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The big banks stocks seem to continue to rise even with the knowledge that they have stolen fortunes from the average investor, this leave the question, why do we accept these corrupt institutions like Goldman Sachs?
As the New York Times and Rolling stone magazine have uncovered, fraud at our major institutions has been so extensive that it makes one wonder why we allow it, and why the government forces us to finance and support it?
In late October 2007, as the financial markets were starting to come unglued, a Goldman Sachs trader, Jonathan M. Egol, 37, was named a managing director at the firm.
Egol, had risen to prominence inside the bank by creating mortgage-related securities, called Abacus, that were at first intended to protect Goldman from investment losses if the housing market collapsed.
However, even as the market was souring, Goldman created even more of these securities, enabling it to pocket huge profits. Goldman sold these securities to its investors, then along with Deutsche Bank bet against the securities by shorting them.
Let’s make this clear, Goldman and Deutsche Bank created these securities, sold them, to their “own” investors then shorted the stock betting they would fail! And actually made a fortune as their investors money transferred to their own pockets.
Why haven’t the investors sued Goldman Sachs or Deutsche Bank?
Sounds like a criminal act, besides a convoluted fraud!
Goldman’s own clients, Pension funds and insurance companies lost billions of dollars on securities that they believed were solid investments, while Goldman transferred their wealth to itself.
Goldman was not the only firm that peddled these complex securities, known as synthetic collateralized debt obligations, or C.D.O.’s, and then made financial bets against them, called selling short in Wall Street parlance. Others that created similar securities and then bet they would fail, according to Wall Street traders, include Deutsche Bank and Morgan Stanley, as well as smaller firms like Tricadia Inc., an investment company whose parent firm was overseen by Lewis A. Sachs, who this year became a special counselor to Treasury Secretary Timothy F. Geithner. Was this a reward?
In addition, it is believed but not yet verified, that Goldman Sachs set up Bear Stearns its main competitor for failure by shorting their shares with a 1.7 million dollar investment. Although Wall Street knows who put up the money no one is talking!
The idea is believed, to eliminate competition and ultimately to have only a few large banks in existence that would swallow the smaller commercial banks, and then be in a position to dictate terms to the US government. The 4 major banks remaining now have that clout.
We know from history that JP Morgan in the 1930’s made a serious attempt to over through the Roosevelt administration and set up a puppet government. And we are aware of an ongoing movement to control the US government, both Congress and the White House. Senator Chris Dodd has stated on several occasions, “The Banks control Congress”
In addition, as Rolling Stone Reports, on Tuesday, March 11th, 2008, somebody nobody yet knows who made one of the craziest bets Wall Street has ever seen. The mystery figure spent $1.7 million on a series of options, gambling that shares in the venerable investment bank Bear Stearns would lose more than half their value in nine days or less. It was madness, “like buying 1.7 million lottery tickets,”.
But the bet paid.
At the close of business that afternoon, Bear Stearns was trading at $62.97. At that point, whoever made the gamble owned the right to sell huge bundles of Bear stock, at $30 and $25, on or before March 20th. In order for the bet to pay, Bear would have to fall harder and faster than any Wall Street brokerage in history. And it did!
The very next day, March 12th, Bear went into free fall. By the end of the week, the firm had lost virtually all of its cash and was clinging to promises of state aid; by the weekend, it was being knocked to its knees by the Fed and the Treasury, and forced at the barrel of a shotgun to sell itself to JPMorgan Chase (which had been given $29 billion in public money to marry its hunchbacked new bride) at the humiliating price of … $2 a share. Whoever bought those options on March 11th woke up on the morning of March 17th having made 159 times his money, or roughly $270 million.
That this was a brazen case of insider manipulation was so obvious that even Sen. Chris Dodd, chairman of the pillow-soft-touch Senate Banking Committee, couldn’t help but remark on it a few weeks later, when questioning Christopher Cox, the then-chief of the Securities and Exchange Commission. “I would hope that you’re looking at this,” Dodd said. “This kind of spike must have triggered some sort of bells and whistles at the SEC. This goes beyond rumors.”
No one has investigated this blatant manipulation of securities, and the forced collapse and takeover of Bear Stearns by JP Morgan as “Required” by Geitner.
The collapse of Lehman bros and Bear Stearns eliminated competition and has allowed JP Morgan and Goldman to make larger profits very quickly. Is anybody suspicious?
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12 31st, 2009| 
