April 16, 2012
By David Gutierrez
A Venn diagram released by Harvard law professor and political activist Larry Lessig reveals the shocking connections between our government and banking and investment giant Goldman Sachs.
Goldman Sachs was a major contributor to (and beneficiary of) the 2007 subprime mortgage crisis that helped initiate the current depression. The bank then proceeded to heavily avail itself of bailout payments and other monetary assistance from the federal government.
In 2010, the Securities and Exchange Commission (SEC) filed a lawsuit against the company, alleging that it had deceived investors about the nature of one of its products, costing them a total of $1 billion.
Goldman Sachs was defended in the lawsuit by its longtime legal firm, Skadden, Arps, Slate, Meagher & Flom, LLP. One of its advisors on defense strategy was a partner in the firm by the name of Gregory Craig, who had left his job as White House Counsel only months before. When observers raised ethical concerns, some of them pointing out that the Obama Administration prohibits its former members from lobbying it for at least two years, Craig responded by saying, “I am a lawyer, not a lobbyist.”
Craig is a classic example of the “revolving door” in this country between industry and government. He has moved back and forth over the years between government positions — he served as foreign policy advisor to both Senator Edward Kennedy and to Secretary of State Madeleine Albright — and legal work, often taking on major corporate clients like Goldman Sachs.
March 16, 2012
By Brandon Turbeville
On March 6, 2012, I wrote an article entitled, “Mass Banking Resignations Signal A Purging Has Begun?” in which I discussed the seemingly large number of banking resignations taking place all over the world. At the time the article was published, the number had reached 122 announced resignations.
This past week saw yet another high-profile resignation where an executive from Goldman Sachs quit in a blaze of glory taking aggressive swings at his former company and the finance industry as a whole in a widely publicized resignation letter in the New York Times. As a result of Greg Smith’s damning indictment of the “culture of greed” at Goldman Sachs, they lost over $2 billion in market share because of the bad press.
The overall list of resignations, originally compiled by the independent blog, American Kabuki, raised a number of questions for most who had the opportunity to go through it – this writer included. This is not surprising since, when one reads that 122 banking officials have resigned from relatively high-level posts, one naturally wants to know why.
Upon first reading, the resignation figure seems quite large. However, considering the number of banks in business around the world, it might have occurred to some that 122 resignations might not be quite the massive exit that many initially suspected it to be. After all, with so many institutions around the world, particularly in the midst of a worldwide economic depression, wouldn’t resignations of this scale be expected? In short, one of the baseline questions that needs to be asked when discussing the recent banking resignations is, “Is this really such a big number?”
Indeed, ever since news of the resignations first came out, no one in the mainstream or alternative media has been able to demonstrate what exactly a normal number of resignations would look like.
However, another recent post by American Kabuki may help shed a little light on this issue.
According to American Kabuki, because of the Securities Exchange Act of 1934, all publicly traded companies must report to the SEC (Securities Exchange Commission) whenever certain officers or board members resign from their post. This publication is made via the database known as EDGAR.
March 15, 2012
New York Times
By Greg Smith
“Goldman Sachs is cracking – even with a bail out. Serves them right.” –KTRN
TODAY is my last day at Goldman Sachs. After almost 12 years at the firm — first as a summer intern while at Stanford, then in New York for 10 years, and now in London — I believe I have worked here long enough to understand the trajectory of its culture, its people and its identity. And I can honestly say that the environment now is as toxic and destructive as I have ever seen it.
To put the problem in the simplest terms, the interests of the client continue to be sidelined in the way the firm operates and thinks about making money. Goldman Sachs is one of the world’s largest and most important investment banks and it is too integral to global finance to continue to act this way. The firm has veered so far from the place I joined right out of college that I can no longer in good conscience say that I identify with what it stands for.
