Skip to main content

UPDATE: (h/t Zero Hedge) From the Telegraph, in Great Britain...

Greece loses EU voting power in blow to sovereignty
By Ambrose Evans-Pritchard, International Business Editor
Published: 7:56PM GMT 16 Feb 2010

(The European Union has shown its righteous wrath by stripping Greece of its vote at a crucial meeting next month, the worst humiliation ever suffered by an EU member state.)

The council of EU finance ministers said Athens must comply with austerity demands by March 16 or lose control over its own tax and spend policies altogether. It if fails to do so, the EU will itself impose cuts under the draconian Article 126.9 of the Lisbon Treaty in what would amount to economic suzerainty.

While the symbolic move to suspend Greece of its voting rights at one meeting makes no practical difference, it marks a constitutional watershed and represents a crushing loss of sovereignty...

(end of update; see below the "fold" for original diary content)

Original Diary Title: "Bloomberg ('Breaking'): Goldman, Greece 'Fooled' Investors"

When does an investor who's "fooled" become an investor who's "defrauded?" We may soon find out. It would appear that Bloomberg Media's lawyers must've had a hand in the phrasing of this headline atop a breaking story, tonight: "Goldman Sachs, Greece Didn't Disclose Swap, Investors `Fooled'."

(Hmmm...."fooled." What does it state in Roget's when you lookup "fraud?" "Defrauded?" "Cheated?" "Scammed?")

Well, once you read the story, the bottom line is that if there's discovery, and source data (i.e.:  "the smoking gun") reveals the parties were aware of the deception at the time it occurred, then it is documentation of fraud.

But, the story also tells us that, on Monday, Greek Finance Minister George Papaconstantinou now claims that this was all "legal" when it occurred?

When did defrauding investors become illegal? Yesterday?

You must be kidding me, right?

Tonight, Bloomberg tells us how Goldman Sachs Group, Inc. managed $15 billion in bond sales for the Greek government after the New York-based firm engaged in a currency swap in 2002 which enabled that sovereign state to hide the depth of its deficit(s).

Goldman Sachs, Greece Didn't Disclose Swap, Investors `Fooled'
By Elisa Martinuzzi

Feb. 17 (Bloomberg) --

...No mention was made of the swap in sales documents for the securities in at least six of the 10 sales the bank arranged for Greece since the transaction, according to a review of the prospectuses by Bloomberg. The New York-based firm helped Greece raise $1 billion of off-balance-sheet funding in 2002 through the swap, which European Union regulators said they knew nothing about until recent days.

Failing to disclose the swap may have allowed Goldman, a co-lead manager on many of the sales, other underwriters and Greece to get a better price for the securities, said Bill Blain, co-head of fixed income at Matrix Corporate Capital LLP, a London-based broker and fund manager.

"The price of bonds should reflect the reality of Greece's finances," Blain said. "If a bank was selling them to investors on the basis of publicly available information, and they were aware that information was incorrect, then investors have been fooled..."

The article continues on to tell us that, according to Bloomberg's research, Goldman Sachs earned roughly one billion dollars underwriting Greek bonds since 2002. Reiterating: out of the 10 bond sales that Goldman either managed or co-managed that have occurred since then, prospectuses for six of them (the other four couldn't be sourced by Bloomberg) contained no mention of the 2002 swaps.

Matrix Corporate Capital's Blain is also quoted in the fairly lengthy article's closing paragraph stating what has become pretty obvious even to folks whose I.Q. might be lower than the outdoor temperature on Wall Street this month...

"Investment banks are guilty of being part of a wider collusion that fudged the numbers to make the euro look like a working currency union," said Matrix's Blain. "The bottom line is foreign exchange and bond investors bought something sellers knew not to be the case."

The Bloomberg article also tells us that the European Union's statistics office, Eurostat, has "...ordered Greece to hand over information on the swaps transactions by the end of this week in an investigation that may extend to other EU countries."

(As a noted in another diary over the past week, Spain is among the "other EU countries" rumored to be a participant in the investigation.)

Does anyone on the planet really think the formal discovery of a "smoking gun memo" is even necessary at this point? It may be a critical "formality," but it is really just that--a formality--now isn't it?

I mean, after all is said and done, that would mean that we'd have to take a closer look at Bush Treasury Secretary Hank Paulson's knowledge of the matter, since much of this occurred on his watch when he was CEO of Goldman Sachs.

#            #            #

Here's some follow-up reading, complete with numerous other links (i.e.: NY Times, El Pais, etc.) on the matter, for those tracking this travesty:

"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)

Originally posted to on Tue Feb 16, 2010 at 10:37 PM PST.

