------ Forwarded Message > From: "dasg...@aol.com" <dasg...@aol.com> > Date: Thu, 18 Feb 2010 23:40:21 EST > To: Robert Millegan <ramille...@aol.com> > Cc: <ema...@aol.com>, <j...@aol.com>, <jim6...@cwnet.com>, > <christian.r...@gmail.com> > Subject: GoldmanSachs + AIG = Another BCCI, Only WORSE, Because It's "Too Big > to Fail"! >
> Too big to fail -- Corporations w/ rights of a person & the power of a nation > <http://www.atlargely.com/atlargely/2010/02/too-big-to-fail-corps-w-rights-of- > a-person-the-power-of-a-nation.html> > http://atlargely.com/ > Goldman Sachs is "too big to fail" and so it was bailed out. I have always > argued that if a company is "too big to fail," then it is clearly too big to > exist > <http://www.atlargely.com/atlargely/2009/02/aig-too-big-to-fail-too-big-to-exi > st-period.html> and poses a national -- perhaps even a global -- threat. > > We have seen how AIG seems to have become the new BCCI > <http://www.atlargely.com/atlargely/2009/03/aig-bcci.html> . But perhaps this > is a two-team dance, which includes Goldman Sachs using AIG as a conduit. They > are, after all, very friendly with one another > <http://www.huffingtonpost.com/2009/03/17/goldman-sachs-goes-for-th_n_175638.h > tml> . > > While it seems like hyperbole when I say that companies that are "too big to > fail" pose a national, and possibly global threat, consider the latest news on > Goldman Sachs > <http://www.businessweek.com/news/2010-02-16/goldman-sachs-greece-didn-t-discl > ose-swap-investors-fooled-.html> : >> >> >> Goldman Sachs Group Inc. managed $15 billion of bond sales for Greece after >> arranging a currency swap that allowed the government to hide the extent of >> its deficit. >> >> >> No mention was made of the swap in sales documents for the securities in at >> least six of the 10 sales the bank arranged for Greece since the >> transaction, according to a review of the prospectuses by Bloomberg. The New >> York-based firm helped Greece raise $1 billion of off-balance-sheet funding >> in 2002 through the swap, which European Union regulators said they knew >> nothing about until recent days. >> >> >> Failing to disclose the swap may have allowed Goldman, a co-lead manager on >> many of the sales, other underwriters and Greece to get a better price for >> the securities, said Bill Blain, co-head of fixed income at Matrix Corporate >> Capital LLP, a London-based broker and fund manager. >> >> >> “The price of bonds should reflect the reality of Greece’s finances,” Blain >> said. “If a bank was selling them to investors on the basis of publicly >> available information, and they were aware that information was incorrect, >> then investors have been fooled.” > > Yes, you read that right. A company so big that it can hide the debt of a > nation. But Greece may not have been the only nation-client to get a dose of > Goldman Sachs business practices. Italy also appears to have > <http://www.telegraph.co.uk/finance/markets/2809685/Italians-claim-country-run > -by-Goldman-Sachs.html> been dragged into an ever widening scandal with GS: >> >> >> For the past month, Goldman Sachs has been dragged into a widening >> corruption probe into the Siemens-Italtel merger dating back to the >> mid-1990s. >> >> >> <snip> >> >> >> The inquiry is just one of several probes across Europe into a €400m (£273m) >> network of black accounts used by Siemens to grease deals. >> >> >> Prosecutors in Bolzano, Northern Italy, claim to have unearthed a Siemens >> payment of DM10m (£3.2m) to a Goldman Sachs account in Frankfurt in July >> 1997. From there it ricocheted around the world, going to London and Tokyo >> before returning to Germany in yen - according to Italy's financial >> newspaper Il Sole. > > This makes the Enron/Arthur Anderson > <http://en.wikipedia.org/wiki/Enron_scandal> scandal look like romper room. > But unlike Enron and Arthur Anderson, Goldman Sachs is too big to be held > accountable, too big to fail in a free market (the irony is amazing), too > important to the stability of the global economy to ever be seriously > investigated. > > Then there is Refco <http://en.wikipedia.org/wiki/Refco> : >> >> >> Though of much smaller size, the regulatory impact of the scandal will be >> larger than for probably any other corporate failure except for Enron >> <http://en.wikipedia.org/wiki/Enron> . Refco had sold shares to the public >> in a public offering only two months before revealing the apparent fraud. >> Their auditors, Grant Thornton <http://en.wikipedia.org/wiki/Grant_Thornton> >> , and the investment banks that handled the IPO, Credit Suisse First Boston >> <http://en.wikipedia.org/wiki/Credit_Suisse_First_Boston> , Goldman Sachs >> <http://en.wikipedia.org/wiki/Goldman_Sachs> , and Bank of America Corp. >> <http://en.wikipedia.org/wiki/Bank_of_America_Corp.> , all supposedly >> completed due diligence on the company, and all missed the CEO's hiding $430 >> million in bad debts. Their largest private investor was Thomas H. Lee >> Partners <http://en.wikipedia.org/wiki/Thomas_H._Lee_Partners> , a highly >> regarded buyout fund, and the reputation of its managers has been similarly >> sullied. >> On October 27, 2005, shareholders of Refco filed class action >> <http://en.wikipedia.org/wiki/Class_action> lawsuits against Refco, Thomas >> H. Lee Partners <http://en.wikipedia.org/wiki/Thomas_H._Lee_Partners> , >> Grant Thornton, Credit Suisse First Boston, and Goldman Sachs. On March 2, >> 2006, a lawyer representing Refco's unsecured creditors began steps to sue >> the IPO underwriters for aiding and abetting the fraud, or for breach of >> fiduciary duty. In April 2006, creditors sued Bawag P.S.K. Group for more >> than $1.3 billion > You see this pattern now, don't you? > > But perhaps Goldman Sachs can pay its way out of being investigated any > further, like it has done before > <http://www.nytimes.com/2009/05/12/business/12lend.html?_r=2> : >> >> >> In the first major settlement involving Wall Street’s role in the subprime >> mortgage >> <http://topics.nytimes.com/top/news/business/companies/general_motors_corpora >> tion/index.html?inline=nyt-classifier> business, the Goldman Sachs >> <http://topics.nytimes.com/top/news/business/companies/goldman_sachs_group_in >> c/index.html?inline=nyt-org> Group agreed on Monday to pay up to $60 million >> to end an investigation by the Massachusetts attorney general’s office into >> whether the firm helped promote unfair home loans >> <http://topics.nytimes.com/your-money/loans/index.html?inline=nyt-classifier> >> in the state. > > How adorable is this? Goldman Sachs uses bail-out money to pay its way out of > being investigated. Can all citizens of the US pay their way out of criminal > investigations? No. Only the very special corporate "persons." > > Maybe the real scandal of the AIG scandal is in fact Goldman Sachs > <http://www.slate.com/id/2213942/> : > <http://www.slate.com/id/2213942/> >> >> >> Why did Goldman have to get back 100 cents on the dollar? Didn't we already >> give Goldman a $25 billion capital infusion, and aren't they sitting on more >> than $100 billion in cash? Haven't we been told recently that they are >> beginning to come back to fiscal stability? If that is so, couldn't they have >> accepted a discount, and couldn't they have agreed to certain conditions >> before the AIG dollars—that is, our dollars—flowed? >> >> >> <snip> >> >> >> What did Goldman, and all the other counterparties, know about AIG's >> financial condition at the time they executed the swaps or other contracts? >> Had they done adequate due diligence to see whether they were buying real >> protection? And why shouldn't they bear a percentage of the risk of failure >> of their own counterparty? > > How disturbing is it that Goldman Sachs has the rights of a person (thanks > SCOTUS <http://en.wikipedia.org/wiki/Corporate_personhood> ), with the power > of a nation? > ------ End of Forwarded Message
