Saturday, January 2, 2010

Financial Crisis...Image by MyEyeSees via Flickr
You guys will not understand what is really going on here until you understand that the tarp loans to GS were just a red herring, a distraction. The real game is AIG, and all the money we pumped in that direction. Which then went to GS, and other firms. The PR people at GS tell us GS had the risk of AIG fallure hedged, but they should be made to prove that those counterparties would have paid 100 cents on the dollar. That is very doubtful, So the 12 or 13 billion GS got from AIG came directly from the taxpayers.
Second, GS has become a government sponsored entity, knowing they can walk into the financial casino, place their bets, and if they lose, the tax payer will cover them. How can the fail to make money?
Third, GS played a major role in creating the commodities supply panic of 2008, convincing everyone that they should pay $150 for oil today, so they don't have to pay $200 tomorrow.
But I doubt if anything will happen, because GS and the other Wall Street big financials are so tight with the financial press, there will never be good investigative journalism on this. Ask a financial reporter if he has any personal friends who work on Wall Street, and they will all say yes. Ask most New York and Washington based reporters in general if they have friends who work on Wall Street. Chuck Todd of NBC admitted as much several months ago, saying that "all of us have social friends on Wall Street, maybe if we all knew some autoworkers, we would look at each set of bailouts differently."
Then throw in the fact that Barney Frank is good friends with Henry Paulson....
Remember, Galleon is just the tip of the iceberg.
Justin, please find out where the AIG money went, and make them prove their other hedge counterparties could pay up. Because we also bailed them out.


  • 9
    You know, these guys would be living in a different universe if so many members of the financial press weren't wearing clown shoes.
    I quote Justin's coworker, after describing how Andrew Hall has his unit rent a tanker and take delivery of 1 million barrels of oil because he thought the price was temporarily low.
    "When the price of oil recovered Hall made as much as $40 million on that one trade alone. "
    Excuse me, but he would have had to make over $42 per barrel to both cover his costs and make $40 per barrell. I find that very improbable.
    Does this idiot reporter know this to be the case? If so, he doesn't provide any evidence. Instead, he gushes on:
    "Hall has also reportedly been buying gold this year. Another good move...."
    But not a particularly innovative one, particularly when you are playing risk-free with other people's money backed by the government.
    I don't have any problem with the idea that individuals can be worth a lot of money. I can name three whose companies I have dealt with and where the company's success clearly bears their imprint:
    1. Bill Gates
    2. John Chambers
    3. Steve Jobs
    Maybe Andrew Hall is one of these folks. Or maybe he's just a guy who engages in highly leveraged, high risk transactions with other people's money. Who knows?
    What I can tell you definitely is that nobody will be able to make that determination more accurately because they read this idiot article in time.
    http://www.time.com/time/business/article/0,8599,1930732,00.html
    Small wonder that America's discussion of this issue approaches the overtly moronic.


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