, or whether they will subpoena the pre-attack documents in question."
---
Flocco 7/16/02
http://www.scoop.co.nz/mason/stories/HL0207/S00l19.htm

* * *

Unusual trading in the stocks of companies that were tenants in the World Trade Center:

Morgan Stanley; Dean Witter & Co. (An investment bank that had occupied 22 floors in the World Trade Center)

The Independent of London reported that "In the first week of September, an average of 27 put option contracts was bought each day" for shares of Morgan Stanley. "The total for the three days before the attacks was 2,157."
---Independent, 10/14/01
http://news.independent.co.uk/business/news/story.jsp'story=99402

* * *

Merrill Lynch & Co. (A major bank whose headquarters were in the World Trade Center)

The Independent of London reported that Merrill Lynch, reportedly "saw 12,215 put options bought in the four days before the attacks, when the previous days had seen averages of 252 contracts a day."
---Independent, 10/14/01
http://riews.independent.co.uk/business/news/story.jsp'story=99402

* * *

Statistics for both Morgan Stanley and Merrill Lynch

Trading volume in Morgan Stanley and Merrill Lynch put options surged "12 times to more than 25 times" in the days preceding the Sept. 11 attacks.
---
Bloomberg 9/18/02
http://www.themodernreligion.com/terror/wtc-unusualtrading.html
   

9/19/02
http://www.suntimes.com/terror/stories/cst-fin-optlg.html

 * * *

Unusual trading 'in the stocks of a reinsurance company which lost billions as a result of the 9/11 attacks:

Reuters, 9/20/01 http://www.completetime?line/2001/reutersO92001.html reported that according to German bankers, there had been "brisk activity" in the trading of shares of Munich Re during the weeks leading up to the attacks.  The company announced in late September that is stood to lose about $1.95 billion as a result of 9/11.  Its shares also fell significantly lower after the Sept. 11 tragedy.
---
Dow Jones Business News, 9/20/01
http://www.completetimeline/2001/dowjonesO92001.html

* * *

The stocks of numerous other companies may also have been traded by people possessing advanced knowledge of the attacks:

The Securities and Exchange Commission published a list that included the names of some 38 companies whose stocks may have been traded by people with advance knowledge of the Sept. 11 attacks.  In addition to the companies already mentioned above, the list included General Motors Corp., Raytheon Co, Boeing, Lockheed Martin, Lehman Brothers; Bank of America, Marsh & McLennan, Continental, Delta, Northwest, Southwest, US Airways, Carnival Cruise Lines, Royal Caribbean Cruise Lines, American International Group, AXA, Chubb, Cigna, CNA Financial, John Hancock and MetLife, American Express, Bank of New York, Bank One, Bear Stearns, Citigroup, Hercules, L-3 Communications Holdings, LTV Corp., Lone Star Technologies, Progressive Corp., Royal & Sun Alliance, XL Capital and W.R.Grace.
---
San Francisco Chronicle 10/3/01 http://www.sfgata.com/cgibin/article.cgi?file=/chronicle/archive/2001/10/03/BU187948.DTL                    

AP 10/3/01
http://www.detnews.com/2001/business/0110/03/bO3308879.htm

AP 10/4/01
http://serendipity.magnet.ch/wot/sec.htm

* * *

Suspicious trading also occurred in the bond market:

The Wall Street Journal [Wall Street Journal, 10/2/01. [http://www.completetimeline/2001/wallstreetjournallOO20l.html ] reported, "Investigators from the U.S. Secret Service contacted a number of bond traders regarding large purchases of five-year Treasury notes before the attacks, according to people familiar with the probe. The investigators, acting on a tip from traders, are examining whether terrorists, or people affiliated with terrorist organizations, bought five-year notes, including a single $5 billion trade, the people say." The Journal added, "Five-year Treasury notes are among the best investments in the event of a world crisis."

 * * *

Countries where these trades were executed.

Singapore, Hong Kong, Italy, France, Switzerland, the Netherlands, Great Britain, Germany and Canada.
---Centre for Research on Globalisation 4/21/02
http://globalresearch.ca/arficles/HEN204B.html

 * * *

Brokerages used.

