Awww, poor mansacks!

[nathanm]

http://www.thestreet.com/story/10727774/1/dow-sees-triple-digit-loss-on-goldman-charge.html

Isn't that just nice. Poor Goldman got sued by the SEC for letting Paulson & Co. pick the most toxic of toxic assets to toss into CDOs so he could short them, and then going on to sell the junk to other investors without informing them of the extra side of toxicity included in their order.

[fotd]

http://www.thestreet.com/story/10727774/1/dow-sees-triple-digit-loss-on-goldman-charge.html

Isn't that just nice. Poor Goldman got sued by the SEC for letting Hank Paulson pick the most toxic of toxic assets to toss into CDOs so he could short them, and then going on to sell the junk to other investors without informing them of the extra side of toxicity included in their order.

Unfortunately, this too will pass. I believe it was John Paulson who played shenanigans with a few bad apples in ManSachs

[nathanm]

Unfortunately, this too will pass. I believe it was John Paulson who played shenanigans with a few bad apples in ManSachs

You're right, I get confused by all the incestuous relationships and confusing "not related" same last name people and misattributed something that John Paulson did to Hank Paulson. My bad.

[fotd]

Those banksters should all be in jail. Anyone up to making a citizen's arrest en masse?  That's why we call them "banksters" or, the Federal Reserve's Mafia.


SATURDAY, APRIL 17, 2010

Other Major Banks Did Deals Similar to Goldman's
by Marian Wang, ProPublica
http://onthehillblog.blogspot.com/2010/04/other-major-banks-did-deals-similar-to.html
"As you may have heard, Goldman Sachs is being sued for fraud by the Securities and Exchange Commission for allegedly misleading investors about a deal that Goldman helped structure and sell. In the civil suit, the SEC specifically faulted Goldman for failing to disclose that a hedge fund was helping create the investment while betting big the deal would fail.
According to the SEC, Goldman Sachs knew about the hedge fund's bets, knew it played a significant role in choosing the assets in the portfolio, and yet did not tell investors about it. (Goldman Sachs has called the SEC's accusations "completely unfounded in law and fact." And in another more detailed statement, it said it "did not structure a portfolio that was designed to lose money.")

As we reported at ProPublica last week, many other major investment banks were doing a similar thing.

Investment banks including JPMorgan Chase, Merrill Lynch (now part of Bank of America), Citigroup, Deutsche Bank and UBS also created CDOs that a hedge fund named Magnetar was both helping create and betting would fail. Those investment banks marketed and sold the CDOs to investors without disclosing Magnetar's role or the hedge fund's interests.

Here is a list of the banks that were involved in Magnetar deals, along with links to many of the prospectuses on the deals, which skip over Magnetar's role. In all, investment banks created at least 30 CDOs with Magnetar, worth roughly $40 billion overall. Goldman's 25 Abacus CDOs -- one of which is the basis of the SEC's lawsuit -- amounted to $10.9 billion.

Our reporter Jake Bernstein explained the investment banks' disclosure failures on Chicago Public Radio's This American Life:

The role of Magnetar, both as equity investor and in their bets against the very CDOs they helped create were not disclosed in any way to investors in the written documents about the deals. Not the marketing materials, not the prospectuses, not in the hundreds of pages that an investor could get to see information about the deal was it disclosed that it was in fact Magnetar who'd helped create the deal, and who'd bet against.
That is, of course, along the lines of what the SEC is suing Goldman Sachs for now. The SEC's suit also says CDOs like the ones Goldman built "contributed to the recent financial crisis by magnifying losses associated with the downturn in the United States housing market."

Notably, the SEC did not sue the hedge fund involved in Goldman's Abacus deals -- Paulson & Co. -- or its manager, John Paulson. Instead, it's going after Goldman. And as we pointed out in our reporting, there's no evidence that what Magentar did was illegal.

We've called the major banks involved in Magnetar CDO deals to see if they were concerned about similar lawsuits. Thus far, Bank of America, Citigroup, Deutsche, Wells Fargo (which bought Wachovia) and UBS have responded and have all declined our requests for comment. Here is Magnetar's response to our original reporting.

