Not that Goldman Sachs is the only vampire squid bank out there pushing global governments to the brink for their own profit, but I thought this was instructive. By the way, this is only a variation on the same thing bankers have done with U.S. cities and states on their pension obligations. My advice: If you're introduced to a banker, spit on the ground at his feet. You can't be charged with assault, but it gets the message across!

Now, though, it looks like the Greek figure jugglers have been even more brazen than was previously thought. "Around 2002 in particular, various investment banks offered complex financial products with which governments could push part of their liabilities into the future," one insider recalled, adding that Mediterranean countries had snapped up such products.

Greece's debt managers agreed a huge deal with the savvy bankers of US investment bank Goldman Sachs at the start of 2002. The deal involved so-called cross-currency swaps in which government debt issued in dollars and yen was swapped for euro debt for a certain period -- to be exchanged back into the original currencies at a later date.

But in the Greek case the US bankers devised a special kind of swap with fictional exchange rates. That enabled Greece to receive a far higher sum than the actual euro market value of 10 billion dollars or yen. In that way Goldman Sachs secretly arranged additional credit of up to $1 billion for the Greeks.

This credit disguised as a swap didn't show up in the Greek debt statistics. Eurostat's reporting rules don't comprehensively record transactions involving financial derivatives. "The Maastricht rules can be circumvented quite legally through swaps," says a German derivatives dealer.

In previous years, Italy used a similar trick to mask its true debt with the help of a different US bank. In 2002 the Greek deficit amounted to 1.2 percent of GDP. After Eurostat reviewed the data in September 2004, the ratio had to be revised up to 3.7 percent. According to today's records, it stands at 5.2 percent.

At some point Greece will have to pay up for its swap transactions, and that will impact its deficit. The bond maturities range between 10 and 15 years.

Goldman Sachs charged a hefty commission for the deal and sold the swaps on to a Greek bank in 2005 while Henry Paulson was CEO.

Taibbi responds to the recent David Brooks column that's clearly aimed in his direction, and pretty much eviscerates him. Fine with me, since I can't stand Brooks' "rational centrist" schtick:

What’s so ironic about this is that Brooks, in arguing against class warfare, and trying to present himself as someone who is above making class distinctions, is making an argument based entirely on the notion that there is an lower class and an upper class and that the one should go easy on the other because the best hope for collective prosperity is the rich creating wealth for all. This is the same Randian bullshit that we’ve been hearing from people like Brooks for ages and its entire premise is really revolting and insulting — this idea that the way society works is that the productive ” rich” feed the needy “poor,” and that any attempt by the latter to punish the former for “excesses” might inspire Atlas to Shrug his way out of town and leave the helpless poor on their own to starve.

That’s basically Brooks’s entire argument here. Yes, the rich and powerful do rig the game in their own favor, and yes, they are guilty of “excesses” — but fucking deal with it, if you want to eat.....

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Well! This certainly should be an interesting summer:

WASHINGTON – A House panel has subpoenaed documents that lawmakers say could shed new light on Federal Reserve Chairman Ben Bernanke's role in Bank of America's acquisition of Merrill Lynch.

The subpoena comes ahead of a hearing next week in which Bernanke is scheduled to testify.

Lawmakers have accused Bernanke and President Bush's treasury secretary, Hank Paulson, of pressuring Bank of America Corp. Chief Executive Kenneth Lewis into the deal and urging him to keep quiet about Merrill's financial problems.

Not divulging that information would have violated Lewis' fiduciary duty to the bank's shareholders.

Lawmakers also have questioned whether Lewis threatened not to go through with the merger in order to squeeze money from the government.

What have I said, over and over? Bill Kristol is NEVER right. And even Foreign Policy Magazine agrees with me, as they list the worst predictions of 2008 and who else but our favorite war-mongering chickenhawk neocon, William "The Bloody" Kristol.

“If [Hillary Clinton] gets a race against John Edwards and Barack Obama, she’s going to be the nominee. Gore is the only threat to her, then. … Barack Obama is not going to beat Hillary Clinton in a single Democratic primary. I’ll predict that right now.” —William Kristol, Fox News Sunday, Dec. 17, 2006

Weekly Standard editor and New York Times columnist William Kristol was hardly alone in thinking that the Democratic primary was Clinton’s to lose, but it takes a special kind of self-confidence to make a declaration this sweeping more than a year before the first Iowa caucus was held. After Iowa, Kristol lurched to the other extreme, declaring that Clinton would lose New Hampshire and that “There will be no Clinton Restoration.” It’s also worth pointing out that this second wildly premature prediction was made in a Times column titled, “President Mike Huckabee?” The Times is currently rumored to be looking for his replacement.

