Matt Taibbi: The People vs Goldman Sachs

[Martin]

A great writeup on all the fraud and criminality Goldman was involved in during the financial crash. Of course with all their friends, from most of Congress and the Executive down to the it's many defenders on this board, we know nothing will happen and no one will be punished.

http://www.rollingstone.com/politics/news/the-people-vs-goldman-sachs-20110511?print=true

They weren't murderers or anything; they had merely stolen more money than most people can rationally conceive of, from their own customers, in a few blinks of an eye. But then they went one step further. They came to Washington, took an oath before Congress, and lied about it.

Thanks to an extraordinary investigative effort by a Senate subcommittee that unilaterally decided to take up the burden the criminal justice system has repeatedly refused to shoulder, we now know exactly what Goldman Sachs executives like Lloyd Blankfein and Daniel Sparks lied about. We know exactly how they and other top Goldman executives, including David Viniar and Thomas Montag, defrauded their clients. America has been waiting for a case to bring against Wall Street. Here it is, and the evidence has been gift-wrapped and left at the doorstep of federal prosecutors, evidence that doesn't leave much doubt: Goldman Sachs should stand trial.

 

[Lemon law]

We also have to remember that the GWB's sec of the treasury, none other than an a former Goldman sacks sax's executive Hank the Crank Paulson structured the entire tarp bailout to benefit and shelter only Goldman Sacks.

The person who should first go to jail, straight to Jail, is Hank Paulson as a far bigger thief than anyone in the entire history of the United States.

 

[BoberFett]

I'm sure the Obama administration will get right on that.

 

[glenn1]

A great writeup on all the fraud and criminality Goldman was involved in during the financial crash. Of course with all their friends, from most of Congress and the Executive down to the it's many defenders on this board, we know nothing will happen and no one will be punished.

http://www.rollingstone.com/politics/news/the-people-vs-goldman-sachs-20110511?print=true

Do us all a favor and quote exactly what criminal actions that Taibbibi claims Goldman engaged in?

 

[Double Trouble]

During the GWB years all the lefties were having wet dreams about prosecution of GWB and his "cabal" for war crimes and all that stuff. Now that it's become clear nothing will come of that, they've moved on to wet dreams about those evil wall street banksters getting hauled off in cuffs.

If you think that's going to happen, I have news for ya: most of the big guns in the Obama administration hail from the same wall street and crooked lawyer background as all the other administrations before them, and I don't think they have any appetite to do much of anything to upset their buddies and contributors. They wouldn't want to endanger their career as lobbyists after they leave their posts....

 

[Darwin333]

Do us all a favor and quote exactly what criminal actions that Taibbibi claims Goldman engaged in?

Fraud.

That is what they call intentionally misrepresenting a product that you are selling, isn't it? There are a bunch others but why bother at this point, they have already purchased their get out of jail free card from both side.

 

[Doppel]

Do us all a favor and quote exactly what criminal actions that Taibbibi claims Goldman engaged in?

Read this a week back, so not sure of page, but Goldman sold crap knowing it was crap to its clients and told Congress in a bold faced lie later on that this is not what they did, despite correspondence during the event to that exact effect.

These bankers really just are not a value-add to society. Banking itself is, but "these bankers", these guys who are doing nothing but sport f***ing money in and out of various ridiculous financial instruments are hardly doing God's work.

Since the greatest recession in generations in huge part on the back of fraudulent activity there are essentially no convictions. Nobody in government or justice actually gives a sh*t.

 

[xj0hnx]

Since the greatest recession in generations in huge part on the back of fraudulent activity there are essentially no convictions. Nobody in government or justice actually gives a sh*t.

Hey man, Obama said there was going to be change, change that we can believe in, right before filling his administration with the very same type of scum, they've got to give a shit ...don't they?

 

[Craig234]

Matt Taibbi, shaming a whole industry of financial journalism showing they don't do close to what they should.

 

[nonlnear]

Hey man, Obama said there was going to be change, change that we can believe in, right before filling his administration with the very same type of scum, they've got to give a shit ...don't they?

No no silly, it was change that has to be believed to be seen.

 

[xj0hnx]

No no silly, it was change that has to be believed to be seen.

Ooooh, ok, now I see. Carry on.

 

[glenn1]

Fraud.

That is what they call intentionally misrepresenting a product that you are selling, isn't it? There are a bunch others but why bother at this point, they have already purchased their get out of jail free card from both side.

