I have a few quotes in Matt Taibbi’s no holds barred look at Wall Street’s profits and bonus culture.

It is classic Taibbi, full of righteous indignation and fury over the bailed out banks quick transformation from near bankruptcy to record profits. He details 7 scams the various TARP recipients have pulled.

Here’s a taste of the article:

“The nation’s six largest banks set aside a whopping $140 billion for executive compensation last year, a sum only slightly less than the $164 billion they paid themselves in the pre-crash year of 2007.”

The question everyone should be asking, as one bailout recipient after another posts massive profits — Goldman reported $13.4 billion in profits last year, after paying out that $16.2 billion in bonuses and compensation — is this: In an economy as horrible as ours, with every factory town between New York and Los Angeles looking like those hollowed-out ghost ships we see on History Channel documentaries like Shipwrecks of the Great Lakes, where in the hell did Wall Street’s eye-popping profits come from, exactly? Did Goldman go from bailout city to $13.4 billion in the black because, as Blankfein suggests, its “performance” was just that awesome? A year and a half after they were minutes away from bankruptcy, how are these assholes not only back on their feet again, but hauling in bonuses at the same rate they were during the bubble?

The answer to that question is basically twofold: They raped the taxpayer, and they raped their clients.”

Every now and again, you spend some time with a journalist, trying to push them down a particular path of discovery. Sometimes you influence a story a bit, end up with a quote or two, but otherwise are a minor factor.

I am thrilled with how much of our conversation ended up in this article. Regular TBP readers will see my fingerprints all over this one . . .

>

Source:
Wall Street’s Bailout Hustle
MATT TAIBBI
Rolling Stone, Feb 17, 2010
http://www.rollingstone.com/politics/story/32255149/wall_streets_bailout_hustle

Category: Bailouts, Corporate Management, Wages & Income

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

46 Responses to “Taibbi: “The Best 18 Months of Grifting This Country Has Ever Seen””

  1. Except the language. I never curse. NEVER. Well, hardly ever — perhaps rarely is more accurate.

    Let’s call it only on special occasions. At worst, occasionally. Make that sometimes. And weekends — I do occasional blaspheme on weekend.

    And some weekdays. In fact, most weekdays. Any day the market is open, I am known to utter a swear word. OK, fuck it, I curse a blue streak, swear like a sailor all the time.

    But Taibbi was cursing long before I met him, so I take no credit for THAT.

  2. Marcus Aurelius says:

    BR: That’s one of the things I admire about this blog — same language you hear in the boardroom (at least every one I’ve been in).

    As far as grifting and raping goes, it’s done openly, in broad daylight (the bankers are no more concerned about people witnessing their crimes than a dog is when taking a dump on a crowded sidewalk), so it’s not like Taibbi should get a Nobel for investigative journalism.

    That said, I am concerned that the American public seems to enjoy being victimized (maybe it’s a cultural variation on battered-spouse syndrome).

  3. flipspiceland says:

    What does Taibbi mean WE haven’t done anything to change it?

    Why doesn’t he go a stepp further and name the names of those who CAN and won’t do the right thing to stop this travesty? The same names need to be in the article every time.

    The Senate and House committees that control this legislation need to be further exposed for the grifting that they are direct beneficiary of and those states and districts identified that the voters in them can do something about. TARGETED with bullseyes on their backs and I don’t much care if real 30-06 shells are used to accomplish it.

  4. ashpelham2 says:

    We simply continue down the Pink Floyd path: Comfortably numb. I look around me at restaurants, such as Subway, which is the only place I can afford to eat any more, and I see nothing but happy, thoughtless, drones with boneless faces. No one is discussing how to get back at Goldman, no one is discussing how long it’s going to take to pay back this debt, if ever, and no one seems to have any better ideas other than to bash Obama (I live in Alabama, don’t ya know). I’m not taking sides pro or con our current leaders, because, what’s the point? It’s different names and faces, but business as usual. Let’s keep our noses and buy what they are selling.

  5. ashpelham2 says:

    Keep our noses DOWN.

  6. ITDog09 says:

    I’m waiting for the YouTube video:
    (Well dressed stodgy old guy, slight British accent)

    Here at Goldman Sachs
    We make money the old fashioned way,
    We steal it from the taxpayers and
    We steal it from our clients.

