I HOPE SO. Who in their right mind wants to be in Manhattan Thursday for the current Scapegoat Fest now underway by the Obama Administration and its MSM enablers? Believe me, I'm no great fan of Goldman Sachs. Or Hank Paulson. Or John Paulson for that matter. Stay tuned for the diversion of blame from any-and-all government responsibility over the past half-century on to the villains and scapegoats of Wall Street. It's time we stepped back and not bought into group-think here. I think there's more than enough responsibility to go around both the private and public sectors. While President Obama purports to mete out blame in only one direction, I beg to differ.
So does John Tamny: The Goldman Sachs Scandal is Much Ado About Nothing
So does John Tamny: The Goldman Sachs Scandal is Much Ado About Nothing
Goldman Sachs committed a billion dollar fraud and who comes to their defense? Republicans take on the SEC in defense of Goldman Sachs! Would you expect anything less?
ReplyDeleteRep. Darrell Issa, the top Republican on the House Oversight committee, is demanding a slew of documents from the Securities and Exchange Commission, asserting that the timing of civil charges against Goldman Sachs raises “serious questions about the commission’s independence and impartiality.”
Issa’s letter, addressed to SEC Chairwoman Mary Schapiro was signed by eight other House Republicans.
These protectors and apologists of corporate fraud are the same teabaggers that complained when they were bailed out.
Amazing.
Don't worry,
Please tell me honey who they frauded? You? Only if you have a government that bails them out which of course I'm against. Stockholders? Only if they don't read the fine print. Pension funds? Only if pension fund managers don't do their due diligence.. All investments, especially in very sophisticated products are risky.
ReplyDeleteWhen you go long or short, you better know what you're doing and be willing to accept the risk.
Have you ever invested in stocks? Bonds? Gone long? Short? There are no guarantees and risk free investments. When you swim with the Big Boys---which I can't and don't---- you better know how to.
Okay, that's it. No more piffle paffle. It's Bush's fault. If he hadn't blown up the towers we'd all be in the land of milk and honey. That's what Republicans do. Not one Republican will tell me when they stopped kicking their dog.
ReplyDeleteOkay, that's settled. Where were we?
Wonderful, mRed..... We were clearly living on another planet....
ReplyDeleteGoldman convinced investors to buy a poor quality CDO (collateralised debt obligation) in the full expectation that it would collapse. Hedge fund Paulson, which was shorting the product, selected the sub-prime mortgage assets that were most likely to default. Goldman then sold the CDO to investors to put someone on the other side of the trade without revealing Paulson's involvement. Investors would have believed the sub-prime assets to be high quality. Investors in the CDO lost over $1 BILLION.
ReplyDeleteYou can read about it here.
Royal Bank of Scotland was the biggest victim of the alleged sub-prime mortgage fraud orchestrated by Goldman Sachs and involving hedge fund Paulson & Co. They lost over a half BILLION $.
And...FYI
ReplyDeleteWilliam, did you even bother to read the piece I linked to in the post above? If not, I hope you will. Again, these big entities were eating these sophisticated MBSs up. These were sophisticated, greedy, big-time investors and not your average man-on-the-street.
ReplyDeleteAs in eons of investors past, some shorted, and some went long. In the end---as in all markets---some made a ton of money and some lost a ton. However, remember governments could have let them take the consequences of their actions, instead of bailing them out.
The real scandal you should be worried about isn't what Goldman and its boutique investors did, but what Nanny government did to bail them out instead of treating them like real men and letting them take it on the chin. Why aren't you outraged about that?
Again, John Tamny writes above:
"The SEC is essentially charging Goldman with a deception, whereby it tricked its clients into a fund certain to decline in value. Unfortunately, that's not the way it works.
"Investment products at any Wall Street firm frequently materialize due to demand from its sophisticated client base looking for ways to play a variety of markets. Goldman's clients are nothing if not sophisticated, and while the full details of the buyers of ABACUS haven't yet emerged, it's fair to say these weren't buyers of the retail variety.
"As for the Post's clear-eyed suggestion in hindsight that the securities "would probably go bad", this wouldn't have been relevant to the investors who piled into the fund, particularly in 2007. Indeed, as author Michael Lewis has made plain in his new book, The Big Short, by the end of 2006 there were 13,675 hedge funds reporting results, and the bearish view of mortgage securities had "in one form or another, reached many of them."
"Lewis's point was that while well known and analyzed, the bearish mortgage vision in ‘07 was the minority one. Back then, the broad market consensus was that mortgage securities were set to rise as evidenced by how easy it was for what Lewis termed the "more than ten, fewer than twenty" investors and funds that made "straightforward" bets against the subprime mortgage market to do so very inexpensively. In Tourre's case, no matter his bearish views, investors didn't agree, and Goldman was simply responding to client demand for exposure to the securities that Tourre was allegedly skeptical about.
"Deutsche Bank's Greg Lippmann plays a prominent role in Lewis's book, and while he developed a bearish view himself, this didn't keep him from servicing clients on both sides of the mortgage trade. This is important too, because numerous commentators are presently trying to suggest Goldman ignored its internal code of serving clients first on the way to marketing ABACUS. The mere suggestion is yet another example of how foolish the commentary surrounding this non-scandal."
You can read the whole thing above, though it's much easier not to and just go into moral outrage mode.