Illustration: michaelmucci.com
Attorneys for the Cookie Monster and Big Bird have reacted angrily to claims that clients of Goldman Sachs are muppets.
”Never at any time have my clients, or for that matter any anthropomorphic furry animals with long necks and googly eyes, been clients of Goldman Sachs’s structured products division,” said a statement by plaintiff lawyer Zachary L. Writstein yesterday.
”The claims have irreparably tainted our clients’ reputations. It is unconscionable and libellous to suggest that, like Colonel Gaddafi or the Greek government, muppets are so gullible they’d buy derivatives from Goldman Sachs.”
Flanked by his legal team, Kermit the Frog also announced he was reserving his rights. ”I’m bewildered,” he told a press briefing. ”The claims are definitely actionable. Miss Piggy and I intend to file in either the Supreme Court of NSW or Victoria. Australia has the best defamation laws in the world you know. The plaintiff can still get up even if the story is true!”
”Look, it’s common knowledge that when Goldman recommends ‘buy’, the firm is dumping stock, and when they say ‘sell’ it’s time to buy,” Kermit’s attorney said. ”To suggest that a muppet would acquire financial products from Goldman Sachs is a shameful and egregious slur upon the person of any children’s television icon, let alone one as knowledgeable as a muppet.”
A spokesman for Fozzie Bear concurred. ”They might be able to dupe those really early childhood characters like IgglePiggle and Makka Pakka, but even Dorothy the Dinosaur is awake to the fact that a client of Goldman is just a target for the prop [proprietary trading] desk.”
A few observations on the Goldman employee’s resignation letter: first, the global response was colossal, especially since this ”Goldman is greedy” angle is hardly earth-shattering news.
Second, it is newsworthy when a banker tells the truth.
Third, the renegade ex-employee Greg Smith worked in ”structured products”. The only people who make money out of structured products are the people who design and sell them, not the punters who buy them.
Fourth, loath as one is to defend the honour of the cuff-linked shysters of Wall Street, Goldman Sachs does shoulder a disproportionate share of the blame for the ills of the world. Ultimately, if it blows up too many clients, it loses them to rival firms.
Fifth, there is a vast lingering groundswell of resentment towards bankers which might be better aimed at government. It is the role of government to regulate and the role of the press to report without fear or favour. Both failed, as did others such as ratings agencies. Their failures paved the way for the massive bubble. Subsequently, both press and politicians supported the massive bailouts, rewards for failure, because the bankers convinced them the world would otherwise end.
So now we have a system where the Wall Street-controlled Federal Reserve keeps printing the money to sustain Wall Street while debasing the taxpayer’s future income via impending inflation – that’s the very taxpayer which just bailed them out and got the bonuses rolling again.
But fair’s fair. Goldman – which was the real beneficiary of the AIG bailout – is hardly going to lobby Washington not to be given free money to survive.
As for the dearth of prosecutions arising from the financial crisis, surely the blame rests with regulators. Wall Street bankers are hardly going to turn up at the police station with an affidavit attesting to fraud, demanding to be ”perp-walked” down to the holding cell.
Things aren’t changing any time soon. Apart from the odd rhetorical admonishment, President Barack Obama has kowtowed to Wall Street interests. And the leading contender for the Republican Party presidential nomination, Mitt Romney, was raising millions in donations from the Street this very week. Goldman, Morgan Stanley, Bank of America – they have all dug deep.
When it comes to being kept by Wall Street, Democrats and Republicans are on the same side.
Has anybody noticed how the din over those insufferably high wholesale funding rates comes and goes just before and after the big banks report their record profits each
half year? It just died down three weeks ago, like clockwork. Since the financial crisis, our big four have even outstripped Wall Street’s top six in consolidating their market dominance.
Alas, the fly in their PR ointment – that pesky banking analyst from Societe Generale in Japan – was at it again this week, flaying the wholesale funding myth as, well, a myth.
In light of the Reserve Bank’s latest prognostications, Christian Carrillo had the hide to reaffirm his view that there was ”no funding crisis or pressure in any meaningful sense of the word”.
”Also, what the RBA is indirectly showing is that, as the cash rate has fallen by 300 basis points since mid-2007, funding rate levels of major banks have probably declined by about 170-180 bp over that period of time,” Carrillo said in a note to clients.
In that five years, as the din has grown louder each year, the big four’s profits have doubled. Bear in mind that the cash rate peaked at 7.25 per cent in 2007.
Finally, it should be noted that while the Muppets have never been clients of Goldman Sachs’ structured products division, they have been a corporate client. In May of 2003, the family of Muppets creator Jim Henson was advised by Goldman on buying back the fluffy, colourful characters from a merchandising company.
Michael West established Michael West Media in 2016 to focus on journalism of high public interest, particularly the rising power of corporations over democracy. West was formerly a journalist and editor with Fairfax newspapers, a columnist for News Corp and even, once, a stockbroker.