The Goldman Sachs saga adds another fact of convenience (and potential conflict of interest) to its story, today, as we learn that the new Greek government has appointed former Goldman investment banker Petros Christodoulou to replace Spyros Papanicolaou as President of the Private Banking and Group Treasury at the National Bank of Greece (a/k/a the Greek debt agency).
Greece Replaces Debt Chief as Crisis Batters Markets (Update1)
February 19, 2010, 06:34 AM EST
By Matthew Brown and Maria Petrakis
Feb. 19 (Bloomberg) -- Greece replaced its debt management chief with a former Goldman Sachs Group Inc. investment banker, as declines in the country's bonds roil European markets.
Bloomberg blockquote continued...
Petros Christodoulou, general manager of treasury and global markets at National Bank of Greece SA, the country's biggest lender, will take over from Spyros Papanicolaou as head of the Athens-based Public Debt Management Agency, the country's Finance Ministry said yesterday in an e-mailed statement. Christodoulou worked at various positions in global markets at Credit Suisse Group AG, Goldman Sachs and JPMorgan Chase & Co. before joined the National Bank of Greece in 1998, according to a company filing...
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...Papanicolaou, a former central bank official, was appointed general director of the debt office by the previous New Democracy government in January 2005...
--SNIP--
"I'm not stepping down," Papanicolaou said in a telephone interview yesterday. "It's normal" that a new government changes staff, he said. "It's a long tradition. Whether it's good or not, that's another story," he said...
Click HERE to review the former Goldman exec's bio from Forbes.
Also today, we learn that the narrative is changing concerning the bigger-picture story from the Greek government. From Zero Hedge: "Head Of Greek Debt Office Replaced By Former Goldman Investment Banker."
...But, but, we thought it was all Goldman Sachs' fault for annihilating Greece? Wasn't it all Goldman's fault for fully (not) disclosing the terms of its nearly decade worth of swaps, which apparently were obvious to Risk magazine but oh so incomprehensible to Eurostat. Although it may all be good - it appears that Greece has found a new enemy. Reuters now reports that Greek opposition lawmakers said on Thursday that Germans should pay reparations for their World War Two occupation of Greece before criticising the country over its yawning fiscal deficits.
As Zero Hedge puts it (h/t to them for bringing this latest development in this story to our attention): "And so the tragicomic becomes surreal."
If you'd like to read more on this travesty, I'd suggest clicking on a few links, down below.
Additionally, Simon Johnson and James Kwak over at Baseline Scenario brought this to our attention the other day, and I'd say it's quite pertinent to the situation at-hand, not just in Greece, but everywhere, including right here in the U.S. of A. From interfluidity.com's Steve Randy Waldman...
Can we handle the truth?
Steve Randy Waldman -- Sunday, February 14th, 2010 at 3:25 pm
Both globally and within most nations, the patterns of consumption required to sustain existing social arrangements are inconsistent with the distribution of the fruits of production. Social and economic stability, therefore, depend upon redistribution for which there is no overt legal framework or political consensus. To square this circle, the financial and government sectors have evolved means of hiding redistribution in complex, continually improvised arrangements. Unsurprisingly, massive wealth distributions arranged in this way leave much to be desired, in terms of straight corruption (the financial and government sectors redistribute a lot of wealth to themselves), justice (e.g. wealth is redistributed to those who happen to speculate early in bubbles), and sustainability (the illusion of value behind the claims of those from whom wealth is taken may prove fragile, but "loss realizations" are socially disruptive if they are not carefully paced and allocated).
Neither financial nor political reform can succeed unless we overcome the social and economic contradictions we have relied upon the financial sector to literally paper over. Off-balance-sheet liabilities that hide the impairment of savers' claims, whether in subprime mortgage-backed securities or sovereign entitlement programs are not aberrations. They are essential tools in the arsenal of social stability, the economic equivalent of military "black-ops", things that must be done but must always be denied in order to protect the American (and European, and Chinese) way of life. Unless we define overt arrangements that overcome the contradictions between the organization of production and socially desirable patterns of consumption, each scandal and reform will necessarily be followed by some new technique or trick that delivers, however unjustly or corruptly, the wealth transfers upon which our societies depend. Our choices are to overtly align the fruits of production with patterns of consumption, to continue to employ accounting fictions and magic to pretend away the contradictions, or to undergo some form of collapse.
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For those interested in more background and follow-up on this developing story...
"Bloomberg ('Breaking'): Goldman, Greece 'Fooled' Investors" (2/17/10)
"Germany: 'Goldman broke the spirit of Maastricht Treaty...'" (2/16/10)
"Johnson: Eurozone May Ban Goldman, Humiliate Fed (updated)" (2/15/10)
"First Greece; Now Spanish Intelligence Opens Wall St. Probe" (2/14/10)
"Does Wall Street Now Openly Control U.S. Foreign Policy, Too?" (2/9/10)