December 18, 2009



A few days ago Barack Obama tried to “shame” the great bankster magnates into doing more to permanently modify mortgages and help economically troubled Americans.
The planned sermon lost some of its zing when several intended recipients couldn’t be bothered to show up. John Mack, Richard Parsons, and Goldman Sach’s Lloyd Blankfein instead literally phoned it in because “inclement weather” allegedly stopped them from flying out of New York (which is odd because everyone else says the weather was fine). Jamie Dimon made it on his corporate jet, and in one for the thanks-for-nothing files so did lame duck Ken Lewis. I guess he’s already looking for excuses to get out of the house.
This public show of disrespect comes a few months after none of these CEOs could be bothered to show up for an Obama lecture right there in Manhattan. While I can appreciate their contempt for Obama, who seems to ask for it,  I still chalk this up primarily to the banksters’ innate arrogance.
It’s the same childish arrogance which inspired Goldman Sachs cadres to embark upon a PR campaign whose premise was that they’re doing “God’s work”, in Blankfein’s now infamous quip. While Goldman has tried to claim that was just a joke, it’s hard to say the same for Brian Griffiths’ October 20 speech in St. Paul’s Cathedral.
“The injunction of Jesus to love others as ourselves is a recognition of self-interest”, went this innovative piece of theological interpretation. “We have to tolerate the inequality as a way to achieving greater prosperity and opportunity for all.” Ah, religious tolerance. It’s especially needed in the case of trickle-down, which by now can’t be sustained by anything other than fanatical believing because it’s absurd.
When we consider these prepared, carefully thought-out intonations, it puts Blankfein’s little joke in perspective, doesn’t it? This is what these psychopaths really think of themselves.
You need this level of self-confidence, or what anyone else would call insane levels of arrogance, to justify the primary activity of the banksters, which is looting the economy and their own banks on a personal basis while calling it “bonuses”.
If you need evidence that these people are literally insane on the subject and have no other way of looking at life, just look at the recent spectacle of Bank of America and now Citi rushing to pay back the TARP, weakening their own balance sheets to do so. Citi has tremendously embarrassed itself in the process, as the market has publicly smacked down its absurd claims to fiscal health.
BofA and Citi did this for only one reason: To get out from under the exec looting restrictions for TARP recipients. Similarly, at AIG we’ve seen CEO tantrums and a mutiny organized by the firm’s own general counsel, all of it over nothing but this demented sense of welfare entitlement. (As vile as AIG and everyone who “works” there are, they do have the virtue of being so stupid that they consistently say what everyone else in the biz clearly thinks but rarely says. So they provide a useful window into the real FIRE sector id.)
I discussed BofA, Citi, and AIG to offer some evidence of how utterly focused on their “bonuses” everyone on Wall Street is. Goldman Sachs is certainly no different. They’re every bit as greedy as anyone at AIG.
So therefore it’s somewhat important that the political heat they’ve been taking has been intense enough to get through to them and make them decide to modify their looting schedule somewhat. They’re now going to pay their top cadres in longer-term stock instead of immediate cash.
Everyone has assumed that they’ll try to compensate themselves for this hassle, that the real payout will end up even greater than what they wanted to give themselves right now, and no one takes the clawback provision seriously. I assume they’ll try to do all this as well.
But they still would rather have just grabbed the dough. They definitely wanted to simply hand out the bonuses to themselves immediately. And clearly they didn’t change their minds because of any fear of Obama, who they do not respect.
No, I think this means the bottom-up political pressure was enough to break through their wall of arrogance and actually get them to change their tactic. (According to reports they’re concerned enough that some are even trying to get pistol permits. Somehow the prospect of a Goldman banker packing heat sounds about as frightening as being sermonized by Obama.) This is just a small thing, of course, but it does prove that we don’t yet have a complete tyranny; that we the people do still have power. What’s happened so far has only been a uncoordinated groundswell of feeling. Imagine what might be accomplished by an organized movement deploying that power in a coordinated way.
What we’ve seen so far is that Goldman Sachs and its fellow bailed out banks may be rich and powerful, but in spite of doing God’s work they’re not infallible, and they’re not invulnerable. They’re part of the same political universe as anyone running for student council.
What about how smart Goldman is supposed to be? Is the fact that they lost money only three days this year evidence of their superhuman trading genius? Not according to this Zero Hedge analysis of the trades conducted by Goldman’s charity fund.

The observations above are troubling: Goldman’s trading is by no stretch of the imagination better than average. In fact, in 2008, the firm’s prop trading was on par with some of the worst performers on Wall Street. Which begs the question: just how has Goldman managed to transform itself into a behemoth that over the past 6 months has had only three trading days of losses? The answer is simple: with no Lehman and no Bear to curb its tentacular dominance of all aspects of the Fixed Income market, Goldman can now rely almost exclusively on its monopolist agency position vis-a-vis mutual, pension, and hedge funds who are desperate to maintain a good relationship and an open dialog with the firm which rewards its best clients with market moving information ahead of all others peasants.

Matt Taibbi elaborates:

Specifically, I’ve heard more than once from traders who tell me that Goldman makes all its money gouging its clients, who either don’t know any better or are reluctant to get on the wrong side of the bank, for obvious reasons. Also, the fact that not only Goldman but all the banks have made mountains of money this year by borrowing cheap from the government and lending dear to the rest of the world is also manifestly obvious (credit card interest rates went up more than 20 percent in the first six months of the year, despite vastly reduced borrowing costs for the banks issuing that credit).

