Posted on 04/14/2011 8:27:55 PM PDT by Chunga85
Goldman Sachs has a lot of friends in high places, including many former Goldman execs. But the company has also made a few enemies along the way to becoming arguably the most powerful firm on Wall Street, including the Chairman and Ranking Republican on the Senate Permanent Subcommittee on Investigations.
"In my judgment, Goldman clearly misled their clients and they misled the Congress," Sen. Carl Levin (D-MI) said yesterday as he and Sen. Tom Coburn (R-OK.) released a two-year study on the financial crisis and its cause.
Generally speaking, Sen. Levin has accused Goldman of selling clients mortgage-backed securities (MBS) while at the same time holding a "huge short" position in the MBS market in 2007. "They gained at the expense of their clients, and they used abusive practices to do it," he said.
In a statement, Goldman denied any wrongdoing; still, its shares were down 2.4% in recent trading vs. a 0.8% decline for its peer group, as measured by the Financial Select SPDR (XLF).
(Excerpt) Read more at finance.yahoo.com ...
If I were Golden Sacks I’d have short the market too. The institutions buying these were fools projecting there would be good times for the next 20 years. Any asset manager would have started dumping these in early ‘07 after seeing the signs of impending doom coming out of the housing market. The amount of stupidity in the investment world today is mind-boggling.
Yeah, like that's gonna do any good.
Didn’t Bush’s “tarp” buddy Paulsen come from Goldman-Sachs to the treasury department? Either the libs are right and W really is stupid. Or he was in on it. There’s no other explanation.
How huge was the short position? How exactly do you go short the MBS market? Spell it out, Senator.
They gained at the expense of their clients, and they used abusive practices to do it
Abusive? What's that?
Here is my analogy for the Goldman Sachs scam:
Your Dr. Goldman prescribes a new miracle cure pill and gives you the prescription. You buy some and start taking the new medicine.
Dr. Goldman then instructs his “Insurance Division” to take out a high priced insurance policy on your life, confident in the fact that it will be much shorter than would normally be anticipated.
At GS this is called good business.
Of course, they made that market. Like Colonel Sanders secret recipe. Only they knew what is was made of....lol.
Carpet-bagged it as a home run...simultaneously bet against it. Burned millions.
Awesome.
Bonuses all around. That's some "free market" capitalism we should all embrace as an "innovation".
Shocking, Goldman which is in the business of securities trading was caught trading.Goldman is guilty of a lot of things but holding a short position while selling the same securities to sophisticated institutional clients is not one of them. It is done all the time on Wall Street. When you play poker you do not reveal your hand.One side wins, the other side loses. Goldman could just as easily have lost their bet. Goldman does not deal with smaller retail clients only large institutions and larger sophisticated investors.
See moderators -- how nice I am?
Since when is anyone obligated to walk you through this? I freely admit you are entitled to your opinions. You, stalwart conservative that you are, should respect my right to express my opinion.
There are financial predators out there FRiend, and we — everybody whose net worth is less than eight figures — are their prey. Since they can’t literally eat us alive instead they eat our money, our livelihood, our hopes, and our dreams.
While this group isn’t exclusively bankers, and all bankers don’t fit into this category, predators seem to be more common in consumer banking than elsewhere. Thanks to a combination of corruption, ignorance, and incompetence, their supporters have done a great job keeping them alive.
The US is in a dark place, where the absolutely most reckless, irresponsible bankers — who made the most reckless, irresponsible decisions — are receiving massive government subsidies. The price tag will be picked up by future generations.
That is, we are collectively putting our children into deep hoc lest bankers suffer the sting of a firm slap by the invisible hand, all the while whining that the free market continues to function.
Bankers, along with their supporters in government, tried to portray the interests of Wall St. and Main St. aligned. They aren’t. There hasn’t been a “class war” from the middle class towards the rich, but there’s been a ferocious one the other direction.
They’re fighting you. It’s not because they don’t like you — some are crazed sociopaths, but most aren’t .. it’s just a game to them. They’re playing to win; you don’t even know the game is on, much less the rules.
