Tag Archives: Kleptocracy

Why Do US Diplomats Need Personal Paramilitary?

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David Lindorff at Counterpunch writes:

“What’s the deal with these “State Department Agents” who investigated the Indian Deputy Consul General’s visa application and her housekeeper’s pay arrangements, initially in India, and who then made the arrest at her home in New York? ……..

Doesn’t the US government have enough “law enforcement” and “defense” organizations already, without giving the State Department its own armed paramilitary operation? Embassies and Consulates already have Marine guards, already have CIA agents working undercover as “diplomats,” and have access to the FBI, the DEA, the ATF, the DOD, the Secret Service and who knows what other three-lettered organizations with armed personnel to investigate law-breaking and to defend diplomats. Why do they need this one too, particularly if all it can do is piss off the people of another country through gratuitously abusive treatment?””

Shankar Sharma: Some Insider Trading More Legal Than Others

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At last. One honest journalist out there has the spine to tell the truth about the Western establishment’s vengeance against upstart South Asian finance,  known to the moron masses as the Galleon group/Gupta insider trading (non) case.

Here’s businessman and journalist Shankar Sharma in a piece that puts to shame the drivel emanating from the entire western press (Bloomberg included), not to mention the rags published by various Indian satraps (Livemint etc):

“On July 21, 2008, Hank Paulson, the then US treasury secretary, met around 15 major hedge fund managers at the offices of Eton Park in New York — itself one of the biggest hedge funds in the world. At least five of the 15 who attended were ex-Goldman Sachs, the firm that was headed by Paulson before he became the treasury secretary.

That very morning, Paulson had spoken to The New York Times reporters and editors and had assured them that the government was looking into the book of Fannie Mae and Freddie Mac, and that this would calm the markets that had been fearing an imminent bankruptcy of these firms.

This was material, non-public information, being selectively disseminated to a group of people whose jobs were to profit from such information. And, by no less than the serving treasury secretary. (Imagine the brouhaha if something like this were to happen in India.)

Those who attended were the who’s who of Wall Street: Taconic Capital, James Chanos of Kynikos Associates (a known short-seller), Steve Mandel of Lone Pine Capital, Dinakar Singh of TPG Axon, GSO Capital (part of Blackstone group), Daniel Och of Och-Ziff and Roger Altman of Evercore Partners.

Seven weeks later, on September 6, the government did indeed take over Fannie and Freddie and put it into conservatorship, wiping out the equity holders. Their stock prices fell 85 per cent from September 5 to September 6, i.e. overnight. Precisely as Paulson had told the hedge fund group.

The government gave scanty information on the names of those present at the July 21 meeting to Bloomberg, who sought this information under the Freedom to Information Act. Paulson’s press secretary told Bloomberg to refer to Paulson’s book on the financial crisis, On the Brink. Except for the little inconvenient fact that there is no mention of this meeting in the book at all.

Now, here is an interesting thing: the fund manager who recounted this tale to Bloomberg, was already short the stock at the time of the meeting. And, he did not cover his short position after this meeting because Paulson had clearly informed the group that the government was going to “wipe out the equity holders”. So, by not cutting his already short position in these names, that fund manager ended up profiting handsomely, by riding the short position all the way to the bottom… all based on Paulson’s generous advice.

And, what is even more significant is that given the negativity surrounding Fannie and Freddie at that time, it is almost given that nearly all those who attended that Paulson meeting would have been short these stocks. The whole world was short Fannie and Freddie (for the record, short interest in both these stocks rose after the July 21 meeting to hit a yearly high on July 24). Paulson revealing the government’s hand made the decision very easy for all these funds: “Don’t cut your shorts, since these stocks are going to zero.” Perfect.

