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Thread: A Free Ride for Goldman Sucks ?

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    Default A Free Ride for Goldman Sucks ?

    Another brilliant piece by Matt Taibbi in the latest Rolling Stone : " The People vs, Goldman Sachs". The upshot being that regardless of whether or not Goldman Sucks committed fraud ( and Taibbi and Gasparino have made out a good case that they did ), there is no doubt that Goldman poobahs lied to Congress about it. A bi-partisan report from the Senate Subcommittee on Investigations chaired by Carl Levin and co-chaired by Tom Coburn has laid out numerous instances of outright perjury. Lloyd "Blankbrain" Blankfein; David Viniar, Daniel Sparks and Michael Swenson repeatedly testified that: they didn't bet against their clients ; that Goldman's short positions were not "a large short" ; that they expected toxic mortgage deals to "perform" and that Goldman had "left money on the table" by refusing to bet against mortgage backed securities.

    Their testimony was directly contrary to their own e-mails and memos. Blankfein specifically asked his toadies : "Are we doing enough right now to sell off cats and dogs." Viniar circulated an e-mail calling Goldman's credit default swaps "the big short". Sparks said internally that Goldman expected many of its mortgage deals to underperform and Swenson bragged about the profits he made for Goldman while betting against mortgages.

    Levin referred these and a host of other instances of clear perjury to Obama's Justice Department for prosecution. They are gathering dust and will continue to do so. There will be no indictments. Why ? Obama is running for re-election next year and needs to raise a billion dollars. Goldman Sucks was one of his biggest contributors as Charlie Gasparino spelled out in his latest book : "Bought And Paid For ". How can he indict these guys and then expect them to contribute to his campaign ?

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    Default Re: A Free Ride for Goldman Sucks ?

    While not wanting to dwell on the political aspects, it's an economic fact that Wall St. corporations 'officially' donated $12+ million dollars to democratic presidential candidates in 2008, and donated $7+ million dollars to democratic senators and representatives in 2010. Far MORE money was donated to democratic candidates by individuals working on Wall St.

    And yes it was a running joke on professional investors' sites for a while that the big Wall St financial houses were playing both sides of the street i.e. recommending certain investments to their 'rich' investor clients ( thus raking commissions ) while at the same time prop trading against them with the 'house's own money.

    As to any realistic possibility of any Wall St. firm facing serious investigation or actual indibtment, it's pretty obvious at this point that neither the US Senate nor mainstream US media nor Obama's Justice Dep't are interested !
    Last edited by Melonie; 05-23-2011 at 03:11 PM.

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    Default Re: A Free Ride for Goldman Sucks ?

    Just a minute. What would prevent the Republican candidate for President ( and congressional candidates ) from using this as a campaign issue ? Similar type stuff kept Truman from running for re-election in 1952. Wall Street is NOT very popular in flyover country. Giving Goldman a pass on such blatant perjury will NOT sell well on Mian Street.

    An interesting side issue is WHY Goldman lied so blatantly to Congress ? A fraud case based on what they were doing is no slam dunk. The only thing I can think of is that they dared not admit that they were fucking their own clients. Which they clearly were. But why lie about it ?
    Everybody on The Street KNOWS what Goldman was doing.

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    Default Re: A Free Ride for Goldman Sucks ?

    ^^^ Again, nobody that is actually in a position to force such an investigation / prosecution ( over the objections of other influential entities ) has much inclination to do so. Instead they are investigating the reasons that oil company profits increased from 6% to 9% !

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    Default Re: A Free Ride for Goldman Sucks ?

    I don't think that Goldman is getting a free ride at all. Not only has its senior executives been been paraded before Congress, but the SEC, DOJ and CFTC are all pursuing different actions against Goldman for different matters.

    The reason that the DOJ and SEC are not pursuing actions relating to the matters covered in Congressional testimony is simple: They can't prove that Goldman knew that the mortgages were not going to perform. Goldman may have lied about their view of the mortgage market in order to sell these mortgages, but an opinion is not a fact. Goldman's counterparties were not exactly moms and pops, but rather were instutional and hedge fund managers who had access to the same market and economic data that Goldman did and could have formed their own views on the mortgage markets.

