Government Sachs Gets Golden Wrist Slap For Global Financial Crisis

01/20/20165 Comments

GoldenHandcuffsby James Corbett
January 19, 2016

Historians of the future will note Yellen's smiling press conference in December of 2015 to announce the long-awaited rate hike as the beginning of the end for the dead cat bubble of the Global Financial Crisis. In some ways this has been a 20 year long Fed bubble that leads in a straight line from the "irrational exuberance" of the Dot Com bubble to the Dot Com bust and 9/11 to the Greenspan bubble and the subprime housing run-up to the Global Financial Crisis to QE1/2/3 and ZIRP to the rate hike to today. And what do we have today?

And on and on. You get the picture. But I bet you wish you didn't.

Ironic, then, that in the midst of this beginning-of-the-end of the 8 year long QE re-leveraging heroin binge we have news that seems to put a bow on the 2008 crisis: Goldman Sachs has announced that it has reached a $5.1 billion settlement as its wrist slap for participating in the wholesale swindle that was the subprime mortgage meltdown. The settlement breaks down into $2.385 billion in civil monetary penalties, $875 million in cash payments and $1.8 billion in consumer relief.

goldmanHere's the kicker: the settlement is the largest in the bank's history, but still small potatoes compared to some of its cohorts in crime who have already reached their settlements, such as Bank of America ($16.6 billion) and JPMorgan Chase ($13 billion).

For those who don't remember the subprime mortgage meltdown and Goldman's role in it (along with the other big banks), they intentionally blew up the housing bubble by creating Structured Investment Vehicles to keep mortgage backed securities and other risky investments off their main books. This allowed them to raise money on the commercial paper market at low interest rates and earn high interest rates by buying toxic subprime mortgage securities. Then they paid off the ratings agencies to AAA certify their toxic mortgage CDO garbage.

Then (and here's the psychopathic genius of it) knowing that it was all going to melt down sooner or later, they pawned the subprime-backed derivative garbage on their customers at the same time as they secretly bet against it. Internal emails released in subsequent investigations show they referred to their own CDOs as "sh***y deals" and called their customers "muppets" for buying them.

The end result? Goldman had its most profitable year to date in 2007 as the market started to turn with a staggering $17.6 billion profit. By 2009, in the depths of the crisis that they helped bring about and as the rest of the world faced total financial armageddon, they did even better, netting just shy of $20 billion profit.

goldman sachs treasurySo, just to recap: Goldman makes tens of billions by selling the very toxic assets they were secretly betting against and in the end they pay a $5 billion penalty.

...Oh, and (needless to say) the Injustice Department practically fell over themselves to announce at the earliest possible opportunity that no one would even be prosecuted for this fraud (let alone go to jail).

...Oh, and poor Goldman will make a slightly smaller profit this year as a result of this golden wrist slap, equivalent to one measly fiscal quarter of profit for the banking behemoth.

All hail Government Sachs, surely a Vampire Squid if ever there was one. And now that their last engineered crisis has been finally covered up for good, it's time to live through the next one. Happy 2016!


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  1. silverpalomino says:

    Another fondle of the wrist for another “too big to fail” bank. It’s interesting how all these countries continue to not jail anyone and they have to constantly cook the numbers to pretend there is a recovery going on. Yet Iceland let their banks go under, threw the bansters in jail and its economy is actually really coming back – slow process, but not as slow as the rest of the world that has faked numbers for all these years.
    BTW, oil analysts are saying that the “glut” of oil – those tankers that are supposedly just cruising around with no place to dock – it only adds up to about 1bpd… if an Asian comeback could start it would require something like 6 times that just to cover the very start.

  2. ImagiNation says:

    … and in the land of Oz the unelected PM just happens to be a former Goldman Sachs partner according to Wikipedia. There goes the neighborhood.

  3. raymondkitchen says:

    I’m curious where this money that was given out as fines to the “too big to fail” banks goes to. Just put aside the fact that they are small slaps on the wrist to these “vampire squids”. Sure the heck doesn’t go back to the victims that actually lost their life savings to this scam.

  4. WAYNED says:

    It is a truly disgusting situation. We are all focused on the small business owner who may make 200K in a year as the problem, but they are doing half their work for a government to pay off bankers for printing our money. It prevents me from buying a house. And the whole banking charade is such that they are approving loans for people in fact less-able to pay them back because in the end, the asset itself, the property, remains in their hands. The only thing holding me back is lack of total purchase price and refusal to carry a credit card and make regular payments to a banking institution. But when taxes are due, I will not have even the down-payment.

    At some point we have to start faulting our failure to overcome the fear of being called anti-Semitic. Banker is code for “jew”, landlord (in LA) is code for “jew”, enforcement is code for co-opted latinos working on behalf of the “jew”, lawyer is code for “jew” and the judges? You can answer this for yourself. Why are jews in control of LA city council?

    Jews are not a race, they are trying to create one, a superior one. Cynthia McKinney is very clear on who is controlling our government.

    I know, it just sounds to “racist” or hitlerian… but in fact, think about a situation where a landlord is knowingly using and deliberately spreading cancer-causing materials that are supposed to be handled in a certain way. (Like they are supposed to move people out and back in at their own expense.) All of the agencies that back them up are bound somehow not to follow their own rules and guidelines, it’s near impossible to find an attorney who is not jewish or part of a jewish agency, and besides, they are all so “liberal” that they can’t get past the “anti-Semite” label, and then… who presides over these cases?

    I’m not saying it’s impossible, but it’s near impossible and so these cases go nowhere and people continue to suffer and live at the whim of truly evil people who do not care about you, particularly if you are not jewish.

    At some point, we will have to look at the domination in the major cities of all elections and departments by nepotistic jews.

    At some point, we have to look at Central Banking in this light.

    • Mohawk Man says:

      You’re not wrong, sorry to say. As spoken by their own regarding “anti-semistism”

      “It’s a trick. We all use it”

      Maybe James will do a piece on Blackrock. Just as incidious and yes, I’ll say it, EVIL!!!!! They are major rent seeking landlords now who bought all those Goldman Sachs defaulted homes (referenced in his piece) for pennies on the dollar. Sounds very familiar. Something must be done. Even our media is completely owned and speech suppressed. I responded to an article in The Hill where someone had written “Obama hates Jews” I simply responded: “Well, then you haven’t’ been paying attention to his appointments in judges, ambassadors and other appointments”. The comment was immediately deleted and I was banned. BANNED! Unbelievable.

      People do no hate certain groups organically. It’s historically based on their behavior and history of cheating, stealing and seemingly have no conscious..I mean none. Look no further that our “Federal Reserve” to see how long and deep this insidious behavior has permeated and destroys some of the basic systems of our society while profiting handsomely. President Grant during reconstruction finally had enough in the south and went so far as having a law passed where no jews would be given a permit to travel to the south. They were the “Carpetbaggers” we all learned about (but not the entire story). Buying cotton and other goods and even plantations for pennies on the dollar. Once banned, they would use proxies to continue this behavior.

      Larry Fink, Stephen Allen SCHWARTZSTEIN–Blackrock.–-doesnt-get-why-people-are-angry

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