Yes "conservatives" such as Bush and Boehner certainly opposed the bailouts by voting for and passing TARP.
Conservatives, opposed to bailouts, would have 'touched' them by watching them fail.
I thought more interesting part was "Savings Of Millions Of People Are Going To Vanish" who don't prepare. GS et.al. ruling the world is nothing new.
Makes me wonder if that's the reason why people still want to privatize SS. Plow a few hundred billion of SS money into the market to prop it up (or even expand it) until the bottom falls out. Those at the top jump out at or near the top and those that invested their SS money into the market get slammed. :hmm:
Nobody would go for dismantling the federal reserve and giving control of currency back to the market, and laws stating that lending what you do not have is fraud and stealing. So the best I can hope for is a post-apocalypse reform because banks and government will never relinquish that power.
Makes me wonder if that's the reason why people still want to privatize SS. Plow a few hundred billion of SS money into the market to prop it up (or even expand it) until the bottom falls out. Those at the top jump out at or near the top and those that invested their SS money into the market get slammed. :hmm:
"Betting" would indicate a certain level of risk. GS had no risk, they knew exactly what they were selling was worthless and stacked the deck in their favor. It's more like out and out fraud.
Isn't "hedging" just another word for "betting"?
If Goldman Sachs was betting against loans defaulting, why aren't the states where betting is illegal prosecuting people from Goldman Sachs?
"Betting" would indicate a certain level of risk. GS had no risk, they knew exactly what they were selling was worthless and stacked the deck in their favor. It's more like out and out fraud.
Of course GS had risk. It's called counter-party risk. They bet out both sides, but if one side fails to pay (*COUGH*AIG*COUGH) then they are SOL. That's why they had the government bail out the losers *AHEM*AIG*AHEM so they could collect.
They didn't have a material exposure to AIG actually, maybe 600M?
bfdd
Where do you get "SS was created as a temporary thing"? Never even heard anyone suggest that.
Was this proven bunk? http://www.reuters.com/article/2008/09/28/aig-goldmansachs-idUSN2834001720080928
What about non-AIG counter-parties that GS had exposure to that had significant exposure to AIG?
Uhh, neither GS nor JPMC needed the bailout money, at all. Paulson stuffed it down their throats so as to create the appearance that all the big banks were in trouble. Otherwise, investors would have gone with the winners, destroyed the losers, profiting both firms even more. Both firms had reversed their field, mercilessly exploited derivatives & naked short selling of their competitors to profit handsomely form the collapse, with GS engaging in the sleaziest tactics of all.
The current crisis in Europe is no different, with GS betting heavily on default by the Greeks & others. Hell, they set the Greeks up to fail, and now push for policies from Germany & the ECB to make it happen.
None of this would be possible w/o synthetic derivatives, which should be outlawed by every country in the world. Financial markets would be a whole lot more stable & more honest w/o them.
This. I looked the guy up, he has no credentials. There are a million people who do what he does.Why should this interview with some kook get played on any network? What gives that kook more credibility than other kooks?
This. I looked the guy up, he has no credentials. There are a million people who do what he does.
Hank Paulson, the Republican Secretary of Finance under President Bush, practically single-handedly saved Goldman Sachs from collapse in 2008. He tried his best to make sure Lehman Brothers, Bears Stearns, Merill Lynch and Morgan Stanley were also saved. He had the full backing of that entire Republican administration.
Bush the pre-socializer: I readily concede I chucked aside my free-market principlesIve abandoned free-market principles to save the free-market system.
Bottom line: George W. Bush is leaving exactly the Big Government legacy he promised to leave. The only uncertainty was over how large of a hole he would dig.
"Compassionate conservatism" and fiscal conservatism were never compatible. Never will be.
Do not confuse Bush for conservatism.
He betrayed every meaning of the word by that time. I wonder if you can appreciate that, or if he so tainted our name that you think voters actually wanted that !@#$. There's a reason McCain lost, we're angry. Most stayed home in protest. I voted against another betrayer.
