|
Korean Job Discussion Forums
"The Internet's Meeting Place for ESL/EFL Teachers from Around the World!"
|
| View previous topic :: View next topic |
| Author |
Message |
mises
Joined: 05 Nov 2007
Location: retired
|
 Posted: Fri Feb 19, 2010 8:55 am Post subject: Greece yells at Germany, blames VSquid and promptly submits |
 |
|
Great fun in the EU:
http://www.reuters.com/article/idUSLDE61H1IZ20100218
| Quote: |
| "How does Germany have the cheek to denounce us over our finances when it has still not paid compensation for Greece's war victims?" Margaritis Tzimas, of the main opposition New Democracy party, told parliament. |
What's going on there anyways? Well, Vampire Squid helped Greece violate EU rules, and when this was exposed, attacked Greek debt:
http://www.reuters.com/article/idUSN1624811620100217
| Quote: |
| NEW YORK, Feb 16 (Reuters) - Goldman Sachs Group Inc (GS.N) arranged a currency swap for Greece that it failed to disclose and that allowed the country, now facing a debt crisis, to hide the extent of its deficit, Bloomberg reported on Tuesday. |
To which Vampire Squid replied:
http://www.lesechos.fr/info/finance/020370026492-le-fonds-speculatif-de-john-paulson-actif-en-grece.htm
http://blog.littlesis.org/2010/02/18/sources-allege-goldman-sachs-and-john-paulson-are-partnering-in-speculative-attacks-on-greece/
| Quote: |
| There aren�t just suspicions that Goldman Sachs is speculating against the Greek debt through the market for credit default swaps (CDS). After having made $3.7 billion dollars by betting on the subprime market, the hedge fund manager John Paulson has been cited as a partner of Goldman Sachs in the Greek market. According to the activist Kevin Connor, co-director of the think tank the Public Accountability Initiative, based on article in the British and Greek press, Paulson�s funds have taken large/important positions in the Greek debt market through a team of 20-30 traders. |
So Greece decided to send in the spooks:
http://www.zerohedge.com/article/greek-spies-hot-trail-cds-speculators-who-singlehandedly-destroyed-greece
Vampire Squid holds strong, and gently inserts a tentacle into the Greek elite:
http://www.zerohedge.com/article/head-greek-debt-office-replaced-former-goldman-investment-banker
| Quote: |
| And so the tragicomic becomes surreal. Yesterday's news about the departure of the head of the debt management agency, Spyros Papanicolaou, was somewhat of a yawner, until we realized that his replacement would be none other than Petros Christodoulou, who until today was head of Private Banking and Group Treasury at the National Bank of Greece (reporting directly to the CEO of the NBG Tamvakakis), as can be seen on the org chart below. Yet was is oddest, is that Mr. Christodoulou worked not only as head of derivatives at JP Morgan but also held comparable posts at Credit Suisse, and... wait for it, Goldman Sachs... Uh, say what? |
Where the hell did I put my tinfoil? |
|
| Back to top |
|
 |
caniff
Joined: 03 Feb 2004
Location: All over the map
|
| Posted: Fri Feb 19, 2010 9:21 am Post subject: |
|
|
| It's like a gd merry-go-round. |
|
| Back to top |
|
|
The Happy Warrior
Joined: 10 Feb 2010
|
| Posted: Sat Feb 20, 2010 3:07 am Post subject: |
|
|
| I'm sorry, mises. I read over this all three times and I still feel like I'm missing something. How do the CDSs allow Gov't Sachs, or as you deem them, the Vampiric Illithid, to speculate against Greek debt? |
|
| Back to top |
|
|
mises
Joined: 05 Nov 2007
Location: retired
|
| Posted: Sat Feb 20, 2010 6:40 am Post subject: |
|
|
Vampire Squid is the moniker given to Goldman by Matt Taibbi:
http://www.rollingstone.com/politics/story/28816321/inside_the_great_american_bubble_machine
| Quote: |
| The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. |
OK, So Vampire Squid helped Greece hide debt using exotic financial instruments. In other words, only Goldman knew the real state of Greek finances.
Then, Squid and John Paulson (who shorted sub-prime with Squid) are driving up the price of credit default swaps and at the same time "shorting" Greek debt, which then drives up the price that Greece must pay for debt. This puts pressure on the Greek state, which is causing their budget crisis to be exacerbated. This is happening at the same time Squid is "advising" Greece on how to fix the problem. Goldman is on both sides of the transaction.
We all know that Greece will be bailed out. Goldman will sell and cover just before the bailout and earn a pretty penny. And they will know when the bailout is coming, because Vampire Squid will be organizing any bailout.
