Tuesday, December 25, 2007

The Buttonwood Agreement


"A system of annuities in which the benefits pass to the surviving subscribers until only one is left.

The tontine is named after Lorenzo Tonti, a Neapolitan banker who started such a scheme in France in 1653, though it has been said that they were known in Italy earlier. Each subscriber paid a sum into the fund, and in return received dividends from the capital invested; as each person died his share was divided among all the others until only one was left, reaping all the benefits."

"The Buttonwood Agreement, which took place on May 17th, 1792, started the New York Stock & Exchange Board (now called the NYSE, which is short for New York Stock Exchange). This agreement was signed by twenty-four stock brokers outside of 68 Wall Street in New York under a buttonwood tree. The organization drafted its constitution on March 8th, 1817, and named itself the "New York Stock & Exchange Board". In 1863, this name was shortened to its modern form, "New York Stock Exchange". Membership on the NYSE has been held as a valuable property since 1868. These days, members must purchase existing seats, which are now limited to a total of 1,366."

"The brokers based the U.S. system upon existing European trading systems"

"The twenty-four brokers who signed the Buttonwood Agreement under a buttonwood tree at 68 Wall Street in lower Manhattan, NYC to negotiate the conditions and regulations of the speculative market. were Leonard Bleecker, Hugh Smith, Armstrong & Barnewall, Samuel March, Bernard Hart, Alexander Zuntz, Andrew D. Barclay, Sutton & Hardy, Benjamin Seixas, John Henry, John A. Hardenbrook, Samuel Beebe, Benjamin Winthrop, John Ferrers, Ephraim Hart, Isaac M. Gomez, Gulian McEvers, Augustine H. Lawrence, G. N. Bleecker, John Bush, Peter Anspach, Charles McEvers, Jr., David Reedy, Robinson & Hartshorne."

The Buttonwood agreement is one of the simplest contracts ever...The agreement stated that they would only trade securities among themselves, that they would adhere to set commissions and that they would not participate in auctions.

The Buttonwood agreement...

"We the subscribers, brokers for the purchase and sale of public stock do hereby solemnly promise and pledge ourselves to each other, that we will not buy or sell from this day on for any persons whatsoever any kind of public stock at a less rate than one-quarter percent commission on the specie value of, and that we will give preference to each other in our negotiations."

What were the first publicly traded securities in the U.S.?

$80 million in U.S. Government bonds that were issued in 1790 to refinance Revolutionary War debt.

What was the first listed company on the New York Stock Exchange?

Bank of New York, which was the first corporate stock traded under the Buttonwood tree in 1792, and the first listed company on the NYSE.

"Trading was carried out at the Tontine Coffee House in a call market, with the president reading out a list of stocks as brokers traded each in turn."

The Federal Reserve is a Branch of the Central Bank of England...The New York FED is the controlling bank of the 12 Federal Reserve banks in the FEDERAL RESERVE Central banking system in the USA...

There are 8000 individual commercial banks in the USA some of them are primary dealers...Of which 30% are members of the Federal reserve system...(Most of Those not in the system will be wiped out by the implosion)

The USA is the Inflationary engine of the global economic system. Set up in 1944 Bretton Woods as the Demand of the world

"The Federal Reserve Bank of New York is the most important of the twelve Federal Reserve Banks of the United States. It is located in New York City, with a secondary office in Buffalo, New York. It is responsible for the Second District of the Federal Reserve System, which encompasses New York state, the 12 northern counties of New Jersey, Fairfield County in Connecticut, Puerto Rico and the Virgin Islands"

"Since the founding of the Federal Reserve banking system, the Federal Reserve Bank of New York in Manhattan's Financial District has been where monetary policy in the United States is implemented, although policy is decided in Washington by the Board of Governors of the Federal Reserve System. The New York Fed is the largest, in terms of assets, and the most important of the twelve regional banks. Its first governor was Benjamin Strong Jr. who led it for 14 years, until his death in 1928. New York City is the financial capital of the United States, and the New York Fed is responsible for conducting open market operations -- the buying and selling of outstanding U.S. Treasury securities. Note that the responsibility for issuing new U.S. Treasury securities lies with the Bureau of the Public Debt. In 2003, Fedwire, the Federal Reserve's system for transferring balances between it and other banks, transferred $1.8 trillion a day in funds, of which about $1.1 trillion originated in the Second District. It transferred an additional $1.3 trillion a day in securities, of which $1.2 trillion originated in the Second District. (Thats a Qurdrillion or 1000 Trillion dollars a year in transactions, at 0.1% that 1 Trillion a year profit) The New York Fed is also responsible for carrying out exchange rate policy by buying (selling bonds) and selling (buying bonds) dollars at the direction of the Federal Reserve's Board of Governors. The New York Federal Reserve is the only regional bank with a permanent vote on the Federal Open Market Committee."

"The Federal Reserve Bank of New York maintains an underground vault in Manhattan. The largest gold repository in the world, larger even than Fort Knox, it is 80 feet (25 m) beneath the street and holds $90 billion worth of gold bullion (approx 5,000 tonnes at). The gold is owned by many foreign nations, central banks and official international organizations. The Federal Reserve Bank does not own the gold but serves as guardian of the precious metal"

"Primary dealers are banks or brokerage firms who may trade directly with the Federal Reserve System of the United States. They are required to make bids or offers when the Fed conducts open market operations, provide information to the Fed's open market trading desk, and to actively participate in U.S. Treasury securities auctions. They consult with both the U.S. Treasury and the Fed about funding the budget deficit and implementing monetary policy. Many former employees of primary dealers work at the Treasury, because of their expertise in the government debt markets, though the Fed avoids a similar revolving door policy."

"Between them, these dealers purchase the vast majority of the U.S. Treasury securities (T-bills, T-notes, and T-bonds) sold at auction, and resell them to the public. Their activities extend well beyond the Treasury market, for example, according to the Wall Street Journal Europe (2/9/06 p. 20), all of the top ten dealers in the foreign exchange market are also primary dealers, and between them account for almost 73% of forex trading volume. Arguably, this group's members are the most influential and powerful non-governmental institutions in world financial markets. Group membership changes slowly, with the current list available from the New York Fed"

The Primary dealers = the Bond market and the Stock markets.

It is the job of the Wall street floor specialists to make a market.

You all have money...They do not...they want it...and do what they have to to get it.

There is no money in the stock markets...The only money in the markets is what the top convinces the bottom to give them...

What the sellers sell to the buyers.

You could give a professional money manager your entire life savings to invest into the market...By buying stock...The seller takes your money and then blows it on lines of coke or imported hookers...and you get a piece of paper that says how rich or poor you are getting in return every month.

And when the bottom is sucked dry and can no longer sustain the top...the market collapses...

Because the top are the first to see that the bottom is sucked dry/played out and bail...

The top buys and sells...the bottom follows along and speculates.

It's what draws the zig zag lines...the bottoms are where the top buys to start the rally and the tops are where the top sells to extract the gains from all the chart followers.

It works great as long as there is a constantly inflating money supply and a large pool of gamblers.

But when consumers have reached their maximum potential to request commercial banks to maufacture more money than was previously manufactured...They are then forced to request the commercial banks to manufacture less money than was previously manufactured and the economy along with the markets implode...Like in 1929.

Like what is going to soon happen.

And it will take more than some planes flying into buildings to distract the bottom this time around.


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