Windows on the World of Raymond Plank
Founder, Apache Corp
Vol. 2010 No. 5
 

GOLDMAN SACHS UPDATE

 

While the headlines in recent weeks have moved away from Goldman Sachs to the threat to the Euro and political implosion of additional European economies, I would observe, that of course Goldman Sachs is conflicted in a number of its financial services, from which it can be noted its senior executives world wide benefit at the annual bonus window both in cash and share awards, as do their counterparts throughout the major investment firms deemed to be banks able to leverage debt if not equity, while making hay and disgorging too high leverage on an accepting Federal Reserve.    

 

Both the United States and the world look to Goldman Sachs, Morgan Stanley, and others to raise capital, and make markets, at which in combination, they excel.  The Glass-Steagall Act was passed in the 1930ies to prevent the abuses which have developed in the intervening 75 years, when limiting amalgamations of power in the Federal Reserve and commercial banks took over combined functions.  Bubbles burst with soap getting in the eyes of every American and counterparts around the globe.

 

En route to the American “poor house,” came the Gramm-Leach-Bliley Act of 1999, signed into law by then President Bill Clinton, which opened the flood gates, polishing off the last vestiges of the protective Glass-Steagall Act, which had served well over the preceding 66 years.

 

Meanwhile, the Securities Exchange Commission stood silently aside.  Now there’s “hell to pay,” but with what?

 

Washington, in my opinion, has become a giant Enron, having learned the lessons well enough to apply them in upscale versions of destruction.  Do the rating agencies have the courage to downgrade Federal Reserve issued paper; its rating dependent upon the ability of the government to raise taxes on the backs of its people to the point where personal debt obligations are able to be met?  Who wants a revolution?

 

Yet a start could be made if the U.S. “stopped beating its wife” – a proxy for major change within this decade’s nominee for global Sin City, where corruption, rather than freedom and dignity, ring.

 

Goldman Sachs?  They’re #1 at delivering despite Sin City’s kiss ass lobbying and despite the S.E.C. looking in the other direction while eager to “pile on” when states’ Attorney Generals “fry a few bad eggs.”

 

Arthur Laffer is no laugh.  His comments appeared publicly on June 7, 2010 under the heading “Tax Hikes and the 2011 Economic Collapse.”