Goldman Sachs: Master of the Universe - by Stephen Lendman
The status applies to all Wall Street giants, none, however, the equal of Goldman, the Grand Master. Like the fabled comic book Superman hero, it's:
-- faster than its competitors, thanks to its proprietary software ability to front run markets (illegal, but no matter);
-- more powerful than the government it controls; and
-- able to leap past competitors, given its special status.
Founded in 1869, GS calls itself "a leading global investment banking, securities and investment management firm that provides a wide range of services worldwide."
Since going public in 1999, the same year Glass-Steagall ended letting banks, insurers and securities companies combine, GS became a giant hedge fund trading against the advice given clients with the full faith and blessing of Washington - the same thing other Street giants did and profited handsomely.
In his April 17 article headlined, "Goldman Sachs Vampire Squid Gets Handcuffed," L. Randall Wray noted SEC laxity for years, "managing to sleep through every bubble and bust in recent memory," and saying Goldman acts above the law "since it took over Washington during the Clinton years." Their criminal behavior is nothing new. It's their established business model, the reason it's been immersed in nearly all financial scandals since the 19th century.
Wray notes that John Kenneth Galbraith's famous 1954 book, "The Great Crash," had a chapter titled "In Goldman We Trust" on its contribution to the Great Depression through risky investment trusts (an early mutual fund cum Ponzi scheme) sold to unwary buyers.
Goldman and other "whip(ped) up a speculative fever in shares, reaping (highly leveraged) capital gains with other people's money." They were fraudulent pyramid schemes, a "Charles Ponzi-Bernie Madoff scam." Then and today, they collapsed, the way they always do when insiders pull the plug at the same time, cashing out to let their customers take the pain.
At the end of his Goldman chapter, Galbraith recounted this years after the crash encounter before a Senate committee:
"Senator Couzens. Did Goldman, Sachs and Company organize the Goldman Sachs Trading Corporation (to sell junk trusts to unwary buyers)?
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 per cent of the entire issue for the sum of $10,000,000.
Senator Couzens. And the other 90 per cent was sold to the public?