The point is, through this crazy and costly legerdemain, Greece's right-wing free-market government was able to pretend its deficits never exceeded 3 percent of GDP.
Cool. Fraudulent but cool.
But flim-flam isn't cheap these days: On top of murderous interest payments, Goldman charged the Greeks over a quarter billion dollars in fees.
When the new Socialist government of George Papandreou came into office, they opened up the books and Goldman's bats flew out. Investors' went berserk, demanding monster interest rates to lend more money to roll over this debt.
Greece's panicked bondholders rushed to buy insurance against the nation going bankrupt. The price of the bond-bust insurance, called a credit default swap (or CDS), also shot through the roof. Who made a big pile selling the CDS insurance? Goldman.
And those rotting bags of CDS's sold by Goldman and others? Didn't they know they were handing their customers gold-painted turds?
That's Goldman's specialty. In 2007, at the same time banks were selling suspect CDS's and CDOs (packaged sub-prime mortgage securities), Goldman held a "net short" position against these securities. That is, Goldman was betting their financial "products" would end up in the toilet. Goldman picked up another half a billion dollars on their "net short" scam.
But, instead of cuffing Goldman's CEO Lloyd Blankfein and parading him in a cage through the streets of Athens, we have the victims of the frauds, the Greek people, blamed. Blamed and soaked for the cost of it. The "spread" on Greek bonds (the term used for the risk premium paid on Greece's corrupted debt) has now risen to -- get ready for this--$14,000 per family per year.
Euro-nation, the secret Geithner memo, and the Ecuador connection
Why did the Greek government throw its nation's fate into Goldman's greasy hands? What the heck was in the "RESTRICTED" document? And why did I have to take it to Geneva, to throw it down in front of the Director-General of the WTO for authentication, a creepy French banker I otherwise wouldn't bother to spit on, and then tear off to Quito to share it with the grateful President of Ecuador?
To give you all the answers would require me to write a book. I have: Vultures' Picnic --in Pursuit of Petroleum Pigs, Power Pirates and High-Finance Fraudsters.
It's really quite important to me that you read it, that you get it now . That's a funny statement, I suppose, from an author. But if you've been reading my stories in The Guardian or watching my reports on BBC Newsnight, you've gotten the facts; but I really want to let you inside the investigations, to cross the continents with me and follow down the leads so that you can get a full picture of The Beasts. The Beasts and their trophy wives, intelligence agency go-fers, political concubines and bone-breakers. And besides, it's enormous fun when it's not scary as sh*t.
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Here's a taste of Chapter 12 - The Generalissimo of Globalization - from the film-enhanced eBook edition. [And more on the 1% Greece-ing us, check out the upcoming issue of In These Times.]
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
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