What is even more curious is: why would Paulson reveal this to a bunch of hedge funds? Revealing this to commercial bankers would probably have some minuscule sense attached to it, i.e. to get them prepared for an impending catastrophe. But, hedge funds? And, an even more damning question arises: why would Paulson reveal negative information to these hedge funds, i.e. that the equity investors would get wiped out by the government takeover? This sort of information from a regulator/government official is unheard of: they are supposed to give out generally positive information, not catastrophic, unsettling information like this. Paulson’s information could lead to only two trading outcomes: one, hang on to your shorts in Fannie and Freddie, or, two, go short some Fannie and Freddie. This short-trade generating advice coming from a regulator, and that too a seasoned pro like Paulson, is extremely suspicious, to say the least.

If this is not giving out material, non-public information, then what is? If Rajat Gupta is guilty, why isn’t Paulson? If Gupta had given Raj Rajaratnam information that Goldman Sachs was going to get an investment from Warren Buffet (and suppose, if Rajaratnam had not sold an already long position in Goldman stock based on this material, non-public information), would this have amounted to a criminal offence on Gupta’s part?

Of the many things I don’t like about this Rajat Gupta affair, one is the Indian media’s sickeningly fawning portrayal of the American justice system as one that “doesn’t spare the rich and powerful, unlike ours where the well-connected get away”, and “how justice is dispensed speedily in the US”, and so on.

Nothing could be farther from the truth. The US protects its own rich and powerful better than we can ever do. Paulson got away clean. Not even an investigation. No investigation by the Securities and Exchange Commission into the trading by these attendee hedge funds. Nothing. Just a conspiracy of silence.

Then, we have the strange case of David Sokol. He was Buffet’s No. 2, and was widely tipped to take over from the old man. Sokol bought shares of Lubrizol, prior to getting Buffet to buy the company outright. After the deal was done, Sokol told Buffet of this purchase. Buffet waved it aside, saying it was no problem. No problem? Sokol traded on inside knowledge of material, non-public information, and Buffet joined him in keeping this a secret.

When the problem came out, Sokol resigned, Buffet shrugged. And, that was it. The cover up had happened. Because any serious investigation would have led to Buffet himself becoming a party to any offence, since he chose not to report this to the authorities. Consideration for his old age? Well…

But in the meeting with the hedge funds later that day, Paulson sang a completely different tune: he revealed in precise detail (according to someone who attended that meeting) what the government proposed to do with Fannie and Freddie. He told the elite group, whose sole business was to profit from any superior knowledge and analysis of events, that the government planned to seize the two firms, and place them into “conservatorship”: a move that would allow the firms to stay in operation, but would wipe out the equity holders.

Who has the gold?

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Came across this tidbit recently:
(Haven’t tried to verify its accuracy..just passing it along, since there was recently a debate among some Austrians and their detractors about whether the Rothschild controlled the gold market)

The Missionary Review of the World, Volume 29, printed in 1906 disclosed:

“The Possession of Wealth: One Jewish banking house is estimated to control $30,000,000,000. The Rothschilds in ten years loaned $482,000,000. Nearly one-half of the gold coined, of the entire world, is said to be in Jewish hands.”

How they figured that out is a bit mystifying, but there it is.

And more on the Rothschilds:

Dutch economist Ad Broere, in his 2010 book “Ending The Global Casino,” informs us that,

“The 19th century became known as the age of the Rothschilds when it was estimated they controlled half of the world’s wealth. While their wealth continues to increase today, they have managed to blend into the background, giving an impression that their power has waned. They only apply the Rothschild name to a small fraction of the companies they actually control.”

Bandit-Bankster Corzine Protected By Holder and Freeh

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Human E vents:

“Considering the magnitude of the failure at MF Global, where over a billion dollars’ worth of client’s money was “vaporized” under legally questionable circumstances, many observers are amazed that chief executive Jon Corzine hasn’t gotten in more legal trouble.  Corzine, of course, has huge Democrat Party political connections, including a career as the Democrat governor of New Jersey, and in the Senate.  He’s a big money bundler for the Obama re-election campaign, and has continued putting big bucks in the Obama coffers long after his disgrace.

