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Thursday, February 18, 2010

Taibbi on Wall Street, Addicts & Con Men

Guess Who the Addict Is?

No, Matt Taibbi hasn't mellowed since his infamous Rolling Stone article last summer ("Inside the Great American Bubble Machine").

Here's an excerpt from the sequel:

Instead of liquidating and prosecuting the insolvent institutions that took us all down with them in a giant Ponzi scheme, we have showered them with money and guarantees and all sorts of other enabling gestures.

Instituting a bailout policy that stressed recapitalizing bad banks was like the addict coming back to the con man to get his lost money back.

--Matt Taibbi, "Wall Street's Bailout Hustle"; Rolling Stone

Elsewhere in the piece, Taibbi poses a question that I've also addressed on this blog ("Dealing with the Devil: Why be a Goldman Sachs Client?"):

Why big institutional investors like pension funds continually come to Wall Street to get raped is the million-dollar question that many experienced observers puzzle over.

I think my explanation is still the most plausible:

Presumably, Goldman Sachs' clients have decided that it is better to be on the inside of whatever scam(s) Goldman is running -- presumably benefiting from them -- than being on the outside, victimized like everyone else.

--Ross Kaplan, "Dealing with the Devil"; City Lakes Blog (9/25/2009)

Key word from the above: 'presumably.'

Even if you don't like Taibbi, read his piece for his primer on street scams and hustles.

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