You want to understand conservatism on this issue? Look no further than Michelle Malkin:
George W. Bush’s political epitaph.
Bush the pre-socializer: “I readily concede I chucked aside my free-market principles”
F' Bush! If there's one motto of the Tea Party, it should be that.
Democrats love it. They'll tell you bailouts are what any reasonable person would do.
Those fat cats should have gone down in flames, but they owned Washington and so Congress / Bush came through for them. Even got the Dems convinced that they had to save them OR ELSE. Hah, or else what? Look around suckers, the economy is still collapsing and there is no bailout in the world large enough to stop it.
All Bush did was loot the public treasury. The only people telling you not to do that are conservatives. There are many Republicans who claim to be conservative, but support Bush's actions. Try to imagine that. People who claim to want limited government, but do everything in their power to grow it.
Do us a favor, help the Tea Party cut the GOP in half. Help us stop the next GWB from becoming President. Only then will the likes of Goldman Sachs fall.
While 65 percent of union members say free trade has hurt the U.S., so do 61 percent of Tea Party sympathizers. Democratic pollster Peter Hart and his Republican counterpart Bill McInturff, who conduct the NBC/WSJ poll, say the greatest shift against free trade has come among relatively affluent Americans, or those earning more than $75,000 a year.
In a McClatchy-Marist poll released this week, 70% of registered voters who identify with the Tea Party opposed making cuts to either Medicare or Medicaid -- the government-run health programs for the elderly and the poor -- to help reduce the nation's deficit. Meanwhile, only 28% of tea partiers said they'd be willing to cut spending on those two programs.
Tea partiers were not alone in opposing Medicare and Medicaid cuts. An overwhelming 80% of all respondents said they opposed such cuts, with a majority of every demographic measured in the survey lining up against them.
Does anyone remember when Craig was touting Obama as a real progressive, saying he doesn't take money from people like this. He doesn't take money from lobbyists or PACs. lols. The Dems are no where near as bad as the Reps, except they both take money from special interest groups and corporations in the tune of billions. Craig you're such a hack.
Isn't "hedging" just another word for "betting"?
'Hedging' generally means a sort of 'insurance', which can be a bet, to reduce the risk of another gamble you're taking.
This is where credit default swaps partly came in.
A company is interested in selling a derivative, but the buyer says, 'that's risky! So I won't pay you that much.' Well, the company wants to be paid that much, so it wants to make the product more attractive by having it 'insured'. Then it can say, 'pay a lot, because if you win you make a ton, and if it goes bad, you're insured!'
Now, legitimate insurance needs things that cost money - like, say, the reserves to actually be able to pay off the policy. And that makes it more expensive, which cuts into profit. Wouldn't it be nice if they could just say they had insurance to make it sellable, but have the insurance be really cheap? That's why government regulates insurance, to prevent it being phony and uesless and creating systemic risk.
Enter credit default swaps - a snake oil, scam industry made of an instrument not called insurance, but insurance by another name, without any regulation.
And, predictably, it fits what the market wanted - much cheaper, unregulated. Now the company could buy cdf's on the cheap to make its derivatives more valuable as 'insured', and an industry cropped to say 'sure, we'll sell you cdf's cheap' because it was free money in the bank - these things never went bad, really, did they, this was just to satisfy some bureaucracy for 'safety' and got rich selling them unable to pay them off. Not that it was a big deal - just trillions of dollars worth creating phony 'safety'.
The futures markets exist for good reason - they allow the sellers of commodities who invest now to sell later, to count on getting a certain buy or sell price so they won't be wiped out if the market goes bad. It's a win-win, done in moderation. But when situations happen where a ton of speculation money enters the market, it can skyrocket demand, which skyrockets prices, making the investors on the right side a fortune - while the people who actually use the stuff suddenly have to pay a fortune for it.
