There’s a reason John Kenneth Galbraith singled out one financial institution worthy of its own chapter title in his history of the onset of the Great Depression “The Great Crash 1929″ first published in 1955.

Chapter III is titled “In Goldman, Sachs We Trust”.

When I first read the book many years ago I thought the descriptions therein of the Ponzi scheme behaviour of Goldman and the other banks in the lead up to the 1929 market crash made for hilarious reading. I don’t have quite the same reaction today.

A couple of excerpts:

…Meanwhile Goldman, Sachs was already preparing its second tribute to the countryside of Thomas Jefferson, the prophet of small and simple enterprises. This was the even mightier Blue Ridge Corporation…Blue Ridge had a capital of $142,000,000 and nothing about it was more remarkable than the fact that it was sponsored by Shenandoah, its precursor by precisely twenty-five days. Blue Ridge had the same Board as Shenandoah…Goldman, Sachs by now was applying leverage with a vengeance…

…August 20, the birthday of Blue Ridge, was a Tuesday, but there was more work to be done by Goldman, Sachs that week. On Thursday the Goldman Sachs Trading Corporation announced the acquisition of the Pacific American Associates, a West Coast investment trust which, in turn had recently bought a number of smaller investment trusts…Having issued more than a quarter of a billion dollars worth of securities in less than a month – an operation that would not have been unimpressive for the United States Treasury – activity at Goldman, Sachs subsided somewhat…

The chapter ends with:

Years later, on a gray dawn in Washington, the following colloquy occurred before a committee of the United States Senate.

Senator Couzens: Did Goldman, Sachs and Company organize the Goldman Sachs Trading Corporation?
Mr. Sachs: Yes, sir.

Senator Couzens: And it sold its stock to the public?
Mr. Sachs: A portion of it. The firm invested originally in 10 percent of the entire issue for $10,000,000.

Senator Couzens: And the other 90 percent was sold to the public?
Mr. Sachs: Yes, sir.

Senator Couzens: At what price?
Mr. Sachs: At $104. That is the old stock…the stock was split two for one.

Senator Couzens: And what is the price of the stock now?
Mr. Sachs: Approximately 1-3/4.

As I said, formerly hilarious. But now in retrospect more like immutable corporate mitochondrial DNA in a huge Financial Genome Tracking project.

More from Matt Taibbi on Goldman:

On giving Goldman a chance

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…

…Actually I did contact Goldman and gave the bank every opportunity to respond to the factual issues in the article. I’m bringing this up because their decision not to comment on any of those questions was actually pretty interesting…

…I tried to make that first list of questions as basic as possible. I asked if Goldman would have turned a profit in Q1 2009 if it hadn’t orphaned the month of December 2008. Then I asked if Goldman had made changes to its underwriting standards during the internet boom years; if Goldman’s position was still that the steep rise in oil prices last year was due to normal changes in supply and demand; and if it could explain its 1991 request to the CFTC to have its subsidiary J. Aron classified as a physical hedger on the commodities market. Citing various sources, I also noted that some people had complained that its move to short the mortgage market in 2006 even as it was selling those same types of instruments proved that the bank knew the weakness of its mortgage products, and asked if the bank had an answer for that. And I asked if the bank supported cap-and-trade legislation, and if it was fair to say (as we planned to in the piece) that the bank would capitalize financially if such legislation was passed…

http://www.slide.com/r/Dt99Od3r2D-lr5FuKhwAVtmfEeCzp2DS?map=2&cy=bb

03 July 2009
India Puts Its Weight Behind Alternatives to the Dollar Reserve Currency

When an alternative to the dollar as reserve currency does occur will this be the most widely telegraphed “black swan surprise” in history?

We would agree that it appears to be an almost classic Prisoner’s Dilemma

The exits are likely to be rather crowded when this one finally comes home to roost, unless the nations can agree to a longer term phased in approach. But even then, once the announcement is made, it is beyond all doubt the endgame for the dollar bubble.

The system has not crashed, it is crashing.

Bloomberg
India Joins Russia, China in Questioning U.S. Dollar Dominance
By Mark Deen and Isabelle Mas

July 3 (Bloomberg) — Suresh Tendulkar, an economic adviser to Indian Prime Minister Manmohan Singh, said he is urging the government to diversify its $264.6 billion foreign-exchange reserves and hold fewer dollars.

“The major part of Indian reserves are in dollars — that is something that’s a problem for us,” Tendulkar, chairman of the Prime Minister’s Economic Advisory Council, said in an interview today in Aix-en-Provence, France, where he was attending an economic conference.

Singh is preparing to join leaders from the Group of Eight industrialized nations — the U.S., Japan, Germany, Britain, France, Italy, Canada and Russia — at a summit in Italy next week which is due to tackle the global economy. China and Brazil will also send representative to the G-8 summit.