Read ProPublica's full Magnetar story. http://www.propublica.org/feature/all-the-magnetar-trade-how-one-hedge-fund-helped-keep-the-housing-bubble

The Magnetar Trade: How One Hedge Fund Helped Keep the Bubble Going (Single Page)

quite amazing....

This gal http://en.wikipedia.org/wiki/Brooksley_Born could have been a hero...

"Born was appointed to the CFTC on April 15, 1994 by President Bill Clinton. Due to litigation against a company called Bankers Trust by major corporate clients, Born and her team at the CFTC sought comments on the regulation of derivatives,[3] a first step in the process of writing comprehensive regulations. Born was particularly concerned about swaps, financial instruments that are traded over the counter between banks, insurance companies or other funds or companies, and thus have no transparency except to the two counterparties and the counterparties' regulators, if any. CFTC regulation was strenuously opposed by Federal Reserve chairman Alan Greenspan, Treasury Secretaries Robert Rubin and Lawrence Summers.[4] On May 7, 1998, former SEC Chairman Arthur Levitt joined Rubin and Greenspan in objecting to the issuance of the CFTC's concept release. Their response dismissed Born's concerns off-hand and focused on the possibility that CFTC regulation of swaps and other OTC derivative instruments would increase legal uncertainty of such instruments, potentially creating turmoil in the markets, and reducing the value of the instruments. Further concerns voiced were that the imposition of new regulatory costs would stifle innovation and push transactions offshore.[7]"

Summers remains in the White House .... where is the justified outrage Roman's?

[fotd]

Culture of corruption that the Supreme Court just allowed to take position in making "them" more powerful than the American citizenry through their ability to purchase future elections. Amazing times. The tea baggers don't have a clue about the term "taking our country back."



Numerian: The Goldman Sachs Credo - So What if We Lie? It's Nothing Personal, It's Just Business

http://www.thepeoplesvoice.org/TPV3/Voices.php/2010/04/18/numerian-the-goldman-sachs-credo-so-what#more10994

" Goldman Sachs has issued a brief statement in defense of their conduct, saying that their job has always been to match the interest of parties with different views about the market. In this case, Paulson & Co. thought the mortgage securities market was going to collapse, while investors in the CDO did not. Goldman gives you the impression they are a disinterested middleman matching buyers and sellers. This is exactly how a trader thinks, and it is traders like Lloyd Blankfein who run Goldman Sachs and have done so ever since the firm went public in the 1990s. This is not what Goldman Sachs used to be like when it was a private firm. Then, it operated only in the interest of one client at a time, and if there was any potential conflict of interest with another client, it would decline the transaction. This culture has died out on Wall Street, and this deal, created as it was on a trading desk, displays the consequences of the new culture where the most important thing is getting the deal done at the maximum amount of profit to the firm."

[Conan71]

Summers remains in the White House .... where is the justified outrage Roman's?

Surprised?  Goldman Sachs was second on POTUS Obama's contributors list behind University Of California.  Just under $1mm.

Nothing to see here, move along....

Actually, I do agree with the analysis you posted on the issue.  A very, very small handful knew the implications of derivatives, and I don't think anyone could have forecast the perfect storm they eventually became the center of.

[nathanm]

Surprised?  Goldman Sachs was second on POTUS Obama's contributors list behind University Of California.  Just under $1mm.

Nothing to see here, move along....

Actually, I do agree with the analysis you posted on the issue.  A very, very small handful knew the implications of derivatives, and I don't think anyone could have forecast the perfect storm they eventually became the center of.

I'm sure the large numbers of folks who had been taking out CDSes on mortgage securities for several years before the meltdown were quite aware of the impending smile storm.

I'm sure most folks outside of the field didn't realize how the CDS writing business would amplify the effects of the mortgage downturn.

[altruismsuffers]

You are all conspiracy theorists.  Why would our government bail out a bunch of lying bastards?  Your tin foil hats are on too tight.

