How the crooks at Goldman Sachs helped cook the books for Greece

[True Earthling]

When corrupt bankers collude with corrupt governments financial calamities are soon to follow.

An old article but good refresher on how we got to this point...

The bankers, led by Goldman’s president, Gary D. Cohn, held out a financing instrument that would have pushed debt from Greece’s health care system far into the future, much as when strapped homeowners take out second mortgages to pay off their credit cards.

It had worked before. In 2001, just after Greece was admitted to Europe’s monetary union, Goldman helped the government quietly borrow billions, people familiar with the transaction said. That deal, hidden from public view because it was treated as a currency trade rather than a loan, helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means. Athens did not pursue the latest Goldman proposal, but with Greece groaning under the weight of its debts and with its richer neighbors vowing to come to its aid, the deals over the last decade are raising questions about Wall Street’s role in the world’s latest financial drama.

In dozens of deals across the Continent, banks provided cash upfront in return for government payments in the future, with those liabilities then left off the books. Greece, for example, traded away the rights to airport fees and lottery proceeds in years to come. Critics say that such deals, because they are not recorded as loans, mislead investors and regulators about the depth of a country’s liabilities.

http://www.nytimes.com/2010/02/14/business/global/14debt.html?_r=2&pagewanted=all

[NJCher]

1. it seems like wherever one looks

Wall Street is involved in some nonproductive, nefarious way.

What's it going to take to rid ourselves of these parasites?

And it just shows how "on the money" OWS is.


Cher

[dixiegrrrrl]

3. tis why I think we will find GSachs behind the Vatican scandal.

[dipsydoodle]

2. Yes - Greece was helped to hide its debt

but that's all water under the bridge now.

If any legal action were to be taken against banks involved any proceeds would be used to pay off unpaid / written off debt - Greece wouldn't benefit now.

The fact remains that Greeece subsequently kept issuing bonds the proceeds of which were used to pay off earlier debt instead of for use for future investment - teaming and lading in effect. Was bound to grind to halt sooner or later which is what has happened now - its ok being a merry go round which never stops until you want to get off.

Current bailouts cannot be perpetual. It was suggested elsewhere some time back that they best might bail out of the Euro and become dependent of non repayable international aid until they get straight.