Goldman-Sachs - Robber Barons - charged with fraud by SEC - Finally !

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So what are the real problems with this bill? With the GOP all saying NO again, is it because it's loaded up with liberal-speak? Higher/new taxes? Socialism? It's being rushed???

I guess i don't understand why the opposition to another bill that in theory is probably what nearly every american would want.
 
So what are the real problems with this bill? With the GOP all saying NO again, is it because it's loaded up with liberal-speak? Higher/new taxes? Socialism? It's being rushed???

I guess i don't understand why the opposition to another bill that in theory is probably what nearly every american would want.


Yes, 60-65+ per cent of Americans want this.

The GOP will have to answer for this. And if (when) the Dems get it passed the GOP will not be able to campaign with something like Repeal Obamacare

the two main things the GOP are trying to water down
- the legislation sets up a new Consumer Protection Agency, the GOP want to water it down.

the other is the legislation requires Banks to set up a fund of 50 billion dollars to bail them selves out if they fail. You may recall tax payers money was used last time they failed.

The GOP is arguing that this fund guarantees more bail outs. Well, without the fund we had bail outs.

Does the FDIC guarantee that other smaller banks will fail? or set up a fund where risk is minimised?


Looking at these two main issues, I believe the GOP is running interference for the same bad actors that are responsible for the 2008 melt down.
 
Both sides will try pass legislation most beneficial to their clients (I mean voters).


ideally they should pass legislation that is beneficial for the American people and American Economy that allows businesses to succeed in a reasonable fashion.

but politicians pass legislation that they believe will help get them get reelected (for the most part)

and the GOP has carved out a position that they are "business friendly".

Most GOP voters don't drill down on all issues, they have there shot callers, be it Limbaugh, Hannity, or their local Chamber of Commerce, etc. (just my opinion, based of a life time of interactions with many, many GOP)
 
1.)They are unethical dishonest, robber barons who knew what they were selling was "shit" and went ahead and did it anyway.

2.)They, and Republicans, should not be standing in the way of common sense regulatory reform. There is unnecessary, heavy handed, counterproductive, monopoly creating anti competitive regulation out there, but this is ASSUREDLY not it.

3.)Deep is right regarding political consequences for the GOP in opposing this.

Does not exclude Goldman, but lets point out other less than perfect people in all of this:

4.)CONGRESS: Everyone here knows what party I align myself with, but please, we can all agree on this. Every single person up there, Democrat or Republican, has most certainly taken plenty of contributions from Goldman Sachs and every other investment bank that helped fuel this crisis that has gone under since. And they did it without the same level of questioning, curiosity and outrage they showed today, rest assured. No one is getting indicted or censured or held in contempt or going to jail over the testimony they provided today. Like many things with Congress, it is largely done with the knowledge that C-SPAN is always rolling the cameras! "Lets look good in an election year yelling at what we all agree are, to some extent, the villains." Ok, I agree, Goldman was wrong times infinity squared, but saying so over and over again takes no courage. Fixing the problem responsibly does.

The equation has not changed- If Blankfein called any of them up, and yes, that includes the aggressive, charged up McCaskill, Levin and Coburn, he would get them direct on the first try. You or I, good luck even getting one straight answer from the person who answers the phone! My Dad was a Vietnam combat Veteran, Chairman of our local Democratic Committee for 15 years and he had a hard time getting in touch with our Democratic Congressman! For all the shit he gets for being "aloof," John Kerry would often follow up a call to one of his office aides with a personal call to my Dad, but he was the exception for sure. Does anyone think robber barons 1-6 sitting at that table today would be getting a blow off answer or have to wait 6 months to talk to a member of Congress?

5.)Ted Kaufmann, D-DE, Biden's place holder and longtime Chief of Staff did touch on this today, but only briefly and he had no company. How about the American people? Didn't we want houses we could not afford? Didn't we think home and stock values were going to rise forever? Didn't we throw all economic/business/historical sense out the window and let greed take over and convince us everything would be just fine?

Carl Levin said the Goldman people are treating this as if it was some kind of natural disaster with no human culpability at all, like a hurricane or a tornado. Well, he is right, but aren't we doing the same right now? Ignoring the context in which the behavior of Goldman and others developed? They were not some evil people plotting late at night on how they were going to get all those old ladies and unsuspecting families, rather, they took what was an already irresponsible mindset and pushed it even further in response to the proliferation of that very mindset.

