Nations Over Banks (Who Serve Only Themselves)
by ilene - May 19th, 2010 5:30 pm
Great Denninger quotable: "No nation can survive when the rule of law becomes subordinate to a handful of rich and powerful people who simply steal anything they want with impunity. The economy of such a nation ultimately is bled dry by that corruption and theft, with the people over time refusing to innovate and provide their effort when it will simply be robbed away from them."
Nations Over Banks (Who Serve Only Themselves)
Courtesy of Karl Denninger at The Market Ticker
Are you listening Mr. Obama?
First, let’s look at the idiocy among so-called "reporters"
Swaps Soar on Germany’s ‘Act of Desperation’: Credit Markets
Desperation? Or is it more like this?
Merkel Seeks EU Rules After German Short-Selling Ban (Update1)
You know, like the rule of law, for instance?
“The lack of rules and limits can make behavior in financial markets driven purely by the profit motive destructive and lead to an existential threat to financial stability in Europe and even the world,” Merkel told lawmakers in Berlin today. “The market alone won’t correct these mistakes.”
Yes indeed. But the profit motive isn’t evil or bad. It’s only bad and troublesome when it comes with lawlessness and conflicts of interest.
As the housing crisis mounted in early 2007, Goldman Sachs was busy selling risky, mortgage-related securities issued by its longtime client, Washington Mutual, a major bank based in Seattle.
Although Goldman had decided months earlier that the mortgage market was headed for a fall, it continued to sell the WaMu securities to investors. While Goldman put its imprimatur on that offering, traders in the same Goldman unit were not so sanguine about WaMu’s prospects:they were betting that the value of WaMu’s stock and other securities would decline.
Got that? Oh, and it wasn’t just WaMu; the article documents trades against Bear Stearns, the State of New Jersey, AIG and Thornburg, with the worst being AIG that they profited from twice - first by their demise, then again when they managed to get paid at "par" for bets with AIG that were in fact worth zero as the company was bankrupt! Yet Lloyd has said:
“Questions have been raised that go to the heart of this institution’s most fundamental value: how we treat our clients.” — Lloyd C. Blankfein, Goldman Sachs’s C.E.O., at the
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site