they changed the rules so they can do investigations regardless of what the vote is.
Considering this "revelation", surprise, the SEC is stuffed with insider political cronies, that sounds like a good thing.
One thing I wonder about. If someone works on Wall street, odds are they will at least become a millionaire due to outrageous bonuses, salary.
So, how much does the SEC payout? I mean it's almost like a bribe, making sure it keeps the financially savvy out of D.C., unless of course they are an arm of the lobbyists/financial sector itself.
Two lawmakers say Goldman Sachs and AIG should be part of the same probe.
(Bloomberg) -- The regulator suing Goldman Sachs Group Inc. for fraud should widen its probe to determine whether securities backed by bailed-out insurer American International Group Inc. were improperly created, said two lawmakers.
It is “not beyond the realm of comprehension” that Goldman Sachs misled investors on collateralized debt obligations apart from the one cited last week by the Securities and Exchange Commission, Democratic Representatives Elijah Cummings and Peter DeFazio said in a letter to be sent to SEC Chairman Mary Schapiro. AIG, rescued by the U.S. in 2008, insured about $6 billion of Goldman Sachs CDOs named Abacus.
“Should any of these transactions be found to include fraudulent conduct, any resulting contractual payments from AIG- issued credit-default swaps could be viewed as ill-gotten gains,” Cummings and DeFazio wrote. “It is imperative that the SEC pursue the recovery from Goldman Sachs of any fraudulently obtained AIG payments.”
Whatever has been protecting Goldman Sachs since 2008 has finally given way.
(Bloomberg) -- Lehman Brothers Holdings Inc., which has been investigating whether any companies may have contributed to its bankruptcy, issued at least five subpoenas to investment firms and hedge funds including Goldman Sachs Group Inc., according to court filings.
(Bloomberg) -- The U.S. Securities and Exchange Commission split 3-2 along party lines to approve an enforcement case against Goldman Sachs Group Inc., according to two people with knowledge of the vote.
SEC Chairman Mary Schapiro sided with Democrats Luis Aguilar and Elisse Walter to approve the case, said the people, who declined to be identified because the vote wasn’t public. Republican commissioners Kathleen Casey and Troy Paredes voted against suing, the person said.
The U.K. Prime Minister Gordon Brown is calling Goldman Sachs morally bankrupt.
Duh! They all are! They think it's business as usual to even run countries, nations into the ground. They believe their daily profits and bonuses are more important than country and scoff at those who still believe honor to country is an important moral value.
The thing about this though is maybe, maybe government leaders will stop doing the status quo, realize corporations have more power than governments and actually do something.
"The golden boys finally aren't going to get away with something"
While I completely agree with your enthusiasm regarding the *attempted* prosecution of GS, I don't believe for a minute that anything serious will happen.
1) The government is too deeply involved with the banks, and vice versa.
2) If GS was once determined to be TBTF (Too Big To Fail), then they'll be declared that again.
3) We no longer live in a Capitalistic country. Sadly, the last "capitalistic" leader we had (Bush) proved that by starting the bailout of everyone and their brother.
Granted, those reasons I stated are somewhat "weak", but those will be the underlying causes as to why GS will not be taken down. They might get a Billion or 2 fine and then they'll recover in 2-3 Quarters thereafter. As for Germany or the UK prosecuting GS - well, that gave me a good laugh. I'd love to see it happen, but then again, I'd also love to see Brendan Frasier develop good acting skills.
BUT, let's assume I'm wrong (and I'd love to be wrong), the best case is that they completely fall either through fraud charge after fraud charge or civil suit after civil suit. It's irrelevant, they already won. No one will go to jail, but everyone will be out of a job, whoopdee doo. The people responsible already made their millions or billions and can relax in the lap of luxury knowing that they successfully robbed the American public.
While you make good points about our moral responsibility to fulfill contracts we enter into, you ignore the other side of the coin. And that other side is that financial institutions knowingly gave loans that they knew were not viable, thus endangering not only their own financial well-being but that of the nation as a whole. There used to be a certain level of trust which people had in their banks. Sure, I know, caveat emptor, but when a bank is presenting something to an individual as a "legitimate" transaction, and when it is nothing of the kind, then it seems to me there is dual fault to be assessed. The fact that banks have buildings does not mean that "They are just buildings". Banks are part of the financial oligarchy and their upper management consists of people, not buildings, and they have been guilty of sleazy abuses of power, succumbing to greed (a human trait) because there were no appropriate regulations to prevent it. I am a fan of individual responsibility, but think for a moment what you would do if you lost your job and you cannot sell your house because the sale price will bring only two-thirds of the mortgage balance. What would be your options at that point, oh great moralizer? And you still claim that the bank which should have foreseen this is free of guilt?
