Money power in private hands
and democracy can't co-exist. Wall Street crooks transformed America
into an unprecedented money making racket.
Goldman symbolizes master of the universe manipulative fraud. It's been
involved in nearly all financial scandals since the 19th century.
It makes money the old-fashioned way. It steals it through fraud, grand
theft, market manipulation, front-running them, scamming investors,
bribing political Washington, having its executives in top administration
posts, and getting open-ended low or no interest rate bailouts when
It's business model and culture assure billions of bonus dollars for
company officials, complicit traders, and others on the take. It's a
crime family, not a bank. It's connected to others like it on Wall Street
and corrupt politicians.
Compared to Goldman, Bernie Madoff was small-time. So are most other
swindlers. Ones who matter most sit in Wall Street board rooms, plotting
Former bank regulator expert on white-collar crime, public finance,
economics, and related law, Bill Black explained Goldman shenanigans
pertaining to earlier SEC charges this way:
"Goldman designed a rigged trifecta. It turned a massive loss into a
material profit by selling deeply underwater, toxic CDOs it owned. It
helped make John Paulson (CEO of a huge hedge fund that Goldman would
love to have as an ally) a massive profit - in a 'profession' where
reciprocal favors are key, and blew up its customers that purchased
An SEC civil suit charged Goldman with defrauding customers. It made
billions, and settled for $550 million. It was pocket change, the equivalent
of four 2009 revenue days. It hardly mattered.
No executive was fined or imprisoned. Grand theft continues unabated.
They include fraudulent pump-and-dump schemes. Major media scoundrels
don't explain. Only scammed customers and insiders part of the dirty
On March 4, Black used James Q. Wilson's "broken windows" metaphor pertaining
to blue collar crime. He applied it to far more serious elite white-collar
offenses. None rise to the level of financial ones. The amounts involved
are staggering. Broken lives, communities, and economies result. The
landscape's littered with them.
No firm's more adept at amassing fraudulent fortunes than Goldman. Its
CEO Lloyd Blankfein calls it "doing God's work." It's hard imagining
greater arrogance. It's harder knowing the Supreme Court ruled banks
and other financial entities immune from securities fraud by those harmed.
Only Washington may sue for redress.
It's also appalling that Murdoch's Wall Street Journal "serve(s) as
cheerleader and apologist for those" who amass wealth by stealing it,
Goldman Executive Resigns
Broken clocks are right twice a day. On March 14, so was The New York
Times. It gave rare op-ed space to high level Goldman executive
Greg Smith for views worth sharing. He served as executive director
and head of the firm's domestic equity derivatives business in Europe,
the Middle East and Africa.
Headlining, "Why I Am Leaving Goldman Sachs," he said:
After almost 12 years with the firm, today was his last day. He worked
there "long enough to understand the trajectory of its culture, its
people and its identity. And I can honestly say that the environment
now is as toxic and destructive as I have ever seen it."
In "simplest terms," he said client interests are sidelined. Goldman
thinks only about making money. "The firm has veered so far from the
place I joined right out of college that I can no longer in good conscience
say that I identify with what it stands for."
In less blunt terms than Black, this writer, and other critics, he stopped
short of explaining its grand theft model, but comments he made suggested
An earlier Goldman culture contributed to its success, he said. "It
revolved around teamwork, integrity, a spirit of humility, and always
doing right by our clients."
Exaggerated? Absolutely, whatever minor differences between today and
earlier existed. According to Smith, "virtually no trace" of what he
admired remains. Whatever pride he once had is now gone. It was time
to leave when he no longer could look aspiring students wanting Goldman
jobs "in the eye and tell them what a great place this was to work."
How can it be operating like a crime family. It's business model involves
grand theft. Customers are defrauded, not helped. Politicians are bought
like toothpaste. Laws are subverted and ignored. Others are discarded
or rewritten at its behest. Economies are wrecked for profit.
