My new hero Matt Taibbi, is at it again. He won't let up....he's like a dog on bone, like white on rice, like the bad penny that keeps showing up right in the faces of Goldman Sachs and his new article goes directly for the jugular vein. His new expose has to do with the reported 3.44 BILLION second quarter profits with 11.4 BILLION earmarked for compensation for their employees.
At the heart of the article it is not 'what' Goldman Sachs made in record breaking profits, it is 'how' they made it, and this is the story of a combination of Corporate and Government Welfare at it's worse. Make no mistake about it, Goldman Sachs made those record breaking profits solely because of the money that the taxpayers paid out for 'saving the economy from pure and utter destruction.' Lie Number One.
My favorite paragraph in this article includes this one:
Ask yourself this question: has borrowing money gotten any cheaper for you this year? Did someone from the government walk up to you after you foreclosed on your house or missed payments on your charge card and, as a favor, just because you’re so cool, jack your credit score back up to the 99th percentile and invite you to start all over again? Because that’s what happened to these assholes. They made every bad move you can think of and they not only got a clean credit slate but a vitually ceiling-free spending limit.
And that is the bottom line. They not only screwed AIG to the wall (and anyone else that got in the way of their razor sharp cleats they were wearing as they walked all over their competitors) and used that company as a back door to gain extra 'revenue' but I think the most disturbing fact of all is exactly how favored Goldman Sachs has been by their friends at the Federal Reserve and Ben Bernanke. This is the one area that I keep coming back to because of the complete lack of public disclosure:
- The Fed Programs. By converting to a bank holding company, Goldman also became eligible for a whole galaxy of new bailout programs administered through the federal reserve like the Term Asset-Backed Securities Loan Facility (TALF); it also became eligible to borrow cheap money from the Fed’s discount window. There is so much to cover here that it would take forever to get to all of it, but the key number to remember here is $2.2 trillion (not billion, trillion). That’s how much the Fed has lent out in assistance since this crisis started and we have no idea how much of it went to Goldman or any other firm, thanks to Ben Bernanke, who refuses to disclose this information. But you can bet that Goldman has taken full advantage of all the various programs designed to relieve the banks of the worthless crap assets they acquired while they were playing roulette the past ten years or so. We just have no idea how much crap they unloaded on the Fed, or how much they borrowed. Would you really bet that it wasn’t much?
In addition, Matt points out the connection between the bailouts, and why and just how this allowed Goldman Sachs to clean up like never before:
Because so much money was lent out under TARP, the underwriters on Wall Street made a massive bonanza on all the new bank stock. As noted above, Goldman’s equity underwriting department hauled in $736 million this quarter. Does this happen without the bailouts? No. Do the bailouts happen if banks like Goldman hadn’t blown up the universe in the first place? No. You do the math; this is another subsidy.
Matt had done another excellent article here, and I'm not going to post much more of it. I suggest you take the time to read it. It is located here:
http://trueslant.com/...
But the final paragraph sums up what I have been saying for a long time. Goldman Sachs is being protected. They are being protected because they has such deep ties in with the Federal Reserve who isn't coming clean on this 'dubious' relationship. And that, along with Timothy Geithner's ties to Goldman Sachs and the Federal Reserve stinks to high heaven.
Taken altogether, what all of this means is that Goldman’s profit announcement is a giant "fuck you" to the rest of the country. It is a statement of supreme privilege, an announcement that it feels no shame in taking subsidies and funneling them directly into their pockets, and moreover feels no fear of any public response. It knows that it’s untouchable and it’s not going to change its behavior for anyone. And it doesn’t matter who knows it.
To add a little snark to what is going down with Goldman Sachs I read this today:
Every so often, Andy Borowitz nails it:
In what some on Wall Street are calling the biggest blockbuster deal in the history of the financial sector, Goldman Sachs confirmed today that it was in talks to acquire the U.S. Department of the Treasury.
According to Goldman spokesperson Jonathan Hestron, the merger between Goldman and the Treasury Department is "a good fit" because "they’re in the business of printing money and so are we."...
Mr. Hestron said the only challenge facing Goldman in completing the merger "is trying to figure out which parts of the Treasury Dept. we don’t already own."
The sad part about this, is that it really isn't that far from the truth. I've gotten to that point where I look at it this way:
The foxes are no longer in the hen house.....the hens have all been eaten and the foxes have taken full possession of the hen house.
Anyone that doesn't really see that a dangerous Dictatorship has been in play between the Federal Reserve, the Treasury and Goldman Sachs just has their head in the sand.
Read Matt's article. He's just so great at what he does, cutting through the 'bullshit' with a mental hack saw that won't quit.
If anyone has already posted this, I'll be happy to take it down.
Thanks as always, for listening and for your comments.
UPDATE: Many thanks to those of you that recommended this diary. Matt Tiabbi is a treasure to us all. He deserves great kudo's for staying on top of what has really gone down these past few years during the financial meltdown, and what the hell happened to all our money. My hope is that he continues and goes as far as it can take him to shine the light on the dark corners of the relationship between Goldman Sachs, the Treasurer and the Federal Reserve. That is a partnership that needs complete exposure in the light of day for our nation.
UPDATE 2: polar bear was kind enough to include information on another great piece by Taibbi - you can find it right here: Entitled: Time To Enshrine Hank Paulson as National Hero - its hysterical.
http://trueslant.com/...