Goldman Sachs as a Chinese Tale
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My father's second cousin had come to the city, and he saw a group of men standing around the vendor of bolts of blue and white cotton cloth. "This is of excellent quality and I'm lettin' them go cheap," cried the vendor to the cousin. He unloaded the bolt from his cart, throwing them down noislily on his reed matt to underscore his point. A handful of men fought to buy the cloth, so cousin joined the fray
When he got home, he discovered that the yardage fell far short of what was promised. Father told him he had been "strung along like a donkey," a country term for being taken. The men who had been fighting to buy the cloth were in the same company as the seller. They were playacting the role of hungry buyers.
The whole business with the fancy derivatives created by the bankers in the 21st Century were no more sophisticated than the cloth seller on the street of old China. And the buyers of the derivatives were like the country bumpkins, out for a good deal. They'd all been strung along like a donkey.
Below, Mark Taibbi's recent piece in "The Rolling Stone":
The formula is relatively simple: Goldman positions itself in the middle of a speculative bubble, selling investments they know are crap. Then they hoover up vast sums from the middle and lower floors of society with the aid of a crippled and corrupt state that allows it to rewrite the rules in exchange for the relative pennies the bank throws at political patronage. Finally, when it all goes bust, leaving millions of ordinary citizens broke and starving, they begin the entire process over again, riding in to rescue us all by lending us back our own money at interest, selling themselves as men above greed, just a bunch of really smart guys keeping the wheels greased. They've been pulling this same stunt over and over since the 1920s — and now they're preparing to do it again, creating what may be the biggest and most audacious bubble yet.
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Having listened to my father's panoramic stories of old China, I see there is nothing new under the sun, especially greed. Mark Taibbi said: "Organized greed will always win over organized democracy..'
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jitu rajgor says:
Yes Belle, world's
Yes Belle,
world's economy, politics and sociology is ruled and run by top 5% people hiding at high places, beyond reach of a common man. People's only faults are ignorance, greed and laziness. Goldman and all others are 'the part of the party'.In stock market they are bullish and bearish six times a year. People have short memory,they easily entered to the trap.At top level no politician, mafia, businessman or a god man are enemy of each other. They compete to cheat people,but never compete with each other.
Belle Yang says:
Doctor Jitu,
If people, in general, have short memories, then Americans must rank at the top for lapses. I am an American citizen, speak like a "California girl," according to some, but I feel like a traveler in this land, learning it's ways.
Farzana Versey says:
The fable-like tale that you
The fable-like tale that you recount, Belle, has made me understand the Goldman Sachs saga finally!
Although not entirely connected, reading about the greed factor makes me recall an old Arab proverb: "Trust in god, but tie your camel."
~F
Belle Yang says:
Hi, Farzana
http://www.rollingstone.com/politics/story/28816321/the_great_american_b...
Above is the link to the full article in "Rolling Stones." It's not very long and it's quite straightforward. I've learned a lot about economics since last summer. I don't gamble on the stock exchange, but I can predict when the stock market will rise and fall fairly well, simply by understanding human nature and behavior. Heck, I predicted the near 200 pt. drop last Monday. Goldman Sachs ought to hire me.
Eric Nichols says:
How Oil Prices Work
This charming anecdote has a parallel parable in how we pay these exhorbitant gas prices when the Earth is practically drowning in oil. Cap'n Ahab has a little oil tanker he putts up and down between North Africa and California. Cap'n Ahab is an honest pirate...he gets whatever he can wherever he can, and is actually quite up front about it. Cap'n Ahab goes ashore in Morocco and scouts out the bazaars for a good price on oil. Achmed has oil at $25 a barrel, but requires payment in gold. Ibrahim has oil at $125 a barrel, but will accept payment in IOUs. Cap'n Ahab is actually prepared for both contingencies...he has a fair load of gold in his tanker for ballast, but also carries a bunch of IOU's from California. Cap'n Ahab buys 100 barrels of oil from Ibrahim and pays him in worthless IOUs, on the promise that gold eventually will be forthcoming. Ibrahim goes away happy, and Cap'n Ahab goes away with a loaded ship. But we wonder why Ibrahim is so happy. He is now minus 100 barrels of oil, and has only worthless IOUs to show for it. Later that evening, Achmed and Ibraham meet in Ibraham's tent over strong coffee to exchange stories and currency. Achmed pays Ibrahim in gold the price of his worthless IOUs. What we learn during this exchange is that Cap'n' Ahab has just set sail with 100 barrels of saltwater. The gold that Achmed has paid Ibrahim is a fair price to keep the actual oil off the market...for which someone will pay REAL gold for. Works every time.
Belle Yang says:
Great story, Eric
I wish I could learn to tell it with a flair, but I think it takes an Alaskan who has been smoking moose dung to do it really well.
Eric Nichols says:
Actually, moose nuggets are
Actually, moose nuggets are a bit hard to keep lit, but we have lots of other uses for them. :)
http://www.sticksite.com/nuggets/index.html
Huntington W. Sharp says:
Regalia
When they're shellacked, I hear they make lovely jewelry.
Huntington Sharp, Red Room
Belle Yang says:
When there is a bubble on shellacked moose turds,
trust that Goldman Sucks is hoovering up the money.
Evie Shockley says:
belle,
I couldn't have said it better myself! Thanks for the lovely painting to make that bitter pill go down (yet again) a bit easier... : )
Belle Yang says:
Only 3 years ago,
an acquaintence who was a real estate agent kept bugging to get into the housing market. Invest in house, buy house, buy house, he said as I drove away.
I already have one shelter/home. Why would I buy another for investment, to give myself more worries and headaches? I think 2nd homes should be taxed up the wazoo, so housing prices remain low enough in general for most or all to afford. Everything in America is a commodity, including health care.
We may have seen the fall of the Iron Curtain, but Capitalism didn't win.