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The Goldman Fraud Charge; is this the beginning of the end of Wall Street

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Goldman Sachs was charged by the SEC this morning with civil fraud in making billions (by taking out insurance policies from the likes of AIG in derivative forms called Credit Default Swaps) on the failure of the very same securities they made billions on just a few years earlier when they bundled them as AAA securities and sold them to you and me. This very charge by the SEC summarizes the entire financial crisis and sheds the light on the Memetic play between an unhealthy ENTERPRISE value system (vMEME)  that has escaped the detection of regulators many decades ago and a vacuous ORDER vMEME (SEC) who’s appointees use their time there as a springboard to lucrative careers on Wall Street (is there a more blatant case of the fox guarding the hen house?).

For those who are not familiar with the Wall Street culture, investment bankers and their regulators call themselves the “Masters of the  Universe”; a highly sophisticated and complex form of the finance ENTERPRISE vMEME that considers the ORDER/REGULATOR vMEME a nuisance that applies to lower forms of intelligence but not to them. This belief was further bolstered by over 3 decades of financial deregulation beginning with the Reagan administration and continuing on today where the SEC has become so ineffective that it must be abolished in order for a SYSTEMIC regulator to rise. For months the SEC couldn’t find anything wrong with Madoff after he handed himself in to them.

So, how much are we to believe that The Obama Administration and the current Congress are serious about regulating Wall Street? Goldman and the rest of the investment banking community have contributed tens of millions to Obama’s campaign and their congressional lobbyists have never been as powerful as they are today. This form of unhealthy ENTERPRISE vMEME is known to move at the speed of light when caught by the ORDER/REGULATOR vMEME. It has already started working on the next investment scheme that will evade the SEC’s detection and create another asset bubble resulting in another financial crisis and again the SEC will not know what’s happening.   I’m sure we’ll soon hear about an undisclosed settlement that will preserve Goldman’s stature as the “Destroyer God” in this Masters of The Universe play where the lives of millions are still being destroyed and global wealth gets more concentrated in the hands of the few on Wall Street.

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Slides from March Spiral Dynamics Integral (SDi) Training

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Some of the slides listed in this post were a part of a presentation I made at Adizes Graduate School in Santa Barbara during the March SDi training. The presentation makes the case for how the erosion in the ORDER value system (BLUE vMEME) that regulates money combined with unprecedented levels of cash flowing from TRIBAL-FEUDAL (PURPLE-RED) value system countries into Western capital markets were the main contributing factors that forever perverted capitalism. Understanding the financial crisis from a value systems perspective helps re-frame the the entire argument of how to regulate an UNHEALTHY EXPRESSION of the ENTERPRISE value system (vMEME)and anticipate its next move before it can become a threat and cause systemic damage and eventual collapse. Feel free to copy any of the slides for your personal use. You can also email me at  sdawlabani@ecovestadvisors.com if you have  any questions about vMEMEs and their relationships to the financial crisis or if you’d like for me to give a lecture to your group about the subject matter.

Dr. Beck, the co-author of the Spiral Dynamics Theory has shared my analysis with the Chicago Group (Paul Volker’s Group), Herman Wijffels (Dutch Economist and former Executive Director at the World Bank) and the office of the Prime Minister of Iceland. This blog provides a good chronology of where Economics meet Memetics specifically as it relates to the clash of value systems over the last two years. I highly recommend you browse earlier posts

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Is there a Shakeup in Obama’s White House?

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The same public discontent that elected Scott Brown to the US Senate seems to be making its way through the White House. So long Ivy League thinking (healthy ENTERPRISE  intelligences), and hello dysfunctional LIFE CONDITIONS, or so admitted our President in a recent interview with ABC News. One of the areas of greatest dysfunction in his administration’s first year, in my opinion has been the ill-advised approach on how to regulate the financial industry. Here’s the noticeable change in our President’s approach as his thinking grows on the job

When the financial crisis was still brewing, speeches by our President-elect were full of what people wanted to hear about re-regulating banks as seen by his head of economic advisers at the time, Paul Volker. As former head of the Federal Reserve, and a Goliath in taming inflation, Volker wanted to separate investment banks from commercial banks (just like they were for 60 years before Clinton de-regulated them). Volker had an untainted view on re-establishing the  ORDER value system (vMEME) to an industry plagued with clever speculation of a FEUDAL vMEME  at a systemic level.  Once Obama took the helm, Volker was sidelined in favor of Larry Summers, Wall Street’s darling who lobbied for deregulating banks and banning any regulation of the derivatives market during his time in the Clinton administration. Many economists argue that these two factors were the major contributors to the global financial crisis.

During the past year, while millions of Americans continued to lose their jobs and the number of homes in foreclosures climbed to over 5 million, Wall Street recovered at a record pace knowing its guy was advising the White House (injecting it with a false ORDER vMEME). Only after the loss of 2 gubernatorial seats and one senate seat to the republicans did the President realize that all is not well with the electorate and that the anger of the tax payer can indeed make him a lame duck President by the time he’s 2 year into the job. Deciding to turn back to Volker’s recommendations immediately after Brown’s election was the first  move from a SYSTEMIC vMEME the President has made since his election. As proof, since the President introduced “The Volker Rule” on Tuesday the Dow Jones has dropped more than 5% and the vultures in the financial industry are running to the exit doors.

It remains to be seen if the President has the capacities to transcend “pragmatism” (healthy ENTERPRISE vMEME) to a “systemic thinking” vMEME in formulating all his policies. His next area of challenge is foreign policy and the Middle East. Would he still be content with doing nothing and stay behind George Mitchell who claims much of the credit for bringing peace to Northern Ireland but has accomplished nothing in a year in the Middle East (“pragmatism” of past accomplishments), or would he be willing to roll up his sleeves and do the work that the world needs done?

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Speaking Gaian Truth to Economic Power