Matt Taibbi ~ AG Eric Holder Has No Balls

Rolling Stone | RS_News | August 15 2012

OPINION ~ I’ve been on deadline in the past week or so, so I haven’t had a chance to weigh in on Eric Holder’s predictable decision to not pursue criminal charges against Goldman Sachs for any of the activities in the report prepared by Senators Carl Levin and Tom Coburn two years ago.

Last year I spent a lot of time and energy jabbering and gesticulating in public about what seemed to me the most obviously prosecutable offenses detailed in the report - the seemingly blatant perjury before congress of Lloyd Blankfein and other Goldman executives, and the almost comically long list of frauds committed by the company in its desperate effort to unload its crappy “cats and dogs” mortgage-backed inventory.

In the notorious Hudson transaction, for instance, Goldman claimed, in writing, that it was fully “aligned” with the interests of its client, Morgan Stanley, because it owned a $6 million slice of the deal. What Goldman left out is that it had a $2 billion short position against the same deal.

If that isn’t fraud, Mr. Holder, just what exactly is fraud?

Still, it wasn’t surprising that Holder didn’t pursue criminal charges against Goldman. And that’s not just because Holder has repeatedly proven himself to be a spineless bureaucrat and obsequious political creature masquerading as a cop, and not just because rumors continue to circulate that the Obama administration – supposedly in the interests of staving off market panic – made a conscious decision sometime in early 2009 to give all of Wall Street a pass on pre-crisis offenses.

No, the real reason this wasn’t surprising is that Holder’s decision followed a general pattern that has been coming into focus for years in American law enforcement. Our prosecutors and regulators have basically admitted now that they only go after the most obvious and easily prosecutable cases.

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Travis Waldron ~ Justice Dept. Ends Investigation Into Goldman Sachs Mortgage Abuses Without Pressing Charges

Nation Of Change | August 10 2012

After a year-long investigation into Goldman Sachs, the bank singled out by a Senate investigative committee for its abusive mortgage practices in the run-up to the financial crisis, the Justice Department announced Friday that it would not press charges against the bank. Goldman Sachs became of the face of widespread mortgage fraud and abuse that led to the subprime mortgage crisis when evidence that it had made trades described by its own bankers as “shitty deals” came to light during a Senate investigation in 2011.

The Department of Justice, however, concluded that it did to meet the “burden of proof” required for charges, the Wall Street Journal reports:

“Based on the law and evidence as they exist at this time, there is not a viable basis to bring a criminal prosecution with respect to Goldman Sachs or its employees in regard to the allegations set forth in the report,” the statement read. [...]

In a statement Thursday, Goldman said: “We are pleased that this matter is behind us.”

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Travis Waldron ~ Former MF Global CEO Jon Corzine Gets $8 Million Pay Package After Firm Went Bankrupt

Nation Of Change | May 22 2012

Jon Corzine, the former chief executive of bankrupt financial firm MF Global, received an $8 million pay package in the year his company plummeted into bankruptcy and faced a shortfall in customer funds totaling $1.6 billion.

Corzine resigned from the firm and turned down an $11 million severance package after MF Global filed for bankruptcy October, and he is not likely to realize the more than $5 million of his pay package that is tied to the firm’s now worthless stock. But he didn’t walk away empty-handed, the Wall Street Journal reports:

About $5.35 million of Mr. Corzine’s compensation came in the form of stock options, which are now worthless as a result of MF Global’s failure. Still, the former New Jersey governor and Goldman Sachs Group Inc. chairman got more than $3 million in cash compensation, including a $1.25 million bonus.

Though Corzine may be the most extreme example, he isn’t the only financial industry CEO whose pay is out-of-whack with the performance of the company he oversees. In 2011, Bank of America CEO Brian Moynihan made six times what he made in 2010 even as the bank’s stock price was cut in half. Goldman Sachs CEO Lloyd Blankfein’s pay increased 13.7 percent (to $19 million) in 2011, even as shareholder return declined 45.6 percent. Wells Fargo CEO John Stumpf received a 2.1 percent bump in pay (to $17.9 million); the company’s shareholders saw their returns decline 9.5 percent.

