Connect the dots: Goldman Sachs made $3.44 billion in profit this past quarter, while the U.S deficit topped $1 trillion for the first time in the nation's history and appeared to be headed toward doubling that figure before the budget year is out. Since most of the increase in the federal deficit is due to bailing out the banks and salvaging the greater economy they helped destroy, why is the top investment bank doing so well?
Well, because that was the plan, as devised by Bush Treasury Secretary Henry Paulson, a former CEO of Goldman Sachs. Remember that Lehman Brothers, Goldman's competitor, was allowed to go bankrupt. The Paulson crowd wouldn't let Lehman change its status to that of a bank holding company and thus qualify for federal funds; soon afterward, Goldman was granted just such a deal, worth a quick $10 billion. Much is now made of Goldman paying back part of its bailout money, but forgotten is the $12.9 billion that Goldman got as its cut of the $180 billion AIG payoff. That is money that will not be paid back.
Goldman is considered a very smart bank because it was early in reducing its exposure to the mortgage derivatives that in large part caused the meltdown. However, it had done much to expand the market and continued to sell suspect derivatives to unwary buyers as sound investments, even as Goldman divested. The firm still holds $1.85 billion in real estate and lost $499 million in the previous quarter on bad loans, but made up for it by playing the vulture role and issuing high-interest debt to governments and companies made desperate by the recession that the financial gimmicks of the banks brought on in the first place.
And Goldman was not just another bank. Before Paulson ran the Treasury Department, another former Goldman head, Robert Rubin, pushed through the repeal of the Glass-Steagall controls on banking activity. While some now play down the significance of this radical deregulation, not so Goldman Sachs CEO Lloyd C. Blankfein -- at least not back in June 2007, when the markets were still doing well. "If you take an historical perspective," Blankfein told the New York Times by way of explaining his company's spectacular success at the time, "we've come full circle, because that is exactly what the Rothschilds or J.P. Morgan the banker were doing in their heyday. What caused an aberration was the Glass-Steagall Act."
That 1933 act was repealed in a law signed by President Bill Clinton at Rubin's urging, and in the following eight years Goldman Sachs recorded a 265 percent growth in its balance sheet. "Back then," the Wall Street Journal reports, "Goldman was churning out profits by trading credit derivatives, speculating on currencies and oil and placing big bets [on] the roaring stock market."
Big bets made in a casino designed by Goldman, which now makes money off loans to the victims. High on the list of victims are state governments that have to turn to Goldman for money because the federal government that saved the banks won't do the same for the states, which have watched their tax bases shrink because of the banking meltdown. As the WSJ noted, "issuing debt to ailing governments" is now a growth industry for Goldman.
Why didn't the federal government just lend the money to the states? Why was all the money thrown at Wall Street instead of needy homeowners or struggling school systems? Because the federal government works for Goldman and not for us. Indeed, when it comes to the banking bailout, Goldman Sachs is the government.
So much so that last fall the New York Times ran a story, headlined "The Guys From 'Government Sachs,' " that stated: "Goldman's presence in the [Treasury] department and around the federal response to the financial bailout is so ubiquitous that other bankers and competitors have given the star-studded firm a new nickname: Government Sachs."
One of those stars was Stephen Friedman, another former head of Goldman. Friedman was both a director of the company and chairman of the New York Federal Reserve Bank when he helped work out the details of the Wall Street bailout. The president of the N.Y. Fed at the time, Timothy Geithner, now secretary of the treasury, requested a conflict-of-interest waiver that allowed Friedman to buy more Goldman Sachs stock, and Friedman ended up with 98,600 shares. At market close on Tuesday that was worth $14,756,476. That's nothing -- three years ago, the 50 top Goldman execs made $20 million each, and this year could be better.
They're not hurting.
ON-BALANCE-SHEET versus Hidden OFF-BALANCE-SHEET!
It turns out their profit is 0.007% of their $48 Trillion in Toxic Derivatives and at that rate it will take
only 3,359 years to cover their Toxic Derivatives (worst case admittedly)!
