Matt Taibbi: Goldman, using key players, turned the once-solid market into a speculative casino.
SHOOT: Goldman Sachs did the same with the internet and they were central to the subprime mess. They sold shit standards whilst knowing what they were selling was shit, and prices irrational.
Matt Taibbi:...what the average investor didn't know at the time was that the banks had changed the rules of the game, making the deals look better than they actually were. They did this by setting up what was, in reality, a two-tiered investment system — one for the insiders who knew the real numbers, and another for the lay investor who was invited to chase soaring prices the banks themselves knew were irrational.
SHOOT: Goldman Sachs did the same with the internet and they were central to the subprime mess. They sold shit standards whilst knowing what they were selling was shit, and prices irrational.
Matt Taibbi:...what the average investor didn't know at the time was that the banks had changed the rules of the game, making the deals look better than they actually were. They did this by setting up what was, in reality, a two-tiered investment system — one for the insiders who knew the real numbers, and another for the lay investor who was invited to chase soaring prices the banks themselves knew were irrational.
Goldman did it by persuading pension funds and other large institutional investors to invest in oil futures — agreeing to buy oil at a certain price on a fixed date. The push transformed oil from a physical commodity, rigidly subject to supply and demand, into something to bet on, like a stock. Between 2003 and 2008, the amount of speculative money in commodities grew from $13 billion to $317 billion, an increase of 2,300 percent. By 2008, a barrel of oil was traded 27 times, on average, before it was actually delivered and consumed.
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