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John Taylor Discusses The "Political Dynamite" That Goldman Sachs Represents
The Closing Bell
April 22, 2010
By John R. Taylor, Jr.
With the SEC suit against Goldman Sachs, an age has come to an end. This action is symbolic: like the closing bell at the old-time New York Stock Exchange. An American saying, “it’s not over until the fat lady sings,” covers it pretty well. She’s singing. The crisis that broke the financial market’s back was spawned way back in 1986 with the Tax Reform Act, which led to much higher levels of corporate borrowing, followed by the Drexel Burnham invention of junk bonds. It only then reached its prime after the Graham-Leach-Bliley Act effectively repealed Glass-Steagall in 1999, in the post-bubble recovery that began in late 2002 as the SEC was financially starved and defanged. The Financial Times noted earlier today that the top three US banks grew dramatically, expanding their assets from under 10% of all bank assets in 1990 to over 40% by 2009 while increasing their capital bases by a far smaller
percentage. With equity capital of around 3% or 4% the top six US banks have assets equal to 60% of the US GNP. The investment banks expanded their leverage to the point that the capital supporting their asset structure was less than 2%. Although the collapse began in 2008 and took many victims, the basic philosophy underpinning the financial system has continued unaltered through this recovery. In the last twelve months, the financial sector has rallied 58% while the S&P has rallied only 42%. Wall
Street has not changed its stripes and will not while the incentives remain the same.
There are many factors underlying the growth in the financial sector of the US and the global economy, and many arguments both for and against the growing sophistication and centralization of financial decision making. Academics and financial leaders will battle over these issues in the years ahead and this process should eventually lead to a deeper understanding of leverage and market correlations and will find a better way to balance the insurance of depositors’ risks with the gains bankers can make by escalating those risks. However, the situation today is already critical, but mostly in a political sense.
That is why the fat lady has sung and the SEC has acted. It is not that Goldman is the ogre that has broken the rules. Everyone has followed this same path, and there weren’t any rules either. There is only one critical difference between Goldman and the others: Goldman is the best, the most efficient. Because it is the best of the breed, the political focus will fall on them. The others will be tried only in the shadow of Goldman, after the show trial is over. Although the public relations team of Goldman came out with a very well reasoned document making their case to those of us who use the firm’s services. Of course, this has gotten great play in the financial press, but it is all beside the point. The issue is not the actual case brought up by the SEC but the entire structure of Wall Street – the fact that a 31 year old derivatives salesman is sometimes paid more than 100 times more than a manufacturing executive in Peoria. The inequality of the system is the issue or, putting it another way, the jealousy of the lunch-pail voter is the political dynamite that cannot be ignored.
The Obama team has been chastised as being in the pocket of Wall Street. Although they argued that they helped the banks only to help middle-America, the argument was too tenuous to strike home with the average voter, and the banks then bit the hand that saved them by continuing their old ways even more brazenly than before. In a political sense Wall Street has become the tar-baby, anyone caught hugging them will be smeared with a wretched sticky mass. Even the Republicans, who have said no to every issue the Democrats have brought up since Obama took power, are forced to join this witch hunt. Congressional hearings on the seamy undersides of financial power and goings-on will become popular news as the banks are forced to turn conservative, cutting gearing and slowing the economy.
h/t Teddy KGB
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The GS fdic insured bank holding company is a victim of their own success. LMAO!!
"the jealousy of the lunch-pail voter is the political dynamite that cannot be ignored"
It isn't jealousy. The lunch-pail voters isn't over paid. Now ... the other guy is.
The only way they can make that kind of money is that they have monopolist control of prices. If there was competition allowed ... I'm sure somebody would do it for less.
There are no free markets just butchers with their thumbs on the scales
I think the bigger issue is that voters are coming to the conclusion that Wall Street doesn't create anything of tangible value... yet the compensation levels would suggest something totally the opposite.
More bluntly, voters see thieves-- not servants doing "God's work".
it's not just wall street though. it's the whole mafia ethic. right now, once again, it's just the 5 families (unions/govvies/banksters/welfares/warfares) battling for hearts & minds & resources. but, they're all collectively sucking the rest of us (voter/citizen /taxpayer/saver/globalized cheap labor) dry.
how far do the walls of the den of thieves extend?
Good points, tip.
Ordinarily the competiton of these interests for resources would be acceptable... if they were actually competing in a pure market-driven system.
But political elite has been badly corrupted, and you are now seeing government intervention in things they have no business being in. It's like opening a black Pandora's Box.
As you point out, the mafia nature extends well beyond the banker olgiarch family. But I would argue they are doing the most "sucking" and have, by far, the biggest tools for blackmail.
yes, absolutely, control of the methods in which we transfer & store our real wealth (the product of each of our individual time & energy). methinks the real question is: who should have that control and under what conditions?
unfortunately, that question is not even being discussed. it's still all about blaming the names, instead of changing the game.
Assetman/TEC:
"I think the bigger issue is that voters are coming to the conclusion that Wall Street doesn't create anything of tangible value... yet the compensation levels would suggest something totally the opposite"
"it's not just wall street though. it's the whole mafia ethic. right now, once again, it's just the 5 families (unions/govvies/banksters/welfares/warfares) battling for hearts & minds & resources."
