Thursday, January 20, 2011

Berlusconi Makes Partner at Goldman

Two recent pieces in the Times segue neatly into each other. The first, “Study Points to Windfall for Goldman Partners” (NYT, 1/18/11), describes the enormous compensation received by Goldman Sachs executives, particularly as a result of stock options offered at the height of the financial crisis. The options were issued in December 2008 "when the stock was trading at $78.78. Since those uncertain days, Goldman’s business has roared back and its share price has more than doubled, closing on Tuesday at nearly $175.” The second piece, “Wiretaps of Berlusconi's Teenage Friend Emerge” (NYT, 1/18/11), concerns “an investigation on charges that he (Berlusconi) compensated Moroccan-born Karima ed-Mahroug, nicknamed ‘Ruby Rubacuori’ or ‘Ruby Heart-Stealer,’ for sex at his villa outside Milan when she was a minor.”  Post hoc ergo propter hoc means if something follows it is necessary, and in the case of the two articles the fact that the Goldman piece was at center stage and the Berlusconi piece bottom right suggests an equation or future etiology. Like a theorem in geometry, these two articles constitute a proof that Silvio Berlusconi should resign his position as premier of Italy and become a partner at Goldman. Any firm where executives can write credit default swaps against the placements of its own clients, as was the case with Goldman’s approach to borrowing by the Greek government, can employ the services of a leader of a country whose finances could turn out to be similarly imperiled. It doesn't hurt that the capital cities of both countries, Athens and Rome, are the seats of classical antiquity, a fact which further strengthens their common bond. Q.E.D. In addition, Mr. Berlusconi would be able to use some of the political skills unearthed in the recent scandal, like spending “evenings with dozens of women, who would strip down to their underwear,” to increase Goldman’s client base.

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