Right. This post mainly goes into derivatives reform, which up to this point has exemptions which in a nutshell, exempt everyone, so the same things can go on. The Lincoln Bill is might tighter, which is a positive, but not as strong as it should be.
But, that doesn't diminish our previous criticisms and pointing out the flaws. As far as I know the same concepts, i.e. the "permanent bail out fund" (resolution trust authority) and the sticking the CFPA under the Fed., the exemptions everywhere are still valid as we pointed out n the linked up posts on the overall bill. (if something has changed, please tell us in a comment, following legislation is like capturing a greased pig!)
Hell, during the primaries I was screaming bloody murder that Obama was bought and paid for by hedge funds and Congress is even worse, that's why it would be very surprising to see anything at all, even the most symbolic, get through Congress that actually wasn't written by these banking lobbyists.
On the entire Resolution Trust authority, which I think it's what you're referring to, supposedly Sherrod Brown has an amendment up to bottom line, break up the big banks with a financial cap (I thought last time I checked, relationship to overall US GDP).
I don't know where some sort of reinstatement of Glass-Steagall or it's weaker counterpart "Volcker Rule" is yet in the bill.
I don't think you'll see to much argument on this site on both health care reform and financial reform....
but bear in mind there are a few Senators and a few Congress reps. really trying to do something. Lincoln, case in point is up for re-election and obviously the entire state of Arkansas is hopping mad. So, it is those representatives who could bow to public outcry the most, because they are going to lose their seats...
except for Harry Reid of course, who acts like he has the Nevada vote already rigged, he ignores his constituents or the American public to such a degree.
This financial "reform" bill is a sell-out to Wall Street by Obama and Co.
Huffington Post has two articles that show that Wall Street has its fingerprints all over this bill. CS Monitor has one past article that shows the same. Even with the provision where $50 billion will be put up by the banks themselves, this bill is a sell-out to Wall Street and increases the power of the Federal Reserve.
This is the area where I think a hell of a lot more details and debate needs to happen. Frankly, I see the glaring loopholes upon which the game is rigged, without transparency. On the other hand, generating more fees doesn't sound too swell. But why exactly is it claimed these "flexible and highly efficient" contracts must not be on public exchanges? What is it that is the problem? Why, would one not want capital requirements if a hedge goes bad? In terms of jobs, are you kidding me? Do we see any jobs as a result of the TARP bail outs? I sure saw a lot of contracts for offshore outsourcing going on, a $2 billion dollar one by Citigroup alone. So, someone prove to me, this capital is magically going to create jobs in a currency swap capital requirements hedge. Jobs with global labor arbitrage? Sure, I can believe that one, but U.S. jobs for the U.S. workforce? Prove it.
Foreign exchange swaps will be regulated like all other Wall Street contracts. At $60 trillion, this is the second largest component of the swaps market and must be regulated.
It is a bit depressing that this bill is being written in a way that will make corporate balance sheets more volatile. Putting FX swaps on an exchange and through clearing firms will drive up the cost for firms to hedge b/c of margin requirements. The margin requirements will tie up corporate capital that could be otherwise deployed for more productive uses. Currently firms can rely on bank credit lines, which are efficient and WHICH ARE EASY TO REGULATE AT MUCH LESS COST TO THE CORPORATION AND TO THE BANKS.
The outcome of this type of regulation:
- fewer companies will be willing to hedge legitimate FX risk
- more volatility in corporate balance sheets and earnings
- less efficient use of corporate capital LEADING TO FEWER JOBS FOR MAIN STREET (can someone please explain to me the difference between Main Street and Wall Street)
- a huge loss in revenues for banks providing these valuable, flexible and highly efficient contracts - by the way that means a huge loss in jobs for US banks - companies will still hedge with foreign banks
- a big boom in business for clearing firms i.e. Wall Street (I thought they were the bad guys)
The over the counter fx swap market is highly efficient and flexible, a rarity in any market. It works. It doesn't cause volatility, it actually dampens it.
