Goldman charged with defrauding clients...anybody surprised?

[MJinZ]

Goldman defrauding everyone and controlling the Market = common knowledge for the better part of the last half decade.

The news here is that the SEC has finally developed the need/balls/evidence to go after them.

 

[Balt]

I am somewhat surprised that the SEC is actually filing charges. I had thought our government was more corrupt than that.

I'll hold off judgment on that until I see the results. It's only a civil case, and I get the feeling that the damages (if the govt. wins) will be less than the money GS made on the deal (especially since their losses were insured).

So unless it's something big, it's not really much of a punishment.

 

[StageLeft]

Half the people in the inner circle of finance in Washington worked for GS. I see nothing major coming from this. The corruption is too ingrained.

 

[StageLeft]

I am somewhat surprised that the SEC is actually filing charges. I had thought our government was more corrupt than that.

Actually I was surprised for the same reason. That's why I think it's just a carrot at best.

 

[Hacp]

What 13B you're talking about?

If you're referring to the AIG derivatives positions, you're way off line. Those things are settled daily (including collateral calls) and IIRC goldman had some $8B in collateral from AIG and another ~2B of other CDSs to cover the gap exposure.

Most people know jack shit about derivatives, so it's easy to make stupid arguments.

You mean if AIG failed GOldman wouldn't have been out of their money? Like the other banks were out of their money when lehman failed?

 

[Narmer]

You mean if AIG failed GOldman wouldn't have been out of their money? Like the other banks were out of their money when lehman failed?

From what I read, they already hedged those. So, if AIG didn't pay, they would've come out ok.

 

[Jhhnn]

Doesn't anyone see that as a major issue? "We just bought $500 million in these junk bonds, but it's not our fault, we didn't research them at all!"

If I want to sell you something for 10$, and I am also betting against the future value of that item, unless you are consuming that material you would not pay 10$ for it. If you did, you are a fool.

CDS are traded OTC, so there's no way to know what's going on unless you're an insider to the deception...

This is just the tip of the iceberg, anyway. With Bush in the Whitehouse and Paulson at Treasury, bankers figured that the worst that would happen is that they'd get bailed out. After the LTCM affair, they knew the Greenspan put was firmly in place. A few figured wrong, but they already had theirs, anyway- their company, and the whole economy, for that matter, was just a vehicle, a booster rocket that launched them into financial orbit...

The financial giants should have been nationalized, cleaned up, broken into discreet parts (investment, brokerage, commercial banking and insurance) and sold off, with appropriate legal provisions that they could never reach their former "too big to let fail" stature. And derivatives should have been forced onto an open exchange, where everybody knows exactly what everybody else is doing... Certain classes of derivatives outlawed at the same time. It'd ruin the hedge fund racket, which would be so much the better...

 

[LegendKiller]

From what I've read, this whole thing is a little bit of a sham. Although I haven't read anything for myself, nor the complaint, thus there could be a lot more to this. It'll be an interesting process.

1. If Goldman thought there was any real liability to the bondholders they'd have settled already.

2. ACA put the collateral together, not Paulson & Co.

3. The investors were sophisticated people. I know people who looked at the ACA deals and thought they were trash. This isn't a mom-and-pop investor thing, the people who bought should have done their own due diligence.

4. Goldman took their own losses on the position. If they "knew" it was going to pop why didn't they also use CDS to hedge?

 

[heyheybooboo]

What 13B you're talking about?

If you're referring to the AIG derivatives positions, you're way off line. Those things are settled daily (including collateral calls) and IIRC goldman had some $8B in collateral from AIG and another ~2B of other CDSs to cover the gap exposure.

Most people know jack shit about derivatives, so it's easy to make stupid arguments.

You are being intellectual dishonest or simply a lying, obfuscating piece of shit.

AIG passed nearly $14 billion of TARP funds directly to Goldman-Sachs, who underwrote $17.2 billion of the $62.1 billion in CDOs that AIG insured -- paid in full at taxpayer expense.

So.

Are you going to come clean or keep lying your ass off, Jack?





--

 

[SandEagle]

Well, they are a $2 billion dollar headquarter soon for their struggling 7500 employees

http://www.marketwatch.com/video/as...an-sachs/26681592-7411-42A7-A619-4BA21D1B3D78

glad to see my tax dollars helping bail out those less fortunate

 

[LegendKiller]

Well, they are a $2 billion dollar headquarter soon for their struggling 7500 employees

http://www.marketwatch.com/video/as...an-sachs/26681592-7411-42A7-A619-4BA21D1B3D78

glad to see my tax dollars helping bail out those less fortunate

How many billions in taxes has Goldman paid in the last 50 years?

How many billions in taxes did the employees of Goldman pay in the last 50 years?

Really, get over "your taxes". They pay taxes to and they are a shit-ton more than you pay.

 

[Jhhnn]

4. Goldman took their own losses on the position. If they "knew" it was going to pop why didn't they also use CDS to hedge?

Who says they didn't?

It's extremely improper to have an investor "help" you to structure this kind of investment, anyway, unless they're buying the whole deal themselves... it's an obvious set-up, with GS acting in collusion with Paulson & Co, a very clear conflict of interest...

 

[RU482]

How many billions in taxes has Goldman paid in the last 50 years?

How many billions in taxes did the employees of Goldman pay in the last 50 years?

Really, get over "your taxes". They pay taxes to and they are a shit-ton more than you pay.

Buh buh BUT....then who would we blame??

 

[LegendKiller]

Who says they didn't?

