"Goldman Goes Rogue - Special European Audit To Follow"

[kpete]

"Goldman Goes Rogue - Special European Audit To Follow"
Simon Johnson
Baseline Scenario
February 14, 2010

...We now learn - from Der Spiegel last week and today's NYT - that Goldman Sachs has not only helped or encouraged some European governments to hide a large part of their debts, but it also endeavored to do so for Greece as recently as last November. These actions are fundamentally destabilizing to the global financial system, as they undermine: the eurozone area; all attempts to bring greater transparency to government accounting; and the most basic principles that underlie well-functioning markets. When the data are all lies, the outcomes are all bad - see the subprime mortgage crisis for further detail.

A single rogue trader can bring down a bank - remember the case of Barings. But a single rogue bank can bring down the world's financial system.

Goldman will dismiss this as "business as usual" and, to be sure, a few phone calls around Washington will help ensure that Goldman's primary supervisor - now the Fed - looks the other way.

But the affair is now out of Ben Bernanke's hands, and quite far from people who are easily swayed by the White House. It goes immediately to the European Commission, which has jurisdiction over eurozone budget issues. Faced with enormous pressure from those eurozone countries now on the hook for saving Greece, the Commission will surely launch a special audit of Goldman and all its European clients...
http://baselinescenario.com/2010/02/14/goldman-goes-rogue-%E2%80%93-special-european-audit-to-follow/

Johnson continues on to tell us: "...Goldman will probably be blacklisted from working with Eurozone governments for the foreseeable future...Goldman may be on its way to be banned from some government securities markets altogether."
http://www.dailykos.com/storyonly/2010/2/15/837165/-Johnson:-Eurozone-May-Ban-Goldman-Sachs-and-Humiliate-Fed

[FarCenter]

1. International finance is war by other means

The Euro is a potential threat to the global reserve currency status of the US Dollar. The UK Pound Sterling is also threatened by the Euro.

It is reasonable to assume that undermining the Euro would be consistent with the interests of Washington and London.

It is unlikely that the US government didn't know what Goldman Sachs was doing, given the close association of the two.

[FarCenter]

3. This would have been done while Hank Paulson was CEO of GS

It had worked before. In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means.


From http://www.nytimes.com/2010/02/14/business/global/14debt.html?hp

[unhappycamper]

2. It's interesting that other nations are meddling in our business.

First the Spaniards started looking into the torture issues and crimes against humanity and now somebody's looking at Goldman's business practices.

Too bad our government has no balls.

[dkf]

4. Both of these links are MUST READs.

Thank you for posting.

[formercia]

5. The Goldman Wrecking Crew are financial terrorists.

ban them.