The People Suffer While Goldman Sachs People Profit

Larry's Corner

This data just released by CNN:

More Americans fell below the poverty line last year, according to U.S. Census Bureau data released Tuesday.

The nation's poverty rate rose to 15.1% in 2010, up from 14.3% in 2009 and to its highest level since 1993.

Last year marked the third year in a row the rate increased. All told, 46.2 million people are considered in need. In addition, real median household income last year was $49,445, a 2.3% decline, the Census Bureau reported.

Not published in this news alert from CNN but data I have seen recently, indicates that over 40 million people are now receiving food stamps and over 5 million children go to sleep hungry in this country each night.

The increase in food stamp participants are largely from what used to be the GREAT American middle class.
Amazing that the only industry that seems to be flourishing - at least in terms of personal incomes - is the financial bankster industry.

Stay tuned folks, this REcession is still alive and well and will continue for the next several years.  Unless you have not noticed, unemployment is on the rise with zero new jobs last month and close to 900,000 newly unemployed in just two weeks of last month.

In case you have not noticed, inflation - a word we do not hear about much these days as it is obviously kept under raps by our beloved government - is on the rise.  How do I know?  No, I am not an economist nor am I a researcher.  I am however, a shopper, that average Joe (not rally my name) that has some very basic needs like food and fuel.  While I try to shop wisely, I notice that prices in grocery stores have gone up as much as 40% in some cases.  Even in so called discount or low price grocery stores like Aldi's, where at the beginning of the year I paid $2.29 for a gallon of milk, the price is now 2.99 an increase of 31%.  Eggs were 97 cents a dozen they are now $1.49/doz, an increase of 54%.

Fuel prices we all see at the pumps so no need to go into that but in general there has been over a 30% increase there.  It is interesting to see that when oil used to be $86/barrel that the price per gallon at the pump was in the low $2 range but recently when oil was at that same price per barrel our price at the pumps was at arund $3.75.  How can you explain that?  Perhaps some manipulation between the oil companies and the banksters?  Do you think Goldman Sachs is profiting off of the increase profits being made by the oil companies?

Of course, when our government calculates inflation they do not include food in those figures.  Our inflation reports for years now have been inaccurate - another lie from our beloved government gone wild.  It is my opinion that the first item on the list of inflation should be food as that is what most human beings will spend their money on first.  I believe that to sustain life one must have sustenance unless there is this plan of survival of the fittest (wealthiest).

From U.S Census Bureau:

The data presented here are from the Current Population Survey (CPS), 2011 Annual Social and Economic Supplement (ASEC), the source of official poverty estimates. The CPS ASEC is a sample survey of approximately 100,000 household nationwide. These data reflect conditions in calendar year 2010.

• The official poverty rate in 2010 was 15.1 percent — up from 14.3 percent in 2009. This was the third consecutive annual increase in the poverty rate. Since 2007, the poverty rate has increased by 2.6 percentage points, from 12.5 percent to 15.1 percent.
• In 2010, 46.2 million people were in poverty, up from 43.6 million in 2009—the fourth consecutive annual increase in the number of people in poverty.
• Between 2009 and 2010, the poverty rate increased for non-Hispanic Whites (from 9.4 percent to 9.9 percent), for Blacks (from 25.8 percent to 27.4 percent), and for Hispanics (from 25.3 percent to 26.6 percent). For Asians, the 2010 poverty rate (12.1 percent) was not statistically different from the 2009 poverty rate.¹
• The poverty rate in 2010 (15.1 percent) was the highest poverty rate since 1993 but was 7.3 percentage points lower than the poverty rate in 1959, the first year for which poverty estimates are available.
• The number of people in poverty in 2010 (46.2 million) is the largest number in the 52 years for which poverty estimates have been published.
• Between 2009 and 2010, the poverty rate increased for children under age 18 (from 20.7 percent to 22.0 percent) and people aged 18 to 64 (from 12.9 percent to 13.7 percent), but was not statistically different for people aged 65 and older (9.0 percent).²

Footnotes:
1 The poverty rate for Blacks was not statistically different from that of Hispanics in 2010.
2 Since unrelated individuals under 15 are excluded from the poverty universe, there are 422,000 fewer children in the poverty universe than in the total civilian noninstitutionalized population.

See graph...click here

Goldman Sachs as a "Vast Criminal Enterprise"

If Goldman Sachs had shown any sympathy for the victims it stole money from via pensions, mortgages, savings and municipal bonds, then we might have some sensitivity for Goldman Sachs's many trials (literally and figuratively). Goldman Sachs right now is being barraged from two different sides (shareholders and Ireland's Central Bank) who are seeking recompense for GS's fraudulent or criminal behavior.

