Showing posts with label Goldman Sucks. Show all posts
Showing posts with label Goldman Sucks. Show all posts

Friday, April 16, 2010

Even The S.E.C Thinks Goldman Sucks!

Oh boy, the old saying of "If you want to dance, you gotta pay the band", is playing a medley of waltzes (we'll have to wait, to see, if they are death marches) for the banking/investment firm/giant vampire squid company Goldman Sachs.



It's not a good thing, when your company is in a headline like this - "U.S. Accuses Goldman Sachs of Fraud in Mortgage Deal".

Here's the press release from the U.S. Security and Exchange Commission;

SEC Charges Goldman Sachs With Fraud in Structuring and Marketing of CDO Tied to Subprime Mortgages

Washington, D.C., April 16, 2010 — The Securities and Exchange Commission today charged Goldman, Sachs & Co. and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.

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.

We like the way Stephen Gandel, at the Curious Capitalist blog, put it;
So there you have it. Finally, the financial crisis gets its first major fraud case. Investment banks created complex securities that increased the risks of in the financial system. Most then held on to the securities because they didn't know what they had. Goldman instead came up with an elaborate scheme to lay off the risk on unsuspecting investors. Either way, Uncle Sam had to come in a clean up the mess. As the SEC says, in selling something they knew was worthless, Goldman was no different from the medicine man of old. It's a fraud as old as time.

[snip]

Last: So are hedge funds more to blame in the financial crisis than we thought? It certainly looks that way. When the hedge funds went before Congress a year or so ago, they were praised--Paulson included. Now it looks like Paulson masterminded a trade that cost the government tens of billions of dollars. I would hope his next Congressional meeting will be less pleasant.



Now, if you remember, back last October, we added Goldman Sach Advisor Brian Griffiths to our Ignorant Dolt roster, for a taste of playing us for suckers, defending paying fat cats like really really big fat cats, or, as John over on Gawker described;
Lord Griffiths of Fforestfach is quite the Christian apologist for wealthy people; he wrote a book called Morality and the Marketplace and has thought long and hard about how to reconcile the teachings of Jesus Christ with the relentless drive to acquire money. He's done pretty well with it. But wasn't there something about camels, and heaven, and rich men? And if Jesus wants Goldman Sachs employees to get multi-million-dollar taxpayer-financed bonuses, why are the Benedictine Sisters of Mt. Angel launching a shareholder movement to get Goldman to reign in its compensation packages? We guess that, for the fabulously wealthy who go for the whole heaven/hell thing, it makes sense to enjoy as many Amber Lounge after-parties as you can squeeze in while you're in this world, because the one that awaits doesn't really have much to offer.



The McClatchy Newspapers, who, if you recall, were on-the-money, from the get-go, about the Bush Grindhouse lying us into war, has also been the dog-on-bone with Goldman Sachs;

“It appears that the financial ‘protection’ provided by Goldman and described in the SEC complaint may have been more akin to the kind of protection provided by organized crime,” Hurley said.

McClatchy Newspapers, in a series published in November about Goldman’s role in the subprime lending disaster, found that Goldman sold more than $40 billion in mortgages in 2006 and 2007 while secretly betting on a housing downturn that would sink their value. It’s unclear whether any of those transactions have drawn SEC or Justice Department scrutiny, but a Senate investigations panel has been examining them.
Here's two of those articles referenced;
Goldman takes on new role: taking away people's homes

Investors could only lose in Goldman's Caymans deals

Goldman's response to the SEC charges is a yawner - "The SEC’s charges are completely unfounded in law and fact and we will vigorously contest them and defend the firm and its reputation."

Ah, Felix Salmon, you want to step up here and talk a little about that "Goldman reputation";

Goldman’s reputation in tatters

Goldman talks ad nauseam about how everything it does it does for its clients, and how any profits it ultimately ends up making are just a result of being “long-term greedy”. But if it attempts legalistic hair-splitting about how its behavior in the Abacus case was technically not illegal, it’s just going to end up looking even more culpable in the eyes of its clients. Goldman, if it was behaving honorably here, would have been open about the whole truth of what was going on. It would have revealed Paulson’s role in structuring the deal to IKB and other investors, and it would have revealed Paulson’s short position to ACA. Instead, it played IKB and ACA for suckers. And that’s just not the kind of behavior that Goldman likes to think that it engages in.

Goldman, as you might extrapolate out their resounding statement, is going to set up a fall guy for this, however, when you read Annie Lowrey's, from the Washington Independent, analogy, you see she goes all Denzel Washington on Goldman, explaining like we're all four-year-olds.

Yves Smith, over on Naked Capitalism, helps her out;
Oooh, things are starting to get interesting.

A number of journalists and commentators (yours truly included) have taken issue with the fact that some dealers (most notably Goldman and DeutscheBank) had programs of heavily subprime synthetic collateralized debt obligations which they used to take short positions. Needless to say, the firms have been presumed to have designed these CDOs so that their short would pay off, meaning that they designed the CDOs to fail. The reason this is problematic is that most investors would assume that a dealer selling a product it had underwritte was acting as a middleman, intermediating between the views of short and long investors. Having the firm act to design the deal to serve its own interests doesn’t pass the smell test (one benchmark: Bear Stearns refused to sell synthetic CDOs on behalf of John Paulson, who similarly wanted to use them to establish a short position. How often does trading oriented firm turn down a potentially profitable trade because they don’t like the ethics?)