That's not my fault. Roll over if you like. No thanks...I'm not buying.
Warm regards honey.
No one is obligated to do any such thing. You can take Carl Levin's word for everything. It is easier than thinking.
There are financial predators out there FRiend
Like the huge financial firms on the other side of the CDO trades with Goldman?
“How exactly do you go short the MBS market?”
Synthetic CDOs.
I know that and you know that but Sen Levin doesn’t.
Cohn isn’t talking about the deadbeat mortgage crowd. He’s blaming Goldman Sachs. They were selling CDOs as Triple A secured investments to pension, insurance and retirement funds. At the same time, they were betting against them on the short side.
GS *knew* that the investments were worthless. They took advantage of their customers’ good fiath in order to pump the portfolios full of worthless paper. They collected their money for *garbage*.
And at the same time that GS was doing that, it was betting its *own* money that these very investments were going to collapse. Goldman *knew* that they were going to collapse, because Goldman had put them together , and knew how lousy the mortgages were. Even if only 5% of the mortgages were bad, the entire investment became insecure and untradeable - worthless.
This problem is *Goldman Sachs’*. It’s got nothing to do with the homeowners. Blankfein should be in a Federal penitentiary.
I guess that “spelling it out” is what took 640 pages to explain.
THAT is exactly what Tungstenman Sachs did.
They KNOWINGLY sold crap and shorted, all with the help of triple A ratings that were essentially worthless and bogus.
Here is more: http://www.zerohedge.com/article/goldmans-cds-market-manipulation
If you haven’t read the Matt Taibbi (Of Rolling Stones Magazine)article on this subject you really should check it. Corporate Robots need not apply.
They sold them all over the world. They sold them as quality investments. The US was trusted, the dollar was trusted. no longer. Jail is where they belong, but the revolving door from the White House to GS protects this bunch.
Your restraint is admirable.
Leftists attack all business as unethical. Therefore, by an understandable but not particularly intelligent kneejerk reaction, conservatives tend to spring to the defense of all business.
This does not actually make sense. Go back and read Adam Smith, the father of market economics. He was under no delusions as to the inherently ethical nature of businessmen. He was entirely aware that given the opportunity they would (as a group) be quite willing to lie, cheat and steal (and conspire with other businessmen and with government officials) in order make a buck.
He did not assume businessmen were by nature ethical. Quite the opposite. He did, however, point out how there were built-in checks and balances (the famous invisible hand) that caused the market as a whole to function in a generally ethical way despite the unethical nature of many or most of its participants.
If, of course, the market were allowed to function. Smith also knew full well businessmen would cozy up to government whenever possible in order to be given protection from the checks and balances of the market at consumer and taxpayer expense.
This is closely analogous to the system of government set up by our Founders. They did not expect officials would be unanimously virtuous. Quite the opposite. They expected them to be self-seeking and crooked. They set up a system that functions as a sort of “political free market” and provides artificial checks and balances (similar to the natural ones in the real free market) that allow the government to function pretty well despite the unvirtuous nature of most politicians.
Why it is considered conservative to defend business practices as ethical when they are clearly not is beyond me.
“There are financial predators out there FRiend, and we — everybody whose net worth is less than eight figures — are their prey. Since they can’t literally eat us alive instead they eat our money, our livelihood, our hopes, and our dreams.
While this group isn’t exclusively bankers, and all bankers don’t fit into this category, predators seem to be more common in consumer banking than elsewhere. Thanks to a combination of corruption, ignorance, and incompetence, their supporters have done a great job keeping them alive.”
The mortgage crisis is only one more example of business as usual that is made possible by bankster control of the Fed. The Real Estate market is governed by the availability of easy credit. Banksters know ahead of time when they will turn off that spigot and plan their longs and shorts accordingly.
Goldman Sachs, et al, manipulate the system to generate more than enough money for paying off the politicians, buying the media, and targeting anyone left in a position to fight back. What can the prey do when their supposed protectors are compromised by the predators?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.