Then, Greece creates a budget commission to fix the problem, and hires a "former" Squid banker to run it.
Also, I just learned yesterday that the Long Term Capital Management bailout in the 80's was a backdoor bailout of Goldman, just like AIG. |
|
| Back to top |
|
|
mises
Joined: 05 Nov 2007
Location: retired
|
|
| Back to top |
|
|
mises
Joined: 05 Nov 2007
Location: retired
|
| Posted: Thu Feb 25, 2010 6:09 pm Post subject: |
|
|
More on Greece:
http://www.zerohedge.com/article/postcards-greece
^ Video in link. It's worth watching.
But keep this in mind while you're watching it:
http://blogs.reuters.com/rolfe-winkler/2010/02/25/afternoon-links-2-25/
| Quote: |
| What Greece tells us about Europe (Defterios, CNN) �It is not often discussed, but many [striking] government workers enjoy preferential tax rates, can retire at the age of 54 (in some cases earlier) and enjoy 14 months of pay for 12 months worked.� |
It is worth noting:
| Quote: |
| The Euro�s final battleground: Spain (Fidler, WSJ) The folks at Variant Perception warned the world about the impending disaster in Spain last August. Here�s a copy of their report, which they�ve graciously allowed me to share. (Though they�re famous for that one, they do write about more than Spain.) Anyway, Spain�s economic problems are prompting mainstream discussion that the euro could actually collapse. Greece is small enough that it can be rescued by Germany and France. Spain not so much. |
Spain, Greece, Portugal, Ireland. The Euro... |
|
| Back to top |
|
|
bucheon bum
Joined: 16 Jan 2003
|
| Posted: Thu Feb 25, 2010 7:02 pm Post subject: |
|
|
| Yeah, I have little sympathy for Greece. Even if the VSquid is partly responsible and profiting from Greece's financial misery, you gotta put the big bulk of the blame on both Greece's leaders and its voters. The public spending and public sector compensation was way out of control. |
|
| Back to top |
|
|
The Happy Warrior
Joined: 10 Feb 2010
|
| Posted: Thu Feb 25, 2010 8:31 pm Post subject: |
|
|
Sorry, mises. You'll have to catch us up to speed.
I read this on CDOs, but I still don't understand them. |
|
| Back to top |
|
|
mises
Joined: 05 Nov 2007
Location: retired
|
| Posted: Thu Feb 25, 2010 8:53 pm Post subject: |
|
|
Ok. It is a collection of debt-based securities. Typically, they do not include mortgages but sometimes do (these ones did). They pool debt from different sources and different instruments to lessen the risk of buying any one debt. Like a mutual fund for bonds.
The CDO's are only as good as the underlying quality of debt. So if you issue crap (say credit card debt to junkies) but can convince a ratings agency that it is perfectly safe (not a hard thing to accomplish) you can hide the risk of the CDO and sell it to unsuspecting customers - usually a pension fund or other institutional source of capital.
What Paulson did was build (and have built) CDO's that were essentially garbage. These were sold off, and Paulson took out credit default swaps (CDS) which is a form of insurance against default. The institution selling the insurance would assume the ratings of the debt was reasonable, and the cost of the insurance would be low.
As a side note, a CDS does not require the possession of the underlying asset. In other words, with a CDS I can take out a life insurance policy on you, which creates some uncomfortable incentives. No? Think Bear/Lehman.
So he had an organization sell (we don't know who sold them, but I'm sure it rhymes with Holdman Jacks) junk packaged as gold and then bet that they would fail. Then he was praised for all his wonderful brilliance in making a few billion (with a B) profit. It's like me putting a soda in the fridge and the NYT later writing about my brilliant prediction that the soda would become cold.
These instruments are traded over the counter (OTC) which means not on an exchange. The transactions are out of the eye of the market and anyways can't really be understood without 'unpacking' the CDO. So any institution that bought them was dramatically increasing their risk without investors knowing it.
It's evil. This is not a financial system. It is a parasite devouring a host. And they've moved on to Greece.
How many divisions has Goldman et al? |
|
| Back to top |
|
|
bucheon bum
Joined: 16 Jan 2003
|
| Posted: Fri Feb 26, 2010 8:07 am Post subject: |
|
|
Well hey, if it sounds too good to be true, it probably is. Alas, as Bunk said on the wire, "The bigger the lie, the more they believe."
Basically GS has a con artist department.  And while their greed is disgusting, at the same time you gotta be awed by GS' audacity. |
|
| Back to top |
|
|
mises
Joined: 05 Nov 2007
Location: retired
|
| Posted: Fri Feb 26, 2010 8:53 am Post subject: |
|
|
Gosh. Goldman. The Fed.
http://www.thenation.com/doc/20100315/kaufmann
| Quote: |
Friedmanism at the Fed
...
