Goldman Sachs' Black Magic, Here's How They Did It
Dylan Ratigan
October 16, 2009 03:04 PM http://www.forexfactory.com/showthread.php?t=178338&;page=14
How did Goldman, Sachs & Co. ~ saved a year ago by the US taxpayer ~ magically make $3 billion in 3 months a year later?
This as the US dollar collapses, unemployment soars and foreclosures hit a record?
Here is the Goldman, Sachs & Co. revenue break down for the past 3 months:
- Financial Advisory-M/A: 325 million.
- Equity Underwriting: 363 million.
- Debt Underwriting: 211 million.
- Trading-Principal Investments: 10 billion.
Notice that 10 billion is much bigger than two or three hundred million made from the traditional Wall Street businesses.
That $10 billion is evidence of their magic trick. For we the taxpayer gave Goldman Sachs the following:
- 10 Billion in TARP
- 11 Billion from the Fed
- 30 Billion from the FDIC
- 13 Billion from AIG
For a grand total of almost $70 Billion (Goldman along with every other bank and AIG would have been defunct without this money).
Goldman at the apex of the crisis is delivered this money ~ which they then use to borrow against at $20 or $30 for every $1. Which at 30x equals $2.1 trillion in available capital.
As one of the only banks in the world with money at the time, Goldman Sachs was able to buy billions in distressed assets around the world at record low prices -- only to watch $23.7 trillion in US taxpayer money be deployed during the past year to re-inflate the asset's values that Goldman had purchased with our tax money.
The question is not why did we bail out the banks.
The question is why did we give the banks billions of our money so they could then buy assets by the trillions with our money and they keep the profits?
The answer is Henry Paulson, former Goldman Sachs CEO who ran the US Treasury, and Tim Geithner, current Treasury Secretary who at the time ran the New York Federal Reserve, willingly delivered Goldman Sachs the $70 Billion ~ with no strings attached.
Former Treasury Secretary Henry Paulson
So what can we do?
We must demand the return of those investment gains made with America's money ~ it was stolen from us and we can get it back. Demand Claw Backs ~ and not from the future but from the past ~ That is where our money is.
- We must have an exchange for all credit derivatives ~ the current version is riddled with loopholes that let banks avoid transparency by mobbing offshore and prohibiting government regulators from being able to force the use of the exchange by the banks. "
For your information ~ derivatives are worth at least $450 trillion worldwide, with $555 billion in credit at risk in the U.S. banking industry. (Derivatives are forms of insurance or bets on underlying assets, such as now-toxic subprime mortgages, supposedly designed to manage risk.) Warren Buffett calls them "financial weapons of mass destruction " and they are Wall Street's ticking nuclear time bomb.
The game is up, Wall Street ! The shell game has been exposed and our dead horse economy cannot be revived until the truth is fully exposed and meaningful Wall Street reforms are implemented.
Joe Bageant describes the Wall Street crime scene perfectly ~ " The national money shamans have danced around the carcass of our dead horse economy, chanted the recovery chant and burned fiat currency like Indian sage, enshrouding the carcass in the sacred smoke of burning cash. And indeed, they have managed to prop up the carcass to appear life-like from a distance, if you squint through the smoke just right. But it still stinks here from the inside. Clearly at some point we must find a new horse to ride, and sure as god made little green apples one is broaching the horizon. And it looks exactly like the old horse...Then too, what else did we expect? Obama's economic team of free market billionaires and financial hotwires includes most of those who helped Bill Clinton sell the theory that Americans didn't need jobs."
True change starts with the truth and transparency from which comes rightful indignation and finally action ~ but that takes courage and leadership. As Bageant knowingly concludes ~ Remember what happened when we assumed the Democrats were capable of courage and leadership?
Only the people can unite and force change and time is running out. As Mother Teresa once wrote Don't wait for the leaders, be the leaders ! In my case, it's don't wait for the media, be the media !
Allen L Roland
Cartoon courtesy of Tom Toles / Washington Post