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Meteor Blades, JekyllnHyde, Mimikatz, Donna Z, DeminNewJ, tmo, northsylvania, From the choir, Mogolori, hannah, sny, eugene, ogre, Rayne, slinkerwink, whataboutbob, mattman, emal, greenbird, tommurphy, musicalhair, Shockwave, Pescadero Bill, Wintermute, Andrew C White, liz, lysias, LEP, mslat27, Mnemosyne, TX Unmuzzled, Pompatus, gjohnsit, mataliandy, zeitshabba, Creosote, sardonyx, bigforkgirl, agoldnyc, nlacey, srbaxley, concernedamerican, Zinman, conchita, wonkydonkey, djMikulec, boadicea, cosmic debris, Aquarius40, roses, JuliaAnn, kanuk, oceanspray, jalbert, ctsteve, enough already, splashy, Cedwyn, Melanchthon, danthrax, jlynne, CitizenOfEarth, brainwave, gmb, alivingston, jaywillie, jsquared, JimWilson, HeyMikey, laughingriver, Samulayo, defluxion10, nika7k, puffin6092, RebeccaG, lcrp, Schup, Pohjola, inclusiveheart, barbwires, dkmich, Curt Matlock, Kitsap River, mungley, Redbug, Ameranth, avahome, bibble, mm201, environmentalist, Gowrie Gal, Brecht, greenskeeper, joanneleon, Massman, ExStr8, tovan, maybeeso in michigan, bloomer 101, sandblaster, Qui Tacet Consentire Videtur, marina, radarlady, 3goldens, greycat, disrael, PBen, Paul Goodman, Militarytracy, Flint, Melody Townsel, run around, kitchen sink think tank, frandor55, ajsuited, eightlivesleft, Brooke In Seattle, Laurence Lewis, ratzo, Mz Kleen, Annalize5, Chaoslillith, cfk, majcmb1, Pam from Calif, Sun Tzu, EdlinUser, where4art, jcitybone, Kayakbiker, blue jersey mom, jane123, Sandino, Arctor, WisePiper, Pluto, Rogneid, AngieV, the fan man, Ekaterin, Alan Arizona, Paddy999, kathny, jay23, Mother Mags, elliott, Showman, Keone Michaels, vigilant meerkat, Clytemnestra, BlueInARedState, Malachite, Treebeard, ActivistGuy, Gorette, Yellow Canary, cookseytalbott, Hear Our Voices, buhdydharma, Knighterrant, arlene, fou, greenearth, Rat Lady, Lefty Coaster, blueoasis, NBBooks, TalkieToaster, erratic, philipmerrill, bubbanomics, Glorfindel, nilocjin, imabluemerkin, real world chick, JVolvo, NearlyNormal, CTLiberal, Preston S, el cid, sceptical observer, middleagedhousewife, onionjim, Cenobyte, profh, GiveNoQuarter, Clive all hat no horse Rodeo, Cassiodorus, goinsouth, chapel hill guy, revgerry, Statusquomustgo, FrankieB, bstotts, Picot verde, Friend of the court, gerald 1969, Joelarama, BentLiberal, DBunn, seabos84, ammasdarling, One Pissed Off Liberal, out of left field, DorothyT, xaxado, asilomar, dotsright, wa ma, Haningchadus14, Loudoun County Dem, Deadicated Marxist, Texas Tiger, vets74, 0wn, yoduuuh do or do not, DvCM, Cofcos, noofsh, daveygodigaditch, Jimdotz, greenchiledem, Unbozo, gatorbot, Seneca Doane, artisan, HCKAD, jayden, manwithnoname, mcc777c2, SeaTurtle, millwood, leonard145b, JML9999, Terra Mystica, TomP, Empower Ink, rmonroe, MKinTN, fayeforcure, condorcet, Mr SeeMore, dadadata, elwior, theunreasonableHUman, ajr111240, treesrock, VL Baker, pyxylyx, weddedgay, boatjones, Jake Williams, pademocrat, Jeff Y, saildude, Tam in CA, mofembot, Gemina13, pragprogress, SyntaxFeline, petulans, BYw, punkdavid, allie123, Executive Odor, priceman, papicek, statsone, squarewheel, satanicpanic, cameoanne, SciMathGuy, multilee, cybrestrike, J M F, denisegreenbay, driftwood, Tomsank, litoralis, greengemini, Carol in San Antonio, dark daze, Partisan Progressive, slaney black, Ohiodem1, Zotz, JesseCW, mississippi boatrat, worldly1, obiterdictum, MKSinSA, ZilV, MySobriquet, allep10, Losty, Green Karma, Andhakari, ohmyheck, Black Kos, Larsstephens, Words In Action, Just Bob, brentbent, coppercelt, on2them, Jampacked, pyegar, publicv, ydice, Rustbelt Dem, fidellio, Crabby Abbey, wvmom, trixied13, Garfnobl, puffmeister, calichristi, cordgrass, ItsSimpleSimon, HartfordTycoon, Kristina40, DrFitz, tassojunior, halef, Earth Ling, WattleBreakfast, addisnana, Weaselina, farbuska, roystah, DrTerwilliker, elengul, Floande, rasfrome, BrowniesAreGood, Colorado is the Shiznit, allenjo, SuperBowlXX, xgy2, FeloniousMonk, ozsea1, coquiero, Montreal Progressive, sfcouple, Kharafina, QuestionAuthority, Situational Lefty, Greek Goddess, thethinveil, PedalingPete, marleycat, Wolf10, RadicalRoadRat, lebowskiachiever, KVoimakas, bamabikeguy, JWK, moldyfolky, tardis10, MRA NY, nogo postal, whoknu, pensivelady, virtuerules, blue aardvark, zenox, Ezekial 23 20, glower, MichaelNY, PrometheusUnbound, bearette, bluebottles, brown and blue all over, gnostradamus, KiB, OHknighty, DM4, Siri, WoolStreet

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site