A 5-month investigation by McClatchy Newspapers has found that Goldman secretly bet on the housing crash, went out and pimped the dickens out of assets it knew were junk, and may have broken securities laws in doing so. McClatchy found that Goldman…
# Bought and converted into high-yield bonds tens of thousands of mortgages from subprime lenders that became the subjects of FBI investigations into whether they’d misled borrowers or exaggerated applicants’ incomes to justify making hefty loans.
# Used offshore tax havens to shuffle its mortgage-backed securities to institutions worldwide, including European and Asian banks, often in secret deals run through the Cayman Islands, a British territory in the Caribbean that companies use to bypass U.S. disclosure requirements.
# Has dispatched lawyers across the country to repossess homes from bankrupt or financially struggling individuals, many of whom lacked sufficient credit or income but got subprime mortgages anyway because Wall Street made it easy for them to qualify.
# Was buoyed last fall by key federal bailout decisions, at least two of which involved then-Treasury Secretary Henry Paulson, a former Goldman chief executive whose staff at Treasury included several other Goldman alumni.
Whether this really constitutes fraud depends on who knew what, and when did they know it.
How Goldman secretly bet on the U.S. housing crash [McClatchy] (Photo: C. Barr)
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That’s nothing. Do a google search on Goldman sachs bubble.
Related:
Inside The Great American Bubble Machine
Matt Taibbi on how Goldman Sachs has engineered every major market manipulation since the Great Depression
I do not vouch for the article as I *still* haven’t read all of it. I’ve had it saved to read for months now.
@Chris Walters: Me too, I keep getting partway through and then getting distracted.
@Chris Walters: Another scary one that everyone should read.. [www.rollingstone.com]
@Chris Walters: I had a colleague who works in the financial industry tell me that the rolling stone article was whitewashed. Much of what was written wasn’t actually researched and seems to be based on hearsay and conjecture.
That’s why I call them Goldman Sucks.
@holytrainwreck: I see what you did there, and I approve.
There are-unfortunately-plenty of people in the GW Bush administration, as well as Obama’s, that used to work at Goldman Sachs.
Then, there’s the current governor of New Jersey, who led Goldman during the last great bubble in the 90s.
Sigh.
This “investigation” was done by a newspaper, not any sort of governmental agency.
Well, it’s a good thing those responsible will be made to pay for their….oh, wait. Never mind, nothing to see here. Carry on.
Pete Rose got banned from the baseball hall of fame for betting against his own team…what will Goldman Sahs get?
@ConsumerPop:
Banned from the Wall Street Hall of Fame, perhaps?
This is old news, but just like Toyota’s recent safety problems, it just hasn’t been picked up by most of the mainstream media.
@ConsumerPop: More money, when their irresponsible practices nearly destroy the global economy… again.
@ConsumerPop: A pat on the back from all the wealthy elites that benefited from their actions.
@ConsumerPop: A medal.
@ConsumerPop: $12,000,000,000… wait, repaid… oops, there’s the AIG exposure… $12,000,000,000…
And, of cuss, control of the Federal Reserve…
As for the rest of us (all together now):
…another day older,
and deeper in debt…
this isn’t news. We all know the big time capitalists are blood sucking scum bags. It isn’t until their old and had their fill that some of them become philanthropists. And then magically we all forget how horrible they were.
Andrew Carnegie rings a bell, that guy was a super dick.
@Skankingmike:
Vanderbilt
Stanford
Mellon
yea, yea the list goes on and on
So will someone in the govt. do something? The media is proclaiming the whole financial mess to be in recovery. With CIT and 9 banks failing today, GM and Chrysler asking for more money and too many people out of work I’m just not seeing it.
There is way more going on inside these big banks nobody fully knows about yet. We could still see a sudden implosion.
Stock tip for today: Invest in companies that manufacture torches and pitchforks.
@diasdiem: don’t forget tinfoil hats.
@diasdiem: doh! i concentrated my holdings in pine resin & chicken byproducts. i’m screwed, aren’t i?
@mac-phisto:
I think you’re safe. Got to have something to use after the swine are cornered with the pitchforks and torches.
Reminder to self, maybe invest in rails or bond futures for prisons!
Until they prove that the two-tier treatment was a deliberate attempt to defraud investors, there is no grounds for a fraud investigation. If you can’t prove that Goldman had a gap between client-recommendations and legitimate analysis (reference Henry Blodget), it’s just a hedge. Hedging large inventory positions is legal, common, necessary, and encouraged.
end of story….. move along nothing to see here.
oh elliot spitzer, had your whoring ways not brought you down you could be campaigning on your past hard work.
@Ronin-Democrat: Oh everyone else, had you not pinned morality on sex you’d have Spitzer in office.
@Chris Walters: *instant rimshot*.
I could not agree with that more. However, wasn’t what he did kinda sorta illegal?
I dont care about peoples dicking around (Ensign, Clinton) but I find it un-cool when the said dicking around is illegal or adversely affects other people (Sanford, Tyrol).
@MostlyHarmless: Even when NJ thinks it can get away from Corruption they find ways to include us
It was egg on NY face that smeared down onto NJ for prostitution.
@Chris Walters: Sorry, but Spitzer couldn’t really do the “sex is private” thing here: he made a chunk of his reputation by aggressively prosecuting prostitution cases, and publicizing that. If it’s illegal for Joe Schmoe to hire a prostitute, it’s illegal for Governor Spitzer.
