Time to spend a little time connecting dots again. Today's Dots: Goldman Sachs and the SCOTUS decision allowing unlimited corporate interference in our elections.
Dot No 1: Goldman Sachs
There is a growing sense even at the captive-govt level that Goldman has maybe, finally, gone too far. When it helped the Greek govt hide its on-the-edge-of-the-abyss fiscal weakness so it could borrow serious amounts of $$$ from large and important financial organizations who were not Goldman Sachs, there was some feeling that they had possibly crossed some sort of an ethical or even legal line (yah think?) and it might be time to think about maybe possibly potentially putting some kind of, oh, I don 't know, restrictions on them. Or something. Their willingness to play (yet again) a leading role in (yet another) attempt to bring down the planetary economy if it would grow their own personal fortunes struck a few as, well, I hate to say it, but over the top. Possibly even unconscionably greedy.
I mean it's one thing to make paupers out of the middle class in America where that's, you know, the name of the capitalist game and more or less accepted as such even by its victims. It's something else to go meddling in European countries to help them rip off your fellow bankers, turning them into middle-class paupers who could no longer afford a private jet to take them to Paris for lunch. The fellow bankers weren't too thrilled about that. They did not care to play "target". They were supposed to be the hunters, not the hunted. Goldman's lack of appreciation for their expected role and its treatment of them as just another mark offended them.
Which is why their involvement in the Greek scam looks like it may actually get investigated.
No. Really.
The US central bank is looking into Goldman Sachs's role in arranging contentious derivatives trades for Greece, which helped the country to massage its public finances, Ben Bernanke, chairman of the Federal Reserve, revealed on Thursday.
"We are looking into a number of questions relating to Goldman Sachs and other companies and their derivatives arrangements with Greece," Mr Bernanke said, apparently referring to Greek currency transactions structured by Goldman.
Testifying before Congress, Mr Bernanke also responded to concerns that instability in markets for Greek debt and other securities has been heightened by trading in other derivatives, known as credit default swaps, which compensate investors in case of default.
Mr Bernanke said default swaps are "properly used as hedging instruments" and that "using these instruments in a way that intentionally destabilises a company or a country is counterproductive".
Counterproductive? Yah gotta luv it. The financial destabilization of an entire nation is a Bad Thing because it's not productive...of what? It produces huge loans for Greece and huge profits for Goldman. Do we have some other yardstick for productivity now other than profit? Wouldn't that be, you know, socialist thinking? Presumably this refers to Goldman's attempt to turn other banks into totally suckered loser-meat, thereby harming the other banks' ability to continue their widespread theft of public monies and threatening their own profits. But that suggests that if Goldman hadn't been such a damn hog and had allowed the other predators in on the looting of Europe, Uncle Ben wouldn't think there was so much "counter" in the production and the Fed wouldn't now be, reluctantly and with deep sad sighs, forced to "investigate".
Ex-Goldman exec Yves Smith of Naked Capitalism thinks they've practically signed their own death warrant. (Via real economics by way of Norwegianity)
Goldman may have made a fatal mistake. Fatal not to the existence of the firm, but to its standing, reputation, legitimacy, and ultimately, to the thing it covets most, its profits.
Power is most effective when it is used as sparingly as possible. Niall Ferguson, in book The Cash Nexus, stressed the importance of financing to military success (he argues that England was able to punch above its economic weight due to its superior tax collection apparatus and more highly developed bond markets). The Rothschilds, which among other things financed governments at war, went to some lengths to underplay their influence so as not to threaten their state patrons/clients.
The problem is that the behaviors that contributed to Goldman's commercial success have over time become unbalanced, and are putting it at odds with governments. It is one thing to abuse the likes of a Jefferson County, as JP Morgan has. As deplorable as that behavior is, they cannot retaliate. It is quite another to mess with bodies that really are, ultimately, bigger than you are.
Yeah. Problematic at best, suicidal at worst. So why isn't Goldman acting like it's worried about this? Don't they realize the danger to themselves? Or do those secret smirks betoken a small railway car full of aces up their sleeves? Do they know something we don't?
Not exactly. We know what happened but maybe they figured out what it means for them.
Dot No 2: Ramifications of he SCOTUS Decision
Lawyers have been examining the SCOTUS' Corporate Rights decision more closely and it turns out that not only can corpo's spend an unlimited amount of $$$ buying as many conservatives as the Congress can produce (talk about productivity!), but they can do it anonymously and not to have to take the heat for it.
The Supreme Court decision last month allowing corporations to spend unlimited money on behalf of political candidates left a loophole that campaign finance lawyers say could allow companies to pay for extensive political advertising while avoiding the disclosure requirements the court appeared to leave intact.
Experts say the ruling, along with a pair of earlier Supreme Court cases, makes it possible for corporations and unions to donate anonymously to nonprofit civic leagues and trade associations. The groups can then use the money to finance the types of political advertisements that were at the heart of last month's ruling, in Citizens United v. Federal Election Commission.
They can therefore spend $millions$ electing pet conservative puppets to Congress and hide the fact that they're doing it so the conservative can pretend he isn't a puppet and nobody will be able to say otherwise.
Today's Test Question: How are these two dots connected? (Or did I make the answer too obvious?)
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They have done what they were there to do - make $$$ for the big corporations they are involved with. Not to ignore at this point though, the the Greek debt crisis - "engineered" by the same Goldman Sachs, a crisis which now stands chances to destabilize the EU but also to kick back to the US economy as well ... The world economies and finances are so interconnected within the global economy, that it became literally impossible for a financial shock like the one in Greece to remain without consequences for the other (remote) countries as well ... Just stay tuned for what will happen in Europe next, and how EU will decide to go about it - the issue might reveal some further interesting aspects and connections ...
http://goo.gl/W1eJ
Posted by: Mary | May 01, 2010 at 12:11 PM