It might sound surprising to a skeptical public, but culture was always a vital part of Goldman Sachs’s success. It revolved around teamwork, integrity, a spirit of humility, and always doing right by our clients. The culture was the secret sauce that made this place great and allowed us to earn our clients’ trust for 143 years. It wasn’t just about making money; this alone will not sustain a firm for so long. It had something to do with pride and belief in the organization. I am sad to say that I look around today and see virtually no trace of the culture that made me love working for this firm for many years. I no longer have the pride, or the belief.
February 27, 2012
By Kurt Nimmo
As Zero Hedge rightly notes, the latest Wikileaks dump – a collection of emails hacked from Stratfor by Anonymous – is a dud. It consists of liberals whining about Obama and calling him weak for not confronting the so-called right side of the one party system that serves the bankster elite.
One comment in particular reveals that the so-called left encamped in the district of criminals remains completely and hopelessly out of touch with reality. It suggests Obama “could also tell the banks to go screw themselves.”
How is it possible Democrats still do not realize Obama is owned by the banksters and he does not tie his shoes in the morning without first consulting them? Evidence is bountiful.
Soon after Barry the CIA groomed candidate was selected and trotted out with messianic fervor, Open Secrets posted a list of his top contributors, including: Goldman Sachs, Citigroup, UBS and Morgan Stanley.
Obama is still the preferred candidate of the money masters. “Obama has brought in more money from employees of banks, hedge funds and other financial service companies than all of the GOP candidates combined,” reports the Washington Post.
Reports that bankers are turning against Obama “are exaggerated and overblown,” according to one top banking exec cited by the Post. He said “it probably helps from a political perspective if he’s not seen as a Wall Street guy.”
February 13, 2012
By Grant McCool and Nick Brown
When commodities brokerage MF Global imploded, the FBI and federal prosecutors were quick to launch an investigation to pursue what seemed obvious to outspoken regulators and lawmakers: laws were broken and crimes were committed.
More than three months later, it is far from clear that anyone will face criminal charges over the disappearance of more than $600 million in customer money as MF Global spiraled towards bankruptcy in the brokerage’s final, frantic days in the last week of October.
So far, the MF Global investigation is not tracking the early progress of other high-profile financial scandals such as RefCo, where former Chairman Phil Bennett was arrested within days of the disclosure that the futures firm had been hiding losses for years.
Lawyers and people familiar with the MF Global investigation of the firm that was run by former Goldman Sachs head Jon Corzine say that even though the hunt is still on to find out whether or not officials at MF Global intended to pilfer customer money in a desperate bid to keep the brokerage from failing, the trail at this point is growing cold.
To date, scant evidence of criminal intent has emerged in company emails, no former or current employees have sought to cut a deal to provide testimony about potential wrongdoing and seasoned defense lawyers say they are not seeing the tell-tale signs of a hot criminal investigation.
A source familiar with the work of Louis Freeh, trustee for the MF Global holding company that filed for Chapter 11 bankruptcy protection, says investigators have yet to find evidence of fraud in the multi-faceted and complex investigation.
The source, who declined to be identified because Freeh’s office is still conducting its inquiry, says there was plenty of “chaos” at MF Global in its waning days, but “no evidence of fraud.” Freeh is a former Director of the Federal Bureau of Investigation.
Ellen Davis, a spokeswoman for the office of the Manhattan U.S. Attorney, declined to comment. Randall Samborn, a spokesman for the office of the U.S. Attorney in Chicago, also declined to comment.
Criminal and regulatory investigations can of course shift gears at any time if new information comes to light. But adding up the pieces at this stage of the inquiries, the odds look long of criminal charges ever stemming from the collapse of MF Global because of the lack of bad motives or an intent to steal or deceive, the legal standard for a criminal case.
February 8, 2012
By Elizabeth Ody
Wealthy investors aren’t clamoring for a piece of Facebook Inc.’s initial public offering because some own the stock through private transactions while others shy away from risky technology deals, according to advisers.
“It’s kind of the late arrivals who get excited around the time of the IPO,” said Jason Thomas, chief investment officer of Aspiriant, whose clients on average have about $10 million under management with the Los Angeles-based firm. “Our clients remember the tech bubble very well, and are appropriately skeptical of being the last money in.”