But there might just be some other reasons for Corzine’s remarkably smooth skating after the MF Global collapse, as reported by Wynton Hall at Breitbart News: documents uncovered by the Government Accountability Institute reveal that “now-defunct MF Global was a client of Attorney General Eric Holder and Assistant Attorney General Lanny Breuer’s former law firm, Covington & Burling.”

Furthermore, MF Global’s bankruptcy trustee hired the former law firm of Associate Attorney General Tony West.  The trustee is former FBI director Louis Freeh, who hired Eric Holder as a trial counsel when Freeh was working as the general counsel for MBNA America Bank in the early 2000s.  Freeh was a character witness at Holder’s Senate confirmation hearings for the Attorney General position.

The tight web of connections between Justice officials and the banking industry have led many members of Congress to demand a special prosecutor to investigate the MF Global collapse.  It looks like one more affair that Eric Holder’s politicized Justice Department cannot be trusted to investigate.”

Indian Rani: Retiring Prez Patil Traveled By Jumbo Jet With Butlers

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With even the middle-class struggling with soaring food and gas prices, farmers committing suicide (over 200,000 plus over 15 years, 17,000 in one year), electric shortages, no infrastructure, the country on austerity, the political class still rides the gravy train.

This video describes how retiring President Pratibha Patil (July 2007 – July 2012) still travels abroad in a Jumbo jet, with an entourage of 100 people including multiple cooks and butlers, and attendants.

Meanwhile,  UK PM David Cameron at least travels business class. Patil spent almost a million dollars a day when she traveled (22 trips), while the government was telling  Indians that if they earned more than 28 rupees/day (about 50 cents approx), they were not poor.

Patil is not the only one at fault, of course. And her trips were not taken on her own initiative.

But this kind of thing is rampant in the senior officialdom and their media parasites.

Yes, We Have A Banana Republic…

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Linh Dinh at Counterpunch describes the good part of the US descent into a banana-republic:

“It’s all going according to plan, this transformation of the US into a police state and Third-World nation, but what’s meant by “Third World,” exactly? A Third World country is one that is poor, with inadequate infrastructure, an obscene wealth gap and a corrupt government. America is by far the most-indebted nation on earth, with a record-setting trade deficit, so we are, in effect, much poorer than Greece, Zimbabwe, Somalia or any other basket case, but it hasn’t become manifest because we have guns, missiles and drones pointing in all directions. Using our gargantuan military to hold the world hostage, we receive more foreign aids, in the form of debts, than all the other nations combined. Riding a nuclear-armed mobility scooter, America is a gross welfare queen barging down the world’s sidewalk, but this is how an empire is supposed to work, many will smirk, and they are right, of course, until this extortion racket falls apart, and soon enough. Preparing for the inevitable, our ruling class is becoming more belligerent abroad, in a last ditch effort to prolong its advantages, and nastier at home, to slap down domestic rage at a sinking standard of living. Splurging beyond our means for decades, we will revert to the universal means, and not because we care about justice or equality, but because we don’t have a choice.

Just as there are pockets of First World opulence and luxury in even the most dismal Third World countries, rich nations also have stretches of Third World squalidness and destitution, but Third World isn’t all bad. Not by far. To survive on little requires enterprise, resourcefulness and cooperation, virtues that will emerge and even blossom as we slide downward. Ubiquitous in most Third World countries, peddlers will make a comeback here, and the black market will thrive. As globalism recedes, the local will rise. Instead of being slaves to huge corporations, we will become tiny businessmen, as long as we’re not hunted down, then fined or locked up…..

