Goldman Sachs bet on housing meltdown -- and won (Fuckers!)

[trumad]

A McClatchy investigation found that investment bank giant Goldman Sachs made secret bets on an imminent housing crash -- while selling off billions in soon-to-be worthless securities.
BY GREG GORDON
McClatchy News Service

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.

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 has proposed a massive overhaul of the nation's banks. ``This is fraud and should be prosecuted.''
http://www.miamiherald.com/509/story/1310367.html

[Skittles]

1. get those bastards

nail them to the fucking wall

[flyarm]

12. ha , many of them are now in the Obama administration!! eom

[Skittles]

15. get them anyways

[ThomCat]

17. I agree. And not a slap on the wrist.

The entire company should face fines and penalties proportionate to the amount of the fraud plus the amount of economic damage they caused with their fraud.

If they survive paying all of those fines and penalties, then they should have to deal with real regulations. Serious regulations with bit teeth, backed by a regulatory agency that doesn't trust them, doesn't give them any favors, and has the authority to block them, break them up, and shut them down.

Goldman Sachs should be facing the absolute end of business as usual because of the frauds they have committed. It is long past the time when they should face justice.

The fact that they own our President needs to changed. We need to get their people the fuck out of our Department of the Treasury and the Federal Reserve. We need to end their influence over this Administration and our Democratic party.

I would not be displeased to see them broken up until there no longer was a Goldman Sachs.

[Hannah Bell]

2. They bundled them, sold them, got the fees then bet against them. Great scam.

Why aren't these people in jail?

[ThomCat]

18. Because they own our President,

hold most of the important positions in the Dept of the Treasury, have several former Cabinet Secretaries as officers, have former senators as lobbyists, control the Federal Reserve, and have been consistently above the law because of their wealth, connections, and power.

All of that should end. They should be held fully responsible for the full scope of all the frauds they commit, and they should be held responsible for all the economic damage from the frauds they commit too. Then they should be regulated half to death, and broken up into little pieces.

Former Goldman Sachs employees, lobbyists and agents of any kind should be barred from government positions for a very significant length of time, and anyone who worked for the government in any position related to Goldman Sach's business should be prohibited from going to work for them for the same length of time after leaving the U.S. Government.

[tabatha]

3. Thay are beyond evil.

Literally, the scum of the earth.

[AllentownJake]

4. Civil Lawsuits

At the very least the discovery should be interesting.

[grasswire]

5. this is a kind of war against Americans

How is this different from a terrorist attack? Millions of people are destroyed, millions of families suffering, millions of homes lost, jobs gone....eco-terrorism. War. That's what it is. A criminal conspiracy.

[sandnsea]

6. credit default swaps, no secret, nothing clandestine

But very definitely the most unethical thing the financiers have ever done. Well, except to blame this mess on poor people who bought houses for their families.

[KittyWampus]

20. you don't know that Goldman Sachs did or did not withhold information they were legally obligated

to provide. So you can't make such a statement without inadvertently end up looking like an apologist. I am not attacking you... just cautioning. I know you as a DU'er well enough that you aren't defending G.S.

This would require an investigation. Federal or State.

[Solly Mack]

7. k/r

[xchrom]

8. kick

[msongs]

9. thank gosh nobody from goldman sachs has a high level adminstration job nt

[flyarm]

13. you got it!!..makes me

:puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke:

[Yo_Mama_Been_Loggin]

10. That's the game they play.

The Wall Street Journal revently reported the average wage at Goldman Sachs is $700,000 a year.

[exboyfil]

11. It gets even better

part of the hedge was assuming a counterparty position with, you guessed it, AIG, who we bailed out to the tune of $180B. If no AIG bail out, then Goldman Sucks would have gone down as well.

[girl gone mad]

14. They claim they were hedged against AIG..

but they've never proven it. I think it's bullshit.

[voc]

16. ...And that is the Game. nt

[Octafish]

19. An insider's game in which the ''bets'' are fixed is called ''Fraud.''

Thank you Professor Kotlikoff for putting it into words and McClatchey for covering the story.

Thank you, too, trumad.

[glitch]

21. K & R for investigation, indictment, conviction and punitive damages.

And the corporate death penalty, for good measure.

edit: and imprisonment for the principals.