Best of the Week
Most Popular
1.The Greatest Stock Market Crash Of Your Life Is Just Ahead… – Warns Harry Dent - GoldCore
2.Budget 2016: Borrowing, Lifetime ISA, House Prices, Economy, Syria, Brexit and Stocks - Nadeem_Walayat
3.Gold Price Intermediate Top - Clive_Maund
4.Brussels Terror Attacks, Death of the European Union, BrExit Wake up Call - Nadeem_Walayat
5.Stock Market Maybe This Time is Different? - Tony_Caldaro
6.UK House Asking Prices Break Above £300k! Housing Market Paralysis - Nadeem_Walayat
7.A Big Reason Why Silver Price Is Set To Soar - Hubert_Moolman
8.The Financial Crisis Has Just Begun; Is The American Dream Is Over? - Chris_Vermeulen
9.Gold Stocks Spring Rally - Zeal_LLC
10.GLX, GLDX, Baby Gold Bull Market Stillborn? - Rambus_Chartology
Last 7 days
Consensus Forming: China Heading Back Into Financial Crisis - 30th Apr 16
The Next Technical Price Targets for Gold & Silver - 30th Apr 16
Stock Market Downtrend Should be Underway - 30th Apr 16
Gold And Silver – A Clarion Alarm Call For All Paper Assets - 30th Apr 16
US Economic Statistics LIES, LIES AND OMG, MORE LIES - 30th Apr 16
Stock Market Strong Elliott Wave Relationship is Developing - 29th Apr 16
Fed's Kaplan: Brexit to Factor in US June Interest Rate Decision - 29th Apr 16
Silver Miners Strong in Grim Q4 - 29th Apr 16
Is Silver a better bet than Gold in the Near Future? - 29th Apr 16
How to Use the CoT Report in Gold Investing? - 29th Apr 16
Sri Lanka is Intriguing: Areas to Consider for Value Investing - 29th Apr 16
Gold “Chart of The Decade” – Maths Suggest $10,000 Per Ounce Says Rickards - 29th Apr 16
Are We or Are We Not in a New Gold Bull Market? - 29th Apr 16
Silver: The “Five Year Plan” and the Great Leap Forward - 28th Apr 16
Michael Hudson: The Wall Street Economy Has Taken Over The Economy and Is Draining It! - 28th Apr 16
AUD/USD - Trend Reversal or Just a Bigger Pullback? - 28th Apr 16
A Gold Revaluation Could Transform Your Financial Status - Overnight - 28th Apr 16
Monetary Policies Misunderstood - 28th Apr 16
Gold Bullion vs Gold Miners - 28th Apr 16
OECD Suggests BrExit Would Cut Net Migration by 1.2 Million by 2030 - 28th Apr 16
MP Naz Shah Punished for Tweets Made During Israel's Genocide of Gaza Palestinian People - 28th Apr 16
Global Recession in 2016 and Beyond - The Obvious Evidence - 27th Apr 16
Why Gold Bugs Need to Stop Listening to The Fear Mongers and Start Thinking for a Change - 27th Apr 16
BlackRock’s Fink: Fed to Raise Interest Rates by Quarter Point ‘at Best’ - 27th Apr 16
Gold More Productive Than Cash?! - 27th Apr 16
Donald Trump Will Fire Janet Yellen and Be Trapped - 27th Apr 16
Money Saving Gardening by Propagating Roses From Cuttings - Propagating Rose Plants Over 2.5 Years - 27th Apr 16
Facebook Censors Pro Trump and Negative Hillary News - 27th Apr 16
This is the Era of the Democrats and Your Taxes are Going Up - 27th Apr 16
Long Awaited Gold Price Breakout - 26th Apr 16
Crude Oil Price Double Top or Further Rally? - 26th Apr 16
Madness in the Crimex Gold and Silver Trading Pits - 26th Apr 16
Britain's Prospects: GBP and BREXIT - MAP Wave Analysis - 26th Apr 16
CRB, Gold, Oil, Cotton, Coffee - 7 Must See Commodities Charts - 26th Apr 16
Gold Price Target is $3,000 and Silver is $75 per Ounce - 25th Apr 16
Parameters for a Stock Market Sell Signal-in-the-making - 25th Apr 16
Stock Market Dangerous Divergence - 25th Apr 16
Gold Miners Nub is the Sweat of the Sun - 24th Apr 16
US Dollar Price Forecast - 24th Apr 16
Stock Market Upside Objective Reached - 24th Apr 16
Why Leftist Greeks have more reasons than Liberals to favour Entrepreneurship and Support Entrepreneurs - 24th Apr 16
The Dow Jones is a Catalyst for Misplaced Stock Market Optimism - 24th Apr 16
Why Russia Harasses U.S. Aircraft and Ships - 24th Apr 16
Stocks Bull or Bear Market Rally? - 23rd Apr 16
A Bright Future for Solar Power in the Middle East - 23rd Apr 16
Silver Commitments of Traders – Halloween is Arriving Early This Year - 23rd Apr 16
Good News, Bad News, Both Favor Gold And Silver - 23rd Apr 16
Mish's Sure Fire Proposal to End Japanese Deflation - 23rd Apr 16
Mish Shedlock: “EXCUSE ME MR. PRESIDENT, IS THAT A JOKE?” - 23rd Apr 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Catching a Falling Financial Knife

