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

reply to post by marg6043


What you're saying doesn't make sense.

How did Goldman help Paulson bet against these securities?

If this is the case, then Paulson should be charged by the SEC but he isn't being charged by them.

What they are saying is Paulsons firm picked these securities and then Paulson went out and bet against them which is smart. This way you make money either way or you minimize your losses.

They are saying someone from Goldman tipped off Paulson but tipped him off to what?

What did they tell Paulson? Paulson isn't stupid and a blind man can see that these were risky investments and they should cover their backside.

So what did Goldman tell Paulson about the securities? What could Goldman tell Paulson about the securities? Anyone who looked at them should know they are risky. This big returns don't come from safe investments.

I'm still trying to figure out the fraud. If there was fraud involved, why not prosecute Paulson? The reason they are not going after Paulson because he didn't need Goldman to tell him these were risky securities.

I don't see any crime here.

reply to post by Matrix Rising


The fraud I believe was based on the fact that they mislead investors on who picked the securities that were put into the portfolio. They said ACA I believe it was when in reality it had nothing to do with them and all to do with Paulson.

I don't think Paulson should be guilty, in fact that guy is smart as hell going against what he created haha. But it was still speculation on his part as there is no 100% sure bet in the market.

reply to post by poet1b


Basically, you are advocating the socialist, let's hold your hand type of investing.

This makes no sense.

Of course there's risk and this is why people should due their due diligence before investing.

For instance, I lost money investing in penny stocks but I made money investing in options and on the Forex market as well as investing in Gold. I also invest in long term bonds.

The problem is people invest in these risky investments and they love the big returns but when they lose their investment they cry foul.

Before you invest in these things, there's a big disclaimer that says investing is risky and you can lose money.

Yes there are crooks out there but these politicians just inflate the problem in order to spend and waste more money. This is why year after year the same problems come to the surface even though we keep allowing these crooked politicians to throw money down the black hole.

When I invested in Penny Stocks, I knew the risk and when I lost money I didn't blame everyone else.

reply to post by Matrix Rising


I get it, you like to gamble.

Hey everyone has their vices, but why should everyone else have to pay such high taxes for their sins while you don't?

Lots of people got suckered into believing that putting money into the market was a sure bet. This big con game has wreaked havoc with everyone's lives, and we all had to pay for your vices.

Why do you expect everyone else to subsidize your vices?

Who is the socialist here?

The Glass Steagall act of 1933 were a series of Banking Regulations that were passed into law which had intended to prevent another series of bank failures leading to the last great depression.
It was repealed in 1999 by the Gramm–Leach–Bliley Act.

This deregulating of the Banks allowing them to gamble freely with their capital by investing in fraudulently written mortgages were the catalyst of the banking crisis and today's financial/economic woes.

Here's some good info for many that are discussing accountability!

I have been watching with a mixture of awe and dismay some of the really bad analysis, sloppy reporting, and just unsupported commentary about the Goldman Sachs case.

I put together this list based on what I know as a lawyer, a market observer, a quant and someone with contacts within the SEC.
www.msnbc.msn.com...

So this guy wants to give his opinions.

1. This is a weak case. Actually, no — its a very strong case. Based upon what is in the SEC complaint, parts of the case are a slam dunk. The claim Paulson & Co. were long $200 million dollars when they were actually short is a material misrepresentation — that’s Rule 10b-5, and its a no-brainer. The rest is gravy.

There you go!
SEC is useless though, I mean come on, why didn't this case pop up earlier.
You want to tackle things immediately before th crime scene changes.

2. Robert Khuzami is a bad-ass, no-nonsense, thorough, award-winning prosecutor. This guy is the real deal — he busted terrorist rings, broke up the mob, took down security frauds. He is now the director of SEC enforcement. He is fearless, and was awarded the Attorney General’s Exceptional Service Award (1996), for “extraordinary courage and voluntary risk of life in performing an act resulting in direct benefits to the Department of Justice or the nation.”