We are cutting off our noses to spite our face by moving these contracts to exchanges.
It seems the White House is out there in de Google, using keywords to pop up a campaign to pass this bill (in what form is a very good question). So assuredly the SEC timing has a lot to do with this. Everybody hates Goldman Sachs, so one civil fraud case is great PR to pass something.
Ya know, I don't know if this is a bad thing, or a good thing, except what the details are of reform that is passed and pass something, well, it's been going on 2 years, Sept. 2008 was the bomb month, and nothing has been done yet.
The lack of morals is what has gotten us into this mess.It is about me making money but not at the financial risk of the very industry that I am making money from!
This is the 2nd time I pulled in a Ratigan piece into the weekly economic funnies roundup.
Not that it's bad. Frankly John Stewart has often given more real information in his skits than CNN.
BTW, who thinks the claim CNN isn't biased is absurd. It's more like they are vague and so often present material that is just pure lobbyist punditry fiction. It's not accurate, in depth reporting overall, so it's become a drivel of vanilla nothing to me. They are blaming their ratings fall because they do "objective hard news". Just ridiculous. AP, Reuters, Bloomberg, PBS are doing objective hard video news in the U.S.
Ratigan really is a "must watch" on the financial crisis, although on some other issues, I wince. He should stick to finance/econ. ;) It's almost like he's channeling this site's "Populist" outrage meme with accurate facts to back it all up.
I'd have to dig this up but the national cap and trade market has already been created just waiting for the bill to come about and guess who owns it? Goldman. I'll dig up that source.
Is she a "corporate raider", i.e. running in with "private equity" to break up and sell off the assets to say...China (a horrific trend that has happened in manufacturing) or is she trying to bring these companies back to life?
For example, I am reading up on all of these so called economists who claim the U.S. will "lose jobs" if we confront China's currency manipulation. The reason? OMG, that might hurt the offshore outsourcing industry, at least to China (no one touches the king of offshore outsourcing, India). The premise of these people is somehow a reduction in productivity figures will "hurt" U.S. workers and also a premise is that somehow offshore outsourcing is "good for America". You should see the jumps in assumptions and manipulations to the point I don't think these people should be called economists, and instead philosophers or lobbyists.
I mean welcome to EP Eric, but we try to write posts either from the "horse's mouth" or quote directly the person and write original content around that.
they changed the rules so they can do investigations regardless of what the vote is.
Considering this "revelation", surprise, the SEC is stuffed with insider political cronies, that sounds like a good thing.
One thing I wonder about. If someone works on Wall street, odds are they will at least become a millionaire due to outrageous bonuses, salary.
So, how much does the SEC payout? I mean it's almost like a bribe, making sure it keeps the financially savvy out of D.C., unless of course they are an arm of the lobbyists/financial sector itself.
Two lawmakers say Goldman Sachs and AIG should be part of the same probe.
Whatever has been protecting Goldman Sachs since 2008 has finally given way.
It looks like the SEC is all about politics.
EU Sues Goldman Over Volcanic Ash Fallout, over on ZeroHedge.
The U.K. Prime Minister Gordon Brown is calling Goldman Sachs morally bankrupt.
Duh! They all are! They think it's business as usual to even run countries, nations into the ground. They believe their daily profits and bonuses are more important than country and scoff at those who still believe honor to country is an important moral value.
The thing about this though is maybe, maybe government leaders will stop doing the status quo, realize corporations have more power than governments and actually do something.
"The golden boys finally aren't going to get away with something"
While I completely agree with your enthusiasm regarding the *attempted* prosecution of GS, I don't believe for a minute that anything serious will happen.
1) The government is too deeply involved with the banks, and vice versa.
2) If GS was once determined to be TBTF (Too Big To Fail), then they'll be declared that again.
3) We no longer live in a Capitalistic country. Sadly, the last "capitalistic" leader we had (Bush) proved that by starting the bailout of everyone and their brother.
Granted, those reasons I stated are somewhat "weak", but those will be the underlying causes as to why GS will not be taken down. They might get a Billion or 2 fine and then they'll recover in 2-3 Quarters thereafter. As for Germany or the UK prosecuting GS - well, that gave me a good laugh. I'd love to see it happen, but then again, I'd also love to see Brendan Frasier develop good acting skills.
