10 Sleazy Ways That Goldman Sachs Distracted Us While Pocketing Billions from the Treasury

By Nomi Prins, AlterNet. Posted May 28, 2009.

4) Have the balls to frame taking FDIC guarantees meant to spur consumer lending as a good thing. “We still have some capacity under the FDIC-guaranteed at pretty attractive spreads,” Goldman CFO, David Viniar told investors on a conference call last month.
 

5) Take $10 billion of TARP money, while saying you don’t really need it, you’re just being a good corporate citizen and don’t want to make the other firms look bad.
 

6) Take $12.9 billion from the TARP and FED money that was given to AIG so you can back your AIG related losses, while saying that you really hedged all your positions to AIG and didn’t really need that money.
 

7) Watch your stock rise nearly double in value since TARP, and through executing the rest of your strategy, though much of your capital is coming from federal assistance.
 

8) Laugh as Geithner’s NY FED boss and former Goldman CEO Stephen Freidman, said he just bought some stock in Goldman because it was ‘inexpensive’  and made $3 million out of the purchase before resigning his position, after helping his former firm stay at the top of the Wall Street pecking order through a host of friendly decisions.
 

9) Tell everyone you are paying back TARP because you’re healthy and don’t really want to be unencumbered by trivial restrictions (not that there are that many to begin with.)
 

10) Emit high-fives all around as Geithner and Bernanke backs you up, and Geithner takes the Congressional heat for all the help he provided you – like the AIG money that the government was ‘forced’ to provide, which boosts your stock price more. Then, if that’s not enough, smile as Geithner reiterated this week that the government’s $1 trillion gift from the public cash registers would be coming through in,  June for all those private investors who want to put up a little of their money and get a lot of government money, to buy some of the junky assets that the Fed doesn’t yet have.
What can we do about this particular pillage:

Usually, I just vent about these kinds of Machiavellian strategies.  But, I realize this may not accomplish much by itself. So here are some things you can do to help out:
 

One, add your support to Representative Alan Grayson’s (D-FL) bill HR 1207 – http://action.firedoglake.com/page/s/Fed1207 which requests opening the Fed’s books to Government Accountability Office (GAO) inspection– so we can know just how much money banks got cheaply in return for relatively worthless assets posted as collateral, and keep them from churning these cheap loans into faux stock value. 

Second, email FDIC Chairwoman, Sheila Baird at Chairman@fdic.gov, stating: Don’t let Goldman Sachs, Morgan Stanley, JPM Chase and others repay TARP money, just to get out of restrictions without requiring arrangements to repay the FDIC backed money they raised, nor without strings attached just because they had it to begin with.

Third, write to Tim Geithner: We are not idiots. Don’t provide our money to private investors to purchase Wall Street’s toxic assets while banks (and not just Goldman) are not admitting they already have been dumping assets into the Fed.

In general, Geithner’s notion of ‘letting’ banks repay or not, is also a scam. It’s as if the Treasury department is somehow in control of them, which they clearly aren’t. Yes, banks should repay TARP, they should also repay cheap FED loans and FDIC guaranteed debt. Why? Because that’s the only way to get a true read on their condition. Anything else is just smoke and mirrors.
 

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Nomi Prins is a senior fellow at the public policy center Demos and author of the upcoming book It Takes a Pillage: Behind the Bailouts, Bonuses, and Backroom Deals from Washington to Wall Street (Wiley, 2009) and Other People's Money and Jacked: How "Conservatives" are Picking Your Pocket (Whether You Voted for Them or Not)

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