Zeev's Turnips Patch-No Politics (ZEEV)

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Zab,

There is a method to this madness, IMHO. Partisan politics such as Democrat vs. Republican is just distraction.

The key to understand all this is GSax. The broker-dealer commission-based business model has been under tehnology challenge for over a decade. That's why GS went public back in 1999. That's why all the broker-dealer investment banks have been leveraging like crazy over the past decade after their IPO business died with the dot com bubble. GS has been gradually moving into the insurance under-writing space (try to buy a high deductible health insurance plan, chances are that you will find a subsidiary of GS). They have been trying to take out AIG for some time. Hank Greenburg was taken out by Eliot Spitzer (HBS classmate and roommate of Jim Cramer) on threat of abusive public prosecution, knowing that Greenburg had no viable succession plan. The Spitzer-Greenburg spat also exposed just how vulneragle AIG was to regulatory attacks. Last week, the government licensed rating agencies went after AIG with downgrades that required immediate massive increase in collaterals in a deleveraging envrionment. This was no co-incidence.

Lehman and Bear-Stearns were just victims of consolidation (another way to increase margin in a line of business that's witnessing margin evaporation due to technology progress). Bear-Stearns also had a massive commodity position contrary to JPMorgan's massive shorting of certain commodities on behalf of the PTB.

GS and JPM own the Treasury and the FED . . . whichever of the two major political parties controlling the Whitehouse would not have made an iota of difference. Clinton had Rubin from GS, W has Paulson also from GS . . . how long did Paul O'Neil (a non-GS non-banking Treasury Secretary) last? How little power did he have? 3/4 of GS poltical donations go to Democrats; at least W tried Paul O'Neil in an attempt to revitalize American manufacturing industries, but that didn't last long when they realized that any government interventionist program (warfare or welfare) requires banker support. In exchange for that support, the bankers get what they want, pulling the levers that government coercive power entails.