Goldman, Greece failed to disclose swap -report

Reuters ^ | February 16, 2010 | Staff

[C19fan]

Goldman Sachs Group Inc (GS.N) arranged a currency swap for Greece that it failed to disclose and that allowed the country, now facing a debt crisis, to hide the extent of its deficit, Bloomberg reported on Tuesday. The Wall Street bank managed $15 billion of bond sales for the European country after arranging the swap, Bloomberg reported, citing a review of the prospectuses.

No mention of the swap was made in sales documents for the securities in at least six of the 10 sales Goldman arranged for Greece since the deal, the report said. It added the bank helped Greece raise $1 billion of off-balance-sheet funding in 2002 through the swap.

[C19fan]

Insert infamous line from Casablanca and quote starting with "Fool me once".

[stephenjohnbanker]

“Goldman Sachs Group Inc (GS.N) arranged a currency swap for Greece that it failed to disclose and that allowed the country, now facing a debt crisis, to hide the extent of its deficit”

Goldman tries to hide MOST of their “cook the books” deals.

I shudder to think of what they do that doesn’t get disclosed ;-)

[LZ_Bayonet]

Goldman Sachs - “banksters”

[Wolfie]

I imagine GS is in for some harshly worded letters.

[A Strict Constructionist]

“I imagine GS is in for some harshly worded letters.”

A B C D E F G.

It is time to take these guys down a peg. Who do they think they are the world government?

[Wolfie]

I imagine the only question is how much extra the Greece fiasco will add to their bonuses next year.

[C19fan]

I am sure Goldman bought some default insurance with a big payout if Greece goes under. That is how they made a killing in mortgages. Selling crap as gold to investors and knowing it was crap making profitable bets it would fail.

[PGalt]

Very interesting. Thanks for posting. Sovereign nations aren’t too big to fail, but international banksters are. They sure don’t have a problem Greecing each others palms. Why don’t they just buy the country instead of submitting it to debt-slavery? Sheesh, they’d have to do something productive.

[Lorianne]

Risk Magazine reported on the swap in July 2003.
http://www.businessweek.com/news/2010-02-15/greece-s-goldman-sachs-swaps-spawn-eu-dispute-on-disclosure.html

[A Strict Constructionist]

“fiasco will add to their bonuses next year.”

Fiasco or not the bonus payments just seem to keep rolling in. Waht a job. It’s almost criminal without the jail time.

[DTogo]

The US Government has trillions of “off balance sheet” debts and obligations it likes to avoid reporting too: Social Security obligations, Medicaid/Medicare obligations, etc.

[snoringbear]

“Why don’t they just buy the country instead of submitting it to debt-slavery?”

“Submitting it to debt-slavery?” Doesn’t it take both a buyer and a seller to pull off these deals?

[Wyatt's Torch]

Thanks for that link. I’m not really sure I see the issue. There is not enough information about the swap to tell exactly what happened. Companies all over the world use swaps as hedges against inflation. Mine uses them to take our amount of fixed rate debt from about 40% to about 70%. If Greece was using swaps to effectively “fix” their exchange rate and try to minimize the risk of currency fluctuations impacting the interest payments on their debt then it’s a smart financial strategy. But there’s not enough information available to tell me exactly how they were used.