Government allegations that financial giant Goldman Sachs defrauded investors are creating a political storm, with some lawmakers hoping that the civil lawsuit filed Friday by the Securities and Exchange Commission is just the beginning.
As the heat increases on the investment bank, which has denied all wrongdoing, Politico reports that they have hired Greg Craig for legal help. Craig formerly worked as the top lawyer for President Barack Obama and left the White House earlier this year to join the law firm Skadden, Arps.
The executive order Obama signed the day after he was inaugurated bars high-level executive branch appointees who leave the administration, like Craig, from communicating with their former employers. That executive order also prohibits such officials from lobbying the federal government during the remainder of the Obama administration.
The Politico article notes that since the SEC is an independent government agency, it would not coordinate with the White House on enforcement matters, such as the pending lawsuit targeting Goldman Sachs.
The article goes on to quote a source familiar with Goldman Sachs as saying Craig was hired for his ability to give advice and his "deep understanding of the legal process and the world of Washington."
The U.S. government is not the only authority interested in further probing Goldman Sachs.
The British and German government have also raised the possibility of investigations. And on Capitol Hill, Democrats in the House and Senate are calling for more answers.
You might think that a Wall Street giant like Goldman Sachs, which has been reporting profits of about $1 billion per month for the last six months, wouldn't waste the time and talent of its fantastically well-remunerated employees on a penny-ante business like single-family foreclosures and evictions.
"Goldman spent years buying hundreds of thousands of subprime mortgages, many of them from some of the more unsavory lenders in the business, and packaging them into high-yield bonds. Now that the bottom has fallen out of that market, Goldman finds itself in a different role: as the big banker that takes homes away" from families like Tony Becker, Gladys Aguirre, and thousands of others, as described in McClatchy's excellent investigative article by Greg Gordon.
Meanwhile revelations continue to surface about Goldman's "pump-and-dump" operation with a mountain of financial derivatives which they claimed to believe were rock-solid...
In 2006 and 2007, Goldman Sachs Group Inc. peddled more than $40 billion in securities backed by at least 200,000 risky home mortgages but never told the buyers that it was secretly betting that a sharp drop in U.S. housing prices would send the value of those securities plummeting.
Goldman's sales and its clandestine wagers, completed at the brink of the housing market meltdown, enabled one of the nation's premier investment banks to pass most of its potential losses to others before a flood of mortgage loan defaults staggered the U.S. and global economies.
Only later did investors discover that what Goldman promoted as triple-A investments were closer to junk.
I was contemplating the nauseating hypocrite Obama's latest spit-on-the-public joke about regulating the financial services industry (a 29-year-old junior executive from Goldman Sachs was appointed Chief Enforcement Officer of the SEC), and really...
What can you say?
The guy in this video plugs his favorite sock-your-money-away-in-precious-metals operation for about 30 seconds, and then...
U.S. employers cut a larger-than-expected 467,000 jobs in June and the unemployment rate climbed to a 26-year high of 9.5 percent. Workers also saw weekly wages fall, suggesting Americans will have little appetite to spend and the economy's road to recovery will be bumpy.
Mortgage applications fell last week by the most since February, defying efforts by President Obama's administration to revive the housing market.
The Mortgage Bankers Association's index of applications to purchase a home or refinance a loan dropped 19 percent to 444.8 in the week ended June 26, from 548.2 in the prior week. The group's refinancing gauge declined 30 percent to the lowest in seven months, while the index of purchases fell 4.5 percent.
Investment bankers at Goldman Sachs are about to "earn" the biggest bonus payouts in the firm's 140-year history!
David Williams, an investment banking analyst at Fox Pitt Kelton, said: "This year is shaping up to be the best year ever for investment banks, or at least those that have emerged relatively unscathed from the credit crisis.
"These banks are intermediaries in the bond markets where governments and companies are raising billions of pounds of new money. There is also a lack of competition that means they can charge huge sums for doing business."
Last week, the firm predicted that President Barack Obama's government could issue $3.25tn of debt before September, almost four times last year's sum. Goldman, a prime broker of US government bonds, is expected to make hundreds of millions of dollars in profits from selling and dealing in the bonds.
FSZ - Free Speech Zone - www.freespeechzoneblog.com
All data and information provided on this site is for informational purposes only. Free Speech Zone makes no representations as to accuracy, completeness, currentness, suitability, or validity of any information on this site and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis by individual diarists, independent journalists, and the views herein are those of the individual authors and do not reflect the views or opinions of the people who run this site. Free Speech Zone is a "common carrier" and the views presented herein
are in no way endorsed, condoned, or representative of
Free Speech Zone, its owners, or management.
"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."
-First Amendment to the United States Constitution
