Goldman executives cheered housing market's decline, newly released e-mails show

reply to post by GreenBicMan


Yes, but to know that what they were spreading was toxic, they would not have to know when it was going to tank. All they would have to do is wait.

Now, to further speculate or investigate this, if I was a researcher or someone looking to catch these asshats, all one would have to do is see if they began to let slip the problems.

If they could be found to have been releasing the problems with these derivatives, then another component of the FRAUD could be linked.

reply to post by endisnighe


You have to be joking.

They gave out these loans because "compassionate" politicians wanted everyone to own a home even if they haven't paid a bill in 3 years.

Again, Goldman was just covering their backside and this is why government should stay out of these things.

If lenders didn't give out these loans then they would be called racist and the liberals would say they hate poor people.

We have always had Wall Street greed. People go to Wall Street to make money.

What we haven't had is 13 trillion dollars in debt and over 100 trillion dollars in unfunded liabilities given to us by government.

They create the problem and then ask for billions to fix the problem they created.

reply to post by endisnighe


Well there is 2 sides to every trade.

Some people may go into those things to hedge their outstanding bullish positions in real estate, wouldn't you say?

So if I was long California real estate with millions invested in real land it would make sense for me to short these instruments provided by Goldman.

So if I was short lets say an ETF that tracks real estate with 1,000,000 shares under my belt I would most likely want some protection and actually go long some of these instruments.

So just remember there is 2 sides to every trade and there can me multiple reasons for me to get into positions.

Hindsight is ALWAYS 20/20

reply to post by Matrix Rising


I agree with the fact that the government caused the initial problem with the toxic loans. No argument there.

But GS then went about creating these funds with all of the toxic debt vehicles combined. Then they shorted them knowing that they would collapse in value. All the while not disclosing the problems with these vehicles.

Unless I am completely mistaken, this is considered fraud. I cannot sell something on the market stating it is one thing when it is another can I?

Is this not what they did? The government creates the toxic loans, GS and other financiers bundle them into the toxic vehicles and present them as sound investment all the while shorting them to make billions.

What part of this does not incriminate GS in the criminal activity? Yes, I believe the politicians that began this endeavor are JUST as culpable in the FRAUD and more than likely were knowledgeable of all the facts. I think anyone that pushed the agenda and then profited from it should be arrested and charged with the crime.

At the very least, the politicians were negligent and the most likely, purposefully creating the problem to enact MORE CONTROL parameters.

Create the problem, than supply the "supposed" solution of more control.

reply to post by GreenBicMan


I agree with you and everyone about the covering your backside. The problem is not that GS did that. The problem is they knew the problems with the vehicles, did not disclose this and then shorted the positions.

I know all about covering your positions in the market. Like I stated earlier, I know many farmers that use this to cover possible losses in the commodities market.

Using that as an example, let us say a large group of farmers get together and flood the market with bad corn for example. Knowing there is a problem with the corn they invest heavily in betting the futures of corn will go up. The information comes out about a huge problem with the corn and a large quantity of the corn has to be destroyed or dumped. That in turn makes the corn prices skyrocket.

Is this not fraud? Is this okay because shorting is okay? It is two different things in my opinion.

edit to change that the farmers would bet that the prices would increase. Kind of the same thing I had just stated that it was shorting. Ooops.

[edit on 4/26/2010 by endisnighe]

reply to post by endisnighe


Again, it's impossible to show Goldman knew these things would collapse. They were just covering their backside in case they did collapse. That's smart business.

“Goldman Sachs did not have access to any special information that caused us to know that the U.S. housing market would collapse,” the firm stated in an “executive summary” of its arguments released April 24.

Again, how can you prove they had special information that told them the market would collapse?

They just covered themselves and played it smart. This is what you do with risky investments.

What if the housing market didn't collapse? Then their short positions would be worthless.

You don't need special information in order to short risky investments just common sense.

reply to post by Matrix Rising


It doesn't matter who started, the point is that GS committed fraud even against its own investors that were not on the top list after they created worthless paper to make money.

A fraud is a fraud is a fraud unless it turns into a frog



They probably get more tax payer money to pay out the law sues they will be hit with from those that lost money while investing with them.

reply to post by marg6043


How did they commit fraud?

They just covered themselves. This is what you do when you make risky investments.

This is why people will invest in a long term bond which is considered safe and then they might sell options which come with more risk.

They cover themselves on both ends.

The idiots that lose their shirt will blow it all on risky investments because they want the quick money.

Goldman covered themselves because government strong armed them to give out risky loans.

Are you saying it's illegal to cover your backside with shorts?

I told you guys not to listen to cramer or cnbc, they are just cheer leaders.

In horse racing its well known the trainers go on tv and just lie about the horse and whether it will try in a race. Its accepted.

Man is everything corrupt in this world or what?

lol

reply to post by Matrix Rising


Well, this is where you and I will but heads on the "term" risky investments.

As I said, how can you state, that GS did not give the true risk of the vehicles and have been shown to have created purely worthless funds?

Many were stating the problems. Of course you had the governmental shills stating just days before the SHTF that everything was fine with these vehicles. Outright lies of course and THEY KNEW IT.

I knew it and I am not a large investor or even that much up on the market. I was able to clear my retirement account taking a 25% tax loss and still hit it big in the gold market. I of course was in the construction field for a land developer and saw first hand all the problems that were leading us down this path. Of course being Libertarian minded I was listening to folks like Ron Paul and other people that were warning us of the problems. When I saw the problems in the California property market I knew it was time to pull out.

