Monday, March 8, 2010

"Clever, Not Smart" Bonuses Are Payoffs & Fink at BlackRock Knows Why - Jim Hightower Calls the Goldman Sachs' Scam a Greek Tragedy

I know no one believes me, but these people are not that smart.

Just clever.

And completely amoral.

Larry Fink (founder of the notorious BlackRock, which "controls or monitors more than $12 trillion worldwide — including the balance sheets of Fannie Mae and Freddie Mac, and the toxic A.I.G. and Bear Stearns assets taken over by the U.S. government last year") is highlighted in Vanity Fair because he's sorry he was so dumb (just like Greenspan) about the risks of derivatives but he's got another groovy idea about how to risk your money - and really - he is smart - really! He's smart - really, really, really - all his friends say so! And he picked up quite a few deals when everything got real cheap after the crash. (Oh, and won't you please give him some more of your money to manage? He's particularly good at pension funds and state and local government investments.) (Emphasis marks added - Ed.)

In December, when Fink’s $13.5 billion acquisition of Barclays Global Investors was finalized, BlackRock, the company he founded 22 years ago, officially became the largest money-management firm in the world. A global colossus — with $3.3 trillion in assets under its direct management and another $9 trillion it supports — BlackRock manages about $1 trillion of pension and retirement funds for millions of Americans and oversees the investments of scores of institutions around the world: from state and local governments to college endowments, from Fortune 500 companies to the sovereign-wealth funds of, among others, Abu Dhabi and Singapore.

BlackRock’s vast reach in the global markets is not, however, its only source of influence these days. That Fink pulled off the Barclays deal in the aftermath of 2008’s financial meltdown is, in itself, impressive, but he did more than merely survive the wreckage unscathed. Indeed, it is hard to argue that anyone, or any firm on Wall Street, gained as much stature from the economic crisis as did Fink and BlackRock. At the height of the disaster, when the American economy was on the brink, it was to Fink that Wall Street’s C.E.O.’s — including J. P. Morgan Chase’s Jamie Dimon, Morgan Stanley’s John Mack, and A.I.G.’s Robert Willumstad — turned for help and counsel. As did the U.S. Treasury and the Federal Reserve Bank of New York, whose top officials turned to Fink for advice on the financial markets and assistance on the $30 billion financing of the sale of Bear Stearns to J. P. Morgan, the $180 billion bailout of A.I.G., the $45 billion rescue of Citigroup, and those of Fannie Mae and Freddie Mac at $112 billion and growing.

Today, through an array of government contracts, BlackRock has effectively become the leading manager of Washington’s bailout of Wall Street. The firm oversees the $130 billion of toxic assets that the U.S. government took on as part of the Bear Stearns sale and the rescue of A.I.G.; it also monitors the balance sheets of Fannie Mae and Freddie Mac — which together amount to some $5 trillion —and provides daily risk evaluations to the New York Fed on the $1.2 trillion worth of mortgage-backed securities it has purchased in an effort to jump-start the country’s housing market.

. . . But BlackRock’s enormous and growing influence and its sheer size — too big to fail, some say — has begun to raise questions. “It’s like the Blackwater of finance, almost a shadow government,” says one senior bank executive, referring to the mountain of government contracts awarded to the firm. Although others — including the massive California-based Pacific Investment Management Company — have benefited from the gravy train of post-bailout government jobs, none appears to have gained nearly as much as BlackRock. Fink’s firm has been granted a privileged view into a broad swath of the financial markets, raising questions, says James Bianco, the C.E.O. of Bianco Research, about how it is handling possible conflicts of interest. That BlackRock was awarded key contracts with no competitive bidding, in a process enveloped in secrecy, has also raised hackles in Congress and led to questions about Fink’s long-standing relationships with senior government officials, particularly former Treasury secretary Henry Paulson and Geithner, his successor.

But I'm sure nothing underhanded was going on in the land of the free (access). Please read the rest here. It'll open your eyes, sweetheart. My secret flame, Jim Hightower, is still alive and kicking (all of them!). Let me know if you appreciate this as much as I did (wishing all the while that they would all go under as per Greece), and can see the parallels with the clever Government Sex guys playing tricks on our taxpayers. Mmmm. Sexy! (And windy.) (Emphasis marks added - Ed.)
Jim Hightower; Goldman Sachs Authors a Greek Tragedy
March 04, 2010


Another Greek-based cargo ship and its crew was recently hijacked by Somalian pirates, costing the Greek owners an undisclosed amount in ransom.

Such ongoing acts of brazen piracy off the coast of Somalia have riveted the establishment media's attention. But the same news hawks have missed (or ignored) a much more brazen, longer-running and far larger robbery in Greece by Gucci-wearing thieves who are more sophisticated than common pirates - but lack a pirate's moral depth.

I refer to - who(m) else? - Wall Street financiers. Specifically, Goldman Sachs.