    In order to prove that Goldman committed fraud, law enforcement agencies would need to prove that Goldman had specific information about the quality of the borrowers, impending defaults or late payments, etc., that it did not disclose to its counterparties. As far as I know, no hard evidence has surfaced to suggest that Goldman hid specific infoirmation regarding the quality of these mortgages. If such evidence did exist, I have no doubt that they would be besieged not only by federal law enforcement agencies, but by also civil suits brought by the firms that purchased these mortgages

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    Default Re: A Free Ride for Goldman Sucks ?

    Quote Originally Posted by rickdugan View Post
    I don't think that Goldman is getting a free ride at all. Not only has its senior executives been been paraded before Congress, but the SEC, DOJ and CFTC are all pursuing different actions against Goldman for different matters.

    The reason that the DOJ and SEC are not pursuing actions relating to the matters covered in Congressional testimony is simple: They can't prove that Goldman knew that the mortgages were not going to perform. Goldman may have lied about their view of the mortgage market in order to sell these mortgages, but an opinion is not a fact. Goldman's counterparties were not exactly moms and pops, but rather were instutional and hedge fund managers who had access to the same market and economic data that Goldman did and could have formed their own views on the mortgage markets.

    In order to prove that Goldman committed fraud, law enforcement agencies would need to prove that Goldman had specific information about the quality of the borrowers, impending defaults or late payments, etc., that it did not disclose to its counterparties. As far as I know, no hard evidence has surfaced to suggest that Goldman hid specific infoirmation regarding the quality of these mortgages. If such evidence did exist, I have no doubt that they would be besieged not only by federal law enforcement agencies, but by also civil suits brought by the firms that purchased these mortgages
    We are looking at two totally different things. I sort of agree with you that prosecuting Goldman for fraud is no easy row to hoe. But perjury would be a slam dunk based on Goldman's own internal documents and e-mails. They told Congress one thing and had previously said the exact opposite when just talking to each other. Goldman, as early as 2007, KNEW the mortgage market was in serious trouble. They were both unloading as much toxic mortgage waste as possible AND buying credit default swaps from AIG to hedge against the mortgage market.

    It is true that many of Goldman's customers were sophisticated investors with their own duties of due diligence. BUT what about cases where Goldman was packaging the product and representing it as safe, Triple A, investment grade stuff ? Cases where Goldman's own internal memos say that they KNEW it was garbage ? Where they mocked a client who bought $100 million of the garbage as a "white elephant, flying pig and unicorn all at once." What about Goldman's fiduciary duties to its CLIENTS ? Their duty of good faith ? The whole case against Goldman is based on exactly the sort of non-disclosure you lay out. Goldman DID know and did not disclose. Instead they bet in a way exactly opposite to the interests of their own clients.

    Assuming arguendo that they did NOT commit fraud then WHY lie about it to Congress ? And there is no doubt that they did just that.

    Is this the kind of precedent we want to see set ? It's O.K. to lie to Congress so long as you're a big enough campaign contributor and provide enough high paying jobs to former Democrat officials ?
    Last edited by Eric Stoner; 08-28-2012 at 08:31 AM.

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    Default Re: A Free Ride for Goldman Sucks ?

    Quote Originally Posted by Eric Stoner View Post
    We are looking at two totallhy different things. I sort of agree with you that prosecuting Goldman for fraud is no easy row to hoe. But perjury would be a slam dunk based on Goldman's own internal documents and e-mails. They told Congress one thing and had previously said the exact opposite when just talking to each other. Goldman, as early as 2007, KNEW the mortgage market was in serious trouble. They were both unloading as much toxic mortgage waste as possible AND buying credit default swaps from AIG to hedge against the mortgage market.
    IDK, but if perjury was a slam dunk then I strongly suspect that prosecutions would have started. One email or snippet is not necessarily definitive proof of one's beliefs over a period of time. Anyway, we shall see.

    But Goldman KNEW no more than anyone else about the mortgage markets overall. There were many hedge fund and institutional mortgage investors who did NOT buy what Goldman was selling. Goldman was betting against the mortgage market and some other investors were betting with it.

