It deals with the "legend" of the crash of worldwide systems if the billions in bailout dollars were not given to the banks. Goldman Sachs guys were central to all the decisions made and these guys made sure that Goldman Sachs survived and, indeed, prospered into the mammoth body it is today. Now that the economy has successfully been financialized, the stock market is treated as though it were indicative of the whole economy; hence, we treat Wall Street as if it represents the health of the economy while unemployment remains high. How did American get to this point?
David Stockman writes from his checkered past as head of his own private equity fund company, his term at the head of the Office of Management and Budget (1981-1985) and as a member of the US House of Representatives (1977-1981) who supported Reaganomics.
Web Extra: Read an Excerpt of David Stockman's New Book: The Great Deformation, The Corruption of Capitalism in America
By David Stockman - By ABC News
. . . .
GOLDMAN AND MORGAN STANLEY: THE LAST TWO PREDATORS STANDING This was a blatant miscarriage of governance. As will be seen, at that late stage of the delirious financial bubble which had overtaken America, Goldman Sachs and Morgan Stanley had essentially become economic predators. Their bankruptcy would have resulted in no measureable harm to the Main Street economy, and possibly some gain. It would have also brought the curtains down on a generation of Wall Street speculators, and sent them packing in disgrace and amid massive personal losses—the only possible way to end the current repugnant régime of crony capitalist domination of the nation's central bank.
Goldman and Morgan Stanley helped generate and distribute hundreds of billions in toxic assets—mortgage-backed securities and CDOs based on subprime mortgages—that were now resident on the balance sheets of a wide gamut of Main Street institutions like corporate pension funds and insurance companies, along with institutional investors spread all over the planet. The TARP and Federal Reserve funds that were pumped into Goldman and Morgan Stanley, however, did nothing to ameliorate the huge losses being incurred by these gullible customers.
. . . .
In the days after September 15, the shock absorbers of the last two investment banks left standing, Goldman and Morgan Stanley, also failed the test. Their most illiquid asset classes—such as securitized mortgages, CDOs, commercial real estate securities, and corporate junk bonds— declined in market value by between 20 percent and 50 percent during the meltdown. Even when blended with holdings of low-risk government bonds and blue chip corporate securities, the blow to capital was devastating, and they would not have survived the ordeal on their own. (emphasis added)
Read the rest of Chapter 2 here
3 COMMENTS:
The Royal Bank of Canada has been outsourcing the work of employees and some employees have lost their jobs. The CEO claims he is not outsourcing employees which is technically true because he is using another company to outsource (iGate and Indian firm that has workers with visas):
Here is my letter to him:
Mr. Gordon M. Nixon, CEO
Royal Bank of Canada
200 Bay Street
PO Box 1, Royal Bank Plaza
Toronto, ON M5J 2J5
8 April 2013
Dear Mr. Nixon
We Canadians have become aware that your bank is planning to outsource the work of its loyal employees. Apparently, you have chosen to embarrass and humiliate your employees by asking some of them to train their own replacements! Do you have no shame, man?
I see that RBC is denying that they are hiring foreign workers but you do say you will outsource employees in the future once they are trained and once they leave Canada. What kind of Canadian are you? You would rather hire cheap foreign labour to take the place of well-trained Canadians? You want to make more profit but at what cost to the economy, to unemployment and to the workers you are releasing?
Banking should be about more than making bigger and bigger profits. Where are your moral scruples? Where is your concern for the public good? Banking is a public service not a casino in which to make big money! You seem to have lost your moral compass.
Now, let's take your pay. I understand you will be taking home $12.6 million this year. That does not include your huge pension, your options and/or your shares and/or bonuses. This payment to you is in spite of the fact that RBC had to take "liquidity" from the Bank of Canada of up to 63% of the value of your bank in 2008. Your bank also had to borrow US Fed funds after the crisis.
I realize that RBC is now known as Too Big To Fail which means that you expect the government to bail out your bank if you become insolvent. TBTF also implies that the executives are Too Important to Jail. The incentive to take big risks is being increased with the potential of a bailout from government every time your bank fails.
It is a real shame that bank executives have begun to feel they are entitled to be members of the 1% and to exploit the rest of us. It would only be right to have banks regulated like utilities for the benefit of the public and not for the enrichment of the already wealthy.
Sincerely
JR
Enclosure: Wealth Inequality in Canada
For the most part, Canadian banks follow the lead of their counterparts in the US. Indeed, most of the larger ones have not only a presence here but are working to gain market share in many new markets.
Toronto Dominion (TD) has a big push on here in Florida. RBC has been here for quite some time. Since these banks have a greater market here in the US then in Canada by virtue of population, this becomes a very important place to do busniess and as such, they follow the lead of the banksters that have operated here for years but have learned how to steal the wealth from the public.
If I were a Canadian, I would look into that crystal ball that reflects the past here in the US and see what may be ahead for Canada.
Your question to Mr. Nixon should not be "what kind of Canadian are you? but rather should be what kind of "bankster" are you? The answer of course, would be, "an American style" bankster.
We already know how political bankster are and how they dominate governments in an effort to someday rule the world and rule the world they will if not stopped. Until lwe do away with the need for money - not any time in our lifetimes - and do not need banks anymore, the banksters will take control because they have control of our lifeblood -$$$$$.
I would believe they even might have a motto. "All for one bankster and one bankster for all.
Keep up the good work Joyce.
Larry\
Publisher, GS666
Thanks, Larry. It is good to know that you are aware of what Canadian Banks are doing in the US. I think we will have some kind of financial bubble before too long as banks love their money!
Post a Comment