Prince Harry, Goldman Sachs Pays Better than Porn

Politics / Credit Crisis 2012 Aug 29, 2012 - 09:17 AM GMT

By: Janet_Tavakoli

Politics

Best Financial Markets Analysis ArticleDear Sir,

It has come to our attention that you have been offered a role in a porn film for $10 million. We urge you to reject it.

Princely Pay and Elite Status

Goldman Sachs is prepared to pay you much better than porn, and as a partner, your position will be much more prestigious than the Duke of York's role as a representative for international trade and investment. We twist country treasurers and central bankers around our little fingers. Politicians are at our beck and call. We even pay a lower tax rate than your grandmother.


As a royal, you'll regain your rightful status. We've managed to pervert capitalism and have even infiltrated our own regulators and government. If you join us, your elite status will be assured in perpetuity.

Department of Jesters

Our mortgage unit, Goldman Sachs Alternative Mortgage Products (GSAMP) was nicknamed "Garbage Sold at Mythical Prices" by financial professionals. In 2007, Ohio barred California-based New Century mortgage lenders from doing business after despicable practices. A complaint of alleged fraud against us detailed our close relationships with imploding mortgage lenders: Countrywide, New Century, and Fremont. They were bailed out, bankrupt, and/or sued.

The complaint showed "an accelerating meltdown for these subprime lenders, and despite known serious loan problems, [we] continued to securitize the loans and sell them in packages of residential mortgage backed securities." Rotten deals like GSAMP-2006 S3; (a $494 million deal from April 2006) were created and distributed by us and repackaged in other deals.

We paid a record $550 million to settle SEC fraud charges related to one subprime collateralized debt obligation (CDO) called Abacus. But that was chump change to what we would have paid if our GSAMP subsidiary and our own securitization department had been investigated.

Congress and TARP investigators uncovered further damaging evidence. Senator Carl Levin (D-MI), Chairman of a senate investigative panel, issued a memo stating that we at Goldman Sachs "magnified the impact of toxic mortgages." For example, The Wall Street Journal reviewed data showing that a $38 million subprime-mortgage bond created in June 2006 was referenced in more than 30 debt pools (via derivatives) causing around $280 million in losses to investors by 2008. In other words, we kept repackaging, reselling or buying credit default protection on losers, thus multiplying losses to others many times over on the same trash.

Were we seriously investigated? Were we indicted? Of course we were not. Were any criminal charges brought? Of course they were not.

We dodged questions by claiming we lost money. But that's the nature of control fraud. Parasites earn high pay while eating their host. That's why we needed taxpayer subsidies like the bailout of our credit default swap contracts with AIG.

William K. Black, a renowned fraud investigator, explains control fraud in his book, The Best Way to Rob A Bank is To Own One. His team had over 1,000 felony convictions of major financial figures after financial fraud in Savings & Loans resulted in a financial crisis a couple of decades ago. Our current crisis was 70 times larger after we neutered enforcement. Today our Department of Justice ("DOJ") is our private Department of Jesters.