Back, last August, we pointed out how being noted for your greediness, wasn't, necessarily a good thing in "Survey Shows Name Should Be "Goldman Sucks", and then, December, added some more reasons.

They looted Main Street (and, possibly, Greece), so, it's nice to see, even belatedly, the S.E.C., finally, getting a glove, and getting into the game.


Bonus Links

Ezra Klein: Three questions about the Goldman fraud filing

Choire, at The Awl - Goldman Sachs SEC Lawsuit: "The CDO Biz is Dead We Don’t Have a Lot of Time Left"

Gregory White: Here Are The Financial Companies That Got Screwed By Goldman's Alleged Fraud

Steve M: BOEHNER'S SELF-CANCELING GOLDMAN TALKING POINTS

Scarecrow: SEC Sues Goldman Sachs; US “Shocked, Shocked,” to Find Wall Street Fraud

Dealbook: S.E.C. Inquiry May Widen, Khuzami Hints

John Nichols: Will SEC Crackdown on Goldman Spur Senate Action?


Wednesday, March 31, 2010

How's Goldman Sachs Going To Exploit This?

Certain individuals, particularly centered on those with a gambling problem, have been known to "bet the house", from time-to-time.

Now, thanks to some new "innovative financing", they can also "bet the stadium" (perhaps, along with the house).



Colleges offering ‘sports mortgages’

Now, combine that frustration with cash-strapped college athletics departments, struggling to upgrade aging stadiums, and you’ve got the latest innovation in marketing for big-time athletics — the sports mortgage.

At Kansas, Jayhawk fans who sign up to pay up to $105,000 over 10 years will earn the right to buy guaranteed top seats for football over the next three decades. In return, the seats themselves will stay locked in at 2010 prices.

[snip]

The new pricing plans are known as “equity seat rights,’’ and are being pitched as a win-win for fans and teams. Diehard fans can be certain of what they’ll pay to see their favorite team well into the future — and can always sell tickets in the secondary market while taking a tax write-off for donating to a school. Teams can bank on extra revenue and avoid borrowing.

Stadium Capital Financing Group, the Chicago company behind the change, says it has the potential to transform how both college and pro teams court their most loyal fans. They’re confident sports mortgages will overtake the personal seat license, which doesn’t necessarily lock in ticket prices.




Okay, we're coloring outside the lines here, putting the ol' thinkin' caps on.

But what happens if the mortgage company, perhaps due to other investments, tanks?

How's Goldman Sachs going to exploit this?

Does, say, Goldman Sachs raise there hand, purchase the company, chop up the companies debt, and start selling "Stadium Derivatives", essentially just repackaging their programs that helped tank the world's economy?

Sports Mortgages?

Sounds like "three-yards-and-a-cloud-of-a-financial-mess" getting ready to come out of the locker room.


Bonus Goldman Sucks Riffs

Matt Taibbi: The Great American Bubble Machine

Paul Krugman: The Joy of Sachs

John Cook: Congrats Goldman Sachs! You're the New Symbol of Banker Greed

Survey Shows Name Should Be "Goldman Sucks"

Yet More Reasons The Survey Says Goldman Sucks!

Today's Ignorant Dolt - Brian Griffiths, of Goldman Sachs


Sunday, December 13, 2009

Yet More Reasons The Survey Says Goldman Sucks!

Well, now we have a clue, on why Goldman Sach's Brian Griffith was so hawkish for achieving greater prosperity and opportunity.



Goldman Fueled AIG Gambles ... Wall Street Titan's Role Shown in Journal Analysis; Firm Says Problems Hidden

Goldman Sachs Group Inc. played a bigger role than has been publicly disclosed in fueling the mortgage bets that nearly felled American International Group Inc.

Goldman was one of 16 banks paid off when the U.S. government last year spent billions closing out soured trades that AIG made with the financial firms.

A Wall Street Journal analysis of AIG's trades, which were on pools of mortgage debt, shows that Goldman was a key player in many of them, even the ones involving other banks.
Barry Ritholtz suggests there's some action needed;
Any Congress people — Bernie Sanders maybe? Perhaps Senators Schumer or Dodd might forget all of the Finance driven campaign contributions they have gotten over the years and come up with a plan. I would imagine Alan Grayson is one of the few Freshman Congresmen who can think of a way to clawback some of the ill gotten booty Goldman grabbed from Treasury.

Read the entire article, our computer doesn't have the font "Profound Creepiness".

In the meantime, we'll trot out Richard Dawson, for a hearty call out;

"Survey Says ... Goldman Sucks!"


Bonus Links

NYT Editorial: Goldman’s Non-Apology

Igor Volsky - Goldman Sachs Report: Watered Down Senate Bill Would Lead To ‘Bull Case Scenario’ For Insurance Industry


Greg Gordon | McClatchy Newspapers: Goldman takes on new role: taking away people's homes


Wednesday, October 21, 2009

Today's Ignorant Dolt - Brian Griffiths, of Goldman Sachs

It's, kind of, not fair, when they make it this easy.

