How Goldman secretly bet on the U.S. housing crash | McClatchy »
Posted By deathray 4 weeks, 1 day ago in Business & Finance
WASHINGTON — 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.
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deathray
Hm...summarizing a life...Investment banker, sailor, unintentional gourmet cook. Ex US Naval officer, also Foreign Service. Split my time between NYC and Miami Beach ...
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hyperbola4 weeks ago
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Well "good" depends on your point of view. If you mean that they have been "scamming" people for a long time, that is true. How quickly we forget that these scams are repeated every time we give the corrupt oligarchs a bit of wiggle room, e.g. who remembers "junk bonds" scams or the Savings and Loan scandal - not very different from Goldman this time around.
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Of course, it probably helps when your "friends" sit in the top government economic postions and can "trigger" the movements you need and/or warn you when they are about to take action. Time to end the "revolving door" between Wall Street and government for good.
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jordan114 weeks, 1 day ago
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I can see why having more loans to sell as securities was good for goldman, & how cooking the credit credit and income of people would give them those loans. But I don't see how betting they would fail would profit goldman. Finance not being my strong point, anyone got an answer for that?
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stephen-johnson4 weeks, 1 day ago
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With all the Goldman alumni in high government positions, want to bet that no serious investigation of this will ever get launched?
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Looks like Matt Taibbi was right about Goldman.-
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deathray4 weeks, 1 day ago
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certainly true.
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you should read matt's latest pieces re: goldman:
http://taibbi.rssoundingboard.com/ -
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reallypsst4 weeks, 1 day ago
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Corruption has won because all of our politicians have a stake in wall street,as we saw most of goldman sachs players were hand picked to run in high positions in government,this is not only criminal it is treacherous at most,these people have no honor and are guilty as hell !
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cowboygrandpa4 weeks ago
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FTA:
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"Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled the nation's premier investment bank to pass most of its potential losses to others before a flood of mortgage defaults staggered the U.S. and global economies.
Only later did investors discover that what Goldman had promoted as triple-A rated investments were closer to junk.
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.""
The problem is, we continue to allow these corporations to do business in the same ways regardless of the outcome to the investors.
Take their assets, I mean those in charge. Seize their accounts, take their passports, put them in prison with some mean some hardcore street thieves, who would think nothing of slitting their throats for their commissary purchases.
Let them see the price they pay for being criminals.
I'm sick of them being favored because they think they are smart. They are criminals, not smart.-
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hyperbola4 weeks ago
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Over a century ago when "banks" were running these kinds of scams in "bucket shops", they were put out of business and strict laws against "bucket shops" (those who deal in the market have their own personal profit interest in the market) passed.
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It is no accident that the filling of our government with corrupt "Wall Streeters" (in all administrations since Reagan, including Clinton and Obama) led to the federal government revoking anti- "bucket shop" legislation (and forcing states to do the same at their level). THAT KIND of subversion of our government is actually the real scam.
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