More on the corruption surrounding Goldman Sachs. Matt Taibbi of Rolling Stone has been doing a good job following all of this. Here's a link to the article referenced in the video.
Saturday, July 18, 2009
Is Obama on Goldman's Payroll?
I've spent most of my career working in the financial services industry, and I have never seen the kind of corrupt shenanigans that are going on today. Washington is absolutely in Wall Street's hip pocket. Yes, today, on the heels of a near collapse in the economy. The gentleman in this video provides a very lucid analysis of what's going on.
Goldman Sachs' Tentacles Reaching into Government
Here's a very clear presentation on how Goldman Sachs has woven its way into the fabric of our government. Is it any surprise that they are able to virtually print money?
Tuesday, July 7, 2009
Inside the Great American Bubble Machine
This is a must-read article about Goldman Sachs' abuses from Matt Taibbi at Rolling Stone.
Click here for related article.
Wednesday, June 10, 2009
Executive Pay Caps are a Sham
The government’s theory is that compensation plans at the big banks were responsible for the banks’ excessive risk taking. To curb the risky behavior, the government wants to limit pay to $500K per year. I guess the idea is that the bankers will engage in risky behavior until they’ve made their $500K, then they’ll pack up their beach chairs and go on vacation until January.
This is obviously a very indirect and gutless way to deal with a major problem, and for starters, it won’t work. The best managers and technicians in these risky endeavors are simply going to move on to banks that aren’t covered by the provisions of the law, or they’ll start up their own firms. Let's face it, if you make $5 million a year, you’ll move to London if you have to. Some sacrifice! The trouble is, the banks they leave will keep running their risky businesses, but they’ll just run them with less talented people; i.e., those who are willing to work for less than $500K a year. How’s that for an unintended consequence? We might as well let teenagers manage our nuclear arsenal as well.
The fact of the matter is that we don’t want our banks engaging in risky activities AT ALL, other than normal lending activities, which have historically been challenging enough for our bankers to manage. We need to restore banking to what used to be called the 3-6-3 principle: borrow at 3%, lend at 6%, and be on the golf course by 3 o’clock. As holders of the public trust, we want our banks to engage in simple, transparent activities. The days of banks using depositor money to speculatively trade in exotic derivatives and foreign currencies for their own accounts need to come to an end, as do the days of banks making loans and then selling them off with no further exposure to risk. If you make a loan, you need to be prepared to stand by the risk of that loan. You’ll then be more careful making the loan in the first place.
We’ve already seen plenty of evidence that Obama and his team are as corrupt as any group of politicians we’ve had in the White House. The payoffs to labor unions, special interest groups, and corporate bigwigs started as soon as Obama took office. So, it’s no surprise that his administration is pussyfooting around with implementing much needed reforms. It’s no surprise, but it’s inexcusable. (Full disclosure: I voted for Obama, but suffice it to say, I’d like my vote back.)
We don’t need indirect, half-hearted approaches to solving major problems. We need to identify root causes, and aggressively rebuild the systems that will serve the public’s interests and restore trust in our financial system. That’s what was done following the Great Depression, and the regulations that came out of that era served us well for many years until our politicians succumbed to lobbyists’ payola or to their own ill-conceived notions of how to create a "great society" that were completely oblivious to unintended consequences. We must return to basics. Restoring the Glass-Steagall Act would be a great place to start.
This is obviously a very indirect and gutless way to deal with a major problem, and for starters, it won’t work. The best managers and technicians in these risky endeavors are simply going to move on to banks that aren’t covered by the provisions of the law, or they’ll start up their own firms. Let's face it, if you make $5 million a year, you’ll move to London if you have to. Some sacrifice! The trouble is, the banks they leave will keep running their risky businesses, but they’ll just run them with less talented people; i.e., those who are willing to work for less than $500K a year. How’s that for an unintended consequence? We might as well let teenagers manage our nuclear arsenal as well.
The fact of the matter is that we don’t want our banks engaging in risky activities AT ALL, other than normal lending activities, which have historically been challenging enough for our bankers to manage. We need to restore banking to what used to be called the 3-6-3 principle: borrow at 3%, lend at 6%, and be on the golf course by 3 o’clock. As holders of the public trust, we want our banks to engage in simple, transparent activities. The days of banks using depositor money to speculatively trade in exotic derivatives and foreign currencies for their own accounts need to come to an end, as do the days of banks making loans and then selling them off with no further exposure to risk. If you make a loan, you need to be prepared to stand by the risk of that loan. You’ll then be more careful making the loan in the first place.
We’ve already seen plenty of evidence that Obama and his team are as corrupt as any group of politicians we’ve had in the White House. The payoffs to labor unions, special interest groups, and corporate bigwigs started as soon as Obama took office. So, it’s no surprise that his administration is pussyfooting around with implementing much needed reforms. It’s no surprise, but it’s inexcusable. (Full disclosure: I voted for Obama, but suffice it to say, I’d like my vote back.)
We don’t need indirect, half-hearted approaches to solving major problems. We need to identify root causes, and aggressively rebuild the systems that will serve the public’s interests and restore trust in our financial system. That’s what was done following the Great Depression, and the regulations that came out of that era served us well for many years until our politicians succumbed to lobbyists’ payola or to their own ill-conceived notions of how to create a "great society" that were completely oblivious to unintended consequences. We must return to basics. Restoring the Glass-Steagall Act would be a great place to start.
Sunday, May 10, 2009
Geithner's PPIP: The Greatest Boondoggle in History
Treasury Secretary Tim Geithner's Public-Private Investment Program (PPIP) is the "greatest boondoggle in the history of the world," says William Black, a former bank regulator, who was counsel to the Federal Home Loan Bank Board during the S&L crisis. Says Black, an Associate Professor of Economics and Law at the University of Missouri - Kansas City, as occurred during the S&L era, the PPIP will allow banks to exchange "trash for cash" and turn "real losses into faulty gains." If the goal of Tim Geithner and other regulators was "to rip off the American taxpayer for the benefit of the least-deserving wealthiest people you can imagine, well - mission accomplished," Black says.
Black's interview on Yahoo! can be seen here:
Black's interview on Yahoo! can be seen here:
Friday, May 8, 2009
Good Morning America Explains the Financial Crisis
This is really cute. So simple an 8th grader or a member of Congress can understand it.
Click here to watch video.
Click here to watch video.
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