Governments don't rule the world, Goldman Sachs does. Spoken on the BBC by a young trader named Alessio Rastani, these words 'went viral' as things tend to do nowadays. Within a couple of days, the video had gathered more than 2 lakh views on YouTube and for many people, was well on its way to becoming a basic definition of the state of the world. Check it out at http://goo.gl/EegjS, in case you haven't already done so.
However, unmasking Goldman Sachs as the real ruler of the world on the BBC was the least of what the nattily turned-out young man did. When asked whether he thought the Eurozone rescue would work, he said that for a trader it really didn't matter. “I'm a trader,” he said. “We don't really care whether they're going to fix the economy, our job is to make money from it”. He also said that the big money, the smart money, doesn't really believe in the rescue plan. They believe that the EMU is finished and they don't really care about the Euro. As far as they are concerned, it's just an opportunity to make money. He said that as a trader, he hoped for another big recession. Personally, it didn't matter to him whether anything worked, whether the EMU could be rescued or what happened to the markets. As a trader, his job was to make money and if there was another recession or a big crisis then that would be a bigger opportunity to make money. Jaws dropped at the BBC when he said that he had been dreaming of this moment for three years.
Rastini said that the current economic crisis was like a cancer. People seemed to be hoping that it would just go away eventually but it wouldn't and that it would just grow till it would be too late. And then he came up with his kicker. He said that people should get prepared themselves instead of relying on the governments. The governments did not rule the world, Goldman Sachs ruled the world. Goldman Sachs doesn't care about the rescue package and nor do the other big funds.
Even though Rastini clearly has a flare for the dramatic (somewhat like the last crisis' Dr Doom, Nouriel Roubini), the kinds of opinions that he has expressed are not exactly on the outer fringe. As a matter of fact, they are not very different from what many European leaders have expressed over the last few months. Traders in general and the some banks in particular are doing well out of the crisis and countries whose deficits and debt levels were actually quite reasonable are under speculative attack aided by whisper campaigns that are designed to first create panic and then profit from it.
Generally speaking, I dislike the phrase 'this time, it's different' in the context of economic or investing cycles. However, the crises of the last few years have genuinely been different in one respect-and that's the Internet. Ideas that would have stayed either an individual's head, or stayed limited to a narrow audience are now all over, influencing streams of opinions far and wide. Opinions that blame the big global banks and the financial industry (and even businesses in general) find it easy to get instant and enormous popularity on the Internet.
I believe that this tells us something very important about what the large mass of people are thinking. A lot of people think that everything that is happening is a conspiracy. I personally don't believe that. Well, not everything, at least.