Oh Hallelujah! What a Christmakwanzukkah present that would be. Also in the Hall of Shame:

2. Jim Cramer of Mad Money, for advocating holding onto BearStearns stock six days before it lost 90% of its value and was eventually sold to JP MorganChase.

3. Dennis Blair and Kenneth Lieberthal, for seriously underestimating the potential risks to oil tankers along shipping lanes.

4. Donald Luskin, for not only denying the existance of a recession, but questioning the sanity of anyone who thought we might be in a recession.

5. The Economist Magazine, for their rose-colored view of Kenya's presidential election.

6. Business Week for their prediction that Hillary Clinton and Michael Bloomberg would duke it out for the Democratic nod, only to have surprise underdog John McCain win the presidential election.

7. Scientist Walter Wagner for his opposition to the Large Hadron Collider by suggesting everything from mini-black holes to all out planetary destruction would result.

8. Goldman Sachs analyst Arjun Muti for predicting $200/barrel oil by year's end.

9. Charles Krauthammer, for his completely wrong forecasting of the battle between South Ossetia and Georgia...(not predicting foreign warfare correctly is a specialty of Krauthammer, evidentally).

10. Henry Paulson, for assuring that the banking industry was stabilized by his magic spewing of $700 billion to various industries with little to no oversight.

Please, can we call out an end to taking seriously people like Kristol, Cramer and Krauthammer now?

CNN's Christine Romans looks through the archives and finds that either the Bush administration was completely oblivious to the impending financial crisis, or were simply lying to the public. Watch and reach your own conclusion.

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ROMANS: It's about as dire a President can get on the economy.

PRES. BUSH: We're facing a choice between action and the real prospect of economic hardship for millions of Americans.

ROMANS: This from an administration that for months said the economy was vibrant, the financial system strong. The President didn't acknowledge 'storm clouds' until last December, By then, it was raining.

The horror, the horror:

"We have a treasury secretary in America - Hank Paulson. I'm afraid he's gone insane. He's become like the Colonel Kurtz of Treasury Secretaries. He's gone native. He's co-opted trillions of dollars of American taxpayers' money and he's playing hedge fund like a rogue trader. We have got a rogue trader in the Treasury Secretary's office. He's being aided and abetted by Ben Bernanke who's been discredited as the entire Federal Reserve Bank has been utterly discredited. We're looking at a possible inflationary depression in America and the worse is yet to come, much worse is yet to come."

"To pay for all this insanity from Hank Paulson, they have two options. They can either raise taxes or they can inflate the money supply. They can destroy these things US dollars [waves a dollar bill at the camera]. Dollars 30 years ago used to be backed by this stuff - gold [waves a gold coin at the camera]. Now thanks to Hank Paulson and Ben Bernanke US dollars are backed by these - bananas [waves a banana at the camera]. They're absolutely worthless. Anyone buying US dollars today is going to lose money."

Do read on....

James Fallows: Palin shares some toxic traits with our current leadership: Ignorance, lack of curiosity, 'decisiveness,' and of course, dishonesty. It's really epic. Is it possible to support a candidate who campaigns on the notion that expertise is simply irrelevant? Hell yeah! Facts are overrated.

The Anonymous Liberal: John McCain has become a pathological Pinocchio, spouting a torrent of lies.

The Brad Blog: Legendary rightwing vote-suppressor honored by Republicans in D.C.

The Big Picture: Hank Paulson's God Complex just got bigger. The Director of Government Bailouts, and head of the Socialism Department at Treasury has informed Congress to back off his turf.

Bob Geiger: The Saturday Cartoons

Helping people is not the role of government according to conservatives, but when Wall Street screams, they listen. Fannie and Freddie are getting some help from Uncle Sam.

U.S. Treasury Secretary Hank Paulson said yesterday that the U.S. authorities will provide additional liquidity to the troubled mortgage groups and pledged to buy stakes in the pair should market conditions worsen...

I'm not against help from the government, but it's so hypocritical to then attack Americans who believe government can help them too. Do you hear that all ye little Saturday FOX Stock show freaks? That means you----Jonathan Hoenig.

Jonathan Honeig thinks it’s a right to smash a dog’s head against a wall

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WSJ: Fannie and Freddie: Another Bailout That Leaves Shareholders Starving