Glenn Greenwald On Goldman Sachs Corruption And Washington Capture (Do NOT Miss This)
Until I have commentary and links completed, just read Greenwald's newest piece on the billion-dollar truth, Wasington capture, and corruption at Goldman Sachs.
Below is an excerpt:
Several commenters add a crucial point: back in September, the Federal Reserve allowed Goldman (and a few other surviving institutions) to convert from an investment bank into a bank holding company. The Wall St. Journal claimed at the time that the move meant the firm would "come under the close supervision of national bank regulators, subjecting them to new capital requirements, additional oversight, and far less profitability than they have historically enjoyed."
A mere nine months later, Goldman boasts of "blowout profits." So much for "less profitability." As for allegedly greater regulations and capital restrictions, they freely admitted from the start: "'We don't believe we'll have to get out of any businesses,' says Lucas van Praag, a Goldman spokesman. Adds Morgan Stanley's Mark Lake, 'There will not be much in terms of divestitures'."
But what the conversion did allow was access to lending from the Federal Reserve. Since then, the Fed has increased its balance sheet by $2 trillion while steadfastly refusing to disclose the beneficiaries of that credit. Thus, even aside from the bailout money it directly received and the billions in bailout money which it indirectly received (through AIG), Goldman has had access to massive amounts of Fed lending in order to fuel its bulging profits. That unimaginably enormous (though entirely secret) lending is, in part, what is behind the Ron Paul-sponsored bill to audit the Fed -- a bill that is now co-sponsored by a majority of House members from across the political spectrum (progressive, conservative and everything in between), yet which continues to be blocked by Congressional leaders from receiving a floor vote.
Jul 13, 2009 at 2:21 PM
Reader Comments (3)
http://www.nytimes.com/2009/07/13/business/13goldman.html?hp
Nassim Taleb speaking at The Big Picture conference points out how taxpayers paid for the losses at Citi AND subsidized Bob Rubin's bonuses -- which he earned by helping set Citi up to take those same losses. Taleb also brings up two of my favorite topics of conversation: pitchforks and clawback. (OK, I imagined the pitchforks.) But why SHOULDN'T we claw back Bob Rubin's bonuses, Taleb suggests? Good question, Mr. Taleb. I'm sure we could think of other candidates for clawback, too.
http://www.ritholtz.com/blog/2009/07/nassim-taleb-at-tbp-conference/
Blankfein: Harvard AB Winthrop House '75
Paulson: Harvard MBA '70
Having done Russia (http://www.thenation.com/doc/19980601/wedel), the Harvard Boys are now on to America.