Goldman Sachs Prospers at Taxpayers' Expense

If prudent investors can only make .5% on short term assets, how does Goldman Sachs prosper?

Robert Rubin was a very powerful man. After 26 years and rising to the level of Co-Senior Partner, he left Goldman Sachs in 1994 to become Treasury Secretary in the Clinton Administration. His first major undertaking was during the Mexican bailout of 1995.

...Rubin drew criticism in Congress for using a Treasury Department account under his personal control to distribute $20 billion to bail out Mexican bonds, of which Goldman was a key holder.

For 1998, the first year which we have public financial information on Goldman Sachs, their total revenue was $22 billion and their net profit was $1.256 billion. It is highly probable that the $20 billion was extremely helpful to Goldman Sachs -- if not essential to its continuing existence.

"In April 1998 Travelers Group announced an agreement to undertake the $76 billion merger between Travelers and Citicorp, and the merger was completed on October 8, 1998. The possibility remained that the merger would run into problems connected with federal law. Ever since the Glass-Steagall Act, banking and insurance businesses had been kept separate. Weill and Reed bet that Congress would soon pass legislation overturning those regulations... . To speed up the process, they recruited...to the Board of Directors...Robert Rubin (Secretary of Treasury during Democratic Clinton Administration) whom Weill was close to... ."

TIDBIT: Goldman Sachs Will Be Sitting Pretty With Emanuel in the Obama White House
By Timothy P. Carney, Examiner Columnist, Nov 21, 2008

EXCERPT Today, in these tumultuous times of bailouts and meltdowns when the investment banking leviathan needs Washington more than ever before, Goldman Sachs can leverage its most valuable asset yet White House chief of staff Rahm Emanuel.

Traditionally a Democratic booster, and one of Barack Obama’s top sources of funds in this past election, Goldman has always had particularly strong allies in government.

Rahm Emanuel is one such ally. An interesting early chapter in the Goldman-Emanuel relationship took place in the setting of Bill Clinton’s 1992 campaign for the White House. Clinton hired Emanuel as his chief fundraiser.At the same time, however, Emanuel was on the payroll of Goldman Sachs, receiving $3,000 per month from the firm to “introduce us to people,” in the words of one Goldman partner at the time. This is certainly a noteworthy relationship, but it’s one that has almost entirely escaped scrutiny. (snip)

In his four terms in Congress, Emanuel raised $74,750 from Goldman, making the firm his number four source of funds. Goldman has helped Emanuel. How has Emanuel helped Goldman? The most obvious answer, as mentioned in this column two weeks ago, is in Emanuel’s lead role in shepherding the “$700 billion” bailout—first proposed by former a Goldman CEO, Bush Treasury Secretary Henry Paulson—through the skeptical House.

Of course, back in the Clinton days, Goldman benefited from NAFTA and the bailout of the Mexican currency, with Emanuel pushing NAFTA through Congress, and Rubin hammering out the peso bailout.

Did Goldman improperly funnel money to the Clinton campaign by subsidizing Emanuel’s salary in 1992? Did Goldman’s help to Clinton spur the Democratic president to push NAFTA and the Mexican bailout?

The answers to these questions are opaque, and with Emanuel burrowed deep within the Obama White House, the continued relationship between Goldman Sachs and Obama’s right hand man won’t be easy to follow.

Watch which regulations of Wall Street Obama fights for. Watch where the bailout money goes.

SOURCE http://www.washingtonexaminer.com/opinion/columns/TimothyCarney/ Goldman_Sach_Will_Be_Sitting_Pretty_With_Emanuel_in_the_Obama_White_House_112108.html

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TIDBIT: In December 2009, at the height of the nation‘s financial meltdown, Wall Street's Christopher Flowers, who oversees NJ Gov Jon Corzine's personal assets, made a bundle.

