Faith, Fraud, and the Gilded Machine

How the decoupling of money from value turned the U.S. economy into a religion, and Goldman Sachs into its cathedral.

The gold plating is beginning to peel. On the same day Goldman Sachs reported a record quarter, its traders popping corks over $4.1 billion in quarterly profit and $15.18 billion in revenue, regional banks across America were quietly bleeding out on the floor. Western Alliance and Zions Bank watched their shares collapse after both admitted to the one word the markets fear more than “recession”: fraud.

Two of their borrowers, car-parts maker First Brands and subprime auto lender Tricolor, have gone belly-up, leaving behind a trail of missing collateral, opaque paperwork, and unanswered phone calls. The KBW regional-bank index fell six percent, its worst day since spring. Analysts gamely described the news as “idiosyncratic,” banker code for “please don’t panic.” But every crash begins with an idiosyncrasy, the tiny crack that later swallows the dam.

The Financial Times confirmed the obvious: Zions discovered “apparent misrepresentations,” Western Alliance filed a lawsuit to recover $100 million, and the Department of Justice is now sniffing around. This wasn’t one-off mischief; it was a signpost. The same shadow credit ecosystem that props up the illusion of growth, repackaging bad debt into “income streams,” calling leverage “innovation,” and mistaking opacity for sophistication, is starting to show through the varnish.