As the talks have neared, China and Russia have stepped up calls for a rethink of how global currency reserves are composed and managed, underlining a power shift to emerging markets from the developed nations that spawned the financial crisis.

“There should be a system to maintain the stability of the major reserve currencies,” Former Chinese Vice Premier Zeng Peiyan said in a speech in Beijing today, highlighting the nation’s concerns about a global financial system dominated by the dollar.

Fiscal and current-account deficits must be supervised as “your currency is likely to become my problem,” said Zeng, who is now the head of a research center under the government’s top economic planning agency. The People’s Bank of China said June 26 that the International Monetary Fund should manage more of members’ reserves.

Russian Proposals

Russian President Dmitry Medvedev has repeatedly called for creating a mix of regional reserve currencies as part of the drive to address the global financial crisis, while questioning the dollar’s future as a global reserve currency. Russia’s proposals for the Group of 20 major developed and developing nations summit in London in April included the creation of a supranational currency.

“We will resume” talks on the supranational currency proposal at the G-8 summit in L’Aquila on July 8-10, Medvedev aide Sergei Prikhodko told reporters in Moscow today.

Singh adviser Tendulkar said that big dollar holders face a “prisoner’s dilemma” in terms of managing their holdings. “That’s why I’m telling them to do this,” he said.

He also said that world currencies need to adjust to help unwind trade imbalances that have contributed to the global financial crisis.

“The major imbalances which led to the current situation, the current account surpluses and deficits, have to be addressed,” he said. “Currency adjustment is one thing that suggests itself.”

Emerging-Market Dependence

For all the complaints about the dollar, emerging markets such as India remain dependent on the currency of the U.S., the world’s largest economy and a $2.5 trillion export market. The IMF said June 30 that the share of dollars in global foreign- exchange reserves increased to 65 percent in the first three months of this year, the highest since 2007.

Tendulkar said that the matter needs to be taken up in international talks, and that it emphasizes the need for those talks to go beyond the traditional G-8.

“They can meet if they want to,” he said. “The G-20 has a wider role, has representation of the countries that are likely to lead the recovery process.”

China Allows Yuan Trade Settlement, Offers Tax Breaks
By Bob Chen and David Yong
July 2, 2009 09:44 EDT

July 2 (Bloomberg) — China will allow companies to use the yuan to settle cross-border trade and let them keep their entitlement to export tax rebates, seeking to reduce the reliance of importers and exporters on the U.S. dollar.

The People’s Bank of China will encourage banks to offer yuan settlement services from today, the bank said in the regulations published on its Web site. Transactions inside China will take place in Shanghai and four cities in southern Guangdong province, including Guangzhou and Shenzhen, while those outside China will occur in Hong Kong, Macau and the Association of Southeast Asian Nations, it said.

“It’s China’s first step to make the yuan global,” said Shi Lei, an analyst in Beijing at Bank of China Ltd., the nation’s largest foreign-currency trader. “It will protect exporters from swings in exchange rates and boost the yuan’s role in the world currency system.”

China is promoting greater use of the yuan in international trade and finance after Premier Wen Jiabao in March expressed concern that a weakening dollar will cause losses on the country’s holdings of U.S. assets. A Chinese Foreign Ministry official said today he hoped the U.S. currency would remain stable, while reiterating a call for diversification of the international monetary system.

“Companies in China and neighboring countries are facing relatively huge risks of exchange-rate fluctuations because of big swings in the U.S. dollar, the euro and other major settlement currencies,” today’s central bank statement said.

First Settlement

Asean comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Hong Kong Monetary Authority Chief Executive Joseph Yam said on June 29 he hopes the first yuan settlement transactions will start this month after signing an agreement with People’s Bank Governor Zhou Xiaochuan. Companies currently have to convert yuan into dollars or other currencies to settle international trade.

“Hong Kong will be the natural place for arranging these transactions,” Yam said in a statement today. “This is the key to the maintenance of the status of Hong Kong as an international finance centre.”

Tax authorities are working on the proposed rebates for exports settled in yuan, the central bank said. Bank of China Ltd. will be the clearing bank in Hong Kong and Macau.

Stability, Convenience

About 50 percent of Hong Kong’s trade with China may be settled in yuan after the program starts, Stanley Wong, deputy general manager at Industrial & Commercial Bank of China (Asia) Ltd., the Hong Kong unit of China’s biggest bank, said in an interview on May 5. Hong Kong companies want to use yuan in trade because it will probably appreciate against the U.S. dollar more than 3 percent every year, he said.

“We hope companies will like to use yuan because of its stable value and convenience,” People’s Bank of China Deputy Governor Su Ning said in an interview with state-owned China National Radio today.

