Greg Smith just revealed that the king has no clothes in his lambasting of Goldman Sachs. But these boys are so arrogant they won't let the truth get in the way of their lust for money. Exactly who came up with the idea of selling basically worthless sub prime mortgages in the first place at this point is anyone's guess but Goldman sure took it to another level. I have no proof but I'd bet 10 to 1 they'd sell a hedge on their dying grandmother if they had the chance. It's obvious from Smith's description that they are both immoral and amoral. "She'll be fine I tell you we just wheeled her around the block only yesterday and she's not having coughing fits like last week". A sick lot this. Didn't we see this same scenario on an episode of the Sopranos?
How did our financial house get in such a mess one might ask? It was by a mere stroke of a pen. Actually it was several when the common sense legislation was cast to the wayside and it was full steam ahead for the shenanigans were now experiencing. A snippet from a current article gives insight into the situation:
May be the most serious public lashing Goldman got came from in 2010 when the firm was accused by U.S. securities regulators and a Senate subcommittee of selling faulty subprime-mortgage linked securities to investors.
Goldman paid a $500 million fine to settle a lawsuit filed by the Securities and Exchange Commission over its marketing of collateralized debt obligations. And endured a public tongue lashing from Sen. Carl Levin over another CDO deal.
Goldman's strategy so far has been to keep a low profile and hope the uproar blows over. Indeed, some Goldman customers are saying Smith's critique isn't a big deal for them.
One longtime customer of Goldman's wealth management business said just about everything in Smith's letter was true. But he said you could say the same thing about any other big Wall Street investment firm.
This customer, who didn't want to be named, said Wall Street firms like Goldman long ago stopped being client centric after they went from private partnerships to publicly traded companies, which forces executives to focus ever more on the bottom line.
All of this financial skullduggery might seem new to a novice but looking back nearly a century the very same schemes were devised in the very heart of Wall Street. Only back then they were called "bucket shops". Do a search of that term and you'll find that history repeats itself. So bad and so toxic a game was being played back then that it was the reason for the tight financial laws that remained on the books until the 1990s when Glass - Steagall was repealed. Back then however entire countries didn't fall from playing the game as we're seeing today. Could be wrong but a look into Greek debt might reveal an intimate tie in to Goldman. This is a similar game that was played in the 1980s with junk bonds only on a larger scale. So easy to do when the rules are cast aside.
But the real kicker in all this is that to date nothing has been done to remedy the problem. Yes legislation was passed to put an end to financial wrong doing yet in four years not one perp walk not one indictment have we witnessed. And what of the talking heads of the financial news? They act as if a mosquito just flew in and out of the room. Nothing to see here just go about your business and don't let it be known that we're part of the con game too. They too touted the fine wardrobe of the emperor until it was too late. Probably busy buying hedges against the meltdown.