Tuesday, July 31, 2012

The 'Bermuda triangle' in Goldman/GR waters

There has been some buzz about the EU ombudsman looking into a complaint by Corporate Europe Observatory (CEO) to remove Draghi from sitting on the board of the G30 because it is too close to banking interests (duh!). However, there is tangible evidence of more damning sins committed by Draghi that have not received adequate coverage let alone led to a complaint. Priorities in the wrong order.

It's not the vague stuff that the financial media implies with 'his past at Goldman Sachs'.It is precise allegation of perjury in connection with Goldman Sachs/GR debt controversy. There are corroborating  ramifications implicating Goldman Sachs, the EU Commission, and the ECON Committee of the European Parliament, that also have gone under the radar.
Similarly, on a lesser level, the press sometimes allude to the fact that his son is a fixed income trader at Morgan Stanley. Yes, but Draghi's fault is compounded by having given false testimony during his nomination in 2011 in denying any personal conflict of interest.

The great news items of the past few weeks are connected to the above:
  • The LIBOR scandal in which regulators are complicit
  • The greatest extension of ECB's power since its creation through a banking union (Bloomberg)
  • An extension of joint liability to bank bailouts modeled after TARP just when US Treasury Inspector General Barofsky releases a book describing it as "a badly managed program that bailed out 'fat cat' bankers at the expense of U.S. taxpayers" (Yahoo)
The media, pundits, and all kinds of 'experts' are unable/unwilling to connect the dots, leaving the reigns of policy entirely in the hands of entities captured by the financial lobby. We name names in this post (very incomplete list).

The Goldman/GR 'Bermuda triangle' media/NGOs won't get near to
  • Draghi may have perjured himself during his nomination in 2011 about his connection to the Greek/Goldman Sachs debt fraud. Perhaps to put in relation with this, ECB has repeatedly denied Bloomberg access to internal data about the GR-Goldman swaps. Last occurence in June 2012 (ZH).
  • It's not an isolated incident: Goldman Sachs VIP Gerald Corrigan, who is also a G30 member, may have given a false testimony on the issue before the European Parliament in 2010 in regards to a 2005 'significant restructuring' of the swaps arrangement with GR
  • EU Commission Olli Rehn and ECON chair Sharon Bowles may have covered up by dismissing prosecution of the parties involved months before Eurostat even examined the contentious swaps
The common thread between these actions is they involve the GR/Goldman Sachs scandal jointly with EU officials.  There is no valid justification for the financial/Brussels media to keep a lid of silence on this or beating around the bush.

In an earlier post ECB-Watch showed that @nicholasdunbar and Marc Roche (@LeMondeFr), singled out because their coverage of Goldman/Greece benefited their career,  have engaged in serious omissions (See the '2005 blindspot').

@icouet covered the CEO complaint also noting that the Greek Goldman scandal was controversial for Draghi (Echos). calls CEO's complaint 'weird' and that's about it  (HuffPo). @Spiegel says about the Goldman/GR scandal that 'Draghi denies to this day that it was aware of the controversial business.', which is a caricature (Spiegel). @corporateeurope spotted Draghi's G30 membership early:
The Bermudan triangle is at the nexus of corporate and EU government wrongdoing, which is right up their alley. Why, then, haven't they also filed a complaint about his documented perjury?

Why it is critically relevant now

Has there ever been a more critical time than now to scrutinize the ethics track record of the ECB, as LIBOR scandal unveiled and greatest expansion of ECB power since creation about to take place? No, and the fact it wasn't done during Draghi's nomination only makes the need more urgent.
There are strong suspicions US/UK regulators covered up the LIBOR manipulation (WSWS). From the cover up of the Goldman/GR scandal we know bringing to justice perpetrators of market fraud/breaches of primary dealer duty isn't imperative of the EU Commission. In fact, it awarded an underwriting contract via EFSF to Goldman a year after the 2010 controversy.

Facts are stubborn and they cast a very dark shadow over Olli Rehn's reputation (see, for instance, '2005 blindspot'). In light of the EU Commission's (in)actions, Michel Barnier's grand gesturing on criminalizing fraud in response to the LIBOR scandal rings hypocritical.

Some bright light has yet to be shed on the actions of the ECB, the EU Commission, the ECON Committee in relation to the Goldman/GR scandal. Until these actors are cleared of any wrongdoing it is insane to grant the ECB further powers and we cannot trust Barnier/Rehn to deal with the implications of LIBOR.
There is a subtle connection between the Goldman/GR deal and LIBOR. The spokesman of Goldman Sachs before a Parliamentary debate intended to shed light on the problem (in reality a masquerade) is also chairman of CRMPG. He may have gaving false testament of high significance in response to a question from Eurostat head about the 2005 restructuring of the Greece's hidden debt (see '2005 blindspot). The EU Commission and Parliament looked the other way. It turns out CRMPG is cited in recent revelations about market rigging (ZH).

EU taxpayer a second class citizen; financiers, first class

The EU taxpayer has been on a roller coaster ride these past few years. According to the EU Commission, it has approved, to date, taxpayer funded bailoust of banks in the order of 40% of EU GDP (EU portal). The proposed banking union's pooling of deposit insurance scheme promises to expand and perpetuate this habit.

One would hope, at the very least, that the structure of banking be overhauled such as to unroot the cause of such bailouts. Barnier made this promise in 11/2011 as reported in an article titled 'Barnier panel to study break-up of EU banks' (FT). Nothing with regards to that or Glass-Steagall has filtered through the documents pertaining to the banking union, not even arguments rejecting these proposals. [1]

Isn't it obvious the planned banking union is designed by and primarily for the benefit of banking and finance?
[1] UPDATE (significant) 06 July 2012 Is banking union endgame or not? (ECB-Watch).

Also see


  1. Would you agree that the EU Financial Mass Media would be compromised be hound further tolerance by EU audience, if it comes to light that the ECB-EU Banks (Trading Desks where manipulating schemers and swindling each other for years first. With untested financial product lines. The Porsche/Volkswagen story may confirm it is all exactly playing out as blinker5 technology figures showed many years ago. 1 concerted global Bankers Family Team Action Show. Nowadays of course nobody want's to end up with the Truth and holding the empty bags in revolving conveyor lines. And if not solved, my envisioned money factory becomes reality sooner.

    PS.15 trillion US Dollars are in daily global circulation. Ireland could employ thousands just by buying US Dollars upon one single command alarm. Push the button before anyone else, using any presently known price discovery method. Much earlier as Bloomberg TV girls could even say A.

  2. I understand your job is to spread around shit

  3. Replies
    1. By Corporate Europe Observatory:

      Jan 15, 2013: The President [of the ECB] and the private finance club.


      "The Ombudsman is expected to publish his decision this month, and this background briefing is intended to provide insight into the case and present the arguments made by CEO."

      Feb 12, 2013: The ECB on the loose


      "The decision of the EU Ombudsman on a complaint filed by Corporate Europe Observatory enables the European Central Bank to associate even more closely with the financial lobby. The timing couldn’t be worse."