You two are right on the money. The markets as we know them now are a private preserve reserved solely for the purpose of selective looting and wealth re-distribution. Real producers of wealth are used and abused while the parasitic kleptocracy steals everything in sight but produces nothing of real value.
I'm not a union guy, never have been, but I laugh when I hear people talk about how dastardly their ulterior motives are. In a 100 years of hand-outs the unions couldn't do the damage that the WSCC did in just 15 years.
The MIC got theirs with an endless series of uwinnable wars on 9-11; The MIC-2 (medical industrial complex) got taken care of by both Bush and the Obamanation. Wall Street saw all of that happening and decided to get theirs, too.
We the people are left to fight over scraps from the Dark Lords tables.
To paraphrase yet another ZH-er, " the problem is that the people fear the system. This won't be resolved until the system fears the people"
re: unions -- $300/hr for standing on your ass in NYC just cuz it's the day of the lord is not wealth creation, it's wealth extraction, especially when you got guys around them working twice as fast at a 10th the price and still making a fair living wage (when they can get work). this ain't your granddaddy's depression. the Forgotten Man (and Woman) don't own a blue collar & aren't up to the necks in debt.
yes, maybe not the same negative quantitative effects, but qualitatively, don't they both exist because of the other? can't really question the system when the system exists to get you somethin for nothin. better to say "they get theirs, so I's gots to gets mine..."
If there is to be wealth redistribution it cannot be called jealousy to want an equal piece of the government handout. And so why should the lunch-pail voter subsidize the millionaire banker ?
+1!
To quote another registered user here: when efficiency is outlawed only outlaws will be efficient.
Address the real issue Mr. Obama (and Mr. Taylor) that set the table for this mess in the first place:
Does the government intend to make/continue to make "affordable" credit a civil right and if so who is expected to take on the reciprocal risk and under what conditions?
I am a senior citizen and I do not want to be the counter-party to Goldman Sachs et al getting free credit. Let GS and Bernanke sell apples. I want my 5% taxable on my short term savings.
Agreed. What I was getting at is to what extent are you willing to subsidize risk so that US home ownership can stay north of 60%, so that politically favored groups can get easier credit or so that financial institution loan portfolios "look like America?"
Zero is my subsidize others' risk factor. I gave at the ranch from 1988 to 1997. I lost the ranch in 1997 because I bet that others, upon whom I relied, would do the right thing. Big mistake that will not be repeated.
I fail to see the mechanism that forces affordable credit. Banks are smart enough to know what the risk is, insurance companies are smart enough to know what the risk is, when the loan fails and the bank comes to call and user doesn't pay, then the insurance company does, and if they don't then it ends there.
But everyone involved knows the risk and doesn't have to participate - yet they choose to.
+1
Here Comes the Boom - Nelly
http://www.youtube.com/watch?v=nqWZqQXk_Ao
'Hold everybody accountable? Ridiculous!'
- W. Edwards Deming
'I repeat... that all power is a trust; that we are accountable for its exercise; that from the people and for the people all springs, and all must exist.'
- Benjamin Disraeli
'No we're not the same
Cause we don't know the game
What we need is awareness, we can't get careless
You say what is this?
My beloved lets get down to business
Fight the Power.'
-Public Enemy
'The Financial Crisis Inquiry Commission, the body set up by Congress to examine the cause of the system-wide credit crunch, said yesterday that it would use its legal powers for the first time to force Moody's, the credit rating agency, to produce documents.'
-FT 04/22/2010
'If they can get you asking the wrong questions, they don't have to worry about the answers.'
- Thomas Pynchon
'The two enemies of the people are criminals and government, so let us tie the second down with the chains of the Constitution so the second will not become the legalized version of the first.'
-Thomas Jefferson
The rating agencies are the enemies of the people.
Once upon a time I sat down in front of the agencies. Had an exclusive to place a'third'a billion face of a rather unique asset class. In order to get the buy side to bite, of course, we needed a rating.
It is not in any way embellishment to state that the work done by the agencies on this deal was so amateurish, so ephemeral, that a high school student with the toolkit of 'opposable thumbs and frontal lobes' could have coaxed Senor Google into producing a superior report.
Ultimately the squints created a white paper and slicks in my biz waved it around industry conferences as if it were gospel.
Of course the gospel was built on the bell curve and the curve was based on assumptions.
While seers like Taleb and Mandelbrot have shown that it is the flight of an arrow and that reality is the tail risk, the coin flippers have heretofore admitted no more than hey... it's a modified coin flip and our assumptions, which we provided to you in the King's English, why they're free speech babe!
But verily, Money is not Speech, Corporations are not People,and Fee Speech is not Free Speech.
Shame that there isn't a smoking gun.
Waitaminnit ...
by Jesse Eisinger Oct 15 2008
Portfolio Magazine
In December 1997, J.p. Morgan closed on its first big credit-derivatives deal, the Broad Indexed Secured Trust Offering, or Bistro for short. Insurance companies and banks, the initial customers, were enthusiastic, snapping it up in just two weeks. The deal was enormous for the time, off-loading more than $9.7 billion of J.P. Morgan’s exposure. Morgan had succeeded in reducing its balance-sheet risk and was able to free up capital to buy its stock back.
