In what can only be called as the most insightful, comprehensive and truthful article of the past decade, Matt Taibbi in excruciating detail gives a report on how Goldman Sachs and the other Wizards of Finance caused the single greatest financial catastrophe in our nation's history.
The article is long but well worth the read, especially if you want to understand the way in which financial securities fraud has blown a hole in our very own version of the Titanic and is now running rampart in our key financial sectors.
Time and time again Taibbi explains how Goldman Sachs 'raped the taxpayers and raped their own clients.' It is an amazing piece of journalism and I applaud Taibbi for his courage and the time he spent researching this highly complex matter.
The first part of the article on Goldman Sach's part in 'taking down AIG' is like watching the movie 'Alien' as 'it' destroys one person after another that dares gets in it's path:
Still, the trick for Goldman was: how to collect the insurance money. As AIG headed into a tailspin that fateful summer of 2008, it looked like the beleaguered firm wasn't going to have the money to pay off the bogus insurance. So Goldman and other banks began demanding that AIG provide them with cash collateral. In the 15 months leading up to the collapse of AIG, Goldman received $5.9 billion in collateral. Société Générale, a bank holding lots of mortgage-backed crap originally underwritten by Goldman, received $5.5 billion. These collateral demands squeezing AIG from two sides were the "Swoop and Squat" that ultimately crashed the firm. "It put the company into a liquidity crisis," says Eric Dinallo, who was intimately involved in the AIG bailout as head of the New York State Insurance Department. It was a brilliant move. When a company like AIG is about to die, it isn't supposed to hand over big hunks of assets to a single creditor like Goldman; it's supposed to equitably distribute whatever assets it has left among all its creditors. Had AIG gone bankrupt, Goldman would have likely lost much of the $5.9 billion that it pocketed as collateral. "Any bankruptcy court that saw those collateral payments would have declined that transaction as a fraudulent conveyance," says Barry Ritholtz, the author of Bailout Nation. Instead, Goldman and the other counterparties got their money out in advance — putting a torch to what was left of AIG. Fans of the movie Goodfellas will recall Henry Hill and Tommy DeVito taking the same approach to the Bamboo Lounge nightclub they'd been gouging. Roll the Ray Liotta narration: "Finally, when there's nothing left, when you can't borrow another buck . . . you bust the joint out. You light a match."
And why not? After all, according to the terms of the bailout deal struck when AIG was taken over by the state in September 2008, Goldman was paid 100 cents on the dollar on an additional $12.9 billion it was owed by AIG — again, money it almost certainly would not have seen a fraction of had AIG proceeded to a normal bankruptcy. Along with the collateral it pocketed, that's $19 billion in pure cash that Goldman would not have "earned" without massive state intervention. How's that $13.4 billion in 2009 profits looking now? And that doesn't even include the direct bailouts of Goldman Sachs and other big banks, which began in earnest after the collapse of AIG.
Taibbi goes on to explain not just 'one scam,' but a long horrendous series of scams that went on during the 'Great Heist of 2008' and of course are still going on as Wall Street heads for the cliff off of the top of Mt. Everest:
To help them screw their own clients, the major investment banks employ high-speed computer programs that can glimpse orders from investors before the deals are processed and then make trades on behalf of the banks at speeds of fractions of a second. None of them will admit it, but everybody knows what this computerized trading — known as "flash trading" — really is. "Flash trading is nothing more than computerized front-running," says the prominent hedge-fund manager. The SEC voted to ban flash trading in September, but five months later it has yet to issue a regulation to put a stop to the practice.
this is a better Link, thanks to SuperBowl:
Got 'that' last part? The SEC voted to 'ban flash trading in September, but five months later it has yet to issue a regulation to put a stop to the practice.
Gee, it must be nice to have 'friends in high places like the SEC' protecting Americans from these crooks and liars who are skimming the profits of of the bailout 'money' via the taxpayers while millions of people are not out of work, foreclosed up in their homes having had their own credit ruined and watching as these same 'Banks and Investment houses are refusing to lend money' to help our country get back on it's feet again.
Americans are committing suicide, they are the 'silent zombies' who have been emotionally, physically and spiritually ruined by what can only be called, 'socially acceptable economic terrorism.'
The body count is still rising. For months on end, marked by bankruptcies, foreclosures, evictions, and layoffs, the economic meltdown has taken a heavy toll on Americans. In response, a range of extreme acts including suicide, self-inflicted injury, murder, and arson have hit the local news. By October 2008, an analysis of press reports nationwide indicated that an epidemic of tragedies spurred by the financial crisis had already spread from Pasadena, California, to Taunton, Massachusetts, from Roseville, Minnesota, to Ocala, Florida.