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Jim Hightower ~ Banker Hubris Knows No Bounds

Nation of Change | March 21 2012

Have you heard about the earthquake that has shaken Wall Street to its very core? Well, brace yourself, for this really is a shocker: Bonus payments are down.

Yes, the exorbitant bonus checks pocketed each year by the Goldman Sachers, Citigropers and other financial tinkerers have been cut by about 25 percent this year, and — oh! — you should hear the Wall Streeters moaning the hard-times, down-and-out banker blues.

“It’s a disaster,” sobbed one. “The entire construct of compensation has changed.”

Many Americans, of course, will say … “Good! About time!” And it is difficult in these times of middle-class collapse and rising poverty to get teary-eyed over a few financial swells getting a trim. But, come on, Wall Street bankers are human, too (aren’t they?) — so open your hearts to their pain.

A hedge-fund manager, for example, says he’ll now have to strain to pay his $7,500 annual dues to remain a member of the Trump National Golf Club in Westchester. Plus, he worries about food, health care and boarding. Not for him and his family, but for his two dogs — he’s been laying out $17,000 a year for upkeep of his labradoodle and bichon frise, including around $5,000 to hire a dog-walker to take them out each day. He might resort to walking them himself a couple times a week.

The crunch is so bad that one financier confesses that he now shops for discounted salmon for dinner and has had to give up his annual ski trip to Aspen, Colo. And a high-dollar accountant who does financial planning for the wealthy practically weeps for clients who are having to cut back.

Empathizing with the stress of it all, he asks: “Could you imagine what it’s like to say, ‘I got three kids in private school, I have to think about pulling them out?’ How do you do that?” Dabbing his eyes with tissues, he adds that these people have been raking in around $500,000 a year, and they never dreamed “that they’d be broke.”

Broke? We should all be as “broke” as they are.

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Thomas R Eddlem ~ Goldman Sachs Reeling from Employee Charges, CFTC Fine

The New American | March 16 2012

Goldman Sachs Corporation is facing a new wave of charges of not looking out for the interests of its clients this week, as one corporate vice president published a resignation March 14 letter in the New York Times and the company agreed March 13 to pay a $7 million fine to the Commodity Futures Trading Commission. Goldman Sachs stock took a hit on the two-pronged attack March 14, losing $2.2 billion in stock value with a three-percent plunge, though the stock recovered significantly the next day.

Goldman Sachs is Wall Street giant investment banking giant, with 33,000 employees, $28.8 billion in annual revenue and $4.4 billion in profit in 2011.

Former Goldman Sachs Vice President Greg Smith wrote in the March 14 New York Times that “I can honestly say that the environment now is as toxic and destructive as I have ever seen it.” Smith complained that the client’s interests had been “sidelined” to the corporate interests and that “When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.” Smith resigned as executive director of the firm’s United States equity derivatives business in Europe, the Middle East and Africa, a middle level position with the firm. “Call me old-fashioned, but I don’t like selling my clients a product that is wrong for them,” Smith charged of the Goldman Sachs corporate culture.
Specifically, Smith charged that “I attend derivatives sales meetings where not one single minute is spent asking questions about how we can help clients. It’s purely about how we can make the most possible money off of them. If you were an alien from Mars and sat in on one of these meetings, you would believe that a client’s success or progress was not part of the thought process at all. It makes me ill how callously people talk about ripping their clients off.”

Will Goldman Sachs Exec Fallout Change Wall Street?

RTAmerica | March 15 2012

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Goldman Loses $2.2B After Scathing Op-ed

Christine Harper (San Francisco Chronicle) | RS_News | March 15 2012

FOCUS | Goldman Sachs Group Inc. saw $2.15 billion of its market value wiped out after an employee assailed Chief Executive Officer Lloyd C. Blankfein’s management and the firm’s treatment of clients, sparking debate across Wall Street.