J.P. Morgan would go on to launch a credit- derivatives assembly line, becoming the Henry Ford of the new financial market.
Bistro “was the most sublime piece of financial engineering that was ever developed. It was breathtaking in terms of beauty and elegance,” says Satyajit Das, a risk consultant and the author of Traders, Guns, and Money, a financial history. But “in many ways,” Das adds, “J.P. Morgan created Frankenstein’s monster.”
For J.P. Morgan, Bistro worked wonderfully. But even in that first deal, the weaknesses in structured finance and credit derivatives that would come to the fore in the 2007 credit-market crash were already there.
Despite its blue-chip assets, Bistro didn’t perform pristinely. The initial slice, the equity layer that Morgan retained as a cushion against trouble, was so thin that it couldn’t weather even one default from one of the bigger companies in the bundle. That ultimately happened, wiping the slice out entirely. The investors who were one notch up, in what’s called the mezzanine layer, lost money as well. Even the buyers of the top-rated tranches, which were thought to be rock solid, had to endure bumpy periods before they got their money back.
During that first major deal, the credit-rating agencies, which were supposed to be impartial, were already deeply enmeshed in the give-and-take of the process.
A former Morgan banker who helped create Bistro recalls that Standard & Poor’s was giving the bank a tough time. The rating firm would run the deal through its models, and “each time, it came up with disastrous results. We did some tinkering and all of a sudden, it could rate the deal,” the banker says.
AM Here: Tinkering!
What an innocuous word for fraud.
Move along nothing to see here.
"AM Here: Tinkering! What an innocuous word for fraud. Move along nothing to see here."
The financial Gods tell us it's only fraud if you get caught. And considering the rule of law is now (re)designed to protect them rather than serve us, I don't expect much catching these days. Consider the SEC lawsuit against Goldman, which was never designed to be air tight as much as for air time. Let's see if we can't get a few more lawsuits filed to feed the hungry lawyers.
When the law is no longer a vehicle for justice and instead acts like a one armed bandit on meth, it's time to re-boot the system and start all over again. Interestingly enough, the powers that be seem to understand that we have already passed over into the Twilight Zone and their single purpose is to rape, rob and pillage before the end.
the pynchon quote bears repeating:
'If they can get you asking the wrong questions, they don't have to worry about the answers.'
- Thomas Pynchon
Moody's and S&P need to be gone, period.
Complete annihilation of a corrupt, cancer ridden beast. Then start over.
+100 (on a scale that goes to 10)
+10
Now it goes to 110.
I haven't stopped seen uber-bullish news the whole morning.
I am all in on this dip, buying FAS 3X Banking Sector BULL hands over fist and then some GS on top.
I'm not much of an investor, but I do know gambling. Never. Never ever, go all in.
The smart play when someone says something like this... is to fade them.
if you're not joking, i would sell that at 11:54AM EST.
I have noticed this as well and also that bear "heresy" continues to be attacked vigorously in a lot of market blog comments. I actually think this is good for the bear case. The January decline produced very powerful bearish sentiment from the get go. In hindsight this was a clear sign it was doomed to fizzle. Now we have bullish sentiment at extremes even after Goldman and Greece, volcano et al. I remember reading somewhere that when the decline finally set in for real the bullishness and optimism would be strong all the way down as investors draw deeply from the hopium pipe. Sort of the inverse of the bearish denial we saw all the way up. Bullish stridency and hubris + where are the bears? = potential for a decline that might surprise both camps.
Yesterday the DNC blasted the Republican Senate candidate in Illinois for accepting campaign cash from GS. Today, we get a Wall Street Journal article with the headline, "Obama to Keep Goldman Funds". This orchestrated suit from the SEC is a shakedown for campaign cash.
GS doesn't just have a monopoly, they friggin' write the legislation. The own the system. Cut the umbilical cord to the treasury and the fed and let's see how good they are. No bailouts ever, ethical accounting standards. Please, this whole argument is a canard.
Yeah, that's pretty much right on the mark.
It's amazing how the Fed has strayed away from their core commercial banking/lending origins. Today, they are essentially supporting unregulated hedge fund operations that take egregiously risky bets-- but are bascially providing an unlimted backstop to encourage more of that behavior.
Well, that, and they've totally forgotten how to regulate an industry gone wild. And as you've pointed out, it puts Goldman in the position to "write the legislation", because they have the financial explosives.
And there is nothing in this "SEC vs. Goldman" case that has changed that equation. It simply a sideshow.
The Fed did not stray. If you believe that then I suggest you actually read the words penned by the very men who created the Federal Reserve. The Fed has a specific purpose and it serves that purpose very well. And further, that specific purpose is not its publicly stated purpose, yet that specific purpose is also documented in the very words of the men who wrote the legislation that would create the Federal Reserve system. And the Fed has always, every time, served that purpose.
The world you live in is not the world you think you live in. Warning! Don't take the red pill. You may find it difficult to reintegrate into society.