During the meltdown, Flowers made $20 million in less than a week just for writing a " fairness opinion." Flowers and Corzine were cronies at Goldman Sachs. (Source: Too Big To Fail, Andrew Sorkin's book about the meltdown)

Some call the Obama/Chris Dodd/Barney Frank financial reform bill the “The Goldman Sachs Preservation Act of 2010” Here's how G/S and the Wall Street predators operate.

COMING TO A TOWN NEAR YOU Mother Jones magazine circa Feb 2007 reported on the activities of Mark Florian, Chief Operating Officer of Goldman Sachs' municipal finance division.

According to the report, Florian was traveling to statehouses across the US to convince state officials that selling state assets would be "mutually beneficial." One of the scams involved selling state roads, then monetizing them via bonding----which would make billions per year for G/S until the end of time.

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REFERENCE Goldman Sachs opened an office in Princeton NJ 2006 when ex-G/S head Jon Corzine was elected NJ governor (next stop: looting the NJ Treasury).

Goldman Sachs Hedge Fund Partners
701 Mount Lucas Rd
Princeton, NJ 08540-1911

G/S Hedge Fund Partners advertises it seeks investments in traditional infrastructure sectors including transport infrastructure such as "monetizing" toll roads, airports and ports as well as regulated gas, water and electrical utilities.

Then-Gov Corzine (ex-Goldman head) stationed Goldman Sachs functionaries in state government as the issue of road monetization surfaced. Corzine hired four of his G/S buddies including G/S alumnus Bradley Abelow as state Treasurer. Corzine took a road show across the state to sell the monetization deal. However, monetizing NJ roads hit a large pothole and collapsed like a flat tire---b/c taxpayers were onto the G/S scam.

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HOW'S THAT G/S BONDING WORKING OUT FOR YOUR TOWN? Jefferson County, Alabama decided to build an elaborate new sewer system with the help of out-of-state financial wizards with names like Bear Stearns, Lehman Brothers, Goldman Sachs and JP Morgan Chase. The result was a monstrous pile of borrowed money that the county used to build, in essence, the world's grandest toilet — "the Taj Mahal of sewer-treatment plants" is how one county worker put it.

Now Jefferson County is one of the most indebted municipal governments in US history, with a current debt of approximately $7,000 for each man, woman and child residing in the county. Two extremely controversial undertakings by the county account for the majority of this debt.

First was a massive overhaul of the county-owned sewer system, and second was a series of risky bond-swap agreements. Both have been scrutinized by federal prosecutors, with several former county officials convicted of bribery and corruption. In 1995, Jefferson County entered into a consent decree with the EPA regarding sewer overflows into the Cahaba River watershed.

A total of $3.2 billion of new construction was subsequently contracted, both to comply with the consent decree and to expand the system to newly-developing areas and increase the number of ratepayers financing the construction. Much of this work was awarded to inexperienced companies, many of which have since been convicted of bribery, along with several county officials.

A series of controversial interest rate swaps, initiated in 2002 and 2003 by former Commission President Larry Langford (removed as the mayor of Birmingham after his conviction, were intended to lower interest payments, but have, in fact, had the opposite effect, increasing the county's indebtedness to the point that officials have issued formal statements doubting the county's ability to meet its financial obligations. The bond swaps are at the center of an investigation by the SEC.

In late Feb 2008 Standard & Poor’s lowered the rating of Jefferson County bonds to “junk” status. In early March 2008, Moody's followed suit and indicated that it would also review the county's ability to meet other bond obligations.

On March 7, 2008, Jefferson County failed to post $184 million collateral as required under its sewer bond agreements, thereby moving into technical default.......it is likely the county would enter into bankruptcy, which would result in one of the larger municipal bankruptcies in American history.”

7/24/10
Goldman reveals where bailout cash went
By Karen Mracek and Thomas Beaumont, Des Moines Register

Goldman Sachs sent $4.3 billion in federal tax money to 32 entities, including many overseas banks, hedge funds and pensions, according to information made public Friday night.

