PODCAST-TRANSCRIPT-WEEKLY-UPDATE-2009-JULY-5 (FRANCONOMICS.COM)
Hello. Welcome to the weekly economic podcast from Franconomics.com for the week ending July 5, 2009. I am Sam Mishra, your podcaster on the mission of unraveling the 20 trillion dollar value drain from Main Street to Wall Street which is currently under way. If you don’t know what we mean by value drain, please read up on the two value drain articles on Franconomics.com, where you can also get links to the traditional Value Chain analysis of Michael Porter. Value Chain is how businesses create value, and Value Drain is how banks (and politicians, if you will), drain value. When Value is created, there is prospertity, unemployment is low, people are happy, families are bonding, GM makes new Hummers which everyone loves, and human beings are going to the space and to the moon. When Value is drained from society like the blood is drained from a slaughtered animal, all you have is a corpse. Sure, there is some meat to eat, but the people gorging on that dead meat are the bankers and the politicians and the elites. But for the masses, when the banks drain 20 trillion dollars, people are jobless and foreclosed and on the streets, families are falling apart, unemployment is at record highs, people with full-time jobs are paranoid that they will lose theirs, GM is bankrupt and selling the Hummer brand to China, and intelligence agencies have nothing better to do than tap the phones of gullible Americans.
Let’s start this podcast with an analysis of the Goldman rebuttal to the Rolling Stone article by Matt Taibbi titled The Great American Bubble Machine. If you have not read it, we have a link to it from the long articles section of our homepage on Franconomics.com. I sure hope Rolling Stone has good media insurance, for it takes more than courage to go after the most influential group of bankers, namely the greedy Friedmenites we call the crème-de-la-crème of the Investment banking world, the free-riding parasites also known as the Goldman bankers. The timing of the article is also relevant, since this podcast is going out to you from Boston, Masachusetts. The State of Masachusetss is Goldman’s new friend. Wanna know why? Goldman is the only Wall Street firm so far to have paid to settle charges — $60 million to the state of Massachusetts — for creating and commercializing and profiting from the toxic mortgage bonds that were at the heart of the recent financial crisis. You know the rebuttal Goldman sent to the Taibbi article: We reject the assertion that we are inflators of bubbles and profiteers in busts, and we are painfully conscious of the importance in being a force for good. So Mr. Goldman banker, it gives you pain to be a force for good? So what gives you pleasure? When you are a force for evil? Pluheeze. Everybody avoids pain and courts pleasure. So, by your own admission, you are a force for evil. There, we have nailed you down, Goldman. And remember, ultimately good triumphs over evil….
Also Taibbi claims correctly that Wall Street banks were behind the dot-com bubble. Remember 1996, 1997, 1998. Dot-coms going IPO without any earnings? It all started with the famous 1995 IPO of Netscape, albeit the lead banker for them was Morgan Stanley. Folks, when these Goldman and Morgan bankers took companies public, they also corrupted the public markets, as in the stock markets. You want to know WHY? Well, we will soon publish for the masses the basics of modern finance theory which tell us that the stock price of any company is the sum of all the current and future dividends, discounted to their present valuations. But that is theory, right. And what is practice? Create a bubble, and take companies public with zippo revenue, hype it up, and at the peak of the hype, take your own company IPO. Remember the Goldman IPO in 1999? These greedy “toxy-morons” are shameless when they lie that they do not profit from bubbles, history proves otherwise.
Also worth mentioning in this podcast is a quote from an article by Mark T. Williams, a former Federal Reserve Bank Examiner, on the July 4th issue of the Boston Globe. Mr Williams had this to say: if the financial market was a gun fight, the Fed would be carrying pea shooters while the Wall Street structured-product gurus would be carrying AK-47s. He goes on to describe how the Fed treats the examiners as second-class citizens, below the economists and the monetary policy greeks. No wonder, all the MBAs and ivy-league undergrads want to flock to the banks, for who wants to be a second-class citizen at the FED when you can be a rick millionaire. Remember the old sage saying: If you go to Goldman, you will be a millionaire. If any of you kids still in college are still listening, let me warn you. Soon, some of these Goldman bankers will be in jail for breaking the laws. This is still a great country. When things go out of whack, we throw a few of them in jail, so that every one gets a lesson. Keep listening to this article, for we touch upon the law of PROMPT CORRECTIVE ACTION next.
I admit it is going to be hard, for it was somewhat shocking to discover from Taibbi’s video that Goldman is deep in bed with the politicians, and a congressman who was trying to expose Goldman for some wrongdoing was quickly shut down by Dick Gephardt for the democratic party will lose all future campaign funding from the rich bankers. IF THIS IS NOT CORRUPTION, WHAT IS??? Folks, we need campaign finance reform at the grass-roots, congressional election level, else the corruption of the elites and the looting of the working poor by the rich bankers and politicians will continue. If you don’t do something to stop it, while you take your kids in what you think is a nice car for that picnic in the rest area, the banker will be taking his dog to a nice vacation in Hawaii or the Caribbean or Greece or what have you, and the money would have come from the 20 trillion dollars that they drained from your bank accounts and are funneling into theirs.
