PRESS RELEASE
The Goldman Sachs Boys and Their $100 Billion Super-LTCM Bailout
Oct. 13, 2007 (EIRNS)—Treasury Secretary Henry Paulson, of Goldman Sachs, and his sidekick, Treasury Undersecretary for Domestic Finance ("Plunge Protection"), Robert Steel, also of Goldman Sachs, are trying to orchestrate a crazy $100 billion bailout scheme, which dwarfs the $3-4 billion bailout arranged for hedge fund LTCM by the Federal reserve in 1998, according to today's Wall Street Journal.
Under the plan, all the top U.S. and perhaps some British banks, will join to create a "receptacle," which will buy up the worthless so-called assets held by the "structured investment vehicles" (SIVs) of Citibank and many other banks. Although these mortgage-backed securities and collateralized debt obligations are worth nothing, the new "super-conduit" will lay out $100 billion to buy them at their current nominal value, or close to it, in order to try to sustain the lie that all the hedge funds and banks together, which hold trillions in such worthless "assets," are still solvent.
The "super-conduit" will raise the funds to buy the worthless SIV assets by selling short-term debt to the public. But why would anyone be crazy enough to buy it? Here's the catch: It will be backed dollar-for-dollar by the consortium of banks which Paulson and Steel are trying to put together. The banks are to put themselves on the line for this worthless paper,— in reality, for the hedge funds and the British Empire.
The tentative name for the "receptacle" is Master-Liquidity Enhancement Conduit, or MLEC. If the banks agree, its announcement could come as early as Monday, Oct. 15, the same day Citigroup releases its results. [ap]