That distinction belongs to Stephen Friedman, the former chairman of the board of the New York Federal Reserve Bank and a member of the board of directors of Goldman Sachs. Through those two posts, Friedman may have had access to privileged information about the extent of Goldman's exposure to AIG and the opportunity to profit from the Fed's bailout of the beleaguered insurance giant. While he was serving on both boards, Friedman purchased 52,600 shares of Goldman stock, more than doubling the number of shares he owned. These purchases have since risen millions of dollars in value--and raised allegations of insider trading.
Friedman's purchases were exposed by the Wall Street Journal in early May 2009, and within days he resigned as chair of the New York Fed. His resignation letter claimed that although he had acted "in compliance with the rules," the suggestion of impropriety had become a "distraction" from the important work of the Federal Reserve. In a press release, New York Fed executive vice president and general counsel Thomas Baxter also said that Friedman's acquisition of Goldman shares "did not violate any Federal Reserve statute, rule or policy."
...
And now, at least one member of the committee, Massachusetts Representative Stephen Lynch, is calling not just for continued Congressional investigation but for other enforcement agencies to look into possible insider trading and other matters surrounding the AIG bailout. In an interview with The Nation, Lynch said that he intends to meet with the SEC to see "whether or not they might be helpful with this." Lynch also suggested that the Justice Department's Financial Fraud Enforcement Task Force should be investigating Friedman's Goldman purchases as well.
A full investigation would not only determine if Friedman violated the Fed's rules; it would also shed light on the arcane regulations and conflicts of interest that riddle the Federal Reserve system, an important public service, since Congress is debating whether the Fed should serve as the leading regulator of systemic risk in our economy. Indeed, what we already know suggests that even if Friedman acted "in compliance with the rules," the rules were inadequate and easily subverted and therefore did little to guarantee transparency and accountability.
That Friedman was simultaneously chair of the New York Fed and a board member of Goldman Sachs was itself a violation of Fed policy. As a "Class C" director who is on the New York Fed board to represent the public, Friedman was barred from being on the board of a bank holding company or even owning stock in a bank holding company. This policy came into play in September 2008, when Goldman converted from an investment bank to a bank holding company (the policy did not apply to investment banks). Friedman was not only on the board of Goldman but also held 46,000 shares in the company. So he had to make a choice: resign from the Fed or resign from Goldman Sachs and sell the shares he owned.
But Friedman did neither. Instead, to allow him to maintain his roles at the Fed and Goldman, New York Fed officials, led by then-president Geithner, asked the Federal Reserve board of governors in Washington for a waiver, which was granted on January 21, 2009.
In the meantime, the New York Fed made its now-infamous decision--on November 9, 2008--to pay AIG counterparties like Goldman Sachs, Bank of America and Merrill Lynch full value for insurance on mortgage-backed securities that had tanked when the housing bubble burst. It was a $62 billion deal, and Goldman was the greatest domestic beneficiary, receiving an estimated $13 billion. Goldman had been locked in a dispute with AIG since 2007 over the value of those securities--a dispute New York Times reporters Gretchen Morgenson and Louise Story described as "one of the most momentous in Wall Street history"--until the Fed stepped in and sided with Goldman.
Despite demands from Congress and the media, neither the Fed nor AIG disclosed the names of the banks or the amount of money each had received through the bailout until March 15, 2009, when AIG finally did so. While the public was left in the dark, Friedman nearly doubled his Goldman holdings by purchasing 37,300 shares for about $3 million. Friedman made that purchase on December 17, 2008, just over a month after the Fed decided to pay Goldman and the other banks full value for the insurance on mortgage-backed securities. Since he had yet to receive the waiver, his purchase of additional shares occurred at a moment when he was still prohibited from owning the shares he already possessed and was thus out of compliance with Fed policy.
On January 22, 2009--just one day after the Federal Reserve granted Friedman the waiver--he purchased another 15,300 shares of Goldman. According to the Wall Street Journal, the "million-dollar purchase brought his holdings to 98,600 shares." On March 16, 2009--one day after the public was finally told the identities of the banks and the amount of money each had received from the Fed--Goldman was trading at approximately $94 per share. A week later the stock price had risen to just under $112. As of late February Friedman had gains of approximately $4.2 million on those post-bailout stock purchases.
The fact that Friedman's actions augmented rather than diminished the conflict of interest was not lost on members of the House Oversight Committee. "At a time when Mr. Friedman was prohibited from owning Goldman Sachs stock, he proceeded to buy 37,000 more shares of it anyway," says committee chair Edolphus Towns. "That strikes many Americans as unjust, unwise and unfair."