The shares dropped 3.4 percent in New York trading yesterday, the third-biggest decline in the 81-company Standard & Poor’s 500 Financials Index, after London-based Greg Smith made the accusations in a New York Times op-ed piece.

Smith, who also wrote that he was quitting after 12 years at the company, blamed Blankfein, 57, and President Gary D. Cohn, 51, for a “decline in the firm’s moral fiber.” They responded in a memo to current and former employees, saying that Smith’s assertions don’t reflect the firm’s values, culture or “how the vast majority of people at Goldman Sachs think about the firm and the work it does on behalf of our clients.”

Former Federal Reserve Chairman Paul Volcker, 84, whose “Volcker rule” would limit banks like New York-based Goldman Sachs from making bets with their own money, called Smith’s article “a radical, strong” piece. “I’m afraid it’s a business that leads to a lot of conflicts of interest,” Volcker said at a conference in Washington sponsored by the Atlantic.

Goldman Sachs slid $4.17 to $120.37 yesterday. The shares are still up 33 percent this year.

David Wells, a spokesman for Goldman Sachs in New York, declined to comment beyond the contents of the memo and an earlier e-mailed statement in which the firm said it disagrees with the views expressed in the op-ed.

Fraud Lawsuit

Executives at Goldman Sachs haven’t changed their behavior even after the firm paid $550 million to settle a fraud lawsuit with the Securities and Exchange Commission and was accused by the U.S. Senate’s Permanent Subcommittee on Investigations of misleading clients, Smith wrote. The company published a report in January 2011 with 39 recommendations on how to improve its business practices and client focus.

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Full Text of Greg Smith’s Resignation Letter From Goldman Sucks er…Sachs

Mail Online | March 14 2012

Today is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.

To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.

It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization. I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief.

But this was not always the case. For more than a decade I recruited and mentored candidates through our grueling interview process. I was selected as one of 10 people (out of a firm of more than 30,000) to appear on our recruiting video, which is played on every college campus we visit around the world. In 2006 I managed the summer intern program in sales and trading in New York for the 80 college students who made the cut, out of the thousands who applied.

I knew it was time to leave when I realized I could no longer look students in the eye and tell them what a great place this was to work.

When the history books are written about Goldman Sachs, they may reflect that the current chief executive officer, Lloyd C. Blankfein, and the president, Gary D. Cohn, lost hold of the firm’s culture on their watch. I truly believe that this decline in the firm’s moral fiber represents the single most serious threat to its long-run survival.

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What Shall We Tell Our Children, Mr. President?

Martin Andelman | Reader Supported News | January 2 2012

OPINION | It’s 4:00 AM. I couldn’t sleep…

I had lunch with my 15-year-old daughter today. It’s her Homecoming Dance this coming weekend, and with 12 of them all going together, they thought they’d get a limo to take them to dinner and then to the dance. The kids were struggling with being able to afford it and get it done, so she called me. My wife and I decided to help them make it happen. But that’s not my point here…

During lunch she said in passing: “Maybe a few years ago when people had money…” and it made me sad to realize that they know… they see and hear what’s happening in this country… they see people, including me, working more and worrying more. This has already affected their lives growing up. They’ll take the feelings they have today with them through the rest of their lives.

I’m going to vote for President Obama in 2012… again. I’m going to do so because I see no viable alternative. And I will pray for us all.

But, what shall we tell our children, Mr. President?

Shall we tell them how you came into office… wrapped in a message of hope and change… promising transparency… saying you’re one of us… and then how you fought relentlessly to help the people of this country? Or should we tell them the truth, Mr. President?

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Corzine-Gensler the Goldman Connection

Matt Taibbi (Rolling Stone) | RS_News
December 8 2011

Gensler & Corzine

OPINION | On the road this week, so apologies for the brief post. (Have a longer thing coming out later this week.) Getting a lot of calls about Jon Corzine and his relationship with Commodity Futures Trading Commission (CFTC) chairman Gary Gensler.

