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Not pointed out by Zerohedge was an interesting relationship between Citi and Goldman Sachs. Recall, that Goldman Sachs was AIG's biggest counter-party. And the fact of the matter is that Goldman would have blown up along with AIG had the Government and the Fed - with close to a trillion dollars in taxpayer money - not bailed out AIG and the big banks. Let's wipe the lipstick off that pig and call it what it was:
An AIG/Goldman Sachs de facto collapse.
Recall that Henry Paulson was Treasury Secretary when Goldman de facto collapsed. Paulson was the former CEO of Goldman and had been appointed Treasury Secretary in July 2006. As it turns out, Goldman had been impaled on AIG's nuclear mortgage -derived credit default swaps, to which GS was the main counter-party. I have always suspected that Paulson was inserted into the Treasury post because "they" knew that eventually the big banks - led by Goldman - were going to hit the derivatives wall and a Wall Street bank representative inside the Treasury would be needed to fix the problem.
Fast-forward to today. Who is the Treasury Secretary? Jack Lew. Jack Lew worked at Citibank up until late 2010, when he was moved into Government "service" as Director of the OMB. After that he was appointed Obama's Chief of Staff. In 2013 Obama appointed him to be Treasury Secretary. Lew is clearly a political beast but I find it interesting that a former Citi employee is now Treasury Secretary at a time when Citi is now the largest derivatives owner in the U.S. and the 2nd largest in the world (Deutsche Bank is #1).
And, Zerohedge points out, Citibank was the primary force behind the recent legislation passed by Congress - legislation that was buried into the controversial budget Bill - which allows banks to move their derivatives into their FDIC insured subsidiary. This legislation, by the way, is a de facto bailout-in-advance for the Too Big To Fail Banks. Remember, Obama promised no more bank bailouts. Once again he lied.
At any rate, it may of course be just a mere coincidence that Paulson was appointed to Treasury Secretary about 2 years before Goldman blew up on derivatives and Lew was appointed Treasury Secretary, well, about 2 years before Citi might blow up on derivatives. I mean, why else would Citi aggressively push for FDIC coverage of its derivatives exposure if it were not worried about fomenting risks? By the way, Citi has now moved all of its derivatives into its FDIC-covered subsidiary and it's the only bank to have done so.
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Reader Comments
Of course not! These psychopathic greedy self serving pigs are many unnameable things, but they are not stupid & when it comes to money, they don't leave anything to chance. They know exactly what they are doing, or so they think. One of their many fatal flaws is in thinking they know everything & in thinking they are so much smarter than everyone else. This in turn breeds an ego driven arrogance so profound that they end up in a whole other world... a world set apart from the rest of humanity.