The Secret Goldman Sachs Tapes 201
An anonymous reader writes: The radio program "This American Life" has published an extraordinary investigative report on how the U.S. government regulators in charge of keeping an eye on the banks actually interact with powerful financial institutions (podcast here). Financial journalist Michael Lewis describes the report thus: "The Fed failed to regulate the banks because it did not encourage its employees to ask questions, to speak their minds or to point out problems. Just the opposite: The Fed encourages its employees to keep their heads down, to obey their managers and to appease the banks. That is, bank regulators failed to do their jobs properly not because they lacked the tools but because they were discouraged from using them. The report quotes Fed employees saying things like, 'until I know what my boss thinks I don't want to tell you,' and 'no one feels individually accountable for financial crisis mistakes because management is through consensus.'"
is anyone really surprised here (Score:5, Insightful)
Re:is anyone really surprised here (Score:5, Interesting)
Yup, just like with the BLM/MMS it's a case of regulatory capture. In fact in the financial sector it was even worse as the banks were basically allowed to make minor changes to their operating and reporting structure to choose which regulatory agency(ies) they reported to so if one agency started to get too strict they'd just make changes and get a new regulator, and once enough banks switched there would be downsizing at the effected regulator so there were strong incentives not to go strong on enforcement.
Re:is anyone really surprised here (Score:5, Insightful)
most people here anyone have known for a long time that the banks and government have a symbiotic relationship. I guess its nice to see some proof for once. I cant say I am shocked in the least however.
So why is it, that when presented with evidence of some horrible thing, people tend to use it as a tool to act arrogant? "I always knew that was going on. You're a fool if you didn't."
You didn't know, you suspected. We all did. This is evidence. Get mad. Apathy is your enemy.
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We are still waiting for management consensus to trickle down to us so we know what to think.
Re:is anyone really surprised here (Score:4, Informative)
the banks got the money to cover the bad loans (that the government mandated be made) without even thinking once you know, how about we give it to the people to pay the back bills, the banks get their money AND the people can keep their homes. but of course not. it didnt work out that way. america is in a worse spot than it was prior to the housing and financial collapse (unless you are a banker or politician)
Re:is anyone really surprised here (Score:5, Interesting)
"the banks got the money to cover the bad loans (that the government mandated be made)"
The bad loans were not enough to cause the financial crisis. Total mortgage debt was something like $13 trillion, maybe half those were at risk of default. The banks (themselves, not because the government held a gun to their heads) inflated the mortgage debt by a factor of six, into something around $62 trillion. The instruments used to create some $40 trillion were RMBS and their deriviatives such as CDS. When a few defaults happened, as was expected in the high-risk, low tranche RMBSes, market groupthink and emotional overreaction occurred, and even mortgages which had been bundled into high tranche instruments, which hadn't defaulted and were not likely to default, lost value. Banks could no longer use hi tranche RMBS which had not experienced any defaults as collateral to roll over their funding. That's what CDS hedges were for, of course. But the CDS market was brand new and immature. So either banks didn't hedge enough, or the insurers (because they rightly thought there was no risk of default) didn't have enough to pay the insurance.
In conclusion, the "bad loans" were a very small part of the market and could have been absorbed. The banks who made the bad loans had the houses as collateral, right? The bad loans alone did not cause the crash. It was the market mechanisms that inflated house loans into many times their real value through the use of financial insturments, and then market groupthink which saw a few defaults and panicked wildly, spreading the asset price drop to assets that really were still good loans, and then the inabilityt of insurers such as AIG and Bear Stearns to pay on the insurance claims when the RMBSes dropped, that caused the crash.
The Fed should have bailed out individual homeowners instead of the banks.
One of the reasons cited in the SIGTARP Maiden Lane report [slashdot.org] ("Factors Affecting Efforts to Limit Payments to AIG Counterparties") for intervening in the financial system was: "FRBNY was concerned about the effects of bankruptcy on key sectors of the market, such as retirement accounts and the credit markets." Why doesn't the Fed bail out Detroit then, since retirement accounts are affected there, too?
Re:is anyone really surprised here (Score:4, Interesting)
There's also the problem that CDS's are insurance, but because of deliberate technicalities are not regulated as such. The laws and regulations that have been introduced since the 17th century, which keep insurance from being a complete scam or gamble, didn't apply. You could get a CDS on something you didn't even own; you could even get CDS's for several times the value. That's like letting me take out a $1M insurance policy on your $300k home, and then looking the other way when I go to your place and play with matches. It's a setup that's pretty much guaranteed to explode at some time - it doesn't take much to set it off.
