With almost $638 billion in assets, presence in 32 countries and a roster of ex-employees at the highest levels of America’s governmental financial regulatory agencies, Goldman Sachs is widely considered to be the most powerful company in the world.
But that has its drawbacks: Goldman is also thought by many to be the most evil company in the world.
Type “Goldman Sachs is” into google and the first search term that comes up is “Goldman Sachs is evil.” (See right.)
There are tons of weird rumours going around about what Goldman is REALLY up to.
Of course they’re (probably) not true, but they are amusing.
A bond scheme hatched by Greek monks went on to bankrupt the Greek economy and usher in the era of P.I.I.G.S (Portugal, Ireland, Italy, Greece and Spain), according to Michael Lewis' investigative report from last year.
What does this have to do with GS? Apparently quite a bit.
Goldman apparently created a special instrument for the Greek's bond deals and made a tidy little sum as European economies began to default like dominoes.
While the idea of 'blending into the skyline' makes sense architecturally and aesthetically, the aspirations Goldman had for its new headquarters in New York City's Financial District has made some people suspicious.
Apparently, the true reason behind such a design is terrorism. It would seem to some that Goldman's new HQ is made not only to blend in, but to protect the firm (and the precious people inside) from a 9/11 like attack.
The indisputable fact that Goldman made a profit on the mortgage-backed securities crisis, and admits to having done so, has not been a PR victory.
In fact, it has led many to accuse the company of having an instrumental role in the creation of the crisis. The theory in this case rests on the 'fact' that Goldman was fully aware that instruments like Credit-Default Swaps and Mortgage-Backed Securities were destined to fail but sold them anyway to collect fees and unload their exposure to the inevitable fallout.
A cabal of Goldman-haters, led by Rolling Stone Magazine contributor Matt Taibbi, goes a step further than just pinning the recent crisis on the company, they lay the majority of the nation's troubles over the past century on GS.
In a piece that appeared in a July, 2009 issue of Rolling Stone, Taibbi linked Goldman's actions to The Great Depression, The Internet Bubble, Rising and Falling Gas Prices, and even Global Warming.
Darth Blankfein indeed.
This theory goes like this: In 1991, a group of Goldman bankers (including future GS President and CEO Gary Cohn) saw major potential value in futures for a derivative packaged up from from 24 separate commodities. The resulting bundle combined everything from precious metals to grain and was called the 'GSCI' (Goldman Sachs Commodities Index).
Then the Government de-regulated the futures market and allowed traders to grab as much of the commodities futures market as they wanted.
Goldman's ongoing buy-up of the market on grain spurred its competitors to do the same. Large investment banks gobbled up grain shares until the price of grain skyrocketed and made it too expensive for millers to purchase actual grain, causing a food shortage.
The commonly-accepted belief that 'Goldman Sachs is in business for Goldman Sachs and ONLY Goldman Sachs' has led to speculation that the company's clients are being systematically steamrolled by the GS freight train.
This one might be true. A former Goldman exec, Thomas Mazarakis admitted to his own clients that his fundamental strategies group had gone against internal guidance and made trades that bet against Goldman's own clients. Goldman turned a profit.
And last year, a former Goldman Sachs programmer said, 'Unbeknownst to most of the non-strategists, you could see basically every position and holding across the company, whether you were supposed to or not.' (Goldman says this isn't true.)
Lloyd Blankfein and his colleagues were the largest private collection of donors to the President's 2008 campaign with contributions of almost $1 million. The amount has caused Goldman's critics to theorize wildly about the rationale.
There have been many calls for Obama to return the campaign contributions or stop appointing former Goldman execs to government roles.
And everything that Obama has done for Goldman since his election has been rife with conspiracy, from the appointment of Tim Geithner, to the awarding of TARP money to Goldman and even the recent chaos in Libya.
Whether or not Goldman Sachs has a 'Chinese Wall' barring prop traders from trading on information gleaned from the firm's client business has been questioned for some time now. (Technically, all firms that engage in both have to separate the businesses, or it's illegal.)
Last year, it emerged that Jerry Ouderkirk ran both Goldman's CLO prop trading desk and its client trading desk and that the desks were located directly next to one another. (Ouderkirk was later removed from the CLO prop trading post when Goldman stopped CLO prop trading.)
Goldman is now under fire for its alleged treatment of the women in its ranks who have filed a lawsuit and claim that sexual discrimination is rampant within the cozy corporate confines of GS.
And the evidence against Goldman is compelling this time, with a number of women showing good cause to be upset over being passed over for promotions and paid less than their male counterparts.
And then there's the whole stripper fiasco. (Just kidding.)
This is the most famous of all 'Evil Goldman' theories: That the appointment of former Goldman CEO Hank Paulson to Treasury Secretary under George W. Bush was orchestrated by Goldman Sachs to give one of their employees an ear at the top.
Paulson's decisions during the economic crisis and resultant bailout has provided most of the conspiracy theory fire. The choice to let Lehman Brothers (a historical Goldman rival) fail while stepping in to salvage what was left of Bear Stearns and AIG (which Goldman is accused of 'owning' since the bailout) had many critics shouting from the rooftops that Hank was a Goldman plant in the Treasury Department who served Lloyd Blankfein first and the American people second.
Also not helping the rumour: former Goldman executives were already swelling within the ranks of Governmental regulatory agencies.
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