THE GOLDMAN SACHS CONSPIRACY?

The drum beat against Goldman Sachs is growing louder.  As the global economy collapsed last year and U.S. citizens sank under crushing house prices and job losses Goldman appeared to be flourishing (also see here).   Despite doing more than just about any other firm to help create the housing bubble Goldman is now one of the greatest beneficiaries.  But what was once nothing more than a conspiracy theory has now turned into a full blown public debate about manipulation and Goldman’s use of taxpayer bailout dollars.

It’s widely believed that the firm would not have survived the financial crisis without bailout cash and a few interesting moves in the AIG portfolio, but now as the market gyrates in odd fashion on a daily basis the U.S. taxpayer appears to be the one losing.   Goldman’s close ties to the U.S. government have also raised some eyebrows lately.  The routinely high program trading correlated with market ramps are odd as well:

gs

Meanwhile, job losses continue to mount, wages remain flat and the stock market is 40% off its all-time highs.  But Goldman Sachs is rumored to be having their best year ever.  And they’re rewarding their employees for it.  I’m not generally one for conspiracy theories, but something isn’t right when millions of Americans seem to be in so much pain while the firm that helped create much of this crisis is flourishing.

As always, Martin Armstrong has an opinion and some entertaining reading here on the Goldman Sachs conspiracy…If you missed Matt Taibbi’s piece in Rolling Stone you can find it here.

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.

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  • SS

    This crap just sickens me. GS should be trading at $0.

  • AlDavis

    It’s beyond ridiculous. Allowing government officials to provide beneficial treatment to ex co-workers is an outrage. It’s one thing if you use client dollars to manipulate the markets, but using taxpayer dollars is entirely different….

  • Bill

    I agree ,something is really wrong with GS . Lots of finance blogs are raising the same concerns . Seems to be coming out of the “underground” at this time. GS cronies should be wiped from the White House and Politics no question . Strange though , history seems to be repeating itself in part . Didn’t the rising fascism in Europe in the 1930’s arise from blaming banks and their greed for all the then problems and rampant inflation ( though the left were “right” , it still caused a World War ) . Thats it students !!! A third world war will restore our economy . And what ethnic group has control in most part of the current banking industry ? A rhetorical question with a very dark answer . History repeats .

  • StanleySteamer

    We all know GS is dirty and we also know there is nothing we can do about it.

  • bzik

    We all know GS is dirty and we also know there is nothing we can do about it.
    ——————————–
    wrong. you should have been supporting Ron Paul. ask yourself – would you support him if he runs again? i bet you would go for a more conventional “compassionate” candidate.

  • Mrinmoy

    Hi Tpc,
    I am a regular visitor of your website. Nowadays with all manipulators controlling the Govt, economy, market, media it is very hard to get real truth from traditional media. You have been doing an excellent job of keeping people informed about the truth.
    However I believe the manipulators have grown so big and become so powerful, nothing is gong to get fixed without a big revolution at this point. For this I feel a need for all protesters to become united.
    My personal humble suggestion for you will be to find all like-minded people and websites and start coordinating more with all together and also give visitors an opportunity to learn about all different people on this.
    I particularly find few other people/website to be like-minded.

    http://market-ticker.denninger.net/
    Ron Paul
    Rick Santelli of Cnbc
    Nil Cavuto on Fox news

    Regards,
    Mrinmoy

  • Frank the Tank

    Plenty can be done about it: 1. Sell every mutual fund that holds GS stock and explain to every fund company that you won’t buy any of their funds if a single one holds GS. 2. Take your money out of the banking system. They just want you to show up every day with your money to play. They view the public’s money as the market’s punching bag, to be pounded mercilessly until it behaves properly and sells when it shouldn’t and buys when it shouldn’t. Just don’t show up for the game, hoard cash. 3. All this would require sacrifice. You would have to be willing to forgoe any rewards of the markets trading higher. It would require solidarity and acts of unison. You basically would have to get people to tone down, or eliminate, their market greed and just walk away…very difficult, but not impossible. Just pulling out the ten year average returns for mutual funds could do the trick. That $10.00 bill you lost in the bottom of your sock drawer in 1998 and just found the other day has done better than the ten spot you put into the market that year.

  • Paul

    TPC,

    Let me give you some tough love:

    Are you seriously now going to try to sell the Goldman conspiracies that Zero Hedge and other sites have been pushing? Gosh, you’re months too late and with even less information than Tyler Durden has. At least he has a paranoid-schizophrenic argument.

    If Goldman were an individual, you’d be liable for libel. You offer no evidence other than a bunch or random links!!

  • DF

    I’m surprised you were able to access this site. Doesn’t Goldman block this kind of stuff?

