Life Ain't The Movies. We're Never Going to Get Our "Carlo" Moment From Goldman.

Yesterday I received a ton of emails about the New York Times Paulson's Calls to Goldman Tested Ethics During Crisis. The Times did its job as investigative journalists, showing that Treasury Secretary Paulson was in frequent contact with Goldman Sachs during the meltdown of mid-September 2008, especially with regard to the bailout of AIG.  If you haven't read it, hit the link.  Hopefully, for people who thought that we were just a bunch of disgruntled conspiracy nuts last year when we first raised serious questions about Goldman and the AIG bailout (and this blog was way ahead of just about everyone on this subject) will now see the light.  Hopefully, investigative reporting that includes obtaining call logs and schedules of Mr. Paulson and other government and Federal reserve officials through the Freedom of Information Act will spur on a full fledged investigation and get to the truth of what went on last Summer and Fall.

For me however, this article is a turning point.  I realize that no matter what kind of evidence is unearthed that Goldman Sachs owes its very existence (and what a existence it is now with a bank charter and greatly reduced market making, investment banking, prime brokerage, futures and options brokerage etc. competition) to the Government and the People of The United States of America, they are NEVER going to admit it.  Similar to all the folks that lived to hear Richard Nixon say, "I did it.  I engineered the Watergate cover up from Day 1." and never got to hear it, this is all we are going to get from Goldman;

A spokesman for Goldman, Lucas van Praag, said: “Lloyd Blankfein, like the C.E.O.’s of other major financial institutions, received calls from, and made calls to, Treasury to provide a market perspective on conditions and events as they were unfolding. Given what was happening in the world, it would have been shocking if such conversations hadn’t taken place.”

Although federal officials were concerned that Goldman Sachs might collapse that week, Mr. van Praag said the only topics of discussion between Mr. Blankfein and Mr. Paulson at the time involved Lehman Brothers’ troubled London operations and “disarray in the money markets.” Mr. van Praag said Goldman was fully insulated from financial fallout related to a possible A.I.G. collapse in mid-September of last year. 

"Fully insulated".  That is all you are ever going to hear from Goldman no matter how ridiculous it sounds.  Remember the great scene in Godfather I where Mike confronts his brother-in-law Carlo and makes him confess to setting up Sonny?  Michael Corleone:

"Today I settle all family business Carlo so admit what you did.  Get him a drink. C'mon, don't be afraid Carlo.  You think I'm gonna make my sister a widow?  I'm Godfather to your son.  Go ahead drink.  No Carlo, you're out of the family business.  I'm putting you on a plane to Vegas (hands Carlo airline tickets).  I want you to stay there.  Only don't tell me your innocent.  It insults my intelligence.  It makes me very angry."

And then Carlo admits his crime.  Goldman and Lucas van Praag insult my intelligence and make me very angry.  However, they are not going to give any of us that moment Mike had with Carlo.  I will no longer wish for things that I know will not come true.  It is fruitless. I no longer care because enough people are starting to get angry and are starting to ask the right questions, not just about Goldman but the entire sick, incestuous relationship Washington has with New York.  The revolving door on both sides of the aisle.  The kind of revolving door where outgoing government officials park themselves at Wall Street firms for a couple of years and become "investment bankers." The kind of revolving door where Treasury Secretaries leave government and take down $ millions for their "service" while Wall Street CEOs leave to become Treasury Secretaries and help out their pals at the peoples expense.  The kind of system where the various financial lobbying groups have essentially bought and paid for key Congressmen on both sides of the aisle, allowing them to f**k up our vital system of finance for their own personal gain.  The kind of system that sees important Congressional aides float back and forth between the industry and Washington, the kind of sh*t that is just below the surface.  Actually, that's probably where most of the evil stuff gets done.

Let's not make the mistake that Goldman Sachs is the center of all evil, which I know I can sometimes do.  The system is rotten and Goldman is just one of the players.  Banking is vital to national security and there is plenty of money to go around without all the heinous bull-sh*t.  We have to clean it up. Here's Mike and Carlo.  

 

Comments

[williambanzai7]

BTW--We still don't know who Cheney officially met with in his Energy policy strategy sessions in the early minutes of the Bush fiasco, although we can surmise with 100% certainty that he was later convicted of massive fraud as the CEO of a well know Texas derivative PONZI operation called ENRON.

Paulsen was just following administration protocol.

[williambanzai7]

You must of read one of the risk factors I wrote into the TARP prospectus last September:

Credit and Settlement Risk: TARP will be exposed to credit default risk on parties with whom
it trades and will also bear the risk of settlement default. We have absolutely no clue
how much this could be. Counterparties such as AIG and Goldman Sachs, who were previously
thought to be the gold standard, have become a virtual pinata of toxic financial risk and systemic peril.