Back to the positive aspect. Each home can become a store or a restaurant. Each car is a gypsy cab. In totalitarian Vietnam, the government actually gives its people much more leeway to conduct petty business than is allowed in America. A private home can display a table with, say, five cans of soda, two brands of cigarettes and some candies, and that’s a store, though nobody is manning it most of the time. To get service, you might have to shout. It’s not their only source of income, but this pee wee initiative does bring in a buck or two a day, so it’s better than nothing. ….. There is no welfare, food stamps or Social Security in a Third World country, no safety net outside of your extended family……

One can say that the United States is becoming a police state because it is turning into a Third World country. Already, choppers snake through skyscraper canyons and tanks roll down main streets. The police state protects and advances the interests of the ruling class, which in our case is the military banking complex, and since an informal market nibbles at the profits of banks and corporations, you can expect their henchmen, cops and regulators, to stomp hard on us smallest fries. (Underpaid in a collapsed economy, cops will also use these opportunities to shake us down, so that’s a kind of tax we’ll have to pay.) In any case, it appears that as we become poorer and thinner, not to mention more enterprising or devious, and more colorful too, since everyday will be casual Friday, we will have to fend off our bullying state, if not the gangs that rise up in its place.”

Preet Bharara – Overhyped and Toothless

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Gary Weiss in Salon

“Yet nowhere in Gabriel Sherman’s well-researched piece in New York is there even one mention of Preet Bharara.

There’s a simple reason for that:  Preet Bharara is not busting Wall Street. He’s not collaring the masters of the meltdown. He’s done nothing to even slightly discomfit Wall Street’s still-ferocious money machine, or has yet to bring to justice the architects, enablers and continuers of the 2008 financial crisis — the bankers who got us into that mess, and the ones who are continuing to extract pain from foreclosed homeowners, in the New York area and beyond.

As a matter of fact, his over-hyped insider-trading prosecutions, the main focus of the Time piece, are doing the Street a favor, by targeting people who actually ripped off Wall Street — individuals like hedge fund managers Raj Rajaratnam and Danielle Chiesi, who functioned a bit like the goons who used to dope race horses in the old days.

Bharara’s insider trading targets rigged the game for their own profit by illegally misappropriating information, in effect stealing from their employers and other investors, just as the horse-dopers cheated racetracks and other betters. Another analogy, also from the racetracks of old, would be to the scam artists who used to “past-post”: bet on races after they knew the outcome.

That’s how insider trading works. It’s a form of theft and cheating. It’s bad. Bharara was right to prosecute them, just as he has aggressively pursued drug gangs in the outer boroughs. But let’s be clear on something: The big players, the Goldman Sachses, Merrill Lynches, Banks of America and so on, don’t like insider trading any more than Preet Bharara does.

And none of his criminal prosecutions to date — including his recent bust of three high-ranking former Credit Suisse execs, accused of rigging the value of mortgage bonds they held in 2008 — had any connection to the pain being felt by Americans today, which can be directly traced to the misconduct of mortgage bankers and derivatives traders in the run-up to the financial crisis.

The real perps of the financial crisis haven’t been in Bharara’s — or the Justice Department’s — cross hairs for a single moment since Barack Obama took office three years ago. It’s one of the most troublesome failings of his administration.”

Rajat Gupta Verdict: Insider-Trading & IP Theft By The Govt

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“Anyone can benefit from insider information but not anyone can afford a supercomputer. They may both provide – with fair certainty – a market advantage but only one advantage will be prosecuted.”

–    Anthony Wile, The Daily Bell

Rajat Gupta: Did Goldman Frame Gupta To Save Its Skin?

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We know that Rajat Gupta was a big Obama supporter.

We know that Goldman Sachs switched its loyalties to Mitt Romney earlier this year, mainly out of animosity to Dodd-Frank, which they claim is crushing the banks.

As early as last year  ThirdPoint LLC, said to be part of a Michael Milken-related market racketeering network, attacked Obama.

[Third Point is a leading hedge-fund that’s  credibly alleged to have colluded with Goldman Sachs in collusive raids on rivals. Documents accidentally released in a lawsuit against Goldman Sachs by Patrick Byrne of Overstock now show that Goldman did in fact pass on non-public information of its clients to select hedge-funds .

ThirdPoint has since cut stakes in Goldman Sachs in March this year, probably sensing that the firm is due for a huge beating.]

GS’s troubles are ongoing.

In March 2012, Greg Smith, a senior manager, trashed the firm, specifically Lloyd Blankfein and Gary Cohn, for corrupting the culture…..as if that were possible.