  7. dead hobo says:

    How do I swear in foreign languages ?

    The foundation of a good liberal arts education

  8. torrie-amos says:

    matt matt matt, it goes back alot longer

    you’re missing the set-up, every con has several truths

    YOU COMPLETELY MISS THE WAR TRADE, SHORT THE CURRENCY BUY COMMODITIES

    that was paulson, who handed it over too blankfein, who has 20 years in commodities

    then you add in the leverage in aug 04 and you have the perfect set-up, you know where all the money is and where will it flow

    140 oil tipping point, then all of those mortage holders, with that 5k a year oil tax which no one saw coming, started to default in droves

    and the beat goes on

    you’ve missed the continued copper bullshit, copper is the new oil

    you’re a few steps behind matt

  9. [...] From The Big Picture: Every now and again, you spend some time with a journalist, trying to push them down a particular path of discovery. Sometimes you influence a story a bit, end up with a quote or two, but otherwise are a minor factor. [...]

  10. Its Me says:

    If factories were expanding, airlines were buying planes, Sky-scrappers were going up, one could look at this expansion and say “yea I can see how a bank would make money during all this”.

    But how does a business like a bank make money when there is no expansion? Blood does not come form a rock. So how does a lending company make money when there is no money leant?

  11. Darmah says:

    Couldn’t read the whole thing, it’s too depressing, so I just read the connections to the cons. Well done. I used to be angry about the whole thing, but now, just depressed. They are walking away with our money in broad daylight and no one is doing anything about it. I don’t expect either political party to step up, especially the Republicans. I know what I’d like to do, but can’t even mention it jokingly. As a buddy of mine says “bohica, baby” (bend over, here it comes again).

  12. wally says:

    “So how does a lending company make money when there is no money lent?”

    There is a lot of money lent right now – from the government to the banks and from the banks back to the government.

    It just does not go to you or to me or to a productive purpose. This is the fly in the ‘recovery’ ointment.

  13. DL says:

    Looks like the banksters in Germany are trying to get a bailout of their own. Their exposure in Greece is 43 billion Euros; in Portugal it’s 47 B euros, in Ireland it’s 193 B euros, and Spain it’s 240 B euros.

    When it’s the banks versus the voters, it’s pretty obvious who’s going to win.

  14. Bokolis says:

    What follows may seem harsh, even vulgar…but things as screwed up as this don’t change from a glorious revolution.

    As I’ve said, until Bokois sees some executions, I’ll never take righteous indignation, or our government seriously…and I don’t necessarily mean through due process. I’d prefer that, an elected official at the highest echelons of government gave up his/her own career/freedom/life (through the resulting due process, of course) to literally chop off these guys’ heads at one of these otherwise dog-and-pony-show Congressional hearings.

    I’m not advocating it; I’m just waiting to see it. In the meantime, I will continue to, as (I believe) BR has put, go about my business of picking up nickels in front of a steamroller.

  15. Moss says:

    The story depicts only the most obvious instances of rape and pillage. In effect the cyclical wave. The secular aspects of the banksters ‘innovations’ are much more insidious and destructive.

  16. hgordon says:

    Bokolis’ solution is a bit abstract. The real issue is that we (the “Main Street” constituency) need to see an actual personage to lead the counterattack, and thus far we only have bit players (Volcker, Spitzer, Warren, etc). Maybe an American version of Joseph Stalin would be the answer, though I don’t know who specifically meets that description.

  17. An Inquiring Mind says:

    This is no secret, It began a century ago. About 12 key people (call them The International Bankers) have been gaining control and manipulating governments, markets, money, etc. and slowing building power. They pass the baton on to their progeny. A mindless, purposeless activity… control of planet and its wealth just for the sake of… control of planet and its wealth. That’s the game. Wonderful isn’t it.

    Goldman Sachs is just one of their tools, out in the public eye (as is IMF, Bank of Settlements, etc.). The real guys keep themselves invisible.

    There is no conspiracy theory here. It IS what is happening.