BUT, let's assume I'm wrong (and I'd love to be wrong), the best case is that they completely fall either through fraud charge after fraud charge or civil suit after civil suit. It's irrelevant, they already won. No one will go to jail, but everyone will be out of a job, whoopdee doo. The people responsible already made their millions or billions and can relax in the lap of luxury knowing that they successfully robbed the American public.
While you make good points about our moral responsibility to fulfill contracts we enter into, you ignore the other side of the coin. And that other side is that financial institutions knowingly gave loans that they knew were not viable, thus endangering not only their own financial well-being but that of the nation as a whole. There used to be a certain level of trust which people had in their banks. Sure, I know, caveat emptor, but when a bank is presenting something to an individual as a "legitimate" transaction, and when it is nothing of the kind, then it seems to me there is dual fault to be assessed. The fact that banks have buildings does not mean that "They are just buildings". Banks are part of the financial oligarchy and their upper management consists of people, not buildings, and they have been guilty of sleazy abuses of power, succumbing to greed (a human trait) because there were no appropriate regulations to prevent it. I am a fan of individual responsibility, but think for a moment what you would do if you lost your job and you cannot sell your house because the sale price will bring only two-thirds of the mortgage balance. What would be your options at that point, oh great moralizer? And you still claim that the bank which should have foreseen this is free of guilt?
Right. This post mainly goes into derivatives reform, which up to this point has exemptions which in a nutshell, exempt everyone, so the same things can go on. The Lincoln Bill is might tighter, which is a positive, but not as strong as it should be.
But, that doesn't diminish our previous criticisms and pointing out the flaws. As far as I know the same concepts, i.e. the "permanent bail out fund" (resolution trust authority) and the sticking the CFPA under the Fed., the exemptions everywhere are still valid as we pointed out n the linked up posts on the overall bill. (if something has changed, please tell us in a comment, following legislation is like capturing a greased pig!)
Hell, during the primaries I was screaming bloody murder that Obama was bought and paid for by hedge funds and Congress is even worse, that's why it would be very surprising to see anything at all, even the most symbolic, get through Congress that actually wasn't written by these banking lobbyists.
On the entire Resolution Trust authority, which I think it's what you're referring to, supposedly Sherrod Brown has an amendment up to bottom line, break up the big banks with a financial cap (I thought last time I checked, relationship to overall US GDP).
I don't know where some sort of reinstatement of Glass-Steagall or it's weaker counterpart "Volcker Rule" is yet in the bill.
I don't think you'll see to much argument on this site on both health care reform and financial reform....
but bear in mind there are a few Senators and a few Congress reps. really trying to do something. Lincoln, case in point is up for re-election and obviously the entire state of Arkansas is hopping mad. So, it is those representatives who could bow to public outcry the most, because they are going to lose their seats...
except for Harry Reid of course, who acts like he has the Nevada vote already rigged, he ignores his constituents or the American public to such a degree.
This financial "reform" bill is a sell-out to Wall Street by Obama and Co.
Huffington Post has two articles that show that Wall Street has its fingerprints all over this bill. CS Monitor has one past article that shows the same. Even with the provision where $50 billion will be put up by the banks themselves, this bill is a sell-out to Wall Street and increases the power of the Federal Reserve.
http://www.huffingtonpost.com/2010/04/18/thomas-hoenig-top-fed-off_n_541...
http://www.huffingtonpost.com/2010/03/14/dodd-financial-reform-bil_n_498...
http://www.csmonitor.com/layout/set/print/content/view/print/270181
It was bad enough that Obama sold-out to Big Insurance & Big Pharma (as Jane Hamshers article below shows), but now this?
http://www.huffingtonpost.com/jane-hamsher/fact-sheet-the-truth-abou_b_5...
This is the area where I think a hell of a lot more details and debate needs to happen. Frankly, I see the glaring loopholes upon which the game is rigged, without transparency. On the other hand, generating more fees doesn't sound too swell. But why exactly is it claimed these "flexible and highly efficient" contracts must not be on public exchanges? What is it that is the problem? Why, would one not want capital requirements if a hedge goes bad? In terms of jobs, are you kidding me? Do we see any jobs as a result of the TARP bail outs? I sure saw a lot of contracts for offshore outsourcing going on, a $2 billion dollar one by Citigroup alone. So, someone prove to me, this capital is magically going to create jobs in a currency swap capital requirements hedge. Jobs with global labor arbitrage? Sure, I can believe that one, but U.S. jobs for the U.S. workforce? Prove it.
