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« UPDATE: Citigroup Warns Customers It May Delay Future Account Withdrawls By 7 Days | Main | Peter Schiff On The Fed Hike, Obama In Vegas (VIDEO) »
Monday
Feb222010

Et Tu London: Goldman Sachs helped Britain hide debt

Much noise this morning surrounding the news that Goldman Sachs (and a number of other banks) allegedly helped Greece to hide the full scale of its ballooning government debts through financial jiggery-pokery over the past decade or so. Eurostat has now demanded an explanation from the Greeks for $1bn of currency swaps it says it was unaware of (though Greece seems to be insisting the authorities did know).

The original story about Goldman’s involvement appeared in Der Spiegel last week (though the theme has been the subject of investigation by the excellent euro blog A Fistful of Euros for some time), and over the weekend the New York Times produced an excellent feature filling in the gaps. One of the more intriguing lines from that latter piece says: “Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere.”

So, the obvious question goes, what about the UK? Did Britain hide its debts? Was Goldman Sachs involved? Should we panic?

To which the answers, respectively, are: yes, yes and no. Britain has been finding various ways to hide its debt off its balance sheet for years; Goldman Sachs was one of the prime movers in this industry, through its infrastructure arm; but the fact is we (and by extension, one presumes, investors) have known about this for quite some time. The chief modus operandi here was the private finance initiative, something which helped the Government remove just south of £50bn from the official balance sheet. Goldman was a big player in the industry.

Continue reading...

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Max Keiser on Goldman helping Greece lie about their debt.

 

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Reader Comments (9)

Really? "Gasps for breath in disbelief".........End the debt...end the Global farce.....Multinational Corporations rule the world. End them NOW......take your Country Back one Dollar at the time.....buy local and Buy AMERICAN....if you can find anything made here.
Feb 22, 2010 at 3:49 PM | Unregistered CommenterAint Bullshittin'
goldman has their hands in every financial robbery in recent times. Time to break up these crooks!
Feb 23, 2010 at 11:41 AM | Unregistered CommenterSell Short
As soon as the Greece story broke, we predicted more hidden debt to follow. GS, JPM and their ilk help countries "hide" their debt. Then, armed with inside information of hidden weaknesses they gang up with hedge funds and short the Euro (for example). Just like they hid the weakness in the "AAA" CDOs they wrote, then armed with inside information of the deception, hedged against them with AIG credit default swaps. This is almost exclusively what they do, because it is so profitable to burn the candle of depravity at both ends.

This practice of luring governments (or any large financial player) into deceptive financial dealings gives them the inside advantage to then stick it in and break it off in the inevitable collapse of their swindles. When you remove all the derivative smoke and mirrors, it's no more sophisticated than that.

And they make hundreds of millions stabbing suckers in the back, instead of spending life in prison. These banker "Bitches" Geithner, Blankfein, Dimon, Summers and Bernanke should all get their sphincter's lubed up to pull a train on each other with Madoff at the caboose position, yelling "Be my Bitch you bung fuckers, be my BITCH".

Then put that on YouTube and let the healing begin.
http://letthemfail.us/archives/3707
Feb 25, 2010 at 9:08 AM | Unregistered CommenterWil Martindale
Wil, nice piece. I had seen the Cohan quote earlier, but you know, sometimes even my eyes just glaze over. I mean, bailout bitches doing nasty deeds? Shockers. I went back and read the bloomberg piece you quote -- the only question I have is whether Goldman, et al. still owned the CDO's they both underwrote and bought protection on from AIG. I'm assuming NO, but the Bloomberg doesn't make this clear.

Ugh. Where's Eric Holder these days? Probably shopping for arugula with Timmy and Michelle.
Feb 25, 2010 at 9:50 AM | Unregistered CommenterJames H
the only question I have is whether Goldman, et al. still owned the CDO's they both underwrote and bought protection on from AIG. I'm assuming NO, but the Bloomberg doesn't make this clear.

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both...they still owned some of them...and they sold off a good portion as well...in the case of SocGen they created the CDOs sold them to SocGen and then bought protection for SocGen from AIG...they did this on more than 1 occasion...acting as a 3rd party to obtain hedge protection for its clients...all from AIG...

---------------

Goldman identified AIG early as being clueless...the mark....see this link...

http://www.huffingtonpost.com/david-fiderer/how-paulsons-people-collu_b_435549.html

Snip:

According to Michael Lewis's reporting in Vanity Fair, the guys at AIGFP were clueless:

Toward the end of 2005, Cassano [the head of AIGFP] promoted Al Frost, then went looking for someone to replace him as the ambassador to Wall Street's subprime-mortgage-bond desks. As a smart quant who understood abstruse securities, Gene Park was a likely candidate. That's when Park decided to examine more closely the loans that A.I.G. F.P. had insured. He suspected Joe Cassano didn't understand what he had done, but even so Park was shocked by the magnitude of the misunderstanding: these piles of consumer loans were now 95 percent U.S. subprime mortgages. Park then conducted a little survey, asking the people around A.I.G. F.P. most directly involved in insuring them how much subprime was in them. He asked Gary Gorton, a Yale professor who had helped build the model Cassano used to price the credit-default swaps. Gorton guessed that the piles were no more than 10 percent subprime. He asked a risk analyst in London, who guessed 20 percent. He asked Al Frost, who had no clue, but then, his job was to sell, not to trade. "None of them knew," says one trader. Which sounds, in retrospect, incredible. But an entire financial system was premised on their not knowing--and paying them for their talent! [Emphasis added.]
Feb 25, 2010 at 12:11 PM | Registered CommenterDailyBail
http://www.vanityfair.com/politics/features/2009/08/aig200908?currentPage=4

there's the VF link talking about cassano and aigfp being clueless...
Feb 25, 2010 at 12:13 PM | Registered CommenterDailyBail
It is all a legalized version of 3 card monty... Good post Wil.
Feb 25, 2010 at 6:15 PM | Unregistered CommenterS. Gompers
I am reposting these 2 new articles here:

Special report: Goldman's promised land: Salt Lake City

http://www.reuters.com/article/2012/03/09/us-usa-goldmansachs-utah-idUSBRE8280XC20120309


Goldman Sachs Divests From Hedge Funds

http://news.hedgefund.net/default.aspx?story=13427


Note: MF Global used London in a similar manner. Also Goldman threatened to relocate their London operations to Spain a year or so ago if they didn't get special tax breaks. (that's when the bankers there were waving money at the protesters below).
Mar 10, 2012 at 6:59 AM | Registered CommenterJohn
So the head of the snake is telling the tail what to do...nothing has changed...nothing. Except for Iceland, Venezuela they said no to the EVIL bankers that WE seem to entertain.
Let us all wake up and do something...I think if we get rid of Monsanto and make them poor then we have made a great step forward.
Oct 15, 2012 at 1:36 PM | Unregistered CommenterMia

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