  18. Steve Barry says:

    The grift is so obvious, yet the MSM can’t see it…we loan these institutions all this TARP money…then subsidize them with massive backstops and change accounting rules so only a total idiot would not gain massive profits. Then we cheer like the mother of a 2 year old when they pay the original TARP back. The backstops are all still in place so they take massive bonuses too. Problem solved.

  19. dr.j says:

    Happy to see we have found a group to hate. that’s just so productive. I assume if we are going to kill all the idiots this blog site would be empty. I have appreciated the aggregation of data and charts, but this emoting is fatiguing.

    Sheesh, if blame is meted out and sainthood is what we expect, why not hang the hedge fund managers who shorted MBS and did not tell everyone about the risks they saw? How about hanging the 2-20 group for over charging?

    This blog is starting to sound like a bunch of bored, ill informed housewives grousing about how they feel (self included).

    Just get back to charts and let’s reduce the public display of personal therapeutics. It is really sad.

  20. Steve Barry says:

    The article does provide this nugget (or turd depending on your worldview) of what will inevitably occur:

    I said, ‘Fuck it, let’s make some money,’” he recalls. “I absolutely did not believe in the fundamentals of any of this stuff. However, I can get on the bandwagon, just so long as I know when to jump out of the car before it goes off the damn cliff!”

  21. Steve Barry says:

    I’m sure Goldman will jump just in time.

  22. bsneath says:

    You know you are on the wrong path when a bank makes $13.4 billion in profits, pays out $16.2 billion in bonuses and compensation and you cannot find one damn thing that it has done in the tangible world of the real economy.

  23. bsneath says:

    I apologize Barry for not using proper TBP etiquette –

    mean’t to say “.. you cannot find one fucking, god damn thing….”

  24. Robespierre says:

    Bokolis Says:

    “As I’ve said, until Bokois sees some executions, I’ll never take righteous indignation, or our government seriously…and I don’t necessarily mean through due process.”

    That my friend will never happen in the US. The truth of the matter is that the US main-street has been conditioned to complete obedience through years of fear conditioning and bread and circus propaganda (current politicians learned a lot from Nazi propaganda techniques). In other words US main-street has been converted in a bunch of sheep that are perfectly happy going to the mall and watching football. By the way it does not make a difference who is in government. There are really no differences between Democrats and Republicans (see what they do not what they said). Having said that, what you wish to see has a very good possibility to happen in countries where main-street is actually politically active and has a natural distrust on their “established leaders” (Europe?). Witness for instance Greece-JPM in recently news. So if you are looking to any substantive change you should look elsewhere.

  25. The Curmudgeon says:

    A well-put addition to the case for revolution. This is fuedalism all over again. Bankers are the new aristocrats, existing in a symbiotic-at-times, and competitive-at-times relationship with government, not unlike the relationship of monarch to church before it all fell down on the Continent about end of the eighteenth century.

    Our own reign of terror, our own long march, whatever, would do us well. But I Imagine something better than just the guillotine for Goldman’s, et.al.’s, executives–I imagine taking them all to the farm to dig potatoes and cut beans. Work them like mules while the help back home in the mansion moves the rest of their family in, and eats food raised by their former masters. Brand them with a dollar sign on the forehead to signify their venal sin of caring more for money than for their fellows. Once they can’t work anymore, then shuffle them off to the guillotine.

  26. call me ahab says:

    “As far as grifting and raping goes, it’s done openly, in broad daylight (the bankers are no more concerned about people witnessing their crimes than a dog is when taking a dump on a crowded sidewalk)”

    pretty much it Marcus- the analogy is a good one-

    regarding Taibbi- hard to bring things to light that are done right out in the open- but maybe he is making sure the banks are aware of the indignation-

    not that they care however

  27. call me ahab says:

    “Brand them with a dollar sign on the forehead ”

    wow TC-

    reminds me of that scene in Inglorious Basterds where Brad Pitt carves the swastika in the Nazi’s forehead

  28. Lugnut says:

    Its all done in the open now. The Vampires have become immune to the sunlight and no longer hide in the shadows

  29. The Curmudgeon says:

    @ahab:

    It’d be the mark of their god.

