Posted on 09/25/2009 9:25:39 PM PDT by STARWISE
From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression - and they're about to do it again
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The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.
In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who's Who of Goldman Sachs graduates.
By now, most of us know the major players. As George Bush's last Treasury secretary, former Goldman CEO Henry Paulson was the architect of the bailout, a suspiciously self-serving plan to funnel trillions of Your Dollars to a handful of his old friends on Wall Street. Robert Rubin, Bill Clinton's former Treasury secretary, spent 26 years at Goldman before becoming chairman of Citigroup — which in turn got a $300 billion taxpayer bailout from Paulson.
There's John Thain, the a**hole chief of Merrill Lynch who bought an $87,000 area rug for his office as his company was imploding; a former Goldman banker, Thain enjoyed a multibilliondollar handout from Paulson, who used billions in taxpayer funds to help Bank of America rescue Thain's sorry company.
And Robert Steel, the former Goldmanite head of Wachovia, scored himself and his fellow executives $225 million in goldenparachute payments as his bank was selfdestructing.
There's Joshua Bolten, Bush's chief of staff during the bailout, and Mark Patterson, the current Treasury chief of staff, who was a Goldman lobbyist just a year ago, and Ed Liddy, the former Goldman director whom Paulson put in charge of bailedout insurance giant AIG, which forked over $13 billion to Goldman after Liddy came on board.
The heads of the Canadian and Italian national banks are Goldman alums, as is the head of the World Bank, the head of the New York Stock Exchange, the last two heads of the Federal Reserve Bank of New York — which, incidentally, is now in charge of overseeing Goldman — not to mention …
But then, any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture:
If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.
The bank's unprecedented reach and power have enabled it to turn all of America into a giant pumpanddump scam, manipulating whole economic sectors for years at a time, moving the dice game as this or that market collapses, and all the time gorging itself on the unseen costs that are breaking families everywhere — high gas prices, rising consumercredit rates, halfeaten pension funds, mass layoffs, future taxes to pay off bailouts.
All that money that you're losing, it's going somewhere, and in both a literal and a figurative sense, Goldman Sachs is where it's going: The bank is a huge, highly sophisticated engine for converting the useful, deployed wealth of society into the least useful, most wasteful and insoluble substance on Earth — pure profit for rich individuals.
They achieve this using the same playbook over and over again. The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap.
Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased.
They've been pulling this same stunt over and over since the 1920s — and now they're preparing to do it again, creating what may be the biggest and most audacious bubble yet.
Rest @ link
Oh, it regulates them all right! LOL.
In 2000, on its last day in session, Congress passed the now-notorious Commodity Futures Modernization Act, which had been inserted into an 11,000-page spending bill at the last minute, with almost no debate on the floor of the Senate. Banks were now free to trade default swaps with impunity.
who knows the last bill that every member actually read and voted on behalf of the people.
Pg. 3
(One of the truly comic moments in the history of America’s recent financial collapse came when Gov. Jon Corzine of New Jersey, who ran Goldman from 1994 to 1999 and left with $320 million in IPO-fattened stock, insisted in 2002 that “I’ve never even heard the term ‘laddering’ before.”)
Sorry, meant to notice you .. we call it pinging here.
So, you are pinged .. and thanks for your research.
Yep. The Commodity Futures Modernization Act was the one Brooksley Bourn warned against?
I HATE these lefty crooks.
Yow!
My brother is a financial adviser, very conservative financially, but a dem, and he said all this to me (except it was in the credit card loan trading aspect being paper), so this guy makes sense. I know it’s not only goldman, everyone trained in the business knew what was going on, but the geniuses there came up with the rule changes.
What I just thought about was the ironic appearance of the horrific H1N1 flu and our “need” for buy-health-insurance-or-go-to-jail. I don’t have health insurance. I wonder if I will have internet access in prison?
You are right. Put your money with the most powerful fascists if you want a guarenteed return.