    There was really no winning for Goldman with this. If they had held on to those mortgages and took serious losses to the extent that they were at risk of collapse, then we would now be criticizing them for needing a bailout. Instead, we are criticizing them for doing the responsible thing by reducing their exposures during a time of uncertainty.

    Quote Originally Posted by Eric Stoner View Post
    It is true that many of Goldman's customers were sophisticated investors with their own duties of due diligence. BUT what about cases where Goldman was packaging the product and representing it as safe, Triple A, investment grade stuff ? Cases where Goldman's own internal memos say that they KNEW it was garbage ? Where they mocked a client who bought $100 million of the garbage as a "white elephant, flying pig and unicorn all at once." What about Goldman's fiduciary duties to its CLIENTS ? Their duty of good faith ? The whold case against Goldman is based on exactly the sort of non-disclosure you lay out. Goldman DID know and did not disclose. Instead they bet in a way exactly opposite to the interests of their own clients.
    Again, Goldman KNEW no more than anyone else about the mortgage markets overall. And if Goldman did not fully disclose the risks associated with the types of mortgages being placed in these pools in their private placement memoranda (PPMs), we would not be having this discussion and they would likely be on their way to a multi-billion dollar settlement with the SEC.

    Hindsight is 20/20 and nobody knew the extent to which the mortgage market was going to melt down, nor how high the default rates would be. Certain proefssional investors just made bad investment decisions, period.

    And not to get technical about this, but right now brokerage firms are not subject to the fiduciary standards that fee based money managers are held to, but rather are only required to ensure that a particular investment is suitable for a given client. Under the current suitability standards, it is hard to argue the notion that large hedge funds and institutional investors can purchase pretty much anything that they want.
    Last edited by rickdugan; 05-24-2011 at 12:14 PM.

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    Default Re: A Free Ride for Goldman Sucks ?

    Quote Originally Posted by rickdugan View Post
    IDK, but if perjury was a slam dunk then I strongly suspect that prosecutions would have started. One email or snippet is not necessarily definitive proof of one's beliefs over a period of time. Anyway, we shall see.

    But Goldman KNEW no more than anyone else about the mortgage markets overall. There were many hedge fund and institutional mortgage investors who did NOT buy what Goldman was selling. Goldman was betting against the mortgage market and some other investors were betting with it.

    There was really no winning for Goldman with this. If they had held on to those mortgages and took serious losses to the extent that they were at risk of collapse, then we would now be criticizing them for needing a bailout. Instead, we are criticizing them for doing the responsible thing by reducing their exposures during a time of uncertainty.



    Again, Goldman KNEW no more than anyone else about the mortgage markets overall. And if Goldman did not fully disclose the risks associated with the types of mortgages being placed in these pools in their private placement memoranda (PPMs), we would not be having this discussion and they would likely be on their way to a multi-billion dollar settlement with the SEC.

    Hindsight is 20/20 and nobody knew the extent to which the mortgage market was going to melt down, nor how high the default rates would be. Certain proefssional investors just made bad investment decisions, period.

    And not to get technical about this, but right now brokerage firms are not subject to the fiduciary standards that fee based money managers are held to, but rather are only required to ensure that a particular investment is suitable for a given client. Under the current suitability standards, it is hard to argue the notion that large hedge funds and institutional investors can purchase pretty much anything that they want.
    Goldman's internal memos and e-mails say different. That they DID know better than a LOT of other folks. And that Goldman was saying one thing behind closed doors and quite another to their own customers. Here's the clincher afaic : Not only did Goldman hedge its postion vis a vis toxic mortgage products but afaik they did NOT advise a single client to do likewise.

    Secondly, for a lot of its clients, Goldman was more than just a broker.

    Third, if Goldman wasn't dirty then why did they agree to pay a record SEC fine of $550 million over the Abacus deal ? And the Abacus deal was just one of several where Goldman's behavior was highly questionable, to put it mildly.

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    Default Re: A Free Ride for Goldman Sucks ?

    Quote Originally Posted by Eric Stoner View Post
    Goldman's internal memos and e-mails say different. That they DID know better than a LOT of other folks. And that Goldman was saying one thing behind closed doors and quite another to their own customers. Here's the clincher afaic : Not only did Goldman hedge its postion vis a vis toxic mortgage products but afaik they did NOT advise a single client to do likewise.

