Goldman Sachs' Black Magic

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Submitted by Arraya on October 18, 2009 - 2:43pm

http://theautomaticearth.blogspot.com/
I started out saying that Dylan Ratigan had a few stats that you might find useful, the ones that sum up the funds Goldman Sachs has received from Washington, and which rightfully belong to the American taxpayer. Since, as Ratigan states, the funds were leveraged 20-30 fold, and the potential 20-30 fold losses incurred with taxpayer money will also be the taxpayer's liability, the numbers have at least a better than fair-odds chance at understating the total damage, and by a considerable margin at that. Here are Ratigan‘s numbers for what Goldman received from the government, and has used to reap record profits and pay its people billion of dollars in bonuses :

$10 Billion in TARP
$11 Billion from the Fed
$30 Billion from the FDIC
$13 Billion from AIG

Goldman Sachs has repaid -or so we are led to believe- the $10 billion they received through the TARP program. That leaves, according to Ratigan's math, $54 billion in other government and Federal Reserve funds that have not been repaid. And what is that $30 billion from the FDIC anyway? The FDIC doesn't even have $30 billion, while it has trillions of dollars in deposits to supposedly guarantee. It should be obvious to anyone with sufficient breath to fog a mirror that prior to announcing record profits, great dividends for shareholders and billions of bonuses for traders, Goldman Sachs should be forced to repay the taxpayer.

And then some. After all, they made their profits with those taxpayers funds, right? And they would have ceased to exist without those same funds, right? So shouldn't the taxpayer be first in line for a hefty part of those profits? And principal, and interest? Of course they should. It’s what anyone would expect, and demand, if they lend out money. And most of us would be willing to put some measure of pressure behind that too.

Your taxpayer money is lent out through the government you yourself voted into place, which then hired officials like Tim Geithner and Larry Summers to fill crucial posts, people with strong Wall Street connections, whom you never got a chance to vote for or against, to do with your money whatever they please. Which they do.

Mascara and lipstick, or so I’m told, can make most pigs look quite desirable, if they are applied in sufficient quantities.

Still, there comes a time when you should ask yourself: what if the pig is dead?

This is such a time.

Or is there still anyone out there willing to claim that what we are facing is a financial crisis, instead of a political one?

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Submitted by Arraya on October 19, 2009 - 3:59pm.

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This is an insightful and
Submitted by e henry schoenberger on November 4, 2009 - 10:14am.

This is an insightful and accurate snapshot of the reality we find ourselves in while Goldman has infiltrated the US gov and received $50 billion plus of "risk" capital from the various sources delineated - to continue to fabricate innovated financial products that are "too complex to explain!" So Goldman - which the Fed allowed to become a Bank Holding Company in Sept 08, to be able to obtain FDIC funding (under the radar)- is still only an investment bank generating fees from purely financial investments for itself - and not lending money for commercial or consumer loans which is the fundamental mission of banks!

It is self-evident that with 17% unemployment, we remain in terrible financial straits, with millions of our fellow Americans suffering from the utter devastation of financial tragedy. And Congress has still not properly addressed what needs to be done - if the history of the after life of the Great Depression has provided any lessons.

In 1989,when my first book, "Invest for Success: How to Avoid Getting Ripped Off by Real Estate Partnerships, the Stock Market and Diversification was being published, I wrote letters to Sen.C. Dodd; J. Katz, secretary of the SEC; and Sen. George Mitchell warning about encroaching Financial Darwinism considering that Wall Street was no longer engaged in real investment for capital formation - but was focused on financial investment for fees.

In January of this year I began to write my 2nd book - "How We Got Swindled by Wall Street Godfathers, Greed and Financial Darwinism," which I completed several months ago and is now being considered by two publishers who may care enough about the truth to publish a book which starts on the banks of a river whose source is Social Darwinism and runs past all the contributory culprits to the inevitable conclusion that the current, and root cause of our financial holocost (caust) is Financial Darwinism! And we will not stop the current of Financial Darwisim by tinkering with new regulations agreeable to Goldman or the other Financial Darwinists.

Visit my blog at: www.howwegotswindled.blogspot.com for a better understanding, from a successful vetran of 40 years in the securities business who knows and has lived in the underbelly of the real truth.

I fully appreciate the objectivity and accuracy of Arrya's piece - but as bad as Goldman may be the underlying context is systemically rotten and we need public outrage about the root cause to have any chance to correct the continuing rip offs and lack of Congressional courage to correct the substance of the problems by properly rebuilding barriers against greed like Glass-Steagall and the 1956 Bank Holding Company Act. (I feel less isolated after reading Arrya) If Goldman does not immediately return all Gov risk capital then it should be forced to act like a bank and provide loans to create jobs for the economy rather than use leverage that taxpayers have provided to issue derivatives for fees to satisfy their swine-pay syndrome. We must again regulate unbridled unfettered self-interested greed, or we are doomed to remain in the clutches of Trojan Mega Bank Holding Companies.