#444 – Dick Bernard: "Goldman-Sachs Rules the World"

UPDATE: If you have not yet read Naomi Klein’s “The Shock Doctrine The Rise of Disaster Capitalism”, do it….

Tuesday I noted this item on Yahoo news. It includes a remarkable video, worth watching, which at most recent count had been viewed well over 600,000 times on YouTube. You can access the video within the article, or directly, here.
The article and the video speak abundantly clearly for themselves. The person being interviewed is apparently real, and his opinion is informed and apparently quite honest.
Essentially: big money views financial crises like our own, and now the Eurozone, very, very warmly. Crises are big opportunities to make lots of money.
I’m like the vast majority of people: I don’t have money to “play with” in the stock market.
I do have a pension fund, and a 401-k, that are managed by larger institutions, but other than giving them very general directions in the limited ways one has (“be careful”), I don’t watch the fund go up and down. If the markets were to truly crash, I would be in trouble, just like the vast majority of us.
But the Big Boys (and Girls, too), don’t look at financial crises the way I do.
I can offer a very tiny example from my own “real world”.
In the fall of 1987, there was a near catastrophic stock market crash in the United States. I remember it pretty vividly as I was driving from St. Paul to Duluth when the news of it broke so I could listen to it the entire trip. At the time I was a novice in selling securities – mutual funds – and while I was the tiniest of small part-time players, I at least knew the terminology, and I had access to a product – a mutual fund that I was learning about. I knew what they were talking about. But the 1987 was near panic: in relative terms worse than anything that’s happened in U.S. recent history, other than the fall of 2008.
In October, 1987, I had a small savings account in my bank – perhaps $2000. It was making 5% interest – an amount that seems stratospheric today, but then was pretty normal.
I also had a single $50 share of a major public utility. It was a gift, and with the gift came the opportunity to directly buy additional shares in the utility without going through a broker and paying fees.
In a moment of risk-taking – uncharacteristic for me – I withdrew the money in the savings account, and spent part of it on a mutual fund; later I invested the rest in the public utility shares.
Later, in the manner of the times, the utility bought an interest in an automobile auction firm – an uncharacteristic move for a conservative utility – but it made a wise choice. I know how its shares did.
In my small time way, the investments were the best financial decisions I ever made. I had, as the jargon goes, “bought low”, and later I “sold high”. And the results were very impressive. My measly 5% in the bank would have yielded next to nothing compared with much, much higher returns in the market. And utility stocks are generally considered pretty conservative.
I learned that a panic response to a crisis is not very productive. Best not to be stampeded into making some decision one might later regret.
The big players understand this concept; we small-fry don’t. The “too big to fail” near-collapse of the entire U.S. banking system at the end of the Bush administration was a boon to the wealthy bankers, not a crisis at all. I think the rescue was an essential act for we citizens, but the real beneficiaries were the Biggest of the Big Shots in Finance. The same could be said for the later rescue of Big Industry, like General Motors. Necessary, but cynical.
I believe, as the better informed world apparently does as well, that Rastani (the guy in the video) is talking straight.
It may make you mad to see how we small-fry are fodder for the Big Players in Money, but it is useful to see how panic is useful in the short term to the cynical players in the market.
I can only hope that there is some sanity somewhere in the Goldman-Sachs and other towers in the World Markets in New York, London and other places. But these Big Players are, it seems, addicted to the most extreme of Risk-Reward.
In the end the entire money system may well collapse, but at the very last gasp, there’ll be some isolated tycoon out there on some remote ocean island seeing the calamity as an opportunity….

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