    Secondly, for a lot of its clients, Goldman was more than just a broker.

    Third, if Goldman wasn't dirty then why did they agree to pay a record SEC fine of $550 million over the Abacus deal ? And the Abacus deal was just one of several where Goldman's behavior was highly questionable, to put it mildly.
    Nobody knows how a market is going to move, how deep the move is going to be or how long that move will last. Goldman just made an educated guess and they were right.

    And Abacus is not representative of Goldman as a whole. This was about one guy, and a VP level at that, who collaberated with a hedge fund manager to put together an offering that should never have been sold. This one guy was also the person who put together the marketing pieces in which he lied about how the mortgages were selected. The sad thing is that Goldman was paid a measly $15 million by Paulson for doing this, which is small potatoes for a deal of that size. Believe me when I say that Goldman was not going to risk its reputation over a transaction fee of $15 million.

    And again, these are not clients in the investment management sense. Brokerage firms take the other sides of bets all day long. Also, it is very unclear if Goldman was consistently short or was in and out of net short positions at different points.

    Of course, none of us have seen all of the evidence, including the firm's proprietary trading records for the entire timeframe or all of the other emails around this outside of the few that were cherry picked for sensationalism. But suffice it to say that I am sure that the regulators have already done a much deeper dive than Rolling Stone Magazine.

    Time will tell, but I can say that if the SEC or DOJ had enough to go after Goldman for anything else, I suspect that they already would have.

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    Default Re: A Free Ride for Goldman Sucks ?

    Quote Originally Posted by rickdugan View Post
    Nobody knows how a market is going to move, how deep the move is going to be or how long that move will last. Goldman just made an educated guess and they were right.

    And Abacus is not representative of Goldman as a whole. This was about one guy, and a VP level at that, who collaberated with a hedge fund manager to put together an offering that should never have been sold. This one guy was also the person who put together the marketing pieces in which he lied about how the mortgages were selected. The sad thing is that Goldman was paid a measly $15 million by Paulson for doing this, which is small potatoes for a deal of that size. Believe me when I say that Goldman was not going to risk its reputation over a transaction fee of $15 million.

    And again, these are not clients in the investment management sense. Brokerage firms take the other sides of bets all day long. Also, it is very unclear if Goldman was consistently short or was in and out of net short positions at different points.

    Of course, none of us have seen all of the evidence, including the firm's proprietary trading records for the entire timeframe or all of the other emails around this outside of the few that were cherry picked for sensationalism. But suffice it to say that I am sure that the regulators have already done a much deeper dive than Rolling Stone Magazine.

    Time will tell, but I can say that if the SEC or DOJ had enough to go after Goldman for anything else, I suspect that they already would have.
    Again, I am sorry but I must beg to differ. One thing that was clearly established by the post mortems of the financial crisis was that the SEC is both understaffed and often lacks expertise. The DOJ is politically compromised and will not go after Goldman so long as Obama is dependent on them for campaign contributions.

    Do you seriously think that Goldman has been sitting on exculpatory e-mails and other records ? According to numerous sources in multiple reports, Blankfein blew a gasket after the savaging Goldman got both in the press and from Obama. If there were records that set out YOUR version of events, why hasn't Goldman put them out there ? ( I know, I know. You're playing Devil's Advocate as opposed to sticking up for Goldman.)

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    Default Re: A Free Ride for Goldman Sucks ?

    Quote Originally Posted by Eric Stoner View Post
    Again, I am sorry but I must beg to differ. One thing that was clearly established by the post mortems of the financial crisis was that the SEC is both understaffed and often lacks expertise. The DOJ is politically compromised and will not go after Goldman so long as Obama is dependent on them for campaign contributions.

