Goldman Sachs: Profitting from CIT's Demise-and the Collapse of the US Job Market

Currently CNBC is busy painting Goldman Sachs in the best light possible. Just like they're misrepresenting the meaning behind Intel's "gains" and leaving out facts to paint a rosier bull-market picture that just isn't there.

They already called an end to the mortgage crisis and they keep calling unemployment a lagging indicator when all evidence is pointing to it being a leading indicator, as it begins to affect peoples' ability to pay their rent or mortgage, rental property management companies and banks are going to suffer great losses. When CIT group blows up because they can't find a buyer who is willing to take their irresponsible lending contracts, the line of credit to over a million small to mid-size businesses will disappear and they will start laying off people, further feeding the problem. The commercial real estate market will experience it's first real crash around this time, while Prime and other home mortgages experience their second large crash. This will force newly built home sales to drop significantly and many of those companies will start laying people off, so forth and so on.

What does this have to do with Goldman Sachs?

CIT Group Rises on $3 Billion Goldman Sachs Financing (Update4)
www.bloomberg.com...

They've already hedged against this. Goldman, as Paul Krugman so aptly stated, does not buy into its own hype. They knew exactly what they were doing. What do you wanna bet that Goldman made some money off of CIT Group and is currently responsible for its stock price drag down causing the company to fall into a liquidity crisis? They've been praised a lot lately for their ability to make money from risky investments. What's riskier and more profitable than to loan $3 billion, hedge against it at great interest rates, and force their stock down and reap twice the rewards? I'd LOVE to read that loan contract. There's a lot more manipulation going on here than anyone of us is aware of. They might be working to create another crash, because they have yet to not benefit from them thus far.

www.rollingstone.com...

Any attempt to construct a narrative around all the former Goldmanites in influential positions quickly becomes an absurd and pointless exercise, like trying to make a list of everything. What you need to know is the big picture: If America is circling the drain, Goldman Sachs has found a way to be that drain — an extremely unfortunate loophole in the system of Western democratic capitalism, which never foresaw that in a society governed passively by free markets and free elections, organized greed always defeats disorganized democracy.

www.washingtonpost.com...

The success also may renew questions about the government's role in the company's fortunes. Goldman Sachs last month repaid its $10 billion in federal aid, but it has not disclosed to what extent it continues to rely on other federal rescue programs, such as borrowing from the Federal Reserve.

Goldman reported revenue of $13.8 billion in the second quarter, up from $9.42 billion during the comparable period last year. More than three-quarters of that revenue came from the basic business of buying and selling financial instruments such as mortgage-backed securities, corporate bonds and derivatives. Viniar said the company was making unusually large returns in what he described as "plain-vanilla transactions" because of a relative dearth of competition.

In conclusion, I believe that there will be NO recovery until this fraud is brought to light. If it isn't we will make systemic failure at the expense of our livelihood a regular occurrence, and with the level of government collusion, there's no telling what face it could take.


(Edit: Title, Spelling, Grammar)

[edit on 18-7-2009 by projectvxn]

From the Looks of it, Goldman Sachs is more powerful than the sum of their parts can reveal:

The Raw Story.com

Goldman Sachs has played a crucial role in creating every market bubble since the 1920s -- and has profited from not only the bubbles, but from the crash that followed as well, says a new expose in Rolling Stone magazine.

An article in the July 9-23 issue of the magazine, written by Matt Taibbi, lists five asset bubbles that the 140-year-old investment bank helped create -- and one that Taibbi asserts the firm is currently working to make happen.

The five bubbles the article says Goldman was central to creating are the Wall Street stock bubble in the 1920s, which led to the Great Depression; the tech-stock bubble of the late 1990s, which ended in the 2001 recession; the housing bubble of the past decade, which resulted in the current economic crisis; the oil price run-up last summer, when oil shot up to $140 a barrel, likely helping tilt the entire world into recession; and what Taibbi describes as "rigging the bailout," when Goldman Sachs' well-placed alumni inside the U.S. government engineered last fall's bank bailout in such a way that the company profited massively.