Thanks for the link
This is outrageous. The next gathering in Washington I'm there.
a staffer for the House Energy and Commerce Committee just happened to be at a briefing when officials from the CFTC made an offhand reference to the exemptions."I had been invited to a briefing the commission was holding on energy," the staffer recounts. "And suddenly in the middle of it, they start saying, 'Yeah, we've been issuing these letters for years now.' I raised my hand and said, 'Really? You issued a letter? Can I see it?' And they were like, 'Duh, duh.' So we went back and forth, and finally they said, 'We have to clear it with Goldman Sachs.' I'm like, 'What do you mean, you have to clear it with Goldman Sachs?'"
The CFTC cited a rule that prohibited it from releasing any information about a company's current position in the market. But the staffer's request was about a letter that had been issued 17 years earlier. It no longer had anything to do with Goldman's current position. What's more, Section 7 of the 1936 commodities law gives Congress the right to any information it wants from the commission. Still, in a classic example of how complete Goldman's capture of government is, the CFTC waited until it got clearance from the bank before it turned the letter over.
No, it really hasn’t done its job of regulating. The Libertarians had their say and stuff was deregulated.
http://www.cbsnews.com/stories/2009/08/19/60minutes/main4546199.shtml
parsy, who says its time for the libertarians to hit the road
Oh, it regulated, regualted it so that the thing had a veneer of fairness, just enough to sucker in the rubes, while ensuring these superbanks were too big too fail.
I've posted that tidbit about the CRA and GLBA to you twice, yet you haven't commented on it?
Government "regulation" is what gets us people like Madoff.
The whole enterprise might be better if the government stayed out of it, then it would be incumbent upon the industry itself to convince the public that the playing field was level.
Sorry, at the office so I am on and off. I will read and get back to you. I just put up a new one, about “Bucket Shops” you may find interesting.
parsy, who is posting and working
And I don't think you can fete the fair-haired golden child "Regulation" as long as her ugly stepsister "Enforcement" is locked in the basement. Inasmuch as eliminating the common-sense notion that banking ought to be a most conservative endeavor was an act of "regulation (in the negative sense)," I don't understand your confidence in Congress to get it right.
From what I have read CRA is guilty of opening the door on low-doc loans. I grant you that. Its just that after the door was opened, a lot of crap went thru the door that never had squat to do with the CRA. I sorta think this crap would have happened without the CRA, because there was a ton of money needing someplace to go, but who knows. Let’s assume CRA opened the door.
But then what happened? That is why those links are so relevant. Wall Street figured out ways to repackage “dog sh*t” as that one guy put it as AAA rated paper and sold it. Add the side bets to that, and here comes the meltdown.
Plus, you had the Fed pumping out money like crazy, and the gov’t running up huge deficits, and the GOP not wanting to regulate, and the GOP not wanting to raise taxes on the rich, and the Democrats who fell in love with the rich themselves, and KABLAM! Here we are.
parsy, who is waiting for the New America
“Inasmuch as eliminating the common-sense notion that banking ought to be a most conservative endeavor was an act of “regulation (in the negative sense),” I don’t understand your confidence in Congress to get it right.”
My confidence is limited. I had an epiphany a week or so ago. Crony capitalism isn’t just passing a law to help your crony, it can also be refusing to pass a law that restricts your buddy. Maybe not an epiphany, but sometimes when verbalize something it is easier to get a grasp on. So, if the GOP refuses to regulate when they should, that is crony capitalism as much as passing a law to help fudge.
parsy, who keeps on thinking
Subprime loans, from what I can see, WERE the "dog sh*t."
If these loans never went into default, there would be no collapse. The housing industry was probably the prime mover of the economy, post-internet bubble.
Or passing a law that repeals an existing law, as in the case of GLBA.
But that's precisely my point, it's all "crony capitalism." What's changed about the Federal government that says, "NOW, we're going to regulate it all, fairly and effectively."
The same people are writing the laws now who were doing it in 1999 and 2000.
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