Curiouser & Curiouser
deeper and deeper
At 9:30pm on Sunday, September 21, 2008, Goldman Sachs was saved from imminent collapse by the announcement that the Federal Reserve would allow it to become a bank holding company – implying unfettered access to borrowing from the Fed and other forms of implicit government support, all of which subsequently proved most beneficial. ... in the name of global financial stability.
We now learn – from Der Spiegel last week and today’s NYT – that Goldman Sachs has not only helped or encouraged some European governments to hide a large part of their debts, but it also endeavored to do so for Greece as recently as last November. These actions are fundamentally destabilizing to the global financial system, as they undermine: the eurozone area; all attempts to bring greater transparency to government accounting; and the most basic principles that underlie well-functioning markets. When the data are all lies, the outcomes are all bad – see the subprime mortgage crisis for further detail.
...Faced with enormous pressure from those eurozone countries now on the hook for saving Greece, the [European Commission] will surely launch a special audit of Goldman and all its European clients.
...
If the Federal Reserve were an effective supervisor, it would have the political will sufficient to determine that Goldman Sachs has not been acting in accordance with its banking license. But any meaningful action from this direction seems unlikely.
Instead, Goldman will probably be blacklisted from working with eurozone governments for the foreseeable future
Interesting how many recognizable names worked for GS… Including, but not limited to: Henry Paulson, Lawrence Summers, Ron Corzine, Josh Bolten, Rahm Emanuel ...
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