Oh but you think this is different. Is it? Were the financial crises of the 1970s and 1980s any different? Who made those bad loans to countries that could never repay them? And who had to pick up the tab for the bad loans? You (or your parents). Was it different in the 1920s and 1930s? How did that explosion happen? Wall Street fleeced Main Street then called in the loans, deliberately forcing a crunch. And who paid the cost of that? Your parents or grandparents.
The Federal Reserve has always served its masters well. They keep their ill gotten gains and the rest of us pay off their excessive expenses. And they do it again and again, because each generation of gullible humans believes the initial lie from the banksters - that they can get something for basically nothing. And once sucked into the lie, the common man holds onto that hope, against all reason, until the lie implodes once again and the banksters walk away with the profits and the common man has to clean up the mess.
The purpose of the Federal Reserve is to make the lie that "economic problems" are "systemic" believable. The reality is there is no economic problem. It's all a direct result of fraud, perpetrated against you, your parents, and your grandparents. And they will do it again, against your children and grandchildren. That is always the purpose of every central bank since the first one arose centuries ago. The Federal Reserve is no different.
Sure, they've strayed. Their serving a larger and inherently riskier constituency than they did in decades past. Much like they did in the late 1920's. The reality is that they do create "economic problems" by enabling fraudulent activity of their masters. You don't think so? Ask any peasant that lived through the Depression. And yes, it no different, as it will all end the same.
They do serve their masters well, though.
+5
The argument that the banks are in some way part of our "infrastructure", and that "helping banks helps main street" has completely and utterly failed. The argument was laughable when it was originally made, but now it generates something far closer to hostility. The sooner politicians recognize this the sooner they can save their careers.
Banking has become the number one flash point in American politics. If you are aligned with the banking system, you are seen as "evil" and "on the take". Even now we see increasingly desperate politicians hopelessly attempting to resurrect the "infrastructure" argument in an effort to curry favor from the banking system while at the same time shaking off the negative image. It isn't working.
Politically speaking, there is only one path forward and it lies in direct opposition to the banking cartels.
This is the do-or-die moment for American politics.
So far, the Democrats are seizing the initiative better than the Republicans are -- but I wouldn't bet on that holding true for much longer. Republican voters are just as outraged as Democrats.
This isn't about "jealousy". It's about the now well established consensus among American voters that Wall Street is a scam. That insider thieves have hijacked the Republic. And that our politicians have been complicit in that scam.
This is now officially "interesting".
Honestly, I see it as more sinister than that.
The Democraps are in power and they will suffer the electoral losses (money) consequent to being assigned blame for WS's excesses.
This is an attempt to play chicken with the GOP. They can put up some finance bill that they KNOW the GOP (also in-pocket) has to oppose. This will spread the blame just in time for the fall election cycle. Great talking point to go out on the stump with - we tried to reform WS but the Repugs stopped us.
Nevermind that both sides are in the pocket and nothing will come out of this. It's political theatre at its core and all about staying in power and maintaining lead-hog trough location.
+ 3600 to Popo
America has turned apathetic, with maybe only 5% having any understanding at all what is really going on. Such a busted out wreck that I really dont even feel sorry for it or its inhabitants, steady downward spiral until you find yourself begging for 'may I have some more gruel please, sir'.
So now the 'economy' simply revolves around how much longer 0% interest money can keep on being printed out of thin air to inject into the comatose patient like glucose IV? Sad, only delaying the innevitable which is complete collapse at some point. With basically all industry and manufacturing shipped overseas, the only economy to point to is manufacturing more fiat dollars, and how Wall St can best package up synthetic horse apples and CDS them? Then I look around zerohedge and see most of the debate is on how to best position for '2012 elections'? Pathetic.....needless to say, I am Jacks Raging Bile Duct.
I'm skeptical. I think the GS witch hunt is a smokescreen to make Joe Six think they got what was coming to them, meanwhile, they head out the back with all the real capital. There's just too many Goldman people in government to make me think anything can really happen unless GS is like a snake's skin that will be molted at some convenient time.
Like buzzsaw99 said, GS owns the system. They are skynet.
The SEC remains toothless. They could begin regulating derivatives but they will never do that.
aerojet- I hear what youre saying, but heres my question- How long can they keep heading out the backdoor with all the loot, oulled another fast one on poor ol dumb J6P, when the loot pile is already gone?
They really just think from here on out they print up trillions, steal it, and no one is the wiser? Wheres the point of diminishing returns in this thin-as-ricepaper BS that anyone can clearly see is nothing but fraud? My senses are flashing red that its here now. Blowing smoke up the keesters of a nation of bankrupt and unemployed with a 'Messiah' president with a 55% strong disaproval rating doesnt make for much smooth sailing for the Wall St pirate ships! Or the Gubmint! Something very wicked this way comes, cant shake that feeling.
GOLDMAN PR BARRAGE:
http://williambanzai7.blogspot.com/2010/04/goldman-sachs-launches-pr-bar...
OF ROTTEN SAUSAGES AND WALL STREET:
http://williambanzai7.blogspot.com/2010/04/of-rotten-sausages-and-wall-s...
I dont know - this looks like the real deal: The SEC has made a serious allegation against GS . This has already done a lot of damage.
