Goldman Sachs & the 4 Not-So-Little PIIG’s

Wall Street did not create Europe’s debt problem. But bankers enabled Greece and others to borrow beyond their means, in deals that were perfectly legal.

–“Wall St. Helped Greece to Mask Debt Fueling Europe’s Crisis“; The New York Times(2/14/2010)

We all know the basic story line by now.

Some systemically-important entity is left, hemorrhaging and in financial shock, on the side of the road, the victim of (yet another) financial hit-and-run.

Yesterday, it was AIG; now, it’s Greece.

Tomorrow, it will be one or more of the other “PIIGS” (Portugal, Italy, Ireland, Spain).

The license plate of the well-appointed, luxury car just disappearing over the crest clearly reads “Goldman Sachs.” The forensic evidence at the crime scene (make that “non-crime scene”) further implicates it.

Yet when the cops pull over the speeding, inexplicably damaged vehicle, the driver explains, quite calmly and rationally, that “no laws were broken.”

And the cops — and the rest of us — are left scratching our collective heads.

(Actually, that last part about the financial cops is wishful thinking — it turns out that they work for Goldman Sachs, used to . . . or want to).

“Non-Crime Scene”

As always, Goldman Sachs’ defense is a bit more subtle and multi-layered (see the “It’s Not My Dog Defense.”)

Appearances notwithstanding, Goldman Sachs was actually speeding to get help.

Oh, and the injured pedestrian was carelessly walking in the road.

Or they suddenly ran in front of the car, deer-like, and there wasn’t time to stop.

Because, after all, driving conditions were terrible.

Which brings up the possibility (likelihood?) that other cars may have been involved.

Which doesn’t really matter, anyways, because the patient, now lying near death, was already suffering from terminal cancer.

And even that doesn’t matter, because Goldman Sachs had Greek law changed to make committing financial hit-and-run . . . perfectly legal (Oops! That would be U.S. law).

And so on.

A-r-g-g-h-h!! Enough already!!

Chapter 2: Different this Time?

What’s different this time is that apparently it’s up to ordinary Germans to decide whether to front Greece the money it foolishly promised to re-pay its Wall Street loan sharks, led by Goldman Sachs.

Of course, when the prey was AIG, Goldman Sachs merely had to pick up the phone (walk down the hall?) to make sure that it’s predatory bets were made good by the U.S. government (and the taxpayers standing behind it).

But what sway does Goldman Sachs have over 80 million German taxpayers?

Perhaps more to the point, what leverage does Goldman Sachs have over the German government?

Here’s a guess: its best instrument and lever is none other than the very same, bought-and-sold U.S. government that delivered Goldman Sachs — rather amply — from the fallout resulting from its disastrous AIG hit-and-run.

How much more of this does anyone possibly need before revoking Goldman Sachs’ driver’s license, for good??

How and whether to save the PIIG’s remains to be seen.

This time, however, the entity that should be presented with the clean-up bill — whether it’s for the funeral or the hospital — is Goldman Sachs.

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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