Comments on: Goldman’s win

By: HBC

HBC — Sat, 17 Jul 2010 21:13:38 +0000

When Phil Gramm and other agents of satan went about repealing Glass-Steagall and de-fanging CFTC they were essentially – no, deliberately, decriminalizing a process that would lead to mass impoverishment on an unprecedented scale. It is now but the flimsiest of clausal deniability of wrongdoing that stands between Goldman Sachs and a firing squad.

If Congress took the same “liberal” approach to decriminalizing hard narcotics, at least Americans could afford the mind-numbing substances it would take to be completely chill with the perpetrators and their unctuous apologists.

By: hsvkitty

hsvkitty — Sat, 17 Jul 2010 17:39:53 +0000

Oh and a reminder that the advice of Brooksley Born was ignored because she understood that unregulated risky derivatives could not be left unregulated due to lack of ethics on Wallstreet and greed.

As Born recently observed: “Recognizing the dangers wasn’t rocket science … but it was contrary to the conventional wisdom and the economic interests of Wall Street”.

Is there any wonder there is a hue and cry that a corrupt Wallstreet runs the Government? The URL’s above and this GS slap on the wrist and an ineffective SEC does nothing to counter those beliefs. Nor does the watered down regulations.

By: hsvkitty

hsvkitty — Sat, 17 Jul 2010 17:26:19 +0000

Yes Danny, sorry, it was FCIC dump.

CDOs were flagrantly touted and misrepresented (Even Mr Fab was in awe of their complexity) and designed to be complex and riskier then most were aware.

Greed in the midst of a bubble? The fat cat greed is always there and has to be bridled. Without Financial regulations, it just gets more creative and this last bit of regulation is just a hurdle with loopholes to find.

What corruption on Wallstreet am I complaining about? All of it! Sure retail investors fell for high yield risk as did those burned by the ponzi schemes. So you are saying they deserved to be cleaned out because they were greedy? Madoff says so too, as does Fab. They should have been more careful, but then TRUST was also supposed to be part of the equation, although that term seems to be as important as ethics in finance. (relatively non existent which is why corruption is rampant)

http://baselinescenario.com/2010/04/20/c linton-rubin-summers-derivatives/

And then we have people like Rubin who insist after the fact that he was all for derivative regulation because he knew the risks, yet voted in favour of his previous benefactors when he quashed regulations which could have prevented the crisis.

http://www.huffingtonpost.com/2010/04/20 /rubin-i-actually-supporte_n_545113.htm l

There is a long trail of complicity and greed, but I was hoping that starting at the top would at least stop the fatcats from doing it again and again. Meanwhile, the little guys involved are doing time.

By: Danny_Black

Danny_Black — Sat, 17 Jul 2010 07:21:07 +0000

hsvkitty, firstly GS dumped those docs on FCIC not the SEC after they complained about not delivering all the docs.

Exactly what corruption you complaining about? What there is is greed in the midst of a bubble and when you follow the trail of how is driving that greed it leads to the retail investor….

By: hsvkitty

hsvkitty — Fri, 16 Jul 2010 21:15:21 +0000

Danny Black, that is hog wash. There is so much corruption on Wallstreet and it is so common place, no one wants to call it anything but what it is… legalized book making. (yet marketmaking sounds so much more ethical doesn’t it?)

I hope this slap on the wrist is followed by morecivil suits. Their cohorts (and other others) are happily crowing it was a trumped up case, but it was just a poorly handled one.

They should have fined Goldman that much simply for dumping documents on the SEC to distract them.

By: Danny_Black

Danny_Black — Fri, 16 Jul 2010 07:59:50 +0000

slowlearner, the fact is that this case was always rubbish and the SEC was relying on a hysterical press and ignorant general population to not understand what happened, ignore that at the time of the trade it was not obvious that the world was coming to an end and hope people would judge based on 20-20 hindsight – which turned out to be a pretty good prediction on what would happen.

Given at one point it looked like GS was in serious danger of collapse, this settlement was a non-brainer for them.

By: Danny_Black

Danny_Black — Fri, 16 Jul 2010 07:55:50 +0000

specialk4000, the real reason is that there was never a case to answer and this case was political ammunition to pass a worthless bill. That bill is now passing so no need to keep suing GS, the SEC just took the blood money and ran.

By: Danny_Black

Danny_Black — Fri, 16 Jul 2010 07:52:51 +0000

Basically there was never a case to answer and GS paid extortion money to the goverment to make them go away. The SEC doesn’t care because the finReg bill is now passing and they don’t need a punchbag anymore.

By: enoriverbend

enoriverbend — Fri, 16 Jul 2010 02:58:43 +0000

What slowlearner said.

It was an extremely weak case and a small, token (by GS standards) settlement seemed preordained. Consider the $550M as a political payoff or extortion money for the SEC to shut up and go pester someone else.

The more amusing part is that IKB is being rewarded $150M of the “restitution” for, well, managing to hire incompetents.

By: specialk4000

specialk4000 — Fri, 16 Jul 2010 01:49:02 +0000

While it’s true that this sort of settlement has historically been standard procedure (at least in recent times – I wonder if it was always thus?), here’s why we should be surprised: we just had a rather large financial crisis, one of whose prime beneficiaries appears to have been Goldman Sachs. How naive of me to think that perhaps the time for business as usual had passed. And Felix, if you actually think any jury empaneled in this country could have been persuaded to acquit Goldman Sachs of any charge short of serial murder you are living on a different planet. The SEC decides not to go forward because most of its employees ultimately want to work for Goldman or somebody else on Wall Street and an ugly trial would sully those prospects.

By: slowlearner

slowlearner — Fri, 16 Jul 2010 00:12:20 +0000

This was always the most likely outcome. The SEC prefers to settle cases rather than litigate, especially against powerhouses such as GS. It conserves resources and allows the SEC to pursue additional cases with the time, money, and labor it would have expended on suing GS. Likewise, GS had enormous incentives to settle the case in order to draw a line under what was a serious PR disaster. And it is standard procedure in SEC settlements for the settling party not to admit wrongdoing – admission of guilt in such settlements is almost unheard of. I don’t see how anybody could have been surprised by this outcome.

By: DanHess

DanHess — Thu, 15 Jul 2010 22:00:03 +0000

Apparently the meeting yesterday between Buffett and Obama was a very long meeting, and it was initiated by Buffett, not Obama.

By: DanHess

DanHess — Thu, 15 Jul 2010 21:47:45 +0000

Looks like the SEC blinked! Note that this came one day after Obama met with Buffett.

Obama Meets With Buffett to Discuss Economy, Jobs
http://www.washingtonpost.com/wp-dyn/con tent/article/2010/07/14/AR2010071405107. html

Coincidence? Not a chance. Goldman’s special dividend payments to Buffettt have proven to be the best investment of all time.

By: HBC

HBC — Thu, 15 Jul 2010 21:37:08 +0000

In ethics, money and trust, Goldman’s win is society’s loss. That much is now settled. By the hyena-like shrieking of their laughter shall ye know the way to the bank.

By: TinyOne

TinyOne — Thu, 15 Jul 2010 20:49:15 +0000

Is this as close as we will get to a mea culpa from you for your over-the-top, hysterical analysis when this case first broke? You pontificated with minimal understanding of the facts of the case and minimal comprehension of bespoke mortgage credit derivatives. Here’s a napkin for the egg on your face.