    And I might also point out–we’ve really never had this type of revolution. The American Revolution was a war of our elites against England’s to see who got to get rich in North America.

    The revolution we need is of the type that destroys our feeble, corrupt, fraudulent institutions, not unlike a wildfire in the forest clears away the old growth, such that vibrant new organizations can take their place.

  30. [...] have learned absolutely nothing from the global economic meltdown.” (Rolling Stone also Big Picture, Crossing Wall [...]

  31. torrie-amos says:

    nobody will do anything until all pension money goes poof, majority of folks, now matter how you measure it, have a stake in things financially thru 401k’s, homes etc., jobs

    folks are in protection mode, not raping and pillaging

  32. TakBak04 says:

    BR…yes, indeed…many footprints could be identified by your readers.

    btw, I felt this is one of the better written articles by the magnificent Taibbi… and hopefully it gets as much or more circulation as his other articles which were very good but so filled with shock language they might have turned off some readers who couldn’t get past the “colorful” prose. If you had a hand in that, also…then that’s a good thing. His narrative and analogies to scams (“cat in the bag” and “pig in a poke” “Sting” and the rest) made it an excellent and understandable read that anyone could learn more from. Glad he’s keeping on top of the reporting on the latest, and with the outrage that many of us still feel as to why nothing has been done well over a year later. The scam goes on and yet there are folks in jail for a bag of weed or stealing a loaf of bread or two. And, there are libraries that will be closed, schools that will be understaffed and health services cut and the millions of jobs gone along with basic services and the rest….but there is no accountability for this crime of the century.

  33. Bokolis says:

    @ Robespierre:

    It was all implied in my comment…kind of why I made it.

    With regard to Greece- as my call sign may imply, I might know something here- the lot of them are both slackers and complainers. I’d like to tell you that, if they ever got worked up enough to rebel/fight, we’d really see some fireworks. I’m more inclined to believe, however, that Greeks with any drive bolted a long time ago.

    Bokolis is a libertarian, but, in power, I’d be that Stalin…for the love of my country, I recuse myself and shall prepare for the reload.

    And, thanks to both you and hgordon for correctly spelling my call sign. Though I’d much rather blame a prankish editor, Bokolis’ proclivity/penchant for communicating in the third person sometimes bites me in the ass.

  34. dead hobo says:

    Matt Taibbi said:

    “They raped the taxpayer, and they raped their clients.”

    reply:

    To the bankers:
    —————————–
    Va bouffer ta merde. Va te faire enculer. Tabernac!, Choleque de merde! Nique ta mère. Tête de noeud. Va t’faire mètt, connard

  35. wnsrfr says:

    Barry, I missed the punchline for your swearing comment…I thought for sure you were going to write “but I don’t swear at dusk, never at dusk…”

    “I used to smoke marijuana. But I’ll tell you something: I would only smoke it in the late evening. Oh, occasionally the early evening, but usually the late evening – or the mid-evening. Just the early evening, mid-evening and late evening. Occasionally, early afternoon, early mid-afternoon, or perhaps the late-mid-afternoon. Oh, sometimes the early-mid-late-early morning. . . But never at dusk! Never at dusk, I would never do that. ” -Steve Martin, Wild and Crazy Guy

  36. cognos says:

    Its been true since long before Marx/Lenin and Hitler –

    In the tough times… find the successful people and say they are “evil”.

    Witch! Witch! Witch! You guys are sheep.

  37. Zenster says:

    @Steve Barry: 11:05
    I’m more inclined to think that the MSM is smart enough to see what is going on but the owners & editors, e.g. WSJ don’t benefit from disclosing it. It takes alternative media like the blogsphere & Rolling Stone to do the heavy lifting. I became a supporting RS subscriber after Taibbi’s first Wall Street article.

    Although I’m pessimistic that the Idol & Reality watchers will ever take notice of what is actually being done to them, we have to try & wake them up. Soon they will be able to sit in front of the flat screens with glassy eyes from newly legalized “medical” pot.

    @flipspiceland Says: 9:29 – Why doesn’t he [Taibbi] go a stepp[sic] further and name the names of those who CAN and won’t do the right thing to stop this travesty? The same names need to be in the article every time.

