The U.S. entered into its first housing downturn of the post–Great Financial Crisis era. And the worst still awaits.

On Tuesday, researchers at Goldman Sachs released a paper titled “The Housing Downturn: Further to Fall.” The investment bank now forecasts that activity in the U.S. housing market will end 2022 down across the board. The firm projects sharp declines this year in new home sales (22% drop), existing home sales (17% drop), and housing GDP (8.9% drop). For perspective, Russia’s souring economy is only expected to see its GDP fall 3% this year.

And don’t expect relief in 2023. Goldman Sachs projects further declines next year in new home sales (another 8% drop), existing home sales (another 14% drop), and housing GDP (another 9.2% drop).

To continue reading the rest of the article, please click on the source link below:

https://fortune.com/2022/08/31/housing-market-recession-to-be-even-bigger-in-2023-forecast-goldman-sachs/

Now that the Supreme Court has struck down eviction protections for most of the U.S., as many as 3.5 million households are at risk of losing their homes, including hundreds of thousands of tenants this year alone, according to a Wall Street analysis.

That’s because federal rent assistance has been agonizingly slow to make it to renters, with just 10% of available funding having gone out by the end of July. Another factor is that many tenants behind on rent are in large cities with tight housing markets, which makes them more likely to face eviction, Goldman Sachs analysts said Monday in a research note.

To continue reading the rest of the article, please click on the source link below:

https://www.cbsnews.com/news/eviction-moratorium-ends-families-homes-risk/

WAPO-

Sen. Bernie Sanders (I-Vt.) on Wednesday unveiled legislation that would place a hard cap on the size of financial institutions, a proposal that would splinter Wall Street’s biggest firms in an effort to ward off future taxpayer bailouts.

The measure is dead on arrival with a Republican Congress and President Trump in office. And even if the current Democratic Party were to take control of government, it would face a difficult path to passage, as many of the party’s moderates have opted for answers to the banking crisis that did less to alter the financial system.

Sanders’s bill would bar financial institutions from holding assets, derivatives and other forms of borrowing worth more than 3 percent of the entire U.S. economy. That would cap their size at $584 billion in today’s dollars.

[WAPO]

Axios-

“Lloyd Blankfein is preparing to step down as Goldman Sachs Group Inc.’s chief executive as soon as the end of the year, capping a more than 12-year run that has made him one of the longest-serving bosses on Wall Street,” the Wall Street Journal reports.

Why he matters: “The departure would conclude a 36-year Goldman career for Mr. Blankfein, the son of a Brooklyn postal worker who rose to the pinnacle of Wall Street. In 1982, he quit his job as a tax lawyer and joined Goldman’s commodities arm as a gold salesman. He rose through the ranks of the firm’s trading business and was named CEO in 2006 when Hank Paulson became Treasury secretary.”

[AXIOS]

The Independent-

The bosses of two of Wall Street’s biggest banks received a $314m (£241m) windfall last year as the value of their shares soared after Donald Trump’s victory in the US presidential election.

Jamie Dimon, who is chairman, president and chief executive of JP Morgan, and Lloyd Blankfein, the chief executive of Goldman Sachs, each saw their stock and options rise by more than $150m, new figures compiled by consultancy Equilar for the Financial Times show.

US bank shares jumped in the aftermath of Mr Trump’s win on 9 November, as investors predicted Wall Street-friendly policies and increased spending from the new administration.

[THE INDEPENDENT]

Bloomberg-

With those 102 characters, Lloyd Blankfein introduced himself to Twitter, taking a swipe at President Donald Trump for pulling out of the Paris climate accord.

The Goldman Sachs Group Inc. chief executive officer’s June 1 debut on the social media platform was unusual. No other leader of a big U.S. bank has an official Twitter account. Most avoid taking stands on political issues in any venue for fear of igniting a backlash or damaging their brand. And Blankfein, who has been the target of public scorn for his bank’s role in the 2008 financial crisis, was opening himself up to more abuse.

