McClatchy has a good article How Goldman secretly bet on the U.S. housing crash
"In 2006 and 2007, Goldman Sachs Group peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages, but never told the buyers it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting."
"Now, pension funds, insurance companies, labor unions and foreign financial institutions that bought those dicey mortgage securities are facing large losses, and a five-month McClatchy investigation has found that Goldman's failure to disclose that it made secret, exotic bets on an imminent housing crash may have violated securities laws. 'The Securities and Exchange Commission should be very interested in any financial company that secretly decides a financial product is a loser and then goes out and actively markets that product or very similar products to unsuspecting customers without disclosing its true opinion,' said Laurence Kotlikoff, a Boston University economics professor who's proposed a massive overhaul of the nation's banks. 'This is fraud and should be prosecuted.'"
4 comments:
oooh, can't wait to read this. Just finished the article/excerpt from the new book 'Too Big to Fail' in the Oct issue of Vanity Fair. Excellent. Totally and completely crazy all that was going on for 5 days last September.
Thanks for the post.
Let's see......
Mississippi Attorney General Jim Hood assailed the investment banks "who packaged this junk and sold it to unwary investors."
Attorney General Martha Coakley, said her office focused on investment banks because they provided a market for loans that mortgage lenders "knew or should have known were destined for failure."
New Orleans' public employees' retirement system, an electrical workers union and the New Jersey carpenters union also are suing Goldman and other Wall Street firms over their losses.
Funny......I don't see the SEC or Justice Deapartment mentioned here.
Where exactly is President Obama and his AG Holder, regarding these issues?
Serious criminal accusations are being asserted by prominent and credible legal and economic leaders regarding the massive fraud perpetrated by our leading financial institutions and Obama and Holder have nothing to say.
Oh right, the Obama administration is busy trashing FOX news.
What a joke. We've all been had.
From where I sit, Obama appears to be completely bought and paid for by Wall Street. Geithner is a disaster for the taxpayers and citizens of this county. Look at the deal he made for CIT (now in bankruptcy). Taxpayers out 2.3 billion (chump change I know).
Professor William Black is in Manhattan today... wonder if he is going to get some airtime so that the American people can learn the truth about the fraud-based Wall Street financial system and the true cause of the global financial meltdown, and subsequent cover-up by the Tresury and Federal Reserve orchestrated by the Paulson-Geithner-Blankfien-Bernanke group.
Indictments and prosecutions need to happen.... and fast. Let's have juries decide what constitutes fraudulent behavior, not lawyers and paid mouths for Wall Street.
And the best part of the article.....
"On Oct. 16, a Goldman vice president, Adam Storch, was named managing executive of the SEC's enforcement division."
You can't make this stuff up.
This from another piece on McClatchy (Mystery: Why did Goldman Stop Scutinizing loans it bought?)
http://www.mcclatchydc.com/economy/story/77788.html
"John Talbott, a former Goldman investment banker and the author of a new book, "The 88 Biggest Lies on Wall Street," said "it wasn't a mistake" when illegal immigrants got home mortgages.
The lenders, he said, "just wanted somebody, anybody to sign a note" so they could sell it to Wall Street, where ratings agencies that were paid hefty fees by the investment banks bestowed triple-A grades or their equivalent on most subprime bonds.
"It's not just unethical," Talbott said of the chain of profiting subprime players extending from real estate appraisers to Wall Street. "It's totally criminal."
This from a Goldman insider.
TT
And one last piece from McClatchy.....
"How Moody's sold its ratings - and sold out investors"
This article goes to the very core of what a Control Fraud is and how it operates. Rule number 1; get rid of the auditors and internal compliance and accounting people who will not play the game.
Each McClatchy article is a piece of the puzzle. Just put them all together and it really is self-evident what happened (Fraud on a massive scale) and who was at the center of the action (Wall Street).
TT
http://www.mcclatchydc.com/227/story/77244.html
FYI...I think Warren Buffett just sold all his (Bershire's) stock in Moody's.
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