Two other Goldman executives are under investigation for tipping caught on wire-taps, Henry King and David Loeb.

[This is the evidence that Judge Jed Rakoff wouldn’t let the jury hear. It was the core of the defense’s argument that, not Gupta, but the other proven tipsters at Goldman has passed on the Buffett tip. The jury, confused by hearsay that was wrongly included of Gupta talking about non-public non-material information to Galleon, hung the Galleon case on him and convicted on this insubstantial evidence.]

Last year,  after the SEC first began administrative proceedings against Rajat Gupta (March 2011) we heard that Lloyd Blankfein had hired a big-shot DC criminal attorney (August 23, 2011).

Then, in Feb 2012,  sources close to Goldman reported to the NY Post that the nine month long investigation would likely not lead to criminal charges.

Why not?

How did they become so sure that Blankfein wouldn’t be facing charges?

Did they fix the deal around that time?

Only a month later, March 2012, the defense reluctantly began sending particulars of its charges to Gupta.

Yet it had been investigating Big Raj for a decade, and had been on the Galleon case since 2007.

What took so long? Was there any pressure from Goldman?

Was the fix in by then, and is that why Goldman insiders were so sure that Blankfein would be off the hook?

After all. Gupta is a RETIRED director at Goldman, and his main professional association is with McKinsey, not with Goldman.

He had nothing to do with the trading culture of Goldman that was the source of its problems.

He just sat on a board, which probably met a few times a year. The public, angry at Goldman, wouldn’t know that they’d been fed Gupta, to protect the core of Goldman itself.

Did Blankfein figure out that throwing overboard a South Asian patsy, albeit a powerful one, one associated with the loss of jobs to Americans, would save his skin in the media, dominated, rightly, by anger over the financial crisis?  Did it help that Gupta was also an Obama donor?

That Blankfein had an eye on PR at this time is clear because around the same time that he  made some other interesting moves, as I noted earlier.

1. He announced his support for Romney (January 2012)

2. He told the press that Goldman was in the clear (February 2012)

(This was around the time the defense was asking for particulars of the charges to be sent)

3. Bharara starts sharing Brady material (Feb 2012)

In March 2012, a month later, Bharara was finally forced to disclose what specifically he had on Rajat Gupta.

4. Blankfein was hired as a public spokesman for gay marriage by Human Rights Campaign  (February, 2012).

The timing of all these events is surely extremely suggestive…

Blankfein’s attorney, Reid Weingarten, represented WorldCom CEO, Bernie Ebbers, who was convicted in 2005 of fraudulent accounting, in the largest such scandal in US history until the Bernie Madoff ponzi.

Charles Gasparino at The New York Post:

“Goldman Sachs will not support Obama,” the firm’s CEO, Lloyd Blankfein, muttered at a recent dinner.

It was a meeting with the CEO of Blackrock, Larry Fink, himself another of Wall Street’s top Obama boosters back in 2008. But “Larry is looking for someone to support this time,” a friend of Fink told me.

Blankfein has apparently found his pick. According to people who know him, Blankfein’s bet is that Romney will win the Republican nomination fairly early, putting him in a decent position to win the presidency — and in office does his best to water down some of the more insane aspects of the Dodd-Frank financial-reform law.

Some caveats: Romney barely won the Iowa caucuses and still faces much conservative skepticism about his various flirtations with big government as Massachusetts governor. Goldman still has many committed Democrats, and Wall Street support can be fickle. Blankfein might well reverse his bet if Obama takes a commanding lead in the polls.

But with the polls fairly even, the firm so far seems to be betting big that the GOP base will conclude that Romney has the best chance of winning over independents and beating the president in November. That would allow a reversal of Obama’s most leftist policies — including financial reform, which threatens to strangle Goldman and all the big banks while doing little to address the core problems that led to the 2008 collapse.

What makes Goldman’s move to the right so striking is just how far to the left it was in 2008. The Goldman community gave more than a $1 million to the 2008 Obama campaign, bested only by donors tied to the ultraliberal University of California. But the latest contribution records (through the end of September) show that Goldman-linked givers barely crack the top 20 of Obama donors, with a little more than $50,000 toward his 2012 re-election effort.

By contrast, Goldman-linked donors are Romney’s leading source of corporate campaign cash, spending $367,200 on his 2012 effort so far. That’s nearly $127,000 more than the firm put up for 2008 GOP nominee John McCain.

Not that Goldman has suddenly become a hotbed of Tea Party conservatism. Its beef with Obama is focused almost entirely on Dodd-Frank’s impact on its bottom line.”

Tyler Durden On The Plunge Protection Team

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Tyler Durden at Zerohedge has this week’s important report. None of it is surprising if, like me, you are a paranoid conspiracist, tired of being proved right over and over and over The report only confirms what any sensible observer, who wasn’t biased or ideological, could have seen.

I differ from Durden on a number of things, one being that I’m not sure the answer to our problems is an expansion of Federal regulation or the Department of Justice.

But I don’t fall into the opposite school of thinking, either. Let’s destroy national sovereignty isn’t the solution. I think there are other approaches, but since no one asked me, I’ll keep them to myself.  Let the ideologues knock themselves out. It’s too much fun watching to stop it.

The ideological divide, and purist positions are part of the problem, not the answer. And I wouldn’t be surprised if I were to find out that it has been set up that way intentionally. It certainly plays into controlling the terms of the debate.

Be that as it may, my position is that “insider trading” is secondary to the entire post-war conduct of the state-corporate complex.

Still, does that mean we need to defend Paulson…or Gupta…if they are guilty as charged? No. Live by force and fraud, die by force and fraud is a reasonable approach to take.

We needn’t take the part of the prosecution. Indeed, we can’t, when we remember how many people were lying on their loan forms, how many journalists had their lips stuck to the backsides of politicians, celebrities and Wall Street bigwigs they were supposed to be covering, and how many regulators looked the other way through it all.

But it is also wrong to think of Paulson or Gupta as private citizens either. They are BOTH king-pins of the state-corporate complex.  We don’t know exactly what either did wrong, and at this point Gupta’s actions look like peanuts next to the role of the plunge-protection team, but let’s wait and see it unfold.

I feel compassionate to them as human beings, for sure. And my own take was always that Paulson should just have been asked to step down, return that part of his fortune that was  dishonestly acquired to the victims or give it away to some charity of his choosing.

No waste of tax-payer money, no show trials, no time wasted.

But you know, in that case, we will also have to let the jails open and let the population out too. Including murderers (you don’t know what led them to kill, do you?).

If we are going to be determinists (“Bernanke’s money printing” made me steal and lie, your honor), then surely murderers should be let out too (“Child abuse made me kill) and serial cannibals (“Vicious snuff movies made me what I am, your honor). Let them all go.

And while you’re at it, stop ANY corporation or individual from using the laws (backed the by the state) too.

Where is the libertarian outrage over Googe’s lawsuits (using Federal courts) against competitors? Where is the outrage over corporate non-disclosure agreements (upheld by federal courts) signed under duress of various kinds to hide even criminal wrong-doing? Where is the outrage over blackmail and bribery used to steal what are by common understanding public funds meant for public use or to damage weaker firms or individuals? No outrage, right?

Instead, libertarians selectively defend fraud (“no such thing as IP”; no such thing as blackmail; no such thing as fraudulent advertising or marketing; no such thing as damaging pornography; no such thing as bribery).  Or rather, they’re all good things!

You get my drift.

Behold the ideologue. He’s not a bad guy. He’s even a good guy. But he’s become too clever in his conceit (pun intended…ideology is an extended conceit…in the literary sense… and it is conceited in the moral sense). So clever that common-sense and honor have fled long ago.

[Links and tidying up to follow…I just had to unburden myself of my feelings this morning. And by the way, I’m quite sure some of these blogs on the libertarian circuit are “sponsored” by various parties” as go-to sites.

