“There is no more powerful expression of a society’s values than its economic institutions. In our case, we have created an economy that values money over all else, embraces inequality as if it were a virtue, and is ruthlessly destructive of life. The tragedy is that for most of us, the values of global capitalism are not are values. It is hardly surprising, therefore we find ourselves in psychological and social distress.” David Korten, economist
“Regret to me means something you feel you did wrong–I don’t have that.” Daniel Sparks, former head of Goldman Sach’s mortgage department, April 27, 2010 testifying before the U.S. Senate panel investigative committee
“We did not cause the financial crisis. I do not think we did anything wrong.” Michael Swenson, Goldman Sachs managing director, April 27, 2010 testifying before the U.S. Senate panel investigative committee on the banks selling toxic securities to German client IKB bank, while simultaneously betting against the investment it sold.
During a full day of grilling in front of a Senate investigative committee, Goldman Sachs investment banking activities were put under the microscope and continued to defend their actions as a market maker–in short–a bookie, the top bookie in Casino America.
There is no question that Goldman, along with the rest of Wall Street originated toxic loans on a biblical scale, packaged this nuclear waste as salable securities, got rating agencies such as Moody’s to slap triple AAA ratings and send out armies of salesman around the globe to peddle this crap to unsuspecting, and not so unsuspecting buyers.
The net result was that Goldman Sachs made tens of billions of dollars, extracted more than 50% of this compensation to itself instead of the shareholders who own the bank and let the American taxpayer clean up the mess after their economic orgy almost burned down the U.S. economy.
While all this may be legal, it stinks to high heaven. It drags in the high and mighty. It drags in politicians like Barack Obama, Hillary Clinton, Chris Dodd, Charles Schumer, Tom Daschle, George W. Bush, John McCain and John Kerry–all who have received hundreds of thousands, if not millions in campaign contributions from Goldman Sachs and its employees.
It drags Warren Buffett in, he was 20% owner of Moody’s, and made a $5 billion investment in Goldman Sachs, with much better terms than the U.S. government got, I might add…
Goldman Sachs purchased loans from Washington Mutual (WAMU), who in turn based its stated income loan business (liar’s loan) from Long Beach Mortgage. Long Beach Mortgage was founded by Roland Arnall, one of George W. Bush’s top contributors. Arnall’s old Ameriquest Mortgage, had lobbyists on staff like Massachusetts now governor Deval Patrick for over $300 thousand a year, while Arnall’s Ameriquest Mortgage hosted the Rolling Stones music tour to advertise its business, and paid the Texas Rangers baseball club for naming rights, Ameriquest Field. Before Arnall died of cancer a few years ago, Bush appointed Arnall U.S. ambassador to the Netherlands. Washington Mutual was one of the most predatory mortgage lenders of them all. Before it collapsed, the mammoth leveraged buyout firm Texas Pacific Group (TPG)invested billions of pension fund assets into WAMU and loss it. TPG gets its money, like the rest of the private equity world, from state pension funds.
Goldman Sachs also did business with New Century Financial, the ultimate Death Star bucket shop in subprime mortgage origination, who U.S. Bank originally owned 24% of the warrants of New Century. In 1998, Ernst & Young, gave New Century an entrepreneur of the year award. Later in 1994 New Century Financial was dumped on the public by investment bank Friedman, Billings & Ramsey with the assistance of underwriters Merrill Lynch, Morgan Stanley and UBS. It was brought out as a REIT (real estate investment trust) so that it could game the tax laws. By 2005, The Wall Street Journal called New Century a “top gun earner” with 222 offices from coast to coast using 47,000 mortgage brokers to originate more than $51 billion in toxic mortgage loans.
Goldman went on to create collateralized debt obligations, with the New Century loans, with additional toxic loans from Angelo Mozilo’s Countrywide Loans, which is now part of the bailed out Bank of America Merrill Lynch. By 2007, founders of New Century Financial, which were now and still are multimillionaires, which was paying loan processors as much as $100 thousand a year, filed bankruptcy. The Delaware bankruptcy judge called New Century a “ticking time bomb.”
Goldman Sachs may be the illuminati, but their fingerprints are everywhere. Pay attention, America. We have not even mentioned private equity…