Hey, girl, you can totally trust Goldman Sachs now when it suggests you should buy subprime mortgages. Not like that other time.
Goldman is telling its clients to buy stakes in some of the ABX subprime-mortgage indexes that it helped create back before the crisis, back when it was betting against subprime mortgages. It was betting against subprime mortgages so hard that its pet name for that bet was “the big short,” just like the Michael Lewis book.
We know Goldman has hurt you in the past. A lot. We know it has only been a few years since Goldman was selling you collateralized debt obligations stuffed with toxic subprime mortgages with one tentacle and then betting heavily against them with the other. But it has paid its dues, baby: $550 million, to be exact. That’s real money. Money that took several hours of hard work to make up. Those hours gave Goldman time to think about how it had done you wrong. Actually, scratch that — Goldman doesn’t admit or deny wrongdoing, baby. You know that’s not how it rolls. But you get the picture. Anyway, the Securities and Exchange Commission says Goldman is totally in the clear now.
Wall Street pays its respects to the president it tried to defeat.
Fox Nation-
As CEOs concluded their meeting with President Barack Obama Wednesday evening, the White House deployed three uniformed Secret Service officers to keep the awaiting reporters from speaking with the group, among them Goldman Sachs CEO Lloyd Blankfein.
President Barack Obama is meeting with another batch of CEOs today to marshal support for his proposal to reduce the deficit, his third such session in the past two weeks.
But this time there’s a twist: He invited a banker. Goldman Sachs CEO Lloyd Blankfein gets to join the club.
The first meeting had attracted a bit of a hullabaloo among Wall Street watchers because the President, while looking for help solving the fiscal crisis, turned to corporate titans but no bankers. With his infamous “fat cat” reference and the perception of a distrust of Wall Street, the slight appeared pointed to some.
But now Obama has let in Blankfein, despite Goldman Sachs abandoning him in the election. That makes one banker out of 26 CEOs that have publicly met with the president.
Prior to the 2008 when Wall Street was laying on big bets on the housing market, mortgage servicing was the equivalent of blackjack; the odds for a player who knew the rules were very good and having a company that collected monthly mortgage payments from homeowners provided a reliable revenue stream. Even better were the companies that operated in the sub-prime space — “default servicers” — because if you couldn’t shake the shekels out of the homeowners pocket, you could always seize the property in foreclosure and make back your nut and then some. In the colorful vernacular of the industry these mortgage loans are referred to as “S&D” (scratch and dent).
Now Goldman Sachs isn’t the place you’d think would want to make paltry and piddling sums off the backs of individual homeowners, but, then again, recent history has proven this notion incorrect. Goldman, for most observers, is a company that operates in hedge fund heaven, a financial stratosphere full of qualified investors and high rollers with lots of coin to spread around. But when it comes to trolling for revenue Goldman will bait its hooks for anything that might prove profitable, and back in 2007 the Wall Street giant had its eye on a relatively small Houston based company by the name of Litton Loan Servicing run by a father and son team, Larry Litton Sr. and Larry “Blake” Litton Jr. The company had a portfolio of “non-performing” sub-prime loans which they attempted to turn around by pursuing a variety of options including loan modifications. Whatever Goldman wants Goldman gets and in late 2007 the financial giant muscled out the competition to acquire Litton at auction. However, according to Suzanne Kapner, writing for the Financial Times in a March 16th 2011 article, Goldman’s interest wasn’t simply distressed mortgages. The ever cagey financial giant “also wanted to use the data that Litton collects from delinquent borrowers to help it make bets on the housing market, said people familiar with the strategy.”
A U.S. judge rejected bids by Goldman Sachs Group Inc (GS.N) and Deutsche Bank AG (DBKGn.DE) to dismiss a federal regulator’s lawsuits accusing them of misleading Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB) into buying billions of dollars of risky mortgage debt.
In separate decisions on Monday, U.S. District Judge Denise Cote in Manhattan said the Federal Housing Finance Agency may pursue fraud claims over some of the banks’ representations in offering materials regarding mortgage underwriting standards.
Goldman Sachs Group Inc agreed to pay about $12 million to settle charges that it violated “pay-to-play” rules in a case involving undisclosed campaign contributions to a former Massachusetts state treasurer who was a candidate for governor in the state, U.S. securities regulators said on Thursday.
A former vice president in Goldman’s Boston office, Neil Morrison, worked on the campaign of Timothy Cahill around the same time that he was also soliciting underwriting business from the Massachusetts treasurer’s office, the Securities and Exchange Commission said.
Goldman Sachs Group Inc. (GS) was sued by German lender Bayerische Landesbank and accused of fraud over losses on mortgage-backed securities.
BayernLB, which bought about $511.9 million in securities in 16 offerings that Goldman Sachs underwrote, said the securities were riskier than promised and were “destined to fail,” according to a complaint filed yesterday in New York State Supreme Court.
