What happens when fraud becomes the business model for investment bank Goldman Sachs? Goldman schemed to obtain huge profits for itself by selling CDOs of sub-prime mortgages to unsuspecting investors. Goldman knew that these securities were toxic and would become worthless. Goldman made huge amounts of money on fees and then made even more money by betting on the collapse of the mortgage market to which they contributed. Goldman was responsible for homeowners being foreclosed on and for syphoning money from the savings and pensions of others into their own coffers.
Now we have news about Goldman "suffering" from the results of their actions in bringing about the financial crisis: they are not making enough money now so they are laying off staff in order to maintain executive compensation (here); they are asking their workers to become knowledgeable in many aspects of the investment business rather than specializing in any one area (here); some GS bankers are getting pay cuts (here) ; and, finally, Goldman has had to forego $20 million in fees because of conflicts of interest in the Kinder Morgan deal (here and here).
And, of course, there are the myriad of ongoing lawsuits that Goldman is facing as a "cost of doing business" (here, here, here, here, etc.).
We can only hope that some of the stress that Goldman caused others will eventually land squarely on Goldman. We need some real justice for all the frauds committed by Goldman Sachs.
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