Matt Taibbi on Goldman

I know I said the 2nd,but this is too good to miss.  pl

http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine

Comments

[91B]

Colonel,
too good to miss?

This has already been thoroughly sliced and diced in the blogosphere.

Nice to see you back posting though. :-)

[Patrick Lang]

91b

I don't read blogs. pl

[Arun]

CFTC:
http://www.dailykos.com/storyonly/2009/7/29/759398/-CFTC-Verifies-Taibbi-Charges:-Wall-St.-Caused-08-Oil-$-Spike>via dailykos

CFTC Will Pin '08 Price Surge on Speculators, in a Reversal From Bush Findings

{the price surge of petroleum}

[William R. Cumming]

No surprise that MAMMON worshipers cluster together. And after they have made "it" then involved with public and private display of wealth. Why? To these people, money is power to buy people and things! Look at Bernie Madoff and clearly he recognized that the power was even more important to him than the truth or justice of the situation. These people are all control freaks and want the money to control others! A dangerous mindset. And of course once they obtain great wealth they then think that it must have been "deserved."! I would not let Bernie and his talents rot in prison. I would sentence him to communnity service in AF-PAK! Oh yes! How much work does Goldman do in Iraq and AF-PAK? How many VETS work at Goldman?

[Bobby Murray]

Thank you for taking the post this Col. Lang.

Kind Regards,
b

[Jose]

Col., welcome back...you were missed....

Funny thing is no regulations, that I am aware of, have passed to prevent another meltdown...is America living on borrowed time?

[Fred]

JP Morgan and Lehman drove up oil prices in the past by buying up oil storage capacity and withholding it from the market, thus causing short term spikes due to actual physical constraints (Exactly as Enron did in the California electricity market by shutting down generating units). Goldman is doing the exact same thing now.

As for cap and trade Taibbi can get off his high horse and actually report on what the administration is trying to accomplish by creating incentives to build NEW power generation units with a different fuel utilization and pollution profile. It would well be worth his time to look at both the science and economics rather just rant. We have enough group think inside the beltway we don't need any more outside of it.

[curious]

maaasssiiiiiveee frauuuud... what else.

It's fairly amazing that nobody up there asks serious questions so far, considering they almost bring down the country. And they are putting the country in serious debt. but hey ....

http://zerohedge.blogspot.com/2009/07/goldman-var-exemption-question.html

Today it appears several Congressmen, lead by Alan Grayson, are willing to drive a sharp stick pretty deep into the hornets' nest, by sending a letter directly to Wall Street Don Ben Bernanke, demanding an explanation exactly to the question of Goldman's VaR Exemption.

Among the reasons provided as casue for potential alarm are the following:

1) In the letter granting a regulatory exemption to Goldman Sachs, you stated that the SEC-approved VaR models it is now using are sufficiently conservative for the transition period to bank holding company. Please justify this statement.

2) If Goldman Sachs were required to adhere to standard Market Risk Rules imposed by the Federal Reserve on ordinary bank holding companies, how would its capital requirements differ from the current regulatory regime?

3) What is the difference in exposure to the taxpayer between these two regulatory regimes?

4) What is the difference in total risk to the portfolio between these two regulatory regimes?

5) Goldman Sachs stated that “As of June 26, 2009, total capital was $254.05 billion, consisting of $62.81 billion in total shareholders’ equity (common shareholders’ equity of $55.86 billion and preferred stock of $6.96 billion) and $191.24 billion in unsecured long-term borrowings.” As a percentage of capital, that’s a lot of long-term unsecured debt. Is any of this coming from the Government? In this last quarter, how much capital has Goldman Sachs received from the Federal Reserve and other government facilities such as FDIC-guaranteed debt, either directly or indirectly?

6) Many risk-management experts, most notably best-selling author Nassim Taleb, note that VaR models can dramatically understate risk. What is your overall view of Taleb’s argument, and of the utility of Value-at-Risk models as regulatory tools?

[Mark Gaughan]

pl,
You were right all along
mg

PS: Oooo. Look how much that stimulus package is costing us! Oh My!

