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Life After the Oil Crash
Deal With Reality or Reality Will Deal With You
I found a version of this article posted to the web and was so blown away - not by the things Goldman has been involved but that they're being covered in such great detail by an MSM outlet that I ran down to buy a print version but they were sold out. This 12 pager absolutely begs to be purchased, so much so that I feel a bit uncomfortable linking to it as my guess is RS purposely did not post it online to see if they could drive purchases of the print edition. I think this is great idea on their part, I've been saying for ages if the MSM would do real journalism (like this article) and just hold off on posting stuff to the web we junkies would be forced to run down to the local bookstore or newstands to get a print edition. Inevitably somebody posts it the web but it is usually NOT in a manner that is easy on the eyes so many of us will go buy the print version.
Anyway, this is true first order major league quality journalism here. Matt Taibbi is a brave man:
What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain – an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.
The bank’s unprecedented reach and power have enabled it to turn all of America into a giant pump-and-dump scam, manipulating whole economic sectors for years at a time, moving the dice game as this or that market collapses, and all the time gorging itself on the unseen costs that are breaking families everywhere – high gas prices, rising consumer-credit rates, half-eaten pension funds, mass layoffs, future taxes to pay off bailouts. All that money that you’re losing, it’s going somewhere, and in both a literal and a figurative sense, Goldman Sachs is where it’s going: The bank is a huge, highly sophisticated engine for converting the useful, deployed wealth of society into the least useful, most wasteful and insoluble substance on Earth – pure profit for rich individuals. Source
What's amazing is that after publication of the article, many readers actually wrote to Taibbi to say it was Goldman's right to rip people off going so far as to say that even if they're own pension funds bought toxic crap based on Goldman's recommendations that it was Goldman's right to get rich. Taibbi writes on his blog:
After my Rolling Stone piece about Goldman, Sachs hit the newsstands last week (unfortunately the piece is not yet up on the magazine’s web site, so I can’t link to it yet — but it is out in print), I started to get a lot of mail. Most of it was thoughtful and respectful criticism, although there was an amusingly large number of people writing in impassioned defense of their right, under our American system, to be ripped off by large impersonal financial companies. "If my pension fund is buying [crap mortgages] from Goldman, and my pension fund loses lots of value, that’s not Goldman’s fault," wrote one reader. "No one is forcing anyone to buy anything. The only thing Goldman is guilty of is making profits."
I’m not even going to go there — the psychology of a human being who would take the time to actually write in a complaint like that is so bizarre that it would take more time than I have today to even begin discussing it. Source
We're discussing the article at the LATOC Forum for those who are curious. It's worth nothing that there have been a number of Rolling Stone articles published in the last few years that I would put in the must-read category, all of which are fortunately archived at their website:
On to the rest of the day's news:
Goldman, which continues to attract the very best investment bankers andis chaired by Lloyd Blankfein, is on track to pay staff more than it did in2007, itself a record year. Having recently repaid its $10bn (£6bn) bail-outfrom the US Treasury, thus releasing it from government compensation legislation, the bank is on track to produce a total compensation pot of$20 billiion this year, according to analysis of the Wall Street Journal . . .Here in California, Mr. Schwarzenegger ordered a third furlough day forstate employees in July, meaning many state offices will be closed for longweekends for most of the month. The state’s controller, meanwhile, waspreparing to prevent further disruption to government services by printingmore than 28,000 i.o.u.’s which will be sent on Thursday to thousands ofCalifornians awaiting income tax refunds if there is no budget agreement . .A day after the state Senate failed in a late-night bid to close part of adeficit now projected at $US26.3 billion, California Controller John Chiangtook steps to begin issuing IOUs to tens of thousands of companies and individuals owed millions of dollars by the state . . .Unless drastic budget cuts come at the local level, many California schooldistricts may be unable to pay the bills in the next two years, state schoolschief Jack O'Connell said Tuesday. "Billions of dollars of state budget cuts toeducation have left school districts with deficits that school boards andadministrators are attempting to address," O'Connell said at a newsconference in San Jose. "The decisions they have been forced to make areheartbreaking . . . These are choices no educator in California wants tomake. But the alternative is bankruptcy and entering state receivership."With California a day away from issuing IOUs instead of paying its bills, Gov. Schwarzenegger and the legislature remain at odds over how to close anow $26.3 billion deficit. Schwarzenegger on Thursday ordered