December 10, 2016

Trump appointee Cohn a major player in the 2008 financial disaster

Independent, UK - Mr Trump has just appointed one of the most powerful men on Wall Street and a key architect of the 2008 financial crisis. Pinning blame for the world’s financial crisis of 2008 on one man or one bank would not be fair, but Gary Cohn and his entourage at Goldman Sachs is a good place to start.

What is indisputable is the root of the crash: the systemic mis-selling of risky assets from banks to consumers. Sub-prime mortgages were handed out like free candy on Halloween. And when consumers started defaulting like a pack of lemmings throwing themselves off a cliff, banks were swirling overhead like vultures. But before long, banks crashed too, ultimately leading to global instability and the destruction of people's livelihoods.

The bank that [Cohn] built up lost billions of dollars during the crisis, and $1.2 billion of that was lost from the residential mortgage business alone - a section of the business he had pushed to expand before 2008.

"Of course, we regret that we did not do many things better: like having less exposure to leveraged loans, which caused us approximately $5 billion in losses, having less exposure to mortgages, and, it should go without saying, we wish we had seen more proactively the effects of the housing bubble," he told Congress in 2010.

The losses were, he said, proof that the bank and consumers all went down together. Yet somehow, Cohn stayed dry on board that massive, sinking ship.

The champion of trickle-down economics earned more than $60 million between 2012 and 2015 alone - not including shares and stock options etc - and he, along with every other white, middle-aged man with a Rolex, escaped imprisonment for the US government’s largest bailout in history. In government, he can liquidate all his shares in the bank, worth $212 million, tax free.

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