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E-mails show Goldman Sachs boasting as meltdown unfolds

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21 Comments
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why are they not all in jail? USA has anti-racketeering laws but are strangely mute.

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This is why government regulation on markets needs to be kept tight. Sports players can't place a bet on their own team losing because it will compromise their motivation to play well. This company selling subprime policies to "widows and orphans" after they already know the business is shot to pieces, and then using shorts to cash in on these same "widows and orphans" when they lose everything they own is predatory and immoral behaviour and should be illegal (if it isn't already).

If they knew the business was bust, they should have legitimately saved the company money by not selling them and thereby protecting the unsuspecting public from policies that were known to be toxic.

The public cannot protect itself from rogue companies and must rely on the government to lay out a level playing field. Companies should be allowed to pursue their own business plans and develop innovations within their industries as long as it doesn't cross the line into exploitation and fraud. It's a delicate balance, but one that needs to found and fully regulated.

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It's hard to really know what happened in this case. It looks like Goldman lost a lot of money in the housing market, then changed their position and started to sell it short and recouped their losses. On one hand it's what you'd expect them to do since they obviously aren't going to invest in something they think isn't going to pay off. The question is what happened during the transition....did they continue to push housing as a safe investment to clients when they personally felt it was heading in the other direction? The email is tough to stomach, but then again you're talking about one guy without really knowing what his position was. He sounds like a small salesman (orphans and widows), not someone selling multi-billion dollar packages to overseas banks. That's the behavior of one individual, not the policy of an entire company.

The Paulson deal, on the other hand, is an entirely different story....

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Oh no, we don't need stiffer regulations on the market. The Free Market system is doing just fine. < :-)

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donkusai,

that was the point in creating the anti racketeering laws in the first place. They are called RICO and are already there. All the Attorney General has to do is look them up. Nice wikipedia has it : http://tinyurl.com/f3jux and notes Goldman Sachs in the recent case. It puts them in the same company as The Hells Angels, Major League Baseball, and the Gambino crime family.

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This is more like an arms dealer playing both sides. Dealer wins.

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sf2k - thanks for the info.

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Goldman Sachs is a Federal Reserve owner. If you don't like their "Financial Terrorism" then don't invest in the fiat dollar that supports them. I say invest and buy locally --> don't give your hard earned money to these globalists and their inflation taxes.

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Hedging is no longer allowed? Who wrote this article? He must be related to the guy who wrote the emails.

I love how politicians blow smoke and shift blames to other people when they are the ones who created the problem to start. The collapse of the mortgage back securities and derivatives markets could all be traced back to the sub-prime mortgages themselves, which were made in unsafe and unsound manners; to the point where a borrower did not have to show proof of repayment source (income) to get a mortgage. Who sets these ridiculous standards? Freddie Mac and FNMA, of course. And which group of individuals pressured Freddie and FNMA to do this? The politicians in Congress.

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And which group of individuals pressured Freddie and FNMA to do this? The politicians in Congress.

-Let me get this straight: Fannie and Freddie pay millions a year to politicians and you think the politicians are actually making the calls? Sort of how Congress controls Goldman-Sachs?

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What isn't clear and may be someone in Japan working for or knows GS first hand can clarify : were the profits from shorting CDO's also to the benefit and protection of their CDO investors of this financial instrument or was it exclusively for GS's benefit? If the latter, I'd say GS is very culpable. Maybe this will be cleared up by Blankfein at the Congressional hearing this coming Tuesday.

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Badsey

I say invest and buy locally --> don't give your hard earned money to these globalists and their inflation taxes.

It makes no difference what you do or how you invest, you're still invested in Wall Street.

Public Utilities are traded. Mortgages are traded. and many other parts of our normal day are traded on Wall Street.

That's why we have to regulate their actions. < :-)

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investing locally is not investing in Wall Street. Some local organic farmers take memberships, which are investments by people to support the crop, then the crop is divided up later, get a share. This works well with smaller local farms. Since re-localization is about smaller more efficient less polluting systems, this fits the bill just fine.

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SF2k

investing locally is not investing in Wall Street.

You're correct there, but you can't keep from being invested in some manner on Wall Street, unless you're a hermit, maybe. < :-)

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There are smaller banks and credit unions that are locally owned and don't issue stock. Almost all of the big banks are indeed owned by the same banking cartel and eventually they buy out the smaller independent banks. This is part of Obama's "to big to fail" theme.

If you buy damn near anything (gas, processed food etc) you are mostly supporting this banking cartel. I feel I gave the crooks enough of my money so I try to support the little guy now = fresh foods if possible, ride a bike etc. Only pay in gold and silver etc -joking.

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I say invest and buy locally --> don't give your hard earned money to these globalists and their inflation taxes.

I dunno, I've been cleaning up pretty well lately. Just got back to what I had before worldcom went under.

That's why we have to regulate their actions.

Bah, takes all the fun out of it. If I wanted a safe investment I'd buy into a strip club or a bar, nothing more stable than a drunk pit. Point is that you don't go into the market expecting to make a little bit of money then cop out, you make a lot or you lose a lot. People made stupid investments, put their entire retirements in shaky mutual funds, or bought artificially inflated stocks, I did. The market isn't stable, it shouldn't be, and if you can't roll with it you shouldn't be invested in it.

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Who sets these ridiculous standards?

Nimbus is just parroting the criminals' position. that the mortgage business was a victim of dishonest customers and evil politicians. Rather than the obvious fact that the mortgage business became taken over by organized crime, and that they were engaged in massive accounting fraud. The setting of the ridiculous standards was a major part of how the fraud operated.

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I would have boasted and joked as well, knowing that the public had been successfully conned into believing the Republicans were responsible for the meltdown. Goldman Sachs people were already well-placed in the incoming Democrat administration, to which GS contributed 7 times as much money as Bush ever got from Enron. What was / is anyone gonna so about it? What can they do? Obama got a million bucks from these people...

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Rather than the obvious fact that the mortgage business became taken over by organized crime, and that they were engaged in massive accounting fraud.

Man there are so many factors to the whole thing they'll be sorting it out for decades. Thats the only obvious fact I can glean out of the whole situation. For now I blame the government, the corps, the local banks, the brokers, the consumers, the accountants, the SEC, the EITF, Clinton, Bush, Obama, myself, every single member of congress since I started voting, and the financial advisors. If I left anybody out I blame them to.

Point is, everybody was living in their own little dreamland for a while and when reality shut it down a lot of us were left realing. Now we can either step up or shut down, I'm going to make the best of it. Since the whole healthcare thing I smell a pharmeceutical boon on the horizen.

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This is part of Obama's "to big to fail" theme.

Seriously? TARP, the embodiment of 'to big to fail', was implemented under a previous administration. Replace "Obama" with "US Government" and your points are on the ball. Do you seriously think that Obama himself is responsible for the situation the world is in now? You know he is just an actor, the real players are behind him like they were behind the previous guy...

Anyway, Goldman hedged. Its quite simple. They all did. They're encouraged too. It makes them money (the shareholders and the ones that are personally incentivized). The question I want to know the answer to is why Goldman, why now?

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Goldman Sachs people were already well-placed in the incoming Democrat administration, to which GS contributed 7 times as much money as Bush ever got from Enron. What was / is anyone gonna so about it? What can they do? Obama got a million bucks from these people...

Thats why this doesn't make sense. Why is this happening now? Whats the real agenda?

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