The odd fact is that the bankers at Goldman Sachs knew the subprime mortgage market would collapse because they helped it become toxic with securitizations and, just before the collapse destroyed the savings and pensions of others, Goldman shorted the whole mortgage market that they had just perverted and profited mightily.
So Goldman Sachs now pretends not to know that TBTF banks like themselves will be bailed out again if they fail once more. It is the lie that they tell themselves and tell others along with all the other lies.
What Bankers don't know
By Golem XIV
. . . .
They no doubt felt that while there would be a disaster for some, there would still be money to be made for a few of the, luckier or ‘smarter’, ones. I suspect they would still count themselves as among the ‘smarter’ and acted accordingly.
What’s more, no matter how massive the losses that would be inflicted, I suspect our loathsome twosome also thought there had to be someone who had to take the risks and suffer the losses, in order that the system itself be preserved to profit another day. Only they wanted to make sure that that ‘someone’ was not them personally. On this, the rest of the Global Financial class agreed with them.
Today, five years in to the cataclysm, it is clear that that ‘someone’ was only ever going to be you and me. Someone had to be frogmarched up to ‘save’ the system but it was never going to be the wealthy. Those senior bond holders are oh so sacrosanct. Whereas depositors, well they can be bailed in can’t they.
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