Evidence of this can be seen in how many former and current Goldman Sachs personnel are working for the government, or should I say working the government:

Last Treasury secretary, Henry M. Paulson Jr: ex- Goldman.
Treasury secretary before him, Robert Rubin: ex-Goldman CEO

Current Treasury secretary Timothy Geithner has lots of ties to Goldman Sachs, and he's also a former NY Fed Chairman.

His informal group of advisers includes E. Gerald Corrigan, a managing director of Goldman Sachs and a former New York Fed president; Treasury Secretary Henry M. Paulson Jr.; John Thain, the CEO of Merrill Lynch; Paul A. Volcker, the former Fed chairman; and Peter G. Peterson, the former U.S. secretary of commerce.

Goldman Sachs Takes over the Treasury: Steve Shafran, Kendrick Wilson III, Edward Forst, and Neel Kashkari.

Former Bush Administration Chief of Staff: Joshua Bolten
Current Goldman CEO Lloyd C. Blankfein is known to have been among the few working out the details of TARP and other government initiatives. It is a revolving door of Goldman Sachs personnel

Call me a conspiracy theorist, but this is just screwed up. They've even went as far as to hire a law firm to have a blogger shut down, I wonder why? Goldman Sachs hires law firm to shut blogger's site

As a matter of fact Goldman Sach's was Barack H. Obama's largest corporate contributor during the election campaign totaling $980,945 His largest contribution coming from the University of California totaling $1,385,675.

But here's the kicker: This was one of John S. McCain's top contributors as well with $256,045 in the pot. Why would one institution contribute to the candidacy of TWO opposing candidates? If this isn't rigging the playing field I don't know what is. We have these people engineering bailouts, the stimulus, healthcare reform, and they are now threatening to put the ENTIRE economy into the hands of the Federal Reserve, which is rumored to be changing hands to Larry Summers which has been receiving millions of dollars in dubious kick-backs from bailed out companies such as Goldman Sachs:

Larry Summers, Tim Geithner and Wall Street's ownership of government

White House officials yesterday released their personal financial disclosure forms, and included in the millions of dollars which top Obama economics adviser Larry Summers made from Wall Street in 2008 is this detail:
Lawrence H. Summers, one of President Obama's top economic advisers, collected roughly $5.2 million in compensation from hedge fund D.E. Shaw over the past year and was paid more than $2.7 million in speaking fees by several troubled Wall Street firms and other organizations. . . .
Financial institutions including JP Morgan Chase, Citigroup, Goldman Sachs, Lehman Brothers and Merrill Lynch paid Summers for speaking appearances in 2008. Fees ranged from $45,000 for a Nov. 12 Merrill Lynch appearance to $135,000 for an April 16 visit to Goldman Sachs, according to his disclosure form.

That's $135,000 paid by Goldman Sachs to Summers -- for a one-day visit. And the payment was made at a time -- in April, 2008 -- when everyone assumed that the next President would either be Barack Obama or Hillary Clinton and that Larry Summers would therefore become exactly what he now is: the most influential financial official in the U.S. Government (and the $45,000 Merrill Lynch payment came 8 days after Obama's election). Goldman would not be able to make a one-day $135,000 payment to Summers now that he is Obama's top economics adviser, but doing so a few months beforehand was obviously something about which neither parties felt any compunction. It's basically an advanced bribe. And it's paying off in spades. And none of it seemed to bother Obama in the slightest when he first strongly considered naming Summers as Treasury Secretary and then named him his top economics adviser instead (thereby avoiding the need for Senate confirmation), knowing that Summers would exert great influence in determining who benefited from the government's response to the financial crisis.