GS intends to fight this in court. Settling at this stage will not do anything to vindicate them or repair their reputation.
If the SEC loses this - it will be a very major blow to the dems.
If GS loses this - they are toast.
This looks like its for all the marbles.
Unless there are bankers and politicians behind bars or swinging from light posts, and the Fed has been dissolved; I'm not buying.
They always come with guns blazing at first. Big news, story of the week, someone needs to get a promotion by George!
The backroom deals haven't started yet.
Here is some great "comedy" on our "recovery"
Jim Paulsen on Yahoo Finance tech ticker. I was asking myself what planet he is on.
http://finance.yahoo.com/tech-ticker/forget-the-%27new-normal%27-%22this...^gspc,^dji,dia,spy,man,xhb,rth&sec=topStories&pos=9&asset=&ccode=
Jim Paulson is on planet 'I got a bank account stuffed with billions of free dollars I didnt do squat for...what are you people complaining about, economy's GREAT'!
Its simple, all these CNBC yapheads they parade thru the lineup all got shovelled money over the last year like never before, economy is just GREAT to them! Funny, they never have anyone who has been out of work for 2 years on CNBC to ask their opinion...
The only thing I disagree with is your notion that Obama will be tarred - (oooooh better watch those metaphors in this politically correct day and age). I suppose he may, but that fact is, it is not my impression that Obama CARES. He most certainly does not care; he is already governing by executive order and agency regulation, congressional actions - laws, etc; those are just window dressing. There is not the slightest appearance of concerns about hypocrisy in his (nor most any politician these days) in his narcissistic view. In any discussion which may have at its heart the desire for understanding and perhaps even the search for real solutions there should be no delusions about whether or not 'the one' gives a you-know-what about what anyone thinks; media, voters or otherwise. And Ayn Rand had it right. The sheeple are going to ensure that the only solution to all this mess ultimately will be a disaster worthy of John Galt. (oops, here goes another detour into where the best places are for dehydrated food...)
Obama (and any politician) can only act in the interest of a power. If he has sided with a more powerful entity that states 'Goldman Sacs' must go down (for whatever reason) then he has weighed the pros and cons and come to the conclusion that this appears to be the best (or only) decision to be made. Just ask JFK and Andrew Jackson what happens when you step in front of the train and try to stop it or even steer it. The presidents job is to 'control the flow' of power, hopefully to the end that is best for the citizens, not direct it.
What is going on right now, imho, Pan, reminds me more of a magicians sleight-of-hand. I doubt seriously the one, with all his entrenched ex-goldmans has an interest in seeing gs go down. He has shown time and again that he can punch someone in the head with one hand and have his other hand on their wallet simultaneously - qualm-free. This is an act, and unless there is some other unknown with MORE money acting behind the curtain like a George Soros who has a personal vendetta against them, I would not permanently short GS. No point hoping either, that this president cares what is best for citizens of this country with regard to 'controlling the flow' of power; that myth has already been long-busted.
I'm not trying to defend Obama. The health care debate seems to be an example of what you are saying and it appears the people got trampled to the benefit of the insurance industry.
Is Goldman Sachs performing a rope-a-dope for the benefit of the perception of wall street reform?
Interesting comment pan... To build upon what you suggest, might a "more powerful entity that states 'Goldman Sacs' must go down" be something like, oh, say unions? After all, haven't pension funds been a dumping ground for toxic goodies from the TBTF banks?
I'm still trying to understand the nature of Obama's relationship with Wall Street given his very tight relationship with unions.
Nicely stated.
And it is appropriate to point out that there are entities so powerful that they can decide Goldman is extincted and it will happen.
ArkansasAngie had this right, the issue here is not jealousy. Deep down people understand that the people who actually make stuff, grow our food and provide essential services are being compensated far less than people who have figured out how to game the system and the difference is now measured in orders of magnitude instead of percent. This isn't Chevy vs Cadillac, it is aging donkey vs Rolls Royce and people are starting, I hope, to realize this. Few people begrudge the neurosurgeon his income, and even Bill Gates earns most people's respect because they those individuals provide substantial benefit, either individually in the case of the doctor or on the massive scale of the computers that are ever present in our lives. I don't think that Congress truly understands this. Those people are putting together a bill that will fight the symptoms of the last war and fail to even know that a much more fundamental problem exists, in large part because they themselves created it.
B-I-N-G-O
"That is why the fat lady has sung and the SEC has acted. It is not that Goldman is the ogre that has broken the rules. Everyone has followed this same path, and there weren’t any rules either."
That is incorrect. There are rules. We have rules against fraud, selling products that were known to be, well, fraudulent is breaking the law. Saying that there weren't any rules is a bullshit excuse for regulators to wave around for why they did nothing. I was doing work at the FRBNY during the time just before the Lehman collapse in the middle of the housing collapse (pre countrywide crash) and was awestruck that nobody was paying any of this any mind. It was amazing to me that the regulators were doing, well, nothing. If the regulators were in private industry, they would be held responsible in court.
All that comes out now is spin of why it wasn't their fault. At best those in charge should all be fired and at worst criminally prosecuted for racketeering.
