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Louise Story, Landon Thomas, and Nelson Schwartz at the NYT:
In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means...
Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere.
In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future, with those liabilities then left off the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come.
[Greece paid Goldman] about $300 million in fees for arranging the 2001 transaction, according to several bankers familiar with the deal.
In other words, Greece was just like many American homeowners, who hit their home-equity ATMs every year to remodel their kitchens and buy SUVs they couldn't afford. And Goldman, et al, were just like WaMu and Countrywide.
It was all perfectly legal, of course.
Just out of curiosity, wasn't there a claim awhile back (like 4-5 years ago, I think) where pundits in the EU were saying their financial rules and regulations, because they weren't so strict and by-the-book (or something along those lines where every minutia was being detailed) as the US ones, would prevent loopholes and other tricks being tried?
I've said it many times: AIG, now Greece didn't slip, they were pushed.
"Suckered" into hopeless lose-lose positions on which Goldman went short using CDSs.
Goldman was hoping for a catastrophic outcome knowing that the public purse would be robbed as well.
I doubt that these entities were truly "suckered". They knew and were in on it in one form or other, even if that hasn't been uncovered as yet.
Because Wall Street has played this game all along: ROB THE PUBLIC PURSE! That was the golden goose they all wanted to devour, the only source of massive wealth left due to the unrelenting money printing that has gone on over the past 30 years.
Easy prey if you stalked it properly and had the means and the opportunity.
In terms of whether the arrangements are 'in the spirit' of the EU's rules, the answer is quite likely "no". But, unless someone wants to challenge it in court, the 'spirit' of the law is meaningless.
As an example: it isn't in the 'spirit' of European banking regulations to use CDS to credit-enhance bank holdings and, therefore, make them eligible as "capital" for regulatory purposes. But a huge volume of CDS do exactly that -- put lipstick on piggy securities so that they are "capital".
Getting back to Greece: it's pretty likely that the EU knew, when Greece was admitted, that the country's finances were not honestly represented. But Germany and France choose to look the other way.
Unfortunately, there is nobody who would have gone for these arrangements on such a scale without the wheels being "greased".
Goldman has been at this scam for decades, and it's well documented. http://www.nytimes.com/1998/10/18/business/easy-money-special-report-for-russia-its-us-bankers-match-wasn-t-made-heaven.html?pagewanted=all
Same scam over and over: bribe officials into permitting large bond deals underwritten by Goldman. Keep flooding the market with the bonds for as long as you can dupe investors. BUT: surreptitiously begin fading short as a default gets closer to inevitable. In the Russian deal above, the Russian mafia (aka oligarchs) were bribed and influence was paid for and peddled (Former president George HW Bush) to get the Russian government to allow bond sales with basically no collateral at all. The capital raised in markets exceeded the ability to pay interest by over 3 times. A "bridge loan" was secured with which the bribes could be repaid to Goldman. As this happened, they went short the bonds. And to ensure a default would occur, they flooded a stressed market one last time with bonds they underwrote. You call that a woops event?? If you do you're a fool.
arrogant fucks....
I would like to see the EU sue the sh!t out of Goldman...
Even better a class-action suit by the Greek citizens - after all they are the ones who will get stuck with the financial demage Goldman caused.
If the alligation is provenm at a certain stage it should cross to criminal court: someone should be sent to jail to drag an entire country and region into this mess for cooking the books for profit.
Was it Goldman that caused the damage or did they simply provide (for a hefty fee) the irresponsible Greek (and other) politicians with the means to do damage to their citizens?
That's where Goldman's responsibility - and in my view, financial and criminal liability - lies.
If you hire a hitman to pull the trigger, both you and the hitman share responsibility in the crrime.
We' sooner send troops into Belgium than let Goldman go down.
And that's cause Goldman and Wall Street have too many shills in Washington, and even in at the ECB.
It would take a street revolution for that to seriously happen (and I'm not counting empty rhetoric)
For the Greeks it is a war.
Arthur Andersen, anyone?
This is really naive. You wouldn't find ANY country in western Europe which hasn't 'benefitted' from some kind of structured or tax-oriented US-originated deal. Most have done dozens.
No one in Brussels is going start shaking that particular tree because there is no way to know what would fall out.
No doubt about it: I bet there are more unexploded bombshells like this one around Europe and the world. Spanish CDS? Latvia, Ukraine, Hungary?? Don't look to close, you might get scorched by the hot lava
You really don't get it: It isn't just GS. Deutsche, Soc Gen, RBS, Barclays, MS -- pretty much any competent IB -- can, and has, offered the same/similar products to virtually every government in the world. And they've been doing it for decades.
Bankers who bring these bright ideas to elected officials are greeted with open arms because they offer extremely useful services -- the ability to make a country's finances look better than they are without inflicting any immediate pain on voters.
For a politician, that is more valuable than ANY corporate donation or lobbyist, and the price is laughably low -- Greece only had to pay GS $300 million, chump change, to qualify for entry into the EU! (yes, that's a bit of an exaggeration, but not by a lot!).
Like the Indiana Tollway and the Chicago Skyway, for example, bought out by Macquarie and Cintras, but which Goldman still managed to rake in hefty commission fees on just the same for supposedly arranging the deals.
Little by little Goldman (and all the other banks) are claiming more and more of our economy to the point where they will be soon, if they are not already, our economy's company store.
If yer got a problem just go to the United States of Bullshit for the solution. And they lead the world !
If there will not be GS, there will always be somebody else doing the same.
The only way to stop it completely is to limit concentration of wealth and capital.
By playing this extend and pretend game, Goldman helped elected officials hoodwink the voters who placed their trust in them. Goldman thereby undermined democracy in Greece (and everywhere else it offered this "service", which is probably everywhere).
Goldman in particular and Wall Street (in its present gangrenous state) in general are outright enemies of democracy and good government.
Goldman will have to die that democracy may live.
It's as simple as that.
The Goldman (etal) defense usually runs along the lines of:
Just because we handed them the gun, the ammo and explained in detail how to use it, at no point in time did we suggest that they point the gun at their own head and pull the trigger. Yes, we bought insurance in case they did but we didn't really expect that to happen.
Here, for perhaps the first time, is evidence of just how deeply crony capitalism is implicated in the collapse of a small but still important western democracy.
If we follow this thread where will it lead us...?
Imagine that the shoe was on the other foot and a European bank had helped the Fed hide US govt debt off-balance sheet. Wait a minute...I'm kind of a novice conspiracy theorist, but that doesn't sound implausible to me anymore.
Do you think Deutsche Bank, Soc Gen, RBS, Barclays, etc. don't/can't offer the same products?!
The vast majority of comments here seem not to understand that these kinds of deals, and many others, have been sold by banks and used by governments for decades!
I am, in no way, given GS a free pass. But, at the end of the day, it is each individual government's responsibility not to deceive its people and that's what these products do -- hiding debt levels and selling the future to make the present look better than it is.
The finger of blame in this crisis should rest on the former Greek Government. But now it can be shifted to a hated American player. Who will be able to resist?
Obama's remarks of last week now make him suspect in the eyes of the very Europeans who looked upon him as a new messiah.
Karmic payback's a bitch, ain't she?
Anglophone media are corrupted to the bone, from marginal blogs to mainstream papers. You are all a sorry sight.
www.goldsilvervideoinfo.com
the FED allows Cartel Members to Gamble YOUR MONEY at ZERO RATES
why can't you gamble at zero rates?