Two noteworthy stories chronicling the hegemonic position of the Goldman Sachs Group appeared last week. The first was a scoop by The Guardian about an internal announcement regarding the record bonuses that Goldman will pay at the end of 2009, assuming that the company’s year-end profit projections are borne out. The second piece was a 10-page Rolling Stone spread by Matt Taibbi elucidating Goldman’s central role in every major economic bubble since the dawn of bubble economics.

Read more…

On Sunday, The New York Times ran “Bill Gross of Pimco is on Treasury’s Speed-Dial,” a lengthy article on the cozy relations between PIMCO executives Bill Gross and Mohamed El-Erian and the Treasury Department. The piece had the confessional tone that is commonplace these days on the Times business page. To seek absolution for rapaciously self-interested actions, executives seem eager to tell all to Times reporters. Once the conflicts of interest and manipulation are out in the open, they lose their shock factor and can continue unabated.

The article traced the origin of PPIP to El-Erian, a much-hyped bond manager and emerging markets specialist. Although El-Erian’s plan for shedding toxic assets wasn’t adopted immediately, Treasury Secretary Timothy Geithner eventually warmed to it, and El-Erian and Gross helped shape it at every step. Now PIMCO appears first in line to benefit from the sweet terms they drew up for the government, should any bank ever decide to participate in the program.

Read more…