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Here is an observation and deduction from a good ole American law abiding citizen. I STRONGLY believe that Goldman Sachs is just an extension of the Largest Bank in the world, the US TREASURY, or it could it be vice versa that the US Treasury is an extension of Goldman Sachs. Maybe it is already a known fact, and I am just waking up! Why was Lehman and others allowed to fail and not GC? Look how GC has infiltrated our Government at the highest levels with all these former GC executives/cronies over the years. Recently, they not only got a Banking Charter along side their Investment Banking status, unlawful to law abiding citizens, but somehow accomplished it under the disquise of a financial crisis, so now they have the deepest pocket in the world to manipulate world markets. Bernacke was asked at a Congressional hearing a few days ago if the US Treasury had anything to do with Greece’s bailout and gave an resounding no. So it is no surpise to me that GC appears to be involved in Greece financial crisis bailout. You have to ask yourself the question, why GC? Who knows what is transpiring at the top levels of Government. The sad part is, I believe these guys actually believe a good bit of their own rhetoric (B.S.), sloshing around in Billions of cash as if it were pocket change, while securing their tens and hundred million dollar compensation packages. It appears, they have hoodwinked us the US Taxpayer, the shareholders of the Largest Bank in the World. GC and some of the Wallstreet crowd have developed a whole new meaning to the term “Wealth Creation” through their complex system of derivatives and, for me, as a self proclaimed fundemental and technical analyst, I don’t see what is going to drive their machine going forward here in the USA except the US Treasury. They have for years put investment risk off on to the unsuspecting public and when that appeared to have been exhausted, went after the US Treasury and succeeded. They have assisted in ruining this Economy and they probably are already positioning themselves in the next major world economy player, China. There they can truly partner with the government and have a field day.
The Godfather, Former Sec of Treasury Paulson, a former GC exec, (he sounded just like the Godfather in the movie The Godfather when testifying in front of Congress) started the Investment Banks run on the US Treasury in 2008, to protect his cronies at Goldman Sachs and a few other major banks around the world, to include China, by selling us on the idea that a World Financial collapse was imminent unless the US Treasury gave him a blank check. And, again, the sad part is he actually believed his own rhetoric, and for his world it was probably true, but then he lived in a huge glass house on top of that financial monstrosity . He was totally disconnected with mainstream America and did not have a clue that mainstream America didn’t need any part of his world to survive. That mainstream America would have done just fine, thank you, that SOMEBODY would have come along and picked up the real pieces of that huge debacle known as the derivatives market which much of it was FUNNY money anyway. We could have been purged of the likes of Paulson and all his cronies, including Geithner. These guys got us into this mess and they are the same people enlisted to get us out. The Real Estate bubble was just a means to an end for them, and they now have the audacity to push it off on us, the US Taxpayer, under the guise of saving the Taxpayer. And our Congress just rolls over like a bunch of pussies, but they too have their own power agenda. Wallstreet and Washington have been married for TOO LONG, it is time to annul this marriage once and for all!!!!
I hate to play devils advocate and I have the greatest sympathy for the innocents hurt in this recesssion - I myself suffered greatly - but I find it hard to lay blame on single entities. If the public chooses a capitalist sytem, then history tells us that recessions are going to occur.
GS certainly has proved that it doesnt have the public's welfare in mind and their greed is astounding, but frankly, its a little rich to complain that a company founded to make money in a capitalist system can be reprimanded for doing so. We all love GS in the good times because they make us a killing when we buy their stock. Using derivatives etc to hide dept is nothing new, its pretty standard market practice, and the institutions who buy that debt are not babes in the woods - They all know the risks involved, or certainly should. Those risks also make them money, which in turn makes Joe Public money.
Frankly, in my opinion its the the firm of collective "Joe Publics" that drive asset prices to dizzying heights beyond reasonable valuation levels. No one ever said that stock markets, property etc was completely safe. Just because interest rates are low doesnt mean the joe public should live a glorious life of unsustainable debt. One only needs to look at history to realise that if you have a capatilist system, there are going to be recessions and asset prices will drop, jobs will be lost, companies will go bust.
If GS or any other firm sees asset prices as over valued or they anticipate a crash and then short the market then all that means is they are smart enough to take advantage of it. They didnt make that market crash. You and me did.
Remember, 10% of institutional derivative traders take money away from the other 90% - and 100% of those traders are trying to be as smart as GS by looking for the signs that the market is going to drop dramatically. You and me know that when we trade derivatives (futures), we are taking huge risks and we need to take responsibility for them. And when we win - someone is losing, and that someone may be poor innocent Joe Public. Derivatives are a zero sum game and I cant see how institutional traders actions are so vastly different from large market players.