Regulates Foreign Exchange Transactions:
Foreign exchange swaps will be regulated like all other Wall Street contracts. At $60 trillion, this is the second largest component of the swaps market and must be regulated.
It is a bit depressing that this bill is being written in a way that will make corporate balance sheets more volatile. Putting FX swaps on an exchange and through clearing firms will drive up the cost for firms to hedge b/c of margin requirements. The margin requirements will tie up corporate capital that could be otherwise deployed for more productive uses. Currently firms can rely on bank credit lines, which are efficient and WHICH ARE EASY TO REGULATE AT MUCH LESS COST TO THE CORPORATION AND TO THE BANKS.
The outcome of this type of regulation:
- fewer companies will be willing to hedge legitimate FX risk
- more volatility in corporate balance sheets and earnings
- less efficient use of corporate capital LEADING TO FEWER JOBS FOR MAIN STREET (can someone please explain to me the difference between Main Street and Wall Street)
- a huge loss in revenues for banks providing these valuable, flexible and highly efficient contracts - by the way that means a huge loss in jobs for US banks - companies will still hedge with foreign banks
- a big boom in business for clearing firms i.e. Wall Street (I thought they were the bad guys)
The over the counter fx swap market is highly efficient and flexible, a rarity in any market. It works. It doesn't cause volatility, it actually dampens it.
We are cutting off our noses to spite our face by moving these contracts to exchanges.
It seems the White House is out there in de Google, using keywords to pop up a campaign to pass this bill (in what form is a very good question). So assuredly the SEC timing has a lot to do with this. Everybody hates Goldman Sachs, so one civil fraud case is great PR to pass something.
Ya know, I don't know if this is a bad thing, or a good thing, except what the details are of reform that is passed and pass something, well, it's been going on 2 years, Sept. 2008 was the bomb month, and nothing has been done yet.
The lack of morals is what has gotten us into this mess.It is about me making money but not at the financial risk of the very industry that I am making money from!
This is the 2nd time I pulled in a Ratigan piece into the weekly economic funnies roundup.
Not that it's bad. Frankly John Stewart has often given more real information in his skits than CNN.
BTW, who thinks the claim CNN isn't biased is absurd. It's more like they are vague and so often present material that is just pure lobbyist punditry fiction. It's not accurate, in depth reporting overall, so it's become a drivel of vanilla nothing to me. They are blaming their ratings fall because they do "objective hard news". Just ridiculous. AP, Reuters, Bloomberg, PBS are doing objective hard video news in the U.S.
Ratigan really is a "must watch" on the financial crisis, although on some other issues, I wince. He should stick to finance/econ. ;) It's almost like he's channeling this site's "Populist" outrage meme with accurate facts to back it all up.
on the subject
Visit msnbc.com for breaking news, world news, and news about the economy
I'd have to dig this up but the national cap and trade market has already been created just waiting for the bill to come about and guess who owns it? Goldman. I'll dig up that source.
before thinking it's a douchebag, we know nothing about this person and that's the post content fault. I figured you would be upset.
If this is what is passing for posts (PE advertising on the economic populist), I'm super-glad I left the country!
These are the douchebags of the financial world!!!!
Is she a "corporate raider", i.e. running in with "private equity" to break up and sell off the assets to say...China (a horrific trend that has happened in manufacturing) or is she trying to bring these companies back to life?
For example, I am reading up on all of these so called economists who claim the U.S. will "lose jobs" if we confront China's currency manipulation. The reason? OMG, that might hurt the offshore outsourcing industry, at least to China (no one touches the king of offshore outsourcing, India). The premise of these people is somehow a reduction in productivity figures will "hurt" U.S. workers and also a premise is that somehow offshore outsourcing is "good for America". You should see the jumps in assumptions and manipulations to the point I don't think these people should be called economists, and instead philosophers or lobbyists.
I mean welcome to EP Eric, but we try to write posts either from the "horse's mouth" or quote directly the person and write original content around that.
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