Goldman, a global financial conglomerate and America's largest banking fiefdom, is notorious in our country for its arrogant, anything-goes corporate ethic that is astonishingly avaricious, even by Wall Street's dissolute standards. The firm is villainous enough that it could be its own reality TV show, perhaps titled, "Bankers Behaving Badly." A few highlights:

  • During the past decade, Goldman's wizards were particularly inventive monkey-wrenchers, devising much of the investment gimmickry that enriched crafty Wall Streeters like them, even as it led to the wrecking of our economy.
  • In 2006, Goldman's CEO was considered such a whiz that he was elevated to Treasury Secretary and soon was handed the task of fixing the very economic mess he had helped create. His "fix" was the cockamamie, self-serving, multitrillion-dollar taxpayer bailout that did save Wall Street . . . but has left our economy in shambles.
  • Rather than apologizing for their failures and using their bailout funds to rush loans to America's credit-starved businesses, Goldman's debauched financiers immediately went back to playing the same old global game of high-risk craps that caused America's crash, this time rolling the dice with the backing of our tax dollars.
  • Juiced by an infusion of federal funds, Goldman executives declared a profit this year and promptly lavished more than $16 billion in bonus payments on themselves.
  • To keep the fun rolling, Goldman is now lobbying furiously in Washington to kill regulatory and consumer bills that could rein in its destructive greed.
  • Moving from mere greed to naked narcissism, Goldman's current CEO, Lloyd Blankfein, has proclaimed that his bonus bonanza is warranted because he is "doing God's work."

Perhaps he was referring to one of the Greek gods. It turns out that, for the past decade, Goldman has also been practicing its ethical flimflammery in Greece, a nation long mired in a sea of debt.

In 2001, Goldman's financial alchemists formulated a scheme to allow the Greek government to hide the extent of its rising debt from the public and the European Community's budget overseers. Under this diabolical deal, Goldman funneled new capital from super-wealthy investors into the government's coffers.

Fine. Not so fine, though, is that, in exchange, Greek officials secretly agreed that the investors would get 20 years' worth of the annual revenue generated by such public assets as Greece's airports. For its part, Goldman pocketed $300 million in fees paid by the country's unwitting taxpayers.

The financial giant dubbed its airport scheme "Aeolus," after the ancient Greek god of the wind - and, sure enough, any long-term financial benefit for Greece was soon gone with the wind. By hiding the fact that the government's future revenues had been consigned to secret investors, Goldman bankers made the country's balance sheet look much rosier than it was, allowing Greek officials to keep spending like there was no tomorrow.

Last month, however, tomorrow arrived. Greece's crushing debt has exploded into a full-blown crisis, with its leaders disgraced and the country on the precipice of the unthinkable: the default of a sovereign nation.

So, who is getting punished for the finagling of Greek politicos and Goldman profiteers? The people, of course - just like here! Greeks now face deep wage cuts, rising taxes and the elimination of public services just so their government can pay off debts the people didn't even know it had. Meanwhile, Greece's financial conflagration is endangering the stability of Europe's currency and causing financial systems worldwide (including ours) to wobble again. All of this to enrich a handful of global speculators.

Thanks, Goldman Sachs.

(National radio commentator, writer, public speaker, and author of the book, Swim Against The Current: Even A Dead Fish Can Go With The Flow, Jim Hightower has spent three decades battling the Powers That Be on behalf of the Powers That Ought To Be - consumers, working families, environmentalists, small businesses, and just-plain-folks.)

That famous BeulahMan puts that final spit polish on this opinion of mine. Thanks, buddy! Suzan ______________


Greendayman said...

We are watching it happen in slow-motion like a Sam Peckinpah shootout scene where the middle class is getting shot to pieces.

Thanks suzan - g

Tom Harper said...

Yes, I'm ready to give Larry Fink another chance. He's sorry about that little screwup before, and I know he means it. I'm certain that this time when Lucy holds out the football for Charlie Brown to kick, she won't yank it away at the last second.

I'm going to invest my entire retirement savings in BlackRock. I know it'll be in good hands with Larry.

Suzan said...

Thanks for your input, g. You are always welcome here.

And, Tom, you devil you.

I love you, buddy.

Tell it!

"Good hands," indeed.


Greendayman said...

I think one of the crazy 'wingers should fly his plane into the Goldman Sachs offices instead of the IRS building. But, Fox News and Rush never rally the troops over Wall Street excesses... why is that? Hmmm...?

Suzan said...

I like your style, g.

I myself have been wondering why no one has attacked any of the Government Sex crowd. They certainly have worked hard for it (and deserve it richly). They have the money (our money) to hire protection (of course), and must be expecting some type of payback (but maybe they think it'll be after the "next" crash).

Limpbaugh & Beckd - rally the troops against the criminals who actually stole the money? Nawww. They are still trying to start the next race war - and they've made a good start on it.

You gotta give those thugs props for recognizing blind rage and knowing how to direct it, don't you?

Thanks again. Always love to read your comments.


But, Fox News and Rush never rally the troops over Wall Street excesses... why is that? Hmmm...?