Facebook, the world’s biggest social-networking service, filed yesterday to raise as much as $5 billion in the largest Internet IPO. Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co., Bank of America Corp. (BAC), Barclays Plc and Allen & Co. were hired to handle the deal for the Menlo Park, California- based company. The $5 billion figure is a placeholder used to calculate fees and may change.
Based on recent IPOs, investors who are able to buy in at the offering price once it’s determined could be looking at below-average returns if they seek to buy and hold. They may face a large tax bite if they sell into an early run-up in the stock price.
Buying the Hype
Ed Reinhart, 41, holds about 5 percent to 10 percent of his personal portfolio in Facebook after buying shares in 2010 through SharesPost Inc., a secondary market for private-company stock. He said he likes the company’s revenue-growth prospects and isn’t looking to increase his position in the initial offering.
“You don’t want to buy into the hype,” said Reinhart, who lives in Yakima, Washington, and is a managing partner for Capital Advisors Wealth Management, which works with institutional retirement plans. “I think it would be very wise for individual investors to stay back and let some of this steam escape, and see where all of this shakes out.”
SharesPost and SecondMarket Holdings Inc. facilitate transactions in private-company stock for accredited investors. That generally means individuals with assets of greater than $1 million, excluding a primary residence, or those earning more than $200,000 annually. SharesPost has offered transactions in Facebook shares since 2009.
January 19, 2012
By Nick Enoch
“The guys that screwed up the financial system gets bonuses. If only we all would get bonuses for doing poor work. What a crock.” –KTRN
Bankers at Goldman Sachs are in line for a pay and bonus pot of $12.2billion, despite a fall in profits.
With America is on the brink of a recession, the announcement last night will only add to public fury over Wall Street payouts.
The company, which is awarding its workers $12.2billion globally, has 33,000 staff worldwide.
Analysts expect Goldman to pay out an average of $367,000 in salary, bonuses and stock options to its approximate 33,000 staff globally for their efforts in 2011.
This is down from an average $430,000 the previous year.
The news comes despite disappointing annual results from the investment bank.
Goldman is expected to reveal a full year revenue of $28.8bn – down 26% – while earnings almost halved to $4.4bn.
This would make it its second lowest annual profit in almost ten years, reflecting the impact Europe’s debt crisis is having on the Wall Street bank.
The company’s president, Gary Cohn, said the large payouts were necessary for staff retention.
The dip in profits also underline the struggles the bank, under chief executive Lloyd Blankfein, is facing from new regulations.
The Volcker Rule, due to come into force in July, bans banks from gambling with their own money and limits the amount of capital they can invest in hedge funds and private equity investments.
Former banker William Cohan said: ‘I think a firm like Goldman has real problems.
‘Some of the lines they’ve been traditionally strong in are being regulated out of existence,’ he told The Daily Telegraph.
The bank said that it had cut total staff numbers by 7% in 2011 – to 33,300 people, meaning the average compensation per member of staff is about $366,360.
January 18, 2012
By Kurt Nimmo
“The saying ‘politicians are all the same’ rings true here.” –KTRN
Like Obama, Mitt Romney is a wind-up doll for Wall Street and the bankers. There is virtually no difference between them despite all the fetid air from the GOP propaganda machine.
This is revealed by a quick look at Romney’s top contributors. An Open Secrets page on top Romney contributors reads like a Who’s Who of Wall Street and the financial cartel. The top contributor is Goldman Sachs, followed by Credit Suisse Group, Morgan Stanley, Bank of America, JP Morgan Chase, UBS, Citigroup, Wells Fargo and Barclays – major players in the Wall Street and City of London bankster constellation.
Bain Capital is also on the list. It is a “financial services” and investment firm co-founded by Romney. Bain owns the establishment media propaganda conglomerate Clear Channel, which explains why “conservative” talk show hosts like Limbaugh, Hannity and Levin are supporting Romney, especially with the strong showing of Ron Paul in the primaries. Both Savage (real name Weiner) and Levin have gone so far as to call Paul a threat to the country.
