wall street involved greek crisis ...

The following makes very interesting reading.

Wall St. Helped to Mask Debt Fueling Europes Crisis

By LOUISE STORY, LANDON THOMAS Jr. and NELSON D. SCHWARTZ

Published: February 13, 2010

Wall Street tactics akin to the ones that fostered subprime mortgages in America have worsened the financial crisis shaking Greece and undermining the euro by enabling European governments to hide their mounting debts.

As worries over Greece rattle world markets, records and interviews show that with Wall Streets help, the nation engaged in a decade-long effort to skirt European debt limits. One deal created by Goldman Sachs helped obscure billions in debt from the budget overseers in Brussels.

Even as the crisis was nearing the flashpoint, banks were searching for ways to help Greece forestall the day of reckoning. In early November three months before Athens became the epicenter of global financial anxiety a team from Goldman Sachs arrived in the ancient city with a very modern proposition for a government struggling to pay its bills, according to two people who were briefed on the meeting.

The bankers, led by Goldmans president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greeces health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.

It had worked before. In 2001, just after Greece was admitted to Europes monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europes deficit rules while continuing to spend beyond its means.

This was published at http://jsmineset.com/2010/02/15/in-the-news-today-463/ with a link to the full article at http://www.nytimes.com/2010/02/14/business/global/14debt.html?adxnnl=1&adxnnlx=1266149001-oxYMh/4qfponIKduZexA+g


This was also published at http://jsmineset.com/2010/02/15/in-the-news-today-463/ with a link to the full article at http://www.independent.co.uk/news/business/news/goldman-sachs-the-greek-connection-1899527.html

Goldman Sachs: the Greek connection
Investment giants role in eurozone debt crisis falls under spotlight
By Stephen Foley in New York
Monday, 15 February 2010

Goldman Sachs, the giant investment bank, is today at the centre of the row over the Greek governments finances, amid recriminations over complex financial deals that allowed the eurozone nation to skirt its debt limits.

With European finance ministers meeting in Brussels today and tomorrow to discuss ways to prevent a debt crisis threatening the eurozone as a whole, a spotlight has been shone on techniques used by Greece and other indebted countries to give the appearance of lower budget deficits and debt levels.

The euro membership rules place strict caps on the size of government deficits relative to a national economy, but Goldman Sachs and other banks helped Greece raise cash earlier in the decade in ways that did not appear in the official statistics. With the current recession causing even official budget deficits to balloon all across the continent, fears of further hidden liabilities have been contributing to the crisis of confidence in Greek debt and pulling down the value of the euro.

Goldman Sachs has been the most important of more than a dozen banks used by the Greek government to manage its national debt using derivatives.

The banks traders created a number of financial deals that allowed the country to raise money to cut its budget deficit now, in return for repayments over time or at a later date.


Jim Sinclair's comment:

After reviewing these articles and knowing the ECB has given Greece two weeks to disclose every particular concerning the swap arrangements made between Greece and the usual suspects, the following are reasonable conclusions.

1. The over the counter derivatives are, without any doubt whatsoever, the culprit that took a normal recession into what may well be a decade of economic suffering.

2. The manufacturers of over the counter derivatives in all cases are the usual suspects.

3. Swaps can be used to make camouflaged loans which might well be to some degree what occurred between the US Fed and EU governments in the liquidity crisis.

4. Governments, even poor ones, have the capacity to defend themselves via their intelligence agencies if attacked.

Wall Street is made up of cowards that rush to turn each other in if it is in their benefit. The strategy of breaking countries could easily prove contra-productive as the deed lies in the paper trail.

My comment:

Is there no end to the financial havoc the greedy banksters have caused in the US and the world by their unethical conduct?

Enough is enough.

These banksters must not be allowed to further profit while the vast majority suffer as a result.

Is it any wonder that in a world with one financial crisis followed by another with printing presses running 24/7 that smart investors are turning to gold and gold equities?