Taibbi Interview

[Master Shake]

http://watch.bnn.ca/the-close/july-2...09/#clip189690

[santafe2]

Re: Taibbi Interview

http://watch.bnn.ca/the-close/july-2...09/#clip189690

"The secondary market for mortgages was the equivalent of grinding up rats and selling it as Grade A chuck"....nice find Shake.

[Master Shake]

Re: Taibbi Interview

"The secondary market for mortgages was the equivalent of grinding up rats and selling it as Grade A chuck"....nice find Shake.

He wrote that in the article as well. Good analogy, imo.

[Mega]

Re: Taibbi Interview

Thanks Master....Very good find
Mike

[santafe2]

Re: Taibbi Interview

He wrote that in the article as well. Good analogy, imo.

I wonder if we'll ever have a government with spine enough to call corporations on the carpet for this behavior instead of handing them $13B? As he said, it's nice to have Paulson on speed dial.

[GRG55]

Re: Taibbi Interview

http://watch.bnn.ca/the-close/july-2...09/#clip189690

There's a reason John Kenneth Galbraith singled out one financial institution worthy of its own chapter title in his history of the onset of the Great Depression "The Great Crash 1929" first published in 1955.

Chapter III is titled "In Goldman, Sachs We Trust".

When I first read the book many years ago I thought the descriptions therein of the Ponzi scheme behaviour of Goldman and the other banks in the lead up to the 1929 market crash made for hilarious reading. I don't have quite the same reaction today. :p


A couple of excerpts:

...Meanwhile Goldman, Sachs was already preparing its second tribute to the countryside of Thomas Jefferson, the prophet of small and simple enterprises. This was the even mightier Blue Ridge Corporation...Blue Ridge had a capital of $142,000,000 and nothing about it was more remarkable than the fact that it was sponsored by Shenandoah, its precursor by precisely twenty-five days. Blue Ridge had the same Board as Shenandoah...Goldman, Sachs by now was applying leverage with a vengeance...

...August 20, the birthday of Blue Ridge, was a Tuesday, but there was more work to be done by Goldman, Sachs that week. On Thursday the Goldman Sachs Trading Corporation announced the acquisition of the Pacific American Associates, a West Coast investment trust which, in turn had recently bought a number of smaller investment trusts...Having issued more than a quarter of a billion dollars worth of securities in less than a month - an operation that would not have been unimpressive for the United States Treasury - activity at Goldman, Sachs subsided somewhat...

The chapter ends with:

Years later, on a gray dawn in Washington, the following colloquy occurred before a committee of the United States Senate.

Senator Couzens: Did Goldman, Sachs and Company organize the Goldman Sachs Trading Corporation?
Mr. Sachs: Yes, sir.

Senator Couzens: And it sold its stock to the public?
Mr. Sachs: A portion of it. The firm invested originally in 10 percent of the entire issue for $10,000,000.

Senator Couzens: And the other 90 percent was sold to the public?
Mr. Sachs: Yes, sir.

Senator Couzens: At what price?
Mr. Sachs: At $104. That is the old stock...the stock was split two for one.

Senator Couzens: And what is the price of the stock now?
Mr. Sachs: Approximately 1-3/4.

As I said, formerly hilarious. But now in retrospect more like immutable corporate mitochondrial DNA in a huge Financial Genome Tracking project.

More from Matt Taibbi on Goldman:

On giving Goldman a chance

After my Rolling Stone piece about Goldman, Sachs hit the newsstands last week (unfortunately the piece is not yet up on the magazine’s web site, so I can’t link to it yet — but it is out in print), I started to get a lot of mail. Most of it was thoughtful and respectful criticism, although there was an amusingly large number of people writing in impassioned defense of their right, under our American system, to be ripped off by large impersonal financial companies. “If my pension fund is buying [crap mortgages] from Goldman, and my pension fund loses lots of value, that’s not Goldman’s fault,” wrote one reader. “No one is forcing anyone to buy anything. The only thing Goldman is guilty of is making profits.”

I’m not even going to go there — the psychology of a human being who would take the time to actually write in a complaint like that is so bizarre that it would take more time than I have today to even begin discussing it...

...Actually I did contact Goldman and gave the bank every opportunity to respond to the factual issues in the article. I’m bringing this up because their decision not to comment on any of those questions was actually pretty interesting...

...I tried to make that first list of questions as basic as possible. I asked if Goldman would have turned a profit in Q1 2009 if it hadn’t orphaned the month of December 2008. Then I asked if Goldman had made changes to its underwriting standards during the internet boom years; if Goldman’s position was still that the steep rise in oil prices last year was due to normal changes in supply and demand; and if it could explain its 1991 request to the CFTC to have its subsidiary J. Aron classified as a physical hedger on the commodities market. Citing various sources, I also noted that some people had complained that its move to short the mortgage market in 2006 even as it was selling those same types of instruments proved that the bank knew the weakness of its mortgage products, and asked if the bank had an answer for that. And I asked if the bank supported cap-and-trade legislation, and if it was fair to say (as we planned to in the piece) that the bank would capitalize financially if such legislation was passed...

[ricket]

Re: Taibbi Interview

He wrote that in the article as well. Good analogy, imo.

...hence the quotation marks!

[swgprop]

Re: Taibbi Interview

I've found Taibbi's stuff to be stellar.

GS is the devil, on par with Monsanto- self serving, profit at whatever cost to society, fuck the world, where's my bonus.