Goldman Sachs disclosed the list of companies to the Senate Finance Committee after a threat of subpoena from Sen. Chuck Grassley, R-Ia. Asked the significance of the list, Grassley said, "I hope it's as simple as taxpayers deserve to know what happened to their money." He added, "We thought originally we were bailing out AIG. Then later on ... we learned that the money flowed through AIG to a few big banks, and now we know that the money went from these few big banks to dozens of financial institutions all around the world." Grassley said he was reserving judgment on the appropriateness of U.S. taxpayer money ending up overseas until he learns more about the 32 entities.

Goldman Sachs (GS) received $5.55 billion from the government in fall of 2008 as payment for then-worthless securities it held in AIG. Goldman had already hedged its risk that the securities would go bad. It had entered into agreements to spread the risk with the 32 entities named in Friday's report. Overall, Goldman Sachs received a $12.9 billion payout from the government's bailout of AIG, which was at one time the world's largest insurance company.

Goldman Sachs also revealed to the Senate Finance Committee that it would have received $2.3 billion if AIG had gone under. Other large financial institutions, such as Citibank, JPMorgan Chase and Morgan Stanley, sold Goldman Sachs protection in the case of AIG's collapse. Those institutions did not have to pay Goldman Sachs after the government stepped in with tax money.

Shouldn't Goldman Sachs be expected to collect from those institutions "before they collect the taxpayers' dollars?" Grassley asked. "It's a little bit like a farmer, if you got crop insurance, you shouldn't be getting disaster aid." Goldman had not disclosed the names of the counterparties it paid in late 2008 until Friday, despite repeated requests from Elizabeth Warren, chairwoman of the Congressional Oversight Panel. "I think we didn't get the information because they consider it very embarrassing," Grassley said, "and they ought to consider it very embarrassing."

The initial $85 billion to bail out AIG was supplemented by an additional $49.1 billion from the Troubled Asset Relief Program, known as TARP, as well as additional funds from the Federal Reserve. AIG's debt to U.S. taxpayers totals $133.3 billion outstanding. "The only thing I can tell you is that people have the right to know, and the Fed and the public's business ought to be more public," Grassley said.

The list of companies receiving money includes a few familiar foreign banks, such as the Royal Bank of Scotland and Barclays. DZ AG Deutsche Zantrake Genossenschaftz Bank, a German cooperative banking group, received $1.2 billion, more than a quarter of the money Goldman paid out. Warren, in testimony Wednesday, said that the rescue of AIG "distorted the marketplace by turning AIG's risky bets into fully guaranteed transactions. Instead of forcing AIG and its counterparties to bear the costs of the company's failure, the government shifted those costs in full onto taxpayers."

Grassley stressed the importance of transparency in the marketplace, as well as in the government's actions. "Just like the government, markets need more transparency, and consequently this is some of that transparency because we've got to rebuild confidence to make the markets work properly," Grassley said. ]

AIG received the bailout of $85 billion at the discretion of the Federal Reserve Bank of New York, which was led at the time by Timothy Geithner. He now is U.S. treasury secretary. "I think it proves that he knew a lot more at the time than he told," Grassley said. "And he surely knew where this money was going to go. If he didn't, he should have known before they let the money out of their bank up there."

An attempt to reach Geithner Friday night through the White House public information office was unsuccessful. Grassley has for years pushed to give the Government Accountability Office more oversight of the Federal Reserve. U.S. Rep. Bruce Braley, a Waterloo Democrat, said he would propose that the House subcommittee on oversight and investigations convene hearings on the need for more Federal Reserve oversight.

Braley is a member of the subcommittee. Braley said of Geithner, "I would assume he would be someone we would want to hear from because he would have firsthand knowledge." Braley also noted that the AIG bailout was negotiated under President George W. Bush, a Republican. He said he was confident that the financial regulatory reform bill signed by President Obama this week would help provide better oversight than the AIG bailout included. "There was no regulatory framework in place," Braley said. "We had to put something in place to begin reining them in. I'm confident they will begin to be able to do that."