It is this mentality that creates the demand for creative, risky, "shitty" financial products in the first place. High risk means high return, a hell of a lot of government debt floating around, China is financing it. Do they want low interest rates on their investments? No, they want high returns, so to appease them, we create risky products. So the national debt contributed to it as well.

Again, not letting Goldman off the hook here, far, far from it. I am just pointing out that they were not an island of highway robbers in a vast ocean of perfect saints.
 
The one reform I think we really need, and probably won't get, is to not allow brokers/market makers to also trade. It was obvious from the Goldman hearing that the lines between serving clients’ interests and serving their own (in regards to market positions) are too often blurred.
 
Is this bill meant to reform the finance industry or change the tax rates (or both?)
 
I'm not a big fan of congressional hearings - but I really enjoyed Levin grill Goldman Sachs (even when it was apparent he didn't know what he was talking about).

All in all, I thought the younger executives did a better job under fire than the CEO.
 
5.)Ted Kaufmann, D-DE, Biden's place holder and longtime Chief of Staff did touch on this today, but only briefly and he had no company. How about the American people? Didn't we want houses we could not afford? Didn't we think home and stock values were going to rise forever? Didn't we throw all economic/business/historical sense out the window and let greed take over and convince us everything would be just fine?
great quote:up:
 
Buried in the middle of the 901 pages of exhibits are four “self-reviews”. These are the reports that the Goldman bankers wrote about themselves for the year 2007 in which they listed their strengths and weaknesses.

The first to hoist himself on his own petard is Daniel Sparks: “I delivered the best performance of my career this year . . . we didn’t just survive – we excelled.” Michael Swenson picks up the theme: “On the leadership front I performed exceptionally well over the past year.” Joshua Birnbaum concludes: “I believe I will be a very compelling partner candidate for 2008.”

All three pay lip service to teamwork while making clear the bulk of the success was due to them. Mr Swenson writes: “I am extremely proud of the traders that I have developed under my leadership,” noting that many of them weren’t top performers until they had the good fortune to work for him.

But what about weakness? Goldman bankers, it seems, don’t have any. They don’t even have “opportunities for improvement”. Instead there is a box for “development needs” and even more euphemistically, “unfulfilled accomplishments”, which is surely a contradiction in terms.

Most of them cite obscure and minor shortcomings such as a “need to leverage the firm” – whatever that might entail. Mr Birnbaum deftly makes his weaknesses strengths in disguise: “I command considerable respect from younger members of the department based on my experience and market impact. I need to spend more time converting their respect into a comfort and trust.” In other words: I’m so great my underlings understandably view me like a God.  







FT.com / Columnists / Lucy Kellaway - Fabulous Fab is far scarier than you think
 
Democrats Reject 5% Down Payment Rule

The Senate today rejected a proposal by Sen. Bob Corker, R-Tenn., to impose a minimum 5% down payment for virtually all home mortgages. The amendment to the broader financial regulatory overhaul bill, which failed 42-57, would have required income verification and an assessment of borrowers’ ability to repay as well.

Corker’s proposal also would have stripped out a provision that required financial firms securitizing loans to keep a 5% portfolio risk.

Democrats then passed their own amendment imposing some underwriting standards, but no minimum down payment.

Regarding Corker’s bill, Democrats argued that a 5% down payment would hurt minorities and the poor.

Is Fannie/Freddie addressed in the finance overhaul bill?
 
what's the logic behind a 5% downpayment
besides making sure most people have no savings left

i doesn't seem like a cure for the problem
 
20% down, maybe?

You'd make a fortune if you were in the rental business.

A mandatory 5% down will not solve the problem, it doesn't take a fucking rocket science to figure that out. What is wrong with these guys?

Run a check, do what you need to in order to determine if they can pay or not, but this won't solve anything, it will just make things worse.
 
Fannie asks for another $8.4 billion - May. 10, 2010

NEW YORK (CNNMoney.com) -- Fannie Mae requested another $8.4 billion from the federal government on Monday, saying that it expects its losses to continue because of trends in the housing and financial markets.

The government-controlled mortgage giant said it lost $11.5 billion in the first quarter of 2010, its 12th consecutive quarterly loss. In addition, Fannie paid out $1.5 billion dividend to the Treasury, which received stock after the government took it over in September 2008.