“BayernLB has suffered significant losses as a result of Goldman Sachs’s fraud,” the lender said.
Goldman Sachs and Citigroup Inc. (C) were sued separately yesterday in the same court over mortgage bonds by IKB Deutsche Industriebank AG. (IKB) IKB, a German lender, said it sold $137.4 million in Citigroup securities and $73.2 million in Goldman Sachs securities at a loss.
A federal appeals court in New York has revived a lawsuit accusing Goldman Sachs Group Inc of misleading investors about the risks associated with mortgage securities offerings.
The 2nd U.S. Circuit Court of Appeals in New York said lead plaintiff NECA-IBEW Health & Welfare Fund, which owned some mortgage-backed certificates underwritten by Goldman, may pursue claims on behalf of a class of investors in certificates backed by mortgages originated by the same lenders.
It also said the fund need not allege an out-of-pocket loss to pursue a claim that an illiquid security had lost value.
Thursday’s decision reversed parts of rulings by U.S. District Judge Miriam Goldman Cedarbaum in Manhattan, and reinstates claims related to seven securities offerings in 2007.
It is a setback for Goldman, which like its rivals, faces hundreds or thousands of lawsuits by mortgage debt investors. These investors typically seek to recoup losses on securities they bought by claiming they were misled about the risks.
CNN anchor Erin Burnett claimed Friday that the Federal Reserve is spending money wastefully, but that’s not exactly true.
“$1 million per job. That’s what America’s top money man says we’ve spent on stimulus from the Fed alone,” Burnett said on her CNN show “OutFront” on Friday.
“That is not a cheap cost per job,” Burnett said. “For those who are keeping track, we are not counting the president’s extra $2 trillion or so in stimulus in that money. Just the Fed’s money divided by the number of jobs.”
It has come to our attention that you have been offered a role in a porn film for $10 million. We urge you to reject it.
Princely Pay and Elite Status
Goldman Sachs is prepared to pay you much better than porn, and as a partner, your position will be much more prestigious than the Duke of York’s role as a representative for international trade and investment. We twist country treasurers and central bankers around our little fingers. Politicians are at our beck and call. We even pay a lower tax rate than your grandmother.
As a royal, you’ll regain your rightful status. We’ve managed to pervert capitalism and have even infiltrated our own regulators and government. If you join us, your elite status will be assured in perpetuity.
Department of Jesters
Our mortgage unit, Goldman Sachs Alternative Mortgage Products (GSAMP) was nicknamed “Garbage Sold at Mythical Prices” by financial professionals.
The crony connections just keep on coming over at Eric Holder’s Department of Justice.
BreitBart-
Last week, the Justice Department announced that it will not prosecute Goldman Sachs or any of its employees in a financial probe.
Could that be because the attorney for Goldman Sachs CEO Lloyd Blankfein was none other than Attorney General Eric Holder’s “best friend” and former personal attorney, Reid Weingarten?
Or because in 2008, Goldman Sachs employees donated $1,013,091 to Barack Obama?
Or because Goldman Sachs is the former client of Eric Holder’s and Assistant Attorney General Lanny Breuer’s law firm, Covington & Burling?
But also take a good look at the MERS trademark documents below, especially the very top of page 3 where it names Covington & Burling the sender of what appears to be a fax allegedly in 1998 for “MERSCORP Inc.”. The documents were signed in 2003, 3-4 years after MERS’ 1999?s date via Fmr. V.P. W. Hultman’s secretary Kathy McKnight [PDF link to depo pages 29-39].
THE story of the Bayou Group, the hedge fund firm that collapsed in a whirl of lies and drugs, was always a little weird. But it just keeps getting weirder.
You may recall Bayou — or at least its founder-turned-con man, Samuel Israel III. To the world, Mr. Israel was a trading whiz. Then, one August afternoon in 2005, the police responded to a 911 call from Bayou’s offices in Stamford, Conn., and found a note explaining how he had perpetrated a giant fraud.
Mr. Israel, it turned out, wasn’t managing a hedge fund at all. He was running a Ponzi scheme — a small-time version of the Madoff racket that, at that very moment, was still going strong. Mr. Israel, who said he’d become addicted to painkillers, was later sentenced to 20 years in prison — then two more for jumping bail, faking his suicide and going on the lam. His abandoned vehicle was found on the Bear Mountain Bridge over the Hudson River, the words “suicide is painless” written in the dust on the hood.
I’ve been on deadline in the past week or so, so I haven’t had a chance to weigh in on Eric Holder’s predictable decision to not pursue criminal charges against Goldman, Sachs for any of the activities in the report prepared by Senators Carl Levin and Tom Coburn two years ago.