Both Corzine and Gensler worked at Goldman back in the day, and the word is that Corzine personally lobbied Gensler to delay the implementation of new rules that would have helped prevent Corzine from raiding his own clients’ funds.

This whole issue smacks of the improper communications between other former Wall Street co-workers like Hank Paulson and Lloyd Blankfein. More and more, it appears that, as a matter of routine, federal regulators like Paulson (in 2008) and, later, Gensler reach out to old friends on Wall Street to negotiate/discuss the timing and the form of various policy changes, bailouts, and other regulatory matters. Inside information seemingly is traded with remarkable casualness.

This is one of those issues where there’s no point in calling for more regulations. No matter what laws we have, we can’t have regulatory heads breezily chatting about their enforcement plans with former co-workers who have huge financial interests resting upon their decisions. The Paulson case, in which information about the rescue of Fannie and Freddie was casually disclosed to a group of hedge fund chiefs before the public knew about it, was a far worse thing than what Gensler is accused of. Gensler, despite his Goldman pedigree, has generally gotten good reviews from Wall Street reform types, and has demonstrated a willingness to help tighten up abuses in the derivatives and commodities markets (including walking back deregulatory actions in the derivatives world that he himself had a role in creating back in the Clinton days). But this business with Corzine will likely be a black eye for him, and rightly so.

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This Is What Revolution Looks Like

Chris Hedges | Truthdig
November 15 2011

Welcome to the revolution. Our elites have exposed their hand. They have nothing to offer. They can destroy but they cannot build. They can repress but they cannot lead. They can steal but they cannot share. They can talk but they cannot speak. They are as dead and useless to us as the water-soaked books, tents, sleeping bags, suitcases, food boxes and clothes that were tossed by sanitation workers Tuesday morning into garbage trucks in New York City. They have no ideas, no plans and no vision for the future.

Our decaying corporate regime has strutted in Portland, Oakland and New York with their baton-wielding cops into a fool’s paradise. They think they can clean up “the mess”—always employing the language of personal hygiene and public security—by making us disappear. They think we will all go home and accept their corporate nation, a nation where crime and government policy have become indistinguishable, where nothing in America, including the ordinary citizen, is deemed by those in power worth protecting or preserving, where corporate oligarchs awash in hundreds of millions of dollars are permitted to loot and pillage the last shreds of collective wealth, human capital and natural resources, a nation where the poor do not eat and workers do not work, a nation where the sick die and children go hungry, a nation where the consent of the governed and the voice of the people is a cruel joke.

Get back into your cages, they are telling us. Return to watching the lies, absurdities, trivia and celebrity gossip we feed you in 24-hour cycles on television. Invest your emotional energy in the vast system of popular entertainment. Run up your credit card debt. Pay your loans. Be thankful for the scraps we toss. Chant back to us our phrases about democracy, greatness and freedom. Vote in our rigged political theater. Send your young men and women to fight and die in useless, unwinnable wars that provide corporations with huge profits. Stand by mutely as our bipartisan congressional supercommittee, either through consensus or cynical dysfunction, plunges you into a society without basic social services including unemployment benefits. Pay for the crimes of Wall Street.

The rogues’ gallery of Wall Street crooks, such as Lloyd Blankfein at Goldman Sachs, Howard Milstein at New York Private Bank & Trust, the media tycoon Rupert Murdoch, the Koch brothers and Jamie Dimon at JPMorgan Chase & Co., no doubt think it’s over. They think it is back to the business of harvesting what is left of America to swell their personal and corporate fortunes. But they no longer have any concept of what is happening around them. They are as mystified and clueless about these uprisings as the courtiers at Versailles or in the Forbidden City who never understood until the very end that their world was collapsing. The billionaire mayor of New York, enriched by a deregulated Wall Street, is unable to grasp why people would spend two months sleeping in an open park and marching on banks. He says he understands that the Occupy protests are “cathartic” and “entertaining,” as if demonstrating against the pain of being homeless and unemployed is a form of therapy or diversion, but that it is time to let the adults handle the affairs of state. Democratic and Republican mayors, along with their parties, have sold us out. But for them this is the beginning of the end.

