Posted by Steve Markowitz on April 24, 2010
The Obama Administration has proven adept at riding (creating?) one crisis after another in pursuit of a political agenda. Before we get to the latest one, investment banks, let’s review what we have survived to date since Obama took office:
- Stimulus Package – Upon entering the White House Obama claimed that we needed a financial rescue and gave us the Stimulus Package. The President claimed that without this $800 bil. spending plan the country would face an unemployment rate of 8%. Forget that we subsequently went to a 10% rate with the Package passed, the Administration has since declared victory for the program.
- Auto Manufacturers Bailout – At about the same time, Obama told us that unless we bailed out General Motors and Chrysler the ripple effect would lead to economic Armageddon. Well, after about $60 bil of taxpayers’ money and the Cash-for-Clunkers program, GM paid back only about 10% of the money this past week. But that did not stop the Administration from again declaring victory. However, not one more car was sold because of the government’s efforts. The only differences were that two failed companies and their unions received taxpayer money that the successful auto manufactures and their workers did not receive and a few more cars were sold earlier than would have occurred without the intervention. The taxpayers still have tens of billions invested into GM.
- H1N1 Flu – Then the geniuses gave us the H1N1 (Swine Flu) scare. This time we were told by the Administration that without the entire country getting vaccinated we were in for the worst pandemic of modern times. Remember Joe Biden telling the country he wouldn’t recommend flying because of this flu? What a comedy of errors. First, the vaccine was too late for the flu season. By the time it was available, the pandemic scare proved false and we had only a very mild flu season. Now, we have too much vaccine that nobody wants. More government waste.
- Global Warming – President Obama is a true believer in the false religion of manmade climate change. The President flew to Copenhagen, Denmark, for the big revival meeting last year and was unable to get his compatriots to agree to a deal to reduce global carbon emissions. This failure could turn out to be Obama’s greatest achievement, saving the world untold billions of wasted spending. Only a few weeks before Copenhagen, the world learned that the data behind the manmade global warming theory was intentionally falsified. On a related note, Obama’s plan for the United States to address its carbon output was through a trading process controlled by none other than the investment banks he now attacks. Incredible!
- Healthcare Reform – No further details are needed on this one. Unless we passed the President’s healthcare reform we were told that all sorts of bad things would happen. The fact that most Americans did not want the reform would not get in Obama’s way. This is in keeping with the Progressives’ philosophy that the people they work for are just too dumb to know what they need.
While the above list is probably missing a crisis or two, it makes the point. Either President Obama is so out of touch as to not know a real crisis when he sees one or he is purposely creating them for political gain.
Now we have the latest crisis/villain to go after; the investment banks. Rather than go after the entire industry, Obama is taking on the big one, Goldman Sachs (GS). GS is certainly no saint. However, their business model has remained consistent over the years. Thus, the timing of this attack is political and the leaking of memos, as well as the government’s inaction prior to this week, proves it.
The GS memo leaked, as reported by the New York Times, indicates that in 2007 with the mortgage crisis growing, GS executives sent e-mails indicating they were making “serious money” betting against the housing market. Surprised? Why? That is what GS does, betting with and against markets and making money in the process. The Progressives had no problem with this business model during the economic boom times (bubble). Now that we are in the bust they need a scapegoat, which by the way, will keep the public’s attention away from the government’s (Progressive’s) role in creating the bubble and the subsequent mess.
If Goldman Sachs and the rest of the banks are so bad, why did the Progressives bail them out? Why not let them fail? The government’s excuse, first Bush then Obama, was that the investment banks were “too big to fail”. They told us that had we not bailed them out that more serious problems would have occurred to our economy. The government’s inaction since the bailouts indicates this to be a false claim. Since Lehman closed its doors, large banks like GS have become even larger. Why hasn’t the Obama Administration used the anti-trust laws to break them up? Could it be that government wants to take control of these powerful banks and breaking them up would diminish the power they wish to control?
Only the staunchest apologists for President Obama would not see the writing on the wall. This President and his Progressive partners are on the largest power grab this country has witnessed in modern times. While Obama’s policies are being rejected by the electorate, as indicated by nearly every poll, this has not tempered his drive to push the envelope. The man can be called a lot of things including arrogant, but he cannot be called stupid. Therefore, we should expect even greater crises to be conjured in the future t be used by Obama to further increase governmental power.
There are greater dangers to our Constitution than that offered by Goldman Sachs!
