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Posts Tagged ‘Goldman Sachs’

2016-election

Well, there it is. The candidate that no one would give credence to has won the Oval Office, and in about two months he’ll take the helm on the bridge on the S.S. United States. There are lots of things that can be said about the view off the bow, but we’ll limit this post to the view from the stern. There will be no reaching for apocalyptic metaphors from Bronze Age Biblical passages.

The roots of Trump’s victory date back to the major events of the 2007-09 Great Recession. The people have rejected, decisively, the power of the Wall Street-Washington Axis. Until last night, the United States was not a democracy; it was a corporatist state, one in which the unproductive financial capitalists of Wall Street ventriloquized Washington, D.C. and ran the country by themselves, for themselves.

Just look at the wake our ship of state has made. The U.S. Gov’t. made sure that all the AIG executives got their bonuses, even though it was they who almost drove the global economy into a bottomless abyss. The megabanks all got bailed out on the taxpayers’ dime, even though they had to be bailed out because they’d spent years packaging and selling trillions of dollars of collateralized debt obligations that they themselves didn’t understand, and knew were worthless. Meanwhile, those same taxpayers who bailed out Wall Street lost their jobs, then lost their homes, and, of course, lost their health care coverage.

For decades, the Wall Street-Washington Axis preached the gospel of Rugged Individualism and The Free Market, which was all a lie. Goldman Sachs perfectly exemplifies why: when the market turned on Goldman Sachs during the Great Recession, Lloyd Blankfein, its CEO, called his good old buddy, old chum, old fellow alumni Hank Paulson, who just happened to be U.S. Treasury Secretary. And, presto change-o, Goldman Sachs became a bank holding company with access to the Federal Reserve cash window before the weekend was over.

See? It pays to have friends in high places.

The Americans who voted yesterday don’t have friends in high places, and they’re sick and tired of seeing the country run for the exclusive benefit of those who do. Washington in 2007-09 refused to countenance an economic reckoning for Wall Street because that would have affected their compatriots (and the campaign donor class) in the banks. But in economics, one link forges the next, and the reckoning that should have happened in the markets was translated to the political sphere. Think Tea Party. Think Occupy Wall Street.

And not one banker ever went to prison. In fact, the best thing that happened to Wall Street during the Great Recession, the guy who did the world’s biggest favor for the banksters, was Bernie Madoff. Bernie may be the Platonic Form of Ponzi Schemer, but he had no connection whatsoever to the Wall Street madness that brought on the Great Recession. Still, he became the face of it.

Places like Westchester County, NY, and Fairfax County, VA, came out of the crisis more prosperous than they’d ever been. But it you were not within that Charmed Circle because you lived, say, in a place the Wall Street-Washington Axis labeled “Flyover Country,” you were financially doomed. The elites were not affected by the downturn. Out of sight, out of mind.

The Wall Street-Washington Axis sold themselves on the basis of merit, they convinced the country that they knew best. “If you let us bail out the banksters, we’ll be back to the boom times in no time!” But that didn’t happen. They were wrong. Take Alan Greenspan, once viewed as the Grand Poohbah of All Economics, given to cryptic utterances that verged on the unintelligible. Turns out that he was just an old Ayn Rand fanatic, a rooster claiming credit for the dawn.

These examples could be multiplied. The mistake of Establishment politicians was to think that people would just forget about all that. The political legitimacy of the Wall Street-Washington Axis is based on alleged merit. When that merit is shown to be a complete falsehood, their political legitimacy dissolves.

More than anything else, the Great Recession and how it was handled threw a decisive advantage into the scale on the populist side. Whatever faults Trump may have, he was sharp enough to see this when everyone in the Wall Street-Washington Axis did not. Sanders saw it too, which accounted for his relatively successful campaign, which also surprised the media.

I don’t attribute Hill’s loss to the private email server business, which most people didn’t understand, much less follow. Nor to Benghazi, a word that practically became a Republican mantra. Nor is it the trust/distrust factor.

No, the real issue is that, no matter how hard she tried, Hillary could never portray herself as an “agent of change,” to use an overused term. Forget exit polls, forget college-educated or not. All that’s just trivia and beside the point. She represented continuity with the unacceptable status quo, continuity with a way of governing that the American people want smashed into atom-sized pieces and rebuilt from the ground up.

Ergo Trump.

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Elizabeth II

The Real QE2

By a margin of around 2 million votes the people of Britain gave a giant collective middle finger to the so-called elites of both their island and the EU. Recall that those elites have been warning for months that there would be a skyfall (and not the James Bond movie type) if Leave won and Remain lost.

The clueless American commentariat have trotted out their usual question when anything supposedly bad happens overseas: could it happen HERE? Since we’re not members of the EU, the media portray the Trump phenomenon as a yardstick to measure whether the popular will in England reflects the same type of popular will in the U.S.

The basic parallel between the Brexit vote and the Trump phenomenon is a rejection of the elitist, or corporatist, form of government that has been in effect in the United States as well as in Europe for more than a generation now.

The NRA is a perfect example of our corporatist form of government. The NRA funnels boatloads of money to U.S. senators and representatives, who then do the NRA’s bidding to ensure that people on the no-fly list can still buy assault rifles. Only in the past few days, with a sit-in by Democrats on the floor of the House, have the timbers of the gun lobby begun to shake a little bit.

While the NRA draws more press, Goldman Sachs is far more important. Goldman is not simply an example of the Wall Street-Washington Axis of elites, it is the Motherlode of corporatism/elitism. It’s the most important primary dealer in U.S. Treasury securities (i.e., buying direct from the government and then reselling). With alumni like Hank Paulson serving as Treasury Secretary and many others in prominent and important offices in the financial and regulatory side of the Washington, Goldman Sachs doesn’t just influence the U.S. Government’s financial policies; it is embedded in them. They flow from Goldman, whose word is swallowed whole by Treasury apparatchiks like Tim Geithner. In times of crisis, like the Great Financial Meltdown and Recession of 2008-09, a small group of Goldman executives, alums and acolytes exerted a decisive influence in deciding what steps the United States Government should, and would take in response to the financial crisis. No one dared dissent from the self-interested Goldman Sachs directives, and one way or another Goldman made a lot of money out of the crisis.

Elizabeth II

The Real QE2

Funny how that works. In Britain, they’ve said “enough.” And here?

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Goldman Sachs

European Union antitrust regulators have hit Goldman Sachs, the world’s top electric power cablemaker Prysmian, Nexans and eight other cable firms with a total fine of 302 million euros ($416 million) for running a power cable cartel between 1999 and 2009. The EU authority said the companies agreed to share markets and allocate customers among themselves.

Goldman Sachs acquired cable maker Prysmian through one of its PE funds in 2005, but since then disposed of its interest.

The EU stated that “[p]art of [the cartel’s] plan was to allocate important high voltage power cable projects in the European Economic Area…including large infrastructure and renewable energy projects such as offshore wind farms.”

"Just doing God's work..."

“Just doing God’s work…”

Read the story here:

EU regulators fine Goldman Sachs, Prysmian for cable cartel | Reuters.

 

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