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Archive for the ‘Goldman Sachs’ Category

The Hill

By Peter Schroeder 03/18/12 05:30 AM ET

Democrats have co-opted a fiery resignation letter from a Goldman Sachs employee to argue for rigid rules on the financial sector.

Lawmakers say the letter from Greg Smith, published in The New York Times, is evidence that the reforms Congress passed in the wake of the financial crisis should be strictly implemented.

“This is ammunition for our argument,” said Rep. Barney Frank (D-Mass.), who co-authored the Dodd-Frank financial reform law.

Senate Majority Whip Dick Durbin (D-Ill.) entered the piece into the congressional record, calling it “an indication of why we need to continue our vigilance over this industry to make certain that the right market forces prevail.”

Goldman executives have pushed back against the widely read letter and defended the firm’s behavior and corporate culture.

Dems see ‘ammunition’ against Wall Street in Goldman resignation – The Hill’s On The Money.

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Rolling Stone feature discusses issues explored in The American Ruling Class

facebook July 16, 2009

by Alive Mind

The American Ruling Class has never been more relevant to the current news cycle or to the collective consciousness of the American public. Goldman Sachs is announcing record profits and it is the subject of a big Rolling Stone expose in which Matt Taibbi discusses “The Great American Bubble Machine,” stating, “The first thing you need to know about Goldman Sachs is that it’s everywhere. The world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.” Does Goldman Sachs still rule the world? Find out the back story with the feature documentary, The American Ruling Class.

John Kirby , the director for this film, also posts on the Providence Journal and has done an article on “Building What”. The ad and “Geraldo-at-Large” spot can be seen on the family-members’ campaign Web site, .buildingwhat.org.

The movie, about an hour and a half, can be seen on HULU

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Taibbi: The Lunatics Who Made a Religion Out of Greed and Wrecked the Economy

April 26, 2010 |

The SEC’s lawsuit against Goldman Sachs is a chance to prevent greed without limits.

So Goldman Sachs, the world’s greatest and smuggest investment bank, has been sued for fraud by the American Securities and Exchange Commission. Legally, the case hangs on a technicality.

Morally, however, the Goldman Sachs case may turn into a final referendum on the greed-is-good ethos that conquered America sometime in the 80s – and in the years since has aped other horrifying American trends such as boybands and reality shows in spreading across the western world like a venereal disease.

When Britain and other countries were engulfed in the flood of defaults and derivative losses that emerged from the collapse of the American housing bubble two years ago, few people understood that the crash had its roots in the lunatic greed-centered objectivist religion, fostered back in the 50s and 60s by ponderous emigre novelist Ayn Rand.

While, outside of America, Russian-born Rand is probably best known for being the unfunniest person western civilisation has seen since maybe Goebbels or Jack the Ripper (63 out of 100 colobus monkeys recently forced to read Atlas Shrugged in a laboratory setting died of boredom-induced aneurysms), in America Rand is upheld as an intellectual giant of limitless wisdom. Here in the States, her ideas are roundly worshipped even by people who’ve never read her books or even heard of her. The rightwing “Tea Party” movement is just one example of an entire demographic that has been inspired to mass protest by Rand without even knowing it.

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America must face up to the dangers of derivatives

George Soros | Financial Times | April 22, 2010

The US Security and Exchange Commission’s civil suit against Goldman Sachs will be vigorously contested by the defendant. It is interesting to speculate which side will win; but we will not know the result for months. Irrespective of the eventual outcome, however, the case has far-reaching implications for the financial reform legislation Congress is considering.

Whether or not Goldman is guilty, the transaction in question clearly had no social benefit. It involved a complex synthetic security derived from existing mortgage-backed securities by cloning them into imaginary units that mimicked the originals. This synthetic collateralised debt obligation did not finance the ownership of any additional homes or allocate capital more efficiently; it merely swelled the volume of mortgage-backed securities that lost value when the housing bubble burst. The primary purpose of the transaction was to generate fees and commissions.

