The interview on DEMOCRACY NOW on Monday June 22 opened with the statement: "The Guardian newspaper reports staff at Goldman Sachs can look forward to the biggest bonus payouts in the firm's 140-year history after a spectacular first half of the year, sparking concern that the big investment banks which survived the credit crunch will derail financial regulation reforms. We speak to Nomi Prins, a former managing director for Goldman Sachs in New York , about the possible record bonuses, President Obama's proposed reforms of the financial regulatory system and the The Big Bank Bailout Payback Bamboozle.´"
Nomi Prins notes that the banking industry is afraid of the most important part of the president's package to regulate banks and financial firms. Prins, who is the author of the forthcoming book, It Takes a Pillage: Behind the Bailouts, Bonuses, and Backroom Deals from Washington to Wall Street, has notice in response to recent Obama proposals, "It is high time there is some agency in Washington that is on par with the SEC or the Fed or other regulatory bodies, if this agency can be given that kind of enforcement and power. The agency that would look at mortgage loans being more transparent and safer for individuals, potentially capping credit cards, and most importantly, making sure that the banks who issue the loans and who also package them up and sell them globally and make tons of money on it actually have to keep some of those loans and some of those packages on their own books, so if there are losses, they get hit with the losses-that's the part that the banking industry has gone up in arms about.
This one agency is the part that the Wall Street banks have been most upset about, which is why we know that it could be the best part of his proposal, if it gets the play and the enforcement capabilities it deserves. But it's going to be a knock-down, drag-out fight."
In the same interview on DEMOCRACY NOW, Nomi Prins, who recently wrote in MOTHER JONES magazine on Obama's proposals in an article called "Obama's New Economic Plan: The Good, the Bad and the Weak," has also shared: "The bigger amount of money that has gone to Goldman has come through $12.9 billion from the AIG bailout that went straight to Goldman, its biggest counterparty; $28 billion worth of FDIC-backed guaranteed debt, meaning the FDIC put up a program last fall, and it said, "For banks that deal with consumers"-not banks that deal with multibillion-dollar companies or investors, but people-"we will provide guarantees for debt," which means that those companies can raise debt to help consumers cheaply. Goldman said, ´Alright, fine, we'll take some of that.'
And they took $28 billion worth of that, and they have up to $35 billion that they can take under the FDIC program that was never meant for a company like Goldman Sachs. In addition, there is a ton of money, there are trillions of dollars at the Fed, not all of that went to Goldman, but that has secretly gone to a number of banks in the system, of which Goldman is one, for which the Fed refuses to disclose any information or any detail, which also goes into this.
So when Goldman says-has the nerve to say, feels entitled to say-that it's going to pay its bankers record bonuses after the travesty that it and other banks have created in the markets, it is on the back of federal subsidies that effectively come from our pockets."
Prins, who used to work for Goldman Sachs, then noted in a DN interview this past Monday that the U.S. Federal Bank is stonewalling in sharing on much information on these manipulative lenders (i.e. Americans most political powerful banks and shareholders in the U.S. Fed itself). "The entire spectrum of media has tried to get information from the Fed on these loans, and the Fed has basically said-and Bernanke has said this to the Senate and to the House-that this would actually be dangerous.
The Fed hasn't been made to say." That is, the US media, including Bloomberg and THE NATION magazine have been blacked out of gaining access to a lot of the wheelings and dealings of the Fed this year."
I urge readers to check out the DN interview with Prins on Monday´s Broadcast and to read Prins´ other articles:
Prins, Nomi, "Obama's New Economic Plan: The Good, the Bad and the Weak," click here
"Report: Goldman Sachs on Pace to Pay Out Record Bonuses this Year", click here