It's extremely improper to have an investor "help" you to structure this kind of investment, anyway, unless they're buying the whole deal themselves... it's an obvious set-up, with GS acting in collusion with Paulson & Co, a very clear conflict of interest...

They have already come out and said so. Naturally that's their position and we'll have to wait for proof, but that's their statement thus far.

Furthermore, there are plenty of times that I've seen an investor(s) have input in the pool of assets funded.

It's an "obvious" setup only to those who subscribe to guilty until proven innocent. We only know the surface of the issue. We don't know the timeline yet, which will be key.

 

[LegendKiller]

Buh buh BUT....then who would we blame??

Heh.

I love when these pricks get all sputtering mad about "their taxes" going to bankers. Yet they ignore the taxes the banks, bankers, and the people bankers hire as a result of their jobs, pay. Shit, NY state is in the hole 6bn *just* from the layoff of bankers and bonuses.

Really, people need to get over this whole "mainstreet bailed out wallstreet". Sorry, assholes, Wall St. bailed out Wall St.

 

[Hacp]

How many billions in taxes has Goldman paid in the last 50 years?

How many billions in taxes did the employees of Goldman pay in the last 50 years?

Really, get over "your taxes". They pay taxes to and they are a shit-ton more than you pay.

It doesn't matter how much taxes you have payed. No one should get a bailout ever. Goldman got one through AIG. Fuck that. Not one cent of taxpayer funds should have been used to bail out those irresponsible bastards.

 

[Hacp]

CDS are traded OTC, so there's no way to know what's going on unless you're an insider to the deception...

This is just the tip of the iceberg, anyway. With Bush in the Whitehouse and Paulson at Treasury, bankers figured that the worst that would happen is that they'd get bailed out. After the LTCM affair, they knew the Greenspan put was firmly in place. A few figured wrong, but they already had theirs, anyway- their company, and the whole economy, for that matter, was just a vehicle, a booster rocket that launched them into financial orbit...

The financial giants should have been nationalized, cleaned up, broken into discreet parts (investment, brokerage, commercial banking and insurance) and sold off, with appropriate legal provisions that they could never reach their former "too big to let fail" stature. And derivatives should have been forced onto an open exchange, where everybody knows exactly what everybody else is doing... Certain classes of derivatives outlawed at the same time. It'd ruin the hedge fund racket, which would be so much the better...

Regulation leads to inefficiency. Just take their corporate charters away. Once the big CEOs are risking their own money, they won't take risks like they did with the mortgage thing.

 

[JS80]

I don't get it, why the hell would Goldman reveal another clients' position? Why would they be obligated to tell the customer that Paulson is shorting the security?

 

[halik]

Risk management is subservient to trading. They are easily pressured into saying yes.

Not true, it's actually pretty difficult process to go outside your risk budget as a trader. What usually ends up happening is a) the guy breaks the rules, unbeknown to risk management b) "star" trader blows up, because his risk limits were loosened due to the stardom.

 

[halik]

You mean if AIG failed GOldman wouldn't have been out of their money? Like the other banks were out of their money when lehman failed?

Yes, if AIG folded GS would probably be out couple hundred mil. Certainly not the 12B position.

 

[halik]

You are being intellectual dishonest or simply a lying, obfuscating piece of shit.

AIG passed nearly $14 billion of TARP funds directly to Goldman-Sachs, who underwrote $17.2 billion of the $62.1 billion in CDOs that AIG insured -- paid in full at taxpayer expense.

So.

Are you going to come clean or keep lying your ass off, Jack?





--

From the SIGTARP Report:

· Goldman did NOT own the underlying CDOs; on the contrary, they'd sold equivalent protection on CDOs owned by its clients, and hedged its exposure by buying protection from AIG. If Goldman conceded to the Fed's request for a haircut, they would have taken a loss on their obligations to their clients.

· The Maiden Lane III settlement with Goldman covered $13.9 billion of swaps, however on that portfolio, Goldman already had $8.4 billion of collateral from AIG to cover a drop in value of the underlying to that point based upon AIG's calculations. However, Goldman calculated the loss was actually $9.6 billion, and had purchased additional protection to cover the difference. Thus, the $8.4 billion in collateral, the $1.2 billion in additional protection, and their calculated FMV of the underlying at that point of $4.3 billion meant Goldman would have been made-whole (received par) if AIG defaulted.

 

[halik]

I don't get it, why the hell would Goldman reveal another clients' position? Why would they be obligated to tell the customer that Paulson is shorting the security?

If Paulson is the one picking the RMBS pools for that CMO, it would be highly unethical and likely illegal not to disclose it. Paulson's incentives are exact opposite of the investors buying the bond.

I work on the buy side of fixed income and we'd certainly sue in this situation.

 

[JJChicken]

Fuck Government and fuck the banks.

 

[JS80]

If Paulson is the one picking the RMBS pools for that CMO, it would be highly unethical and likely illegal not to disclose it. Paulson's incentives are exact opposite of the investors buying the bond.

I work on the buy side of fixed income and we'd certainly sue in this situation.

Interesting...

Did Goldman have any direct or indirect short positions? Or did they just do this to accommodate a client and make the fee?

 

[Patranus]

The nation's largest investment bank, famously cozy with top government officials in both parties, has tipped its hand to its shareholders, indicating that major financial "reform" proposals will help Goldman's bottom line.

http://www.washingtonexaminer.com/o...r-Obama-in-Wall-Street-_reform_-90957879.html

LOL

Watch my left hand so you can't see what my right hand is doing.