    Do you seriously think that Goldman has been sitting on exculpatory e-mails and other records ? According to numerous sources in multiple reports, Blankfein blew a gasket after the savaging Goldman got both in the press and from Obama. If there were records that set out YOUR version of events, why hasn't Goldman put them out there ? ( I know, I know. You're playing Devil's Advocate as opposed to sticking up for Goldman.)
    If this Obama angle was really the case, then neither the SEC nor the CFTC would be going after Goldman either. Who do you think appoints the Commissioners of each agency? But the SEC has already tagged Goldman for $500 million and the CFTC is now taking its shot as well, and the worst part is that both of these cases come from one-off situations that Goldman would have been hard pressed to spot and stop. This is indeed political, but you and I disagree as to which way the windmill is turning here.

    And sure Blankfein was pissed - Goldman is taking a beating in the press and he thinks that it is unfair. But no firm in its right mind ever voluntarily releases information that may be part of a regulatory investigation to the press. Ever. There are too many ways that it can be cherry picked or misconstrued without full context. All Goldman can do is let the politicians have their 5 minutes of grandstanding and win its case where it matters, which is with the regulators.

    Goldman has already produced millions of pages of documents relating to its mortgage unit. If the DOJ and/or SEC do not pursue additional charges against Goldman, it will not be because they lack either data or political will, but because they don't have a case.

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    Default Re: A Free Ride for Goldman Sucks ?

    Quote Originally Posted by rickdugan View Post
    If this Obama angle was really the case, then neither the SEC nor the CFTC would be going after Goldman either. Who do you think appoints the Commissioners of each agency? But the SEC has already tagged Goldman for $500 million and the CFTC is now taking its shot as well, and the worst part is that both of these cases come from one-off situations that Goldman would have been hard pressed to spot and stop. This is indeed political, but you and I disagree as to which way the windmill is turning here.

    And sure Blankfein was pissed - Goldman is taking a beating in the press and he thinks that it is unfair. But no firm in its right mind ever voluntarily releases information that may be part of a regulatory investigation to the press. Ever. There are too many ways that it can be cherry picked or misconstrued without full context. All Goldman can do is let the politicians have their 5 minutes of grandstanding and win its case where it matters, which is with the regulators.

    Goldman has already produced millions of pages of documents relating to its mortgage unit. If the DOJ and/or SEC do not pursue additional charges against Goldman, it will not be because they lack either data or political will, but because they don't have a case.
    We'll have to agree to disagree.

    Gasparino made out an excellent case in "Bought And Paid For" that Obama riased millions from Goldman. Taibbi in his Rolling Stone articles and his book "Griftopia" made out a strong case of fraud and perjury on the part of Goldman.

    There IS a counterargument ( which you set out rather well btw ) that Goldman just gamed the system but managed to stay within the lines of legality. But the question remains : Then why lie about it to Congress ? So blatantly that it was a bi-partisan referral to the DOJ. Why not just say : "We didn't break any laws. We just were sharper than everyone else."

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    Default Re: A Free Ride for Goldman Sucks ?

    While nobody is betting that Eric Holder is gonna go after Obama's "Golden Goose" there are two expanding investigations of Goldman by BOTH N.Y.S. Attorney General Eric Shneiderman and Manhattan D. A. Cy Vance Jr. It's ironic that people as politically corrupt as Shneiderman and as dumb as Vance are actually doing this work but Goldman does come under State laws that have been used in the past by both former A.G. Elliott "Client Number 9 " Spitzer and former D.A. Robert "The Talking Cadaver" Morgenthau. We shall see.
    Last edited by Eric Stoner; 06-03-2011 at 10:30 AM.

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    Default Re: A Free Ride for Goldman Sucks ?

    Quote Originally Posted by Eric Stoner View Post
    While nobody is betting that Eric holder is gonna go after Obama's "Golden Goose" there are two expanding investigations of Goldman by BOTH N.Y.S. Attorney General Eric Shneiderman and Manhattan D. A. Cy Vance Jr. It's ironic that people as politically corrupt as Shneiderman and as dumb as Vance are actually doing this work but Goldman does come under State laws that have been used in the past by both former A.G. Elliott "Client Number 9 " Spitzer and former D.A. Robert "The Talking Cadaver" Morgenthau. We shall see.
    Eric, it was just a subpoena and really just more of the same from NY and NYC. They have proven, time and again, that they don't need to have a case in order to threaten prosecution. If history repeats itself, they will make some noise and threaten Goldman Sachs with a criminal indictment (which is enough to kill a corporation even absent any real prosection) in order to shake them down for a settlement. They will then parade the settlement as a big win for them and their consituents.