Last year I spent a lot of time and energy jabbering and gesticulating in public about what seemed to me the most obviously prosecutable offenses detailed in the report – the seemingly blatant perjury before congress of Lloyd Blankfein and other Goldman executives, and the almost comically long list of frauds committed by the company in its desperate effort to unload its crappy “cats and dogs” mortgage-backed inventory.
In the notorious Hudson transaction, for instance, Goldman claimed, in writing, that it was fully “aligned” with the interests of its client, Morgan Stanley, because it owned a $6 million slice of the deal. What Goldman left out is that it had a $2 billion short position against the same deal.
If that isn’t fraud, Mr. Holder, just what exactly is fraud?
Goldman Sachs Group Inc officials won the dismissal of a shareholder lawsuit accusing them of breaching their fiduciary duties by failing to comply with terms of a federal bailout, letting workers engage in “robo-signing,” and causing the bank to package troubled loans into mortgage securities.
William Black debates CNBC shill Bethany Mclean about the Federal Government’s failure to prosecute Goldman Sachs for any role in the financial crisis.
How can Bethany go up against a Fraud Expert William K. Black… An Expert!?
Senator Carl Levin (D-MI) and former Goldman Sachs Mortgages Department head Daniel Sparks, Senate Governmental Affairs Subcommittee on Investigations hearing, April 27, 2010
The Justice Department said Thursday it won’t prosecute Wall Street firm Goldman Sachs or its employees in a financial fraud probe.
In a written statement, the department said it conducted an exhaustive investigation of allegations brought to light by a Senate panel investigating the 2008-2009 financial crisis.
“The department and investigative agencies ultimately concluded that the burden of proof to bring a criminal case could not be met based on the law and facts as they exist at this time,” the department said.
But the department added that if additional or new evidence were to emerge, it could reach a different conclusion about prosecuting Goldman if warranted.
The U.S. Securities and Exchange Commission has dropped an investigation into Goldman Sachs Group Inc’s role in selling $1.3 billion worth of subprime mortgage securities, the investment bank said in a regulatory filing on Thursday.
In February Goldman received a so-called Wells notice from SEC staff related to disclosures in the deal’s offering documents. Such notices typically indicate the agency plans to take some kind of enforcement action, and give firms a chance to respond.
On Monday, the SEC notified Goldman that the investigation had been closed and that it did not intend to recommend any enforcement action against the bank related to the offering, Goldman said in its quarterly 10-Q filing with the SEC.
Goldman Sachs Group Inc has agreed to pay $26.6 million to settle a lawsuit by investors who claimed they were misled into buying securities backed by risky loans from the now-defunct subprime mortgage lender New century Financial Corp.
Investors led by the Public Employees’ Retirement System of Mississippi claimed that Goldman’s boilerplate disclosures for the $698 million GSAMP Trust 2006-S2 were false and misleading by failing to reveal how New Century had ignored its own underwriting standards and used inflated appraisals.
They also faulted Goldman’s due diligence for failing to find the problems when it bought New Century loans and packaged them into securities for the 2006 offering. New Century went bankrupt the following year.
Goldman spokeswoman Tiffany Galvin declined to comment.
The case is one of many in which investors sought to hold banks responsible for allegedly misleading them about the quality of mortgage securities that they sold.
Goldman Sachs Group Inc has agreed to settle a class-action lawsuit with investors who claimed losses on $698 million of securities backed by risky mortgage loans issued by defunct subprime lender New Century Financial Corp.
Lawyers for the investors said in a letter filed in U.S. District Court in Manhattan on Tuesday that a proposed settlement had been reached. Terms were not immediately disclosed, though they are expected to be included in court papers filed by July 31.
Goldman is one of many banks accused by U.S. legislators and regulators of fueling the nation’s housing and financial crisis by misleading investors about the quality of mortgage debt they sold.
A federal judge in February ordered Goldman to face the class-action lawsuit that accuses it of defrauding investors in GSAMP Trust 2006-S2, a $698 million offering of certificates backed by second-lien home loans.
The loans were made by New Century, a subprime mortgage specialist that went bankrupt in 2007.
TGIF y’all! Today is going to be an interesting day.
MSNBC-
Moody’s Investors Service lowered the credit ratings of 15 of the world’s largest banks late Thursday, including Bank of America, JPMorgan Chase and Goldman Sachs, saying their long-term prospects for profitability and growth are shrinking.
The ratings agency said it was especially concerned about banks with significant financial markets businesses because those markets have become so volatile. Some of the largest European banks were also downgraded, including Barclays, Deutsche Bank and HSBC.
The downgrades mean Moody’s is more concerned about the ability of the banks to repay their debts. Moody’s had said in February that it was considering downgrading the credit ratings of major banks in the U.S. and in Europe.
A downgrade usually means that it becomes more costly for banks to raise money by selling debt.
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