“I felt there was some inevitability to it,” Blankfein said in a June 27 interview, six Twitter posts and 40,000 followers later. “In this world, part of my job is to make us understood because the consequences of not being understood were made quite vivid to me.”

Blankfein’s embrace of a new technology and his willingness to speak out on controversial issues go hand in hand with a strategic retooling as he begins his 12th year as the bank’s leader. Call it Lloyd 3.0. If the first act of Blankfein’s career ended with the crisis, and the second covered its aftermath, the third began a year and a half ago with his recovery from lymphoma and his decision to stick around.

[BLOOMBERG]

NY Post-

Just for laughs, let’s start out with this idea — that Goldman Sachs acts as an agent of the federal government. Let’s see if I can persuade you.

For starters, it wasn’t too long ago that then-President-elect Donald Trump vowed to drain the swamp — before he went ahead and hired six Goldman executives to clog up the drains.

Last week, The Post’s Kevin Dugan broke the fascinating story that the Justice Department’s investigation into possible rigging of US Treasury Department securities offerings was focusing on Goldman — which, sources told Dugan, had won an astonishing percentage of government bond auctions from 2007 to 2011.

[NY POST]

NY POST-

The Justice Department’s investigation into Wall Street’s rigging of the $14 trillion Treasury market is zeroing in on Goldman Sachs — just as the bank’s former employees have taken over the agency that’s at the center of the probe, The Post has learned.

Goldman Sachs won almost all auctions for US Treasury bonds from 2007 to about 2011, a remarkable winning streak that came despite safeguards established by the Treasury to keep bidding competitive, sources familiar with the investigation said.

At the center of the case are chats and emails believed to show Goldman traders sharing sensitive price information with traders at other banks — a sign of possible price fixing and collusion, according to sources familiar with the investigation.

[NY POST]

WSJ-

In a strange reverberation of the housing crisis, Goldman Sachs Group Inc. has become a voracious buyer of soured mortgages, trying to make money even as it looks to fulfill terms of a government settlement that calls for it to help struggling homeowners.

Over the past year-and-a-half, the Wall Street giant has become the largest buyer of severely delinquent home loans from mortgage giant Fannie Mae. The firm has acquired nearly two-thirds of $9.6 billion in loans the agency has auctioned, representing unpaid loan balances of $5.7 billion, a Wall Street Journal review of government records shows.

Goldman’s buying spree has been sparked by a $5.1 billion settlement the firm entered into last year with federal and state governments over its role in packaging and selling mortgage-backed securities in the housing meltdown. As part of this, the firm agreed to provide $1.8 billion in homeowner relief.

[WALL STREET JOURNAL]

NY DAILY NEWS-

Donald Trump’s administration is taking on a distinctively Goldman hue.

Trump is adding even more Goldman Sachs executives to his nascent administration. Trump’s top donor and close advisor, hedge fund manager and Goldman Sachs alumna Anthony Scaramucci, will serve as a senior White House advisor, according to The Washington Post, and Trump’s transition team officially announced that Dina Habib Powell will be a “senior counselor for economic initiatives.”

Scaramucci, who runs SkyBridge Capital, is a vocal defender of big banks — at one point he accused President Obama to his face of “whacking Wall Street like a piñata.”

[NY DAILY NEWS]

Reuters-

Goldman Sachs Group Inc has agreed to pay $56.5 million to resolve a U.S. class action lawsuit accusing it and other banks of rigging an interest rate benchmark used in the $553 trillion derivatives market.

The proposed settlement was disclosed in papers filed in federal court in Manhattan on Friday. It came after seven other banks agreed in May to pay a combined $324 million to resolve the litigation.

As part of the deal, Goldman has also agreed to provide lawyers for the plaintiffs evidence including transaction data, documents and witness interviews, which could be used in litigations against the remaining banks, the court papers said.