[Conan71]

John Paulson is a degenerate gambler:

"For months hedge-fund maverick John Paulson had been seeking new ways to bet on the eventual failure of the housing market and collapse of subprime mortgages, and in late 2006 Paulson and his deputies reached out to investment banks like Goldman Sachs for a new vehicle for their bet. This is the story of how they did it."

"To try to protect themselves, the Paulson team made sure at least one of the CDOs was a "triggerless" deal, or a CDO crafted to be more protective of these equity slices by making other pieces of the CDO more likely to take early hits. Paulson's goal was to make the equity piece a bit safer, but this step made the other parts of the triggerless CDO even more dangerous for anyone with the gumption to buy them.

He and Paulson didn't think there was anything wrong with working with various bankers to create more toxic investments. Paulson told his own clients what he was up to and they supported him, considering it an ingenious way to grow the trade by finding more debt to short. After all, those who would buy the pieces of any CDO likely would be hedge funds, banks, pension plans, or other sophisticated investors, not mom-and-pop investors. And if these investors didn't purchase the newly created CDOs, they'd likely buy another similar product since there were more than $350 billion of CDOs at the time.

However, at least one banker smelled trouble and rejected the idea. Paulson didn't come out and say it, but the banker suspected that Paulson would push for combustible mortgages and debt to go into any CDO, making it more likely that it would go up in flames. Some of those likely to buy the CDO slices were endowments and pension plans, not just deep-pocketed hedge funds, adding to the wariness. Scott Eichel, a senior Bear Stearns trader, was among those at the investment bank who sat through a meeting with Paulson but later turned down the idea. He worried that Paulson would want especially ugly mortgages for the CDOs, like a bettor asking a football owner to bench a star quarterback to improve the odds of his wager against the team. Either way, he felt it would look improper."

What a creepy doosh.

http://news.yahoo.com/s/dailybeast/20100420/ts_dailybeast/7686_insidepaulsonsdealwithgoldman

[fotd]

John Paulson is a degenerate gambler:

"For months hedge-fund maverick John Paulson had been seeking new ways to bet on the eventual failure of the housing market and collapse of subprime mortgages, and in late 2006 Paulson and his deputies reached out to investment banks like Goldman Sachs for a new vehicle for their bet. This is the story of how they did it."

"To try to protect themselves, the Paulson team made sure at least one of the CDOs was a "triggerless" deal, or a CDO crafted to be more protective of these equity slices by making other pieces of the CDO more likely to take early hits. Paulson's goal was to make the equity piece a bit safer, but this step made the other parts of the triggerless CDO even more dangerous for anyone with the gumption to buy them.

He and Paulson didn't think there was anything wrong with working with various bankers to create more toxic investments. Paulson told his own clients what he was up to and they supported him, considering it an ingenious way to grow the trade by finding more debt to short. After all, those who would buy the pieces of any CDO likely would be hedge funds, banks, pension plans, or other sophisticated investors, not mom-and-pop investors. And if these investors didn't purchase the newly created CDOs, they'd likely buy another similar product since there were more than $350 billion of CDOs at the time.

However, at least one banker smelled trouble and rejected the idea. Paulson didn't come out and say it, but the banker suspected that Paulson would push for combustible mortgages and debt to go into any CDO, making it more likely that it would go up in flames. Some of those likely to buy the CDO slices were endowments and pension plans, not just deep-pocketed hedge funds, adding to the wariness. Scott Eichel, a senior Bear Stearns trader, was among those at the investment bank who sat through a meeting with Paulson but later turned down the idea. He worried that Paulson would want especially ugly mortgages for the CDOs, like a bettor asking a football owner to bench a star quarterback to improve the odds of his wager against the team. Either way, he felt it would look improper."

What a creepy doosh.

http://news.yahoo.com/s/dailybeast/20100420/ts_dailybeast/7686_insidepaulsonsdealwithgoldman

Scapegoat? All he did was see this debacle in housing coming where the weak people of America who all wanted a house for an investment instead of a place to live went calling on the charleton lenders who provided the fuel for unsafe loans.