But Goldman will only admit to making mistakes as it reaches into its huge pockets and pulls out money for fine after fine; therefore, until some of the executives are criminally prosecuted, we will welcome all those who seek some redress.

Goldman Sachs is described with a plethora of euphemisms that all say "fraud." So at various times Goldman will "fail to manage," "fail to identify," commit "errors in calculations," or fail to adhere to "regulatory requirements."

Continuing, Goldman "misled investors," "unfairly" rewards bank employess, used wasteful compensation methods, performed non-disclosure of information on CDOs and practiced "wrongful conduct."

But really, Goldman committed fraud and deserves the label given it by Goldman Sachs's own Lawyer, Gregory Varallo himself, who used the phrase: A "Vast Criminal Enterprise."

Central Bank fines Goldman Sachs
By Irishtimes

The Central Bank of Ireland has fined Goldman Sachs €160,000 following an investigation into regulatory breaches at the investment bank.

The Central Bank found that the bank failed to manage, monitor and report accurately its regulatory counterparty risk capital requirement during an 18-month period between July 2008 and December 2010.

In addition, the firm's internal control mechanism failed to identify that its regulatory counterparty risk capital requirement was incorrectly calculated, the investigation found.

Goldman Sachs disclosed errors in calculations of the firm's counterparty risk requirement to the Central Bank in December 2010.

In a statement today, the Central Bank said that in deciding the appropriate penalty to impose, it had taken account of the fact that the regulatory capital maintained by the firm during the period was at all times in excess of its capital requirements, and that the bank had co-operated with the investigation from an early stage.

Director of enforcement Peter Oakes said the existence of proper systems and controls to ensure continuous and proper calculation of risk and regulatory capital requirements is essential to the maintenance of stable and properly financed financial service providers. The reliance on automated systems should be tempered by adequate oversight to ensure that systems and controls are comprehensive and proportionate, he added.

"Firms are reminded to monitor and test their internal control systems on a regular basis and should take great care to ensure that any changes to systems are properly and fully tested so that regulatory requirements are adhered to and all regulatory reports provided to the Central Bank are accurate" he said.

Read the article here

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Goldman Sachs's Pay Plan Hurts Shareholders, Lawyer Contends
By Jef Feeley - Bloomberg Businessweek

Sept. 7 (Bloomberg) -- Goldman Sachs Group Inc.’s compensation plan, which almost doubled top executive Lloyd Blankfein’s pay last year, unfairly rewards the investment bank’s employees at shareholders’ expense, a lawyer for investors said.

Goldman Sachs, the fifth-biggest U.S. bank by assets, has lost $50 billion in market value since 1999 while the company has paid out billions in compensation to the firm’s 31,000 employees, including Blankfein, its chairman and chief executive officer, John Harnes, an attorney for investors who have sued over the pay plan, argued today.

Goldman Sachs, based in New York, “is being run for the benefit of employees rather than shareholders,” Harness told Delaware Chancery Court Judge Sam Glasscock III. The judge heard arguments on whether shareholders’ suits seeking to recoup executive compensation should be thrown out and said he’d rule later.

The firm, which set a Wall Street pay record in 2007, was pilloried by politicians and labor unions for its compensation practices after getting taxpayer aid during the financial crisis. In July, Goldman Sachs officials set aside $8.44 billion for the company’s compensation pool in the first six months of this year, according to its website. That was 9 percent less than in the same period in 2010 as revenue tumbled 11 percent.

$19 Million Compensation

Blankfein’s $19 million compensation for 2010, which included a $5.4 million cash bonus, was almost double the prior year’s award even as Goldman Sach’s profits fell. Blankfein and other firm executives agreed to forgo cash bonuses in 2009 and take restricted stock grants as compensation to mute criticism of the firm’s pay practices.

Lawyers for the Southeastern Pennsylvania Transportation Authority, a Goldman Sachs shareholder, argue the firm’s lucrative compensation system is wasteful and rewards employees for taking risks that hurt the firm’s stock price.

Harness noted Goldman officials received billions in pay and bonuses last year while the firm settled claims by the U.S. Securities and Exchange Commission that executives misled investors in collateralized debt obligations linked to subprime mortgages.

The firm agreed to pay $550 million, the largest penalty ever levied by the SEC against a Wall Street firm, to resolve regulators’ claims that marketing materials about the investments had “incomplete information.”

CDOs in 2007

Goldman Sachs created and sold the CDOs in 2007, as the U.S. housing market faltered, without disclosing a hedge fund helped pick the underlying securities and then bet against the investment vehicles, the SEC said in the suit Goldman settled. The bank didn’t admit wrongdoing as part of the accord.

Such “wrongful conduct has cost shareholders billions to date and is likely to cost billions more,” Harnes argued on behalf of Septa. Philadelphia-based Septa is the nation’s fifth- largest public transportation system, according to its website.

Read the entire document here