The US investment bank Goldman Sachs is trying to close down a blogger who looks closely at the bank’s use of bailout money.
Goldman has a venerable history, promoting highly leveraged investment trusts on the eve of the 1929 Wall St Crash. The bank made big profits and got its money out in time. Shame it didn’t tell investors.
Public image is all, and the bank put its dodgy beginnings behind it, going on to become one of the most highly-regarded investment banks.
But almost 80 years later Goldman Sachs was again using the leverage trick – piling one investment on top of another using borrowed money to magnify illusory gains.
Now it wants to move on, free itself to invest again and, no coincidence, avoid Obama's proposed government limits on bankers' pay.
It’s telling everyone it wants to pay back the taxpayer, returning $10 Billion of bailout money, while remaining schtum on the fact that it received $13 Billion of cash it (as of 31 December 2008) via the government bailout of AIG – as well as up to $35 Billion in government loan guarantees.
Who’s the fall guy? A blogger and investor (who admits he’s shorting Goldman stock, ie betting it will fall – while it’s lately been rising). But worse, in Goldman’s eyes, he’s spilling the beans on the bailout fraud.