Posted by Jany on April 16, 2010 at 13:06:13:
From today's New York Times front page: U.S. Accuses Goldman Sachs of Fraud.
Seems that Goldman Sachs (with its VERY close ties to the government) was selling worthless mortgage-backed securities to the public, pumping them as a GREAT investment, while they were secretly shorting them. It proves they knew what they were selling was worthless crap. They made a tidy profit of ONE BILLION DOLLARS on the short sales and they payed themselves millions of dollars in bonuses for being smart enough to put one over on the American people.
While all this was going on, guess who was the US Secretary of the Treasury: Hank Paulson, the former CEO of Goldman.
It appears that everybody on Wall Street, and in the rest of the financial community, learned a powerful lesson from ENRON; they learned the RIGHT WAY to run a 21st century business: sell the public worthless crap, while you secretly rake off all the cash in the background. Oh, and maintain the BIG LIE (through PR) that everything is great.
But Goldman has an advantage Enron didn't: close ties to the government. When Paulson was Goldman's CEO, he went before congress to convince them to relax the rules on selling leveraged derivatives. Congress complied, and the race was on to make as much money as possible before the derivative house of cards collapsed. Paulson's reward? One billion in cash, plus an appointment to be the new US Secretary of the Treasury.
By now, everybody knows they were ALL involved in selling worthless derivatives. What we didn't know, was that companies like Goldman were making EXTRA billions by shorting the crap they were touting to the public as wonderful investments.
This scandal is sure to spread. I'm sure Goldman was not the only outfit doing this kind of thing.
Even then, it will probably take at least four or five years before some insider writes the book about what was REALLY going on.
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