"They paid us billions to ruin America. Back to our ACORN kiddie brothels."
Posted on 04/24/2010 7:02:22 PM PDT by Steelfish
Goldman Executives Cheered Housing Market's Decline, Newly Released E-Mails Show
By Zachary A. Goldfarb Sunday, April 25, 2010
As the U.S. housing market started to slide, executives at the most legendary investment bank on Wall Street, Goldman Sachs, were trading e-mails in which they cheered the declines, even when those declines meant some of their clients were taking major losses, according to newly released documents.
The documents show that the firm's executives were celebrating earlier decisions in which they bet against the housing market, a Senate investigative committee found. In a fall 2007 e-mail, for example, top mortgage trader Michael Swenson was gleeful that credit-rating companies downgraded mortgage-related investments, which caused losses for investors.
"Sounds like we will make some serious money," Swenson wrote.
Lawmakers said the internal e-mails, released Saturday by the Senate Permanent Subcommittee on Investigations, contradict Goldman's assertions that the bank was not trying to make big profits off the decline of the housing market in 2007 and was merely seeking to protect itself if prices collapsed.
With Goldman chief executive Lloyd C. Blankfein and fellow executives coming to Washington on Tuesday to testify before the Senate panel, this weekend's sparring over whether the firm sought to exploit the historic decline in housing prices underscored the intensifying clash between Washington and Wall Street.
(Excerpt) Read more at washingtonpost.com ...
How much did they donate to Obama again?
"They paid us billions to ruin America. Back to our ACORN kiddie brothels."
So freaking what. Short sellers always cheer a decline. Did they break the law? Or did they do something that should have been against the law, so that we now need to change the law? Those are the only real issues here.
Anyone who still believes the collapse of our economy was just an accident is a blithering idiot. It was orchestrated and carried out by politicians and their rich buddies. All we got was a Marxist “president” and a ‘RAT congress out of the deal.
Having said that, and stating, for the record, that I do not like GS at all, the problem was ACORN, CRA, Dodd, Barney Frank, Fannie and Freddie, and even Obama!
Goldman simply tried to make money off of bad public policy.
I'm not defending these jerks, obviously, but it's funny how the MSM are getting right in line with the Democrats' plan to run against Bush again this November. Get that anti-rich-people furor stirred up! Forget Barney Frank and Chris Dodd, too complicated! Boo The Rich--they said happy things when the market was tanking!
What an utterly silly story. The ultimate insult to these reporters isn't the actions that ruined the economy by dems--Barney looks sad at the right times, so he's ok.
Yes- Barney Frank, Chris Dodd; Maxime Waters etc should be serving serious jail time.
In what state is such a violation of fiduciary trust not criminal?
Absolutely, I am not blaming Goldman capitalizing on the stupidity of the US Government in creating a housing bubble.
I do call them on their hypocrisy in being contributing liberal Democrats that fostered the idiocy of sub-prime loans to erase the sins of previous ‘racist bankers’. Maybe it is Goldman’s absolute demonic genius to foster these contrived, unsound housing programs through their Democratic political connections and contributions - while they shorted the market. Goldman rope-a-doped them.
I thought this housing decline was a big big surprise to all the insiders. I guess it wasn’t. Also funny how I read about how this whole thing would play out on blogs all over the internet several years before it hit.
So what? They are free to take positions on markets. Many financial instruments are zero sum games, and market makers like Goldman MUST take the other side of the transaction. I.e., they must bet against their clients’ views.
It was a surprise to most of them. Do you think Bear Stearns, Lehman Brothers, and Merrill Lynch were happy with their positions?
>Barney looks sad at the right times, so he’s ok.
Barney looks sad ALL the time.
The ones at the very top? Sure they were. They skimmed out billions in bonuses and told all the underlines to shut up or else. I am sure all the middle managers sat around the water coolers talking about the coming demise, but they all knew if they made a stink about they would get fired. So they held on, watched the top players get untold millions and finally the walls came crumbling in. It was easy to predict. The timing of the demise was not easy to predict, but the collapse was an absolute certainty. When a house in California is sold at almost 0% down for 1 million dollars to a couple whose gross income is less than 100K then predicting this is easy. It was so easy to predict that even a caveman could do it.
So many crooks and thugs. The stink is overwhelming.
The problem is that they were selling the toxic mortgages that they KNEW were toxic because they knew the mortgages were being written out to any deadbeat with a pulse. (Investigations into toxic mortgages have documented that some mortgages were even made out to dead corpses.)
Then they bet against the toxic mortgages that they were selling.
Allow me to illustrate it another way.
Let's say that I own a butcher shop in a "meat & potatoes" town. I have establish a reputation for selling great steaks and my customers swear by me.
One day, I decide that I will never get rich, serious money rich, one T-Bone steak at a time.
So, I purchase some putrid carcasses that I know are contaminated with E coli and who knows what else, and I start selling cuts and hamburger from them and labeling the meat "Prime Aged Beef" even though I know my meat will probably kill you.
I then buy life insurance policies on you and several of my other customers.
You buy my "Aged Beef". You get sick and drop dead. I cash in on the life insurance policies I bought and I get filthy rich.
You get buried. Too bad. So sad.
After a year, I have been arrested for murder and TV cameras are following me on my "perp walk". A TV reporter sticks a microphone in my face, recounts what I did for the TV camera and asks me if I have anything to say for myself.
I reply, "The problem with this is what?"
Many cheered the decline in the price of oil and made large amounts of money. At oil's 2008 peak, many thought it would go to $200. But the ones who bet on sub $100 oil were right and made money.
That is not the same scenario.
There was nothing wrong with the oil that was being sold.
The analogous situation would be oil traders knowingly selling very dangerous oil that they KNEW would blow up ships and refineries and then betting that oil prices would drop after oil sales came to a screeching halt.
I dunno, he looks pretty happy when he’s pushed through some bullshit legislation, the powermad freak.
Not if you are selling poisoned meat at the meat market that you know is poisoned.
See Post 18.
Let's have a third analogous situation:
Toyota knows that there is a serious safety problem with some of its cars regarding runaway acceleration.
Instead of warning the customers before the sale, they tell the customers that Toyota has a very high reputation for quality. After each sale, Toyota then takes out a life insurance policy on each customer.
As the customer deaths and the life insurance policy payouts pile up, the Toyota dealers gleefully e-mail each other about how they will be making "serious money".
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