    And btw I'm still not buying the theory that the DOJ is giving Goldman a pass when every other federal financial regulator, each of whom also owes allegiance to Obama, is gunning for them. I don't believe that whatever Goldman did for fundraising would protect them for a nanosecond from being thrown to the wolves if the Obama administration could put their heads on a pike in an effort to lay blame for some of the current mess on another party.

    Anyway, as you said, we shall see.

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    Default Re: A Free Ride for Goldman Sucks ?

    Why not ? WHEN has Holder ever demonstrated the slightest independence, integrity or political courage. This is the guy who ramrodded the Marc Rich pardon in exchange for fat contribs from Denise to the Clinton Library and Massage Parlor. Not to mention several sessions on her knees with Bill.

    Both Vance and Schneiderman are working off the same Congressional report that was sent to Holder. While neither can prosecute for lying to Congress, either or both can prosecute Goldman for lying to its clients.

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    Default Re: A Free Ride for Goldman Sucks ?

    Quote Originally Posted by Eric Stoner View Post
    Why not ? WHEN has Holder ever demonstrated the slightest independence, integrity or political courage. This is the guy who ramrodded the Marc Rich pardon in exchange for fat contribs from Denise to the Clinton Library and Massage Parlor. Not to mention several sessions on her knees with Bill.
    When have the Chairpersons of the SEC and CFTC ever demonstrated the slightest independence or political courage? They generally don't, yet they have vigorously pursued GS.

    And sure Vance and Schneiderman can prosecute GS - if they can prove that GS actually defruaded its clients, which thus far nobody has been able to prove outside of the Abacus debacle.

    Believe me when I say that the SEC would have gone after them for a much broader range of charges if they could have and they reviewed mountains of documents from the mortgage group. All they came out of it with was a one-off charge against GS for defrauding two very large institutional investors, who should have known better anyway, in a single mortgage deal.

    The problem with NYS and NYC doing this is that they don't care about righting wrongs - they just want the money and the headlines. They don't need to have a case strong enough to actually prosecute - just enough to threaten an indictment. Every corporation knows that a criminal indictment against the firm is a death sentence by itself, so they always roll over. No doubt that the city and the state will get their headlines and a soon-to-be-poorly-spent settlement, but it won't be won by a prosecution.

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    Default Re: A Free Ride for Goldman Sucks ?

    According to John Crudele of the N.Y. Post, Goldman has PLENTY to worry about thanks to the recent subpoena from the Manhattan D.A.

    1. Lloyd Blankfein and Hank Paulson had dozens and dozens of calls before during and after the financial crisis.

    2. Goldman Board member Rajat Gupta was ensnared in the Rajaratnam insider trading case.
    The SEC has already brought a civil case against him for leaking info to Rajaratnam. Some say the lack of criminal charges means Gupta is cooperating.

    3. The Manhattan D.A. 's office is known for bringing cases and settling for monetary damages.

    4. U.S. Attorney for the S.D. of N.Y. Preet Bharara has yet to be heard from. He could A. shove Vance aside ; B. work with him in a joint investigation or C. step aside. "C" is the LEAST likely.
    The U.S. attorney has far greater resources than either the Manhattan D.A. or the N.Y.S. Attorney General.

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    Default Re: A Free Ride for Goldman Sucks ?

    Ah huh.

    In response to your implied conspiracy concepts:

    1. GS is a major financial player. Paulson had several calls with many different industry players.

    2. If Goldman didn't defraud its clients then it doesn't matter what Gupta has to say, unless you are implying that he may have other dirt on them?

    3. That was exactly my point. Whether Manhattan actually has a provable case is irrelevant - companies will virtually always fold just under the threat of an indictment, which is a death sentence for most corporate bodies. NYC is notorious for prosecutorial extortion.

    4. Again, he has to have something with which to prosecute and, in fact, the WSJ is now reporting that the DOJ is indeed looking at GS. Hell, I'd actually like to see him do it because the DOJ tends to be much more even handed about threatening indictments of corporations than NY.