I do go to them. But I still think my own thoughts.

Zerohedge:

“Today, BusinessWeek’s Michael Serrill and Jonathan Neumann have released a blockbuster report based on a FOIA response by the Treasury, which proves that in America rules are only for little people, that this country has been a banana republic for years, that Animal Farm was spot on, and gives excruciating detail of how Hank Paulson tipped off a select group of Goldman diaspora hedge fund managers about the eventual failure of Fannie and Freddie 7 weeks ahead of this information becoming public knowledge. The report basically is a summary of a meeting that took place at the offices of Eton Mindich’s Eton Park headquarters on July 21, 2008, 7 days after his famous ‘“If you have a bazooka, and people know you have it, you’re not likely to take it out,” speech and 7 weeks before both GSEs effectively filed for bankruptcy and were put into conservatorship. Now if it only ended there it would have been fine – a case of potential criminal collusion between the government (although nothing specific against Paulson as he didn’t actually trade: he just made sure his former Goldman colleagues made money), and the 0.00001% in the face of a few multi-billionaires who most certainly did trade on material non-public information sourced by Hank. Where it however gets worse is when one considers the actual role of one Eric Mindich in the hierarchy of the Asset Managers’ committee of the President’s Working Group on Capital Markets, better known of course as the PPT: a topic we discussed first back in September 2009 when we asked “What Is Goldman Alum Eric Mindich’s Role As Chair Of The Asset Managers’ Committee Of The President’s Working Group?” Back then we did not get an answer. Luckily, courtesy of a few answered FOIA requests, some real investigative journalism, and not reporting for the sake of brown-nosing just so one can get soundbites for their next name dropping “blockbuster” and straight to HBO movie, we are starting to get the full picture of just how high in US government the Goldman Sachs controlled “crony capitalist” adminsitration truly runs.

Before we get into the details of Mr Mindich’s curious relationship with the government, here is the gist of the BusinessWeek piece, which as noted focuses on Paulson who “said he had erred by not punishing Bear Stearns shareholders more severely. The secretary, then 62, went on to describe a possible scenario for placing Fannie and Freddie into “conservatorship” — a government seizure designed to allow the firms to continue operations despite heavy losses in the mortgage markets.”

The gathering comprised some of Wall Street’s most storied investors. Mindich, a former chief strategy officer of New York- based Goldman Sachs, started Eton Park in 2004 with $3.5 billion, at the time one of the biggest hedge-fund launches ever. [Dinakar] Singh, a former head of Goldman’s proprietary-trading desk, also began his fund in 2004, in partnership with private- equity firm Texas Pacific Group Ltd. Lone Pine’s [Stephen] Mandel worked as a retail analyst at Goldman before joining Julian Robertson’s Tiger Management LLC, one of the most successful hedge funds of the 1980s and 1990s. He started his own firm in 1997. [Daniel] Och was co-head of U.S. equity trading at Goldman before founding Och-Ziff in 1994. The publicly listed firm managed $28.9 billion in November. One other Goldman Sachs alumnus was at the meeting: Frank Brosens, founder and principal of Taconic Capital Advisors LP, who worked at Goldman as an arbitrageur and who was a protege of Robert Rubin, who went on to become Treasury secretary.

In other words the point of the meeting was nothing short of the former Goldman CEO telling all his former Goldman colleagues just what he was planning on doing in his capacity as Treasury Secretary.

Others also benefited: Non-Goldman Sachs alumni who attended included short seller James Chanos of Kynikos Associates Ltd., who helped uncover the Enron Corp. accounting fraud; GSO Capital Partners LP co-founder Bennett Goodman, who sold his firm to Blackstone Group LP in early 2008; Roger Altman, chairman and founder of New York investment bank Evercore Partners Inc.; and Steven Rattner, a co-founder of private-equity firm Quadrangle Group LLC, who went on to serve as head of the U.S. government’s Automotive Task Force.”