Goldman Sachs Admits "Improper" Actions in Sales of Securities
Wednesday 13 January 2010
by: Greg Gordon and Kevin G. Hall | McClatchy Newspapers
Washington - The chairman and CEO of investment titan Goldman Sachs acknowledged Wednesday that his company had engaged in "improper" behavior when it made financial bets against $40 billion in securities backed by risky U.S. home loans that it was selling to investors as safe products.
Lloyd Blankfein made the shocking acknowledgement before the Financial Crisis Inquiry Commission, a 10-member panel that Congress created to look into the causes of the worst financial crisis since the Great Depression.
In November, McClatchy reported exclusively that in 2006 and 2007, Goldman sold more than $40 billion in bonds backed by over 200,000 in risky home mortgages while secretly betting on a sharp downturn in housing prices that would depress the value of those securities.
During today's inaugural hearing, the CEOs of the nation's most prominent banks also acknowledged serious flaws in their models and business practices that helped bring about the nation's financial crisis.
Many of the toughest questions from panel members were put to Blankfein, whose firm is a goliath and a virtual farm team for top government posts in the White House and at the Treasury Department.
Commission Chairman Phil Angelides, a former California state treasurer, warned Blankfein that he'd be "brutally honest" in his questioning. Then he went straight to the question of why Goldman thought it was necessary to take out protection against securities it was selling by purchasing insurance-like credit-default swaps. Angelides likened it to selling a car while knowing that its brakes were bad.
Blankfein acknowledged "that the behavior is improper, and I regret the consequence that people have lost money in it." However, he went on to defend his company's role as a market maker, suggesting it's a middleman that's exposed to risks both on what it buys and what it sells.
The heads of JPMorgan Chase, Morgan Stanley and Bank of America acknowledged that they'd paid a huge price for failing to build the possibility of declines in home prices into their risk-management models.
That failure had disastrous consequences, since the banks packaged mortgages into pools that were sold to investors worldwide as securities, often with top ratings from credit-rating agencies such as Moody's Investors Service. When home prices fell, these securities lost money, faith was lost in credit ratings and panic was amplified by the insurance-like bets that were taken out by the very companies that were offering these "safe" securities.
"Given enough time, everything will happen, not can happen," Blankfein said, noting that in the aftermath of the housing meltdown his firm models for even the most improbable scenarios in all its lines of business.
James Dimon, the CEO of JPMorgan Chase, the bank that's emerged the least tarnished in the crisis, said that in retrospect it should have been obvious that mortgages given to people with little or no proof of income was a terrible idea that should have sparked concern.
Lees verder: http://www.truthout.org/goldman-sachs-admits-improper-actions-sales-securities56057
2 opmerkingen:
Controleambtenaren in heel Nederland gaan heel Nederland binnenvallen. Gerede kans dat ze binnenkort een bezoek bij u thuis gaan brengen en er is NIETS DAT U ER AAN KUNT DOEN. De ambtenaren gaan kijken hoe u woont, waar u woont en waarom u woont. De pandjesbrigade gaat landelijk ingevoerd worden. Een verdenking is niet nodig. Iedereen die bijvoorbeeld -ongevraagd- kinderbijslag ontvangt moet de ambtenaren binnen laten om ze de knuffelbeesten en pyjamaatjes te laten tellen. Dat staat in een wetsvoorstel dat door de Tweede Kamer wordt geloodst terwijl we ons staan op te over winden over een nepkabinetscrisis. Rechtsgeleerden achten het wetsvoorstel in strijd met het thuisrecht van burgers, dat is vastgelegd in de grondwet, en met het Europese Verdrag voor de Rechten van de Mens. Ook andere vormen van bijstand gaan op deze manier gecontroleerd worden. Als ze toevallig andere 'verdachte zaken zien' melden ze dat aan de politie. Geen hogere straffen, geen slimmere rechercheurs, maar het grijze voetvolk aan VMBO'ers gaat straks naar binnen met één keer kloppen. Wie weigert kan rekenen op een politieinval en daarnaast verlies van kinderbijslag (nou, fuck dat dan maar), AOW of alle andere vormen van bijstand. Het kabinet acht de wet noodzakelijk om 'het draagvlak van sociale voorzieningen' in de samenleving te behouden. Hoe dat draagvlak eruit ziet, kan u in deze reportage zien.
Update: We noemen deze dienst, De Dienst.
http://www.geenstijl.nl/mt/archieven/2010/01/controleambtenaren_checken_elk.html
En dat afgezien van de onzichtbare controle, zoals bespieding en bestandskoppeling. Zelfs vuilniszakken zijn daarvoor geschikt.
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