    The Senate and House committees that control this legislation need to be further exposed for the grifting that they are direct beneficiary of and those states and districts identified that the voters in them can do something about. TARGETED with bullseyes on their backs…”

    Great idea! An interactive (sortable) spreadsheet link showing the relevant House & Senate Bills, the controlling committees & member districts & votes might be a helpful approach. The link might also include a way to get a Summary of any voter’s Representative & Senator’s votes by relevant legislation. More light has to be focused on the cock roaches. It’s one of the few things that makes them uncomfortable. The links could be on the major financial blogs like TBP, Naked Capitalism, Mish, Calculated Risk, Zero Hedge, etc. with the URL published in Rolling Stone & other willing publications, if any.

  38. cognos says:

    Why not say –

    Citigroup
    AIG
    General Motors

    “Raped” taxpayers, their clients, and their employees through their incompetence?

    I worry alot less about successful institutions. Clients are free to work / trade with them or not. We have very good laws on bribery, fraud, and even whistle-blowing. I bet GS is one of the MORE scrupulous firms. Just smarter and better run, which is always (GOOG, AAPL, MSFT, hedge funds, etc) absurdly profitable.

  39. [...] http://www.ritholtz.com/blog/2010/02/goldman-rape/If factories were expanding, airlines were buying planes, Sky-scrappers were going up, one could look at this expansion and say “yea I can see how a bank would make money during all this”. …. Bankers are the new aristocrats, existing in a symbiotic-at-times, and competitive-at-times relationship with government, not unlike the relationship of monarch to church before it all fell down on the Continent about end cheap flights from Mackay to Melbourne (Avalon) of the eighteenth century. Our own reign of terror, … [...]

  40. Robespierre says:

    cognos Says:

    “We have very good laws on bribery, fraud, and even whistle-blowing. I bet GS is one of the MORE scrupulous firms. Just smarter and better run..”

    1) If they are so smart then why do they spend millions of dollars getting people elected?

    2) Good laws are meaningless unless there is an executive branch willing to enforce them (see item 1)

  41. WallStreetNobody says:

    bsneath wrote: “You know you are on the wrong path when a bank makes $13.4 billion in profits, pays out $16.2 billion in bonuses and compensation and you cannot find one damn thing that it has done in the tangible world of the real economy.”

    That is one of the best and most telling posts I’ve read on this matter.

  42. Thor says:

    Cognos – which bank did you say you worked for again?

  43. JLDawg says:

    Pretty entertaining but very one sided. Good example is that his source in Congress is the level headed Brad Sherman. Let’s face it, the government sets the rules of the game and is in charge of refereeing the game through Congressional oversight and the agencies. They’ve failed for years but they deflect the blame to those that played within that framework. I’m not saying everything that’s been done is right, but it wasn’t illegal. Dig deeper folks. Don’t rely on a “reporter” that clearly has an agenda. If you want a simple solution, raise reserve requirements and make the banks increase reserves in GOOD times, not bad.

  44. stevenstevo says:

    Two simple questions:

    1. Why do Goldman Sachs’ clients stay with them after they get raped?

    2. JP Morgan does the exact same thing Goldman Sachs does, so why is such criticism no levied on them as well?

  45. [...] What a pleasure:  So Matt Taibbi was discussing his most recent article in Rolling Stone, “Wall Street’s Bailout Hustle” (which we discussed here). [...]

  46. arthur.i says:

    I am repeating this old post, got to love cut and paste.

    Monster Inc.

    It is a difficult complex issue and therefore will take a difficult and complex solution. IMO:

    Goldman Sachs sucks. Lloyd Blankfein is a monster, a spineless self-serving trollop. Everyone of the top 1000 executives at GS should be arrested, stripped of all their wealth, tar and feathered and then sent to spend eternity in a prison for male sex offenders and sociopaths. The surviving members of their families should be sold off to people in foreign lands.

    Repeat the above to all the other money grubbing scum sucking nincompoops who are masquerading as educated decent executives who are just doing their job in the financial service industry.

    This is not populist anger. This is a plan.

    Thank God for people like Matt Taibbi. And for people like Barry Ritholtz. Without them and others like them, how much darker would this night be?