See http://en.wikipedia.org/wiki/C... [wikipedia.org]
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Yawn. I am so not impressed with that argument. Can you tell me why this is so bad? Most of the time to goes to dark conspiracy theories with people burning down companies just for the insurance money but nobody can point to an actually case.
Here is the truth. CDS are insurance contracts on credit instruments. Portfolio managers can buy them for bonds that they hold. The problem with buying exactly the credit protection on the bonds they own they need to write a custom contract with a counter party. This is
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To the point that the notional value (which is always far less than the economic or market value) of CDS was greater than the economy AND that this could have been avoid if we had only insured what people owns points to the fact that you don't understand how the market worked. I will use your excellent example of how insurance can offset risk by going to the reinsurance market. Insurance companies are heavily regulated. However, the reinsurance market – just like the CDS market – is a overseas u
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And that's without going into the problem of side-letters...
There was outright fraud being perpetrated, but no one has the balls to prosecute.
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how about we give it to the people to pay the back bills
Because money isn't worth anything without the debt that it represents.
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They're always crying about how poorly freddie and fannie are doing but they could, say, pay off all the student loans for less than the price of a bailout, or bail out a bunch of these actual homeowners directly rather than giving people actual cash. So yeah, it's all a lot of cockery.
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(that the government mandated be made)
This is a persistent myth. The total value of the loans that are proscribed to demonstrate a bank is not involved in red-lining was very small, a small fraction of the total loan market pre-crash. They were a disproportionately small slice of the total defaults.
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Prices are set at the margin, so any new and additional borrowed capital chasing the existing market-share will catalyze a boom in prices.
Where the banks failed is in assessment of borrower's capacity to service. But rising prices combined with the government-sponsored protection that is the mortgage, meant that moral hazard was the order of the day.
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What problem isn't caused by poor young black single mothers?
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The Fed is the national bank (Score:5, Informative)
Goldman Sachs has captured something much much bigger than a regulatory agency. The Federal Reserve is a massive financial operation with a charter from the people of United States to maintain the monetary conditions for a stable and robust market economy.
Goldman got the General Counsel of the New York Fed to force the dismissal of an investigator who was brought in specifically to stop the kowtowing. She was fired for asking follow-up questions and telling her superiors to change her reports themselves if they wanted them changed.
In the background of this scandal, Goldman Sachs was engaged in a transaction with the sole purpose of allowing a European bank to pretend that it was not overextended and so avoid recapitalizing to meet European-Union capital requirements. In other words, a European bank was risking an economic catastrophe that would have forced the EU to conduct a too-big-to-fail rescue, and Goldman Sachs enabled that bank to circumvent European banking authorities.
Every investment in securities involves risk, and risk reduces the price at which paper trades. The Fed is now a guarantor of financial investments, making them more valuable than they might be if true risks were incorporated into the pricing. And the Fed is just one of the sovereign assets controlled by Goldman's posse of financial institutions.
Meanwhile, we have neither a stable nor a robust economy. We just have incredible liquidity for investors in securities.
Mod Parent up (Score:2)
I don't have mod points today, but I listened to the interview and this is a good two minute summary.
Comment removed (Score:4, Interesting)
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This is very easy to solve with good policy:
And good policy is very hard to get right.
1. After leaving government employment, your private sector salary above your top government salary is taxed a 100% the first year, declining by 10% each year thereafter.
2. Pay after bonuses for regulated industries is tied to the pay of the regulators. Pay and bonuses and equity in excess of the government regulator salary is taxes at a rate of 90%.
As a matter of fact, this will solve just about 99% of all problems in the financial services industry, because it will remove the absurd profit motive that drives bankers to take massively inappropriate risks. We'll end up with a nice, respectable, small, non-dynamic, stable financial services industries, doing things like encouraging savings, and lending out money that is accumulated through savings at a reasonable rate of interest.
So what about pay in kind - does that also get taxed at 90%? How about you set up a corporation and charge as a consultant - does your company get taxed at 90%? We can, of course, start making special exceptions to avoid this - a company formed by a former regulator must pay tax at the same rate as the regulator. But this is how policy creep starts. You want a sensible rule that is easy to enforce and can solve a complex social problem that cannot be avoided by lo
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Re:is anyone really surprised here (Score:4, Insightful)
The financial collapse was a result of mistakes, not crimes.