Our roster of Our roster of Ignorant Dolts grows again today, with Goldman Sachs advisor Brian Griffiths, salivating, and drooling all over himself, reaching out for that dubious Ignorant Dolt Crown and Sceptre



From Bloomberg;

Goldman Sachs’s Griffiths Says Inequality Helps All (Update1)

Oct. 21 (Bloomberg) -- A Goldman Sachs International adviser defended compensation in the finance industry as his company plans a near-record year for pay, saying the spending will help boost the economy.

“We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all,” Brian Griffiths, who was a special adviser to former British Prime Minister Margaret Thatcher, said yesterday at a panel discussion at St. Paul’s Cathedral in London. The panel’s discussion topic was, “What is the place of morality in the marketplace?”
Yeah, right ...

My life, if I bothered to check, must be generously uplifted, by Goldman Sachs sucking up the bailout money, and then turning around and dishing out million-dollar bonuses.

John, over on Gawker;
Lord Griffiths of Fforestfach is quite the Christian apologist for wealthy people; he wrote a book called Morality and the Marketplace and has thought long and hard about how to reconcile the teachings of Jesus Christ with the relentless drive to acquire money. He's done pretty well with it. But wasn't there something about camels, and heaven, and rich men? And if Jesus wants Goldman Sachs employees to get multi-million-dollar taxpayer-financed bonuses, why are the Benedictine Sisters of Mt. Angel launching a shareholder movement to get Goldman to reign in its compensation packages? We guess that, for the fabulously wealthy who go for the whole heaven/hell thing, it makes sense to enjoy as many Amber Lounge after-parties as you can squeeze in while you're in this world, because the one that awaits doesn't really have much to offer.

And, David Dayen, on Firedoglake, wryly observes;
He’s certainly got the “Lord” thing down, right?

Go to the head of the line there, Mr. Griffiths.

We don't want you waiting one single second to pick up your Ignorant Dolt gear.

To bring back the spirit of Richard Dawson, planted with a big, wet kiss;

"Survey Says?"

Survey Shows Name Should Be "Goldman Sucks"




Bonus Ignorant Dolt Brian Griffiths Riffs

Pat Garofalo: Goldman Sachs Analyst: Income ‘Inequality’ Will Lead To ‘Prosperity And Opportunity For All’

Mikkel Fishman: Praise Goldman Sachs And The Other Big Banks

Kathryn Hopkins: Public must learn to 'tolerate the inequality' of bonuses, says Goldman Sachs vice-chairman

Saturday, August 08, 2009

Survey Shows Name Should Be "Goldman Sucks"

This had to be, perhaps, the most "Duh!" happening of the week;

Goldman Sachs’ reputation tarnished

Goldman Sachs’ reputation among both the general public and financially sophisticated Americans has been damaged by the events of the past year, according to research conducted for the Financial Times.

In a survey of 17,000 Americans, Brand Asset Consulting found that Goldman’s stature – as measured by several gauges of brand strength – had suffered in 2008 and 2009.

“Goldman Sachs still has that Gordon Gekko look to it among the general public,” said Anne Rivers, who oversaw the survey, referring to the villain of the 1987 film Wall Street.

[snip]

In Rolling Stone last month, Goldman was described as a “great vampire squid wrapped around the face of humanity”. The headline on the cover of New York magazine last week asked: “Is Goldman Sachs evil? Or just too good?” The subsequent article argued in favour of the former, with a tip of the cap to the latter

[snip]

However, some marketing professionals say the storm will pass. “All of this giant squid language they can pretty much brush off,” said William Barker of Brand Finance. “My guess is that their customers are probably very happy with them.”

In July, Goldman reported record quarterly profits of $3.44bn on revenues of $13.8bn.



Yeah, thanks to all the bailout, and other government, money.

Then again, Goldman Sucks isn't playing to (or with) the peanut gallery.

From Joe Weisenthal;
But then, who cares what the general public thinks? Do the Goldman traders care? Nope. Do college graduates, knowing that Goldman is the home of TARP-free high pay care? Nope. Goldman isn't selling 401(k)s or $7 stock trades to the retail investor. What matters is how Goldman is perceived by the professional classes, and to some extent they've always been hated by those on the outside. Big deal.

Meanwhile, Goldman shares look set to open around $165 today, over 300% off their lows from the crisis. If this reputational hit mattered, nobody bothered to tell paid-up Goldman Sachs shareholders.
I suppose, it is conceivably, that in the not-so-distant future, along with all the tax, unemployment, 401K deductions listed on your pay stub, there'll be one for "Goldman Sucks" on it.


Bonus Goldman Sucks Riffs

John Cook: Congrats Goldman Sachs! You're the New Symbol of Banker Greed

Paul Krugman: The Joy of Sachs

dday: Goldman's Record Taxpayer-Subsidized Profits

Nick Baumann: Even the Wall Street Journal Hates Goldman Now

Matt Taibbi: The real price of Goldman’s giganto-profits