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Weekend Assaults: Dominique Strauss-Kahn, Greece, and Goldman Sachs

Posted by Larry Doyle on May 16, 2011 6:17 AM |

What a weekend. I would like to comment on two specific situations.

1. Dominique Strauss-Kahn

Just when you think the world could not suffer any further ‘assaults’ from global financial executives on our sense of decency and the virtuous pursuit of truth, transparency, and integrity, enter IMF chief Dominique Strauss-Kahn. While Kahn obviously is innocent until proven guilty and is entitled to due process, his arrest this weekend in New York City on charges of attempted rape, sexual assault, and unlawful imprisonment upon a hotel maid evinces many reactions including:

1. Did he not have other things on his mind worrying about an imminent Greek default and/or restructuring of Greece’s financial debacle?

2. Do you think this is the first time he has engaged in this type of behavior?

3. Do you think that knowledge of these types of behaviors – if they have occurred previously – could lead to chances that Kahn and ultimately the IMF effectively be extorted?

4. Here’s hoping our criminal justice system operates with a blind eye and that New York Police Commissioner Raymond Kelly gets personally involved in making sure ‘justice is done.’

5. Do you think Kahn really needed the $3,000 room? Out of touch with reality perhaps?

6. You can rest assured the boys on the Wall Street trading desks will have a grand old time bantering jokes about Dominique today. Please share.

2. Greece and Goldman Sachs

At some point, Greece will inevitably default on or restructure its debt. Anybody involved in finance knows this is a virtual certainty. What many may not know, though, is the extent to which Wall Street aided and abetted Greece in disguising and hiding its true financial position. Really? Oh yes.

Wall Street is exceptionally talented in structuring derivative transactions that may not break the letter of the law but certainly press hard upon the spirit of the law. Wall Street gets paid handsomely in the process.

On this topic, I had referenced Goldman Sachs’ role in facilitating Greece’s disguising of its true level of debt in my appearance on CNBC in March 2010. Did Goldman merely execute one transaction with Greece to help it disguise its true financial position? Why would these parties want to do that? In the spirit of  “if one beer is too many and a thousand is not enough,” we learn Greece Had 13 Off-Market Transactions With Goldman To Hide Its Debt:

Greece had 13 off-market derivative contracts with Goldman Sachs, most of which swapped Japanese yen into euro in a 2001 transaction aimed at concealing the true size of the nation’s debt, according to the European Union’s statistics office.

The amount borrowed through the swaps was due to be repaid with an interest-rate swap that would have spread payments through 2019, Eurostat said in a report yesterday. In 2005, the maturity was extended to 2037, the report said. Restructuring the swaps spread the cost over a longer period, leading to an increase in liabilities and debt, Eurostat said.

Repeated revisions of Greece’s figures, beginning in 2009, spurred a surge in borrowing costs that pushed the country to the brink of default and triggered a region-wide debt crisis.

The use of off-market swaps, which Greece hadn’t previously disclosed as debt, let the country increase borrowings by €5.3bn, Eurostat said in November.

Eurostat said most issues surrounding the swaps were resolved in September, when Greece agreed to correct its debt figures.

Speechless? Enraged? Ready to give up wondering what the hell is really going on in the world? All of the above?

Does the stench from the pigsty occupied by the likes of Kahn and others who would ‘profit’ while abusing their position overwhelm you?

I can understand, but encourage you to stay the course. Rest assured that while bulls and bears operate everyday on Wall Street, ultimately ‘pigs get slaughtered.’

Larry Doyle

Isn’t it time to subscribe to all my work via e-mail, an RSS feed, onTwitteror Facebook?

I have no affiliation or business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

  • Dommy

    On Strauss-Kahn’s twitter feed today “IMF’d” … Q: who had a worse weekend: DSK or Jorge Posada?

  • Hawk

    Quite unseemly on all counts.

  • Peter

    Larry

    All seems a bit bizarre that you publish this article on Sunday (1 day after the event) and by Monday, if I Google ‘Strauss-Kahn, Greece, Goldman Sachs’ references to your poison appears in……10 of the top 10 search listings on Google? Are you doing evil to get such a result?

    Looks all very well planned from my position of observation as a complete outsider in North London.

    “What’s the story morning glory? Wake up” (Oasis, UK rock band)

    The world is not a idiot.

    You seem to have a policy of ‘completly discredit the messanger’ before Euro/Greeek hell-default’.

    Goldman, the vampire blood-sucking squid (http://www.rollingstone.com/politics/news/the-great-american-bubble-machine-20100405) has ill-advised Greece, and this has been fatal for both Greece and the Euro (http://www.spiegel.de/international/europe/0,1518,676634,00.html)

    Let’s face it Larry, this is a fit-up job, and a clever PR firm is behind your conquest of search results and the digital channel. The artilcle is not objectove – hastily written on provided data.

