Gasparino on "The Sellout"-Goldman Controls the Market (NSS-a lot of good this guy did at CNBS, how about getting a new platform and cohones like Dylan Ratman did??- of just go box and get your block knocked off) http://forums.wallstreetexaminer.com/index.php?showtopic=845295
RealClearMarkets has an interesting interview with Charlie Gasparino regarding his new book "The Sellout." As make it a rule never to watch CNBC, preferring Bloomberg, although it too is increasingly becoming a slicker propaganda piece at least during the New York hours. The Asian desk is another story altogether.
There seems to be a consensus forming among the non-professional Wall Street types that something has gone seriously wrong with the US republic, and that the Obama administration is failing to address it, failing badly.
One has to wonder what it will take to give Washington a wakeup call, and to grow a spine and start working for the people again. And it defies the imagination that, when confronted by white collar crime, people lose all the perspective and knowledge which they have when it comes to fighting crime and injustice in general. "It won't work, it can't be done, they will just come back and do it again."
Well, duh. If you make it worth their while, administer wristslap justice at best, and let all the top dogs openly flout the laws, of course they will. What the US might need is the reincarnation of Melvin Purvis with a minor in finance. If I were Obama I would put Eliot Spitzer in charge of the SEC and let him rip through Wall Street like the wrath of God.
And if the Congress had a backbone and could push itself away from their feeding troughs for a brief enough time to do something meaningful, they might consider creating a new Pecora Commission with the power of subpoena and the right person at the head of it. But it won't happen because too many hands are too dirty in this one, and the soft blackmail is pervasive on both sides of the aisle and in the Executive Offices.
Here is an excerpt from the interview:
"I don't know when it's going to happen, but if history is any guide, it has to happen again--the "it" being another financial crash. Of course, it won't happen tomorrow or next week, or maybe not even two years from now. But when the memory of 2008 wears off, and mark my words it will wear off, excessive risk taking will be back in a form that evades all these alleged regulatory controls that have been established. Regulation can never cure the disease of excessive risk.
The only thing that can cure it is tough love--allowing firms to fail. That doesn't mean I wanted the Fed and the Treasury to walk away last year. That would have meant Armageddon. But they should have walked away before that, when the systemic risk was smaller and the damage would have been limited. 1998 would have been a great place to start. Let Long Term Capital Management fail; let Lehman, and as I show in my book, possibly Merrill to fail, because the trades were the most vulnerable to LTCM's bad bond market bets.
Instead, by arranging a bailout, and by using free money to juice up the markets, policy makers emboldened Wall Street to take even more risk. That's what they did then, and that's what I fear is happening all over again...
Now I'm not in the Goldman is the center of all evil camp. But I know a lot of really smart people who believe that Goldman's bankers and traders virtually control the federal government in order to advance their own notorious agenda.
In fact, as I show in The Sellout, there were far worse players whose risk taking led to last year's meltdown, starting with Merrill Lynch and Citigroup. They were equally powerful from a policy making standpoint.
Remember, after Robert Rubin fought to end Glass-Steagall's separation of investment and commercial banking, he didn't go back to his old firm, Goldman Sachs, he went to work for the firm that benefited the most from the law's demise, Citigroup.
But Goldman in many ways crystallizes all that is wrong with the financial bailout, started by the Bush Administration, but carried on and expanded by Obama's. Goldman has been declared a bank, not much different than the old Bailey Building and Loan, and yet they don't take deposits or offer checking accounts. So what do they do? They trade, and they are trading as a federally protected bank, meaning they get to borrow at cheaper rates and they are Too Big To Fail."
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