Same thing on the way down, where investors can profit on the right side. So if you're in a position to manipulate the market, to be 'inside' - say you're Goldman Sachs who OWNS the big futures market -you can make a killing on these things. While the bubble is create and things cost a fortune, well, so, prices go up and consumers make you rich. Darn!
The word 'hedging' can be confused with 'hedge fund', which is what you probably were referring to - which is a major 'gamble' high risk fund - some of which make fortunes.
(The other 'big player' at these massive funds that can take big risk are the 'sovereign funds', things that can belong to, say, Saudi Arabia or China, big amounts of national capital the nation's government want to grow, that go around the world looking for attractive big investments, causing harm or not - like the secret investors who bought Chicago's parking meter revenue for 99 years for $1.4 billion IIRC.)
Things that can allow manipulation of a futures market include ending a rule that huge conservative investment funds arenot allowed to invest in them, to saying that these funds now HAVE to have diverse investments in things like futures - resulting in many billions suddenly looking to grab up these types of investments, especially when pointed to them with encouragement by their 'advisors' like Goldman Sachs. No wonder there was a 'Chinese wall' between investment advisors, and investment firms.
It took the brilliant minds of Goldman Sachs to realize the simple truth that nothing is more valuable than our daily bread. And where there's value, there's money to be made. In 1991, Goldman bankers, led by their prescient president Gary Cohn, came up with a new kind of investment product, a derivative that tracked 24 raw materials, from precious metals and energy to coffee, cocoa, cattle, corn, hogs, soy, and wheat. They weighted the investment value of each element, blended and commingled the parts into sums, then reduced what had been a complicated collection of real things into a mathematical formula that could be expressed as a single manifestation, to be known henceforth as the Goldman Sachs Commodity Index (GSCI).
Change was coming to the great grain exchanges of Chicago, Minneapolis, and Kansas City -- which for 150 years had helped to moderate the peaks and valleys of global food prices. Farming may seem bucolic, but it is an inherently volatile industry, subject to the vicissitudes of weather, disease, and disaster. The grain futures trading system pioneered after the American Civil War by the founders of Archer Daniels Midland, General Mills, and Pillsbury helped to establish America as a financial juggernaut to rival and eventually surpass Europe. The grain markets also insulated American farmers and millers from the inherent risks of their profession. The basic idea was the "forward contract," an agreement between sellers and buyers of wheat for a reasonable bushel price -- even before that bushel had been grown. Not only did a grain "future" help to keep the price of a loaf of bread at the bakery -- or later, the supermarket -- stable, but the market allowed farmers to hedge against lean times, and to invest in their farms and businesses. The result: Over the course of the 20th century, the real price of wheat decreased (despite a hiccup or two, particularly during the 1970s inflationary spiral), spurring the development of American agribusiness. After World War II, the United States was routinely producing a grain surplus, which became an essential element of its Cold War political, economic, and humanitarian strategies -- not to mention the fact that American grain fed millions of hungry people across the world.
Futures markets traditionally included two kinds of players. On one side were the farmers, the millers, and the warehousemen, market players who have a real, physical stake in wheat. This group not only includes corn growers in Iowa or wheat farmers in Nebraska, but major multinational corporations like Pizza Hut, Kraft, Nestlé, Sara Lee, Tyson Foods, and McDonald's -- whose New York Stock Exchange shares rise and fall on their ability to bring food to peoples' car windows, doorsteps, and supermarket shelves at competitive prices. These market participants are called "bona fide" hedgers, because they actually need to buy and sell cereals.
On the other side is the speculator. The speculator neither produces nor consumes corn or soy or wheat, and wouldn't have a place to put the 20 tons of cereal he might buy at any given moment if ever it were delivered. Speculators make money through traditional market behavior, the arbitrage of buying low and selling high. And the physical stakeholders in grain futures have as a general rule welcomed traditional speculators to their market, for their endless stream of buy and sell orders gives the market its liquidity and provides bona fide hedgers a way to manage risk by allowing them to sell and buy just as they pleased.
