What can I say but, “here we go again?” If you listen to Republicans and Libertarians, those laissez-faire free marketers, who would let the ball drop where it may, and along with it the entire country, any country, you may be convinced to let the big banks and insurance companies fail because of the risky bets they made. Let them take the poison that they brewed in their cauldrons. But, you're not thinking. Because, failing along with the banks will be your retirement fund, every state pension fund, every trust fund your state and municipality (i.e., your city) has for things like road repair, transportation, utility infrastructure, and even election funding. All of it will be bankrupt or near to it. If you're a Tea Partier, then you probably think it's freedom to just let all the Fat Cat Bankers do what they want. I doubt you'll have your freedom if your city, county, state and country can't pay for elections; or when you'll have to work until you're ninety just to pay for food. You won't have health insurance – that's guaranteed.
So, this article says, “here we go again.” The world's biggest banks, Goldman Sachs, J.P. Morgan, Credit Suisse, UBS, Societe Generale, BNP Paribas and Deutsche Bank, loaned Greece more money than it could ever pay back and then they (the banks) bought Credit Default Swaps (insurance on the debt owed) so that, if Greece defaulted, AIG (and others) would pay the banks what Greece owed them. No-risk loans. And, to top it off, the banks hid the debt so that Greece could qualify for joining the European Union and the Euro Currency, which, I believe, allows a maximum of 3% of GDP debt and no more of a member country. Greece has 12% - 13% of GDP debt. The banks, according to the article, even created an “Index” (like a stock market) so they could bet, i.e., buy shares, on whether Greece would default or not. That's astonishing.
But, at least Goldman Sachs says it didn't do what Lehman Brothers did here – to the astonishment of all experts. Sachs didn't cook the books to make itself appear solvent when it had more toxic debt than it could bear, or so it says, yet it helped cook the books for Greece. Who is Sachs kidding? All of the big bankers raised their hands “to tell the whole truth and nothing but the truth” to Congress, just like Lehman Brothers CEO and Chairman Richard S. Fuld, Jr., did. But, he lied through his teeth. None of these guys can be believed.
Fuld's attorney, Patricia Hynes, says Fuld didn't know “...what those transactions were....” But, here's how that went down. A few weeks before Lehman's financial reports were due, the Controller walked in Fuld's office with the Trial Financial Reports in hand. We're showing a loss, he says. “We can't do that,” Fuld says. “We'll lose our bonuses.” Well, how about we borrow $50 billion, show it as sales, then pay it back after the financial reports? “Yea, that'd work,” Fuld says. “Lets do that. Good job, Connie. Get the bonuses ready. Brilliant. Making money out of nothing.”
In the current perversion of language where the meanings of words are turned on their heads, this kind of behavior is called “business” or “taking care of business” or “normal banking” and “Freedom.” This isn't business and it isn't freedom. This is a scam, loan-sharking, cheating. This is criminal. They're crooks! The banks scammed Greece and defrauded the European Union. And, Greece, just as culpable, was gullible thinking it was getting something to good to be true – an offer they couldn't refuse. Lehman Brothers, too, scammed the world. These scams nearly brought down the United States and may very well bring down Greece, and Spain and Italy. This ain't over yet.
The real cause is misguided ideology, ideas that suggest that capitalistic markets can “self regulate” and that government regulation should be removed, such as is constantly suggested by the Republican Party. If we care about our children and grandchildren having a chance, we won't vote for misguided ideology. The next thing that will happen is that we'll have riots in our streets for economic and social justice. Without justice, there is no freedom.