THE US’S most notorious investment bank, Goldman Sachs, is being charged with fraud.
Gordon Brown described the company as “morally bankrupt”. Yet the bankers are all over his government:
Rolling Stone magazine dubbed the investment bank, “a vampire squid wrapped around the face of humanity”. It has been caught not only making a fortune out of the economic crash, but setting up financial products in order to fail.
The subprime mortgage scandal flowed from the housing bubble. Brokers, having sold to just about everyone who could afford a mortgage, needed to find a way to sell to those who could not afford one.
The resulting subprime mortgages were put together and chopped up into parcels of debt, some riskier than others.
These were then packaged together with more secure loans to create complex financial products with names such as “collateralised debt obligations”.
Banks, hedge funds and private equity firms all rushed to gamble on them.
Goldman Sachs’ version saw John Paulson, a billionaire hedge fund manager, make a fortune.
Ordinary people, who spent trillions rescuing the bankers, are the victims of this fraud.
Goldman Sachs “stars” use a revolving door between banking and government. Its former chief executive, Hank Paulson, went on to become US treasury secretary, bailing out the banks.
The firm’s profits for the first three months of this year are nearly double those of last year.
His treatment exposes the British state