    Can you retract and await further analysis? The Greece / Goldman Sachs corruption will surface soon, and then the world will ask about the integrity of posting such as yours; especially when they dominate 10/10 Google search rankings on the first page. You are almost the victm of your own ‘digitally’ engineered success…..with no room for Orwellian ‘thought crime’ against the PR offensive.

    Peter

    “Never fear the noisy timid and compliant mouth piece. Bring on the organ grinder”
    Ayn Rand

    • LD

      Peter,

      I appreciate the comment you left on my post. I have to chuckle though if you think that there is something nefarious or underhanded on my part. I can promise you there is not.

      The simple fact is I have written extensively over the last two and a half years at my site Sense on Cents. My total number of commentaries is upwards of 1800. I have tagged these commentaries with any and all appropriate tags. Additionally a number of other outlets source and distribute my work in totality or selectively. What is the end result? I have very high Google Analytic rankings. I promise you there is nothing more at play than that.

      I would be happy to chat further about this specific commentary which I wrote on Monday morning at 6am EST before heading out for the day.

      I have no agenda. I like having a voice and sharing my thoughts on issues of the day.

      I will admit that I do not completely follow your line of reasoning in your comment. I am flattered to think that you may believe I have a PR firm working for me. I assure you I do not. Just me with occasional editorial assistance from a friend.

      I respect and appreciate your thoughts and hope we can continue our dialogue.

      I stand by my commentary.

      Best,

      LD

      • http://www.bisant.com Peter

        Happy to. The last post I submitted was denied by your web server.

        • http://www.bisant.com Peter

          Best send me a direct email. I will show you an image of the search results page. I have never seen a Google page like it.

          • LD

            Peter,

            After your comment, I also inputted the search words you referenced and saw the various outlets that picked up my story. I can only gather that my efforts over the last thirty months are making some decent progress in making an impact and impression in the blogosphere.

            I can assure you that there is nothing sinister or otherwise at work here at Sense on Cents. In fact I pride myself on the virtues of truth, transparency and integrity.

            I did write to you directly but I wonder if my message from my site’s email address got caught in your spam filter. I will write from my personal email address.

            Looks like your initial comment may have upset some of the crowd in the front row. Nothing wrong with some good natured jawboning in the midst of pursuing truth and justice both in delivery and content.

            Best,

            LD

      • http://www.bisant.com Peter

        Who is winningforextradestrategy.com

        Larry?

        http://www.winningforextradestrategy.com/forex-analysis/weekend-assaults-dominique-strauss-kahn-greece-and-goldman-sachs.html

        Comes in the top 15 on Google – before Bloomberg or The Guardian, but appears to be classified ads with no
        ads? Check out ‘Banner 468×80′ top right, these are the pixel dimensions of an unsold banner advert by the publisher

        Peter

        • LD

          Peter,

          I know you remain convinced that there is some sort of conspiracy with this story but I can assure you there is not. There are a fairly significant number of outlets that source and spread my work.

          Specifically in regard to winningforextrading, I have no idea who they are but I do recall allowing them permission to carry my work a while back. I viewed it as filler for them more than anything else. There are hundreds of sites like that.

          Very often my stories will be mixed in with those of major media outlets. Again as I referenced previously, the three key words you reference I have incorporated right in the title of this story. It’s like hitting a trifecta at the track.

          If there is a conspiracy, somebody forgot to tell me.

          Maybe I should ask these outlets to make me an offer for my site? What do you think??

    • http://www.bisant.com Peter
  • Peter S.

    Today’s WSJ: “Goldman is striving to win more investment-banking business in emerging markets such as Brazil and India in an effort to capitalize on the fast growth of those economies.”

    What are the odds that they will use Greece as a reference?

    • http://www.bisant.com Peter

      Thanks Peter S,

      ‘Brand-drift’ will be the problem.

      I’m no great fan of any of the parties implicated in this sorry media spectacle. But the relationship between Goldman Sachs and the Greek government, and ultimately the ECB (France / Germany) will unravel.

      Have Goldman broken the Euro-zone? Was DSK really the only man who could broker a fix? Would he immanently have gone on to throw his hat into the ring for French President for the left (Yes)? Are Goldman ‘cleaning drains’ for themselves and others?

      How does all this stack up again a quote ‘We do God’s work?’

      He had a known weak spot for women, but this looks like a ‘fix-up’, probably because he knew the extent of the GS advice to Greece, the ultimate impact… blah blah conjection etc.. Euro-zone break-up? Real people live in the Euro zone! Real human misery http://www.guardian.co.uk/business/2011/may/08/greece-faces-new-bailout-deal

      I think ultimately he’ll be relaesed when he cannot run for president, has resigned from the IMF, and they decide the evidence is inconclusive.

      Seen that, got the T-shirt. T’is ‘The World at Work’!

