Senate report to reveal mortgage crisis details: WSJ

Yahoo ^ | 4/3/11 | AFP

[NormsRevenge]

WASHINGTON (AFP) – The Senate will soon issue findings of a probe of the US mortgage meltdown that fueled the global financial crisis, with Goldman Sachs likely to face fresh embarrassment over its role, the Wall Street Journal reported Sunday.

The Senate Permanent Subcommittee on Investigations, whose high-profile inquiry commission subpoenaed Goldman's and other executives last year, is due to release its report on the subprime implosion of 2007 and 2008.

The paper, citing people familiar with the matter, said the report was expected to release emails from securities firms that developed or sold subprime mortgages and financial vehicles including collaterized debt obligations (CDO).

CDOs were used to help Wall Street firms bet against the housing market. When the housing bubble burst, several of the top CDOs were downgraded to "junk" status, and their values plunged.

Goldman, the Journal reported, created CDOs in 2006 and 2007 to shield its exposure to the US housing market, and has been accused of making large bets against the market while selling bullish positions to group that were not expecting the market to fall.

People familiar with the matter said Goldman and Deutsche Bank -- both of which have been criticized for misleading investors in the housing market -- were expected to draw particular scrutiny in the report, the Journal said.

In January, Goldman said it was renewing its commitment to the "primacy" of client interests, and laid out 39 recommendations stressing greater transparency in how the company does business, especially with regard to its own private trading and potential conflicts of interest.

The Journal said the Senate investigation's findings would likely expose bad blood between Goldman and Morgan Stanley, another Wall Street giant, over their roles in a deal involving a CDO called Hudson Mezzanine Funding 2006-1.

[hobbes1]

There will be no Mention of Fannie, Freddie, and their Dem patrons.

[NormsRevenge]

aw come one, they have to give us a little meat. :-)

[EGPWS]

...and their Dem patrons.

Like Bwaney (from behind) Fwank and Mr. Dodd?

They are so into helping people that they couldn't hurt a soul. /s

[NormsRevenge]

CEO of Goldman Sachs Lloyd C. Blankfein listens to President Barack Obama speak at the annual meeting of the Business Council at the Park Hyatt Hotel in Washington, May 4, 2010. REUTERS/Larry Downing

[kittymyrib]

Let’s not forget that the execs at Fannie Mae and Freddie Mac were paid $35,000,000 in bonuses for doing such a swell job of writing mortgages for people absolutely sure to default. This entire federal government should be disbanded and all authority except the Defense Dept. should be delegated to the states.

[mewykwistmas]

Let’s get to core: how many bankers are in jail because of this?

Thank you. The rest is whitewash

[Toddsterpatriot]

has been accused of making large bets against the market while selling bullish positions to group that were not expecting the market to fall.

Amazing! People who bought bullish positions were not expecting the market to fall. LOL!

In other news, people who bet on the Cubs yesterday won money from people who were making bets against the Cubs.

[evad]

Goldman Sachs, the co-conspirators in the quantitative easing

[Thane_Banquo]

The Democratic Party is a subsidiary of Goldman Sachs. Same for the Bush-Rudy-McRomney RINO establishment. Goldman Sachs represents a clear and present danger to our liberty and Constitutional system.

[Siena Dreaming]

The paper, citing people familiar with the matter, said the report was expected to release emails from securities firms that developed or sold subprime mortgages and financial vehicles including collaterized debt obligations (CDO).

Anything about the CRA?

Didn't think so.

[BobL]

Consider that the AVERAGE salary of GS workers (including janitors) is about $700,000, I think they’ll be able to handle a bit of a tongue lashing by the Senate.

[WesternOne]

Crony capitalism—no other way to call it.
Big Wall Street and the Democratic Party, two peas in the same pod.

Wall Street provided three of Obama’s seven biggest sources of contributors for his presidential bid. In 2007 and 2008, Goldman Sachs employees and family members gave him $994,795, Citigroup Inc. $701,290, and JPMorgan Chase & Co. $695,132.

In 2007 and 08, then candidate Barack Obama received $1 million from Goldman Sachs for his White House bid.

Goldman Sachs second only to the University of California as Pres. Obama’s biggest single source for donors in 2007 and 2008.

Gov. Palin is the only leader who has the experience in tackling and exposing corrupt politicians.

[Free Vulcan]

Fannie and Freddie were the gatekeepers. Without them there would be no junk subprimes originated by banks like Countrywide for brokerages like The Golden Sacks to collateralize. F+F essentially put the system on crack.

Here's the other problem:

"Goldman, the Journal reported, created CDOs in 2006 and 2007 to shield its exposure to the US housing market, and has been accused of making large bets against the market while selling bullish positions to group(s) that were not expecting the market to fall."

Any horse's ass who invests and thinks things will never change is a sucker to be taken and should have never been in the market in the first place.

[Toddsterpatriot]

Any horse's ass who invests and thinks things will never change is a sucker to be taken and should have never been in the market in the first place.

True. The customers buying the synthetic CDOs from Goldman were huge, sophisticated multi-billion dollar firms. In fact, they requested the CDOs be created, so they could buy them. LOL!

[SVTCobra03]

If there was any justice in the world we would see Dodd and Franks on prime time news reports in orange jump suits doing the perp walk on their way to Leavenworth. But there is no justice in this world.

[hattend]

How many of Goldman Sachs personnel are on Obama’s cabinet or upper management team?

I wonder if it will mention that?

[apoliticalone]

Harvard / Goldman / NYC / equals a punched ticket to make USA policy on financial and foreign policy matters.

They even have an expression for it - “Harvard - Goldman Filter”. Most of us representative of more abundant demographics and less prestigious education are not in the club and are basically considered as serfs for exploitation.

http://econlog.econlib.org/archives/2009/12/the_harvard-gol.html

[AndyJackson]

Goldman Sachs second only to the University of California as Pres. Obama’s biggest single source for donors in 2007 and 2008.

I pulled the list. It is remarkably frightening, actually.

University of California $1,591,395
Goldman Sachs $994,795
Harvard University $854,747
Microsoft Corp $833,617
Google Inc $803,436
Citigroup Inc $701,290
JPMorgan Chase & Co $695,132
Time Warner $590,084
Sidley Austin LLP $588,598
Stanford University $586,557
National Amusements Inc $551,683
UBS AG $543,219
Wilmerhale Llp $542,618
Skadden, Arps et al $530,839
IBM Corp $528,822
Columbia University $528,302
Morgan Stanley $514,881
General Electric $499,130
US Government $494,820
Latham & Watkins $493,835

What should be frightening is that the biggest influence consumers are: semi-radical universities still trying to monopolize the debate while taking the New Deal as an extreme right wing position;wall street and finance companies; and legal power brokers.

What is missing is all of the industry that makes America actually run, to the extent we still have some - you know, domestic oil, coal and gas, steel, etc.

A good study of how the US is swirling down the drain could be make from just this list alone.

[unkus]

I heard that Dodd is now in Hollywood.

Bawney is still dropping the soap in showers in gay men’s clubs in MA and DC.