NOT a Goldman Post

It's a slow Saturday so I thought I'd post his informative and funny lecture on Google Video. Here's a synopsis:

THE GLOBAL FINANCIAL CRISIS — Michel Chossudovsky Jan 2009, Montreal
LECTURE: THE GLOBAL FINANCIAL CRISIS — The Great Depression of the 21st Century with Michel Chossudovsky Causes and consequences of the financial meltdown; The speculative onslaught; Financial fraud and the "bank bailouts"; Bankruptcy of the real economy; Impacts on employment, wages and social services; Towards a spiralling public debt; The economic crisis and its relationship to the Middle East war; The centralization of corporate power; The concentration of wealth; The globalization of poverty. What are the policy alternatives?

Goldman's Golden Box

They call HFT "black box" trading but I think "golden box" is more appropriate.

Here's Simon Johnson at The Baseline Scenario:

What happened to the global economy and what we can do about it
Is The SEC Still Working For Wall Street?

The Securities and Exchange Commission (SEC) under Mary Shapiro is trying to escape a difficult legacy – over the past two decades, the once proud agency was effectively captured by the very Wall Street firms it was supposed to regulate.

The SEC’s case against Goldman Sachs may mark a return to a more effective role; certainly bringing a case against Goldman took some guts. But it is entirely possible that the Goldman matter is a one off that lacks broader implications. And in this context the SEC’s handling of concerns about “high frequency trading” (HFT) – following the May 6 “flash crash”, when the stock market essentially shut down or rebooted for 20 minutes – is most disconcerting. (See yesterday’s speech by Senator Ted Kaufman on this exact issue; short summary.)

Regulatory capture begins when the regulator starts to see the world only through the eyes of the regulated. Rather than taking on board views that are critical of existing arrangements, tame regulators talk only to proponents of the status quo (or people who want even more deregulation). This seems to be what is happening with regard to HFT.

HFT is a big deal – perhaps as much as 70 percent of all stock trades are now done by “black box” computer algorithms (i.e., no one really knows how these work), and there are major open questions whether this operates in a way that is fair for small investors.

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Read the rest here

Goldman's Wall Street War

The latest from Taibbi:

Wall Street's War
Congress looked serious about finance reform – until America's biggest banks unleashed an army of 2,000 paid lobbyists

It's early May in Washington, and something very weird is in the air. As Chris Dodd, Harry Reid and the rest of the compulsive dealmakers in the Senate barrel toward the finish line of the Restoring American Financial Stability Act – the massive, year-in-the-making effort to clean up the Wall Street crime swamp – word starts to spread on Capitol Hill that somebody forgot to kill the important reforms in the bill. As of the first week in May, the legislation still contains aggressive measures that could cost once-
indomitable behemoths like Goldman Sachs and JP Morgan Chase tens of billions of dollars. Somehow, the bill has escaped the usual Senate-whorehouse orgy of mutual back-scratching, fine-print compromises and freeway-wide loopholes that screw any chance of meaningful change.

The real shocker is a thing known among Senate insiders as "716." This section of an amendment would force America's banking giants to either forgo their access to the public teat they receive through the Federal Reserve's discount window, or give up the insanely risky, casino-style bets they've been making on derivatives. That means no more pawning off predatory interest-rate swaps on suckers in Greece, no more gathering balls of subprime shit into incomprehensible debt deals, no more getting idiot bookies like AIG to wrap the crappy mortgages in phony insurance. In short, 716 would take a chain saw to one of Wall Street's most lucrative profit centers: Five of America's biggest banks (Goldman, JP Morgan, Bank of America, Morgan Stanley and Citigroup) raked in some $30 billion in over-the-counter derivatives last year. By some estimates, more than half of JP Morgan's trading revenue between 2006 and 2008 came from such derivatives. If 716 goes through, it would be a veritable Hiroshima to the era of greed.

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Read the rest here

Friday Funnies

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Watch Oh Canada The Movie for free here
(Psst....the banking system in Canada is just as bad as it is here)

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Check out the post where this came from!

--Click to enlarge--

Can Goldman Wipe Out The Economy?

Forget what happens to them. The trillion dollar question is-  can one of their mistakes crash the economy? You would think that ending too-big-to-fail would be a national security matter! Something to think about:

Are Goldman Sachs and the Megabanks Able to Wipe out an Entire Economy with a Keystroke?
How artificial intelligence and robotrading pose a growing threat to the global marketplace.

"We have found no evidence that these events were triggered by 'fat finger' errors, computer hacking, or terrorist activity, although we cannot completely rule out these possibilities," a recent Securities Exchange Commission (SEC) report on the so-called May 6 "Flash Crash" that wiped out a cool trillion in a mere half-hour weakly admitted. "Much work is needed to determine all of the causes of the market disruption."

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"It was actually amazing watching it all happen," Gina Sanchez, senior analyst for Roubini Global Economics, told AlterNet by phone. "We went from risk-aversion to risk-seeking in the matter of an hour. But it doesn't bother me so much that the algorithms went after the bids. They were doing what they're supposed to do, which is seek out arbitrage opportunities. What concerned me was how the bids got out there in the first place."

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Read the rest here

Goldman Sachs' Morality Play

I was watching the movie "Plunder" a couple weeks ago and it was surprising how little the plutocrats realized the damage they've caused. I don't recall seeing a single person amongst them that thought their way of life was in any way immoral. Every single one of them think their hands are clean. It's a lot like how BP refuses to acknowledge the huge amount of damage their oil river is causing. I guess it shouldn't come as a surprise that Goldman feels the same.

Goldman Sachs' Morality Play

First Goldman Sachs, then Morgan Stanley, and now several other major investment banks--including J.P. Morgan Chase, Citigroup, UBS AG and Deutsche Bank AG--are reportedly under criminal investigation for their role in packaging and marketing mortgage-related derivatives. Wall Street awaits the prosecutorial hammer's probable drop.

Suspicions, thus far, seem to be that banks deceived investors into betting on debt bundles destined, supposedly, to fail. If true, the practices were arguably bad business or at least inartful client relations. Whether they rose to the level of criminal conduct is another question entirely.

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But when firms are compelled to ally with the government, the tables turn. For prosecutors, a guilty plea from one or more employees--which, of course, leaves "reasonable doubt" out of the equation--is the goal. The pressure point, for financial institutions, is criminal indictment. Forget conviction; charges alone will destroy most financial firms, a reality, bolstered by recent history, that's not lost on Goldman, Morgan or any investment bank in the hot seat. Truth has surprisingly little to do with it.

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Read the rest here

US Probes Goldman's Timberwolf Deal

HuffPo Exclusive:

US Probes Goldman's Timberwolf Deal, Alleged Victim Says 'Whole Thing Was Fraudulent Concoction'

The federal prosecutors investigating Goldman Sachs are focusing on Timberwolf, the infamous "shitty deal" repeatedly cited in a tense Senate hearing last month, according to people who have been contacted by the Manhattan U.S. Attorney's office.

The probe raises the possibility of criminal charges against the storied Wall Street firm, which was charged in April by the U.S. Securities and Exchange Commission with civil fraud for allegedly misleading investors about another subprime mortgage-related security called Abacus.

Investigators from the U.S. Attorney's office have reached out to individuals involved in the deal, including David Mapley, the former independent director of an Australian hedge fund who claims that the firm collapsed shortly after Goldman sold it $100 million of securities in Timberwolf, a $1 billion collateralized debt obligation.

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Read the rest here

The Goldman Strategy

This could be called 'The Goldman Strategy'. A strategy to stifle all real reforms in favor of the banking system's stranglehold on our economy and way of life. We've already had numerous calls to cut back much needed services and the certainty that there will be calls for Greek style austerity measures here in the US grows daily. It is absolutely pathetic that our current Congress can't muster up the guts to stand up to the people destroying our economy and nation for their personal, private gain.

The Last Hold Out: Senator Blanche Lincoln Against 13 Bankers

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Legal authority against market manipulation would be greatly strengthened and there would be more protection for whistleblowers. And the kind of transaction that Goldman entered into with Greece – a swap transaction with the goal of reducing measured debt levels, effectively deceiving current and future investors, would become more clearly illegal. All of this is entirely reasonable and responsible – and completely opposed by the most powerful people on Wall Street.

Of course, most of the anti-Lincoln fire has been directed against the idea that “swaps desks” would be “pushed out” to subsidiaries – i.e., the big broker-dealers could still engage in these transactions, but they would need to hold a great deal more capital against their exposures, thus making the activities significantly less profitable.

It is striking that while Treasury argues that increasing capital is the way to go with regard to financial reform, they are adamantly opposed to what would amount to more reasonable capital levels at the heart of the derivatives business.

This is beyond disappointing.

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Read the rest here

BP or Goldman Sachs - Which is Worse?

This story is about stocks but I love the title so here it is:

BP or Goldman Sachs - Which Company is Worse?
Who's really worse, British Petroleum (BP) or Goldman Sachs Group, Inc. (GS)? Consumers have plenty of reasons to be down on both companies right now. Energy giant BP is up to its elbows in oil as a deepwater well on the ocean floor continues to spew oil over a month after the initial failure, and Goldman is currently under investigation for allegedly peddling investments while at the same time profiting from those investments' failures.

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Read the rest here

Goldman and their ilk

You gotta LOVE Mad Max!

Goldman & Their Ilk, Undeclared Enemies of the United States

10 Most Corrupt US Capitalists

Looks like our old pals at Goldman made another top ten list. It's a short and funny article from The Big Picture you should take the time to read.

10 Most Corrupt US Capitalists

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10. Goldman Sachs:

-Joshua Bolton, chief of staff for George W. Bush, was a Goldman man
-Current New York Fed President William Dudley is a Goldman man
-Current Commodity Futures Trading Commission Chairman Gary Gensler has been a responsible regulator under Obama, but he was a deregulatory hawk during the Clinton years, and worked at Goldman for nearly two decades before that.
-A top aide to Timothy Geithner, Gene Sperling, is a Goldman man
-Current Treasury Undersecretary Robert Hormats is a Goldman man
-Current Treasury Chief of Staff Mark Patterson is a former Goldman lobbyist
-Former SEC Chairman Arthur Levitt is now a Goldman adviser
-Neel Kashkari, Henry Paulson’s deputy on TARP, was a Goldman man
-COO of the SEC Enforcement Division Adam Storch is a Goldman man
-Former Sen. John Corzine, D-N.J., was Goldman’s CEO before Henry Paulson
-Rep. Jim Himes, D-Conn., was a Goldman Vice President before he ran for Congress
-Former House Minority Leader Dick Gephardt, D-Mo., now lobbies for Goldman

Read the full story here

Ask Goldman Sachs to Give it Back!

Now here's some change I could believe in (not that Goldman would ever give a single penny back....money is their God).

Ask Goldman Sachs to Give it Back!

Sometimes when you explain to people that some of the most complicated financial transactions in the country were just side bets, they don't really believe you. They think it's an oversimplification. We couldn't have wrecked the global economy because some people made side bets. These are sophisticated bankers with sophisticated financial instruments, so it must be more complicated than that. It isn't. They bet one another, whoever lost got paid by the American taxpayer.

To be fair, sometimes they had the money to pay off one another without government bailouts, but not often. That's because they were largely betting with money they never had. AIG is the perfect example. Their executives made hundreds of millions of dollars in bonuses from the early wins in these bets, but then stuck the taxpayers with a $182 billion bill when they lost.

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So, we're now starting a campaign to get our money back. I'd love to get the whole $62 billion paid out to the AIG counterparties (let alone the whole $182 billion we've sunk into AIG all together). But, we're going to start out nice and modest. We'd like to have Goldman Sachs pay us our $12.9 billion back that they got from AIG.

That's all taxpayer money. All of it went to Goldman for some silly bet they made with a buffoonish company that never had the money in the first place. As "sophisticated investors" they should have realized that AIG never really had the cash to pay them.

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Read the rest here

Goldman Sachs Revolving Door Update

Here's the latest update on the Goldman/Government/Goldman/Government revolving door from HuffPo.

Goldman Sachs Revolving Door
How times flies! Almost a year ago, we reported on Goldman Sachs's close ties to the government, highlighting the firm's long tradition of executives going to work in public service (as well as the reverse), noting that the links raised questions about potential conflicts of interest for a firm that benefited from a multi-billion-dollar bailout.

Since then, the scrutiny of Goldman has risen to a whole new level, with the SEC alleging that the firm committed securities fraud, federal prosecutors probing its subprime-mortgage-related activites and lawmakers grilling the firm's top executives.

And the revolving door continues to turn -- plenty of former Goldman staffers now work at a range of agencies from the SEC to the Treasury Department. To win friends and influence people in Washington -- and sway the pending financial reform legislation -- Goldman fields a deep bench of lobbyists with plenty of experience in politics, as noted by CBS News and the HuffPost Investigative Fund.

Check out our slideshow of Goldman's Revolving Door: The New Edition:

HFT & Goldman Sachs

This clip drives me crazy. I could suppose this woman is just stupid but I don't think she is. I think she's simply a liar and a shill. "How dare you accuse us of being unethical?"
No ma'am, how dare you!



Just in case you missed it, here's how it works:



That's right....he says "I apologize to the planet". Still think it's moral or even smart? You see, in her mind, the little guy "can't compete because they don't have the proper skills". Is that really your defense to market manipulation? Really? These financial elitists are really full of themselves, aren't they? If you're not in their club, with their unfair access, well...tooo bad! There are so many things wrong with her argument it's astounding. But I guess if your book sales depend on not understanding or caring then.....well...whatever.

Goldman is not going to like this

This is making the rounds pretty quickly. I saw it on Ratigan. Something tells me Goldman is not going to like this.

The best financial reform? Let the bankers fail

The trouble with Wall Street isn't that too many bankers get rich in the booms. The trouble, rather, is that too few get poor -- really, suitably poor -- in the busts. To the titans of finance go the upside. To we, the people, nowadays, goes the downside. How much better it would be if the bankers took the losses just as they do the profits.

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Happily, there's a ready-made and time-tested solution. Let the senior financiers keep their salaries and bonuses, and let them do with their banks what they will. If, however, their bank fails, let the bankers themselves fail. Let the value of their houses, cars, yachts, paintings, etc. be assigned to the firm's creditors.

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Of course, there are only so many mansions, Bugattis and Matisses to go around. And many, many such treasures would be needed to make the taxpayers whole for the serial failures of 2007-09. Then again, under my proposed reform not more than a few high-end sheriff's auctions would probably ever take place. The plausible threat of personal bankruptcy would suffice to focus the minds of American financiers on safety and soundness as they have not been focused for years.

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... In Brazil -- which learned a thing or two about frenzied finance during its many bouts with hyperinflation -- bank directors, senior bank officers and controlling bank stockholders know that they are personally responsible for the solvency of the institution with which they are associated. Let it fail, and their net worths are frozen for the duration of often-lengthy court proceedings. If worse comes to worse, the responsible and accountable parties can lose their all.

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Until 1999, Goldman Sachs was a partnership, with the general partners bearing general and unlimited liability for the firm's debts. Today, Goldman -- like the vast majority of American financial institutions -- is a corporation. Its stockholders are liable only for what they invested, no more. And while there are plenty of sleepless nights, the constructive fear of financial oblivion is, for the senior executives, an all-too-distant nightmare.

The job before Congress is to bring the fear of God back to Wall Street. Not to stifle enterprise but quite the opposite: to restore real capitalism. By all means, let the bankers savor the sweets of their success. But let them, and their stockholders, pay dearly for their failures. Fair's fair.

Read the rest here

Goldman: More fingers in the pie

The title says it all:

The Unbelievably Rampant Corruption On Wall Street
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*Goldman Sachs is getting most of the press about fraud in the mortgage-backed securities market these days.  Of course Goldman is strenuously denying that it "bet against its clients" when it changed its position in the housing market in 2007.  But we all know the truth at this point.  The truth is that Goldman Sachs clearly bet against its clients and was involved in a whole lot of things that were even worse than that.  Many did not think the U.S. government would dare go after Goldman, but that is what we are starting to see.  U.S. federal prosecutors have opened a criminal investigation into whether Goldman Sachs or its employees committed securities fraud in connection with its trading of mortgage-backed securities, and it will be very interesting to see if anything comes of that investigation.

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Read the rest here

Goldman Sachs & the Oil Volcano

A commenter over at Max Keiser's site posted a link to this article pointing out something I was totally unaware of. Is there anything Goldman doesn't have its blood funnel jammed into?

Media ignores Goldman Sachs' ties to Corexit dispersant

In a recent New York Times’ article “Less Toxic Dispersants Lose Out in BP Oil Spill Cleanup”, journalist Paula Quinlan questions why BP is using the 100 % toxic, 54 percent effective dispersant Corexit to clean up the oil when twelve other dispersants proved more effective in EPA testing.

BP spokesman Jon Pack defended the use of Corexit, which he said was decided in consultation with EPA. He called Corexit "pretty effective" and said the product had been "rigorously tested."

"I'm not sure about the others," Pack said. "This has been used by a number of major companies as an effective, low-toxicity dispersant."

BP is not considering or testing other dispersants because the company's attention is focused on plugging the leak and otherwise containing the spill, Pack said. "That has to be our primary focus right now," he said.

Nalco spokesman Charlie Pajor said the decision on what to use was out of his company's hands. He also declined to comment on EPA comparison tests, saying only that lab conditions cannot necessarily replicate those in the field. "The decision about what's used is made by others -- not by us," he said.

Quinlan only looks at part of the picture. She associates BP’s investment in Nalco and oil industry representation on the board as the main reasons that Corexit was used instead of Dispirsit, which EPA testing shows to be twice as effective and a third less toxic. Yes, BP is hedging its losses with the profit it will make with its investment in Nalco, but who else benefits?

Follow the money...and the money goes to Goldman Sachs and friends. Instead, Quinlan (or her editor) goes after Exxon.

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2003

USFilter and Ondeo Nalco enter into a strategic partnership providing equipment, chemicals and service to industrial customers.

The Blackstone Group, Apollo Management L. P. and Goldman Sachs Capital Partners buy Ondeo Nalco.

Nalco Company, a recognized symbol of strength around the world, unveils new logo.

Never mind item three, the logo change executives consider one of the three most important events in Nalco’s 2003 history, hence its prominence on the Nalco corporate history webpage. Look at item number two.

If for no other reason that Goldman Sachs is newsworthy, I think that their $4.3 billion purchase of Nalco in 2003 would be worth mentioning, especially in light of their short trade on TransOcean. The shorts are another missing item in the business section of The Times, as is any information on Goldman’s role in the 9-11 put options on American and United for that matter. “All the lies that are fit to print...” on their banner would be more apropos. Seems someone is treating the demon children at GS with kid gloves.

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As for Goldman Sachs, I find it interesting that they have such a large stake in Nalco. It might be just another coincidence, like their short on TransOcean. I also question why the article singles out Exxon, which helped found the company that was bought out by Goldman Sachs, Apollo and the Blackstone Group. Why are the profits that Goldman Sachs is receiving from the sale of these toxic dispersants not part of the article? How much will GS lose if BP stops using Corexit? Is this not more relevant than Exxon?

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Read the rest here

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Maybe Letterman's joke wasn't so far-fetched.

Goldman’s Dueling Goals

Here's more from that lengthy and excellent article from GRETCHEN MORGENSON and LOUISE STORY at the NY Times. Just about everything you would want to know about them is included. All the signs are pointing to another market crash soon. Don't say you weren't warned.

Clients Worried About Goldman’s Dueling Goals

As the housing crisis mounted in early 2007, Goldman Sachs was busy selling risky, mortgage-related securities issued by its longtime client, Washington Mutual, a major bank based in Seattle. Although Goldman had decided months earlier that the mortgage market was headed for a fall, it continued to sell the WaMu securities to investors. While Goldman put its imprimatur on that offering, traders in the same Goldman unit were not so sanguine about WaMu’s prospects: they were betting that the value of WaMu’s stock and other securities would decline.

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Goldman’s access to client information can also give its traders an advantage that many of the firm’s competitors lack. And because betting against a company’s shares or its debt can create an atmosphere of doubt about a company’s financial standing, Goldman because of its size and its position in the market can help make the success of some of its wagers faits accomplis. Lucas van Praag, a Goldman spokesman, declined to say how much the firm earned on its bets against WaMu’s stock. He said his firm lost money on its bets against the other WaMu securities. In an e-mail reply to questions for this article, he said there was nothing improper about Goldman’s wagers against any of its clients. "Shorting stock or buying credit protection in order to manage exposures are typical tools to help a firm reduce its risk."

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During the early stages of the mortgage crisis, Goldman seems to have unnerved WaMu’s former chief executive, Kerry K. Killinger, according to an e-mail message that Congressional investigators released. In that message, Mr. Killinger noted that he had avoided retaining Goldman’s investment bankers in the fall of 2007 because he was concerned about how the firm would use knowledge it gleaned from that relationship. He pointed out that Goldman was "shorting mortgages big time" even while it had been advising Countrywide, a major mortgage lender. "I don’t trust Goldy on this," he wrote. "They are smart, but this is swimming with the sharks."

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CONFLICT OF PRINCIPLES
As Trading Arm Grows, a Clash of Purpose

When new hires begin working at Goldman, they are told to follow 14 principles that outline the firm’s best practices. "Our clients’ interests always come first" is principle No. 1. The 14th principle is: "Integrity and honesty are at the heart of our business." But some former insiders, who requested anonymity because of concerns about retribution from the firm, say Goldman has a 15th, unwritten principle that employees openly discuss. It urges Goldman workers to embrace conflicts and argues that they are evidence of a healthy tension between the firm and its customers. If you are not embracing conflicts, the argument holds, you are not being aggressive enough in generating business.

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CREATIVE DESTRUCTION
Fostering a Market Then Abandoning It

Even now, two years after a dispute with Goldman, C. Talbot Heppenstall Jr. gets miffed talking about the firm. As treasurer at the University of Pittsburgh Medical Center, a leading nonprofit health care institution, Mr. Heppenstall had once been pleased with Goldman’s work on the enterprise’s behalf. Beginning in 2002, Goldman had advised officials at U.P.M.C. to raise funds by issuing auction-rate securities. Auction-rate securities are stock or debt instruments with interest rates that reset regularly (usually weekly) in auctions overseen by the brokerage firms that sell them. Municipalities, student loan companies, mutual funds, hospitals and museums all used the securities to raise operating funds.

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Stay the course, Goldman advised U.P.M.C. in a letter, a copy of which Mr. Heppenstall read to a reporter.

On Feb. 12, less than a month after that letter, Goldman withdrew from the market — the first Wall Street firm to do so, according to a Federal Reserve report. Other firms quickly followed suit. With the market in disarray, the interest rates that U.P.M.C. and other issuers had to pay investors skyrocketed.

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MUNI MANAGEMENT
Brokering State Debt and Advising Against It

A state assemblyman in New Jersey named Gary S. Schaer also has had unsettling encounters with Goldman. Mr. Schaer, who heads the New Jersey Assembly’s Financial Institutions and Insurance Committee, said he became wary in 2008 when he learned that Goldman, one of the state’s main investment bankers, was encouraging speculators to bet against New Jersey’s debt in the derivatives market.

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Over the years, it has played the role of adviser and fund-raiser for a diverse range of countries, while occasionally drawing criticism for simultaneously betting against the ability of some countries, like Russia, to repay their debts.

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Read the whole thing here

Goldman Sachs: The BP of finance

JR said...
Well, the following article (and its many links) pretty much follow Goldman Sachs through its many iterations over the years. Goldman invariably leaves behind disaster and bankruptcies. It is truly astounding that all their machinations are considered legal (though unethical)!!


And it's true. Goldman leaves in its wake a trail of disaster and bankruptcies just as sure as BP leaves behind massive dead zones. Think Greece. Short sales are now used as financial weapons, to manipulate markets and destroy countries. I seem to recall from history that worldwide domination is not a good thing. It always ends in disaster. It looks like Germany is going to be the first country to say enough is enough. When will America?

As the housing crisis mounted in early 2007, Goldman Sachs was busy selling risky, mortgage-related securities issued by its longtime client, Washington Mutual, a major bank based in Seattle.
Although Goldman had decided months earlier that the mortgage market was headed for a fall, it continued to sell the WaMu securities to investors. While Goldman put its imprimatur on that offering, traders in the same Goldman unit were not so sanguine about WaMu’s prospects: they were betting that the value of WaMu’s stock and other securities would decline.
Goldman’s wager against its customer’s stock — a position known as a “short” — was large enough that it would have generated at least $10 million in profits if WaMu collapsed, according to documents recently released by Congress. And by mid-May, Goldman’s bet against other WaMu securities had made Goldman $2.5 million, the documents show.
WaMu eventually did collapse under the weight of souring mortgage loans; federal regulators seized it in September 2008, making it the biggest bank failure in American history.

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Read the rest here

SEC ignores Goldman's SLP advantage

Yet another advantage Goldman Sachs has given itself to extract wealth from the middle class:

SEC Report On May 6 Meltdown Discusses HFT, Has Not One Mention Of The NYSE's "Supplementary Liquidity Providers"

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One thing that there is no mention of anywhere in the report, is the NYSE contraption known as Supplementary Liquidity Provider, a program created to give Goldman dominance over the DMM-parallel liquidity rebate system at the NYSE. One would think that the SEC would be aware of this program that was supposed to expire in early 2009, yet continues to be extended and provides Goldman and Getco with, arguably, unprecedented forward-looking information on order flow.

Read the rest here

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Anybody remember the game show "Concentration"? As contestants answered questions correctly, another piece of the puzzle was revealed. That's what this story reminds me of- another piece of the puzzle of unjust enrichment Goldman has given itself is revealed.

Goldman now wants your 401k

Ha! Goldman wants to do to 401k accounts what they've done to clients in the previous post- Goldman's Trading Advice: HORRIBLE!. Would you trust Goldman with your life's savings?

Goldman Sachs Seeks Bigger Share of 401(k) Accounts



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Related post here "Nations Over Banks (Who Serve Only Themselves)"

Worse than Goldman Sachs

I don't agree with Ron Paul on a lot of social issues but he hits this right out of the park when he was asked about Goldman. Ellen Brown's book "Web of Debt" lays it all out in clear language on what is wrong with our financial system. It is a must read if you want to understand where we are and how we got there.

Goldman's Trading Advice: HORRIBLE!

From Business Insider:

Goldman's Trading Advice To Clients Has Been HORRIBLE This Year

Your latest moment of Goldmanfreude courtesy of Bloomberg:

Goldman Sachs Group Inc. racked up trading profits for itself every day last quarter. Clients who followed the firm’s investment advice fared far worse.

Seven of the investment bank’s nine “recommended top trades for 2010” have been money losers for investors who adopted the New York-based firm’s advice, according to data compiled by Bloomberg from a Goldman Sachs research note sent yesterday. Clients who used the tips lost 14 percent buying the Polish zloty versus the Japanese yen, 9.4 percent buying Chinese stocks in Hong Kong and 9.8 percent trading the British pound against the New Zealand dollar.

The comparison between Goldman's own trading profits (which have been perfect) and its client advice is amusing, but... it's a little unfair.

Goldman isn't taking directional bets on Chinese stocks on the zloty. And it can't tell its clients to become a bank, borrow from the Fed and lend long.

Goldman Sachs: Counterfeit Value

From OfTwoMinds.com, "one of the very best (and most engaging) summaries of our broken financial system on the entire Web."

Unhinged: When Concrete Reality No Longer Matters to the Market (and What to Do About It)
by Zeus Yiamouyiannis, Ph.D.
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Exhibit 3: The Double Whammy Scam: Profiting from Designed Failure and Placing Bets Backed by Counterfeit Value
A recent government suit alleges that Goldman Sachs colluded with a billionaire short seller, John Paulson, to defraud investors and “construct a package of mortgage linked derivatives designed to blow up” so Paulson could make a fortune.
Continuing from AP reporter, Bernard Condon’s, article in the Washington Post, (Does Goldman Case Tarnish Cassandras of the Crash? April 21, 2010):

So-called short sellers, like Paulson, profit when stocks, mortgages or other assets they bet against lose value. In other words, the game of guessing which way prices would go was allegedly rigged in this case. That sounds bad enough. But some Wall Street veterans say the real tarnish on our erstwhile housing heroes is the package itself - regardless of whether it was designed to fail. By just linking to mortgages but not actually containing any, the Paulson package and others marketed by banks upped bets on housing to more than even the mortgages in existence, making the overall losses much bigger now that boom has turned to bust. "Normally short sellers add rationality to a runaway marketplace," says Charles Smith, who oversees $1 billion at Fort Pitt Capital Group. "But in this case they were adding rocket fuel to the fire." The fuel here is devilishly difficult to understand. Called synthetic collateralized debt obligations (CDOs), these packages contained a series of wagers on whether thousands of homeowners would continue to pay their loans.
The key thing to grasp about them, and the part that explains how they magnified housing losses, is that they don't actually own any mortgages and so aren't limited by the number of such loans. Instead, these investments merely make "reference" to real mortgages to determine which side of the wager wins. (my emphases)

Did you catch that? This language confirms the divorce of concrete reality and the market: 1) “Linking to” mortgages but not containing any, 2) not actually owning any mortgages but being able to bet on them, 3) making “reference” to real mortgages to determine which side of the wager wins, 4) wagering bets not “limited” by material assets. The last point could theoretically involve an infinite number of bets and infinite returns on those bets.
This is well analyzed except for one point: The core of this dealing is deceptively simple, even if the instruments themselves are deliberately complex. Industry bettors simply concoct counterfeit value by leveraging their own abstract, self-assigned-value assets between themselves in a ping-pong ascending scale beyond the value of the underlying concrete assets.
The bet has both replaced and exceeded the thing it refers to. There is no “there” there. Real money is siphoned in fees from the “marks,” the pension funds who are told they are investing in highly rated, stable instruments, and then the U.S. taxpayer is asked to take up trillions of dollars of real debt in order to cover a counterfeit, undisclosed bidding/betting war.
Should I be able to make a “reference” to the Bank of England, or food, or oil, simply collect billions of real money if I bet right, and lose my never-there-to-begin-with counterfeit wealth if I don’t?
Who is the “house” in this casino in which someone can wage a series of bets on assets that actually exceed the value of the assets themselves? It’s always going to be the American taxpayer, the public, bailing out an unregulated, morally and financially reprehensible private market. Usually when someone says, “You really hate America,” it’s a disgruntled conservative with a chip on his shoulder.
Well, these profiteers actually make huge sums of money by destroying America, robbing it blind, and then sticking the American citizen with the check for any downside bets. Now let’s see why very little is currently being done to correct this. 

.....

Read the rest here

Goldman Sachs: A moral failing

An interview with Lia Petridis Maiello:

.....

Joseph Stiglitz: The problem on Wall Street is that we had bought into the idea that
money is everything, and that the metric of whether you are doing well for the economy is how much money you were making for yourself. To me there were two very serious moral failings. One is that so much energy went into exploiting the poorest Americans; selling them houses they knew were beyond their ability to pay, with mortgages that were exploitive. There were people who called themselves mortgage brokers supposedly looking for the best mortgage, but in fact were looking for the worst mortgage. The whole hosts of mortgages that are designed to maximize fees basically rob the poorest people of all their life savings. The irony was that the financial markets were hoisted on their own petard, as I point out in my book. That is to me, one of the most serious moral failings on the part of the financial markets. The second is while Bernie Madoff represented a pyramid scheme engaging in illegal activity, much of what the financial markets were doing was perhaps legal, but clearly unethical, or borderline. That the financial markets did not seem to see much distinction is a severe criticism. A good example is what Goldman Sachs did; how they sold products that they knew were bad, so bad that they were actually selling them short, betting on the fact that they would lose money. The whole debate in their mind is whether what they did was legal or not. The unanimity that it was immoral that they did not disclose to the buyers that they thought these were so crappy that they were going to lose money on them and the fact that they see nothing wrong with that suggests that they live in a parallel universe, a different world, a different moral compass than the rest of society.

....

Read the rest here

Why the SEC Sued Goldman Sachs

Why the SEC Decided to Sue Goldman Sachs

As you might imagine, the ongoing revelations about the SEC (Bernie Madoff, Allen Stanford, and porn, among others) has made things somewhat awkward for the agency's employees. Children jeer at them on the street. Priests sigh in disgust when they confess the name of their employer through the grate. Their local deli guys are like, "How's it hangin', ladyboy?" when they stop in to buy cigarettes. Even old ladies give them a hard time, according to this morning's Journal.

One ex-SEC lawyer was asked at his mother's birthday party: "How does it make you feel that your agency is absolutely incompetent?"

.....

Read the rest here

As funny as this story is, I think it is a distraction and a farce because there IS fraud and crimes WERE committed. The SEC is filled with Goldmanites and this lawsuit will do nothing but create the appearance that something is being done to stop the corruption when you and I both know it won't do a damn thing until every single incumbent is voted out and replaced with honest Congressman who put the people of the USA above corporations and profits and we have a president that kicks all these revolving door Goldmanites out of government positions and replaces them with people that care about our country like Bill Black, Elizabeth Warren and Ellen Brown.

Will Goldman pay for its disaster?

From the Automatic Earth:

Katie Bar The Door

Ilargi: Some things are more equal than others. Always have been. Just maybe not always the same things. Which makes me think of Marie-Antoinette fleeing the cake-eaters in her stagecoach. It also makes me think of this:

If this well keeps leaking for three or four months, it's Katie bar the door

[Stuart] Smith, [a lawyer in New Orleans, who's suing BP] on behalf of fishermen, the Louisiana Environmental Action Network and four large hotels, alleges that BP and others were "grossly negligent" in allowing the blowout to occur. [..] Because the spill has been lingering offshore, the plaintiffs who can claim damages so far are mostly out-of-work fishermen and tourist resorts that are getting cancellations. As rich as BP is, "if this well keeps leaking for three or four months, it's Katie bar the door," Smith said. "I don't think they have enough money."


BP has been shown off late to be a crummy crappy sort of organization, which -with the full faith and credit of the UK and US government- has cut all corners it could find, and then made some more to cut. And now BP has been exposed, and people like Mr. Smith are dead-set to make BP pay, while the company itself is frantically trying to mitigaste its losses through lawyers it couldn't even really afford anymore if it were to pay full damages to all parties.

Which in turn makes my warped brain wonder what the difference is between BP and, say, Goldman Sachs. Environmental disaster, financial disaster, what’s the difference? Is it just that the latter is harder to prove? I don’t know, for one thing you’d think the reward, hence the incentive, would be greater too. Yes, BP has destroyed the livelihood of fishermen and "hospitality workers". So they should be sued for that. But the Wall Street cabal has destroyed the entire economies of entire countries, as well as countless building blocks that formed the foundation of these economies. Towns, pension funds, you name it. No matter how bad Deepwater Horizon will turn out to be, the Vampire Squid disaster will be many times worse, even if it takes longer for it to trickle down to people's conscious brains.

So why is no-one, 2-3 years after the economy started collapsing, suing the Squid? Why does it instead receive ever more funds from the very people it financially strangled? Isn't that the oddest thing, if you think about it? Of course, the fact that there's trillions of public funds now stashed away in Wall Street firms, without which they'd no longer exist, complicates the matter enormously. As a lawyer, you could potentially win huge settlements for your clients, but they’d sort of end up paying for them out of their own pockets.

.....

Read the rest here

Goldman Sachs is embarrassed

Senator Jon Tester has uploaded a video of his grilling of Goldman here.

TESTER: I can tell you that there are some things in my job as a U.S. Senator from Montana that don’t make a lot of sense. One of the things that doesn’t make a lot of sense to me is why these synthetic—and I know you’ve got an answer for it—but why these synthetic instruments came about when there’s nothing in them. And Claire’s right. It’s about—it’s just like betting on a sports event. It’s like betting on whether it’s going to rain. It’s like betting on a bunch of stuff that doesn’t make any sense. It’s not about hedging as a farmer would do it or as an airliner or a coal company or whatever it might be. This is just playing around, from my perspective. And that fact is, I think part of this playing around is why taxpayers had to bail out part of what went on, on Wall Street. And I’ve got some issues with that. And I, like other members on this Committee, I think you’re a smart guy. And I would like to work with you. I think this country is in dire need of Wall Street reform, and I think that you could add some to the equation as long as we can bore down and get to the facts. Transparency is critically, critically important in making sure the consumers are protected. I can’t tell you how many stories I’ve heard of folks who have lost their retirement, lost their college tuition for their kids, lost all sorts of bad things. While other folks that got bailed out are literally making millions of dollars.
 =======================================

That's Sen. Tester grilling Blankfein about derivatives....and speaking of derivatives, here's a very interesting video on the quants who created the mathematical formulas that have created some of the problems that are screwing us.

Favorite Quotes:

• I'd like to apologize to the planet
• It's the formula that crashed Wall Street

Hat tip to Jim's Mailbox

Goldman Sachs on the Supreme Court

Obama just loves him some Goldman, don't he? Or is it like cockroaches...they're everywhere and you just can't get rid of them?

An Updated List of Goldman Sachs Ties to the Obama Government Including Elena Kagan
This essay shows the pervasive influence of Goldman Sachs and its units (like the Goldman-Robert Rubin-funded Hamilton Project embedded in the Brookings Institution) in the Obama government. These names are in addition to those compiled on an older such list and published here at FDL. In the future, I will combine the names here and those on the earlier article but I urge readers to look at the earlier list too (links below). Combined, this is the largest and most comprehensive list of such ties yet published.

.....

At any rate, she’s already in the Obama government as Solicitor General. She also has ties to Goldman Sachs. From 2005 to 2008, according to USA Today and other sources, Kagan served as a member of the Research Advisory Council of the Goldman Sachs Global Markets Institute. Matt Kelley of USA Today wrote in his article, "Possible Supreme Court Pick Had Ties to Goldman Sachs" that Kagan received $10,000 from Goldman Sachs for her services in 2008, per federal disclosure forms. But since she was doing the same thing in 2005, 2006, and 2006, it would appear that she pulled in $40,000 from Goldman Sachs for what appears to be sitting in on one day sessions looking at big issues affecting the global economy. $40,000 grand for so little time is a nice gig if you can get it (and she likely got expenses too) for so little time. It’s not a huge amount but it is enough to affect a player’s mind.

.....

Read the rest here

Goldman Sachs and the Blind 'Experts'

Here's James K. Galbraith on the financial fraud that is pervasive throughout our society.

Why the 'Experts' Failed to See How Financial Fraud Collapsed the Economy

.....

Thus the study of financial fraud received little attention. Practically no research institutes exist; collaboration between economists and criminologists is rare; in the leading departments there are few specialists and very few students. Economists have soft- pedaled the role of fraud in every crisis they examined, including the Savings & Loan debacle, the Russian transition, the Asian meltdown and the dot.com bubble. They continue to do so now. At a conference sponsored by the Levy Economics Institute in New York on April 17, the closest a former Under Secretary of the Treasury, Peter Fisher, got to this question was to use the word "naughtiness." This was on the day that the SEC charged Goldman Sachs with fraud.

....

Control frauds always fail in the end. But the failure of the firm does not mean the fraud fails: the perpetrators often walk away rich. At some point, this requires subverting, suborning or defeating the law. This is where crime and politics intersect. At its heart, therefore, the financial crisis was a breakdown in the rule of law in America.

Ask yourselves: is it possible for mortgage originators, ratings agencies, underwriters, insurers and supervising agencies NOT to have known that the system of housing finance had become infested with fraud? Every statistical indicator of fraudulent practice – growth and profitability – suggests otherwise. Every examination of the record so far suggests otherwise. The very language in use: "liars' loans," "ninja loans," "neutron loans," and "toxic waste," tells you that people knew. I have also heard the expression, "IBG,YBG;" the meaning of that bit of code was: "I'll be gone, you'll be gone."

If doubt remains, investigation into the internal communications of the firms and agencies in question can clear it up. Emails are revealing. The government already possesses critical documentary trails -- those of AIG, Fannie Mae and Freddie Mac, the Treasury Department and the Federal Reserve. Those documents should be investigated, in full, by competent authority and also released, as appropriate, to the public. For instance, did AIG knowingly issue CDS against instruments that Goldman had designed on behalf of Mr. John Paulson to fail? If so, why? Or again: Did Fannie Mae and Freddie Mac appreciate the poor quality of the RMBS they were acquiring? Did they do so under pressure from Mr. Henry Paulson? If so, did Secretary Paulson know? And if he did, why did he act as he did? In a recent paper, Thomas Ferguson and Robert Johnson argue that the "Paulson Put" was intended to delay an inevitable crisis past the election. Does the internal record support this view?
.....

Read the rest here

===============================

This is off-topic to Goldman but I just got through watching the movie "The One Percent", about the disparity of wealth and it occurred to me that (besides the fact that Milton Friedman is an idiot and a stumpy little weasel ) that the one percenters have left out this minor calculation- as they destroy America and the world by concentrating wealth into ever fewer hands, what will they do when society breaks down and people start hijacking food trucks? There won't be anywhere they can run or hide at that point and will see first hand the suffering they have brought on others. They'll starve like every one else. What makes this all so pathetic is the solution is so easy and this suffering is needless.

Goldman Sachs: Experts Market Manipulators

Jim Rickards lays it out for ya today-

.....

There is one other flaw in the EU plan. In 1992, when George Soros attacked the Bank of England, he did so by selling Sterling and buying dollars. This forced the Bank of England to do the opposite which was to buy Sterling and sell dollars. Since the Bank of England had a finite amount of dollars to sell, Soros knew he could beat them by buying more than they had. However, he needed real money to do this and he was perhaps the only speculator in the world at that time with that much money. Today you do not need money to destroy national finances, you can do this by the creation of synthetic short positions in Euros through the use of credit default swaps (CDS) and other derivative instruments. Goldman Sachs are experts at this. And they can create CDS in potentially infinite amounts since there is no regulation and no margin requirements. In effect, Goldman could create a short position equal to ten times the amount of Euros in the guarantee fund. Goldman can create synthetic short positions faster than the ECB can print money. Therefore, the ECB's plan is doomed to fail because they cannot beat the speculators who can use CDS instead of real money.

Read the rest here

Here's an mp3 interview with Jim Rickards. One of the topics mentioned is none other than Goldman.

Half of America Hates Goldman Sachs

Another picture worth a thousand words:

Goldman Sachs and Helicopter Ben

From the Daily Capitalist comes this piece on why Goldman had a perfect trading record:

Goldman Sachs and Helicopter Ben

.....

You may ask: how is that possible? Are they that good? The reason is that they are taking advantage of free money from the Fed:

“The trading profits of the Street is just another way of measuring the subsidy the Fed is giving to the banks,” said Christopher Whalen, managing director of Torrance, California-based Institutional Risk Analytics. “It’s a transfer from savers to banks.”

The trading results, which helped the banks report higher quarterly profit than analysts estimated even as unemployment stagnated at a 27-year high, came with a big assist from the Federal Reserve. The U.S. central bank helped lenders by holding short-term borrowing costs near zero, giving them a chance to profit by carrying even 10-year government notes that yielded an average of 3.70 percent last quarter.

The gap between short-term interest rates, such as what banks may pay to borrow in interbank markets or on savings accounts, and longer-term rates, known as the yield curve, has been at record levels. The difference between yields on 2- and 10-year Treasuries yesterday touched 2.71 percentage points, near the all-time high of 2.94 percentage points set Feb. 18.

Read the rest here
============================

And then there's this

Rigged-Market Theory Scores a Perfect Quarter:
....

Of course, no matter what the question is these days, it seems the answer from Goldman always is: We’re a market maker. When senators ask about e-mails that show Goldman telling its sales army to dump crappy mortgage bonds from its warehouse on its clients? Market maker. When the e-mails show Goldman created the crappy deals? Market maker. By Goldman’s definition, an Amway salesman pitching energy drinks to old ladies in nursing homes would qualify as a market maker. It’s all just matching buyers and sellers to create liquidity, you know.

....

Here's Nathan's view on the above piece:

.....

What’s pretty clear to me right now is that the markets are completely controlled by very few entities – they have been captured. And let’s think about the implications of this, because to me it plays like some James Bond (ridiculous) or Austin Powers (funny) movie, you know there’s always the evil villain in the background whose mission is to RULE THE WORLD, ba, ha, ha! Let’s just say it’s not a coincidence they called him “Goldfinger.”

Well guess what? It’s happened – only sadly this is no movie, it’s for real.

And just think about this. Those four banks that had perfect records are so powerful that should any of the managers of those companies simply turn off their trading computers, the removal of that liquidity would set off a chain of events that could literally collapse the markets of the entire world – just like the taste we got last Thursday but was quickly reversed.

Is this not nearly the power the President of the United States has? We have allowed the power to concentrate into so few hands that we have in effect given them the power to devastate the globe in nearly an instance. The people running these firms did not go through a public vetting process and they do not work on behalf of the people. Think about that – it never should have been allowed to happen and now that it has, we absolutely need to take action.

.....

Goldman Sachs Overview

In a post that really needs to be read in its' entirety, The Automatic Earth takes a big picture look at all the happenings around the world, forming a giant ball of toxic sludge ready to make landfall on the world's economies.

....

New-fangled Fed currency swaps with central banks will run into the trillions, means America is bailing out foreigners. But America is very simply once again through backdoor tactics (never let a crisis go to waste) bailing out its own big banks.

Over the weekend, Obama was on the phone with Merkel and Sarkozy, calling for strong measures, and they said: "Sure, we got "strong" down, but we’re not bailing out your guys, boyo. So show us the money."

And so he did. Europe's central banks are buying up PIIGS sovereign debt as we speak -partly with Fed (US taxpayer) money-, and who do you think are the sellers? SocGen, Deutsche, Goldman, JPMorgan. Want to bet? No need to thank me, Mr. Grayson, glad to be of service.

Moreover, and this would be the topic of the day if we hadn't gotten immune to the immoral hazard of it all,

.....

US regulators are still searching for the cause of last Thursday's market plunge, or so they'd like us to believe. And whether the 1000 point drop was caused by either Goldman, software malfunction, fat elbows, trained dolphins, your "kind" of waitress, or Chinese hackers, one thing is certain: the US government inability to either figure out what went on, or, alternatively, to spin a good lying tale around the whole "event", will keep a lot of people out of the stock market.

For all they know, it may happen again tomorrow morning, wiping out all they have. Then again, the lower the trading volumes, the easier -and cheaper- it gets to make the stock markets look good. Still, lots of investors will have moved into gold, but much of that is just paper. And yes, gold will be fine down the line, but not in the immediate future. Think: getting a haircut administered by a lawnmower.

.....

Read the rest here

Goldman Sachs' moral obligation

I think I could go on talking about Goldman Sachs' moral obligation for a couple of hours and if moral obligations were the law, I think I could do a pretty good job of convicting them in a court. Goldman Sachs' moral obligation to Wall Street? Where is Goldman Sachs' moral obligation to society? Do we, as a society, believe companies can do anything that isn't against the law even if it hurts millions of people? Do drug companies have any obligation to keep new forms of biological weapons that could wipe out mankind from escaping into society if isn't against the law?

Goldman Sachs' moral obligation to Wall Street

(Fortune) -- After much fanfare, the shareholder meeting at Goldman Sachs ended Friday, much as the world ends in T.S. Elliot's, The Hollow Men: "Not with a bang but a whimper."

Up for a vote by shareholders was the separation of the chairman and CEO positions at Goldman, which are currently held by Lloyd Blankfein. In support of the proposal, Julie Tanner, Assistant Director of Socially Responsible Investing at Christian Brothers Investment Services, said in a statement: "While separating the positions of Chair and CEO is not a guarantee against future scandals, it does provide another layer of checks and balances and could improve the board's ability to oversee the activities of the company."

Meanwhile, Proxy Democracy, which helps investors keep track of the actions of institutional shareholders, reports that both AFSCME's employee pension plan and CalPERs voted in favor of the measure. The Florida State Board of Administration and the Ontario Teacher's Pension Plan also voted in favor, according to industry watcher, Pensions & Investments.

Against the measure, and in favor of the chairman and CEO positions being held by the same person, Goldman (GS, Fortune 500) wrote in its proxy: "The combination of our Chairman's ability to call and set the agenda for Board meetings with the CEO's intimate knowledge of our business provides the best structure for the efficient operation of our Board." (Emphasis added.)

In the end, the Goldman position prevailed......

Read the rest here

------------------

In the meantime, here's how other countries handle the problem:
Bankers jailed, sued as Iceland seeks culprits for crisis

Goldman Sachs Escape Plan

The Goldman Sachs Escape Plan

Goldman Sachs and Morgan Stanley may eventually escape proprietary trading ban

Goldman Sachs and Morgan Stanley may ultimately avoid a ban on bank proprietary trading under the Wall Street overhaul.

As part of the Senate financial regulatory debate, Democrats want to bar big banks from proprietary trading. Large non-banks would face potentially higher capital standards under the legislation to account for their trading activities. The restrictions are part of an amendment sponsored by Sens. Carl Levin (D-Mich.) and Jeff Merkley (D-Ore) that has yet to come up for a Senate vote.

Julie Edwards, spokeswoman for Merkley, said on Tuesday that two of Wall Street's heavyweights -- Goldman Sachs and Morgan Stanley -- would not fall under the explicit prohibition in the future if they decided to no longer function as bank holding companies.

Goldman Sachs and Morgan Stanley converted to bank holding companies during the financial crisis in 2008.

.....

Read the rest here

Former Goldman Sachs Lawyer to Be Sentenced for Kiddie Porn Charges Today?

Today is supposed to be the day of Todd Genger's sentencing but as yet, Westchester County has not updated its records to reflect Genger's next couple years. Jr Deputy Accountant waited around all day but does not have an update as of this evening.

To catch you up, Goldman Sachs attorney Todd Genger was busted chatting with a 15 year old girl in mid 2009 and pled guilty in February of this year. The 15 year old Genger thought he was engaging in enlightening Internet "conversation" with turned out to be an investigator from the Westchester County DA's office working undercover a la To Catch a Predator.

Genger faces 1 - 3 1/2 years in prison but will most likely get a nice hard slap on the wrist and a few months "time served". Just a guess.

See: Goldman Sachs' Pervert Lawyer Gets Sentenced? [Jr Deputy Accountant]

The Case Against Goldman Sachs

From the Onion:

The Case Against Goldman Sachs

The Securities and Exchange Commission's lawsuit against Goldman Sachs is revealing a cavalier culture in which the firm invested recklessly and bet against its own clients. Here are some of the company's questionable practices:

* Created its own blood bank and sat on all deposits until the Haitian earthquake
* Tried their hardest to dissuade risk-loving pensioners and teachers' unions from buying into unsound derivatives, but in the end it wasn't enough to stop them
* Drove up commodity index while hedging against price increases by maintaining a 20-acre facility crammed with full barrels of crude oil, stockpiled bales of cotton, and tens of thousands of lean hogs
* The guy who delivered lunch every day was always tipped with one of the company's crumbling mutual funds
* Offered clients discounted concert tickets that junior analysts won by repeatedly dialing into radio contests
* Invested in the highly lucrative underground organ trade through its Mexican subsidiary Goldmando Saques
* Over the years, executives secretly dumped the contents of nearly 2,400 convenience stores' take-a-penny-leave-a-penny trays into their suit pockets
* Taking your money and not telling you what the hell they're doing with it

Goldman Sachs: Financial Terrorists?

Another gem from ampedstatus:

.....

In a market where 70% of all trades are executed by computer algorithms via High Frequency Trading (HFT), Goldman Sachs has the power to make the market crash or rise at will. In fact, Goldman has a major Weapon of Mass Destruction in its Program Trading monopoly of the New York Stock Exchange, as Tyler Durden described on Zero Hedge:

“Goldman’s dominance of the NYSE’s Program Trading platform, where in addition to recent entrant GETCO, it has been to date an explicit monopolist of the so-called Supplementary Liquidity Provider program, a role which affords the company greater liquidity rebates for, well providing liquidity, and generating who knows what other possible front market-looking, flow-prop integration benefits. Yesterday [5/6/10], Goldman’s SLP function was non-existent. One wonders - was the Goldman SLP team in fact liquidity taking, or to put it bluntly, among the main reasons for the market collapse….

… here is the most recently disclosed NYSE program trading data….

What is notable here is that of the 1.4 billion in principal shares, or shares traded for the firm’s own account, Goldman was the top trader by a margin of over 100% compared to the second biggest program trader.

We have long claimed that Goldman is the de facto monopolist of the NYSE’s program trading platform. As such, it is certainly the case that Goldman was instrumental in either a) precipitating yesterday’s crash or b) not providing the critical liquidity which it is required to do, when the time came. There are no other options.”

For further investigation, I turned to Max Keiser, who has written and authored similar Program Trading and HFT computer algorithms. I asked him if he thought this was an attack. Here is what he had to say:

“May 6th was an unequivocal act of domestic financial terrorism in America. A day that will live in infamy.

