How Greed Got Us Into Disaster-the Raft of Goldman Sachs
The raft recalls the famous painting of Theodore Gerricault The Raft of the Medusa. It is based on a historical incident where the survivors resorted to cannibalism in order to survive. The conditions we face now are somehat similar. The banks have played with public funds for immediate gains knowing it is risky and bound to cause chaos. One of the principal villains in the piece is the banking firm Goldman Sachs and they seem to have had a hand in advising Greece on their wealth management. In the cartoon the baby (or the Poor countries) seems to say,’Look your CDO’s Derivates,Swops are going to be the death of me!’
Posts Tagged ‘hedge funds’
Harriet had worked hard to get the education, the skills and there was now the job if she could get past the interview. When she was called for one she was all excited. Her résumé was impressive and she had the right attitude that spoke volumes and she wondered if her peers had in them to see what an asset she was.
The local bank wanted to interview her. It was an institution that served the local community for long. She thought a Bank that had stood for traditional banking needs of four generations of her family was good enough for her. She also was keen to be a part of it. This bank was looked upon in their region with affection and was called by young and the old as Grandma Fiduciary of Fair Lawns. But the grandma had decided to move with the times. The new management bought her lock, stock and barrel. She didn’t mind. She was all for change.
The hedge fund firm Fairfield Greenbottle Group assessing her strengths said, “You are a charmer. You can speak so sweet that even a skinflint will part with his money.”So she was taken on their payrolls and her task was to lie to investors. When she got a million in bonus at the end of the year she excitedly told the chairman Mr. Pupus Lupus, “ You do take care of your employees so well!” Then they handed her sheaves of papers and said,” here is a star who requires kid glove treatment.”
Later she went over the folder thoroughly. She asked her boss, “ I have a great foreboding about this fellow.” Her boss was aghast, and whispered, “ Bernard Madoff is a genius. You may call him a swindler but he can make our firm give millions in bonuses year after year. Only if you’re a team player. ” She was not still convinced, and did some soul-searching. She asked herself before going to bed, “Grandma where is your ethics? Your responsibility for the community?” A question like that before going to bed will only make one sleepless. She wrestled with it whole night. Next morning she alerted SEC who came and rescued her before she could be lumped together with the rest .
The US government’s latest bailout strategy will target big investors to buy more than $1 trillion in troubled assets from the banks. ‘The hope is that, free from the drag of subprime mortgage debt and other bad investments, banks will be more likely to start lending money again and the economy will rebound’.
But investors said Monday they were unlikely to buy into the idea unless the government puts up a lot of the money and promises to absorb a lot of the losses if things go badly.
“The first loss has got to be the government’s,” said Wall Street veteran Muriel Siebert, who runs the brokerage Muriel Siebert & Co. “Maybe the first 25 percent of losses. We don’t know what’s in some of those bonds.”
Billionaire Wilbur Ross, who runs the private equity firm WL Ross & Co., said investors want to know how much risk the government will accept if the investments go sour, and how much money the government is willing to put up — likely in the way of low-interest loans.’
Investors want the Obama administration to give them a free hand in other words to continue business as usual. Had they learned to be committed and responsible with other people’s money this LaurelenHardian ‘fine mess’ would not have arisen in the first place. Now it looks the investors want to play with tax money of the Americans once again. Of course all that havoc they would create if their optimism were to go haywire in future transactions they can blame it on the Administration. This must be what motivates their demand for a deal.( ack: Matt Apuzzo and Stevenson Jacobs, Associated Press)
I just read the news that Robert Solway, a top spammer was sentenced to nearly four years. In a land where patriotism is measured according to how many dollars you can make, spamming may be considered one helluva way of making a fast buck. But then we see in the present days the conventional wisdom of so many institutions, has completely lost its sense and meaning. Business of course isn’t as it was before.
Take the institution of war. In the time of Alexander of Macedonia a soldier wouldn’t think twice from hurling himself into the thick of battle. He put his life on the line just as Alexander. From the greatest to the lowly foot soldier the war was something that you entered into for the country and for personal reasons. His thereby held up the honor of his country and he, in a personal sense, also purged his own goblins of fear. Now we see the war is outsourced, and technology for all its high-tech arsenal does not sanctify patriotism of a nation. It merely creates a smokescreen, for cowardice and the real motive for which nations go to war.
What is the motive? War profits of course. It is the real business these days and it has become anonymous.
If you look closely into the reason of economic crunch we can see this anonymity at work as we see in the sub-prime mortgage crisis of today. In that murky world of the sub-prime mortgage, interest rates were kept low at first and then rose to compensate lenders for the low credit ratings of the borrowers. Why did the Banks outsource their responsibilities to institutions that were questionable to say the least? All for a quick buck, mind you.
We have online criminals for the same reason a nation outsources its vitality, pride and honor to others: it is safer and anonymous. These are no more monsters than those who squander all that a nation holds dear for some quick profits for a few. The spammers are bred from the same cesspool as others.
(ack: Nancy Gohring, IDG News Service Tue Jul 22, yahoo news)