[William R. Cumming]

Recently released production statistics indicate that oil production was actually up during the price surge in spring 2008. Still no reporting indicating energy as opposed to housing (energy did impact housing psychology because people realized that at $4 a gallon they were being stranded from their jobs)! Thus energy may be real culprit for the housing downturn for financial sector overleveraging failure. Hey the best and the brightest of the lobb yists in DC are the energy lobbyists. They make the housing types look like dufuses.

[Different Clue]

Well after Matt Taibbi wrote this article, even fresher revelations of longstanding Goldman-Sachs exploitation of trading methods and arenas came to light. I read about it on James Kunstler's fun-to-read
Clusterfuck Nation blog. (Well..that's what he calls it).
Apparently the big trading floor-keepers have figured out how to send real-time information about every trade made over to priviledged subscribers like G-Sachs a few miliseconds before such information reaches everyone else. G-Sachs has fleets of computers and programs to do millions of trades in each milisecond gap; thereby infra-frontrunning whole vast zones of trading. (That's my best layman's effort to understand what I read.)
Kunstler wonders what Obama's reaction to all this going forward is going to be; and how that will affect his future and ours under his administration. He writes it so much better than I could that I hope a copied-chunk may be permitted...
"As we turn the corner toward autumn, President Obama looks increasingly like a dupe, a tool, or a co-conspirator of Goldman Sachs. If he doesn't instruct the Justice Department to commence investigations of the company, and if he doesn't dissociate himself from their alumni hanging around the White House, the Treasury Department, and elsewhere in the government, he's going to become the object of an awful public wrath. Obama has no other choice at this point except to clean house - to fire Larry Summers, Robert Rubin, Tim Geithner, and all other former Goldman Sachs employees in positions of power and influence around him."
I hope Obama chooses to reverse his current G-Sachs looter-enablement policy. His Israel/Palestine/Middle East policy is heading in a good direction so far as I can tell. But it could take
eight years to become irreversibly set beyond the ability of even the most rabidly "antibama" successor to change it. And if he makes himself a one term President through retaining the BushCo bailout and looter-enablement policies; then he won't have time to push his Middle
East plans to their hoped-for endpoint.

[greg0]

Thanks for the link to Taibbi.
Guess I can't feel too bad about pulling retirement funds out of the Stock Market. Even with the 10% extra tax, it would be foolish to leave anything longterm with the professional theives out there.
Time to go pick the blueberries!

[curious]

Rewarding Bad Actors
New York Times
By PAUL KRUGMAN
Published Online: August 2, 2009 In Print: August 3, 2009

Americans are angry at Wall Street, and rightly so. First the financial industry plunged us into economic crisis, then it was bailed out at taxpayer expense. And now, with the economy still deeply depressed, the industry is paying itself gigantic bonuses. If you aren't outraged, you haven't been paying attention.

And they're still at it. Consider two recent news stories.

One involves the rise of high-speed trading: some institutions, including Goldman Sachs, have been using superfast computers to get the jump on other investors, buying or selling stocks a tiny fraction of a second before anyone else can react. Profits from high-frequency trading are one reason Goldman is earning record profits and likely to pay record bonuses.

On a seemingly different front, Sunday's Times reported on the case of Andrew J. Hall, who leads an arm of Citigroup that speculates on oil and other commodities. His operation has made a lot of money recently, and according to his contract Mr. Hall is owed $100 million.

http://www.dailykos.com/story/2009/8/3/761164/-Krugmans-Goldman-Rage:-Frontrunning-Is-Bad-For-America

[Annie]

Thank heavens. We need your daily infusions of intellectual capital.

[Larry Kart]

Links to two articles that explain in some detail why Taibbi doesn't know what he's talking about in his attempt to turn our financial mess into a conspiracy with Goldman Sachs as the key conspirator:

http://meganmcardle.theatlantic.com/archives/2009/07/matt_taibbi_gets_his_sarah_pal.php

http://www.thebigmoney.com/articles/judgments/2009/08/06/matt-taibbi-just-plain-wrong