Mutual Overexposure

You've been overexposed. We completely understand that feeling! We felt the same way when we bought credit default protection from AIG on rotten CDOs, some of which we manufactured ourselves for ourselves and for foreign banks. We nearly sunk AIG, but U.S. taxpayers were forced to bail it out.

We nearly went under, too! Washington, the Federal Reserve and Treasury are all in our pocket, so they bailed out AIG's credit default swaps on which we got a big payday. They paid our friends at foreign banks for which we originated rotten CDOs; thank goodness, or they might have sued us! Our friends in the U.S. government paid 100 cents on the dollar when other bond insurers were settling the same deals for as low as 10 cents on the dollar. We'll stack our taxpayer subsidies against a royal's any day.

Oh, and you'll love this. A German bank sued us for securities fraud over Davis Square VI, one of the CDOs we originated, against which AIG sold protection. Our Department of Jesters is great at looking the other way. No criminal indictments for us!

Divine Right and God's Work

The Shah of Iran, the son of a mere commoner, claimed he ruled by "divine right." That didn't end well for him. We've got spin that sounds better. We've done deal after deal like the previously mentioned reprehensible trash for which we've been unindicted. We call this doing "God's work." It's working out great for us.

Our Apologists Will Lie to Your Grandmother, the Queen

In November 2008, your grandmother asked why no one foresaw the credit crunch. Yet many financial professionals have well documented track records that show they did. Moreover, they warned that high leverage -- combined with securities that were a classic situation for fraud -- begged disaster.

We handle the media better than you royals. Our media shills say "greed and venality do not make a criminal case." That sentence is true. But the issue is fraud, which is cause for a criminal case. You don't think that we used derivatives to reference the same dodgy $38 million bond over 30 times by accident, do you? Securities experts called us out on this B.S. in real time. That Tavakoli woman from Chicago wrote an entire book about CDO malfeasance in 2003. But we took it as a playbook and escalated, and our Department of Jesters is letting us get away with it!

British academics who are useful idiots wrote the Queen that a "psychology of denial" was responsible for intentional behavior. We'd be most grateful if you could keep your grandmother occupied with your shenanigans so she doesn't ask any more questions.

The Right Stuff

After seeing this snippet in the Daily Mail, we're 100 percent certain you have the right stuff for a long and extremely lucrative career with Goldman Sachs.:

A witness at the casino said: "[Harry] was playing craps with his friends. They were wasted. He was calling other punters at the table 'muppets' and he joked to the dealer that he would kick his head in if he didn't win."

We love your jokes! We only ask for a little more discretion. No, we don't mean about the nude photos; we don't care about that. But these days when we call our clients "muppets," there are no witnesses.

We look forward to your answer, and no matter what you decide, let it never be said that you were uninvited by the unindicted.

Yours sincerely,

The Unindicted Goldman Sachs

The New Robber Barons, provides more details on the causes and culprits of the financial crisis. It is only available as an e-book. You must own a Kindle or have installed the Kindle app for PC, Mac, or iPad to download it. You can find it at Amazon US here, at Amazon UK here, Amazon France here, at Amazon Germany here, at Amazon Italy here, or at Amazon Spain here.

Endnote: Jane Wollman Rusoff interviewed me for Research Magazine's May cover story, "Finding the Culprits of the Crisis," about the deep monetary connections of Wall Street and Washington and the corrosive effect it has had on the economy and the Republic.

Editor's Note: This post is a work of satire.

By Janet Tavakoli

web site: www.tavakolistructuredfinance.com

Janet Tavakoli is the president of Tavakoli Structured Finance, a Chicago-based firm that provides consulting to financial institutions and institutional investors. Ms. Tavakoli has more than 20 years of experience in senior investment banking positions, trading, structuring and marketing structured financial products. She is a former adjunct associate professor of derivatives at the University of Chicago's Graduate School of Business. Author of: Credit Derivatives & Synthetic Structures (1998, 2001), Collateralized Debt Obligations & Structured Finance (2003), Structured Finance & Collateralized Debt Obligations (John Wiley & Sons, September 2008). Tavakoli’s book on the causes of the global financial meltdown and how to fix it is: Dear Mr. Buffett: What an Investor Learns 1,269 Miles from Wall Street (Wiley, 2009).

© 2012 Copyright Janet Tavakoli- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife