tag:blogger.com,1999:blog-5724181159639068489.post4819346597270147636..comments2023-11-05T05:09:14.089-05:00Comments on Goldman Sachs: Information, Comments, Opinions and Facts: The Chimeric Nature of Goldman SachsRobertMhttp://www.blogger.com/profile/03960912417983904202noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-5724181159639068489.post-35392843375177653972011-04-21T10:54:31.238-04:002011-04-21T10:54:31.238-04:00Government’s Place in the Market
A Q&A with El...Government’s Place in the Market<br />A Q&A with Eliot Spitzer<br /><br />DJ: In the book you claim that only government can ensure the integrity, transparency, and fair dealing of markets. But you also offer many examples of how government has failed to ensure these things in recent years. A libertarian might conclude from your examples that government can’t ensure these things. How would you respond to this reading of the evidence?<br /><br />ES: I explain that government has an obligation to ensure integrity, transparency, and fair dealing. That does not mean it will do so at all times. Indeed, the record of the past several years indicates that when enforcement agencies lose their spine or purpose, or are taken captive by the industry they regulate, bad things happen. We have seen all of this with great frequency in the past cycle of abuses. But surely, nobody in the private sector has stepped in to fill the void left by the need for integrity in the market, and my effort is designed to explain how important it is that we not lose sight of the critical role that government can play in this space.<br /><br />DJ: How do you galvanize public support for your proposals when the recent results have been so demoralizing?<br /><br />ES: Probably the movie Inside Job will do more to galvanize public support for a more vigorous effort than anything I can do. Maybe if a few people look at the historical record and realize that prosecutions followed by a coherent regime of rules brought us 50 years of relative banking tranquility—after the Great Depression—the public will support some form of redefinition of the banking structure.<br /><br />http://www.bostonreview.net/BR36.3/eliot_spitzer_financial_regulation.phpAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5724181159639068489.post-83223106101571151502011-04-20T14:09:36.667-04:002011-04-20T14:09:36.667-04:00Short on honest behavior....
Senate Investigatio...Short on honest behavior....<br /><br /><br />Senate Investigations Subcommittee Releases Levin-Coburn Report On the Financial Crisis <br /><br />Investment Banks and Structured Finance. Investment banks reviewed by the Subcommittee assembled and sold billions of dollars in mortgage-related investments that flooded financial markets with high-risk assets. They charged $1 to $8 million in fees to construct, underwrite, and market a mortgage-backed security, and $5 to $10 million per CDO. New documents detail how Deutsche Bank helped assembled a $1.1 billion CDO known as Gemstone 7, stood by as it was filled it with low-quality assets that its top CDO trader referred to as “crap” and “pigs,” and rushed to sell it “before the market falls off a cliff.” Deutsche Bank lost $4.5 billion when the mortgage market collapsed, but would have lost even more if it had not cut its losses by selling CDOs like Gemstone. When Goldman Sachs realized the mortgage market was in decline, it took actions to profit from that decline at the expense of its clients. New documents detail how, in 2007, Goldman’s Structured Products Group twice amassed and profited from large net short positions in mortgage related securities. At the same time the firm was betting against the mortgage market as a whole, Goldman assembled and aggressively marketed to its clients poor quality CDOs that it actively bet against by taking large short positions in those transactions. New documents and information detail how Goldman recommended four CDOs, Hudson, Anderson, Timberwolf, and Abacus, to its clients without fully disclosing key information about those products, Goldman’s own market views, or its adverse economic interests. For example, in Hudson, Goldman told investors that its interests were “aligned” with theirs when, in fact, Goldman held 100% of the short side of the CDO and had adverse interests to the investors, and described Hudson’s assets were “sourced from the Street,” when in fact, Goldman had selected and priced the assets without any third party involvement. New documents also reveal that, at one point in May 2007, Goldman Sachs unsuccessfully tried to execute a “short squeeze” in the mortgage market so that Goldman could scoop up short positions at artificially depressed prices and profit as the mortgage market declined. <br /><br />http://levin.senate.gov/newsroom/release.cfm?id=332491Anonymousnoreply@blogger.com