When future Goldman histories are written, honest ones will say Blankfein,
president Gary Cohn, and other top executives "lost hold of the firmís
culture on their watch. I truly believe that this decline in the firmís
moral fiber represents the single most serious threat to its long-run
Smith said his career involved advising two of the largest global hedge
funds, five of America's largest asset managers, and three of the Middle
East's most prominent sovereign wealth funds. His clients manage over
a trillion dollars in assets.
He took pride, he said, advising them "to do what I believe is right
for them, even if it means less money for the firm. This view is becoming
increasingly unpopular at Goldman Sachs." He knew it was time to leave.
"Leadership used to be about ideas, setting an example and doing the
right thing. Today, if you make enough money for the firm (and are not
currently an ax murderer), you will be promoted into a position of influence."
Three key ways, include:
(1) Advising clients to invest in assets Goldman wants to dump, including
(2) Getting them to buy what makes Goldman most money.
(3) Trading "any illiquid, opaque product with a three-letter acronym,"
no matter how much toxic or without merit.
He attended sales meetings devoid of ways to help clients. They're about
maximizing Goldman's profit, no matter how illegally. "It makes me ill,"
he said, "how callously people talk about ripping their clients off.
Over the last 12 months, I have seen five different managing directors
refer to their own clients as 'muppets.' "
They're marks to be manipulated and scammed for profit. He can't explain
how senior managers don't understand that losing client trust means
forfeiting their business. No matter if you're the smartest guys in
the room. They'll know you're smart enough to scam them without hearing
back room insults about "muppets," "ripping eyeballs out," and "getting
paid" at their expense.
He hopes his article "can be a wake-up call to" Goldman's board. "Make
the client the focal point of your business again. Without clients you
will not make money. In fact, you will not exist."
"Weed out the morally bankrupt people, no matter how much money they
make for the firm." Make "people want to work here for the right reasons.
People who care only about making money will not sustain this firm ó
or the trust of its clients ó for very much longer."
A Final Comment
Goldman's entire history, or at least most of it, reflects predation.
Its scams way pre-date Smith's birth. In the 1920s, its Ponzi scheme
investment trusts defrauded investors. Goldman profited. They lost out,
and when Wall Street crashed were left high, dry, and broke.
One trust sold investors reflected others. Its offering price was $104
a share. It became virtually worthless at $1.75. It lost over 98% of
its value. Unwary buyers then and now lose out. Only the stakes get
Today they're enormous. Getting in bed with Goldman's like swimming
with sharks. You're prey. They're predators. Those burned understand
Goldman's culture enough to know it's toxic and corrupted.
In 2002, it was largely responsible for Greece's debt problems. It involved
circumventing Eurozone rules in return for mortgaging assets.
Using creative accounting, debt was hidden through off-balance sheet
shenanigans. Derivatives called cross-currency swaps were used. Government
debt issued in dollars and yen was swapped for euros, then later exchanged
back to original currencies.
Debt entrapment followed. Greece was held hostage to repay it. The country's
been raped and pillaged. Paying bankers comes first. Doing it left Greeks
impoverished, high and dry. Goldman profited enormously by scamming
an entire country and millions in it.
Its business model thrives on similar schemes globally. It's about profits,
no matter the huge cost to others. Expecting this leopard to change
spots is like imagining reformers will transform Washington.
Former alderman Paddy Bauler once said "Chicago ain't ready for reform."
It's still not ready and may never be.
Neither is political Washington, Goldman, other Wall Street crooks,
or their counterparts throughout corporate America.
They connive, cheat, profiteer from wars, drain trillions from households
and the national treasury, wage war on labor, sell dangerous products,
destroy the environment, and do whatever they damn please complicit
with corrupt politicians who let them.
Goldman and other Wall Street giants are the worst of the lot. Standing
armies pale by comparison. Michael Hudson calls finance warfare by other
means. Generalissimo bankers run everything.
Their job is pillaging households, investors, communities, and countries
for profit. Doing so holds humanity hostage. They'll lose everything
unless stopped. Job one's assuring that's done. The stakes are
too high for failure. Itís up to public rage to change things.
Stephen Lendman lives in Chicago and can be reached at email@example.com.
Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge
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