What if the BIG secret is…GoldmanSachs, AIG et al have been manipulating GOLD by selling contracts…selling SHORT tons of gold to make $USD currency seem to have value?…and other currencies, too.

Now suppose their other derivative and betting frauds bring them down to face justice and prison..then surely their precious-metals [p-m] fraud would be exposed and whole governments of TPTB would collapse.

Could that be used to frighten BO any gov “leader” into bailout activities that only appear to be insane acts to reward criminals?…lest p-m wharehouses are found to be empty? and fiat currencies become worthless? Overnight?

Notice…there has not been one whisper of the volume of GS/AIG p-m derivatives, much less any failure to deliver on p-m obligations… Is that just because their p-m activities have not yet been exposed? Are they about to be found out as their other nefarious acts come to light and data points to p-m contract default?

Sure would cause a run for physical delivery of non-existent p-m…and enough chaos to end the status of the royals. After all, don’t all the worst-case scenarios somehow include p-m [specificly GOLD]in any global basket of real values?

Enough of this hallucination! I just tell lies to amuse fellow inmates.

Schumer and Spitzer are known as great non-friends from way back, though not in an easily linkable way.

Bleh!

These people don’t give a rat’s ass about equity and have to be stopped. I’ve seen it happen in two ways: (1) either they screw others over so badly that finally no one will return their phone calls or do biz with them, or else (2) by law enforcement, investigations and legal action.

Without sensible regulations that are enforced markets are sewers: and as the money (and risk) involved increases, the race to the bottom accelerates.

But from what I’ve seen, it’s the most charming (but ruthless) predators pose as good business people; then the electeds go to them for favors and advice. That Madoff case seems classic: a guy like Madoff talks his way onto the very organizations that write the regulations he wants to control. (And yeah, I’ve seen it at my local level Up Close and Personal.) So the criminals end up writing the rules and the electeds are just grateful and thankful and obsequious (in part because the electeds mean well and are nice, if naive, people).

And I completely agree that if people don’t perceive costs for terrible conduct, then they feel no worries about thieving. And let’s face it, the benefits of thieving surely have a lot of seductive allure if you need 5 homes and private planes, etc.

When an Eliot Spitzer comes along, who can spot the predators and apparently has very few qualms about taking them out of biz legally, that’s a rare and wondrous thing. We need A LOT more of it.

—
EW @ 10, the parts of the Greenberg testimony before that House Committee horrified me — and illustrated EXACTLY what I wanted to point to in this thread. Basically, the very nice, very well intentioned electeds basically treated Greenberg like some kind of King or Expert or FontOfAllKnowledge.
Dreadful!

I like the idea of getting Spitzer involved in the investigation, although it sounds like he’s not the right one to be making decisions about prosecution.

OT but of interest in the Wheel House:
Tomorrow is the Big Day regarding Obama’s decision on releasing the old DOJ torture memos. Glenzilla had a big diary about this yesterday. I have a further angle on this to wonder about:
If Glen is right that Stephen Kappes is at the center of this tempest, and if DiFi and Jello Jay made approval of Leon Panetta’s nomination contingent on retaining Kappes, is that perfidious pair also behind current efforts to withhold the torture memos? And if so, why?

Perchance do the torture memos mention consultation with the perfidious pair, and their approval? Is one of the reasons DiFi’s SSCI torture investigations to be held behind closed doors is to prevent the release of such information on complicity?

The bursting bubble most people have been talking about lately is the housing bubble, but I think another may deserve wary watching: the stinking putrid corpse of the Democratic-Republican “national security” consensus for the past 8 years. It may be about to burst, casting odiferous emanations far and wide. What will it take to burst that inflating bag of offal?

Oops, sorry for all the rotten metaphors. It just seemed somehow appropriate.

Bob in HI

Also, I’m at a loss whether Ed Towns is a buddy of Greenberg or even knows whether he is or not. I’m all in favor of going after AIG for spending my money on PR, but when you’re going after their anti-Greenberg stuff, well, I’m not sympathetic, exactly, but I’m interested in what they have to say. And, sure, it was marginally useful to have Greenberg testify, but I’m also sympathetic to those (including–ack–Issa) who felt it gave Greenberg an inappropriate soapbox.

So if DOJ thought Towns was running interference for Greenberg (or even questioned what he was up to), I can imagine why they’d look at the documents they turned over carefully.

That said, I wonder whether Fraud and CT had differing ideas about whether they could get these guys in jail to convince them to chat about, among others, Greenberg.

Straightening out the system requires two things – putting the system back together again, and making sure the criminals who did the wrecking get their careers blown away on the way to prison in a very showy, public way.

The latter, because the only language the greedheads who’ve been running the system understand is getting knocked on their ass when they step out of line. And they only remember that lesson for a few years.

Right now, it’s been a good twenty years since the last big wave of securities industry prosecutions – the Boesky/Levine/Milken/Drexel cases of the late 1980s. That’s three or four generations ago in financial industry years. Next to no one who was at their level is still in the industry, and the folks who are running the industry now were low-level minions a whole mess of steps down the organizational chart back then.

In other words, the deterrent value is long-since gone.

“I’ve got to worry about being prosecuted for stepping over the line” is not a thought that the greedheads ever learned to entertain, because they haven’t seen people get it. As far as I can tell, they recognize (or believe) they likely have less chance of being prosecuted than of being hit by lightning unless (as I think the Conn. AIG/General Re case indicates) the prosecution is a setup by someone who managed to use the criminal process to eliminate a competitor. So, they let their greed run wild.