“I presented you with a link to serious well-researched information on which to make a judgment as to whether the fact that Heidi Cruz is a key executive for the Houston branch of Goldman & Sachs would have undue influence on Ted Cruz”
The barnhardt blog that you linked to makes no mention of Heidi Cruz at all. (Your blog?)
It is full of conjecture about derivatives, and manages to lump in the quasi-insurance instruments known as Credit Default Swaps for good measure.
Since there is no data on any of the derivatives other than their sheer number the article is useless despite the fact that it appears to have you fascinated. Without knowing what sort they are there is no way to know the exposure of the banks to risk, and yet somehow the blog writer claims to know exactly that.
Perhaps this link (embedded in Barnhardt’s article) will help:
Risk Is Back: America’s Big Banks Are Knee-Deep In Derivatives (FORBES 03/28/2013)
This too:
OCCs Quarterly Report on Bank Trading and Derivatives Activities - Fourth Quarter 2013
http://www.occ.gov/topics/capital-markets/financial-markets/trading/derivatives/dq413.pdf
And Barnhardt does in fact mention Heidi Cruz - here on her front page (See Point 6):
And she provides a link to Mrs. Cruz’ LINKED-IN page:
http://www.linkedin.com/pub/heidi-cruz/4/811/777
I also suggest you go here:
Scroll down the page to this title:
Banks and Derivative Super-Priority
That should give you pause.
Here, put THIS in your pipe and smoke it -
“I Am Putting Everything In Goldman Sachs Because These Guys Can Do Whatever The Hell They Want” Submitted by Tyler Durden on 09/28/2014 23:18 -0400
UN-FREEPING BELIEVABLE!
When we first covered the Carmen Segarra lawsuit alleging the capture of the NY Fed by Goldman Sachs back in October 2013, we didn’t have much hope for justice to get done. We said that “while her allegations may be non-definitive, and her wrongful termination suit is ultimately dropped, there is hope this opens up an inquiry into the close relationship between Goldman and the NY Fed. Alas, since the judicial branch is also under the control of the two abovementioned entities, we very much doubt it.”
Sure enough, the lawsuit was dropped (and no inquiry was opened) but not before it became clear that the very judge in charge of the case, U.S. District Judge Ronnie Abrams, was herself conflicted, after it was revealed that her husband, Greg Andres, a partner at Davis Polk & Wardwell, was representing Goldman in an advisory capacity. Curiously, before she assumed her current office in March 2013, back in 2008 Abrams returned to Davis Polk herself as Special Counsel for Pro Bono. She had previously worked at the firm from 1994 to 1998. For the full, and quite amazing, story of how the “Judge” steamrolled Segarra’s objections reads this Reuters piece.
As a result of this fiasco, some wondered just how far do Goldman’s tentacles stretch not only at the money-printing (i.e., NY Fed) level, not only at the legislative level (see “With Cantor Down, Which Other Politicians Has Goldman Invested In?”), but at the judicial as well.
And then, on Friday, the Segarra case against the Federal Reserve branch of Goldman Sachs got a second wind, when as a result of another disclosure, ProPublica revealed “How Goldman Controls The New York Fed in 47.5 Hours Of “The Secret Goldman Sachs Tapes.” That is to say, nothing new was revealed per se, because as anyone who has read this website for the past 6 years knows just how vast Goldman’s network is not only at the Fed, but in that all important other continent too, Europe.
Sadly, just like a year ago, so this time too, we are reluctant to say anything will change. In fact, there is too much at stake, for Goldman to drop the reins and disassociate from the NY Fed: for pete’s sake, the president of the NY Fed is a former Goldman employee - does it get any more conflicted than that?!
But, wait, Goldman will do penance by “prohibiting its bankers from buying stocks”... the horror. Luckily at least purchasing politicians and Fed presidents is still perfectly allowed.