+1000, this is the real crime and no one will even discuss it, much less bring those responsible to justice.
the name is AIG and the term is "we eat what we kill." that's what "the masters of the universe" opine. what they don't tell you is when they "fail to kill now THEY get eaten." see ya Goldman--"the buzz saw" has arrived.
Yes I know that is a popular way of thinking. Two issues:
1. Businessmen dont go into work evry morning asking if what they do has any social worth. They worry about revenues, cash flow, payroll. What is the social value of advertising(they dont produce anything but try to mislead people into buying things they dont need), cigarettes, alcohol, all kinds of plastic junk etc etc.
2. We ran a cumulative trade deficit over the past 15 years of what - $5 Trillion or so? This was stuff we got for the sheeple from abroad for FREE which the sheple bought by borrowing against their "homes" - right?
Did Wall Street not have a central role in making such a large Trade deficit possible?
Just break them fuckers up already. Support the Brown-Kaufman Amendment.
http://baselinescenario.com/2010/04/22/the-safe-banking-act-break-them-up/
Mercury's comment is among the most incisive I've seen in a while. When individuals have broad access to underpriced credit, and it's politically untenable to remove it, what will be the final outcome?
I bet you'll like this contributor post by Mikla...
Long Periods of Drought … Followed by High Windshttp://www.zerohedge.com/article/long-periods-drought-%E2%80%A6-followed...
House GOP asks SEC for contact details.
http://www.politico.com/news/stories/0410/36097.html
Bullshit... Sach's will go, because Sach's is favorable to going more so than JP... That’s why, Sach’s would go... if at all?
With the SEC suit against Goldman Sachs, an age has come to an end. This action is symbolic: like the closing bell at the old-time New York Stock Exchange. An American saying, “it’s not over until the fat lady sings,” covers it pretty well. She’s singing. The crisis that broke the financial market’s back was spawned way back in 1986 with the Tax Reform Act, which led to much higher levels of corporate borrowing, followed by the Drexel Burnham invention of junk bonds.
***** “Yeah? Ok.. so are you providing cover for Sach’s? by using the truth? Cheap Credit abounds in the late 80’s with the introduction, ok purists with the beginning of wide spread use of structured debt vehicles.” *****
It only then reached its prime after the Graham-Leach-Bliley Act effectively repealed Glass-Steagall in 1999, in the post-bubble recovery that began in late 2002 as the SEC was financially starved and defanged.
***** “Yet more fucking cover? Really? Because Goldman is not the poster child for idiotic profit taking?” *****
The Financial Times noted earlier today that the top three US banks grew dramatically, expanding their assets from under 10% of all bank assets in 1990 to over 40% by 2009 while increasing their capital bases by a far smaller percentage. With equity capital of around 3% or 4% the top six US banks have assets equal to 60% of the US GNP.
***** So bankers, to squeeze out their bonuses… changed the capital requirements??? Bla, Bla and Bla… Goldman / Bankers / Numbers / Talking… if this is the opening salvo of defensive writings to get Goldman off the hook… well they are fucked!” *****
The investment banks expanded their leverage to the point that the capital supporting their asset structure was less than 2%. Although the collapse began in 2008 and took many victims, the basic philosophy underpinning the financial system has continued unaltered through this recovery. In the last twelve months, the financial sector has rallied 58% while the S&P has rallied only 42%. Wall Street has not changed its stripes and will not while the incentives remain the same.
****** “Same shit, Different day! Nothing has changed on Wall Street, yes you are correct... Collateral Arbitrage, pump and keep pumping the algo’s to maintain a positive looking number and of course the purchaser of last resort antics… less we forget the 0% Fed Window.” ******
There are many factors underlying the growth in the financial sector of the US and the global economy, and many arguments both for and against the growing sophistication and centralization of financial decision making. Academics and financial leaders will battle over these issues in the years ahead and this process should eventually lead to a deeper understanding of leverage and market correlations and will find a better way to balance the insurance of depositors’ risks with the gains bankers can make by escalating those risks. However, the situation today is already critical, but mostly in a political sense.
****** “What you mean to say is… that the public is aware of what is going on and calling for someone’s head… You could not keep your business private and now the world knows, you thusly will be punished… poor Jews everywhere will suffer this backlash, in the anti-Iran article today there was the tinge… the anger… towards people who have no part of the guilt, not that will get in the way… Goldman will go the way of the anti-smite in hopes of rallying the troops, but it will do no good… for anyone.” ******
That is why the fat lady has sung and the SEC has acted. It is not that Goldman is the ogre that has broken the rules. Everyone has followed this same path, and there weren’t any rules either. There is only one critical difference between Goldman and the others: Goldman is the best, the most efficient. Because it is the best of the breed, the political focus will fall on them. The others will be tried only in the shadow of Goldman, after the show trial is over. Although the public relations team of Goldman came out with a very well reasoned document making their case to those of us who use the firm’s services. Of course, this has gotten great play in the financial press, but it is all beside the point. The issue is not the actual case brought up by the SEC but the entire structure of Wall Street – the fact that a 31 year old derivatives salesman is sometimes paid more than 100 times more than a manufacturing executive in Peoria.
