Goldman Sachs, Vampire-in-Chief
Matt Taibbi's article should be required reading for all humans, if not just for this gem:
As the story goes, every time there's a bubble, more and more money is created out of thin air, and when its over, the brokerage firms and the investment bankers get out with a lovely golden parachute while the everyman has lost his shirt.
In our latest mess, the CDO's, the bundles of sub prime mortgages or instruments based on them etc.-- were packaged and sold to investors by Goldman while eslewhere at the bank, they were shorting those very indexes. Taibbi recounts an interview with an insider:
Is it securities fraud? Possibly. Is it evil? Seems so. Should they be allowed to do so anyway because we live in a free-market capitalistic society and they've managed to play by the rules?
To answer this last question, we must consider the fact that regulatory capture, as Taibbi describes, is a clear concern with Goldman. You can't possibly effectively oversee the bank and its cohorts when the whole treasury department is laced with ex-Goldmanites-- they clearly have an interest in the industry that supersedes their interest in doing what's best for society as a whole. And isn't that the point of regulation?
Secondly, at one point in the article he refers to "greasing the wheels"-- which is a lot of what finance is all about:
Wall Street is there to yes, perhaps, create money out of thin air, but only so that individuals and businesses can get financing, and everybody can go on doing what they're doing, and getting loans, living well, giving charitably, buying things and keeping people making things so they can keep their jobs, etc.
Madoff created money out of thin air, too. And he, like the other Wall Street titans now vilified, fattened his own bank account and lived like a Saudi royal. Goldman Sachs was more honest about it. And Goldman could more easily change the rules to their advantage via insidious government ties.
There might be a moral threshold at the point where finance stops being about greasing the wheels, and becomes only about lining the pockets of the people turning the cranks, at the expense of everyone else connected to the system.
That's when it time to start cutting off the vampire squid's oxygen supply.
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 a searing indictment of Goldman Sachs, Taibbi describes the firm's role in the crash. He lays out how they've been the principal motivator in every bubble brought on by excessive leveraging since before the Great Depression. As an account of how Wall Street and Goldman put big fat bows on products they pretty much made up, knew would go bust and were simultaneously betting against, it's pretty indisputable.
As the story goes, every time there's a bubble, more and more money is created out of thin air, and when its over, the brokerage firms and the investment bankers get out with a lovely golden parachute while the everyman has lost his shirt.
In our latest mess, the CDO's, the bundles of sub prime mortgages or instruments based on them etc.-- were packaged and sold to investors by Goldman while eslewhere at the bank, they were shorting those very indexes. Taibbi recounts an interview with an insider:
I ask the manager how it could be that selling something to customers that you're actually betting against -- particularly when you know more about the weaknesses of those products than the customer -- doesn't amount to securities fraud.
"It's exactly securities fraud," he says. "It's the heart of securities fraud."In every defense you read of goldman and its Wall Street brethren in the press, the argument is that these guys are simply really good at what they do. But these defenders typically don't have a problem with the fact that Goldman, as the piece illustrates, knows more about the products than their customer, and is in a better position to judge them (hence why they essentially bet against them by shorting them and taking out insurance policies to cover their ass.)
Is it securities fraud? Possibly. Is it evil? Seems so. Should they be allowed to do so anyway because we live in a free-market capitalistic society and they've managed to play by the rules?
To answer this last question, we must consider the fact that regulatory capture, as Taibbi describes, is a clear concern with Goldman. You can't possibly effectively oversee the bank and its cohorts when the whole treasury department is laced with ex-Goldmanites-- they clearly have an interest in the industry that supersedes their interest in doing what's best for society as a whole. And isn't that the point of regulation?
Secondly, at one point in the article he refers to "greasing the wheels"-- which is a lot of what finance is all about:
Wall Street is there to yes, perhaps, create money out of thin air, but only so that individuals and businesses can get financing, and everybody can go on doing what they're doing, and getting loans, living well, giving charitably, buying things and keeping people making things so they can keep their jobs, etc.
Madoff created money out of thin air, too. And he, like the other Wall Street titans now vilified, fattened his own bank account and lived like a Saudi royal. Goldman Sachs was more honest about it. And Goldman could more easily change the rules to their advantage via insidious government ties.
There might be a moral threshold at the point where finance stops being about greasing the wheels, and becomes only about lining the pockets of the people turning the cranks, at the expense of everyone else connected to the system.
That's when it time to start cutting off the vampire squid's oxygen supply.
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matt taibibi is ringing the alarm bells as loud as he can over the role goldman sachs has played in this whole housing bubble debacle and yet each devastating piece is roundly ignored by the rest of MSM.
good for matt.
if he keeps it up with the sledghammer, maybe something will finally break through.
goldman is a poster child for the corporate psychopaths who have corrupted our political process and claimed rights as full "persons" under our constitution.
August 8, 2009 2:02 PM | Reply | Permalink