In December, Mitt refused to release the identity of his “bundlers,” or people who gather contributions from many individuals in an organization or community and give the cash to the campaign.
In other words, the above list is only the tip of the iceberg. Romney’s lack of transparency about his bundlers indicates he is getting money from sources that want their identity concealed.
In November, it was reported that Jimmy Lee, a veteran Wall Street investment banker, and three other top executives at JPMorgan Chase & Co hosted a $2,500-per-person reception for Romney.
“I am committed to doing all that I can to help his campaign because I also believe he is the strongest challenger to President Obama,” Lee told Reuters. Lee said he has known Romney for almost all of his Wall Street career and that he made one of the first loans to Romney at Bain Capital.
January 17, 2012
By Matt Taibbi
If there was ever a news story that crystalized the moral dementia of modern Wall Street in one little vignette, this is it.
Newspapers in Colorado today are reporting that the elegant Hotel Jerome in Aspen, Colorado, will be closed to the public from today through Monday at noon.
Why? Because a local squire has apparently decided to rent out all 94 rooms of the hotel for three-plus days for his daughter’s Bat Mitzvah.
The hotel’s general manager, Tony DiLucia, would say only that the party was being thrown by a “nice family,” but newspapers are now reporting that the Daddy of the lucky little gal is one Jeffrey Verschleiser, currently an executive with Goldman, Sachs.
At first, I couldn’t remember how I knew that name. But then I looked it up and saw an explosive Atlantic magazine story, published last year, called, “E-mails Suggest Bear Stearns Cheated Clients Out Of Millions.” And then I remembered that piece, and it hit me: Jeffrey Verschleiser is one of the biggest assholes in the entire world!
The story begins at Bear Stearns, where Verschleiser used to work, up until the company exploded, in large part because of him personally.
Back in the day, you see, Verschleiser headed Bear’s mortgage-backed securities operations. Toward the end of his tenure, his particular specialty began with what at the time was the usual industry-wide practice, putting together gigantic packages of crappy subprime mortgages and dumping them on unsuspecting clients.
But Verschleiser reportedly went beyond that. According to a lawsuit later filed by a bond insurer called Ambac, Verschleiser also masterminded a kind of double-dipping scheme. What he would do is sell a bunch of toxic mortgages into a trust, which like all mortgage trusts had provisions written into their pooling and servicing agreements (PSAs) that required the original lenders to buy the loans back if they went into default.
So Verschleiser would sell bad mortgages back to the banks at a discount, but instead of passing the money back to the trust, he and other Bear execs allegedly pocketed the funds.
From the Atlantic story by reporter Teri Buhl:
December 22, 2011
The Constitution Times
by Stillie Mason
Goldman Sachs does not rule the world. The Federal Reserve rules the world. The actions by 6 of the world’s major central banks to ease “strains” in the European financial markets, is yet another way in which the markets are manipulated. The Federal Reserve is at the forefront.
The world’s entire financial system is so systemically overloaded and corrupt ,that the circuit breakers designed to provide economic safeguards are a futile patchwork that is failing anyway. The world is wired in a financial mess of such magnitude, that is about to burn up cash like gasoline on a bonfire. That’s where the Federal Reserve and the other banks step in. They provide the liquid – in this case, liquidity. Eventually, that spills inflation over everything.
So, let’s take a step back for a moment and ask ourselves the obvious question again, which is: Why do the banks need to step in? The most simple answer is that there is a debt crisis. Ah, there is that dirty word again – debt. The world is awash in debt and the United States is treading water like a third world country. So, if the United States is also in a debt crisis, coupled with high unemployment, political unrest and spending money it doesn’t have in fighting wars all over the globe; how can the country’s Federal Reserve come to anyone’s rescue? The easy answer is because it can – by printing money, lots and lots of fiat money.