"I Am Putting Everything In Goldman Sachs Because These Guys Can Do Whatever The Hell They Want"

Tyler Durden's picture

When we first covered the Carmen Segarra lawsuit alleging the capture of the NY Fed by Goldman Sachs back in October 2013, we didn't have much hope for justice to get done. We said that "while her allegations may be non-definitive, and her wrongful termination suit is ultimately dropped, there is hope this opens up an inquiry into the close relationship between Goldman and the NY Fed. Alas, since the judicial branch is also under the control of the two abovementioned entities, we very much doubt it."

Sure enough, the lawsuit was dropped (and no inquiry was opened) but not before it became clear that the very judge in charge of the case, U.S. District Judge Ronnie Abrams, was herself conflicted, after it was revealed that her husband, Greg Andres, a partner at Davis Polk & Wardwell, was representing Goldman in an advisory capacity. Curiously, before she assumed her current office in March 2013, back in 2008 Abrams returned to Davis Polk herself as Special Counsel for Pro Bono. She had previously worked at the firm from 1994 to 1998. For the full, and quite amazing, story of how the "Judge" steamrolled Segarra's objections reads this Reuters piece.

As a result of this fiasco, some wondered just how far do Goldman's tentacles stretch not only at the money-printing (i.e., NY Fed) level, not only at the legislative level (see "With Cantor Down, Which Other Politicians Has Goldman Invested In?"), but at the judicial as well.

And then, on Friday, the Segarra case against the Federal Reserve branch of Goldman Sachs got a second wind, when as a result of another disclosure, ProPublica revealed "How Goldman Controls The New York Fed in 47.5 Hours Of "The Secret Goldman Sachs Tapes." That is to say, nothing new was revealed per se, because as anyone who has read this website for the past 6 years knows just how vast Goldman's network is not only at the Fed, but in that all important other continent too, Europe.

Sadly, just like a year ago, so this time too, we are reluctant to say anything will change. In fact, there is too much at stake, for Goldman to drop the reins and disassociate from the NY Fed: for pete's sake, the president of the NY Fed is a former Goldman employee - does it get any more conflicted than that?!

But, wait, Goldman will do penance by "prohibiting its bankers from buying stocks"... the horror. Luckily at least purchasing politicians and Fed presidents is still perfectly allowed.

In fact, what has become clear to everyone is that aside from yet another dog and pony show (led by, you guessed, it the head dog and ponier herself, Elizabeth Warren), not only will nothing change, but in fact the best way to take advantage of a broken, corrupt, sinking system, is to join it. And the best summary of just that sentiment was released over the weekend by Nanex' Eric Hunsader as follows:

Curious what made up Eric's mind? Then fast forward to minute 24 to hear what it sounds like when a top Fed official "questions" Goldman Sachs:


But before we put this topic to bed, here is Raúl Ilargi Meijer explaining why "The US Has No Banking Regulation, And It Doesn’t Want Any"

* * *

It is, let’s say, exceedingly peculiar to begin with that a government – in this case the American one, but that’s just one example - in name of its people tasks a private institution with regulating not just any sector of its economy, but the richest and most politically powerful sector in the nation. Which also happens to be at least one of the major forces behind its latest, and ongoing, economical crisis.

That there is a very transparent, plain for everyone to see, over-sized revolving door between the regulator and the corporations in the sector only makes the government’s choice for the Fed as regulator even more peculiar. Or, as it turns out, more logical. But it is still preposterous: regulating the financial sector is a mere illusion kept alive through lip service. Put differently: the American government doesn’t regulate the banks. They effectively regulate themselves. Which inevitably means there is no regulation.

The newly found attention for ProPublica writer Jake Bernstein’s series of articles, which date back almost one whole year, about the experiences of former Fed regulator Carmen Segarra, and the audio files she collected while trying to do her job, leaves no question about this.

What’s going on is abundantly clear, because it is so simple. The intention of the New York Fed as an organization is not to properly regulate, but only to generate an appearance – or illusion – of proper regulation. That is to say, Goldman will accept regulation only up to the point where it would cut into either the company’s profits or its political wherewithal.

What the ‘Segarra Files’ point out is that the New York Fed plays the game exactly the way Goldman wants it played. Ergo: there is no actual regulation taking place, and Goldman will comply only with those requests from the New York Fed that it feels like complying with.

In the articles, the term ‘regulatory capture’ pops up, which means – individual – regulators are ‘co-opted’ by the banks they – are supposed to – regulate. But the capture runs much larger and wider. It’s not about individuals, it’s a watertight and foolproof system wide capture.

The government picks a – private – regulator which has close ties to the banks. The government knows this. It also knows this means that its chosen regulator will always defer to the banks. And when individual regulators refuse to comply with the system, they are thrown out.

In one of the cases Segarra was involved in during her stint at the Fed, the Kinder Morgan-El Paso takeover deal, Goldman advises one party, has substantial stock holdings in the other, and appoints a lead counsel who personally has $340,000 in stock involved. Conflict of interest? Goldman says no, and the Fed complies (defers).

