By WILLIAM PESEK
Barron’s Asia
June 8, 2016
Goldman Sachs finds itself ensnared in the 1MDB scandal which threatens to squeeze the nation’s credit rating.
Goldman Sachs is sharing its giant vampire squid with Najib Razak’s government in Malaysia.
The investment colossus has found itself at the scene of many a scandal – a financial Forrest Gump, if you will. From U.S. Treasury bidding probes to Greece’s debt crisis to the subprime meltdown, Goldman’s bankers were there reaping fortunes behind the scenes. In a 2009 Rolling Stone piece, Matt Tiabbi famously branded it “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
Make that Malaysia, too. As the Wall Street Journal reports, U.S. officials are probing whether Goldman broke the law by not alerting authorities about dodgy dealings at state investment fund 1Malaysia Development Bhd.
It’s the latest reminder of how Prime Minister Najib’s 1MDB mess is wrapping its tentacles around an entire nation. The unpredictable ways in which it threatens to drag Southeast Asia’s third-biggest economy under, like some massive vampire squid, can be seen in Putrajaya’s balance sheet. Could it even lead to a credit downgrade? Continue reading “A Self-Inflicted Downgrade for Malaysia?”