a thirdunpaid furlough day for 235,000 state employees. With its $1.7 trillioneconomy sputtering and 11.5% unemployment surging, California's difficultyin balancing its budget could affect the national recovery. But the seeds forthe Golden State's budget problems were planted more than 30 years ago.Anyone paying attention to this year’s “solution” quickly realizes that ourshortfall was plugged largely with one-time money or one-time accountinggimmicks that won’t be repeatable when the Legislature and governorcraft our next biennial budget. State finance officials are projecting another$6 billion budget gap in the upcoming biennium, and that assumes areasonably robust economic recovery starting later this year. Yet even ifthe economy strengthens as expected, the state’s budget situation willcontinue to worsen, and the state will likely have far fewer tools availableto fix the problems without inflicting real pain, on Minnesota residents . . .. . . we know employment is a lagging indicator and there have been somepositive signs in other metrics so let’s not slit our wrists. At the same time,we are digging a hole that is so deep that crawling out of it is going to takeyears. All of these people have to find jobs again sometime and I suspect,as do many others, the numbers understate the extent of the problem. US employers sacked far more workers than expected in June, pushing thecountry's unemployment rate to a 26-year high of 9.5 per cent. The LaborDepartment's release of non-farm payrolls showed that 467,000 people lostjobs last month, far more than the 363,000 cuts that had been predicted.In Amish country, a bank run is about as familiar as a Hummer or a flat-screen TV. For decades, the more than 200,000 Amish in the U.S. havelargely lived apart from the mainstream, emphasizing humility, simplicityand thrift. Known as "the plain people," they travel by horse-drawn buggy,wear homemade clothing and live with very little electricity. But the Amishin northern Indiana edged into the conventional economy, lured by the highwages of the recreational-vehicle and modular-homes industries . . .California to Georgia say their almost-new homes need costly repairsbecause of construction defects. The furious pace of home building fromthe late 1990s through the first half of the 2000s contributed to a surge indefects, experts say. It caused shortages of both skilled constructionworkers and quality materials. Municipalities also fell behind inspecting andcertifying new homes. At the height of the boom in 2005, more than twomillion houses were built in the U.S., according to the National Associationof Home Builders, a trade group. Criterium Engineers, a national building-nspection firm, estimates that 17% of newly constructed houses built in2006 had at least two significant defects, up from 15% in 2003 . . .Landmark Mall in Alexandria is part of a growing list of ailing shoppingcenters across the country that have borne the brunt of the recession.Owner General Growth Properties unveiled ambitious plans five years ago toremake the 52-acre center into a suburban oasis of office buildings, homesand shops. But the process was dogged by delays, and now the financialcrisis has delivered a triple whammy. General Growth filed for bankruptcyprotection this spring. The credit crunch has dried up the market for the$2 billion in capital required for the makeover. And consumers just aren'tshopping, with the discretionary purchases taking the biggest hit . . .Our world is a-swirl with forces building hurricane speed, each having animpact on the others. The concatenation of instability in the bond andstock markets, housing and commercial real estate, the mushroom cloudof increased “money” supply, job losses developing in the auto and tobaccoindustries due to recent legislation, the Chinese and Japanese at least eyingmanipulating our currency or replacing the dollar as the standard againstwhich other currencies float, and the possibility that the government isgoing to appropriate the health industry are just some of the warning signsthat indicate it is time to head for the storm cellars with the kiddies, thelivestock, a kerosene lantern, a good book, and an enormous picnic lunch.Washington Post publisher Katharine Weymouth said she was canceling theplans for an exclusive "salon" at her home where for as much as $250,000,the Post offered lobbyists and association executives off-the-record accessto "those powerful few" — Obama administration officials, members ofCongress, and even the paper’s own reporters and editors. The astonishingoffer was detailed in a flier circulated Wednesday to a health care lobbyist,who provided it to a reporter because the lobbyist said he felt it was aconflict for the paper to charge for access to its reporting & editorial staff.Over the past thirty years, toxic chemicals, such as Teflon, plastics, andformaldehyde have increasingly invaded our homes. We used to think thesesubstances were harmless, but a rising tide of evidence has turned thespotlight on chemical exposures . . . One group of substances of particularconcern is a ubiquitous family of hormone twisting compounds, known asendocrine disrupting chemicals (EDCs). These substances are the focus ofintense scrutiny because: #1) they're found in every home in America #2)they're increasingly linked to human disease #3) our exposure to them hasrisen in parallel with the surge in autism diagnoses . . .Gear for when the stuff *really* hits the fan:
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