Dear Sir,
It has come to our attention that you have been offered a role in a porn film for $10 million. We urge you to reject it.
Princely Pay and Elite Status
Goldman Sachs is prepared to pay you much better than porn, and as a partner, your position will be much more prestigious than the Duke of York's role as a representative for international trade and investment. We twist country treasurers and central bankers around our little fingers. Politicians are at our beck and call. We even pay a lower tax rate than your grandmother.
As a royal, you'll regain your rightful status. We've managed to pervert capitalism and have even infiltrated our own regulators and government. If you join us, your elite status will be assured in perpetuity.
Department of Jesters
Our mortgage unit, Goldman Sachs Alternative Mortgage Products (GSAMP) was nicknamed "Garbage Sold at Mythical Prices" by financial professionals. In 2007, Ohio barred California-based New Century mortgage lenders from doing business after despicable practices. A complaint of alleged fraud against us detailed our close relationships with imploding mortgage lenders: Countrywide, New Century, and Fremont. They were bailed out, bankrupt, and/or sued.
The complaint showed "an accelerating meltdown for these subprime lenders, and despite known serious loan problems, [we] continued to securitize the loans and sell them in packages of residential mortgage backed securities." Rotten deals like GSAMP-2006 S3; (a $494 million deal from April 2006) were created and distributed by us and repackaged in other deals.
We paid a record $550 million to settle SEC fraud charges related to one subprime collateralized debt obligation (CDO) called Abacus. But that was chump change to what we would have paid if our GSAMP subsidiary and our own securitization department had been investigated.
Congress and TARP investigators uncovered further damaging evidence. Senator Carl Levin (D-MI), Chairman of a senate investigative panel, issued a memo stating that we at Goldman Sachs "magnified the impact of toxic mortgages." For example, The Wall Street Journal reviewed data showing that a $38 million subprime-mortgage bond created in June 2006 was referenced in more than 30 debt pools (via derivatives) causing around $280 million in losses to investors by 2008. In other words, we kept repackaging, reselling or buying credit default protection on losers, thus multiplying losses to others many times over on the same trash.
Were we seriously investigated? Were we indicted? Of course we were not. Were any criminal charges brought? Of course they were not.
We dodged questions by claiming we lost money. But that's the nature of control fraud. Parasites earn high pay while eating their host. That's why we needed taxpayer subsidies like the bailout of our credit default swap contracts with AIG.
William K. Black, a renowned fraud investigator, explains control fraud in his book, The Best Way to Rob A Bank is To Own One. His team had over 1,000 felony convictions of major financial figures after financial fraud in Savings & Loans resulted in a financial crisis a couple of decades ago. Our current crisis was 70 times larger after we neutered enforcement. Today our Department of Justice ("DOJ") is our private Department of Jesters.
Mutual Overexposure
You've been overexposed. We completely understand that feeling! We felt the same way when we bought credit default protection from AIG on rotten CDOs, some of which we manufactured ourselves for ourselves and for foreign banks. We nearly sunk AIG, but U.S. taxpayers were forced to bail it out.
We nearly went under, too! Washington, the Federal Reserve and Treasury are all in our pocket, so they bailed out AIG's credit default swaps on which we got a big payday. They paid our friends at foreign banks for which we originated rotten CDOs; thank goodness, or they might have sued us! Our friends in the U.S. government paid 100 cents on the dollar when other bond insurers were settling the same deals for as low as 10 cents on the dollar. We'll stack our taxpayer subsidies against a royal's any day.
Oh, and you'll love this. A German bank sued us for securities fraud over Davis Square VI, one of the CDOs we originated, against which AIG sold protection. Our Department of Jesters is great at looking the other way. No criminal indictments for us!
Divine Right and God's Work
The Shah of Iran, the son of a mere commoner, claimed he ruled by "divine right." That didn't end well for him. We've got spin that sounds better. We've done deal after deal like the previously mentioned reprehensible trash for which we've been unindicted. We call this doing "God's work." It's working out great for us.
Our Apologists Will Lie to Your Grandmother, the Queen
In November 2008, your grandmother asked why no one foresaw the credit crunch. Yet many financial professionals have well documented track records that show they did. Moreover, they warned that high leverage -- combined with securities that were a classic situation for fraud -- begged disaster.
We handle the media better than you royals. Our media shills say "greed and venality do not make a criminal case." That sentence is true. But the issue is fraud, which is cause for a criminal case. You don't think that we used derivatives to reference the same dodgy $38 million bond over 30 times by accident, do you? Securities experts called us out on this B.S. in real time. That Tavakoli woman from Chicago wrote an entire book about CDO malfeasance in 2003. But we took it as a playbook and escalated, and our Department of Jesters is letting us get away with it!
British academics who are useful idiots wrote the Queen that a "psychology of denial" was responsible for intentional behavior. We'd be most grateful if you could keep your grandmother occupied with your shenanigans so she doesn't ask any more questions.
The Right Stuff
After seeing this snippet in the Daily Mail, we're 100 percent certain you have the right stuff for a long and extremely lucrative career with Goldman Sachs.:
A witness at the casino said: "[Harry] was playing craps with his friends. They were wasted. He was calling other punters at the table 'muppets' and he joked to the dealer that he would kick his head in if he didn't win."
We love your jokes! We only ask for a little more discretion. No, we don't mean about the nude photos; we don't care about that. But these days when we call our clients "muppets," there are no witnesses.
We look forward to your answer, and no matter what you decide, let it never be said that you were uninvited by the unindicted.
Yours sincerely,
The Unindicted Goldman Sachs
The New Robber Barons, provides more details on the causes and culprits of the financial crisis. It is only available as an e-book. You must own a Kindle or have installed the Kindle app for PC, Mac, or iPad to download it. You can find it at Amazon US here, at Amazon UK here, Amazon France here, at Amazon Germany here, at Amazon Italy here, or at Amazon Spain here.
Endnote: Jane Wollman Rusoff interviewed me for Research Magazine's May cover story, "Finding the Culprits of the Crisis," about the deep monetary connections of Wall Street and Washington and the corrosive effect it has had on the economy and the Republic.
Editor's Note: This post is a work of satire.
Whose scandals were legendary tales
He went into banking
They all got a spanking
And soon they all wound up in jails.
Yeah, wishful thinking.
The Dutch prince (who sadly is now in a coma after being hit by an avalanche) has studied both aeronautical engineering at the Technical University in Delft as well as a Masters in Economics at both Rotterdam and Berkeley. He also has his MBA from Insead in Paris.
(Don't Chelsea Clinton and her husband work at GS now? I believe her husband was there first.)
right on the mark. Eric Holder and Lloyd Blankfein should get free copies of "The
New Robber Barrons". Priceless.
The general public's somewhat muted reaction to the LIBOR scandal is a testament to this. Alas, until the Banker Mystique (which would make a great book title, BTW) is deconstructed in the public imagination this condition will persist.