They may not have been crimes, but do not try and say the financial collapse was a result of "mistakes".
Re:is anyone really surprised here (Score:5, Interesting)
This is a common misconception. The financial system is mathematical but nowhere near rocket science. The majors of Wall Street executives clearly indicate this (I knew a fellow who became a senior executive at GS. A hypercompetitive jock with average intelligence). Obfuscation has been the shield behind which Wall Street hid for many years during the 2000s. There are plenty of sharp people who can work as regulators. It is a different mindset from the money-at-any-cost Wall Street executive and they don't understand it. But it's there.
End the revolving door. With it, regulation becomes ineffectual. A farce.
Additionally, regulators need to be firewalled against politicians' retribution. The big donors give big money to politicians. They don't complain to the regulator, they complain to the politicians who defund and reassign departments pursuing the donor.
Re:is anyone really surprised here (Score:4, Insightful)
Another case in point: Hank Paulson, former Goldman Sachs CEO, and former Treasury Secretary who crafted the bailouts. His undergraduate major? English. [wikipedia.org]
End the revolving door. And firewall regulators from politicians.
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One way to get the regulators to do their job better would be to give the bonuses of some percentage of the fines levied for breaking the regulations. That would reduce their incentive to keep their noses clean in expectation of a high paying job after their government career ends.
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You know what I was told, when my job ended and I said the same?
"Too bad. Not my problem."
Why does that apply to me, one of 30 people able to do my job, but not to somebody wealthy?
Re:is anyone really surprised here (Score:5, Informative)
Absolutely false.
-> In America there have been just a handful of criminal charges brought against senior executives of banks, and even fewer successful convictions. This is very different from the response of prosecutors in earlier banking crises, such as the meltdown of Savings & Loans institutions in America in the 1980s. In that case more than 1,000 bankers were convicted for their misdeeds. [economist.com]
-> William K. Black [senior regulator who pursued offenders during the savings and loan crisis] tells Bill Moyers on the JOURNAL that the tool at the very center of mortgage collapse, creating triple-A rated bonds out of "liars' loans" — loans issued without verifying income, assets or employment — was a fraud, and the banks knew it. And while there is no law against liars' loans, Black points out that there are, "many laws against fraud, and liars' loans are fraudulent. [...] They involve deceit, which is the essence of fraud. " [pbs.org]
-> Winner of the Oscar for Best Documentary in 2010, The Inside Job [imdb.com] chronicles the fraud behavior which led to the financial crisis of 2008 and the recession.
The key word is "control fraud."
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I was just about to link to Bill Black. kudos. It is laughable for any person to say laws were not broken. Such person should be labeled a psychopath.
Re:is anyone really surprised here (Score:4, Insightful)
We don't arrest people for making bad investments.
What the Fed does is bail them out, instead. Now that, I would argue, is what was criminal in this case, because it transferred liabilities from the investors to the taxpayers...
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No crime? How about the credit rating agencies rating toxic loans as AAA because they made money by doing so, Merill Lynch obfuscating and understating its mortgage holdings, and this: http://en.wikipedia.org/wiki/A... [wikipedia.org]
Many of these weren't even investigated. For others, settlements were made rather than actual punishment.
If a poor black man steals $100 he goes to jail. If a rich white man steals $1bn he gets a slap on the wrist and a fine.
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"Throwing people in jail" also isn't a very good solution.
I agree, electric chairs are better.
The financial collapse was a result of mistakes, not crimes. We don't arrest people for making bad investments.
I mistakenly bet on black in Las Vegas and lost $1000. Can I have my money back, please?
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Enjoy. You voted for it.
No, I didn't. I have never voted for a winning president, Voting since 1992, never missed an election.
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Nobody should be surprised at government incompetence, in this case leading to regulatory capture. The proof came out long ago in the pudding of the financial crisis. The interview is not that interesting. Ms. Segarra's experience should be familiar to anyone who's had differences with management.
My only take from the interview was what wasn't said (at least for the first 40 minutes), viz. that the Fed's played along hoping to get easier access to information. Yes, the banks had to give them what they asked
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Correction: (Score:3, Insightful)
When you wrote: "...the banks and government have a symbiotic relationship... you seem to have missed the fact that neither side in this story was "the government"
The Federal Reserve Bank is NOT a part of the Federal Government; it is a bank that is run by the banks. This highly market-manipulating entity which would otherwise run contary to all the antitrust laws that Teddy Roosevelt gave us only LOOKS to the public to be part of the government because of [1] its name, [2] the bank allows the US President
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The Fed is "independent within government". It is explicitly chartered to work in the public interest, as no private corporation is. It is not-for-profit, returning all interest profit to the Treasury each year.
