WHAT DOES WALL STREET ACTUALLY PRODUCE?

Goldman Sachs recently announced that the work of its investment bankers in the past year was so fabulous that they were being given bonuses totaling more than $16 billion. This caused many workaday Americans to shake their heads in disbelief – not merely at the absurd sum, but also at the notion that these soft-hand financiers are engaged in productive "work."

Goldman Sachs recently announced that the work of its investment bankers in the past year was so fabulous that they were being given bonuses totaling more than $16 billion. This caused many workaday Americans to shake their heads in disbelief – not merely at the absurd sum, but also at the notion that these soft-hand financiers are engaged in productive “work.”

What do Wall Street’s narcissistic casino dealers actually do? What do they produce for the good of society? Well, for one sterling example, check out a product they manufactured last year, called the iTraxx SovX. No home should be without one!

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No, it’s not a slick new smart phone. The iTraxx SovX – created by a consortium of Goldman Sachs, JPMorgan Chase, and a dozen other Wall Street powers – is a “sovereign credit derivative index.” A what? It’s a computerized trading scheme that allows wealthy speculators to buy “credit default swaps” on troubled European economies. Huh?

Okay, in plain language, the iTraxx is a tip sheet for global gamblers. In particular, it lets banks and hedge funds lay down big money on a wager that the Greek economy is going to collapse. In other words, if the Greek people suffer, champagne corks will pop on Wall Street, for high-rolling speculators there will have won their bet.

What a terrific product!

By the way, the Greek economy is now teetering on the brink of broke because Goldman Sachs’ financial fabricators invented another profiteering scheme a decade ago that allowed Greek leaders to hide the true depth of their country’s financial trouble. Goldman pocketed $300 million on that sorry deal, and now it’ll rake in more by betting against the economy it helped dynamite.

So, while honest work might be virtuous, Goldman’s financial flimflammery pays better.

“Banks Bet Greece Defaults on Debt They Helped Hide,” www.nytimes.com, February 25, 2010.

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