For Financial Crisis Analysis... Rolling Stone?

Economics

 

Need a breakdown on how we got into this financial crisis? Want to know the players, and how you got played? Where to turn? Wall Street Journal, Business Week and Financial Times, perhaps? Nah...

 

Matt Taibbi writing in Rolling Stone exposes the global reach (broad and deep) and the rich club house Goldman Sachs. It's a cheeky, vitriolic report on the tentacles of GS's global reach, and their involvement in commodity bubbles starting with the Great Depression. Just how ubiquitous are the GS (a boys club, by the way) alum? Here's a snapshot:

 

By now, most of us know the major players. As George Bush's last Treasury secretary, former Goldman CEO Henry Paulson was the architect of the bailout, a suspiciously self-serving plan to funnel trillions of Your Dollars to a handful of his old friends on Wall Street. Robert Rubin, Bill Clinton's former Treasury secretary, spent 26 years at Goldman before becoming chairman of Citigroup — which in turn got a $300 billion taxpayer bailout from Paulson. There's John Thain, the asshole chief of Merrill Lynch who bought an $87,000 area rug for his office as his company was imploding; a former Goldman banker, Thain enjoyed a multibilliondollar handout from Paulson, who used billions in taxpayer funds to help Bank of America rescue Thain's sorry company. And Robert Steel, the former Goldmanite head of Wachovia, scored himself and his fellow executives $225 million in goldenparachute payments as his bank was selfdestructing. There's Joshua Bolten, Bush's chief of staff during the bailout, and Mark Patterson, the current Treasury chief of staff, who was a Goldman lobbyist just a year ago, and Ed Liddy, the former Goldman director whom Paulson put in charge of bailedout insurance giant AIG, which forked over $13 billion to Goldman after Liddy came on board. The heads of the Canadian and Italian national banks are Goldman alums, as is the head of the World Bank, the head of the New York Stock Exchange, the last two heads of the Federal Reserve Bank of New York — which, incidentally, is now in charge of overseeing Goldman — not to mention …  

 

Phew! Astounding...

 

Vanity Fair continues its coverage of the fall of the rich and powerful (Vanity Fall?). In the latest issue Michael Lewis reports on former AIG Financial Products head Joseph Cassano, whom is referred to as a tyrant, terror, and villain. Here's a teasing snippet:

 

Here is an amazing fact: nearly a year after perhaps the most sensational corporate collapse in the history of finance, a collapse that, without the intervention of the government, would have led to the bankruptcy of every major American financial institution, plus a lot of foreign ones, too, A.I.G.’s losses and the trades that led to them still haven’t been properly explained. How did they happen? Unlike, say, Bernie Madoff’s pyramid scheme, they don’t seem to have been raw theft. They may have been an outrageous departure from financial norms, but, if so, why hasn’t anyone in the place been charged with a crime? How did an insurance company become so entangled in the sophisticated end of Wall Street and wind up the fool at the poker table? How could the U.S. government simply hand over $54 billion in taxpayer dollars to Goldman Sachs and Merrill Lynch and all the rest to make good on the subprime insurance A.I.G. F.P. had sold to them—especially after Goldman Sachs was coming out and saying that it had hedged itself by betting against A.I.G.?  

 

Two interesting pieces from non-traditional resources, each with decidedly different temperaments, but equally interesting perspectives on a completely befuddling condundrum. Do you have a recommended read from a non-traditional source? Do share...

 

 

AIG, Finance, Goldman Sachs