Tue 20 Apr, 2010
Obama's master.
The global financial crisis, it is now clear, was caused not just by the bankers’ colossal mismanagement. No, it was due also to the new financial complexity offering up the opportunity for widespread, systemic fraud.
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If the Securities and Exchange Commission’s case is proved – and it is aggressively rebutted by Goldman – the charge is that Goldman’s vice-president Fabrice Tourre created a dud financial instrument packed with valueless sub- prime mortgages at the instruction of hedge fund client Paulson, sold it to investors knowing it was valueless, and then allowed Paulson to profit from the dud financial instrument.
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Brutally, the banks knowingly gamed the system to grow their balance sheets ever faster and with even less capital underpinning them in the full knowledge that everything rested on the bogus claim that their lending was now much less risky. That was not all they were doing. As Michael Lewis describes in The Big Short, credit default swaps had been deliberately created as an asset class by the big investment banks to allow hedge funds to speculate against collateralised debt obligations. The banks were gaming the regulators and investors alike – and they knew full well what they were doing.
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Now it has all collapsed, to be bailed out by western taxpayers. The banks are resisting reform – and want to cling on to the business practices and business model that has so appallingly failed. It is obvious why: it makes them very rich. The politicians tread carefully, only proposing what the bankers say is congruent with their definition of what banking should be.
Let me repeat that last sentence for you:
The politicians tread carefully, only proposing what the bankers say is congruent with their definition of what banking should be.
That sentence is the reason why I’m not surprised at the pussified bill put forth by Chris Dodd. It’s the reason why I’m not surprised Obama sent Rahm Emanuel to New York to host a private meeting begging investors not to flee the Democratic Party. And it’s the reason why I won’t be surprised when nothing happens to Goldman Sachs.
Because our masters expect us to apologize to them for flinching when they cum on our faces.
Tags: Goldman Sachs, Pussy Politicians, Thank Zeus It's 4/20, Wall Street
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