The great American Bubble Machine

here's the thing...

a preface to the below...

capitalism assumes 2 things:

unlimited resources
unlimited growth.

as world heats up, these fairy tales implode.

so what now?

unlimited paper resources.
unlimited greed.

now how do we all opt out?

Go read the above. Best of all, read it in print. Rolling Stone has seen us through when others have not.


and so goldman "answers" taibbi in the pages of the Murdochian (fair & balanced! We report. you decide -- as in We decide what we report) rag, as noted in the nytimes:

Investment Banking »

Goldman and Rolling Stone Writer Trade Barbs

July 1, 2009, 6:47 am

It seems that a war of the words has broken out between Goldman Sachs and Rolling Stone contributing editor Matt Taibbi, who authored an article sub-titled: “How Goldman Sachs took over Washington by engineering every major market manipulation since the Great Depression.”

The 12-page article focuses on Goldman Sachs’s Teflon-like quality, as the investment bank has managed to dodge bullets that brought down rivals like Bear Stearns and Lehman Brothers.

As The New York Post puts it, “the article echoes a string of conspiracies centered on Goldman’s uncanny ability to make reams of cash in both good times and bad.”

For example, Goldman is said to have made billions trading on both sides of a bet on residential mortgages, pocketing large sums betting against them, while the investment bank was raking in cash packaging and selling those same mortgages. (Goldman was apparently not alone in using such tactics — The Post reports that both Bear and Lehman were up to the same thing.)

However, for Mr. Taibbi, “The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity.”

It is claims like that in his article that seem to have gotten Goldman’s back up, The Post says.

Goldman spokesman Lucas Van Praag told The Post in an e-mail: “[Taibbi's] story is an hysterical compilation of conspiracy theories. Notable ones missing are Goldman Sachs as the third shooter [in John F. Kennedy's assassination] and faking the first lunar landing.”

“We reject the assertion that we are inflators of bubbles and profiteers in busts, and we are painfully conscious of the importance in being a force for good,” Mr. Van Praag added.

And it didn’t stop there. Goldman’s response so infuriated Mr. Taibbi, that he wrote a length rebuttal on his blog Tuesday, saying that “you’d have to be absolutely crazy…not to accept the notion that Goldman shouldered a significant portion of the blame for the internet mess. They were, after all, the leading underwriter of internet IPOs during the internet boom years.”

On the Goldman’s role in residential mortgages, Mr. Taibbi continues: “[W]hile their ‘former competitors’…were dumb enough to hold their mortgage paper and be sunk by it, Goldman shorted their own crap, which means…they knew that what they were selling was a loser. So while they maybe weren’t the biggest player, they were still a major player, and one can easily make the case that they were the most obnoxious player, given that they dove into this muck with their eyes wide open, unlike so many other idiots on Wall Street.”

Goldman, whose alumni appear all over the financial map, from Washington to Wall Street. survived the financial meltdown last fall, but not without help. It took $10 billion from the government’s Troubled Asset Relief Program, or TARP. It also received a $5 billion investment from Warren E. Buffett’s Berkshire Hathaway that came with a strong endorsement from Mr. Buffett.

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