TD Waterhouse, NFS, Alex Brown/Deutsche Bank, Goldman Sachs, Lehman Brothers, and several others.
---
Centre for Research on Globalisation 4/21/02 http://globalresearch.ca/articles/HEN204B.html 

CBS News, 9/19/03        http://www.cbsnews.com/stories/2001/09/19/eveningnews/main3ll834.shtml

* * *

Were the unusual trades being monitored by the CIA?

From the Wildeness magazine noted, "It has been documented that the CIA, the Israeli Mossad and many other intelligence agencies monitor stock trading in real time using highly advanced programs reported to be descended from Prosecutor's Management Informational System (PROMIS) Software.  This software can be used to alert national intelligence services of irregularities in the markets that might predict attacks such as the ones that happened on 9-11.  PROMIS was reported as recently as June 2001 to be in Osama bin Laden's possession, and as a result of recent stories by FOX, both the FBI and the Justice Department have confirmed its use for the U.S. intelligence gathering through at least this summer.  This would confirm that the CIA had additional advance warning of imminent attacks."
---Quoted from the Wilderness Timeline. http://www.fromthewilderness.com/free/ww3/02-11_02_lucy.html .

Detailed info on Promis Software available at From the Wilderness 5/24/01 http://www.fromthewilderness.com/free/pandora/052401_promis.html 

From the Wilderness 12/06/01 http://www.fromthewilderness.com/free/ww3 /12 06 01death_proffts_ptl.html

The Canadian daily reported that U.S. authorities apprehended many of the suspected terrorists "through use of the state-of-the?art computer software program PROMIS."
---
From the Wilderness 12/06/01
http://www.fromthewilderness.com/free/ww3/12_06_01_ death_profits_pt1.html

* * *

Ernst Welteke, president of the Bundesbank, was quoted by the London Telegraph [Telegraph, 9/23/01 http://www.portal.telegraph.co.uk/news/main.jhtml?xml=/news/2001/09/23/widen23.xml ] as saying, "There are ever clearer signs that there were activities on international financial markets that must have been carried out with the necessary expert knowledge." And the Miami Herald reported that according to Mr. Welteke, "his researchers came across what he considers aimost irrefutable proof of insider trading." 9/24/01
http://web.archive.org/web/20011109160700/www.miami. com/herald/special/news/worldtrade/digdocs/099922.htm He was also quoted in the New York Times saying, "There have been fundamental movements in these markets, and the oil price rise just ahead of the attacks is otherwise inexplicable"
---New York Times 9/29/01

* * *

John Kinnucan, a principal of Broadband Research, an independent telecommunications research firm, told the San Francisco Chronicle.  "I saw put "call numbers higher than I've ever seen in 10 years of following the markets, particularly the options markets. When one sees this type of activity, the first thing one does is ask oneself, "What is the explanation?  What are people worried about??"
---San Francisco Chronicle, 9/19/01
http://www.sfgate.com/cgibin/article.egi?file=/chronicle/archive/2OGi/09/19/BU184559.DTL

 * * *

Jonathan Winer, an ABC News consultant stated, "It's absolutely unprecedented to see cases of insider trading covering the entire world from Japan, to the U.S., to North America, to Europe."
---
cited in From the Wilderness 4/22/02 http://www.fromthewilderness.com/free/ww3/042202-bushknows.html

 * * *

Don Radlauer, an expert in electronic banking and cash management, pointed out, "No similar trading in other airlines occurred on the Chicago exchange in the days immediately preceding Black Tuesday."
---
The International Policy Institute for Counter-Terrorism  9/21/01
http://www.ict.org.il/articlesiarticledet.cfm?articleid=386 

 * * *

Dylan Ratigan of Bloomberg Business News, in a Sept. 20 interview on Good Morning Texas, said, "This could very well be insider trading at the worst, most horrific, most evil use you've ever seen in your entire life.  This would be one of the most extraordinary coincidences in the history of mankind if it was a coincidence."
---
From the Wilderness 5/16/02
http://fromthewilderness.com/free/ww3/051602?_liewontstand.html  ##


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