Just a wee bit over ten years ago, in March of 1999, the Dow Jones Industrial Average crossed the 10,000 mark for the first time in history. Last week it crossed it again. The mood of the country at the first crossing was one of “irrational exuberance” according to then Fed chairman Allen Greenspan. Last week, the mood of the country could, perhaps at best be called cautious optimism. In between those two crossings the Dow had risen to over 14,500 and also plummeted to 6,500 in a roller coaster motion that was certainly not for the faint of heart. Huge fortunes were made and lost.
In 2008 we saw the onset of one of the worst market free-falls in history, the orchestrated demolition of Lehman Brothers, and the bailout of AIG and a few selected Big Banks. Conducting the orchestra for the prior administration was Henry “Hank” Paulsen, secretary of the Treasury under George W. and former chairman of Goldman Sachs. This is a key point to be engraved in our minds for Goldman Sachs is, and has been, arguably the most influential financial services firm ever to cast a shadow on planet earth. Much of what takes place in the world of high finance is either channeled through… or affected by… the movers and shakers of Goldman Sachs. Money is power.
Therefore, it should not surprise anyone to note that Goldman Sachs’ most recent quarterly earnings report revealed a profit measured in billions. When your former chairman holds (or held) all the strings in the great financial “puppet show” that was the restructuring of 2008, it’s a safe bet that you will (and did) come out squeaky clean and smelling like a rose in the end.
And while consumers can take out their anger on the other greedy Big Banks like Bank of America, JP Morgan Chase, Wells Fargo and the like… what can the little guy do to show his displeasure with Goldman Sachs? Nothing really! Few if any of us have accounts or credit cards at Goldman that we could or would move to some other investment bank in protest. In fact, speaking for myself, if I were wealthy enough to have an account with Goldman, I doubt I would want to protest anything… life is probably as tough for me as it is for Warren Buffet.
As we go forward we need to keep close eyes and ears on the relationship between our Congress and Goldman Sachs. History is likely going to repeat itself and while the current administration may attempt to call the tune, it will likely be Goldman Sachs conducting the orchestra.
Tags: dow jones industrial average, goldman sachs, movers and shakers, secretary of the treasury
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