[REUTERS]

The Federal Reserve Board on Wednesday ordered Goldman Sachs Group to pay a $36.3 million civil money penalty for its unauthorized use and disclosure of confidential supervisory information and to implement an enhanced program to ensure the proper use of confidential supervisory information. Additionally, the Board announced that it is instituting enforcement proceedings against Joseph Jiampietro, a former managing director at Goldman Sachs, seeking to impose a fine and permanently bar him from the banking industry stemming from his and his subordinates’ unauthorized use and disclosure of confidential supervisory information.

Confidential supervisory information includes reports of bank examinations and other confidential reports prepared by banking regulators.  It is illegal to use or disclose confidential supervisory information without prior approval of the appropriate banking regulator.

In levying the fine on Goldman Sachs, the Board found that the firm’s personnel improperly used confidential supervisory information of the Board in presentations to its clients and prospective clients in an effort to solicit business for the firm. Further, the Board found that from at least 2012, the firm did not have sufficient policies, procedures, or adequate employee training in place to ensure compliance with current laws prohibiting the unauthorized use or disclosure of confidential supervisory information. The Board’s order requires Goldman Sachs to put in place an enhanced program to ensure compliance with Board regulations concerning the receipt, use, and dissemination of confidential supervisory information.

The Board expects all firms, including Goldman Sachs, to comply with all U.S. laws, rules, and regulations. The board of directors of Goldman Sachs must ensure that its senior management implements an effective compliance risk management framework and that potential compliance risk failures are appropriately brought to the attention of senior managers and addressed immediately. The Board will actively monitor Goldman Sachs’ effectiveness in doing so.

The order prohibits Goldman Sachs from re-employing individuals involved in the improper disclosure of confidential supervisory information or retaining them as consultants or contractors. In November 2015, the Board permanently barred a former Goldman Sachs employee from the banking industry following his guilty plea for the theft of confidential supervisory information.

For media inquiries, call 202-452-2955

Board Votes

Attachment (32 KB PDF)

Attachment 2 (84 KB PDF)

The penalty might sound pretty stiff. But get a load of the real math.

New Republic-

“Recently Goldman Sachs reached a settlement with the federal government for $5 billion because they were selling worthless packages of subprime mortgages,” Bernie Sanders shouted (as he does) in the last Democratic presidential debate. “If you are a kid caught with marijuana in Michigan, you get a police record. If you are an executive on Wall Street that destroys the American economy, you pay a $5 billion fine, no police record.”

This lack of accountability for Wall Street and the perception of a two-tiered justice system gnaws away at Americans’ trust. But now that the Goldman Sachs settlement Sanders referred to has been finalized, I’m sorry to say that he was wrong. If you are an executive on Wall Street who destroys the American economy, you don’t pay a $5 billion fine. You pay much, much less. In fact, you can make a credible case that Goldman won’t pay a fine at all. They will merely send a cut of profits from long-ago fraudulent activity to a shakedown artist, also known as U.S. law enforcement.

The Justice Department announcement in the Goldman case states that between 2005 and 2007, the investment bank marketed and sold mortgage-backed securities to investors that were of lower quality than promised. As a result, Goldman will pay a $2.385 billion civil penalty to the Justice Department, $875 million resolving claims from other state and federal agencies, and $1.8 billion in so-called “consumer relief” measures, like forgiving principal on loans and providing financing for affordable housing. That’s where the much-touted $5 billion figure comes from.

[NEW REPUBLIC]

• Español

source: http://www.ag.ny.gov/

Truth-Out-

According to an article in The Hill a few weeks back, Lloyd Blankfein – head of Goldman Sachs and symbol of Wall Street’s lack of accountability – warned that Bernie Sanders is “dangerous.” Blankfein told CNBC that Sanders is too set in his ways, adding, “It’s a liability [in this anti-Wall Street environment] to say, ‘I’m willing to compromise’… It’s just incredible. It’s a moment in history. Eventually people, the electorate, will notice nothing is getting done.”