SOURCE http://www.usatoday.com/money/industries/banking/2010-07-24-goldman-bailout-cash_N.htm

THIS DESCRIBES A WELL-WORN WALL STREET TAX EVASION-MONEY LAUNDERING SCHEME........G/S sent $4.3 billion in federal tax money to 32 entities, including many overseas banks....

LOOKS LIKE GANGSTER GOVERNMENT SCAMMED TAXPAYERS USING THE MADOFF MO: The trustee ID'ing Madoff's assets, found Madoff created a labyrinth of interrelated international funds, institutions and financial entities of unparalleled complexity and breadth......with assets and businesses in multiple places offshore that hid government fraud, thievery, money launderering, tax evasion........ all out of sight of taxpayers, the IRS, SEC, FEC and US banking laws.

BTW, stolen money is taxable.

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POINTS TO PONDER

POINT ONE On June 9 President Obama called a press conference to announce, "Several financial institutions are set to pay back $68B to taxpayers." While Mr. Obama's announcement was welcome news, it was assumed that any money or profit would be returned to the general funds from whence it had come in order to pay down the debt. The truth, however, is that the money returned by the banks is finding new life as part of what amounts to a Treasury Department-controlled slush fund.

POINT TWO We keep reading and hearing Congress rushed to approve the "$787 billion stimulus package" early this year, but very little of it has been used. Uber-Lobbyist Thomas Hale Boggs, Esq (Patton Boggs) was interviewed by nightly network news and said there was $2 TRILLION federal stimulus waiting to be distributed..... AND that he is getting unprecendented numbers of calls from all over the US......from those who want a piece of it. Boggs is the son of former Cong Hale Boggs and sister of ABC-TV commentator Cokie Roberts.

POINT THREE Obama tapped VP Joe Biden to "allocate" the stimlulus $$trillions. Biden's family was involved with Texas financier H. Allen Stanford, now charged with an $8 billion offshore fraud, the WSJ said. The Bidens $50 million fund was jointly branded between the Bidens' Paradigm Global Advisors LLC and a Stanford Financial Group entity, and was known as the Paradigm Stanford Capital Management Core Alternative Fund, the paper said. Stanford-related companies marketed the fund to global investors and also invested about $2.7 million of their own money in the fund, the paper said, citing a lawyer for Paradigm.......... Paradigm Global Advisors is owned through a holding company by the VP's son, Hunter, and Joe Biden's brother, James, according to newspapers.

POINT FOUR How can this be legal? A jaw-dropping policy the White House released late on a Saturday afternoon........hoping we would not notice. "Following OMB’s review, the Obama Administration has decided to make a number of changes to the rules that we think make them even tougher on special interests and more focused on merits-based decision making. First, we will expand the restriction on oral communications to cover all persons, not just federally registered lobbyists. For the first time, we will reach contacts not only by registered lobbyists but also by unregistered ones, as well as anyone else exerting influence on the process. We concluded this was necessary under the unique circumstances of the stimulus program."

POINT FIVE The Reserve Primary Fund's recent failure was "a tragedy" said Crane Data. Without details, sounds like a very strange charge. It may just be a diversion and scapegoating in a broad "War on Wall Street" that Obama, Soros and FDIC's Sheila Bair, among others, are engaged in right now, to get complete control of our financial system.

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The Federal Reserve Bank of New York AND the United States Treasury rescued AIG with a taxpayer backstop totaling $180 billion. Much of AIG's bailout also went overseas.

The US Treasury's $180 billion rescue is "interesting" b/c then-COS Rahm Emanuel controlled Treasury's activities. So where did that $180 billion go?

Can you say Bernie Madoff showed us how? "Professor" Ohaha knows nothing about high finance----but Rahm toiled on Wall Street before becoming a (gag) public servant, 4 term Congressman, Clinton henchman, and Fannie Mae looter.

At least half a dozen people, or more, in the Ohaha admin (including Ohaha) will walk away from “Public Service“ living like the Sultan of Brunei......and we can name them all without even breaking a sweat.

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