This calls into question the ENTIRE programs for TARP, TALF, the stimulus bill(Bush Era), the American Recovery and Reinvestment Act of 2009, The healthcare reform bill, the Federal Reserves proposed new role as sole economic police. This calls into question even further Obama's promised commitment to make a clean break with the past administration. And with his positions on blanket warrant-less wiretapping, preventive-prolonged detention, his request to the US Supreme Court to overturn Michigan vs. Jackson, as well as his refusal to prosecute former Bush administration officials, makes for a potentially scary episode in American history, with criminal, mob style government running the show. No need to look at the past huh? I can see why they are saying this and trying to drive it home. Politics is a game of cloak and dagger. But the truth always comes out. This is why I say you shouldn't listen to politicians, but look at what they do.

Make your own conclusion people. But my bet is that ONCE AGAIN we voted against our interests. And once again, they might very well get away with it. Only this time it will be because Americans will be Too Hungry to fight back!


[edit on 18-7-2009 by projectvxn]

This is starting to get MSM Attention..But it is interesting to see the Bull market Bull # propaganda get continuously peddled by CNBC people..

Dick Bove Tells Truth?!

Gotta love the Market Ticker. This guy just corroborated everything I've said about the chain of events coming down the pike. Only he didn't call it for what it really is, FRAUD!

[edit on 18-7-2009 by projectvxn]

yes it appears CIT which is oft confused with CITI.....it still very important due to it's role providing financing for small lenders

seems like CIT would be a prime candidate for a bailout since it actually does something for the real economy....i.e small businesses and thus employment and thus spending and velocity of money

the country's LAST LINE of defense against a complete depression appears to be our willful ignorance......and at some level (most likely gov't) i think they understand this and that is why they sell the propoganda so hard on the MSM level......it doesn't help that there have been many to point out the massive conflict of interests between the revolving door of public and private office and the corruption potential this breeds not to mention the way this hollows out the economy.......anyone with eyes to see understands that minus a miracle we are headed toward a being a much poorer county in regards to our living standards.....and in case you don't UNDERSTAND poor economy's do not have many freedoms....connect the freak'n dots...then have a drink and remind yourself You individually can still excel and make $.....there will still be many new millionaire's each year....there will still be many making more $.....you just have to find the areas that are growing. so mix some generalized realism in with some legitamite optomism

reply to post by cpdaman


You have to admit it is difficult to see any legitimate optimism when the kind of manipulation we're seeing is so pervasive.

It's also quite insulting to see an administration FULL of Goldman Sachs people turn down aid to a company that poses sytemic risk to the REAL economy because the Goldmanites have that loss hedged and are waiting to feast on the carcass. Not that I want them to be bailed out, this is their bed and the have to sleep in it. But it is hipocracy and fraud flagrantly being tossed in everyones face.

CIT bet all on government bailing them out

[edit on 18-7-2009 by projectvxn]

[edit on 18-7-2009 by projectvxn]

it's all in what you are optomistic about

optomistic that the gov't will become less corrupt LOFL that the country will not enter a depression.....too late for that.......that GS is not a cancer on the country .....NOPE

but understand 75% of people still have jobs in depressions......

optomistic that anyone can still search and find ways to make money given they are determined ....bet your AZZ u can .....you gotta find the opportunity's and or sectors that are growing.

[edit on 18-7-2009 by cpdaman]

reply to post by cpdaman


I have, and those sectors have proven to be good. Especially foreign currency exchange. But this isn't normal, people are pissed, more and more information is getting out today because of the internet. I worry because I don't want to see my fellow Americans suffer. I do what I do because if I can help just a few people avoid getting blindsided I will have done my duty, not just as a concerned citizen, but as a human being.


Selling optimism when what is coming down the pike is the exact opposite is irresponsible. But so is ignoring the positive, so I try my best to guide people in the direction of actions and solutions. I am only one man, but I do my best with what I've got.

Excellent post. The OP gets a star from me.