The lawsuit Segarra filed against the NY Fed and three of its executives was thrown out on technicalities by a judge whose husband was legal counsel for Goldman in the exact same case. No conflict of interest, the judge herself decides.

This is not regulation, it’s a sick and perverted joke played on the American people, which it has been paying for it through the nose for years, and will for many years to come. Sure, Elizabeth Warren picks it up now and wants hearings on the topic in Congress, but she’s a year late (it’s been known since at least December 2013 that Segarra has audio recordings) and moreover, it was Congress itself that made the NY Fed the regulator of Wall Street. Warren has as much chance of getting anywhere as Segarra did (or does, she’s appealing the case).

The story: In October 2011, Carmen Segarra was hired by New York Fed to be embedded at Goldman as a risk specialist, and in particular to investigate to what degree the company complied with a 2008 Fed Supervision and Regulation Letter, known as SR 08-08, which focuses on the requirement for firms like Goldman, engaged in many different activities, to have company-wide programs to manage business risks, in particular conflict-of-interest. Some people at Goldman admitted it did not have such a company-wide policy as of November 2011. Others, though, said it did.

Let’s take it from there with quotes from the 5 articles Bernstein wrote on the topic over the past year. To listen to the Segarra files, please go to The Secret Recordings of Carmen Segarra at This American Life.

One last thing: Jake Bernstein’s work is of high quality, but I can’t really figure why he says things such as the audio files show: “a New York Fed that is at times reluctant to push hard against Goldman and struggling to define its authority”. Through his work, and the files, it should be clear that just ain’t so. Both the Fed’s policy and authority are crystal clear and ironclad.

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Bangalore Equity Trader's picture

Listen Zero's.

Do you think Goldman has any secret financial blogs on interwebs?

Ignatius's picture

There was a time when 'going with Hitler' seemed like a good idea, also.

X.inf.capt's picture


goldmann sachs does rule the world...

0b1knob's picture

Jon Corzine also did whatever the hell he wanted too.   Including stealing all his customer's money.

Four chan's picture

and it worked^ this is like backing hitler in 1939

cifo's picture

So it's going to take 5 or 6 more fucking years?????

SafelyGraze's picture

+1 ob1knob

"Jon Corzine also did whatever the hell he wanted too. Including stealing all his customer's money."

and that's why the smart money was with mfg

and with gs


outamyeffinway's picture

When everything's burning and judge's are hanging and Congressmen are missing, we'll know why.

economics9698's picture

A few hard core MF's know where the ropes are.

strannick's picture

Yes, they are the diabolical masters of the universe. It would be like investing in Hitler in 1932.

The Doofus's picture

Lloyd Blankfein cornholed my mother.  I'll never forgive that son-of-a-bitch.  But his business model is aces.  Corruption and Cronyism.  He can't lose.

Keyser's picture

But, he's doing God's work... bbwwwaaahhhhhaaaaaa....



El Crusty's picture

investing in hitler in 1932 would have been a smart buy. selling off all your shares in hitler by 1944 would have been an even better sell- massive profits.

now the real question in relation to today's timeline, when was 1932 and when is 1944?

Manthong's picture

.. just doing god's work of rape.

Bindar Dundat's picture

GS will be the cause of WW3 and we will be on the losing side because of greed and corruption at GS and others.  

We're screwed.

chunga's picture

yeah but that's racist and hateful and spiteful and true

CuttingEdge's picture

Look on the bright side...

When the guillotines start rolling (as they do when every empire collapses), Blankfein, Dimon, Corzine and corporate fascist cunts like them will be at the top of the list for a neck shave. Their transgressions are too well documented for it to be otherwise.

Hopefully in our lifetimes, and definately worth getting pay per view if you can't make the pilgrimage to spectate.

fockewulf190's picture

Expect more nailgun accidents in the near future.

BlindMonkey's picture

Can we put the list to a vote here on ZH?

Lore's picture

Such corruption is only possible in organizations dominated by clinical psychopaths. The terror experienced by peons must be beyond belief.  In my experience, such a state is very unstable and temporary.  The greatest weakness of psychopaths is themselves, for trying to remake the world in their own broken image.  Sadly, they always do a lot of damage on the way down. In this case, the capital of nations is being hollowed out to delay the inevitable.  Foreign policy is reduced to desperate protectionism for an increasingly fragmented, disintegrating mafia. It's actually an exciting time, if only we can stand back and watch from a safe distance.  

Political Ponerology

Blankenstein's picture



You get to hear some of the players at the Fed who do the Squid's bidding. Two that are on the recording are Michael Silva and Jonathon Kim: 



Jonathon Kim's Linkedin link no longer works


BlindMonkey's picture

"Jon Corzine also did whatever the hell he wanted too. Including stealing all his customer's money."