You are such the hypocrite, Pompous Conanus. All Paulson did was utilize capitalism tools to create another type of investment for the banksters to screw the middle class utilizing lack of regulation. 

[Conan71]

You seriously think John Paulson betting on the collapse of the mortgage system was just?

Oh, I forget it's your national holiday.

[fotd]

You seriously think John Paulson betting on the collapse of the mortgage system was just?

Oh, I forget it's your national holiday.

It's not just. But it is legal. It was GS (and the other banksters along with their GOP guardians) that betrayed free enterprise.

[fotd]

This is a truth teller classic!

Video: Jon Stewart These Frigging Guys Goldman Sachs and the GOP

http://rackjite.com/archives/4886-Video-Jon-Stewart-These-Frigging-Guys-Goldman-Sachs-and-the-GOP.html

"What scares the Hell out of me about all this is how confident the Republicans are about nixing the regulation of banking and Wall Street in the face of what we ALL know they did to us. They did more to hurt us than all the Negroes and Mexicans put together, in all of American history ever did to us!     

They stole over half our retirements, a third of the value of hour homes, tens of millions lost their homes, more tens of millions lost their jobs and still the Republican Party who is owned by Bankers and Wall Street who caused all that are touting no change - regulation is socialism - and believe they are going to win so big come November that they will take the House and Senate. Not to mention the glory of the GOP and W. Bush doubling the debt over the past 8 years and supporting two optional wars which  they GOP refused to pay for. "

[Conan71]

It's not just. But it is legal. It was GS (and the other banksters along with their GOP guardians) that betrayed free enterprise.

Did you make money betting on failure?  Where's your sense of ethics?  I hear you railing all the time about a lack of ethics in others.

GOP guardians? What exactly was Gold Man Sacks er their employees trying to buy for almost $995K from POTUS Obama?  Why has G(M)S only averaged giving 35% to GOP candidates and causes in the last 20 years vs. 64% to Dimocrats if the GOP is their guardian and enabler?

Did you not post an article where by derivatives were devised during the Clinton years, yet Bubba did nothing about them either?  What kind of protection has years of influence peddling by the securities and investment industry bought them?

Again, political contributions from Wall St. 2010 cycle:

                                  D             R      D   R
Venture Capital:           72%         28% (52/47 over 20 years)
Hedge Funds:               61%        39% (65/34 over 20 years)
Private Equity & Invest:  69%        31% (53/47 over 20 years)

Stats, not Jon Stewart.

You aren't telling the truth, truthteller.

[fotd]

Did you make money betting on failure? (NO, even though I had access)  Where's your sense of ethics? (SAY WHAT?)  I hear you railing all the time about a lack of ethics in others. (POTUS OBAMA was not in power at the time and while you were wanting McCain/Palin)

GOP guardians? What exactly was Gold Man Sacks er their employees trying to buy for almost $995K from POTUS Obama? (POST DEBACLE)  Why has G(M)S only averaged giving 35% to GOP candidates and causes in the last 20 years vs. 64% to Dimocrats if the GOP is their guardian and enabler? (They always go with who appears to be the eventual winner....and their web of deceivers give much more to the GOP than you want to believe)

Did you not post an article where by derivatives were devised during the Clinton years (YES! but it wasn't BC who started the fire), yet Bubba did nothing about them either (too stupid)  What kind of protection has years of influence peddling by the securities and investment industry bought them (now you're talking!)?

Again, political contributions from Wall St. 2010 cycle:

                                  D             R      D   R
Venture Capital:           72%         28% (52/47 over 20 years)
Hedge Funds:               61%        39% (65/34 over 20 years)
Private Equity & Invest:  69%        31% (53/47 over 20 years)

Stats, not Jon Stewart.

You aren't telling the truth, truthteller.

Pompous Conanus, quit with the constant posting of the moneyed political patronage unless you plan to start lashing out at SCROTUM rulings on the new corporate ownership of politics in America.