The yuan has strengthened 21 percent against the U.S. currency since a dollar peg was scrapped in 2005. China has limited the yuan’s advance in the past year as a stronger currency makes its goods less competitive overseas at a time when economic growth this year could slow to 7.2 percent from 9 percent in 2008, according to World Bank forecasts.

Currency Swaps

The People’s Bank of China has agreed to provide a total of 650 billion yuan ($95 billion) to Argentina, Belarus, Hong Kong, Indonesia, Malaysia and South Korea through so-called currency- swaps to expand the yuan’s usage. China and Brazil in May began studying a proposal to move away from the dollar for trade settlement and use yuan and reais instead.

Malaysia’s government has been calling for reduced dependence on the dollar for “some years” and now that China is supporting yuan settlement it is worth considering, said Tan King Tai, an executive director at Pensonic Holdings Bhd., a manufacturer of household electrical appliances in the northern Malaysian state of Penang that sources parts from China.

“The dollar has become quite volatile and speculative in some ways,” he said. “If the yuan can be stable, it will help companies with their financial budgeting.”

To contact the reporters on this story: Bob Chen in Hong Kong at bchen45@bloomberg.net

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Seu comentário está aguardando moderação.
03/07/2009 – 16:20 Enviado por: Alexandre Weber- Santos/S.P.

foo nesta voce demorooooooooo

US property firm bought for $36bn
San Francisco
San Francisco is one of EOPT’s key markets
Investment giant Blackstone is to buy US real estate firm Equity Office Properties Trust (EOPT) for $36bn (£17bn), the biggest ever private deal.

EOPT is the largest US stock-market listed property company – controlling 580 buildings in 16 states as well as in Washington DC.

Specialising in corporate offices, it has annual rental income of $3.4bn.

Blackstone, founded in 1985, currently has $67bn of investments including almost $13bn in real estate.

The previous record private equity deal came in July when Bain Capital, Kohlberg Kravis Roberts and Merrill Lynch spent $33bn on Hospital Corporation of America.

Last week Clear Channel, the largest owner of radio stations in the US, was bought by a private equity consortium for $26bn.

Equity Office Properties Trust was founded by Sam Zell, a real estate tycoon who started by purchasing office property at distressed prices.

Last year he bought the Verizon building in New York for $515m.

The deal will include Blackstone assuming $16bn worth of debt held by EOPT.

http://news.bbc.co.uk/2/hi/business/6164700.stm

De acordo com artigo de Matt Taibbi, publicado na Rolling Stone (The Great American Bubble Machine ), o Goldman Sachs tem sido responsável por cada uma das bolhas — e crashes — nas bolsas de valores desde 1920 — e já estaria preparando a próxima bolha.

In Rolling Stone Issue 1082-83, Matt Taibbi takes on “the Wall Street Bubble Mafia” — investment bank Goldman Sachs. The piece has generated controversy, with Goldman Sachs firing back that Taibbi’s piece is “an hysterical compilation of conspiracy theories” and a spokesman adding, “We reject the assertion that we are inflators of bubbles and profiteers in busts, and we are painfully conscious of the importance in being a force for good.” Taibbi shot back: “Goldman has its alumni pushing its views from the pulpit of the U.S. Treasury, the NYSE, the World Bank, and numerous other important posts; it also has former players fronting major TV shows. They have the ear of the president if they want it.” Here, now, are excerpts from Matt Taibbi’s piece and video of Taibbi exploring the key issues.

http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine/print

The Great American Bubble Machine
Matt Taibbi on how Goldman Sachs has engineered every major market manipulation since the Great Depression

MATT TAIBBIPosted Jul 02, 2009 8:38 AM

In Rolling Stone Issue 1082-83, Matt Taibbi takes on “the Wall Street Bubble Mafia” — investment bank Goldman Sachs. The piece has generated controversy, with Goldman Sachs firing back that Taibbi’s piece is “an hysterical compilation of conspiracy theories” and a spokesman adding, “We reject the assertion that we are inflators of bubbles and profiteers in busts, and we are painfully conscious of the importance in being a force for good.” Taibbi shot back: “Goldman has its alumni pushing its views from the pulpit of the U.S. Treasury, the NYSE, the World Bank, and numerous other important posts; it also has former players fronting major TV shows. They have the ear of the president if they want it.” Here, now, are excerpts from Matt Taibbi’s piece and video of Taibbi exploring the key issues.

http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine

E bom o Obama fazer algo logo, senao os republicanos retomam o congresso e vao levar o governo a um processo de imobilidade ate 2012 quando Ted Bush deve ser o candidato dos republicanos.

Alias, os republicanos se parecem com um certo partido no Brasil onde o poder passa dos pais pros filhos e netos. Em alguns casos, nem o nome muda.