So if this small window into Goldman’s activities is representative of the performance of all their trading, then it turns out GS isn’t some capitalist dynamo after all, but simply an entrenched parasite gorging on extorted rents. It’s a dug-in tick bloating itself sucking the blood that happens to flow by.
It seems that the perception of how “smart” Goldman is is just another example of people’s propensity to think attractive people are smarter than they really are. In this case, it’s Goldman’s alleged profits and their master-of-the-universe propaganda which look attractive in a way similar to the evil Queen from Snow White. But it’s an illusion. 
Even by MSM accounts Goldman has long since lost touch with its client-friendly roots and vaunted “greedy, but long-term greedy” culture. Blankfein’s tenure is simply the culmination of the ascendancy of the most venal, nihilistic, short-term greedy gutter trader culture. Goldman Sachs is simply a medieval land baron extracting grain from the serfs. It relies only on position and pull, not on intelligence or innovation. The evidence is it has little of these. It’s a feudalist, not a capitalist.
So they’re not that smart.
They are in fact a ward of the state. We the people OWN this welfare patient. Goldman Sachs would not exist today if it had not been the recipient of massive bailouts, both directly and indirectly to its own bottom line and to the financial system in general.
There was the $10 billion from the TARP, but that was just a small piece. There’s also $13 billion laundered through AIG, $28 billion in FDIC guarantees through the “bank holding company” scam (even though they were never held to any of the vaunted “restrictions” the MSM blathered about) plus no one knows how much in free money from Fed loans (also allowed thanks to becoming a “bank”; this is the part of the bailout the government is keeping secret; they’re simply afraid to tell us how much money they’ve stolen from us and handed over to the likes of Goldman; Bernanke shouldn’t be audited, he should be strung up). There’s also plenty of other goodies, government contracts, the pull to get preferential policy like the ban on short-selling, and on. Then there’s the Too Big To Fail premium and the oligarchy premium. And in general Goldman swims in a pool filled and heated by taxpayer money. Without the bailout the whole sector would just have flopped and gasped in a fast-freezing puddle.
We the people own these banks. All of them. And especially a phony bank like Goldman, who even more than a basket case like Citi is purely a creature of the casino, a casino which shouldn’t exist at all.
So they’re not so tough. They’re a soft, fat, coddled little welfare queen.
And why are they so coddled? Because in their most thorough-going feudal strategy they’ve infiltrated their personnel into the government so completely that the term Government Sachs isn’t even a joke, but an accurate depiction of the neo-fascist corporate state.
I won’t repeat here the long, long list of Goldman cadres who entered high-level government and government officials who went to work for Goldman, but you can read it here and here, just for a few examples. Put it all together and we can see how and why Goldman Sachs is the most preffered corporation by this corrupt government, and how this is the real basis of all its phony profits.
So let’s recap. Goldman Sachs is motivated only by greed, and has made so much money that it sees itself as anointed by God. Yet even in this arrogance it feels vulnerable.
This feeling of vulnerability is because it is NOT smart and NOT tough and NOT solvent. Rather it has only mediocre intelligence, strength, or solvency, if left on its own.
ALL of its strength, all of its savvy, is 100% dependent on preferential treatment from the government, and from the gangland extortion racket it is able to run based on this entrenched welfare state position.
So we the people, the rightful owners of Goldman Sachs, don’t have to worry about this entity as if it were some majestic and terrible Death Star. Goldman IS just another government welfare program.
So the goal is simply to end this particular welfare program. We take back the government, from the bottom up, and we can break these pigs.
I don’t have the whole answer yet on how to do that, but I hope we can start to realize that what we’re up against is really just a stupid, clumsy beast. It is big and bloated, but it’s not smart or tough.
It’s not God, and the reason they keep telling themselves they’re doing God’s work is out of a sense of vulnerability, not strength.
Only the people have strength, but only if they choose to use it.


  1. I think of GS as a firm with a profile of Narcissistic Personality Disorder, and as Christopher Lasch pointed out-accurately I believe- in “Culture of Narcissism”, the U.S. is particularly afflicted by this trait.

    As a firm that only makes its money on the back of inside information and rigged trading, I wonder how long this newly minted bank will last. Hopefully not very.

    In the meantime, the worm is turning for the next leg in the ongoing economic crisis to occur, and I suspect it will make the last leg seem like a warm up by comparison.

    Comment by Edwardo — December 18, 2009 @ 7:21 am

  2. The older I get the smarter Ayn Rand was. Pumping up the go’mint only favors those who control the go’mint. Hayek explained why the worst people always end up in charge.

    All this is academic since the problem is now too big to be solved.

    Comment by jake chase — December 18, 2009 @ 10:22 am

  3. It looks like nothing will be done until the next crash.

    At that point, while I don’t think “government” will try to change anything (this government is beyond redemption), I think it will lose authority once and for all.

    That’s when the people will take their opportunity to reconstitute.

    Comment by Russ — December 18, 2009 @ 1:11 pm

  4. […] from the TARP and that Goldman paid it back (Goldman’s real cut of the loot so far is over $50 billion and counting).   In Blankfein’s exchange with Levin, you can look in vain for B himself to provide any […]

    Pingback by Goldman Testifies: “We’re Not That Smart.” Jerks, too. « Volatility — June 6, 2010 @ 2:54 pm

  5. I like the way you wrote this, Russ. It’s a really zippy and kind of entertaining style.Had me grinning over many sentences 🙂

    Comment by DualPersonality — February 21, 2012 @ 12:48 am

    • Thanks DP 🙂

      Comment by Russ — February 21, 2012 @ 4:52 am

  6. You insulted pigs AGAIN 😦

    Comment by DualPersonality — February 21, 2012 @ 12:49 am

    • Point taken. I’ll have to stop doing that. Sort of like how I hate it when I see criminals called “snakes” or “wolves”.

      Comment by Russ — February 21, 2012 @ 4:53 am

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