I suppose you're talking about the Abacus deal they set up for John Paulson. If you think that's fraud then the term has no meaning. The primary buyer of that deal was the multi-billion dollar German bank IKB and thus can hardly be credibly called an unsophisticated investor. And failing to "disclose" that someone is on the opposite side of the trade from you (be it a hedge fund or anyone else) is a tautology; and thus considering it a "crime" shows how completely clueless that anyone is that would say something like this aloud.

 

[Kadarin]

No no silly, it was change that has to be believed to be seen.

Faith-based change you can believe in.

 

[IceBergSLiM]

This combined with his previous expose of the SEC being completely compromised in a conflict of interest with the Banksters is completely infuriating.

Out of control.

 

[brencat]

You don't have all this 'search for yield', financial engineering, massive borrowing, and bubble after bubble when interest rates are higher.

Greenspan -- "The Biggest A$$hole in the Universe" Matt Taibbi, Griftopia

Exactly right

 

[IceBergSLiM]

I suppose you're talking about the Abacus deal they set up for John Paulson. If you think that's fraud then the term has no meaning. The primary buyer of that deal was the multi-billion dollar German bank IKB and thus can hardly be credibly called an unsophisticated investor. And failing to "disclose" that someone is on the opposite side of the trade from you (be it a hedge fund or anyone else) is a tautology; and thus considering it a "crime" shows how completely clueless that anyone is that would say something like this aloud.

No your missing the point. Clearly that's not the same as buying gold for $100 and selling it for $200 as you are implying with your "tautology" statement. yes it is assumed someone trading something is making a profit and yes we know that isn't fraud.

The fraud came in when they said here this is a good deal, mean while internally they knew it was a terrible deal and stacked huge bets against it.

Tabbi had a great example.... telling someone you are selling them a flawless new car, delivering a car that you know has no breaks and an engine that can explode at any time, then taking life insurance out on the buyer.

 

[JTsyo]

No your missing the point. Clearly that's not the same as buying gold for $100 and selling it for $200 as you are implying with your "tautology" statement. yes it is assumed someone trading something is making a profit and yes we know that isn't fraud.

The fraud came in when they said here this is a good deal, mean while internally they knew it was a terrible deal and stacked huge bets against it.

Tabbi had a great example.... telling someone you are selling them a flawless new car, delivering a car that you know has no breaks and an engine that can explode at any time, then taking life insurance out on the buyer.

The part missing is that, GS wasn't just a simple party selling something. It was an "adviser" for its clients. They had trusted GS to act in their best interest but GS used that trust to off load it's troubled products. It would be like your broker telling you to buy a stock because he wanted to get rid of it from his own portfolio.

 

[glenn1]

No your missing the point. Clearly that's not the same as buying gold for $100 and selling it for $200 as you are implying with your "tautology" statement. yes it is assumed someone trading something is making a profit and yes we know that isn't fraud.

The fraud came in when they said here this is a good deal, mean while internally they knew it was a terrible deal and stacked huge bets against it.

Tabbi had a great example.... telling someone you are selling them a flawless new car, delivering a car that you know has no breaks and an engine that can explode at any time, then taking life insurance out on the buyer.

No, it's you that is missing the point. You're suggesting that IKG, a $16 billion dollar bank should be excused from due diligence rules. And your used car analogy sucks, these guys aren't some elderly lady buying a Buick on Craigslist - they're more like General Motors or Ford and if they buy a car without brakes then it's their own damn fault for being absolute idiots.

 

[IceBergSLiM]

No, it's you that is missing the point. You're suggesting that IKG, a $16 billion dollar bank should be excused from due diligence rules. And your used car analogy sucks, these guys aren't some elderly lady buying a Buick on Craigslist - they're more like General Motors or Ford and if they buy a car without brakes then it's their own damn fault for being absolute idiots.

lol. Fraud is fraud. It doesn't matter who was defrauded an old lady or GM.

Its like an assassin killing another assassin. Well its not really murder , the assassin should have known better. lol

 

[Macamus Prime]

If these men are willing to harm and hurt fellow human beings for money, I doubt they would even care or worry about justice being served in this life.

And, we all know they currently don't acknowledge anything happening in the afterlife either.