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Liberals will be furious at your claim..... because it puts the Government in a "bad nanny" position.
Listen to Rush Limbaugh much? Try thinking instead of regurgitating. Here's a book by a serious and unabashed lefty: The Conservative Nanny State [deanbaker.net]. Sorry if the cognitive dissonance makes your head hurt.
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Talk to the GGP. He's the one that chose to categorize politics as such. Should I go on a grand dissertation of shades of gray? Sorry, no time for that now. I just told him how full of shit he is.
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Liberals will be furious at your claim...
Would you please just piss off? Haven't you yet noticed that both "Liberal" nanny-staters AND "Conservative" Don't Tread On Me! types BOTH have their hands in the cookie jar (your wallet), and have done so for a *long time*?
How you idiots can *still* be banging that librul vs. conservative drum after all we've seen for the last two centuries just amazes me.
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The Banks Own the Government. (Score:3, Insightful)
Our government clearly lacks the balls to regulate the banks and provide leadership. This is just sad.
Re:The Banks Own the Government. (Score:5, Informative)
Our government clearly lacks the balls to regulate the banks and provide leadership. This is just sad.
I disagree. It's not lack of balls, but a combination of regulatory capture and (generally legal) bribery.
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It's not lack of balls, but a combination of regulatory capture and (generally legal) bribery.
Translation: The federal government is very corrupt.
I have an idea.. lets give these corrupt sons of bitches more authority.
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I don't know why you were modded down.
Anonymous Cowards start with a score of 0. He was modded up, not down.
Too big (Score:5, Insightful)
Isn't it nice ... if you destroy one persons life, you get penalty big enougf to ruin your life - if you ruin 100'000 you get a "golden parachute".
Number of prosecuted persons (from last bank breakdown - and one before that - and next) is just appalling.
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Are you insinuating that in Enron only three to five were doing illegal stuff? No way!
Sorry, I think Enron (and others) got us into this "not responsible".
Contact your senator (Score:5, Interesting)
Carmen Segarra was hired to to clean up the poor oversight of the banks. Instead, she was fired for doing her job. Read the prepublica articles. It's a shame. Contact your senator and tell them to launch an investigation into the retaliation against Carmen!
New Pledge (Score:5, Funny)
I pledge allegiance to my share
of the United Stockholders of America
and to the profit for which it stands
one stock, Class-B non-voting, with a golden parachute for our CEO
Amen.
Top-down management (Score:3, Insightful)
> The report quotes Fed employees saying things like, 'until I know what my boss thinks I don't want to tell you,'
No shit, its called top-down management. The minions don't do, say or think anything until instructed by their boss (or their boss's boss, or their boss's boss's boss)
Did anyone seriously expect anything else out of a system which STILL (probably will NEVER) hasn't nailed anyone to the wall for the financial crash?
oh, that's easy! (Score:3)
If we just get those evil (insert other party) out of office and then pass better laws, finally, regulations will work and achieve the desired outcome! Life will be swell!
Working On My Pandering Campaign Platform (Score:4, Insightful)
Re:Working On My Pandering Campaign Platform (Score:4, Insightful)
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According to T (other) FA, that ended in 1939. It was mentioned for historical reference.
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Another political thread? (Score:2)
summary (Score:5, Interesting)
I happened across this before it got on here and listened to the entire thing. Here's a brief summary:
1. This American Life is a great show. My favorite, you should listen to it often.
2. Managers at the fed seem to be terrified of the banks
3. The lady doing the recordings is aggressive and speaks her mind.
4. There are many "Old Guard" people at the fed that have a cozy, friendly relationship with the banks they work with.
5. The banks actively cultivate this relationship because they realize friendly regulators are less likely to press issues.
6. She uncovered the fact that GS had no formal definition for "Conflict of interest" which is a violation of Fed rules.
7. The fed worked for months gathering evidence and there was consensus that they needed to force GS into creating a policy
8. Suddenly one day her management agreed GS did have a policy just not a good one.
9. She was called in and her boss tried to bully her into changing her report to say they did have a policy.
10. Not too long after she was fired.
11. I believe the suggestion is that GS has control over management and who gets hired/fired at the fed.
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Good summary, the whistle blower is EXACTLY the kind of person we, the citizens, need at the Fed, and as it turns out, she is the type of employee who will have the shortest career at the Fed. It sucks.