    Btw, are you still not yet seeing a ridiculous amount of innuendo and accusation with almost no actual proof of any wrongdoing?

    I will eat my words about one thing though. I said before that GS would not fight back publicly, but obviously I was wrong. I guess that this has received so much ongoing press that GS has changed its mind. The full story is in the Wall Street Journal, which I encourage you to read, but you will need access to today's edition, or subscriber access to view. However, there is reference to it in the following:

    http://www.theatlanticwire.com/busin...-report/38515/

    What a shock that Senate staffers couldn't do a proper job of analyzing the numbers.

    When this all shakes out, we will all see just how much of an absurd political witch hunt this whole thing was.
    Last edited by rickdugan; 06-06-2011 at 09:58 PM.

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    Banned Eric Stoner's Avatar
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    Default Re: A Free Ride for Goldman Sucks ?

    Quote Originally Posted by rickdugan View Post
    Ah huh.

    In response to your implied conspiracy concepts:

    1. GS is a major financial player. Paulson had several calls with many different industry players.

    2. If Goldman didn't defraud its clients then it doesn't matter what Gupta has to say, unless you are implying that he may have other dirt on them?

    3. That was exactly my point. Whether Manhattan actually has a provable case is irrelevant - companies will virtually always fold just under the threat of an indictment, which is a death sentence for most corporate bodies. NYC is notorious for prosecutorial extortion.

    4. Again, he has to have something with which to prosecute and, in fact, the WSJ is now reporting that the DOJ is indeed looking at GS. Hell, I'd actually like to see him do it because the DOJ tends to be much more even handed about threatening indictments of corporations than NY.

    Btw, are you still not yet seeing a ridiculous amount of innuendo and accusation with almost no actual proof of any wrongdoing?

    I will eat my words about one thing though. I said before that GS would not fight back publicly, but obviously I was wrong. I guess that this has received so much ongoing press that GS has changed its mind. The full story is in the Wall Street Journal, which I encourage you to read, but you will need access to today's edition, or subscriber access to view. However, there is reference to it in the following:

    http://www.theatlanticwire.com/busin...-report/38515/

    What a shock that Senate staffers couldn't do a proper job of analyzing the numbers.

    When this all shakes out, we will all see just how much of an absurd political witch hunt this whole thing was.
    Afaic yours is a legitimate view i.e. it is a valid argument in favor of GS. For one thing Taibbi and Gasparino both rely on sources that are effectively competitors of Goldman and/or are staffers for the likes of Bernie Sanders who is hardly a friend of free market capitalism.

    That being said :

    1. Paulson used to be Blankfein's boss at Goldman and records show that they spoke far more than any other pair during the crisis. Secondly when AIG was on the verge of collapse Paulson let Goldman collect 100 cents on the dollar on its credit default swaps issued by AIG when everyone else in the room was willing to discount. At the least, it smacks of favoritism and thus its an amazing coincidence that Paulson used to run Goldman.

    2. The REAL question involving Gupta is what, if any , insider info he was privy to and what if any use was made of it by Goldman. In fairness, at present this is smoke without any fire but it has not fully played out yet.

    3. That is a legit argument but it far more often has been made against Elliot "Black Socks" Spitzer than Bob "The Undead" Morgenthau. What tack Cy "Dum Dum" Vance will take remains to be seen. The fact remains that Goldman settled with the SEC rather than fight it out.

    4. We will see.

    As to your last point, Goldman has been ham fisted in their media dealings and spin control thoughout the financial mess and its aftermath. Quibbling over the math strikes me as a diversion as opposed to a direct contradiction of the claim that they failed to disclose material info to their own clients and counterparties. Again, we will see.
    Last edited by Eric Stoner; 06-15-2011 at 10:47 AM.

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    Default Re: A Free Ride for Goldman Sucks ?

    It is not clear yet, but this MIGHT be another "I told you so." Obama was busy last week trying to mend his fences with Wall Street. Contributions to the Anointed One by major Wall St. banks are down and Obama needs their cash for his run next year. Add in Jamie Dimon's new backbone in opposing unecessary bank regulation and it is not clear at all that Wall St. will support Obama as they did in 2008. One more reason for Obama to direct Holder to give Goldman a pass.
    Last edited by Eric Stoner; 06-16-2011 at 06:54 AM.

