Goldman: Speculation and Impunity

“Today is my last day at Goldman Sachs. After almost 12 years at the firm, I can honestly say that the environment now is as toxic and destructive as I have ever seen it… To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates… The firm has veered so far… I can no longer in good conscience say that I identify with what it stands for.” The New York Times of March 14 echoed the resignation of Greg Smith, who was Goldman Sachs’ executive director and head of the firm’s U.S. equity derivatives business in Europe, the Middle East, Africa and Asia. Once again, deception, impunity and lack of control are affecting the lives, the jobs and the assets of thousands of people inside and outside of the United States given the extent of the businesses of this investment bank. At the same time, the complicity and the symbiosis of the imperial presidency Bush/Obama and the Congress is being shown with this modus operandi.

An institutional context of corrosive usury and greed is prevailing in some banks and investment firms that are beacons of high finance such as CitiGroup, Wells Fargo, Bank of America, Morgan Stanley, Goldman Sachs, etc. In 2008, this context was fed by excessive bailouts and benefits of $13 and $14 trillions. These are businesses and corruptions that include clean-up operations and make the Banking Fund for the Protection of Savings and the Mexicana de Aviación disaster seem cunning operations run by petty thieves. The Consejo Coordinador Empresarial is behind the big loot, that is, floating Pemex-CFE where sharks such as Goldman Sachs are operating and betting, something that is part of the electoral offer proposed by the usual Peña Nieto and Vázquez Mota. They ask for votes in order to strip the electorate of assets which are linked to the people and increasingly more valuable for the oil ceiling and whenever the world energy equation favors the public control of vital resources. Thanks to the Commodity Futures Modernization Act, a law passed by Bill Clinton in 2000, they offer to bring national wealth where clients and nations are impoverished. According to economist Chris Hedges, Goldman Sachs’ commodities price index is the most quoted in world markets. Thanks to Clinton, the company speculates based on popular demand: rice, wheat, corn, sugar, meat, minerals, metals and fossil fuels.

Smith’s resignation is revealing: “Over the course of my career I have had the privilege of advising two of the largest hedge funds on the planet, five of the largest asset managers in the United States, and three of the most prominent sovereign wealth funds in the Middle East and Asia. My clients have a total asset base of more than $1 trillion. I have always taken a lot of pride in advising my clients to do what I believe is right for them, even if it means less money for the firm. This view is becoming increasingly unpopular at Goldman Sachs. Another sign that it was time to leave.”

Although the role of some operators, such as Robert Rubin, who is close to the current, unmentionable presidents, left a permanent sign in the crisis and subsequent plundering of Mexican public funds (and oil) during the great operation of speculation and bailout that made the country kneel down after the debacle of December 1994, Smith thinks that the actions of Lloyd C. Blankfein and Gary D. Cohn, chief operating officer and president of Goldman Sachs, is one of the most serious threats to the survival of the firm even though Blankfein declared on London newspaper, The Times, that Goldman Sachs was doing God’s work. The idea of securitizing hundreds of thousands of toxic mortgages started there. Later, Goldman Sachs, just like other banks and firms, sold these mortgages to its clients at the same time that it was betting against them.

The prosperity of Goldman Sachs was not due to the wonders of God, but to the money it received from benefits and bailouts of the Department of Treasury and the Federal Reserve, which proceeded to print money as had never been done since Tiberius in 33 BC, who aimed to recover the finances of the Roman Empire. The Federal Reserve acts as a central bank, it has the monopoly for the issuing of currency, and therefore regulates interest rates and determines the amount of money that flows into the economy.

Those in the Mexican Congress, who passed the unusual rise of the IMF quota without pity or responsibility, should remember where the funds will end up: with Blankfein. A few months after the collapse that made thousands become unemployed, the executives of Goldman Sachs obtained the biggest compensation in Goldman Sachs’ history of 143 years; according to official figures revealed by Hedges at Zuccotti Park in front of hundreds of squatters, the executives received $18 billion in 2009, $16 billion in 2010 and $10 billion in 2011. Blankfein was later arrested by the New York police in front of Goldman Sachs headquarters.

Smith is ashamed of this and he is resigning.