Re:summary (Score:4, Informative)
This American Life is as factual as Top Gear, i.e. they are entertainment....
You have no idea what you're talking about. It's a show of taped interviews with people. You can't get any more factual than that.
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http://en.wikipedia.org/wiki/This_American_Life [wikipedia.org]
In January 2012, "This American Life" presented excerpts from a one-man theatre show by Mike Daisey as an exposé of conditions at a Foxconn factory in China.[14] The episode was entitled "Mr. Daisey and the Apple Factory" and became one of the show's most popular episodes, with 888,000 downloads and 206,000 streams. WBEZ planned to host a live showing and a Q+A of "The Agony and the Ecstasy of Steve Jobs" in Chicago on April 7, 2012.[15]
On March 16, 2012, "This American Life" officially retracted the episode after learning that several events recounted both in the radio story and the monologue were fabrications. Daisey apologized for presenting his work as journalism, saying it is actually theatre, but refused to acknowledge that he had lied—even in the face of obvious discrepancies. WBEZ canceled the planned live performance and refunded all ticket purchases.[15] The same day, This American Life devoted their weekly show (titled "Retraction") to detailing the inconsistencies in "The Agony and Ecstasy of Steve Jobs."[16] The show includes interviews between Rob Schmitz, the reporter who discovered the discrepancies and Daisey's translator in China, Cathy Lee, as well as an interview between host Glass and Daisey. The podcast of this episode became the most downloaded in the show's history.[17] However, the Harper High School series broadcast in February 2013 surpassed it in number of downloads.[citation needed].
The show also removed three stories by Stephen Glass (no relation to Ira Glass) in the week following the retraction of the Daisey episode due to less-than-truthful content. These were noted to have been previously removed, but had resurfaced in episode streams due to a website redesign. Though the segments are cut from the streams of the episodes, the transcript of the contents were kept accessible on the This American Life website. These were from the episodes "57: Delivery," "79: Stuck in the wrong decade," and "86: How to take money from strangers."[18]
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So are you citing this as evidence that the show is generally factual, and that in the one case they got it wrong they apologized? Or are you citing it as proof that they are liars, and only admit it when they are caught?
Re:summary (Score:4, Insightful)
You can't get any more factual than that.
And the best entertainment writers can't come up with material half as funny and/or tragic.
The Fed is corrupt through and through (Score:5, Interesting)
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I'm shocked, shocked that gambling is going on here!
Gotta watch Casablanca again on of these days.
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Intentions Trump All (Score:2)
I went through the process to become an examiner (Score:5, Interesting)
The biggest selling point they gave me was that if I played nice after 10 years I could leave the Comptroller's office and get a huge paycheck from one of the major banks.
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The wrong people are scared (Score:5, Insightful)
Listened to segment on NPR this morning, what I got out of it was the Fed is afraid of the big investment banks, when it should be the other way around. I was honestly a bit shocked by how timid and afraid the Fed people were, it was embarrassing.
This (Score:2)
This is how you know it was all planned, from Clinton signing off on the final; removal of Glass Steagall to Fab stating "I don't even know what I'm selling".
The same group of people have been at these financial constructions designed to rob people, the FED is a part of it, you need only look at who runs the financial institutions, who is tops at the fed, who has the presidents ear and finally who really drives the wars in the Middle East.
All the same group of people, it's amazing people aren't pointing it
Bitcoins (Score:2)
Seriously people!
This is the EXACT reason that bitcoins were invented and this is the EXACT problem that is solved.
You no longer have these Banks colluding with the FED to stuff your money supply.
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Yes, you can sink all your money into Bitcoin and hope that a currency which doesn't respond at all to the size of the economy works out and saves the world.
Or you could become more involved in the political process and try to get people elected who will appoint more independent Fed governors and financial regulators and pass better laws for them to work under.
Choose your long shot.
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You need to learn a bit more obviously.
There are many many ways. That is if you just don't spend them with the multitude of vendors that support them. Hell, even PayPal is getting in on the act, you have a paypal account?
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Hell no, get your own if you want some.
Paulson at Goldman-Sachs then Sec Treasury (Score:5, Informative)
Can your say conflict of interest? I knew you could.
Although TIME Magazine had him as runner up for the Person of the Year in 2008 [wikipedia.org] they also listed him as one of the "25 People to Blame for the Financial Crisis" [wikipedia.org]
The Fed is the banks. (Score:2)
DAMN Good Report (Score:2)
But sad, almost disgusting to see how lousy the government and its agencies can be. Maybe I want to throw up now.