      Peter

  • cru82sader

    PETER FROM LONDON….AKA DUNCE FROM THE UK

    • http://www.bisant.com Peter

      Thank you for your reply. Not sure where the dialogue goes from here.

  • Hawk

    Peter …..your inane commentary is reminiscent of the foofoo bird who, like you, flies in ever increasingly smaller concentric circles until it disappears up it’s own arse . Let’s hope you disappear soon.

    Give’em Hell LD

    • http://www.bisant.com Peter

      Do ‘Hawks’ eat Foofoo birds?
      You might get a bit of indigestion.
      Which falconry do you come from? Who feeds you?

      I fly in a straight line

      • Hawk

        Foofoo birds would not be eligible for the Hawk’s table, given the nauseating and noxious malodorous scent common to the foofoo species. I eat what I kill and have for quite some time, my fine feathered friend. I would welcome the opportunity to match flight records with you Pedro. As for your insistence that you fly straight…… A brief read through of your nonsensical posting proves otherwise.

        Bye Bye Foo Foo

        • http://www.bisant.com Peter

          Give us some facts Hawk. This is just ‘attack, kill eat’…Repulbicanism?

          Do you like the tea party? Would you give me a direct answers? Or do you deny Obama is a US citizen? Direct response?

          Please stop the ‘death related’ responses and inspect the data. Google the terms. It has now been a week and nothing comes up on the first page of Google search results other than Larry’s column. How, for three highly searched terms is that possible?

  • DSK

    A majority of those polled in France believe DSK was set up.

    Meanwhile the chants of “na, na, na, na, ….na, na, na, na…hey, hey, hey …Good Bye…” will now resonate as DSK has resigned his post as head of the IMF.

    Hopefully real justice will be served with no question of underhanded deals.

    • http://www.bisant.com Peter

      Hi DSK

      Soon he’ll be unable to run for French president. Then, he’ll be released without charge. Let’s watch the plt unfold….

  • DSK

    Indicted …No winners in this situation…truly very sad for everybody impacted by this.

    Let justice be done.

  • http://www.bisant.com Peter

    From the guardian in London
    “The IMF is run by its governors and executive directors, of whom the overwhelmingly dominant authorities are the US treasury department, which includes heavy representation from Goldman Sachs, and, secondarily, the European powers.

    http://www.guardian.co.uk/commentisfree/cifamerica/2011/may/19/imf-dominique-strauss-kahn

    Makes re-reading the Goldman’s role with respect to Greece and interesting one.

  • http://www.bisant.com Peter

    From the Huffington Post

    “Strauss-Ka­hn was trying to move the bank in a more positive direction, a direction that didn’t require that countries leave their economies open to the ravages of foreign capital that moves in swiftly–p­ushing up prices and creating bubbles–a­nd departs just as fast, leaving behind the scourge of high unemployme­nt, plunging demand, hobbled industries­, and deep recession.

    Strauss-Ka­hn is being prosecuted for speaking out about Goldman Sachs/ JP Morgan banking corruption­.
    Our govt is infiltrate­d by Goldman Sach ex employees.
    Goldman has massive investment in France.
    Who do you think they like better, puppet Sarkozy or a massively popular Socialist running for French President?
    This guy is going down in the name of out of control capitalism­!!!!”

    http://www.huffingtonpost.com/steve-clemons/the-meaning-of-strauss-ka_b_862357.html

  • http://www.bisant.com Peter

    Strauss-Kahn was on the plane to re-structure Greek debt. But, as the Automatic Earth has it

    “Goldman Sachs and the Greek government engaged in some 13 currency swap deals over the past decade. Secretive, over the counter, backroom deals set up with one purpose only: hide the depths of the doldrums. And while it’s impossible to gauge the exact “standing” of those specific deals, they are an indication of what is at stake.

    German banks alone have €28 billion in Greek debt on their books. That does not include any swaps! A haircut such as that which would probably be required in a run-of-the-mill debt restructuring might be in the vicinity of 50% or more. Which would take €14 billion out of German banks’ books. And many billions more out of other global banks. They would need to recapitalize, and some might not be able to do so.

    But that’s not the worst part. Those same German banks carry €114.7 billion in Irish debt, and €146.8 billion in Spanish debt. That is still only the German banks. What British, French, Dutch and Spanish banks hide in their vaults at 100 cents on the dollar (or euro) is easily an order of magnitude more.

    And that’s how we get to our word of the day. Reprofiling.

    Another bail-out would be A) useless and B) politically untenable. The logical next step, restructuring, risks the bankruptcy of an entire series of smaller and larger financial institutions. So something in between was needed. And that has become “reprofiling”. Which in essence is a term devoid of any real meaning. But that doesn’t matter much in a world in which accounting standards are routinely changed on the fly, and in which private losses are not recognized, but instead transferred to the public sector.”

    Getting DSK out of the way enables……






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