Only time will tell!

3. Goldman lost $90 million, hence, they are innocent. This is a civil, not a criminal case. Hence, any mens rea — guilty mind — does not matter. Did they or did they not violate the letter of the law? That is all that matters, regardless of what they were thinking — or their P&L.

Hmmm....
A civil case?

4. ACA is a victim in this case. Not exactly; they were an active participant in ratings gaming. Look at the back and forth between Paulson’s selection and ACA's management. Fifty-five items in the synthetic CDO were added and removed. Why?

What ACA was doing was gaming the ratings agencies for their investment grade, Triple-A ratings approval. Their expertise (if you can call it that) was knowing exactly how much junk they could include in the CDO to raise yield, yet still get investment grade from Moody’s or S&P. They are hardly an innocent party in this.

Good To know!

5. This was only one incident. The market sure as hell doesn’t think so — it whacked 15 percent off Goldman’s market cap. The aggressive SEC posture, the huge reaction from Goldie, and the short-term market verdict all suggest there is more coming.

And not just at Goldman Sachs. I suspect the kids over at Deutsche Bank, Merrill and Morgan are working furiously to review their various CDO deals.

Let's see what happens with Douche Bank.
Merril and Morgan are obviously involved.

6. The timing of this case is suspect. More coincidental, really. The Wells notice (notification from the SEC they intend to recommend enforcement) was over eight months ago. The White House is not involved in the timing of the suit itself, it is a lower-level staff decision.

I would disagree with this but then again who am I.
For something this MASSIVE I wouldn't call anything a coincidence.

7. This is a complex case. Again, no. Parts of it are a little more sophisticated than others, but this is a simple case of fraud/misrepresentation. The most difficult part of this case is likely to turn on what is a “material omission.” Paulson’s role in selecting mortgages may or may not be material — that is an issue of fact for a jury to determine. But complex? Not even close.

There you have it!

8. The case looks thin. What we see in the complaint is the bare minimum the prosecutor has to reveal to make their case. What you don’t see are all the e-mails, depositions, interrogations, phone taps, etc. that the prosecutors know about and Goldman Sachs does not. During the litigation discovery process, this material slowly gets turned over (some is held back if there are other pending investigations into Goldman Sachs).

Man would I love to see those!
And to say the timing is nothing and Obama has nothing to do with it....
Well...
What if he is involved in those emails or phone taps?

9. This case is political. I keep hearing that phrase, due to the SEC party vote. It is incorrect. What that means is the case is not political, it means it has been politicized as a defense tactic. There is a huge difference between the two.

Very true!

www.msnbc.msn.com...

Hope you all enjoyed it!!!

Hopefull this sheds some light on our discussion!

reply to post by nh_ee


And vast numbers of us who were paying attention tried to warn everyone we knew. I predicted on the NYT forums around 2004 or 5 that the longest they could keep this going if they pulled out all the stops was 2008, I nailed it on the money, but it was just a good guess.

Yeah, Wall Street backed Obama, rather than Hillary, but putting some money into Obama was simply hedging their bets. Whoever won the demo nom was pretty much a shoo in. It's not like Obama needed the money. How much loyalty Obama owes to them is a big question.

Here is the bigger picture. Obama has within his grasp the ability to reshape history, put himself high up on the list of great world leaders.

Do you really think Obama is going to go for the money, or history?

reply to post by ModernAcademia


Thanks for the link.

It sounds like this could be the central case that is just the beginning.

reply to post by ModernAcademia


I believe that the reason the SEC didn't came out earlier with what GS was doing, is base in the American people been angry to the bailouts and the SEC corruption and restructuring, plus remember the media was all over Madoff ponzi scheme.

Now that things are calm when it comes to the public outrage and the SEC is under "new management" you know "Obama administration" and GS pay some of its dues if no all, (with all the profits under the table if not with the bailout itself like GM) things are starting to leak.