 

[Martin]

No, it's you that is missing the point. You're suggesting that IKG, a $16 billion dollar bank should be excused from due diligence rules. And your used car analogy sucks, these guys aren't some elderly lady buying a Buick on Craigslist - they're more like General Motors or Ford and if they buy a car without brakes then it's their own damn fault for being absolute idiots.

No, it isn't their fault for assuming their broker was acting legally. And no, it's not one big bank harmlessly screwing over another big bank - millions of people lost their jobs and homes because these games.

 

[Craig234]

To glenn1, there's no such thing as fraud. For him, 'due diligence' is the only issue - anything that's fraud is the buyer's fault. He's clueless.

He not only doesn't understand why pretty much no one who understands Wall Street agrees with him - he probably doesn't know they don't.

It seems unlikely he's ever read books on the topic, such as Griftopia or many others.

 

[Attic]

No, it's you that is missing the point. You're suggesting that IKG, a $16 billion dollar bank should be excused from due diligence rules. And your used car analogy sucks, these guys aren't some elderly lady buying a Buick on Craigslist - they're more like General Motors or Ford and if they buy a car without brakes then it's their own damn fault for being absolute idiots.

What IKG should or shouldn't have done doesn't belong in the same topic when considering whether or not GS intentionally mislead them into buying CDO's for the purpose of creating an investment vehicle that they, GS, could then bet against.

IKG in large part bought the corrosive CDO's becuase of GS misrepresented the contents of the CDO's they were selling. It's shocking this isn't immediately understood. Given GS took out huge bets against the investment vehicles they were selling, and they, GS, needed someone to invest billions of dollars in these investment vehicles as a precondition to being able to bet against them; then it stands to reason that GS was defrauding clients about the contents of these investement vehicles. Namely GS committed fraud by misrepresenting the extreme risk of the investment vehicles, CDO's, they were selling.

The CDO's were toxic, GS knew it because they built them, yet they had to sell them in order to bet against them and in order to sell them they lied to clients. It is not to much to ask for GS divluge pertinent information along the lines of, "hey, well I know we are really pushing you into this purchase, but you know, we feel strongly that they are going to go to zero. We know exactly what is in them and that's why we have chosen to bet against them". GS bet against these CDO's, but didn't feel it was important to let the clients know that they were betting against them? It stinks so bad that if you can't smell it you have to be a part of it.

 

[glenn1]

What IKG should or shouldn't have done doesn't belong in the same topic when considering whether or not GS intentionally mislead them into buying CDO's for the purpose of creating an investment vehicle that they, GS, could then bet against.

IKG in large part bought the corrosive CDO's becuase of GS misrepresented the contents of the CDO's they were selling. It's shocking this isn't immediately understood. Given GS took out huge bets against the investment vehicles they were selling, and they, GS, needed someone to invest billions of dollars in these investment vehicles as a precondition to being able to bet against them; then it stands to reason that GS was defrauding clients about the contents of these investement vehicles. Namely GS committed fraud by misrepresenting the extreme risk of the investment vehicles, CDO's, they were selling.

The CDO's were toxic, GS knew it because they built them, yet they had to sell them in order to bet against them and in order to sell them they lied to clients. It is not to much to ask for GS divluge pertinent information along the lines of, "hey, well I know we are really pushing you into this purchase, but you know, we feel strongly that they are going to go to zero. We know exactly what is in them and that's why we have chosen to bet against them". GS bet against these CDO's, but didn't feel it was important to let the clients know that they were betting against them? It stinks so bad that if you can't smell it you have to be a part of it.

There is some serious ignorance being displayed in this thread. The buyer of the Goldman Abacus deal jot onl was aware of what mortgages were included, they engaged in extended negotiations with the primary seller (John Paulson) about what would be included. So the idea that IKG was naively relying on the supposed misrepresentations of Goldman is not only wrong, but 180 degrees off the truth.

 

[IceBergSLiM]

There is some serious ignorance being displayed in this thread. The buyer of the Goldman Abacus deal jot onl was aware of what mortgages were included, they engaged in extended negotiations with the primary seller (John Paulson) about what would be included. So the idea that IKG was naively relying on the supposed misrepresentations of Goldman is not only wrong, but 180 degrees off the truth.

IKG isn't even part of the equation. There is no clause in the definition of fraud that excludes other banks, other people in the same industry or any such thing. You are consistently ignoring the fact that it is 100% irrelevant how much due dilligence was done and by whom in a fraud case.