Now he is working on stealing everyone's 401k. Success begets success.

stant's picture

The squid knows folks who buy ink by the tanker

tvdog's picture

Nowadays, newspapers lose money, by and large. The people who own them don't own them to make money - at least not to make money in the newspaper business.

With CNBC's ratings, does it make money? If so, for how long? In any case, its owners are unlikely to care whether it makes money or not.

Escrava Isaura's picture


Unproved Science

Who cares what is real when large interests can manufacture nonsense, downright lies, and the populace is not able or willing to understand the difference.


Left Software: Living in la la land


Right Software: Living either in the past (denial) or in the future (science fiction)


Neoclassical Hard Drive: Just keep telling them: Market can fix everything. Market can fix everything.  


Neoliberal Hard Drive: There are NO solutions. Move the Forward demand to the Present… Hell, we all gonna die.


imaginalis's picture

Or just blurt a load of shight bullet points

Kirk2NCC1701's picture

The way I see it, if the Yids can play mind games, so can we: Learn to kibbitz in some basic Yiddish and pretend you're in the Club also. Especially if your name ends in "er".

Profit is profit.

tarabel's picture

I had no idea that Captain Kirk hated his multicultural crew so much. He certainly hid it well.

Kirk2NCC1701's picture

It's got nothing to do with "hate" (an emotion, from the Mid-brain). It's got to do with cognitive decisions (a rational process, from the front of the brain).

Audacity, Courage and Imagination trump Fear, Hate and Preconceptions.

If they can infiltrate us, we can do the same. They are paranoid as it is, so this would really wind them up. ;-)

BigJim's picture

I've often thought the Palestinians should just convert to Judaism. Then they'd get a signing-on bonus for crossing the Gaza fence rather than a hail of bullets.

MontgomeryScott's picture

Kirk liked HIS crew just fine.

It was the KLINGONS he didn't like. They killed his son...

HowardBeale's picture


Have you seen that recipe for Revolution Surprise? I know it's here somewhere...

homiegot's picture

They meet fact to face and destroy any communications. If you want to keep something secret these days you gotta keep it off the net.

imaginalis's picture

I might argue only if 3 are dead

LibertarianMenace's picture

I'd imagine that until this blows over, that they'll be frisking each other more than ususal to make sure no one in the conversation is wired.

Clever Name's picture

I will start a mutual fund, anyone in? Guaranteed winners all!


More suggestions, please?

fedupwhiteguy's picture

Winners? Well, I'm betting SKF. We can always hope...




rocker's picture

They don't need any blogs when they too control the biggest Blogs of all. The Financial Main Street Media. CNBC, FBN, Bloomberg.

But that's not the real story. If one just thinks about it. Goldman is the FED and the CB of the World. Follow the Money.

Hank Paulson, CEO of Goldman and Neel Kashkari also from Goldman bailed out Goldman and others under Bush.

And somehow, Goldman became a bank so they too could go to the discount window. They wanted more than Buffit gave them.

Greed is Good. Bush worshipped Hank and Neel who enginnered the bailout to saved the Financial system. Too big to fail lives on.

Yet nobody went to jail. Nobody. I have lost faith in our financial system, our government and our political system.

NoPension's picture

You lost faith? This was that straw, the one that broke the camel's back?

Fuck these motherfuckers. At least throw one in jail. At least try to put on a show for us. They don't even hide it anymore. Just a hidy-ho, f ff fuck you, little people, peon tax slave debt serfs. Civilians, that's what we are.
And to add insult to injury, if you stop off at the watering hole, and try to forget about this shit, a roid ranger pops you, and that costs 10 grand. But an illegal , no Licencse ,no insurance..... They let him go on his way.

I can't wait until the wheels come off this bus, and the guns and ropes come out. Yeah, we will all suffer, but it will be worth it.

The law. A fucking joke. Only "little" people and civilians have to follow the law.

El Crusty's picture

They did throw one of those fuckers in jail. Madoff didnt do anything differently than any of the other members of "The Club"- stole insane amounts of money from people that trusted him, lied through his teeth about everything until the whole house of cards came crashing down. Bernie got thrown under the bus because the rest of the boys needed a martyr to keep the illusion that these people will be thrown in jail for ripping people off.
there is zero difference between Madoff's investment scheme and goldman's or the fed's schemes- they are ponzi scams no matter how you look at em.
Madoff was nothing more than a bone thrown to the keep the lynch mob at bay for a while longer.

limpinalien69's picture

Madoff stole from the wrong group. Don't steal from your own kind is their motto. Steal and rob the from anyone else is fine.

dolbiere's picture

you have to remember that hank also engineered his own defense from future prosecution for his role in saving the world. ben was sure a good lead blocker. how much more corruption can there be when the american taxpayer was put on the hook by these two criminals to make AIG whole , so as goldman could collect its 20billion (if not more) for a bad bet. oh and they brought in warren buffet so as to make it look like a clean deal.

NaN's picture

"Greed is Good."

That reminds me, if greed is good, then so is gluttony.