Goldman Sachs Conspiracy and Crony Capitalism

The extent of Goldman Sachs' influence over and ties to the Government are extraordinary. In the spirit of getting the word out, I'll post an excerpt of the fine work of an Investment Advisory called "Notes from the Investment Underground" by William Bonner who is affiliated with www.crisisstrategyalert.com... Unfortunately, you can't presently get this info on any web link.

"Contrary to the prevailing analysis, we believe that the Obama and Bush administration insistence on protecting banks at the expense of the taxpayer is the result of a Machiavellian effort by Goldman Sachs and other major banks to influence U.S. economic policy by infiltrating the corridors of power.

"Today, we duly note that Goldman Sachs has just hired former Barney Frank staffer Michael Paese to be its top Washington lobbyist. This position was formerly held by Mark Patterson, the current chief of staff at the Treasury.

"Pease and Patterson are not the only ones to pass through the revolving door between Washington and Goldman. Bush’s Treasury secretary, Hank “The Hammer” Paulson is a former Goldman CEO. And his replacement, Tim Geithner, was mentored by Gerald Corrigan, a former New York Fed president and current partner and managing director of the Office of the Chairman of Goldman Sachs.
Who else was President Obama considering for Treasury secretary? Former Goldman hotshots Robert Rubin and Jon Corzine (now the governor of New Jersey).

"Are other Goldman alumni close to government? Just a few… Ed Liddy, who the government appointed as CEO of AIG was Goldman’s vice chairman. World Bank president Robert Zoellick was a managing director. Neel Kashkari (an appropriate surname for a government bagman if ever there was one), the 35-year-old overseer of the TARP program was a vice president. And Geithner’s replacement as president of the New York Fed, William C. Dudley, is also a former Goldman employee.

"Oh… and Robert Rubin was Treasury secretary under President Clinton. And former Goldman senior partner Stephen Friedman headed Bush’s National Economic Council in the first term. And Josh Bolton, another former Goldman golden boy, served as White House chief of staff under Bush.
The former CEO of the NYSE, John Thain, is also a Goldman alumnus. And his replacement, Duncan Niederauer, spent 22 years of his career at the bank.

"Of course, these high-level appointments are probably just coincidental. Just as it was probably coincidental that on September 15, 2008, then New York Fed president Tim Geithner pressed for AIG’s biggest counterparty, Goldman Sachs, to help the insurer raise capital after it became clear that AIG was at risk of going bankrupt. And that on the same day Goldman’s current CEO, Lloyd Blankfein, was at the New York Fed. And that Goldman ended up in receipt of about $12 billion in tax dollars thanks to AIG’s wholesale credit-default swap unwinds after the government bailed out the insurance giant.

"Oh… and which bank’s employees were among the largest donors to President Obama’s recent campaign, giving more than $884,000? You guessed it…
If it’s a conspiracy to believe that Goldman Sachs gets preferential treatment from White House administrations that are 1) in receipt of major funding from Goldman Sachs employees and 2) populated by former Goldman Sachs insiders, we’d love to know what the official explanation is."

For info on bailout participants' lobbying activities see www.ritholtz.com...

Note on AIG: Liddy (mentioned above) sat for 5 years on Goldman's board and still retains over $3million in Goldman stock. He, with Government Sachs, was in a position to decide whether counterparties to CDS contracts should be paid in full or take a haircut. Two thirds of the $173 Billion AIG received from taxpayers went to counterparties and Goldman was the largest recipient.

I'll post one addendum the above just below.

So this will be no surprise to some, but here is a little more from the same source. They are commenting on New York Fed chairman Stephen Friedman who is in the news today:

"According to The Wall Street Journal, Friedman, who once ran Goldman, made a tidy $1.7 million from the purchase of 37,300 of the bank’s shares while chairman of the New York Fed.

"Why is this noteworthy? Because last September the New York Fed speedily approved Goldman’s application to become a bank holding company and therefore qualify to receive a $10 billion tax-funded cash injection. And members of the New York Fed’s board are prohibited from owning shares in bank holding companies.

"Not that this ban worried Friedman too much. While the Fed considered an application for a waiver on the rule, Friedman not only kept his existing Goldman shares, but also bought 37,300 more Goldman shares in December. Friedman says there was no conflict of interest in his purchase of the shares. He is stepping down as chairman of the New York Fed at the end of the year, when the waiver allowing him to own the shares expires. Presumably, he wants to hold onto his $1.7 million gain."

I'm still waiting for the prosecutors to start doing their work.

Enjoy!

Prosecution?? Ha!! Never gonna happen.

btw I think you might like this thread..
Former S&L Regulator: 'Absolutely' A Banking Bailout Coverup

No prosecutions, but there may be some more sacrificial (suicidal) lambs.