The historian Crane Brinton in his book “Anatomy of a Revolution” laid out the common route to revolution. The preconditions for successful revolution, Brinton argued, are discontent that affects nearly all social classes, widespread feelings of entrapment and despair, unfulfilled expectations, a unified solidarity in opposition to a tiny power elite, a refusal by scholars and thinkers to continue to defend the actions of the ruling class, an inability of government to respond to the basic needs of citizens, a steady loss of will within the power elite itself and defections from the inner circle, a crippling isolation that leaves the power elite without any allies or outside support and, finally, a financial crisis. Our corporate elite, as far as Brinton was concerned, has amply fulfilled these preconditions. But it is Brinton’s next observation that is most worth remembering. Revolutions always begin, he wrote, by making impossible demands that if the government met would mean the end of the old configurations of power. The second stage, the one we have entered now, is the unsuccessful attempt by the power elite to quell the unrest and discontent through physical acts of repression.

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How Goldman Sacked Greece

by Greg Palast (In These Times) | Greg Palast
November 6, 2011

Here’s what we’re told:

Greece’s economy blew apart because a bunch of olive-spitting, ouzo-guzzling, lazy-ass Greeks refuse to put in a full day’s work, retire while they’re still teenagers, pocket pensions fit for a pasha; and they’ve gone on a social-services spending spree using borrowed money. Now that the bill has come due and the Greeks have to pay with higher taxes and cuts in their big fat welfare state, they run riot, screaming in the streets, busting windows and burning banks.

I don’t buy it.  I don’t buy it because of the document in my hand marked, “RESTRICTED DISTRIBUTION.”

I’ll cut to the indictment:  Greece is a crime scene.  The people are victims of a fraud, a scam, a hustle and a flim-flam.   And––cover the children’s ears when I say this––a bank named Goldman Sachs is holding the smoking gun.

In 2002, Goldman Sachs secretly bought up €2.3 billion in Greek government debt, converted it all into yen and dollars, then immediately sold it back to Greece.

Goldman took a huge loss on the trade.

Is Goldman that stupid?

Goldman is stupid—like a fox. The deal was a con, with Goldman making up a phony-baloney exchange rate for the transaction.   Why?

Goldman had cut a secret deal with the Greek government in power then.  Their game:  to conceal a massive budget deficit.  Goldman’s fake loss was the Greek government’s fake gain.

Goldman would get repayment of its “loss” from the government at loan-shark rates.

The point is, through this crazy and costly legerdemain, Greece’s right-wing free-market government was able to pretend its deficits never exceeded 3 percent of GDP.

Cool. Fraudulent but cool.

But flim-flam isn’t cheap these days: On top of murderous interest payments, Goldman charged the Greeks over a quarter billion dollars in fees.

When the new Socialist government of George Papandreou came into office, they opened up the books and Goldman’s bats flew out.  Investors’ went berserk, demanding monster interest rates to lend more money to roll over this debt.

Greece’s panicked bondholders rushed to buy insurance against the nation going bankrupt.  The price of the bond-bust insurance, called a credit default swap (or CDS), also shot through the roof.  Who made a big pile selling the CDS insurance?  Goldman.

And those rotting bags of CDS’s sold by Goldman and others? Didn’t they know they were handing their customers gold-painted turds?

That’s Goldman’s specialty.  In 2007, at the same time banks were selling suspect CDS’s and CDOs (packaged sub-prime mortgage securities), Goldman held a “net short” position against these securities. That is, Goldman was betting their financial “products” would end up in the toilet. Goldman picked up another half a billion dollars on their “net short” scam.