But Beside the law sues that investors that lost money will be doing and GS paying back is not much I see coming in the name of indictments and jail time for the crocks running the financial system, they are too link to the Federal Reserve.

Originally posted by Matrix Rising
reply to post by marg6043

 

What you're saying doesn't make sense.

Perhaps it makes no sense to you, but for those looking for financial retribution for losing money they have lawyers that will make all the sense in the world.

Anyone who does business with Goldman Sachs deserves to lose their money. They destroy businesses, large and small, and people's lives, rich and poor, gloating while their clients contemplate suicide for ever trusting them.
All to enrich themselves.
Ashanti Gold trusted them. Sought their advice.
Somehow, a British Company was able to buy Ashanti Gold for a song not long after taking Goldmans advice. SOME advice, Goldman of course came out smelling like a rose.
www.goldmansachs666.com...
Better keep your holy water handy....

Originally posted by Stewie
Anyone who does business with Goldman Sachs deserves to lose their money. They destroy businesses, large and small, and people's lives, rich and poor, gloating while their clients contemplate suicide for ever trusting them.
All to enrich themselves.

Insiders Sold Shares As SEC Probed Firm

Five senior executives of Goldman Sachs Group Inc., including the firm's co-general counsel, sold $65.4 million worth of stock after the firm received notice of possible fraud charges, which later drove its stock down 13%.

Sales by three of the five Goldman insiders occurred at prices higher than the stock's current level. The stock sales by co-general counsel Esta Stecher, vice chairmen Michael Evans and Michael Sherwood, principal accounting officer Sarah Smith and board member John Bryan occurred between October 2009 and February 2010. It was the most active spate of insider selling in three years, according to InsiderScore.com in Princeton, N.J., which tracks and analyzes purchases and sales of stocks by top executives and directors. - Full Text

Securities regulations require "insiders" to file their trades via SEC Form 4. You can track all insider trading activity , including the trades mentioned in the above article here (click the page links at the bottom to access earlier information).

Retailers still in this market need every advantage they can muster...it pays to pay attention.

I might add that the Sec complaint against GS includes the allegation that Fabrice Tourre , acting on behalf of GS , falsely represented to ACA that Paulson was taking a $200MM equity position in the portfolio (long).

Just a little over one year after being elected as a junior senator, in 2006 Obama was the featured guest before a private gathering of the Goldman Sachs executives in Chicago, an honor unheard of for someone that politically insignificant, speaking before the most powerful financial firm on Wall Street and one of the most powerful in the world. This was quietly reported in Bloomberg News.

This is another example of why I despise Obama. There are too many instance of him emerging from the shadows to become a major player. Without any vetting or real disclosure of his shady background.

The worst move our country ever made was to let him near the White House.

from SevenThunders

A lot of people are faulting Goldman Sachs for the wrong reason. Namely that they profited over their shorting of the housing market. Without the ability to make bets against the market it would be impossible to hedge your trading account in difficult markets. It is absolutely critical for market liquidity to allow short trading. Also it is a communist mentality that plays the politics of envy card, so that folks hate anyone who makes money.

What's slimy about Goldman Sachs is that they deliberately lied to their customers and sold toxic debt packaged as quality debt. They did this to create a short position for Paulson and themselves.

This is the essence of the truth. People, listen up.

Short selling is a strategy used by traders like Paulson and G-S. There is nothing inherently wrong with short selling. It is neutral.

Allowing G-S and Paulson to package and sell the two-day-old bread as fresh from the oven is the problem. It is a lie and a fraud. And this is what our goverment is supposed to protect us from. Instead, they lay in bed with G-S.

reply to post by ModernAcademia

The most difficult part of this case is likely to turn on what is a “material omission.” Paulson’s role in selecting mortgages may or may not be material — that is an issue of fact for a jury to determine. But complex? Not even close.

"May or may not be material"? They are the guts of the case, for chrissakes. Paulson picked the most likely losers and bundled them as "good investments", G-S's young VP Fabrice helped create this synthetic CDO. Then they told investors that it was ACA that put the whole thing together.

