Goldman Sachs
Two Rotten Financial Apples
There are two things wrong with the economic structure in the United States. The two major organizations have the mandate to ‘adjust’ factors which effect the US economy in the effort to maintain stability, prosperity and growth of the US economy.
The first is the Federal Reserve Board. A previous post details the ‘quantitative easing’ strategy. This has been a complete failure. As the previous post suggests, it seems that almost everything that the FED does is ineffectual at best and more likely disastrous. I have no idea how much money Goldman Sachs makes selling Treasury bills to the FED, but how can this continue? Is the purpose of the FED to enrich those at Goldman Sachs, I hope not. Then FIX it.
The second is the Treasury Department of the Federal Government. Currently the banks are allowed to ‘borrow’ money from the Treasury at almost 0% if not 0%. The banks are not restricted from using these funds to buy US Treasury bills which yield much higher than 0%. Guaranteed money for the banks. Now the point of making these funds available to the banks is to ensure liquidity and to assist in the commercial flow of funds by making loans available to business etc. Is Congress really this stupid? Bankers are not famous for their largesse or charity. Why would they take a risk when they can guarantee a profit? My only answer is by charging a very high interest rate and loaning only to businesses which are overly secure. Are those two actions why the Treasury makes the funds available? I hope not. Then FIX it.
Quantitative Easing II
A major policy of the U.S. Federal Reserve is Quantitative Easing. Already dedicated and spent is $2,000,000,000,000. That’s right trillion. Ben says let’s belly up to the bar for another $600,000,000,000.
Finally an explanation of The U.S. Federal Reserve which is understandable. Click the UTube link below. Thank you Garnet.
Perhaps we should buy some more Goldman Sachs stock. No, all the profit has already been taken by the insiders as usual.
Is This The Change We Were Promised?
President-Elect Obama has made the appointment of his Treasury Secretary his top priority.
Here are some of the names in the hat:
- Warren Buffett – very successful financial trader
- Sheila Barr – chairperson of the Federal Deposit Insurance Corporation. (active in trying to stop home foreclosures by banks)
- Timothy Geithner – New York Federal Reserve President.(involved in rescue of Bear Stearns and AIG, involved in failure to save Lehman Bros.)
- Jon Corzine – New Jersey Governor (former Goldman Sachs CEO, former US Senator)
- Robert Rubin – former Treasury Secretary (has stated he is not interested)
- Lawrence Summers – former Treasury Secretary
-Henry Paulson – current Treasury Secretary (has stated he is not interested)
How many big changes do you see in this list?
With looming additional financial crises and the disposition of the $700,000,000,000 bailout with our money – it is no wonder this is a priority. It is also an opportunity. His choice will be an indication of things to come. The World Economic Summit will be held November 14 and 15 makes this appointment even more pressing.
Indications of the future are great. World Conferences are important. But what is interesting to me is the actual mechanism for the bailout.
Confusion as a tactic becoming more common.
Have you noticed how an authority figure such as scientist, lawyer, banker, doctor or politician, tends to drift into technospeak on most issues these day? Have you also noticed that often you understand less at the end of the discussion than you did initially? Do you recognize that this technospeak is often just a tactic to cover up the speaker’s lack of understanding of the issue. And finally, do you recognize that this technospeak is often a tactic to purposely confuse us to hide the real self-serving purpose of the issue?
This current financial crisis is a classic example of technospeak. I am obviously using that term loosely as the discussion here is actually economic gooblygook.
Secretary Paulson is begging the government to provide $700 billion, billion with a b of taxpayer dollars. He wants this money to prop up some financial markets on Wall Street. Has anyone looked at the Wiki bio on Secretary Paulson. His career prior to the Treasury Department was Wall Street. Specifically one of the prime actors in this current crisis. It is estimated that Secretary Paulson has a net worth of $700 million. Has anyone asked him how much of that is in Goldman Sachs stock or investments? I assume because of his past position at Goldman Sachs in 2005 and 2006, that he had a significant stock position. What is it now?
I do not know the answer, but I suggest that it was liquidated when the stock and stock options were of real value. Why would he liquidate all of the GS assets? Perhaps he did it to separate himself from Wall Street influence as required by his new government position. I wonder why he did not just escrow his assets like most government employees in powerful positions?
I am assuming that Secretary Paulson bailed out of Wall Street. Perhaps I am incorrect. I believe that many of the Wall Street tycoons who have seen the stock in their companies plummet somehow sold out before the crashes over the past couple of years. Somehow they smelled something and bailed. Senator McCain and others brought legislation to committee to revamp the Fannie Mae and Freddie Mac operations in 2005, primarily to institute more oversight and regulation of their operations. This legislation was buried in committee and never came to a vote. Please note that both houses were controlled by the Democrats at that time.
OK, what am I getting at. I complain about transparency and then I am obtuse. Other posts will deal with types of mortgages, how a mortgages is approved and what happened.
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