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Generational Dynamics Web Log for 6-Oct-2010
6-Oct-10 News -- Scapegoats found for financial crisis, while bankers continue to lie

Web Log - October, 2010

6-Oct-10 News -- Scapegoats found for financial crisis, while bankers continue to lie

France, on high alert for terror, arrests 12 people

Scapegoats found for financial crisis, while bankers continue to lie

On Monday, Goldman Sachs senior investment strategist Abby Joseph Cohen appeared on CNBC and lied about the S&P 500 price/earnings ratio index, as we reported yesterday.

On the same day, Iceland's Parliament voted to bring criminal charges against former Prime Minister Geir H. Haarde, according to Ice News. It's not surprising that Iceland's politicians needed a scapegoat, since as many as 8,000 Icelanders were protesting and throwing eggs, tomatoes and paint at the Parliament building, according to Bloomberg. They were protesting the severe financial hardships that Icelanders are undergoing from forced austerity.

And in France on Tuesday, a court sentenced a young trader, Jerome Kerviel, to three years in prison for causing the financial crisis at Sociéte Générale. He didn't make a penny from the trades that he placed, according to CS Monitor, and he says that his management tacitly approved of what he was doing, as long as he was making money for the bank.

The contrast is absolutely incredible.

The global financial crisis was caused by massive fraud perpetrated by almost every major financial institution in the world, led by Goldman Sachs. Abby Joseph Cohen herself has undoubtedly made millions of dollars in bonuses and commissions for her part in this world wide fraud.

And even now, she's still on TV lying about price/earnings ratios to protect her bonuses and commissions, as we reported yesterday.

And yet, the two people facing criminal action did not make any money at all, and had little if any responsibility for causing the massive defrauding of investors around the world.

Former PM Haarde claims that he had no way of knowing that Iceland would face a financial crisis. But that claim is laughable, since I first wrote about Iceland's impending crisis in 2006, and I wrote about it just after Fitch Ratings issued a new rating on Iceland's banks, revising the country outlook from "stable" to "negative." So obviously a lot of people knew that Iceland was headed for financial problems in 2006. In fact, it seems that almost everyone knew except Iceland's Prime Minister.

So I suppose you could say that Haarde deserves to be charged.

But wait. In August, 2009, I wrote "Iceland begs for mercy as Europe turns the screws," I pointed out that European countries had invited Iceland banks into their countries, and must have been fully aware of the Fitch downgrade. In other words, politicians throughout Europe were as guilty as Haarde. But Haarde is the scapegoat.

So undoubtedly, both Haarde and Kerviel deserve to be the targets of some kind of legal action. The problem is that a lot of people deserve it a lot more, especially people who made huge amounts of money by defrauding investors.

Additional links

There is growing skepticism in Europe about the terror alert that the US issued last weekend, because of its imprecision. It was a blanket US call for travelers to watch out for terrorist attacks in public places, but didn't mention any place to avoid or even a country. It was so vague that it provides little or no guidance to travelers, and it doesn't seem consistent with intelligence data from the European countries themselves. Debka

France has been on high alert for terrorist attacks for several weeks, because of threats from militants in Algeria and Morocco, part of Al-Qaeda in the Islamic Maghreb (AQIM). On Tuesday, French police arrested 12 people and seized guns in anti-terror raids linked to the warnings from US officials that al-Qaeda may be planning Mumbai-style attacks in Europe. Agence France Presse

Japan's Prime Minister Naoto Kan gave a speech in Brussels, at a meeting also attended by China's President Hu Jintao, in which he indirectly criticized China for its continuing retaliatory actions in the disagreements over the disputed islands in the East China Sea. Japan Times

Donald Trump says that he's "seriously considering" running for president in 2012. Fox News

(Comments: For reader comments, questions and discussion, see the 6-Oct-10 News -- Scapegoats found for financial crisis, while bankers continue to lie thread of the Generational Dynamics forum. Comments may be posted anonymously.) (6-Oct-2010) Permanent Link
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Generational Dynamics Web Log for 6-Oct-2010 6-Oct-10 News -- Scapegoats found for financial crisis, while bankers continue to lie

Scapegoats found for financial crisis, while bankers continue to lie

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Generational Dynamics Web Log for 6-Oct-2010
6-Oct-10 News -- Scapegoats found for financial crisis, while bankers continue to lie