At no time did Blankfein, who personally supported Hillary Clinton against Barack Obama in 2008, find fault with Clinton; his alarm is solely focused on the senator from Vermont. He contrasted Sanders with more flexible candidates who are willing to work with Wall Street when he emphasized that a candidate must be “willing to compromise.”

The Sanders campaign – supported by public records – charges that Wall Street donations make up a considerable portion of the Clinton war chest. She is supported by at least one huge Wall Street PAC, and, of course, has made millions of dollars in speaking fees from Wall Street financial firms.

[TRUTH-OUT]

AP-

Goldman Sachs said Thursday it had reached a roughly $5 billion settlement as part of a federal and state probe into its role in the sale of mortgages in the years leading up into the housing bubble and subsequent financial crisis.

It is by far the largest settlement the investment bank has reached related to its role in the crisis, but the payment dwarfs the payments made by some of its Wall Street counterparts.

Goldman will pay $2.39 billion in civil monetary penalties, $875 million in cash payments and provide $1.8 billion in consumer relief in the form of mortgage forgiveness and refinancing as part of the agreement. The U.S. Department of Justice, the attorneys general of Illinois and New York and other regulators who are part of the settlement have not officially signed off on the deal, which could take some time.

[AP]

The Intercept_

When Bernie Sanders brought up Hillary Clinton’s prodigious fundraising from Wall Street at the Nov. 14 Democratic presidential debate, Clinton called it an attack on her “integrity.” And in an interview this week, she said that “anybody who thinks they can influence me on that ground doesn’t know me very well.”

But the fact remains that the Clinton campaign is fundraising heavily from Wall Street. Contributions from the securities and investment industries comprise her fourth-largest pile of campaign money, totaling $2,044,471. Commercial banks have given $443,519 directly to her campaign.

One major donor to her Super PAC, Priorities USA, is Donald Mullen Jr., a man who was singularly able to profit from the financial crisis both before and after the crash of the housing bubble.

[THE INTERCEPT]

image: Flickr.com

NY POST-

An ex-employee of the Federal Reserve Bank of New York pleaded guilty in Manhattan federal court on Wednesday to passing off secret government documents to Goldman Sachs.

Jason Gross, 37, admitted to a misdemeanor charge of theft of government property for passing along regulatory documents from the New York Fed to his friend and ex-colleague, according to a plea deal with the Justice Department.

That former colleague, Rohit Bansal, worked at Goldman at the time, according to people familiar with the case.

[NEW YORK POST]

image: Jason Gross Reuters

Friedman, J.P., Renwick, Manzanet-Daniels, Clark, JJ.

Upon remittitur from the Court of Appeals for consideration of issues raised but not determined on appeal to this Court (25 NY3d 1043 [2015]), order, Supreme Court, New York County (Barbara R. Kapnick, J.), entered April 24, 2012, which, to the extent appealed from, denied defendant’s motion to dismiss the causes of action for fraudulent inducement and fraudulent concealment, unanimously affirmed, without costs.

Plaintiff, ACA Financial Guaranty Corp., alleges that defendant, Goldman, Sachs & Co. fraudulently induced plaintiff to issue a financial guaranty for a synthetic collateralized debt obligation while concealing the fact that its hedge fund client Paulson & Co., which selected most of the portfolio investment securities, planned to take a “short” position. Plaintiff alleges that had it known this information, it would not have agreed to the guaranty as it exposed plaintiff to substantial liability.

On a prior appeal, we reversed, granted defendant’s motion to dismiss the causes of action for fraudulent inducement and fraudulent concealment finding that plaintiff’s amended complaint failed to establish justifiable reliance as a matter of law (106 AD3d 494 [2013]). The Court of Appeals reversed our order, finding that plaintiff has sufficiently pleaded justifiable reliance for the causes of action for fraud in the inducement and fraudulent concealment, and remitted the case to this Court “for consideration of issues raised but not determined” (25 NY3d 1043 [2015]).

