They Don't Call Goldman Sachs the Vampire Squid for Nothing

It's amazing how long it took this story about Goldman Sachs manipulating the metals market to get out. Then it'll be amazing to see how long it will actually take for somebody to do something about it. A mere slap on the wrist perhaps, followed by minimal outrage. If using Fed liquidity had a real rate cost, this kind of thing would rarely happen and maladjustments would be controllable.



Basically, GS has secured a major warehouse for storing inventories of metals for the London Metal Exchange. Then it games the real economy by keeping a choke hold on supply.


Nomi Prins write on the latest SEC token hand slap of JP Morgan. 


Elsewhere, a policy recommendation (pre-banking crisis) about the merit of bank bailouts comes from the IMF. Of course, this sage advice only applies to second and third-world countries, not Banana Republics like the U.S.  The study of 124 banking crises by the IMF found that propping banks, which are only pretending to be solvent, hurts the economy. Once again, it's not about policy at all. It's influence and corruption that rules:

"Existing empirical research has shown that providing assistance to banks and their borrowers can be counterproductive, resulting in increased losses to banks, which often abuse forbearance to take unproductive risks at government expense. The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance."

On this very topic David Stockman nails it about well as I have ever heard on the Dylan Ratigan show.

Here come the Democrats to join the Republicans in another corrupt hand-off of tax repatriation breaks to the multinationals. Here's what the Manchurian Candidate, Presidente Hopium (Obama) said about the subject in 2009:

"For years, we've talked about shutting down overseas tax havens that let companies set up operations to avoid paying taxes in America. That's what our budget will finally do. On the campaign, I used to talk about the outrage of a building in the Cayman Islands that had over 12,000 business -- businesses claim this building as their headquarters. And I've said before, either this is the largest building in the world or the largest tax scam in the world."

But what Hopium actually does is the pathological opposite of what he says. Do you know when Hopium is lying to you? His lips move. A bipartisan bill to allow a tax repatriation is backed by key corporate lobbyists and that's all that matters, all sold on the phony justification of "creating jobs."