It's really unbelievable. The
way that Goldman Sachs keeps sticking its foot in it is simply
unbelievable. Lets not review their gross profits and bonuses or their
many failed PR schemes to gloss over unseemly profits (a practice we
have dubbed "greedwashing"). Let's simply recap this week's news.
On Sunday, the New York Times
detailed in a front-page expose how Goldman may have hastened the
demise of AIG (and perhaps the global economy), by betting that the
housing market would collapse and jacking up its insurance for mortgage
securities with AIG to extract more and more money from the firm as the
housing market went south.
On Tuesday, we reported
the respected German magazine Der Spiegel revealed that Goldman did a
billion dollar deal with Greece in 2002, which helped that nation hide
its staggering debt for years. Now Greece is tottering on the brink of
default, a scenario that could lead to another global meltdown, and
Goldman's role is coming under scrutiny. (Unlike the rest of the world,
Goldman is probably hedged against a Greek collapse.)
Now the trenchant traders at Goldman have picked a new target. Not
satisfied with bringing the global economy to the brink, they now
appear to be devoting time and energy to mini, cyber attacks on bank
Little Lloyd Goes After Robin Hood
On Wednesday, British activists launched a major campaign to push
Gordon Brown's government into adopting a "Robin Hood Tax" on financial
transactions. "By taking an average of 0.05% from speculative banking
transactions, hundreds of billions of pounds would be raised every
year," their website claims.
The campaigners unveiled an amazing ad featuring British actor Bill
Nighy (Love Actually, Valkyrie, Pirates of the Caribbean) as a
deliciously smarmy banker. Nighy also took to the airwaves on the BBC's
biggest morning shows arguing that a tiny transaction tax would be
"small change for the bankers, but big change for the world."
The Robin Hood Tax campaign website
is loaded with lots of clever downloads and posters and attracted
visitors by asking them to vote for or against the transaction tax. On
the first day of the campaign launch, the tech-heads running the site
noticed that they were being spammed with 4,600 "no" votes in a short
period of time. They posted a message on the site saying "naughty
naughty" letting the spammer know that he was being "watched from the
trees." Within 24 hours they say they traced the spamming to two
computers, one allegedly registered to Goldman Sachs.
It's Not Just A Fairy Tale
Goldman has reason to be worried. On Thursday, the Financial Times
front page proclaimed that a global deal on a financial transaction tax
was in the offing and could be agreed by the G-20 countries at their
next meeting in June.
Goldman has a lot to lose if such a tax becomes a reality. Goldman's
computers may buy or sell shares as many as 1,000 times a second. It is
these high-volume, high-speed trades that would take the biggest hit.
Average investors, who hold stock for the long term, would hardly
notice. A tax of 0.20 percent, as has been proposed in the U.S.
Congress, could raise $100 billion per year. That is real money, money
that could be used to put Americans back to work, rebuild our ravaged
economy and meet other critical needs.
By today, the Robin Hood Tax "yes" vote had a substantial lead on
the "no" camp, with 28,017 votes compared with 3,300. Let's hope the
vote keeps on mounting and the campaign spreads around the globe. There
is nothing that would put the brakes on the reckless casino-style
gambling on Wall Street more than this tiny tax on the likes of Little