We find that plaintiff adequately pleaded all of the requisite elements comprising a fraud claim. “To make a prima facie claim of fraud, the complaint must allege misrepresentation or concealment of a material fact, falsity, scienter on the part of the wrongdoer, justifiable reliance and resulting injury” (Dembeck v 220 Cent. Park S., LLC, 33 AD3d 491, 492 [1st Dept 2006]). Defendant argued, inter alia, that the motion court erred in finding that the amended complaint adequately pled a material misrepresentation and scienter. However, the motion court properly determined that plaintiff pleaded a material misrepresentation. Plaintiff provided allegations that defendant misrepresented Paulson’s economic interest in ABACUS. Further, the complaint alleges that two other entities refused to assist Paulson upon learning of its true role in the transaction, and Paulson’s position was described as a “stark departure” from the basic assumption in the industry that sponsors of a deal want it to succeed. These allegations all supported plaintiff’s claim that the alleged misrepresentation/concealment of Paulson’s conflict of interest was material and it would not have provided the financial guaranty had it known the truth.

The motion court correctly found scienter sufficiently alleged. Ordinarily, intent to commit fraud is a question of fact which cannot be resolved on a motion to dismiss (Schisgal v Brown, 21 AD3d 845, 847 [1st Dept 2005]), and proof of intent is to be determined from surrounding circumstances (see Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553 [2009]; Oster v Kirschner, 77 AD3d 51, 56 [1st Dept 2010]). Here, plaintiff’s complaint alleged [*2]that Goldman had a long-term and economically rational interest in pleasing a client with whom it had already done billions of dollars in transactions and in positioning itself as a leader in the burgeoning market for the type of investment product involved in this matter. As such, the complaint contains a rational basis for inferring that the alleged misrepresentations were made intentionally (see Seaview Mezzanine Fund, LP v Ramson, 77 AD3d 567, 568 [1st Dept 2010][rational inference standard]).

We have considered defendant’s remaining arguments and find them unavailing.

THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: AUGUST 18, 2015

DEPUTY CLERK

NBC-

Goldman Sachs Group Inc. will pay $272 million to settle a lawsuit that claimed the Wall Street bank defrauded investors about the safety of about $6 billion of residential mortgage-backed securities they bought in 2007 and 2008.

The settlement with investors led by the NECA-IBEW Health & Welfare Fund, an electrical workers’ pension fund in Decatur, Illinois, was disclosed in filings with the U.S. District Court in Manhattan on Thursday.

NECA-IBEW accused Goldman of misleading investors about the underwriting of home loans backing the securities, including the quality of appraisals and whether borrowers were capable of repaying their loans. The fund said the securities’ prices collapsed during and after the financial crisis, while their credit ratings fell to low, “triple-C” junk grades from “triple-A.”

[NBC]

HuffPost-

The Federal Reserve can’t stop hiring Goldman Sachs executives. On Monday, the Dallas Fed named former Goldman Sachs Vice Chairman Robert Kaplan as its president — a post with significant regional regulatory responsibilities and influence over critical monetary policy decisions.

Kaplan will serve on the the powerful Federal Open Market Committee, which sets interest rates that have a massive impact on economic growth, unemployment and inflation. He’ll also be a major regulator. Kaplan has been critical of the regulatory response to the 2008 financial crisis, saying that the Wall Street reform law passed by Congress is hurting small businesses.

“My complaint about Dodd-Frank is that it should be slimmed down and focused on two or three top priorities,” Kaplan told The American Interest in 2012. During the same interview, Kaplan hinted that he’d be willing to end the Fed’s historic eight-year adherence to zero interest rate policy, saying that “what the Fed thinks it has been doing over the past three years [2009-2012] is what the ECB is now doing for Germany and Europe: buying them time, and hopefully putting on the pressure for [fiscal policy-makers] to get in gear because they can’t keep on indefinitely with hyper-aggressive monetary policy.”

[HUFFINGTON POST]