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    Default Re: A Free Ride for Goldman Sucks ?

    ^^^ alternate argument is that the State of NY, via the AG's office, is looking for another 1/2 billion in 'settlement money' from GS to help out their state budget problem !!! The 'Spitzer Precedent' essentially created a shake-down operation where actual in-depth investigation and prosecution is taken off the table in exchange for 7-8-9 figure 'fines' being leveed i.e. a 'settlement'.

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    Default Re: A Free Ride for Goldman Sucks ?

    Quote Originally Posted by Melonie View Post
    ^^^ alternate argument is that the State of NY, via the AG's office, is looking for another 1/2 billion in 'settlement money' from GS to help out their state budget problem !!! The 'Spitzer Precedent' essentially created a shake-down operation where actual in-depth investigation and prosecution is taken off the table in exchange for 7-8-9 figure 'fines' being leveed i.e. a 'settlement'.
    That is a possibility. However Schneiderman, while just as much of a scumbag as Spitzer, does not have half his brains.

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    Default Re: A Free Ride for Goldman Sucks ?

    Quote Originally Posted by Eric Stoner View Post
    It is not clear yet, but this MIGHT be another "I told you so." Obama was busy last week trying to mend his fences with Wall Street. Contributions to the Anointed One by major Wall St. banks are down and Obama needs their cash for his run next year. Add in Jamie Dimon's new backbone in opposing unecessary bank regulation and it is not clear at all that Wall St. will support Obama as they did in 2008. One more reason for Obama to direct Holder to give Goldman a pass.
    If GS' previous campaign contributions were meant to purchase something then they should ask for their money back. Since Obama has been President, GS has endured: (1) legislation that will seriously restrict future business activities and cost them a lot of additional money in compliance and legal costs; (2) multiple Congressional hearings, chaired by a Senator of Obama's own party, designed to publicly beat GS up for political theatre value; and (3) continued investigation by the DOJ, CFTC and SEC, the last of which has already rung GS' bell for over half a billion dollars.

    And what has Goldman done to deserve all of this? Well, Abacus was clearly a problem and they paid dearly for it, but all the rest of this nonsense now looks like nothing more than a big witch hunt.

    See the article below:
    http://online.wsj.com/article/SB1000...698816400.html

    This may be an "I told you so" coming back at ya'.
    Last edited by rickdugan; 06-17-2011 at 09:54 AM.

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    Default Re: A Free Ride for Goldman Sucks ?

    Quote Originally Posted by Eric Stoner View Post
    Again, I am sorry but I must beg to differ. One thing that was clearly established by the post mortems of the financial crisis was that the SEC is both understaffed and often lacks expertise. The DOJ is politically compromised and will not go after Goldman so long as Obama is dependent on them for campaign contributions....
    Being fair and giving credit where it is due, Eric is right on this one.

    Z

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    Default Re: A Free Ride for Goldman Sucks ?

    Quote Originally Posted by Eric Stoner View Post
    Again, I am sorry but I must beg to differ. One thing that was clearly established by the post mortems of the financial crisis was that the SEC is both understaffed and often lacks expertise. The DOJ is politically compromised and will not go after Goldman so long as Obama is dependent on them for campaign contributions.
    You say that as though the previous treasury secretary was not chief executive of Goldman and every serious competitor to Obama is not also panhandling on Wall Street.

    Not using that as an excuse for Obama's actions, but in the current political landscape nobody can escape the corrupting effects of the power financiers wield. Say Obama, or someone else brings the hammer down on them. Without a broad legislative agenda to direct a new order they (the financiers) are in a position to basically say "fuck you, you think 9% unemployment is bad how does 25 sound?"

    Things didn't, and still haven't got bad enough for the public to really care and the spirited opposition that does exist is fractured across a huge gulf of ideology. On one hand you have the libertarians who think regulation is to blame, on the other there are liberals calling for new deal type reforms which Dodd–Frank doesn't even come close to. I of course lean towards the latter option given that it worked for oh, 50 years while free reign led to dozens of panics in the 19th century and a depression in the 20th but...obviously we shall get neither, the banks always win.

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