Stock Market Collapse: More Goldman Market Rigging?

When Goldman does not get its way, it is in a position to throw a tantrum and crash the market. . . .

Read more here –

6 Responses

  1. When Hank Paulson appeared before the committee investigating the financial crisis and its causes, the so-called investigators were more interested in getting explanations from him than elucidating his role, as former Goldman CEO, in setting up conditions for the crisis. This is because they were all in agreement with Paulson that the “new economy”, ie, the derivatives market, is a good thing and it only needs to be regulated.

    “Financial innovation” is not to be challenged. When Paulson was asked whether this derivatives market actually provided for the allocation of capital for use by entrepreneurs and businesses that actually create jobs and grow the economy, he replied, essentially, that he was simply giving his customers what they wanted, a way to hedge risk. The allocation of capital was a non-issue and the real problem was regulation of the new products, the “synthetic CDO’s”, & etc.

    He was not challenged. The “new economy” is not challenged. If this market volatility and the next inevitable crash does not stimulate some one to challenge the new financial economy and its “innovation”, we have learned nothing and the crisis investigation committee might as well adjourn and toss its report on the ash heap of history along with the 911 Commission report and other useless documents.

    I think we need to be less mesmerized by the insanity produced by this new financial economy, devote less energy to trying to explain the chaos it creates, and spend more energy on the matter of fundamental reform. We need to eliminate this financial economy and return to the fundamentals of investing. Risk is risk. Hedging it only puts the onus somewhere else on some one else. The best way to hedge risk is to make something that really works in the real economy. A CDO, synthetic or not, is not a product, not an asset. It’s a POS ( piece of shit ).

  2. The sainted Brooksley Born, member of this crisis investigation committee, she who has been lionized for her early resistance to the deregulatory enthusiasm of Greenspan, Rubin, Paulson, and others who created the current chaos, most lovingly kissed Paulson’s tanned behind.

    There are no heroes who will put the house in order. There is no strong advocate for deep structural reform, no one who is standing up and saying “This is wrong! It needs to change!”

    Therefore, our economy is doomed.

  3. great article.
    It seems like the tragedy of human race is to confuse imaginary with real. Most of humanity thinks that money and gold is more real than earth, sky, water, animals, food, health, happiness, compassion, life itself.
    Quite scary. Like a mass psychosis

  4. Great article (as always).

    Here is another good one (well, a slideshow acctually):

  5. I was looking at the link to the Weimar Republic article and I saw this:

    “One billion non-inflationary bills of exchange called Labor Treasury Certificates were then issued against this cost. Millions of people were put to work on these projects, and the workers were paid with the Treasury Certificates. The workers then spent the certificates on goods and services, creating more jobs for more people. These certificates were not actually debt-free but were issued as bonds, and the government paid interest on them to the bearers. But the certificates circulated as money and were renewable indefinitely, making them a de facto currency; and they avoided the need to borrow from international lenders or to pay off international debts.6 The Treasury Certificates did not trade on foreign currency markets, so they were beyond the reach of the currency speculators. They could not be sold short because there was no one to sell them to, so they retained their value. ”

    Isn’t this what China is doing now? Two currencies- one internal and not susceptible to speculation. Could (should) the US do this? Could Obama and Congress create a jobs program that paid out in a type of payment not available to speculation?

  6. Dear Ellen:

    Prior to the late 1970 and early 1980, there were little or no derivatives, whether the derivatives were exchange traded puts and calls or later credit default swaps and the like.

    Prior to large scale derivatives, the opportunities to cheat the market game was limited to trading on inside information prior to a take-over or selling and short selling prior to bad earnings or exposure of company fraud.

    But that was too easy to identify and prosecute as the FEDs did to such notable as Milken, Boesky, Levine and Standley Goldblum of Equity Funding.

    Now with all of the buying of puts and selling of calls and betting on the controlled collapses of Bear Stearns, and Lehman it is hard to detect even if the top officials were honestly trying to catch the criminals. With the enormous amounts of resources and even the participation of the plunge protection team, they have set up the game so they can make money even when the stocks just stay relatively unchanged or trading prior to large moves.

    The extremely large size of the derivatives arena make it such that they can bet the Sky on their fixed games of chance.


    John Olagues

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