Funny that I had told my bosses the problems and they talked to their investment fund manager. Yes the manager knew the problems and slightly covered the problems. I made bucks and the fund took only a slight loss.

The whole problem of this was the outright lies that the grading agencies, the government and the financiers KNEW all the problems but did not DISCLOSE the information.

Some would argue that they were attempting to prevent a collapse.

They did not do to well with that endeavor did they?

The problem occurs because people don't understand the market.

So it's easy for crooked politicians to yell about crooked Wall Street when they are the biggest crooks.

These politicians will say give us billions and give us more control and we will save the day.

They just make things worse.

Seriously, anyone who buys the "gubament made me do it" line has divorced themselves from reality. You clearly are not smarter than a third grader.

I had a long term commitment to 9, but to be safe, I hedged my bets by putting money down on 6 and 8. with a little money on the 4, because I thought 4 was due.

At a certain level the commodities market makes sense, but when it drives the prices of commodities through the roof on speculation, then it is not making sense.

This huge Wall Street scam was created immediately after major deregulation of the investment markets. When the investment firms were given free reign to do what they wanted to do, they immediately began lying, cheating, and stealing, and the government did not make them do it.

Free Market concepts do not work.

How much more evidence do people need?

reply to post by endisnighe


I agree as well with all the evidence I have seen if indeed correct they are most likely guilty of the charges brought forth by the SEC.

I just don't see them as the scapegoat to this whole debacle like the MSM / GOV would want you to believe. In reality it was our elected rep's. and they know it too, so of course you gotta blame GS, right?

reply to post by Matrix Rising


They covered themselves at the top, while the rest of their investors at the bottom lost money.

The last time I check, Martha steward went to jail for inside information and she didn't even created worthless paper.

I guess you have not been reading the list of law sues that they are to be hit by those that GS committed fraud against, or that is what they claim.

Read the news my friend.

The horde of lawyers in line for the law sues are just getting bigger.



[edit on 26-4-2010 by marg6043]

reply to post by endisnighe


A blind man can see the true risk.

Of course they stated the true risk. Every investment states that there's risk involved.

Of course there will be people highlighting the positives of the investment to investors. They are trying to sell the investors.

The investor has to due their due diligence.

When I invest in something, I due the due diligence. It doesn't take a genius to know these were risky investments.

Do you listen to every car salesman or real estate agent? No. Goldman couldn't see that the market would crash, they just covered their backside.

How can you prove that the people at Goldman were psychics?

Originally posted by woodwardjnr
It's good to see that people are now realising the financial collapse was not some, huge mistake or act of God, but a calculated fraud. Will those behind it be brought to justice? And, what sort of punishment should they expect?

This was done on purpose. I think someone else touched on it. It may be that the real cronies behind this are securing themselves in other positions like the EMF and prepping GS for a big fall along with the FED. Then come the saviors from the UN.

I hope not but it makes more sense for why this was released now.

reply to post by marg6043


You have to be joking.

So now it's Goldmans job to cover all investors? You can't be serious.

If they didn't cover their investment that's their fault.

I always make sure I cover my risky investments so I can minimize the loss.

Goldman isn't their to hold their hands.

They covered themselves at the top because this is what you do with risky investments.

The problem is people invest without thinking. They love it when the big checks are coming in from huge returns but they don't stop to think that the well may run dry and they need to cover their backside.

reply to post by woodwardjnr


They probably won't be punished for anything since they have tons of money and pretty much have control over the government.

Edit: BTW, great thread OP. I will star and flag.

[edit on 26-4-2010 by Striker122]

reply to post by Matrix Rising


Now the retributions are going to be in the 1 billion mark.

See that is what the GS investor lost on the risky worthless paper

Here’s what allegedly occured. Goldman sold a “synthetic CDO,” or collateralized debt obligation, to investors. Goldman allegedly told those investors that subprime-mortgage securities underlying the CDO were selected by a third-party firm called ACA.

However, the SEC alleged, it was the Paulson fund that had selected the securities. Paulson in a separate transaction then put up lots of money to bet that those securities would sour.

Investors who purchased slices of the CDO, such as IKB, a German bank, collectively lost $1 billion as the mortgage-backed securities quickly soured amid the mortgage crisis, according to the SEC.

Goldman allegedly helped Paulson bet against those securities, and Paulson’s firm made a profit of about $1 billion.

This are only the big numbers.

blogs.wsj.com...

reply to post by Matrix Rising


So you don' think GS shouldn't be punished for lying and cheating, and pulling a huge con, selling investments that were worthless as solid investments?

You whole position seems to be that even if GS is guilty of fraud they didn't really do anything wrong. What nonsense.

The bigger problem is that with 401k plans, most people don't control their own investments. This is the biggest hole in the system. The people managing these funds have been allowed to get by blatant fraud, and this is a bigger part of what has gone wrong.

Here is the real solution. If the investment industry chooses to act like gambling houses, as they have been since dereg, then tax them like gambling houses.

Make em start paying the sin tax rates that everyone else pays.

Short term gains should be taxed at 50%, maybe more.

Hows much tax are we paying on a bottle of beer these days?

People who gamble in the market should pay the same rate.