In the year-earlier quarter, Fannie suffered a $23.2 billion loss, but an accounting change makes comparing the year-over-year losses difficult.

Fannie's request for more federal funds comes just four days after Fannie's twin Freddie Mac also asked for a handout - to the tune of $10.6 billion - after posting an $8 billion quarterly loss.

In using Fannie (FNM, Fortune 500) and Freddie (FRE, Fortune 500) to prop up the mortgage market, the government in December lifted a $200 billion limit on their bailouts, essentially giving the twin housing lenders a blank check. Before their latest requests, Fannie Mae had already received $76.2 billion from the federal government and Freddie had gotten $50.7 billion.

Again, is Fannie/Freddie addressed in the finance overhaul bill?

Chris Dodd, Barney...hello?
 
SEC's Goldman Charges Send Shocks Through Financial Markets - WSJ.com


Too connected and powerful to be held accountable?


or


these charges are baseless?

The charges are absolutely baseless, and are just a political show. Goldman Sachs was merely the market maker in the Abacus transaction, they were not a financial adviser to ACA and therefore it was not their responsibility to judge the quality of the products. ACA was a sophisticated bond insurance company, not an old granny off the street who got ripped off.

In plain words, what happened was that ACA insured these bonds, the bonds failed, and they had to pay close to a billion dollars in claims for the insurance they sold. The bond portfolio was reviewed and approved by ACA. They had all the information that Paulson had about the bonds. It doesn't matter who selected the portfolio of securities. All that matters is that they were given full disclosure of content that was included in the package to be insured, which they were. It doesn't matter who was buying the insurance, whether it was Goldman, John Paulson, Ben Bernanke, or anyone else, because that would have no effect whatsoever on the performance of the underlying securities. Also, anyone who knows anything about finance would know that it is a given that someone is on the other, opposite side of the transaction. If ACA is selling insurance, obviously someone (a bearish investor) is buying the insurance.

The charges are completely without merit and anybody saying that the Goldman bankers should be arrested, or hanged, should do a little more research on the issue before forming such an unfounded opinion.
 
Simon Johnson, on Real Time, really explained well what Goldman Sachs is alleged to have done. Wow. Selling securities designed to fail then buying insurance to profit on it? Un-fucking-believable. I pray they get hammered for this.

It was Paulson who bought the insurance. And the the transaction itself was an insurance transaction. ACA sold the insurance, so obviously there had to be a buyer for the insurance. Goldman did not buy the insurance, in fact, they were in effect on the same side of the trade as ACA, because they couldn't sell all of the securities that Paulson wanted to short. They therefore lost approximately $90 million in the transaction.
 
The charges are absolutely baseless, and are just a political show. Goldman Sachs was merely the market maker in the Abacus transaction, they were not a financial adviser to ACA and therefore it was not their responsibility to judge the quality of the products. ACA was a sophisticated bond insurance company, not an old granny off the street who got ripped off.
while overall I agree with this it is worth noting that valuing bonuses over responsibility is what created a lot of this mess
 
The charges are absolutely baseless, and are just a political show. Goldman Sachs was merely the market maker in the Abacus transaction, they were not a financial adviser to ACA and therefore it was not their responsibility to judge the quality of the products. ACA was a sophisticated bond insurance company, not an old granny off the street who got ripped off.

Am inclined to agree....IIRC you work in Wall Street yourself, is this correct?
 
Am inclined to agree....IIRC you work in Wall Street yourself, is this correct?

Yes, not anymore however. I was there for a little bit but I realized I don't like working incredibly long hours and reporting to someone else. So I went back to school to do pre-dental, and will be going to dental school in a couple of years.
 
while overall I agree with this it is worth noting that valuing bonuses over responsibility is what created a lot of this mess

By "mess" if you are referring to the entire financial crisis, you are absolutely correct.

But if you are referring specifically to the Abacus transaction, then I have to disagree. Like I said, Goldman was just the market maker. Paulson made money and ACA, IKB, and Goldman itself lost money in the transaction. The combined gain/loss of all the parties was zero. If ACA had made money, then Paulson would have lost money. In this specific transaction there was no way for all the parties involved to make money (or lose money, for that matter).
 
Yes, not anymore however. I was there for a little bit but I realized I don't like working incredibly long hours and reporting to someone else. So I went back to school to do pre-dental, and will be going to dental school in a couple of years.

Respect. :up:
 
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