There's just so much corruption in our government, and most of it eminates, not from the District of Criminals, but from Wall Street. Like deep throat said, "follow the money." Of course, Goldmansachs wouldn't be able to get away with it, if it weren't for the Federal Reserve Act of 1913.

This is well written up.

But what can anyone do? I think this is a situation where "if you can't beat them, join them" (or something like that) applies. Invest in GS?

GS working with the government and selling tools to profit on is known, but no one is/can do anything about it other than rant on the web/streets

Star and flag.

Well written.

would you rather that goldman sachs be doing poorly?
that would be terrible for the economy.

its high time we get back to the american way of doing things. being successful.

america is the greatest country ever and i hate seeing people try and put it down with their armchair quarterbacking. our freedom has been taken away and its time we restore the stars and bars in all their glory against obama and the rest of the minorities trying to overpower our country with their liberal agenda that is killing children everyday.

reply to post by tigpoppa


You have no idea what you're talking about do you? I would rather Goldman Sachs do thing ETHICALLY and LEGALLY. Neither is the case. There are many conflicts of interest here and there is A LOT of market manipulation.Much of which could be illegal, the government collusion IS illegal under conflict of interest rules.

As for putting down America, where the hell are you getting this? How is calling out illegal and ethically dubious behavior by a corporation putting down America? Armchair? You haven't been around these part too long obviously..Those who know me know I get things done. How about you read this information and maybe you'll realize that it isn't me who is hurting America for personal gain it is Goldman Sachs, and their cronies in Washington.

As for Obama and "The rest of the minorities". I'm Hispanic. I'm fiscally conservative(Not to be confused with Bush neocons) and I know and uphold the Constitution. If you think that what is wrong with America is minorities then you truly have no idea what the hell is going on. There's a reason racists are called ignorant, cause they don't know SQUAT.

Check your self in the mirror. You don't seem to know what is causing this, you don't seem to care to know, you chalk up criticism of a corrupt institution to "America hating". And then you proudly proclaim that minorities are the cause of our problems, and that somehow Goldman Sachs "doing good" at the expense of Tax payers is actually "Doing good".

Read a freakin' book for cryin' out loud...Or are books too "minority" and "liberal" for you too? Further more, if you know nothing about economics as you have so far proven, then I suggest you familiarize yourself with the subject.

[edit on 19-7-2009 by projectvxn]

Very nice OP - there are only a couple of people on ATS that I respect for views on economy and finance, and your certainly one of them.

I wish I knew how to track down all the source material you provide - if you have net sources where you go I would appreciate if you could let us know.

I also love Max Keiser - he is a fricken legend - he reminds me of an old friend of mine, very similar level of intellect and straight forward approach (he as an engineer though - not an economist).

The outcomes of all this chicanery are going to be hard to predict, both inside and outside the US - however I can't see any kind of future for the US dollar - however, it concerns me that central banks still have low reserves.

That this is all engineered is beyond question - the question I have is, how is Goldman Sachs expecting to exit this collapse of the US dollar? Because I see it can't be too far off - defaults on foreign debt seem to be certain, that will impact the US dollar value extremely negatively.

What real assets are Goldman holding that will keep them afloat if the US dollar is devalued - if it isn't gold - which it doesn't seem to be - what is it?

Personally I have made a substantial bet on gold and silver - which i am hoping is going to pay off - but it seems that the players aren't betting on gold.

reply to post by Amagnon


Most of the information I receive is not net based. I have sources in the Dept's of State, Commerce, and a few on Wall St. The ONLY reason I post media related to what I receive is because no one would believe a word if I didnt.

Goldman Sachs' assets are hard to pin down as most of their acquisitions are done by software and the volume and type of assets change by the minute. However they do have HUGE hedge bets in China. So does B of A and a few others. I'd look into what they are buying and HOLDING in those sectors.

I am NOT qualified to give investment advice. And any investing you do HAS to suit your goals and needs. I'm sure you know this, but I dont want to be responsible for steering you in the wrong direction.