****** ”Goldman employee’s for the good of the company you will need to take a haircut, upper management will of course do the same and hide their extra monies in bonuses. This saves monies and gives the angry mob what they want all at once, it’s a win, win.” ******
The inequality of the system is the issue or, putting it another way, the jealousy of the lunch-pail voter is the political dynamite that cannot be ignored.
The Obama team has been chastised as being in the pocket of Wall Street. Although they argued that they helped the banks only to help middle-America, the argument was too tenuous to strike home with the average voter, and the banks then bit the hand that saved them by continuing their old ways even more brazenly than before. In a political sense Wall Street has become the tar-baby, anyone caught hugging them will be smeared with a wretched sticky mass.
****** “Racial under tones… tar-baby? Really? That’s reaching, I guess there are people stupid enough to read this and digest it as prescribed… God Help Us All! The bigots are causing Goldman Duress… anything but Goldman’s unabashed profiting on misery and dare I say the culture that would allow for such atrocities to our Grand System.” *****
Even the Republicans, who have said no to every issue the Democrats have brought up since Obama took power, are forced to join this witch hunt. Congressional hearings on the seamy undersides of financial power and goings-on will become popular news as the banks are forced to turn conservative, cutting gearing and slowing the economy.
****** “This Witch Hunt is Bad for all Boogie! Boogie!! Boogie!!! That’s some funny shit… Like the algo allowance being cut will affect Main Street?! This tells me a couple of things…
1. There is no real witch hunt. This is a prop piece used for the set of a drama to be played out for all to see. An attempt at misdirection at best and a temperature gauge at worst.
2. We are all FUCKED! If the public does not have the stomach to demand heads rolling for the fleecing of their monies… Ignorance reigns supreme… In My Humble Opinion!” ******
I will mention the unthinkable… I call for JP Morgan’s Head! For allowing the kids to become so unruly. I say That JP Morgan is unfit to maintain the balance. The culture of corporate protectionism, the maintaining market share and growing market share thru legislation… the death of innovation in favor of the status quo as maintained not by Goldman… they simply lack the horsepower… but by JP.
I like the cost cutting push of the employee’s taking a haircut, taking a negative and turning it into a positive is entertaining… but it does not fix the larger issues we face as a nation and as of now… nothing has changed and nothing seems to be on the horizon with regard to change. Drive it until the wheels fall off.
JW, please expand on this post --- you were unnecessarily concise.
And by all means, please insert more empty lines between your paragraphs.
And I'm not hearing enough cowbell --- we really need more cowbell!
Common sense:
While Goldman Sachs' lawyers negotiated with the Securities and Exchange Commission over potentially explosive civil fraud charges, Goldman's chief executive visited the White House at least four times.Read more: http://www.mcclatchydc.com/2010/04/21/92637/goldmans-connections-to-white.html#ixzz0lqTBz200
Community organizer, hoocoodanode, cleanup expert and "former White House counsel, Greg Craig, has been retained to represent the Wall Street giant" as it defends itself against charges that it defrauded investors who placed bets on complicated financial instruments."
"Obama described Craig as one of the top lawyers in the country who has a range of clients. And the president rejected the notion that Craig could influence the administration in Goldman's favor." (cause we FIRED him...get it)
"We have toughest ethics rules that any president has ever had. And the one thing that [Craig] knows is that he cannot talk to the White House, he cannot lobby the White House. Once he left the White House, he cannot in any way use his former position to have any influence on us."
http://politicalticker.blogs.cnn.com/2010/04/21/obama-wh-learned-about-goldman-sachs-suit-on-cable-tv/?fbid=qUlh16RyeGZ
You know what, F it all. lets not even bother, look at this!!@ teenagers detailing their shopping trips on youtube video. wtf. if this is the next generation (and it is) we deserve to go down. granted they were taught to act this way by the boomers and their offspring.
http://runway.blogs.nytimes.com/2010/04/22/tube-tops-and-teddy-bears/
"LOTS of young women today show their bedrooms, clothes and character in the thousands of “haul” videos made for YouTube. These are short videos that feature a woman’s recent shopping haul, hence the name."
You are the problem this Country has... ignore the problems in favor of some regressive rant about things your wee little head can get around.
You are the problem! not little girls and their panties... the fodder that swill you ingest and regurgitate... almost on command.
Please, shoot yourself and all of your ignorant spawn that you have corrupted as well.
JW n FL, first off let me congratulate you on your firt post that is not 4500 page cut and paste.
The point I am trying to make (and yes it was an o/t mini rant, so sorry), is that the post-boomer generations have been taught vapid materialism by their parents, I find it frustrating. It isn't the little kids fault. We live in a brainwashed materialistic society and I find it very frustrating.
I am fighting the good fight, keep myself informed and engage in discussion and debate with other people, not just on this site. But yes, I find it very frustrating that the vast number of Americans or not concerned with the future of our country or the world, or really too much more then what is on TV tonight. I think that is a tragedy.
I have seen wall street from the inside, and it makes me sick....
To the extent I went off topic, deepest of apologies, otherwise go fuckyourself.
I do not have any spawn, however I'd love to facialize you mother.
Thanks and have a great day!
http://www.zerohedge.com/forum/peak-phosphorus
Here off topic substance... the sheep are to blame becuase of the bell they follow? substance is substance lack thereof is lack thereof...
like I said shoot yourself. you are the problem.