This plays into my personal financial philosophy: “Never give your money to people who play games with money for a living.”
In the name of all that’s holy, break these financial holding companies into smaller pieces, and restore Glass-Steagall. Before they get even more back on their feet.
At this point in the game, we should no longer be surprised by their venal, corrupt practices: it’s like the scorpion and the frog – it’s simply their nature.
Enjoy these breaking stories while they last. When newspapers die, so might these type of stories. Perez Hilton and The Drudge Report certainly won’t be out there doing investigative journalism.
@johnfrombrooklyn: What does this story matter? It’s almost better to be ignorant, since Goldman will go on controlling the government; and being aware of yet another layer of hypocrisy and corruption will just make your head explode.
Every person I know that works for Goldman Sachs makes a ton of money and yet seems incredibly angry and bitter at the world.
No matter how much stuff you buy or how much you make, it will never fill that cosmically huge void of working for a company that contributes nothing to the world.
Money isn’t everything.
Living in Charlotte I think the real story should be “Where were the McClatchy Newspapers?” The Charlotte Observer pimped “affordable access to housing” for years at the urging of our banks. People have known about Goldman for years, the real story is how everyone looked the other way and those in the media that had a position to question were either shut down or didn’t have a clue about finance.
@Esquire99: Telling a company that it’s engaging in illegal practices kinda is telling it how to run its business, yes? And what’s the point of the SEC doing a report if (as you would seem to prefer) the government has no power to do anything but wag its finger and say “Bad company! Bad!”
Fuck ‘em – you know how Obama can be really popular? Go after these clowns, prosecute ‘em, and send ‘em to Gitmo to share cells with other people who want to destroy America.
wake up… Obama works for them… 2nd highest contributions to his campaign were made by goldman sachs.
@Esquire99: I wouldn’t blame you even if you thought that being done by a newspaper was the same as by a Minister of Information. News outlets have failed tremendously in this area for far too long to be easily forgiven.
@The Cynical Librarian: Haha brilliant advice if I do say so
@The Cynical Librarian: I wouldn’t be surprised if in a 100 years we all forget about this mess and there is private school’s and public libraries dedicated to Goldman Sachs CEO’s who donated billions for funding.
@futuresuperbowlMVPJayCutler: I will certainly agree on this point. Media outlets are profit driven corporations now, more interested in selling blood and sex than doing actual investigative reporting.
@u1itn0w2day: I read it and loved it as well. Taibbi is great, and he got a lot of help for the article from Tyler Durden of Zero Hedge ([www.zerohedge.com]). I had not heard of the website before Taibbi’s piece, but I am now a loyal visitor every day. Lots of great information that everyone should know.
@dragonfire81: You wouldn’t happen to know where I can get some of this sex the media outlets seem to be selling? I’ve got a little money saved up and am feeling kinda horny.
@YOXIM: My question was not whether or not prostitution should be illegal or whether the current laws made sense or not.
My question was whether or not – under the current laws – did Spitzer do anything illegal.
@YOXIM: Peruse the magazine rack near the checkout of your nearest wal-mart.
@Trai_Dep:
I have no problems with government investigations into areas that they legislate. Clearly a Government investigation into Goldman’s activities, especially if there is suspicion that they violated the law, would be within the government’s power. I have a problem with the govt. telling Goldman how to run its business and how much to pay its employees, but if the Government (SEC, Congress, etc.) wants to look into possible illegal trading practices, more power to them.
@dragonfire81: The masses of sheeple want to know what exciting new tidbit about the death of Michael Jackson that you are holding out?
@MostlyHarmless: My recollection was his crime was to use escort services which tried to list the credit card charges under innocuous terms, which the FBI stumbled upon using statutes designed to catch terrorists engaging in the Global War On Terrorâ„¢. From these transactions, they charged him with some kind of fraud and/or RICO and/or Conspiracy.
A stretch in every sense of the word, for a victimless crime, by an agency headed by a Republican that benefited by kneecapping a viable Dem officeholder with credible potential for running for the President.
Who also angered well-placed Wall Street executives upset that Spitzer was raining on the Sub-Prime Luau a few years before it combusted to eviscerate the global economy (which, had he done so, would have saved untold trillions of dollars since the worst of the Sub-Prime excesses happened in the last two years).
Yup. Sleeping with call girls: EVIL!
@Mr.Duke:
Someone sells you a car they know is a lemon and you say “they didn’t put a gun to your head?” IDGI. Is this a blame the victim post?
Or maybe I am misunderstanding. Yes, there is always some reasonable responsibility on the part of the buyer, but the bigger issue is a company that sells assets it knew were junk in the tune of billions of dollars. Let’s focus on those guys before focusing on Joe Blow who may or may not have understand what he was buying.
@econobiker: [www.gatesfoundation.org]
[money.cnn.com]
two of the world’s richest men like those of old who were cut throat and “evil” are now super big time philanthropists.
it’s the cycle of life and very catholic. (even if they aren’t) DO evil things while young and repent on your death bed.
@Nakko: Oh yeah those same newspapers that ignored Acorn for years, spiked the story about John Edwards and got scooped by the national enquirer for Pete’s sake!
Yeah they do really well at those “investigations” they do.