I certainly have no good feelings about the Fed or our major banks, even if this report DID come from the Fed. Too bad the media didn't do ITS job to highlight things like this. Thanks, Slashdot and "This American Life".
Re:Goldman Sachs All Throughout the Obama Admin (Score:4, Informative)
Obama or Biden a former GS executive ? I'd like to meet your crack dealer.
Re:Goldman Sachs All Throughout the Obama Admin (Score:5, Insightful)
Warren Buffet, a government employee and/or consultant? Please
Warren Buffet has probably one of the few people who has always gotten the best of Goldman Sach's because whenever they really fuck things over, he squeezed them for top of the line deals. Pretty much what Goldman Sach's did to anyone else given half the chance.
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Warren Buffet ... squeezed them for top of the line deals.
Can you give a little more detail on that?
Re:Goldman Sachs All Throughout the Obama Admin (Score:5, Informative)
He did this in 2008, http://online.wsj.com/articles... [wsj.com], an easy $500 million that no one else would be able to get.
Re: Goldman Sachs All Throughout the Obama Admin (Score:2)
Ate you going to update Wikipedia with your bogus facts? The bailouts happened on Bush's term. Democrat or republican makes no difference. Both parties practice the same revolving door policies.
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The Fed guy at Goldman was right. Reality doesn't matter. In spite of the numerous replies pointing to the large number of inaccuracies, the post is still modded +5 Informative. In a world where the majority of people find false information "informative", what good is a moderation system?
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It is a well known fact that Bush's Treasury Secretary, Henry Paulsen, who railroaded the wall street bailout through congress, was a former Goldman Sachs CEO. It is unfortunate that very little changed under Obama, but the article is primarily discussing conditions prior to and during the 2008 financial collapse, before Obama was even elected.
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Of course, Obama then gave a cabinet post to Geitner, who was in charge of the NY Fed before and during the collapse. ie. the guy who was supposed to be regulating wall street.
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The Federal Reserve doesn't regulate Wall St. The only thing they regulate are boring transactional stuff like funds transfers (e.g. ACH), and even then often only if the banks voluntarily use the Federal Reserve's electronic services (an opt-in regulatory burden). Their policy making authority is extremely limited. You can thank President Andrew Jackson for that.
Most of the power the reserve banks have is soft power--the bank presidents are at the center of a complex network of relationships between privat
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To say this isn't "regulation" is pedantic nonsense. It is the single most important tool the FED has for regulating the economy. To say otherwise is like saying that the gas peddle on a car is not a "regulation", even though it is the basic control to increase the speed of the vehicle.
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I guess it's the operative question, if, for some bizarre reason, the only person whose behavior you wish to review is Obama's. Why is this about him exactly?
Re:Goldman Sachs All Throughout the Obama Admin (Score:5, Informative)
Timothy Geithner never worked for Goldman Sachs and off the top of my head I can also see Warren Buffet never worked for Goldman Sachs or the Obama administration, Robert Rubin never worked for Obama, Rogert Altman has neither worked at Goldman Sachs or the Obama administration.
Might want to check that list again to see what other missteps are there.
Re:Goldman Sachs All Throughout the Obama Admin (Score:4, Funny)
Perhaps you didn't notice those names were in ALL CAPS, which makes his allegations very, very serious.
Re: More regulation (Score:2)
Your sarcasm and oversimplification has convinced me that government always bad corporations always good.
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Compared to all the other banks that took stupid risks GS was one of the firm that actaully did not require the bailout money due to their better risk management..
They got TARP money, a few billion form the AIG bailout, etc. They also got to declare themselves a "bank" (as in a depository bank, not an investment bank, which is what they are). That gave them access to billions in effectively interest free loans from the Fed. If you don't think that's a bailout, try getting a 0.1% loan from the Fed. I'd love to get that deal for my mortgage.
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Let's not the forget the stupid risks those other institutions took included insuring overvalued GS securities that GS knew would make a loss. Who insured most of the GS securities? AIG. What happened to GS for conducting large-scale insurance fraud? Their debts were covered by the US government, nothing more.
Summary of the GFC: An influx of customers allowed banks to create a massive tranche of debt securities, causing profits to rise. Many institutions wanted to re-invest their profits in AAA-rated
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From the folks who brought you the Dred Scott decision and the Slaughterhouse cases: the Supreme Court has declared bribery legal.