Posted in Banks, Constitution, Goldman Sachs | Tagged: Bubbles, Cash for Clunkers, Chrysler, Constitution, Copenhagen, Crisis, General Motors, Global Warming, GM, Goldman Sachs, H1Ni, healthcare reform, Investment Banks, Joe Biden, Lehman Brothers, Obama, Progressives, Stimulus Package, Swine Flu, Too Big to Fail, Unemployment | Leave a Comment »
Posted by Steve Markowitz on April 22, 2010
Two stories were reported today relating to President Obama and the investment bank, Goldman Sachs. The one that got the most publicity was the President’s speech at Cooper Union College, lower Manhattan, NY. The President castigated the banking community in general, of which Goldman Sachs (GS) is the largest investment bank, with specific reference for their opposition to Obama’s proposed banking reforms. Forgetting for the moment the merits of any proposed reforms; is the President naive enough to expect bankers to back more regulations of their industry or was his speech mainly to get in on the now popular hunt for the scoundrels of the ongoing economic mess? Either way the speech was more befitting of a Community Organizer than the President of the United States.
If the President wants to go scoundrel hunting, yes, Wall Street is a place to look. However, he should not ignore the major role that government played in creating the financial meltdown. Had they not changed Fannie Mae’s and Freddie Mac’s charter to offer mortgages to those that could not afford them and had they not kept interest rates artificially low, the bubbles would not have been created and Wall Street would not have gotten so rich. Obama purposely ignores government’s role as this would bring attention to the illogic of his Progressive beliefs that we need even more of this failed governmental intervention.
The second Obama and Goldman Sachs story involved campaign money that Obama accepted from the same scoundrels, GS, in his run for the Presidency. GS employees donated $1 million to Obama’s campaign. In deciding not to return the money, Obama spokesman Hari Sevugan said:
“We make these decisions on a case-by-case basis, and in this case we have not accepted contributions from specific individuals accused of wrongdoing, nor have we advocated for positions that big Wall Street banks generally favor.”
How disingenuous and inconsistent of the President. At the Cooper Union College speech the President went after the entire banking industry, not just the perpetrators of wrongful acts. But, when it comes to the tainted funds that his campaign accepted from GS, he hides behind the claim that the people who gave the money have not individually “accused of wrongdoing”. Hmmmmm.
Let’s put the Goldman payments to the Obama campaign into perspective. According to the Wall Street Journal, since 1989, no company has donated more to Democrats than GS. In addition, the Company was the fourth-largest corporate source of campaign cash to Republicans during that same period. Smells funny? So you thought only Republicans were in bed with the fat-cats? So much for the “change” Obama promised us.
Obama has shown that he is from the kettle that brought us George W. Bush with a difference in style. Bush used the threat terrorism to justify his power grab. Obama uses Wall Street, Global Warming and potential economic calamites to grab his. The results are the same: more Washington trampling on our Constitution.
Posted in Banks, Constitution, Fannie Mae, Goldman Sachs, Governmental Intervention | Tagged: Bush, Campaign, Change, Community Organizer, Constitution, Cooper Union College, Democrats, Fannie Mae, Freddie Mac, Goldman Sachs, Hari Sevugan, Investment Banks, Mortages, President Obama, Progressives, Republicans, Wall Street | Leave a Comment »
Posted by Steve Markowitz on April 20, 2010
The New York Times reported that Goldman Sachs’ (GS) earnings rose 91 percent in the first quarter of 2010 to $3.46 billion, with revenues increasing 36 percent to $12.78 billion. This could have been very good news for GS shareholders and the economy as a whole had it not come on the heels of the governments’ massive bailouts.
While technically GS did not receive any direct bailout funds, indirectly they were huge beneficiaries. First, GS was involved with counter-party trades with insurance giant AIG. Had the U.S. government not bailed out AIG with over $150 bil., GS stood to lose tens of billions. Also, had the bailouts not occurred, the banking business would have been in the tank significantly reducing GS’s earnings. Finally, the government let some banks fail (Lehman) and bailed others out. This lessened competition and guaranteed the remaining banks greater profits.
When the government gets involved with manipulating the economy, not only do dislocations occur, but also questionable decisions. This may explain the timing of the just announce SEC charges against GS. Is the government trying to “repair” a problem they helped create?
Today, two of the architects of the government’s meddling policies, Tim Geithner and Ben Bernanke, are going up to the Hill to answer questions from the Congress. Don’t’ look to the knucklehead politicians to ask the real questions.
Posted in Bailouts, Banks, Goldman Sachs, Governmental Intervention | Tagged: AIG, Bailouts, Ben Bernanke, Congress, Goldman Sachs, GS, SEC, Timothy Geithner | 1 Comment »