Treasury Secretary. I also said that we should re-enact a form of Glass Steagall (Bring Back Glass Steagall). What can I say’¦no one listens!

And what I consider the worst part of this whole mess is that Lehman Brothers did not have to go bankrupt. Indeed, were I prone to conspiracy theories, I would say that Hank Paulson ‘“ who owns 10’s of millions of dollars of Goldman Sacks stock, should NEVER have had one word to say about what to do about the fate of Lehman Brothers. Did he recuse himself from discussions on Lehman Brothers? NO. Did he stand to gain personally ‘“ either positively or negatively ‘“ re the decision that the FED and Treasury would make about Lehman ‘“ YOU BET! Did he recuse himself from any of the meetings where this was being discussed? NO WAY.

Does it hurt Hank’s portfolio and huge holdings in Goldman Sacks that one of Goldman’s largest competitors has been effectively knocked out of the game? NOT ONE BIT!

Best of all, the proposal that Richard Fuld, the CEO of Lehman Brothers put forth to the FED and Treasury the weekend before they went under, was that they be allowed to become a ‘œBank Holding Company’ which would have made it easier for the company to borrow. The FED said no ‘“ which all but guaranteed their demise. And guess what’¦ within 5 days, Goldman Sacks, Morgan Stanley were permitted to become Bank Holding Companies.

Honestly, while I am not a conspiracy theorist, it makes me wonder. Now we have a 35 year old wet behind the ears guy named Neel Kashkari who is responsible for determining how the $700 billion is parceled out to financial institutions. (He’s a Goldman Sachs guy). The head of the U.S. Treasury Hank Paulson is a former head of Goldman Sachs. I could go on, but I would run out of paper showing the trail of ex Goldman Employees who are in positions of serious power in our financial system. Can anyone see the obvious problem with Neel lending money to a Goldman Sachs client? Da! I can.

Ladies and Gentlemen, if I could see the problems early last summer, why didn’t the FED and Treasury? BTW, all it would have taken to avert the huge crisis that we are now facing would have been simple letters of guarantees or letters of Credit from the FED and the Treasury guaranteeing the loans banks make between one another. That should have been the first move, and I will bet you dollars to Yen, that’s all it would have taken to have averted this crisis.

Was this crisis allowed to happen to the ultimate gain of a market participant?

You tell me?

——-
Walter Schubert, a third generation member of the New York Stock Exchange is the Founder and CEO of GFN.com: The Gay Financial Network.

Photo credit: stock.xchng.