At least 33 people chose to commit suicide in national parks in 2008. And there seemed to be an economic component to at least some of the cases. For example, an Associated Press report noted that a "49-year-old builder blamed the economy in a note he left for his ex-wife and attorney before killing himself at the edge of the woods at Georgia's Kennesaw Mountain National Battlefield Park." Similarly, in October, Bruce J. Colburn, a "[f]reshly unemployed, former business executive" from Reading, Pennsylvania, traveled to Montana's scenic Glacier National Park where "he shot himself in the chest with a handgun, according to park officials."
Across the United States, people have been reacting to dire circumstances with extreme acts, including murder, suicide and suicide attempts, self-inflicted injury, bank robberies, flights from the law, and arson, as well as resistance to eviction and armed self-defense. And yet, while various bailout schemes have been introduced and implemented for banks and giant corporations, no significant plans have been outlined or introduced into public debate, let alone implemented by Washington, to take strong measures to combat the dire circumstances affecting ordinary Americans. There has been next to no talk of debt or mortgage forgiveness, or of an enhanced and massively bulked-up version of the Nixonian guaranteed income plan (which would pay stipends to the neediest), or of buying up and handing over the glut of homes on the market, with adequate fix-up funds, to the homeless, or of any significant gesture toward even the most modest redistributions of wealth. Until then, for many, hope will be nothing but a slogan, the body count will rise, and Americans will undoubtedly continue going to extremes.
What kind of American business person could possibly read the above stories of 'what they have wrought' in our nation, and not understand this:
If YOU or the company you are or currently are responsible for 'short selling' Americans and putting them out of their homes and their jobs, and what has amounted to the Eroning of our country the Katrinaing of America, then you have no business calling yourself a loyal friend of this nation or a patriotic American.
Destroying lives, no matter how far removed, is still destroying lives.
It is a solely because of the United States people that Wall Street even survived what 'they caused in the first place' to bring our nation's to its knees, and if these crooks and liars think that they are any different from any other home grown Domestic terrorists, they are not. They have and are reeking havoc in people's lives all over our country and I would challenge anyone to please, tell me how this is 'acceptable business as usual.'
No One Saw It Coming?
Bernanke Knew The Financial Crisis Was Coming
After hearing Bernanke’s AEA address three years ago, I wrote in this in the February 2007 issue of my investment newsletter, Forecasts and Strategies:
"Anyone reading between the lines could understand that Bernanke is worried about a financial storm ahead. In his speech, Bernanke used the terms ‘crisis,’ ‘panic,’ ‘threats,’ ’stress’ and similar words at least 36 times.
"Bernanke said the Fed has set up a ‘crisis center’ to handle potential global financial problems – to anticipate them and deal with them if they occur. What are the possibilities?
* A dollar crisis, like the one Paul Volcker suggested would happen in the next few years.
* A non-dollar currency crisis in Asia, Europe or Latin America (shades of the 1997 Asian currency crisis).
* A housing crash and foreclosure crisis.
* A major terrorist attack on a key financial center, such as New York, London or Tokyo.
* A sharp rise in inflation.
"I doubt the Fed will cut rates again unless there is an imminent financial crisis of some sort that will require more liquidity and lower rates."
Just one year later, of course, Bernanke’s fears became reality when the financial panic of 2008 forced the Fed to cut interest rates to nearly zero and inject billions of new money into the economy to prop up the financial system.
Bernanke has since admitted that the crisis was "the worst in modern history."
So what is Bernanke saying now?
Blowing Bubbles... Blowing Policy... And Blowing Smoke
Not only were people warning about this catastrophe for years and years before it actually happened, but even now our Congressional Whores and the SEC sits idly by taking their own sweet time about 'banning flash trading in September,' but has yet to issue a regulation to put a stop to the practice.
Don't let anyone tell you 'no one saw it coming,' because not only did they see it coming, they were 'making a killing' even before it happened and are still making a killing:
WISN-TV uncovered a host of similar tragedies including:* A 21-year-old Milwaukee man who shot himself in the face after "he ran out of unemployment [insurance]." * A 43-year-old West Allis man who hanged himself in his basement with a belt. "[T]he mortgage payments are behind," his girlfriend told the police. "There are astronomical medical bills." * A 40-year-old Milwaukee woman who overdosed after having "financial problems." * A 24-year-old Milwaukee man, "fired from his job three weeks before," who suffocated himself with Saran Wrap. * And a 38-year-old Milwaukee man who shot himself in the head. He'd lost his job six weeks earlier.
Thank you Matt Taibbi for your courage and fortitude, for never letting these 'bastards' think that they are getting away with it, because I for one hope that none of them ever gets another decent night's sleep in their miserable worthless lives, as America suffers from their 'endless gambling casino's in the sky' which will end up taking us all off the cliff soon enough.