  • http://www.pragcap.com TPC

    Paul,

    I’m not going to put up with being accused of libel because I post a few links to stories that OTHER people write. This is a free site that I write in an attempt to shed light on the markets and give people some FREE guidance from someone who has been around the block more than a few times.

    I appreciate your comments, but that sort of stuff makes me wonder why I even work on the site. Coming up with quality content (I try not to post garbage like so many other sites just so they can post something every hour) isn’t easy so if you don’t like a piece just move on, but please don’t accuse me of A. breaking the law or B. doing the world some grand disservice.

    You didn’t like the article. Nothing wrong with saying that. But keep things in perspective. This isn’t the NY Times or something….

  • matt

    Paul is a jackass. And likely works at goldman.

  • Dean
  • Paul

    TPC,

    My point, not very clearly stated, I realize, was that you shouldn’t go down the conspiracy theory path that so many other sites have gone down. There’s a lot more and better material out there than the sensationalizing stuff on Goldman. I find it dreary, really. I mean, don’t you think you should at least offer some perspective on the program trading information you post. I mean, if people who don’t understand this stuff very well are mislead, then you’re doing a disservice to everyone.

    Matt,
    Ah, if only I did work at GS! But that you think I do is why it’s a conspiracy. Or do Goldman traders really have nothing better to do than read random bearish blogs?

  • don

    TPC:

    Your site is one of the best, reflecting not only the effort you put into it but also quality of thought . . .

    Keep it coming.

  • http://www.pragcap.com TPC

    Paul,

    This site will never become a conspiracy theory site unless I go totally insane and start losing my mind. That’s not the kind of environment I am trying to create here. But I’ve gotten a ton of emails on this stuff in recent weeks and I personally thought the Armstrong piece was highly informative and entertaining. Readers are definitely interested in hearing about these kinds of stories. Of course, regular readers know that these kinds of posts are about 1 in 100 so don’t worry about the direction of the site. Besides, Zero Hedge and Denninger seem to have a monopoly on the conspiracy theory crowd so I won’t impede on their progress.

    I appreciate and encourage readers to keep me honest, but also keep in mind that it’s not easy coming up with good content all the time. I don’t have a staff of writers and researchers like many sites do. I hope to improve the site over time so I do appreciate the feedback, however….

    Thanks for understanding.

    TPC

  • http://www.pragcap.com TPC

    Don, thanks for kind words.

  • x

    few questions on the GS and hidden hand issue

    1. Can GS single handedly prop markets up. Pushing out a conviction buy every day helps but someone else needs to follow their recommendation?

    2. Is the theory that they can only pay themselves big bonuses (without public outrage) if markets end the year on a nice high?

    3. If GS, a few euro banks, and a few central banks want markets up nicely this year, is fighting this battle pointless?

    4. Don’t most hedge funds also want a strong UP market to make up for high water marks?

    So, if its all rigged to the upside …..

  • Michael

    Nice article. Worth reading! See also http://invetrics.com

  • http://shankystechblog.blogspot.com/ Shanky

    TPC – “I personally thought the Armstrong piece was highly informative and entertaining” Are you implying that it is fiction sprinkled with some real possibilities? Simply a “good read”? Please tell me you have to have some clue that the system is corrupt. How can you read this and not have your stomach churn.

    MT and ZH do have the market cornered, but there is no “cornering” OUR freedom I hope. What the does “I’ve gotten a ton of emails on this stuff in recent weeks” represent? The ground is swelling and the people need informative, bright and respected bloggers like you to spread the observations they see.

    Do you think Immelt or Murdoch are goning to let us know the truth? “This is a free site that I write in an attempt to shed light on the markets and give people some FREE guidance from someone who has been around the block more than a few times.” Well, give your readers what they are asking for. Now more than ever you have a chance to be a difference maker. Use the power of your pen (pc) to motivate your readers to learn more and pursue the truth at least. This has gone beyond being a conspiracy theory. This is anarchy IMHO.

    I really appreciate your blog and all your efforts to effectively communicate some very important and timely information to your readers. I visit every day and link to your articles all the time. By not covering this topic now is like treason in my eyes. I hope you consider your “tons of emails” as enough evidence to pursue this topic further. Right now we need all the experienced people we can get to make a difference.

    Thanks for all you do,

    Shanky

  • http://www.pragcap.com TPC

    Shanky,

    Im not saying that I won’t write about this sort of stuff, but I am not interested in turning this site into a conspiracy theory site. I write about these kinds of things when there appears to be some real solid facts to back up the theories. I feel like the information involved in this post does that. What I am not going to do, however, is start writing about how every little move up in the S&P is some great big conspiracy (as some other sites do).