But, instead of cuffing Goldman’s CEO Lloyd Blankfein and parading him in a cage through the streets of Athens, we have the victims of the frauds, the Greek people, blamed.  Blamed and soaked for the cost of it.  The “spread” on Greek bonds (the term used for the risk premium paid on Greece’s corrupted debt) has now risen to — get ready for this––$14,000 per family per year.

Euro-nation, the secret Geithner memo, and the Ecuador connection

Why did the Greek government throw its nation’s fate into Goldman’s greasy hands?  What the heck was in the “RESTRICTED” document? And why did I have to take it to Geneva, to throw it down in front of the Director-General of the WTO for authentication, a creepy French banker I otherwise wouldn’t bother to spit on, and then tear off to Quito to share it with the grateful President of Ecuador?

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Finding Freedom in Handcuffs

By Chris Hedges (Truthdig) | RS_News
November 7 2011

Truthdig columnist Chris Hedges, an activist, an author and a member of a reporting team that won a 2002 Pulitzer Prize, wrote this article after he was released from custody following his arrest last Thursday. He and about 15 other participants in the Occupy Wall Street movement were detained as they protested outside the global headquarters of Goldman Sachs in lower Manhattan ~ RSN-Editors

Faces appeared to me moments before the New York City police arrested us Thursday in front of Goldman Sachs. They were not the faces of the smug Goldman Sachs employees, who peered at us through the revolving glass doors and lobby windows, a pathetic collection of middle-aged fraternity and sorority members. They were not the faces of the blue-uniformed police with their dangling cords of white and black plastic handcuffs, or the thuggish Goldman Sachs security personnel, whose buzz cuts and dead eyes reminded me of the East German secret police, the Stasi. They were not the faces of the demonstrators around me, the ones with massive student debts and no jobs, the ones whose broken dreams weigh them down like a cross, the ones whose anger and betrayal triggered the street demonstrations and occupations for justice. They were not the faces of the onlookers – the construction workers, who seemed cheered by the march on Goldman Sachs, or the suited businessmen who did not. They were faraway faces. They were the faces of children dying. They were tiny, confused, bewildered faces I had seen in the southern Sudan, Gaza and the slums of Brazzaville, Nairobi, Cairo and Delhi and the wars I covered. They were faces with large, glassy eyes, above bloated bellies. They were the small faces of children convulsed by the ravages of starvation and disease.

I carry these faces. They do not leave me. I look at my own children and cannot forget them, these other children who never had a chance. War brings with it a host of horrors, including famine, but the worst is always the human detritus that war and famine leave behind, the small, frail bodies whose tangled limbs and vacant eyes condemn us all. The wealthy and the powerful, the ones behind the glass at Goldman Sachs, laughed and snapped pictures of us as if we were a brief and odd lunchtime diversion from commodities trading, from hoarding and profit, from this collective sickness of money worship, as if we were creatures in a cage, which in fact we soon were.

A glass tower filled with people carefully selected for the polish and self-assurance that come with having been formed in institutions of privilege, whose primary attributes are a lack of consciousness, a penchant for deception and an incapacity for empathy or remorse. The curious onlookers behind the windows and we, arms locked in a circle on the concrete outside, did not speak the same language. Profit. Globalization. War. National security. These are the words they use to justify the snuffing out of tiny lives, acts of radical evil. Goldman Sachs’ commodities index is the most heavily traded in the world. Those who trade it have, by buying up and hoarding commodities futures, doubled and tripled the costs of wheat, rice and corn. Hundreds of millions of poor across the globe are going hungry to feed this mania for profit. The technical jargon, learned in business schools and on trading floors, effectively mask the reality of what is happening – murder. These are words designed to make systems operate, even systems of death, with a cold neutrality. Peace, love and all sane affirmative speech in temples like Goldman Sachs are, as W.H. Auden understood, “soiled, profaned, debased to a horrid mechanical screech.”

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