Best case is they start making half a $Trillion profit a year and then maybe in a 100 years they could do it!
he knows these facts about Goldman and appointing Summers
and Geithner makes Obama a party to Goldman.
FDR would have eviscerated Goldman or nationalized them. Period.
And let's understand that Obama and all the presidents before and after him are nothing but CEO's who work for these corporations and when they leave, they leave with a big package. It's shame to say it but it is what it is. The American people refuse to come together to stand for the rights of the people because we are so divided by nonsense.
Just like parents raising their kids, they have us fooled folks, the Democrats and Republicans are really one party. They play good cop and bad cop rule with our lives and we fall for it. Not to mention that some are bigots but when in history did we ever trust lawyers. And that seems to be the only people running this country. China has highly technologically advanced people running the show and moving them into the 22nd Century and we have lawyers. Vultures eat the caucus and all.
We all know very well that there is little real physical money involved in any of this, and if any one of these companies were forced to produce it, they would simply be deemed insolvent. I know that this is how it works, at several major media companies that I have actually seen the books of. It's baked by design... not by intent.
So all this seems to me that it is simply making ones self look much larger then they are to warn of predators, or in this case, keep the credit flow coming in from China and other places.
Essentially what we have it seems is a "person" with an wicked spending habit that far out weighs their income, trying to make everyone think all is good, inevitably kicking the can down the road, in a round about game of music chairs for the next CEO to get stuck without a chair.
One day someone is going to stop the music... and after this debacle, I assume it will be the lenders, who have to now be completely aware that it's all a sham, and they are the fall guys... That is the US taxpayers and the those stuck buying toxic assets that will never reap returns.
a) loan book records, detail showing where profit left firm
b) cash distributions (total dividends extracted from balance sheet annually prior to claiming they were under capitalized, and since that time)
c) number of subsidiary firms receiving cash from bank balance sheet, that may be paid back later, as a loan –
d) record of funds routed offshore per quarter, and back into company accounts the next quarter where the financial firm might be claiming a profit from trading, but is simply routing funds back to their firm, which were parked offshore during the crisis. Rotations going back 10 years can measure increased activity in moving money offshore; outside of U.S. accounts.
e) executive payout and bonus payment records, for prior 10 years to see if firms ever paid out that much money in any year prior to 2008 or in past down economic cycles.
f) shareholder registry to cross reference with Fed Board of Governors and Secretary of Treasury officers or policy makers, to see if regulators approving actions of Treasury, or acting to write new regulatory law, are also shareholders of banks benefiting from pass through operations (via past or present dividends/cash distributions)
http://freepdfhost.com/form_page.php?id=3205
Sample petition above. Print on legal size paper and fax.
It's so easy to criticize when you're not burdened with the facts.
What was that about facts again?
Goldman Sachs would have lost
the "bets" they made. By seeing that
the banks were saved, those bets were
paid to Goldman Sachs.
TARP money that was paid to those saved banks
went to Goldman Sachs.
There ought to be a law......
It seems to me that George W. Bush's administration should be investigated in every aspect of its performance not only at the international level but also for its domestic agenda. And if the results of such investigations spill over to the present administration that would be as it should be.
It is incredible to read that our federal government "works for Goldman and not for us;"
That " bankers and competitors have given the star-studded firm a new nickname: Government Sachs;"
That the secretary of treasury Timothy Geithner who was president of the N.Y. Fed before Obama "requested a conflict-of-interest waiver" allowing former head of the Goldman Stephen Friedman "to buy more Goldman Sachs stock" resulting in his acquiring as many as 98,600 shares!!
And last but not the least that Bush's last treasury secretary Henry Paulson who had also once served as Golden Sacks' CEO to allow Lehman Brothers, Golden Sack's competitor, to go bankrupt but in contrast make it possible for Golden Sacks to "qualify for federal funds" and the resulting billions of dollars advantages.
We should never forget that our government should be a “government of the people, by the people and for the people.” That is the whole of our society and not a small privileged segment of it.
Semper fi
And if the results of such investigations spill over to the present administration that would be as it should be."