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Thursday, February 25, 2010

Greece crashes, Goldman Sachs and Chase profit

Once banks start betting that somebody's going to go bankrupt, they obviously won't lift a finger to help. And everybody else runs away. It's one way down at that point.

Wait 'til somebody opens a pool on Portland.

Comments (7)


"These contracts, known as credit-default swaps,"

This is the same crap that sank the banks last year. No insurable interest and leveraging the payoff when the debt does crash.

Now if I can just figure out what Paulson pere is going to do and bet that way, I'll make a mint. Geithner will of course be a puppet on a string for gol-damn Goldman again.

The leveraged buyout of the planet continues.

Unless Holder's DOJ finds the courage to take on GS and JPM (Obama's best bankster bud Dimon), this process will not be halted. But Holder and his lieutenants, in their previous employments, have been too intimate with GS and JPM to suddenly discover concern for the American people, much less the rest of the world.

Pointing the finger at the Banks and Credit Default Swaps is a bit like walking into a condemned building and noting only the awful wallpaper. The building was not condemned for the selection of wallpaper.

Neither Greece nor Portland got into their respective messes due to Bank coercion.

The politicians intentionally chose to make these poor decisions because there are no personal consequences, and the public wanted the politicians to make these decisions. It is difficult to have sympathy for the public when they act so irresponsibly.

It is unsurprising that the Banks intend to make money from this coming and going. What are corporations for if not to make money and limit risk?

The solution for Greece is the Viking Swimming Test – swim or drowned. Let Greece find its way out of this mess if it can’t let it return to the Drachma. The rest of the PIIGS need the object lesson.

Mark Sherman

Re: "What are corporations for if not to make money and limit risk?"

Maddog (Mark Sherman), you do recall that Randian acolyte Alan Greenspan -- Mr Andrea Mitchell to some who bother about conflicts of interest in mainstream media -- acknowledged his lifetime of theoretical and ideological error?

Have you found time yet for Joseph Stiglitz's "Freefall: America, Free Markets, and the Sinking of the World Economy?" Or even this brief review of Mr Stiglitz's talk last P?http://blogs.wweek.com/news/2010/02/26/the-global-financial-crisis-made-in-america-as-discussed-in-portland-by-joseph-stiglitz/#more-43844

The concluding graf is suggestive:

"Banks are still a big part of the problem. All the money we gave the banks hasn’t restarted the crucial flow of credit. Why? Because we didn’t put any conditions on what the banks did with the money. So the banks were still faced with the same unfortunate incentives and used the money to pay out dividends and bonuses instead of passing it along to those really in need. Stiglitz said that lack of a vision of what we wanted from the banks has left the financial system even worse than when the crisis began. In the last year 140 small banks – the banks that loan to small companies and help jumpstart the economy – have gone bankrupt, which has in turn allowed the big banks to get even bigger."

But how much can be said or heard or reviewed in an evening? There is no mention, for example, of FDIC head Sheila Bair's role in strangling credit by seizing solvent banks for the benefit of WallSt Nation's institutions. WAMU is the most glaring example of this because it was the largest bank seized and the most egregious misuse of regulatory power. Credit immediately tightened after Bair gave $307,000,000,000 of WAMU's assets to JPM -- a few days before the distribution of TARP monies -- for $1.888B. In Seattle, it should be remembered, WAMU was a prominent supporter of loans to small entrepreneurs; yet the beneficiary -- and collusive partner -- of Bair's theft, JPM Chase, is not.

The role of corporations in contemporary American society has become a primary concern. Although Mr Greenspan has proffered a kind of apology for the damage done by deregulation of the financial industry, he has not offered an alternative to the too-big-to-fails that have resulted. The culpability of the taxpayer-subsidized banks cannot be dismissed by the assertion that they, like a scorpion midstream on a frog's back, only do what they were designed to do.

Maddog (Mark Sherman), if you have not already read this piece from James Lieber in the VVoice (29Oct09), you might find it useful in deciding what should happen next in this political economy:

The grafs on Holder, et al, are cause for pessimism. And Lieber is too easy on the FDIC's Sheila Bair: I suspect he has revised his opinion of her in the wake of Kirsten Grind's investigative series (Puget Sound Business Journal) on the theft of WAMU.

Well, you have to hand it to Goldman, they are about as bald faced as it gets as far as their business practices. Set the entity up for failure, then place high paying bets that they will! And profit handsomely on both occasions.

So the real question will be, will the taxpayers of this country bail out Greece? Or should we say send more money to Goldmans via greece and AIG?

And if so will the taxpayers finally say enough? Stay tuned. Its going to get interesting.

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