August 18, 2010

Techno-Thriller: Why Was Goldman Sachs So Worried About One Nerdy Sentence? | David Viniar, Goldman's CFO, testified under oath to the Federal Crisis Inquiry Commission and claimed that Goldman didn't track its derivatives deals separately from its other transactions. FCIC panel chair Angelides pressed him: "Are you telling me you have no system at your company that tracks revenues or assets of contracts, and liabilities and payments under contracts? You have no management reports, no financial reports that track these contracts?" "I've never seen one," Viniar answered. The Commissioners seemed to verge on accusing him of lying. "Nobody here really believes (that)," said one. Flash back to February of this year, when David Viniar said this in a presentation to investors: "Technology is fundamental to everything we do, from revenue-producing activities to enabling much of the control infrastructure of the firm." And here's another quote, from Goldman's Business Principles: "We take great pride in the professional quality of our work." As the Wall Street Journal reported, Goldman has said that "credit trading desks ... are separated by industry group ... (and) traders are indifferent to whether they are selling clients a bond or a credit derivative." The Journal added: "The firm also said its technology systems firm-wide don't single out derivatives transactions." Now comes the part of the movie where we place our sentence, that jigsaw puzzle piece, into context so that we get its full meaning: " The Goldman Sachs risk system is called SecDB (securities database), and everything at Goldman that matters is run out of it. ... Database replication...
The assault on US workers’ wages The Financial Times article is a stark indication that the corporate-government campaign to narrow the wage differential between American workers and super-exploited workers in Asia and other “emerging economies” is meeting with considerable success. The breakdown of American and world capitalism is being utilized by the ruling class to carry through a drastic and permanent reduction in American workers’ wages and living standards and raise the level of exploitation. This is a calculated policy of class war. It is being ruthlessly pursued by taking advantage of the misery and desperation caused by mass unemployment and the spread of home foreclosures, utility shutoffs, hunger and homelessness. The Obama White House gave the signal for corporations to use layoffs and the threat of plant closures to slash wages by forcing General Motors and Chrysler into bankruptcy last year and insisting that the wages of newly hired workers be cut in half as the precondition for a government bailout of the auto companies. Now, new workers at the auto companies are making the near-poverty wage of $14 an hour. And this is just the beginning, as the auto companies prepare to demand even deeper cuts in wages and benefits and the lifting of all restrictions on speedup. Similar demands are being made in every sector of the US economy. The lowering of labor costs in the US toward the levels that exist in Asia is at the heart of the Obama administration’s so-called “jobs” program. Having ruled out any government job-creation programs and...

Jodi Dean

Jodi Dean is a political theorist.

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