Holy shit that was a short post. What a rip off. I was hoping for a cut and paste of the entire contents of the Library of Congress.
Now go KILL YA SELF (KYS for short).
Touche!
JW doesn't seem to grasp that running across his interminable comments in this context is like turning on a drinking fountain only to find it spewing like a fire hose. If he wants to submit an article, he should be contacting TD instead of dumping it in here.
Touche to a Douche.
Or a link to an article would suffice.
I must have really touched a nerve with him, he probably has 300 vids of himself and his teletubby dolls on youtube.
Bad on me for responding to his tantrum.
CNBC still trying to run interference for GS
http://www.cnbc.com/id/36710264
Me thinks that Mr. Taylor is shilling for the dems in this article. The article is talking points from the DNC.
I think the article is non partisan. Then again I am on the outside in Australia and haven't connected any particular side of issues with a party.
The 'personal' hatred of Obama sometimes displayed on financial blogs leaves most of us on the outside fairly perplexed. We can't see the demons that seem to worry you. Then again maybe what you call socialism we would call right-wing outside of the US.
In anycase I just flick by the partisan rants as of no interest.
But at least you now have a President that can form a sentence.
The sentences formed mean nothing... Bush was the same.... both are puppets of the lobby, bought and paid for whores.
The people who elect them, either side... are the same people who pay for the lobby against themselves.
Here.. its a past post but sourced and sited for any and everyone who would like a crash course...
The Banks are using profits to pay for their Lobby? not the 0% Fed Window?
http://www.wired.com/threatlevel/2009/08/bank-lobbyists/
**** "In the first three months of 2009, the financial sector spent $104.7 million to lobby Congress and the administration, down 8% from the same period last year" ****
http://online.wsj.com/article/SB124640640747376775.html
So that I am clear... 2008 was a vintage year for Banks? they made soooooooooooooooooooooo much money on 2008 that in the first 3 months of 2009... they could drop $104.7 MILLION DOLLARS?
http://en.wikipedia.org/wiki/Emergency_Economic_Stabilization_Act_of_2008
"But at least you now have a President that can form a sentence."
...that's pre-recorded. Remember your little Chatty-Cathy and her magic pull string?
"Jealousy"?
So a kid has taken all the other kids' lunch money, and some of the kids complain to a teacher and say something should be done about it, and they're told they're just "jealous."
Wrong word.
The enormous amounts spent in the US on elections and on lobbying is also something we find astonishing.
Until you get rid of both of those things inevitably a politician and president are going to be 'owned' to some extent by some group or other.
See Jon Stewarts latest take off of the UK election, the campaign for which will run one month. Little fan fare and glitz.
You are of course correct, Kina, about US politicians being bought and sold by corporate special interests and Wall Street like so much cattle.
I cannot fail to notice, however, that the UK, Canada and your Australia are just as much bastions of growing statist repression as is the USA.
What is most frightening about the UK is the lack of a written constitution, lot less legal machinations for the elite to get what they want...
I don't see the Constitution doing you guys much good.
the first amendment is serving me just fine, hell when i lived in london during college, porn was illegal (OMG no moneyshot noooo1!!), and they just legalized importation of The Excorcism. wtf?
I am a fan of the 2nd amendmant myself, though I know butter knives are considered WMD's over there.
I'm not hatin on the UK, but its nannystateland.
You're showing your age now! (I presume you mean The Exorcist?)
As I said above, do not cry for the vampire squid.
http://www.mcclatchydc.com/2010/04/21/92637/goldmans-connections-to-white.html
Read Animal Farm.
This is textbook procedure for Commies.
...The issue is not the actual case brought up by the SEC but the entire structure of Wall Street – the fact that a 31 year old derivatives salesman is sometimes paid more than 100 times more than a manufacturing executive in Peoria. The inequality of the system is the issue or, putting it another way, the jealousy of the lunch-pail voter is the political dynamite that cannot be ignored...
What a load of crap. We have sports stars and media/music/acting stars all making more and not raping the public to get it. Where is the value of Goldman Sachs?
There isn't any. There is nothing they are doing that a number of other TBTF banks aren't already doing. Goldman should have failed like Bear Stearns and Lehman. They bought a year of grace and pissed it away. Others can effectively take their place.
They should have been thankful for their second chance and done some of God's work.
i'm still not buying it, seems like a desperate attempt to provide some cover for the corrupt system as a whole.
using the squid analogy, this is merely good PR for the US gov to be shown slicing a couple of tentacles off. but the head is there still and the tentacles will grow back soon enough...
good point, always remember that when the head of GS testified before the pecora commission, their stock was @ 3/16.
"The issue is not the actual case brought up by the SEC but the entire structure of Wall Street – the fact that a 31 year old derivatives salesman is sometimes paid more than 100 times more than a manufacturing executive in Peoria."
The issue is people who actually produce something of value (the guy in Peoria) vs the people who make huge sums of money shuffling other people's money around, producing nothing and, eventually, demanding that they be bailed out to the tune of trillions of dollars by the taxpayer when their fraudulent game gets called.