To scare the lawmakers, themselves large owners of the very banks and stocks that they are supposed to be regulating, a financial Weapon of Mass Destruction was put to their head and they acquiesced.

As the inventor of the continuous double-auction, market-making technology (VST tech. US pat. no. 5950176) that is referenced 132 times by program trading and HFT patents since 1996, I can tell you that Goldman, JP Morgan and the gang simply pulled the ‘buys’ from their computer trading programs and manufactured a crash. And when the coast was clear, and it was clear the politicians were not going to vote for anything that would break up the ‘too big to fail’ banks, all the ’sells’ were pulled from the computers and the market roared back.

This is a Manchurian Candidate market where program trading bots start the ball rolling in whatever direction Wall St. wants the market to go - and then hundreds of thousands of day-traders watching Cramer on CNBC jump on the momentum bandwagon and commit the crime for the Wall St. financial terrorists, who then say, ‘It wasn’t us, it was ‘the market!’”

On Friday, the next day, after the “break up the too big to fail banks” amendment was soundly defeated by a 61 to 33 margin in Senate and a deal was struck to eliminate key provisions from the audit of the Federal Reserve bill, Goldman was meeting with the SEC to work out a settlement in their case against them. Once again, Goldman proves that crime pays. Welcome to the New Mafia World Order.

....

The bottom line: the United States has been taken over by a financial terrorism network....

.....

Read the rest here

Goldman's Perfect Score

We have an anonymous commenter here at GS666 that continues to post one great link after another. I don't know whether this is the work of one person or many.
Here's one from the last post-
---------------------------

What is the probability of this in a true free market? Good?...Go scratch your ass something else is going on here...

Goldman Sachs Has First Perfect Quarter With Zero Trading Loss
May 10 (Bloomberg) -- Goldman Sachs Group Inc.’s traders made money every single day of the first quarter, a feat the firm has never accomplished before.
--------------------------------

Exactly. The market is rigged. I heard some commentator talking about how the stock market has become just a whole bunch of computers jabbering away at each other. Here's Ellen Brown talking about the subject:


Parts 2 & 3 are at Max's site here

That link came from another anonymous commenter. Good work. These two fit perfectly together in explaining the problem and solution. Goldman reminds me of those caper movies where the bad guys figure out a way to rig the system and make off with the loot to a tropical isle. The Perfect Score. Just gotta pay off a few Congressmen, plant a few insiders in the system, plant your virus in the system and Boom! You're Golden.

 I'm most of the way through the book The Lost Science of Money, and it's pretty clear that this game has been played for about 3,000 years. There seems to be a problem with those in charge not looking back in history to see what sort of monetary system works and what doesn't (hint: it's not gold). Goldman is playing the game just like the rest in their bunch, extracting wealth from society without regard for the consequences.

Psst...Anonymous, it would take only slightly more effort to turn those comments into posts. Why don't you contact Larry and become a posting contributor? You can still remain anonymous.

Goldman Sachs Robbed the EU

Good Monday morning to all. Ready for another week of scams?

Goldman Sachs Robbed the EU By Way of Greece

Membership in the EU comes at a price. That price is a limit on deficits. This aspect of the EU treaty was meant to insure the solvency of its member nations and so support the Euro currency itself. No member can unilaterally revalue its currency as it is, by treaty, an abstraction of the net worth of the various member's ability to back it. This severely limits the unilateral options for dealing with sovereign debt by member countries, which in turn opened up unusual opportunities for member countries to be exploited by international banking.
While there are treaty limits on debt incurred by member countries, there are no constraints on banks lending to them. What evolved in the Greek sovereign debt crisis is a massive short opportunity on the Euro, had you known it was developing. And who would know outside of Greek government and the banking and finance community like Goldman Sachs or JP Morgan?
The early banking intercessions that propped up the appearance of Greek solvency were likely simple and direct exploitations of an economy in distress. The New York Times reported in February:

Despite persistently high deficits, a 1996 derivative helped bring Italy's budget into line by swapping currency with JPMorgan at a favorable exchange rate...In what amounted to a garage sale on a national scale, Greek officials essentially mortgaged the country's airports and highways to raise much-needed money...A similar deal in 2000 called Ariadne devoured the revenue that the [Greek] government collected from its national lottery.

These deals were undertaken as accounting camouflage for debt as a sale or leveraged investment to obtain or protect membership in the EU. In Greece's case, it got out of control. Like a pay day loan operation, the debt deadlines were deferred again and again, and the practical cost of that debt is as unfathomable as the derivatives on which it was leveraged. It has been the most massive and sophisticated pay day loan scam in history.

...

Read the rest here

More Goldman Market Rigging?

Here's the latest from Ellen Brown:

Stock Market Collapse: More Goldman Market Rigging?

Last week, Goldman Sachs was on the congressional hot seat, grilled for fraud in its sale of complicated financial products called "synthetic CDOs." This week the heat was off, as all eyes turned to the attack of the shorts on Greek sovereign debt and the dire threat of a sovereign Greek default. By Thursday, Goldman's fraud had slipped from the headlines and Congress had been cowed into throwing in the towel on its campaign to break up the too-big-to-fail banks. On Friday, Goldman was in settlement talks with the SEC.
Goldman and Wall Street reign. Congress appears helpless to discipline the big banks, just as the European Central Bank appears helpless to prevent the collapse of the European Union. . . . Or are they?




Suspicious Market Maneuverings
The shorts circled like sharks in the Greek bond market, following a highly suspicious downgrade of Greek debt by Moody's on Monday. Ratings by private ratings agencies, long suspected of being in the pocket of Wall Street, often seem to be timed to cause stocks or bonds to jump or tumble, causing extreme reactions in the market. The Greek downgrade was unexpected because the European Central Bank and International Monetary Fund had just pledged 120 billion Euros to avoid a debt default in Greece. Strategically-timed ratings downgrades of this sort are so suspicious that Indian market regulator SEBI recently created a stir by asking the rating agencies operating in India for periodic reporting concerning their fees and rating norms.

Markets were roiled further on Thursday, when the U.S. stock market suddenly lost 999 points, and just as suddenly recovered two-thirds of that loss. It appeared to be such a clear case of tampering that Maria Bartiromo blurted out on CNBC, "That is ridiculous. This really sounds like market manipulation to me."

Manipulation by whom? Markets can be rigged with computers using high-frequency trading programs (HFT), which now compose 70% of market trading; and Goldman Sachs is the undisputed leader in this new gaming technique. Matt Taibbi maintains that Goldman Sachs has been "engineering every market manipulation since the Great Depression." When Goldman does not get its way, it is in a position to throw a tantrum and crash the market. It can do this with automated market making technologies like the one invented by Max Keiser, which he claims is now being used to turbocharge market manipulation.

Whether Goldman actually crashed the market in this case will be left to conjecture, but Keiser explained in an email how it could theoretically be done:

Remove all the buy orders that you control (since HFT traffic is 70% of the order flow, if you simply pull your HFT buy orders, you remove a huge chunk of the market - in a heartbeat - leaving a sudden price vacuum). If you wanted to scare congress to vote the way you wanted them to vote - a congress that is directly invested in stocks trading on the exchange and ETF's tied to the prices on the exchange - just pull your buys. When they do what you want them to do - replace your buys. If you want to make the market go up - pull your sell orders. It works both ways. (It's all detailed in my Virtual Specialist Technology patent - how to make markets in an 'infinite inventory environment.')

Goldman was an investment firm until September 2008, when it became a "bank holding company" overnight in order to capitalize on the bank bailout, including borrowing virtually interest-free from the Federal Reserve and other banks. In January, when President Obama backed Paul Volcker in his plan to reinstate a form of the Glass-Steagall Act that would separate investment banking from commercial banking, the market collapsed on cue, and the Volcker Rule faded from the headlines.

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