This is a clear demonstration of how derivatives and synthetic securities have been used to create imaginary value out of thin air. More triple A CDOs were created than there were underlying triple A assets. This was done on a large scale in spite of the fact that all of the parties involved were sophisticated investors. The process went on for years and culminated in a crash that caused wealth destruction amounting to trillions of dollars. It cannot be allowed to continue. The use of derivatives and other synthetic instruments must be regulated even if all the parties are sophisticated investors. Ordinary securities must be registered with the Securities and Exchange Commission before they can be traded. Synthetic securities ought to be similarly registered, although the task could be assigned to a different authority, such as the Commodity Futures Trading Commission.

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Crooks and Liars- By Susie Madrak Tuesday Apr 20, 2010 2:00pm

This is really heating up. Stay tuned for further developments as Congress is emboldened by the SEC civil fraud charges:

Washington is suddenly looking very unkind to the firm that used to be known as “Government Sachs.” Now the Senate’s Permanent Subcommittee on Investigations, led by Carl Levin, Democrat of Michigan, is planning to focus hearings scheduled for next week at least in part on Goldman Sachs’s role in the financial disaster.

Levin’s staff has uncovered new documents “that link certain actions to specific people” at Goldman, according to a senior legislative official who spoke on condition of anonymity. The official would not divulge the nature of the allegation but said that Levin believes it amounts to “another big shoe to drop on Goldman.”

Spokespeople for Levin said they were not prepared to discuss the nature of the probe, but his committee has been conducting several weeks of hearings and one is planned for April 27 on “the role of the investment banks.” “We expect to have some information tomorrow,” spokesman Bryan Thomas said Monday.

Keep in mind that a win in the SEC case is by no means a slam dunk:

To a layperson, the case against Goldman may seem clear cut. After all, investors did not know some information about the product that they might have considered vital, and they lost $1 billion in the end. But the rules that govern these kinds of transactions are not so plain.

Several experts on securities law said fraud cases like this one, which focuses on context rather than content, are generally more difficult to win, because it can be hard to persuade a jury that the missing information might have led buyers to walk away.

They added, however, that the strength of the S.E.C.’s case is impossible to gauge until the agency discloses more of the evidence it has assembled. So far it has provided only a sketch.

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Goldman Sachs fraud charges ‘just the tip of the iceberg’: prof

Raw Story- By Andrew McLemore
Saturday, April 17th, 2010 — 10:06 pm

Charges of fraud brought against banking titan Goldman Sachs by the Securities and Exchange Commission rocked financial markets Friday, but experts say the allegations are merely the first of many to come, Reuters reported.After the SEC went public with the allegations, the Dow Jones dropped 125 points and Goldman Sachs stocks dropped 13 percent — the largest one-day drop in company history.

“This is just the tip of the iceberg,” said James Hackney, a professor at Northeastern University School of Law. “There are a lot of folks out there in different deals who played similar roles, and once it starts building steam, plaintiffs’ lawyers will figure out this is where the money is and there should be a lot of action.”

Reuters Global editor at large Chrystia Freeland said the significance of the charges is “huge.”

Goldman Sachs’ members like to think of themselves as “the smartest, the richest,” but Freeland said they also like to think of themselves as the “most virtuous.”

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Goldman Sachs FRAUD Charges Filed By SEC Over Subprime Mortgage Securities

Huffington Post |  Ryan McCarthy First Posted: 04-16-10 10:51 AM   |   Updated: 04-16-10 11:49 AM

The Securities and Exchange Commission has charged Goldman Sachs with civil fraud over its controversial collateralized debt obligations tied to the subprime mortgage market.

As the New York Times notes in its in-depth story on the subject, the charges are “the first time that regulators have taken action against a Wall Street deal that helped investors capitalize on the collapse of the housing market.” A London-based vice president at Goldman, Fabrice Tourre, was also charged in the complaint.

In essence, the SEC claims Goldman Sachs and one of its top officers misled investors by failing to disclose that hedge fund manager John Pauson, who made billions betting against the housing market, selected the assets that went into a complex security called “Abacaus”.

Paulson, the SEC alleges, “paid Goldman Sachs to structure a transaction in which Paulson & Co. could take short positions against mortgage securities chosen by Paulson & Co. based on a belief that the securities would experience credit events.”

But Goldman Sachs, which was allegedly paid $15 million by Paulson, did not disclose these facts to investors who bought Abacus, according to the complaint.

Here’s the SEC’s full release — scroll down for the complaint:

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