...
"These [securities] are in the vortex--these are at ground zero of all this," says Lynch. "They've got huge positions. And what happens to Goldman if AIG is allowed to go into bankruptcy? The market was pricing those derivatives at 50 percent of value, yet they were paid 100 cents on the dollar. There's just no way in hell they would have received that in the bankruptcy process. So here's someone sitting here with this great inside knowledge and capitalizing on it. Maybe it's just too obvious."
The government was so intertwined with Friedman's stock purchases, one can imagine there is significant pressure to move past any questions about insider trading. That's why it's so critical that the Oversight Committee continue its investigation.
Finally, it's worth noting that before Friedman resigned, he finished his job as chair of the search committee charged with finding a replacement for Timothy Geithner at the New York Federal Reserve Bank: William Dudley, another Goldman alum. |
|
|
| Back to top |
|
|
bucheon bum
Joined: 16 Jan 2003
|
| Posted: Fri Feb 26, 2010 9:19 am Post subject: |
|
|
Maybe you should just start a thread devoted to articles on Goldman Sach's  .
And I have a hunch Morgan Stanley is complicit in this type of behaivor too. GS is just getting more attention right now because it has higher profits and is doing it on a larger scale. Kinda like Target/Wal-Mart and Reebok/Nike in the past. The latter gets beat upon by bad publicity while the former skates by even though its practices are nearly identical. Why? simply because the latter is the more successful of the two. |
|
| Back to top |
|
|
mises
Joined: 05 Nov 2007
Location: retired
|
| Posted: Fri Feb 26, 2010 9:52 am Post subject: |
|
|
BB, yes, Vampire Squid isn't alone.
The Greek/German spat is great:
http://www.zerohedge.com/article/greece-retaliation-against-germany-escalates-calls-boycott-german-products?utm
| Quote: |
Have we just crossed the historic Rubicon when a photoshopped classical statue is about to lead to a collapse in a monetary and customs union, and possibly something a tad more serious?
It appears the Greeks are two minutes away from saying "take you bailout and shove it." The reason: The Focus cover which shows a status of Venus de Milo flipping off the Greeks, who were characterized as the "cheats of the eurozone."
After recent Greek media outbursts have recalled the Nazi wartime occupation of the country, as well as demands for WWII reparations, today's action by the Federation of Greek Consumers, calling for a boycott of products made by "banana-eating" Germans, is a direct response to the airbrushed statue of Venus expressing the communal German sentiment. Oh, and that whole KfW rumor? Don't buy it: "[KfW bond purchasing] considerations have been presented because it's seen as the only way of avoiding accusations of...direct aid," the lawmaker said. But he stressed that no decisions have yet been taken. I.e., More posturing.
From Dow Jones:
In a statement Friday, Greece's umbrella Federation of Greek Consumers, Inka, referred to Germany's war record and also the magazine article in calling for Greeks to boycott all German products and shops.
"In a sign of protest Inka...calls on all citizens of the country to boycott all German products and shops even if they say they are sorry," the statement said.
"The distortion of a Greek historical statue of beauty and civilization, at a time when [the Germans] were eating bananas in the trees, is unacceptable and inexcusable from later civilized peoples," the statement added.
Earlier Friday, Greek Prime Minister George Papandreou said in parliament that the issue of Germany's wartime reparations to Greece remained unsettled, but also said Greece would not exploit the current crisis to pressure Germany on the issue.
Papandreou is due to visit Berlin March 5 to shoot the shit with Angela Merkel. We can't wait to see what rumors that meeting creates. |
Good stuff. The first cool breeze that rolls though the Euro leads to WW2 references and civilization pissing contest.
Hey, how about this eh? The dollar is looking much more stable than the Euro! Man, what a difference a few months makes. |
|
| Back to top |
|
|
bacasper
Joined: 26 Mar 2007
|
| Posted: Fri Feb 26, 2010 9:26 pm Post subject: |
|
|
| mises wrote: |
| Hey, how about this eh? The dollar is looking much more stable than the Euro! Man, what a difference a few months makes. |
Would saying the entire Western world is in trouble be an understatement? |
|
| Back to top |
|
|
mises
Joined: 05 Nov 2007
Location: retired
|
| Posted: Fri Feb 26, 2010 9:29 pm Post subject: |
|
|
| Nope. Not an understatement. Not at all. But we've been through worse. This is a period of time in a larger period of time. We'll get past it. It is going to be a rough few years, unfortunately. |
|
| Back to top |
|
|
|
|
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum
|
|
FAQ
Search
Memberlist
Usergroups
Register
Profile
Log in to check your private messages
Log in