Now, let’s take a look at how the laws are being broken by the greedy Friedmenites and the corrupt Goldmenites. We have a link to the Law of Prompt Corrective Action in our resources section on Franconomics.com, and as per this law, the administration should have followed the LAW OF PROMPT CORRECTIVE ACTION and put these banks into "receivership”, including both Goldman and Citigroup. Instead, the government bailed out AIG which bailed out Goldman with 12.9 billion dollars and also with $10 billion in TARP. We have to thank Professor Bill Black of the University of Missouri for brining this law into everyone's attention. To see his interview with Bill Moyer, please check our Video Resources section.
Once you follow the link and read up on this law, you will see that when Goldman paid its executives bonus in 2007, it broke the law, for the law explicitly states that “An insured depository institution shall make no capital distribution if, after making the distribution, the institution would be under-capitalized.” What do we mean by under-capitalized. We mean under-capitalized to the tune of $22.9 billion dollars by mid-2008. That is 22,900 million dollars folks. How? Let’s do the math again, $12.9 billion from the insurance company AIG, and $10 billion from the government provided TARP. Added, it is $22.9 billion. So, when we demand that the Goldman bonus of 2007 and 2008 be pulled back, we have a legal angle to it. The Goldman bonus of 2007 and 2008 are illegal. President Obama, we voted for you. Please pull the goldman bonus back by taxing it at 100% and return the money to those poor people who funded your campaign with their sweat and toil of five dollars a pop!
Also, what comes to mind is whether Hank Paulson, the treasury secretary under the Bush regime break the law by covering up the extent of under-capitalization of these banks? When he created the 700 billion TARP account, and the 85 billion dollar bailout of AIG so that Goldman could be paid the insurance benefit of $12.9 billion from the 85, WAS HE AWARE HOW UNDER-CAPITALIZED GOLDMAN WAS? Instead of taking Goldman into receivership, did he break the law by doling it out another $10 billion? Is the current secretary Geithner doing more of the same with his pPiP plan?
If key public officials are corrupt and instead of upholding the law, if they break it, what will happen to the society, which tolerates this kind of corruption? If you are a concerned American citizen, what is your responsibility? What can you do today so that people who are in charge of protecting the laws don't actually break them. At least bring it up with your congressman, even though we know that most of them take money from bankers and will not favor you. If nothing else, go to FRANCONOMICS.COM, print this podcast transcript, or for that matter, any of the past relevant transcripts, and mail it to your congressman, and to your senator. Please demand that we all ought to know how much money is being drained out every day through plans like TALF and pPiP.
Now, let’s close out this podcast by analyzing the latest unemployment data, which comes out at the beginning of every month. So, looks like the U.S. employers cut a larger-than-expected 467,000 jobs in June, according to the Labor Dept. The U.S. unemployment rate hit a 26-year high of 9.5%. Now, that corresponds to an actual full unemployment of 15%. To understand how and why, we have used the pie chart from the Labor Department itself to explain how really 15% or 3 people out of 20 are not working at all. AT ALL. Is that why Goldman is painfully conscious of the good that it is doing to its own employees?
This is the beginning of what will be a series of nice admonitions to my banker friends. And I apologize to any of my MBA classmates who are into banking and don’t like what I have to say here; OK, here it goes you crème-de-la-crème parasites: You free-riding unhappy parasites, you two timing toxy-moronic hypocrites, you intellectually and morally corrupt Goldmenites, I know you are unhappy. And let me define happiness for you. During this past memorial weekend, I walked with a lot of African Americans on Myrtle Beach for the Bikers Weekend. And then I got into Taco Bell in the morning for my regular usual vegetarian bean burrito. I ordered coke with it, I don’t know why, I always order water. Then I saw it, pure happiness. There were four black boys, they had ordered their burritos, and glasses of water. Water came to my eyes, for I realized that these poor folks, who probably drove from some nearby town, DID NOT HAVE MONEY TO ORDER A COKE. They probably had just enough, like a dollar or a dollar fifty each, for that burrito. But the happiness they exuded, the pleasure they shared, to be able to eat a burrito, even I could not partake in that. For I had ordered that stupid extra coke. You get it now, you confused soon to be serving in JAIL, law breaking banker? That happiness is not there in that extra million dollar bonus. For you would want 2 million dollars next year, for which you will cook up that new scam, but this time, we won’t let you get away that easy, we will throw you in JAIL. I wonder what stuff your greed is made of? You loot and plunder and make the people homeless and jobless, and all you are aware is how painful it is for you to work towards that second vacation home? You should be thrown in jail, instead of being given that plum Treasury job? You greedy Friedmenite, you blood-sucking Parasite, You Oxy-Moronic producer of toxic waste, you Toxy-Moron?
This brings us to a somewhat aggressive podcast, even by our measured and analytical standards. But hey, truth, even though it hurts, needs to be told. Tune in again for our next weekly podcast, and until then, stay well, take care of yourselves, your families, and let us all more fortunate ones treat the jobless, and the homeless with the kindness, courtesy, and respect they deserve, for these are our fellow human beings, and if Goldman tightens its screws a bit more, we will be joining the ranks of these homeless. Thank you.
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