During the 1970s and 1980s, Goldman may not have been the planet-eating Death Star of political influence it is today, but it was a top-drawer firm that had a reputation for attracting the very smartest talent on the Street. The list includes companies such as Goldman Sachs, Morgan Stanley, BAML, and JP Morgan. From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression — and they’re about to do it again. One was that index speculators are mostly “long only” bettors, who seldom if ever take short positions — meaning they only bet on prices to rise. Forget Reddit. They were pioneers in the use of commercial paper, which is just a fancy way of saying they made money lending out short-term IOUs to smalltime vendors in downtown Manhattan. (One of their lobbyists at the time was none other than Patterson, now Treasury chief of staff.) “But they only push prices in one direction: up.”, Complicating matters even further was the fact that Goldman itself was cheerleading with all its might for an increase in oil prices. Take-home pay: $138,336. By the end of March, the Fed will have lent or guaranteed at least $8.7 trillion under a series of new bailout programs — and thanks to an obscure law allowing the Fed to block most congressional audits, both the amounts and the recipients of the monies remain almost entirely secret. Oil Scheduler/Operator positions requiring experience? The bank might be taking all these hideous, completely irresponsible mortgages from beneath-gangster-status firms like Countrywide and selling them off to municipalities and pensioners — old people, for God’s sake — pretending the whole time that it wasn’t grade D horseshit. Eventually, lots of aggrieved investors agreed. The collective message of all this — the AIG bailout, the swift approval for its bank holding conversion, the TARP funds — is that when it comes to Goldman Sachs, there isn’t a free market at all. And here’s the real punch line. Of the 24 companies it took public in 1997, a third were losing money at the time of the IPO. Soaring food prices driven by the commodities bubble led to catastrophes across the planet, forcing an estimated 100 million people into hunger and sparking food riots throughout the Third World. By the time the Securities and Exchange Commission got around to fining your firm $110 million, the yacht you bought with your IPO bonuses was already six years old. However, corporate treasurers, who have more experience, make an average salary … Over the same period, world oil demand dropped from 86.82 million barrels a day to 86.07 million. Although he had already engineered a rescue of Bear Stearns a few months before and helped bail out quasi-private lenders Fannie Mae and Freddie Mac, Paulson elected to let Lehman Brothers — one of Goldman’s last real competitors — collapse without intervention. It’s just asinine.”. “The company had to be in business for a minimum of five years, and it had to show profitability for three consecutive years. That way, someone was always there to buy from the farmer, even when the market temporarily had no need for his crops. Why the hate towards growth PE / sourcing (e.g. “If it’s going to be a tax, I would prefer that Washington set the tax and collect it,” says Michael Masters, the hedge fund director who spoke out against oil futures speculation. Sales and Trading Forum. John Prine Talks Oh Boy Records in New Documentary About Label's 40th Anniversary, ‘Ginny & Georgia’: Meet the New Gilmore Girls, Dialed Up to 11, Watch Axl Rose’s Cameo Appearance on ‘Scooby-Doo and Guess Who?’, Meghan McCain Wants Fauci Replaced With ‘Someone Who Understands Science’, As Toilet Paper Stock Plunges, Bidets Are Making a Splash, Forgiving Student Debt Alone Won’t Fix the Crisis. A GAO report, in fact, found that between 1998 and 2005, roughly two-thirds of all corporations operating in the U.S. paid no taxes at all. In a classic example of how Republicans and Democrats respond to crises by engaging in fierce exchanges of moronic irrelevancies, John McCain insisted that ending the moratorium on offshore drilling would be “very helpful in the short term,” while Barack Obama in typical liberal-arts yuppie style argued that federal investment in hybrid cars was the way out. If the last fund in the line starts to lose value, you no longer have the money to pay back your investors, and everyone gets massacred. And instead of credit derivatives or oil futures or mortgage-backed CDOs, the new game in town, the next bubble, is in carbon credits — a booming trillion dollar market that barely even exists yet, but will if the Democratic Party that it gave $4,452,585 to in the last election manages to push into existence a groundbreaking new commodities bubble, disguised as an “environmental plan,” called cap-and-trade. Goldman won’t even have to rig the game. It became almost a national clichè that whatever Rubin thought was best for the economy — a phenomenon that reached its apex in 1999, when Rubin appeared on the cover of Time with his Treasury deputy, Larry Summers, and Fed chief Alan Greenspan under the headline The Committee To Save The World. investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling. public in 1996, once the tech boom had already begun, Goldman quickly became the IPO king of the Internet era. If cap-and-trade succeeds, won’t we all be saved from the catastrophe of global warming? Corporate Finance. While the collapse of the housing bubble sent most of the financial world fleeing for the exits, or to jail, Goldman boldly doubled down — and almost single-handedly created yet another bubble, one the world still barely knows the firm had anything to do with. The heads of the Canadian and Italian national banks are Goldman alums, as is the head of the World Bank, the head of the New York Stock Exchange, the last two heads of the Federal Reserve Bank of New York — which, incidentally, is now in charge of overseeing Goldman — not to mention …. This is why any corporation with an at least occasionally sober accountant can usually find a way to zero out its taxes. In reality, 18 percent of the mortgages were in default within 18 months. In fact, at least $13 billion of the taxpayer money given to AIG in the bailout ultimately went to Goldman, meaning that the bank made out on the housing bubble twice: It fucked the investors who bought their horseshit CDOs by betting against its own crappy product, then it turned around and fucked the taxpayer by making him pay off those same bets. Just as it did with the investment trust in the 1920s, Goldman started slow and finished crazy in the Internet years. “Since the Depression, there were strict underwriting guidelines that Wall Street adhered to when taking a company public,” says one prominent hedge-fund manager. If that happened, prices would be affected by something other than supply and demand, and price manipulations would ensue. Taibblog: Commentary on Politics and the Economy by Matt Taibbi. “Instead, it was an integral part of a fraudulent scheme to win new investment-banking business.”. Boot Camp. In conjunction with a decline in the dollar, the credit crunch and the housing crash caused a “flight to commodities.” Oil futures in particular skyrocketed, as the price of a single barrel went from around $60 in the middle of 2007 to a high of $147 in the summer of 2008. Moreover, 58 percent of the loans included little or no documentation — no names of the borrowers, no addresses of the homes, just zip codes. First, they bundled hundreds of different mortgages into instruments called Collateralized Debt Obligations. The market was no longer a rationally managed place to grow real, profitable businesses: It was a huge ocean of Someone Else’s Money where bankers hauled in vast sums through whatever means necessary and tried to convert that money into bonuses and payouts as quickly as possible. Take a wild guess. In what was by now a painfully familiar pattern, the oil-commodities melon hit the pavement hard in the summer of 2008, causing a massive loss of wealth; crude prices plunged from $147 to $33. In this way, each investment trust served as a front for an endless investment pyramid: Goldman hiding behind Goldman hiding behind Goldman. “The mortgage sector continues to be challenged,” David Viniar, the bank’s chief financial officer, boasted in 2007. Major underwriters insisted on three years of profitability thus, junk-rated mortgages turned. 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