In fact, what has become clear to everyone is that aside from yet another dog and pony show (led by, you guessed, it the head dog and ponier herself, Elizabeth Warren), not only will nothing change, but in fact the best way to take advantage of a broken, corrupt, sinking system, is to join it. And the best summary of just that sentiment was released over the weekend by Nanex’ Eric Hunsader as follows [TWITTER]:
Eric Scott Hunsader @nanexllc
Follow
After listening to http://www.thisamericanlife.org/radio-archives/episode/536/the-secret-recordings-of-carmen-segarra
I’m putting everything in $GS - because these guys can do whatever the hell they want
5:22 PM - 26 Sep 2014
95 Retweets 60 favorites
But before we put this topic to bed, here is Raúl Ilargi Meijer explaining why “The US Has No Banking Regulation, And It Doesnt Want Any”
* * *
It is, lets say, exceedingly peculiar to begin with that a government in this case the American one, but thats just one example - in name of its people tasks a private institution with regulating not just any sector of its economy, but the richest and most politically powerful sector in the nation. Which also happens to be at least one of the major forces behind its latest, and ongoing, economical crisis.
That there is a very transparent, plain for everyone to see, over-sized revolving door between the regulator and the corporations in the sector only makes the governments choice for the Fed as regulator even more peculiar. Or, as it turns out, more logical. But it is still preposterous: regulating the financial sector is a mere illusion kept alive through lip service. Put differently: the American government doesnt regulate the banks. They effectively regulate themselves. Which inevitably means there is no regulation.
The newly found attention for ProPublica writer Jake Bernsteins series of articles, which date back almost one whole year, about the experiences of former Fed regulator Carmen Segarra, and the audio files she collected while trying to do her job, leaves no question about this.
Whats going on is abundantly clear, because it is so simple. The intention of the New York Fed as an organization is not to properly regulate, but only to generate an appearance or illusion of proper regulation. That is to say, Goldman will accept regulation only up to the point where it would cut into either the companys profits or its political wherewithal.
What the Segarra Files point out is that the New York Fed plays the game exactly the way Goldman wants it played. Ergo: there is no actual regulation taking place, and Goldman will comply only with those requests from the New York Fed that it feels like complying with.
In the articles, the term regulatory capture pops up, which means individual regulators are co-opted by the banks they are supposed to regulate. But the capture runs much larger and wider. Its not about individuals, its a watertight and foolproof system wide capture.
The government picks a private regulator which has close ties to the banks. The government knows this. It also knows this means that its chosen regulator will always defer to the banks. And when individual regulators refuse to comply with the system, they are thrown out.
In one of the cases Segarra was involved in during her stint at the Fed, the Kinder Morgan-El Paso takeover deal, Goldman advises one party, has substantial stock holdings in the other, and appoints a lead counsel who personally has $340,000 in stock involved. Conflict of interest? Goldman says no, and the Fed complies (defers).
The lawsuit Segarra filed against the NY Fed and three of its executives was thrown out on technicalities by a judge whose husband was legal counsel for Goldman in the exact same case. No conflict of interest, the judge herself decides.
This is not regulation, its a sick and perverted joke played on the American people, which it has been paying for it through the nose for years, and will for many years to come. Sure, Elizabeth Warren picks it up now and wants hearings on the topic in Congress, but shes a year late (its been known since at least December 2013 that Segarra has audio recordings) and moreover, it was Congress itself that made the NY Fed the regulator of Wall Street. Warren has as much chance of getting anywhere as Segarra did (or does, shes appealing the case).
The story: In October 2011, Carmen Segarra was hired by New York Fed to be embedded at Goldman as a risk specialist, and in particular to investigate to what degree the company complied with a 2008 Fed Supervision and Regulation Letter, known as SR 08-08, which focuses on the requirement for firms like Goldman, engaged in many different activities, to have company-wide programs to manage business risks, in particular conflict-of-interest. Some people at Goldman admitted it did not have such a company-wide policy as of November 2011. Others, though, said it did.
Lets take it from there with quotes from the 5 articles Bernstein wrote on the topic over the past year. To listen to the Segarra files, please go to The Secret Recordings of Carmen Segarra at This American Life.
One last thing: Jake Bernsteins work is of high quality, but I cant really figure why he says things such as the audio files show: a New York Fed that is at times reluctant to push hard against Goldman and struggling to define its authority. Through his work, and the files, it should be clear that just aint so. Both the Feds policy and authority are crystal clear and ironclad.
Long story, short, friend ... Y’all may continue to bury your heads in the sand, but in doing so, with your butts are high and dry in the air, Goldman & Sachs is gonna bite you hard. And who is going to stop them? Ted Cruz? Particularly when his wife is one of their leading executive officers? I think you need a reality check.