[edit on 19-7-2009 by projectvxn]

Excellent post. We are a nation of laws or we used to be. The American Dream was about success based on hard work and good decisions. Right now, the entire economic system is full of corruption and fraud.

It seems that the government now picks winners, like Goldman Sachs and other investment firms and banks, and losers, like CIT. It is easy to make huge profits when you are bankrolled by the government. If CIT goes bankrupt, and it looks like they will, it will make things even worse.

The people in politics (both parties) are always talking about small businesses being such an important part of America, I know I heard this many times in the fall, from both candidates. Of course, like everything else it was just talk.

Eventually the fraud and bad debt will be washed out of the system, and things will correct and maybe then we will have a recovery, or at least I hope we will.

What truly worries me is how many of these manipulative deals is Goldman Sachs involved in, and out of those deals, how many pose the kind of systemic risk to the Real Economy that CIT does? We need to be investigating these guys or they're going to destroy America.

Goldman Sachs is nothing but a corrupted entity, they have their crocks all over government from the federal Reserve to the Treasury and in the Presidents financial team.

It is said that the fed works for them.

Still now they are even raising their target for 2010 even when the economy shows signs of not recuperating.

But one thing is for sure, we now know how they are the ones manipulating the markets.

Goldman Ups S&P 500 Target for End-Year

Goldman Sachs raised the S&P 500 index's target for the end of the year to 1060 from 940 Monday, but said the risk of "double-dip" recession remains significant.

The only way they are doing this is because they already have a plan so they don't fail.

Corrupted and dirty.

Still now with the news of the GDP in the UK I wonder if they will still keep their forecast target.

www.cnbc.com...

Now the CIT doesn't surprised me at all, the consolidation of big financial at the expenses of small financial institutions is in front of our own eyes when big banks got the bail out while small banks were left to die.







[edit on 20-7-2009 by marg6043]

Good work projectvxn; i did a very similar GS hate thread (in my sig), as they need to be exposed for engineering this whole economic debacle.

I think you should stress the way they have been behind all the bubbles in the past like oil, internet laddering of dot com IPO's, CDO's, etc, and more importantly the way they are about create another pseudo market with carbon taxes and GS has a vested interest in middle-tier companies who will handle the carbon credits.

And instead of credit derivatives or oil futures or mortgage-backed CDOs, the new game in town, the next bubble, is in carbon credits — a booming trillion- dollar market that barely even exists yet, but will if the Democratic Party that it gave $4,452,585 to in the last election manages to push into existence a groundbreaking new commodities bubble, disguised as an "environmental plan," called cap-and-trade. The new carbon-credit market is a virtual repeat of the commodities-market casino that's been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won't even have to rig the game. It will be rigged in advance.

Rolling Stone

p.s. in the UK news today, they are saying how the conservative party will give more centralised power to BoE, if they get into power next year (which they will)!!!!!!!!!! They will disband the FSA (regulation authority) and have an in-house regulatory authority INSIDE the BoE.

wtf

In a way, i'm wishing for them to come clean this G20 in sept '09 and declare the IMF SDR one-World currency. Let's just be done with it, so we can begin the open revolt.

reply to post by marg6043


I want a wall to wall audit of Goldman Sachs and all of their services. I want their loan contracts to be made as public as a Roman bath house, I want them exposed. Goldman Sachs is a large criminal enterprise in the process of artificially manipulating the markets(OTC anyone?) add access to the Federal Government ALL THE WAY TO THE WHITE HOUSE FOR TWO ADMINISTRATIONS (well much longer than that, but this isn't for financial gurus), and you get loads of media fed propaganda. I think we're seeing the biggest heist in World History.

[edit on 20-7-2009 by projectvxn]

reply to post by PrisonerOfSociety


I linked Taibbi's article at RS. It's a piece that one can use to extrapolate a lot of between-the-lines data. But, this is about the collapse of the Job market and how Goldman might be engineering that for a profit. The game is indeed pre-rigged.