Bankers recognized a good system when they saw it, and dozens of speculative non-physical hedgers followed Goldman's lead and joined the commodities index game, including Barclays, Deutsche Bank, Pimco, JP Morgan Chase, AIG, Bear Stearns, and Lehman Brothers, to name but a few purveyors of commodity index funds. The scene had been set for food inflation that would eventually catch unawares some of the largest milling, processing, and retailing corporations in the United States, and send shockwaves throughout the world.
The money tells the story. Since the bursting of the tech bubble in 2000, there has been a 50-fold increase in dollars invested in commodity index funds. To put the phenomenon in real terms: In 2003, the commodities futures market still totaled a sleepy $13 billion. But when the global financial crisis sent investors running scared in early 2008, and as dollars, pounds, and euros evaded investor confidence, commodities -- including food -- seemed like the last, best place for hedge, pension, and sovereign wealth funds to park their cash. "You had people who had no clue what commodities were all about suddenly buying commodities," an analyst from the United States Department of Agriculture told me. In the first 55 days of 2008, speculators poured $55 billion into commodity markets, and by July, $318 billion was roiling the markets. Food inflation has remained steady since.
The money flowed, and the bankers were ready with a sparkling new casino of food derivatives. Spearheaded by oil and gas prices (the dominant commodities of the index funds) the new investment products ignited the markets of all the other indexed commodities, which led to a problem familiar to those versed in the history of tulips, dot-coms, and cheap real estate: a food bubble. Hard red spring wheat, which usually trades in the $4 to $6 dollar range per 60-pound bushel, broke all previous records as the futures contract climbed into the teens and kept on going until it topped $25. And so, from 2005 to 2008, the worldwide price of food rose 80 percent -- and has kept rising. "It's unprecedented how much investment capital we've seen in commodity markets," Kendell Keith, president of the National Grain and Feed Association, told me.
What was happening to the grain markets was not the result of "speculation" in the traditional sense of buying low and selling high. Today, along with the cumulative index, the Standard & Poors GSCI provides 219 distinct index "tickers," so investors can boot up their Bloomberg system and bet on everything from palladium to soybean oil, biofuels to feeder cattle. But the boom in new speculative opportunities in global grain, edible oil, and livestock markets has created a vicious cycle. The more the price of food commodities increases, the more money pours into the sector, and the higher prices rise. Indeed, from 2003 to 2008, the volume of index fund speculation increased by 1,900 percent. "What we are experiencing is a demand shock coming from a new category of participant in the commodities futures markets," hedge fund Michael Masters testified before Congress in the midst of the 2008 food crisis.
The result of Wall Street's venture into grain and feed and livestock has been a shock to the global food production and delivery system. Not only does the world's food supply have to contend with constricted supply and increased demand for real grain, but investment bankers have engineered an artificial upward pull on the price of grain futures. The result: Imaginary wheat dominates the price of real wheat, as speculators (traditionally one-fifth of the market) now outnumber bona-fide hedgers four-to-one.
Today, bankers and traders sit at the top of the food chain -- the carnivores of the system, devouring everyone and everything below. Near the bottom toils the farmer. For him, the rising price of grain should have been a windfall, but speculation has also created spikes in everything the farmer must buy to grow his grain -- from seed to fertilizer to diesel fuel. At the very bottom lies the consumer. The average American, who spends roughly 8 to 12 percent of her weekly paycheck on food, did not immediately feel the crunch of rising costs. But for the roughly 2-billion people across the world who spend more than 50 percent of their income on food, the effects have been staggering: 250 million people joined the ranks of the hungry in 2008, bringing the total of the world's "food insecure" to a peak of 1 billion -- a number never seen before.
And efforts by concerned activists or international agencies to curb grain speculation have gone nowhere. All the while, the index funds continue to prosper, the bankers pocket the profits, and the world's poor teeter on the brink of starvation.