All the time, their own traders were short selling the synthetics.

Originally posted by poet1b

Yeah, Wall Street backed Obama, rather than Hillary, but putting some money into Obama was simply hedging their bets. Whoever won the demo nom was pretty much a shoo in. It's not like Obama needed the money. How much loyalty Obama owes to them is a big question.

Here is the bigger picture. Obama has within his grasp the ability to reshape history, put himself high up on the list of great world leaders.

Do you really think Obama is going to go for the money, or history?

This political "hedging of bets" has been going on for some time now, corporate money thrown at both sides. Funny. The Watergate break-in was prompted by Republican leaders wanting evidence of Democratic corruption...which at the time involved kickbacks. We've gone way beyond kickbacks to what amounts to outright legalized bribery.

Damn, he'd better go for history! Of course, he'll no doubt have to contend with astroturf campaigns to portray Americans as on the side of GS. Angry Americans shouting/writing what terrible things are being done to GS and the ECONOMY...and CAPITALISM ...oh, my.

[edit on 26-4-2010 by desert]

reply to post by Matrix Rising



Perhaps this article will help you see where the fraud occurred:

The SEC alleges that Goldman Sachs structured and marketed a synthetic collateralized debt obligation (CDO) that hinged on the performance of subprime residential mortgage-backed securities (RMBS). Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO.


"The product was new and complex but the deception and conflicts are old and simple," said Robert Khuzami, Director of the Division of Enforcement. "Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party."

www.huffingtonpost.com...

reply to post by mishigas

Just a little over one year after being elected as a junior senator, in 2006 Obama was the featured guest before a private gathering of the Goldman Sachs executives in Chicago, an honor unheard of for someone that politically insignificant, speaking before the most powerful financial firm on Wall Street and one of the most powerful in the world. This was quietly reported in Bloomberg News.

The secrecy surrounding Obama is very troubling. I didn't know about this one. What's even more troubling is that he was elected and people didn't know anything about him.

[edit on 27-4-2010 by Matrix Rising]

reply to post by Matrix Rising


We have known for quite sometimes who are the ones selecting our presidents in this nation.

At a tune of 1 million dollars been spend a day since April 22 by the financial power houses to kill the financial reform restrictions on Wal-street we all know the end result.

Nothing that is done in congress is for the tax payer benefits they all laugh at our incompetence to fight what they do to this nation and to the people.

reply to post by mishigas


The reason why this excuse is smoke and mirrors is because they are not going after Paulson and his firm who they say picked the securities for Goldman.

This tells me there's no evidence and this is just a political play to give crooked politicians the green light to spend and waste billions and gain more control. If anyone thinks the timing of this is a coincidence then I have a bridge to sell you in Brooklyn. This was timed to coincide with this massive sweeping reform bill.

We don't need massive reform. If the SEC investigates and presents evidence that Goldman is guilty of fraud, that's fine with me. But we don't need sweeping financial reform.

The republicans and the democrats do this when they are in power and the useful idiots in the American public fall for it all the time. They inflate something into a crisis and then they need billions to fix a problem and they just make it worse.

Health care is a crisis so we had to sink our kids deeper in debt and pass a bill that will give government control over health care.

Energy is a crisis so they want cap and trade
Goldman is a crisis so they need sweeping financial reform
Illegal immigration is a crisis so they will need sweeping immigration reform and amnesty

Everything is inflated into a crisis and many of these things are problems that these crooked politicians created in the first place.

I wish Americans would stop being so blind and gullible.

Hitler said:

"It's a fortunate thing for governments that the people don't think"

He also said:

"People are generally stupid, if you repeat the same slogans again and again they will eventually believe it"

Sadly, he was right and governments throughout the world know this.

reply to post by ModernAcademia



I just heard Enron is bring a lawsuit against Goldman Sachs.
Immediately thought of Godzilla vs Mothra. This should be entertaining.