    Trust me – I will use this as a forum to help small investors as best I can. That’s basically the only reason the site exists in the first place, but please bear in mind that maintaining a high level of credibility and integrity also help me do that. Throwing out random accusations without real solid evidence is no way to achieve the goal of helping people.

    Thanks for the nice words. I really have the best readers around.

  • http://shankystechblog.blogspot.com/ Shanky

    Thanks TPC. I understand completely. Being a blogger myself I wanted to avoid the conspiracy edge myself. I’m having pretty good success making the ZH blogroll and getting more viewership than ever expected. Thanks to you, ZH, Mish, NC I am learning and am able to provide (along with my own research of course) some great info to my readers. I will crank it up somewhat now and take on some of the conspiracy issues, because I believe the time is right and the cause is good. I am going to try to be somwhere in the middle of you and ZH with about 50% of Market Ticker’s attitude. While proof or credible evidence is hard to come by it is surely getting easier to hide (unless you do a pre-market or 3:30 trade to prop up the markets.

    Thanks for your reply,

    Shanky

  • Anne

    TPC and Paul:

    When will we get past this idea that any suggestion that parties are colluding to rig markets, bribe politicians, or otherwise acting in bad faith, is a “conspiracy theory,” and that all “conspiracy theories” are crazy, and by their very nature deserving of ridicule? In fact, criminal conspiracies are EXTREMELY COMMON. I’m a prosecutor in a small county in Georgia, and just in my county, we have multiple prosecutions for conspiracy every year. Nearly all of these conspiracies, in one way or another, involve some small group of connected insiders that uses a position of power to reap an illegal profit.

    Not only is this scenario not “kooky” or even uncommon, it is something that has repeatedly occured throughout history, and has corrupted federal governments the world over. Why is it that we can talk frankly about the “Russian oligarchy” without batting an eyelash, while any suggestion that a similar problem might have arisen within our own government is written off as a luny “conspiracy theory”? Even after some of our own top bankers have been proven to engage in regular business relations with the Russian oligarchy?

    I promise you that I am not crazy. I do not believe that we’re hiding aliens at Area 51, or that anyone other than Lee Harvey Oswald assassinated JFK. But I do believe that all of the objective evidence available at this moment points to extreme corruption and criminality in both our federal government and our largest corporations. So, rather than snide comments about “conspiracy theories,” let’s have a serious conversation on the merits. The future of our country may well depend on it.

  • http://InsideGoldmanSachs GoldmanSachsExposed

    the really smoking gun on Goldman is at

    http://www.GoldmanSachsExposed.blogspot.com

    Beware of the pieces put out by the GS pr department. That would include the Portfolio.com piece on conspiracy, and Market Watch’s “Even Jack Bauer could not stop the Goldman Conspiracists. Beware …Goldman releasesm these pieces to the public to keep us looking the other way. They would glady admit to the above allegations/conspiracys as long as we dont find out the MARKTETS ARE FIXED!

    wwww.GoldmanSachsExpose.blogspot.com

  • http://InsideGoldmanSachs GoldmanSachsExposed

    get inside the head of a Goldman Conspiracist. Updated by the hour.

    http://www.InsideGoldmanSachs.blogspot.com

  • Lynne

    Goldman will have taken their profits long before the public knows what hits them. What ever happened to ppip? It seems like it’s been put on the back burner, I wonder why.

  • Dean
  • alphatrooper

    GS returned 23% to the american taxpayers

    that is more than most investors would get in a balanced mutual fund

    I dont understand this constant fascination and frankly “need” for there to always be a conspiracy.

    just about every piece of evidence offered here is circumstantial – isn’t the american way supposed to be about justice and innocent until proven guilty – you have not offered proof.

    secondly, there are always going to be people, companies, groups who are just better at playing the system.

    capitalism may not be a zero sum game, but the stock market is pretty close to that notion. there will always be winners and loosers and always an element of insiders cornering and mastering things.

    but what really annoys me is this idea that there is some corrupt alternate society and group of people completely in control and directing all of these things.

    are you aware of just how many moving parts there are in a stock market, government, societal structure and how difficult it would be to actually to pull off this kind of thing

    it’s the same as all the conspiracy nonsense about things like 9/11 or the kennedy murders

    grow up and stop looking for these ridiculous things

    if you want to talk about a real travesty talk about how the developed world has “conspired” (to use a word that will be appealing to all of you) to set the international system of trade up so that there are real winners and losers.

    whilst you are all bleeting about GS making a few extra million/billion and all of you missing out on a few extra points in your portfolio there are people around the world starving to death because their economies cant get off the ground because of how we have set the system up.

    my final point to all of you is to grow up and get some perspective