Financial Crime of the Century

[mxsquid]

Gordon Brown getting ripped apart

http://megamata.com/forum/viewtopic.php ... p=255#p255

[dlry]

Who's Gaining from the AIG Unwinds?

http://tinyurl.com/cvhkew

What this all means is that the statements by major banks, i.e. JPM, Citi, and BofA, regarding abnormal profitability in January and February were true, however these profits were a) one-time in nature due to wholesale unwinds of AIG portfolios, b) entirely at the expense of AIG, and thus taxpayers, c) executed with Tim Geithner's (and thus the administration's) full knowledge and intent, d) were basically a transfer of money from taxpayers to banks (in yet another form) using AIG as an intermediary.

http://zerohedge.blogspot.com/2009/03/e ... banks.html

[dlry]

How the Scam Works

By MICHAEL HUDSON
Newspaper reports seem surprised at how high banks are bidding for the
junk mortgages that Treasury Secretary Geithner is now bidding for,
having mobilized the FDIC and Fed to transfer yet more public funds to
the banks.

Bank stocks are soaring – thereby bidding up the Dow Jones Industrial
Average, as if the “financial industry” really were part of the
industrial economy.

Why are the very worst offenders – Bank of America (now owner of the
Countrywide crooks) and Citibank the largest buyers? As the worst
abusers and packagers of CDOs, shouldn’t they be in the best position
to see how worthless their junk mortgages are?

That turns out to be the key! Obviously, the government has failed to
protect itself – deliberately, intentionally failed to do so – in
order to let the banks pull off the following scam.

Suppose a bank is sitting on a $10 million package of collateralized
debt obligations (CDOs) that was put together by, say, Countrywide out
of junk mortgages. Given the high proportion of fraud (and a recent
Fitch study found that every package it examined was rife with
financial fraud), this package may be worth at most only $2 million as
defaults loom on Alt-A “liars’ loan” mortgages and subprime mortgages
where the mortgage brokers also have lied in filling out the forms for
hapless borrowers or witting operators taking out mortgages at far
more than properties were worth and pocketing the excess. The bank now
offers $3 million to buy back this mortgage. What the hell, the more
they bid, the more they get from the government. So why not bid $5
million. (In practice, friendly banks may bid for each other’s junk
CDOs.) The government – that is, the hapless FDIC – puts up 85 per
cent of $5 million to buy this – namely, $4,250,000. The bank only
needs to put up 15 per cent – namely, $750,000.

Here’s the rip-off as I see it. For an outlay of $750,000, the bank
rids its books of a mortgage worth $2 million, for which it receives
$4,250,000. It gets twice as much as the junk is worth.

The more the banks holding junk mortgages pay for this toxic waste,
the more the government will pay as part of its 85 per cent. So the
strategy is to overpay, overpay, and overpay. Paying 15 per cent is a
small price to pay for getting the government to put in 85 per cent to
take the most toxic waste off your books.

The free market at work, financial style.

Michael Hudson is a former Wall Street economist.
Reply With Quote

[dlry]

What did you think was behind the look the other way crowd...did you think they would pay back TARP money with their money?

In the spirit of givin' them a goose before letting them loose

Report: Goldman Sachs considering stock offer
http://tinyurl.com/c8r9yx

[dlry]

Protesting the bailouts

https://self-evident.org/?p=531

[dlry]

Have we completely lost of sense of what is and is not a conflict of interest? Have we really built a system in which greed fully overshadows responsibility? Is it not time for a complete rethink of what constitutes acceptable executive behavior?

http://baselinescenario.com/2009/04/17/ ... -line-two/


April 17, 2009
A.I.G. Chief Owns Significant Stake in Goldman
By MARY WILLIAMS WALSH

Edward M. Liddy, the dollar-a-year chief executive leading the American International Group since its bailout last fall, still owns a significant stake in Goldman Sachs, one of the insurer’s trading partners that was made whole by the government bailout of A.I.G.

Mr. Liddy earned most of his holdings in Goldman, worth more than $3 million total, as compensation for serving on the bank’s board and its audit committee until he stepped down in September to take the job at A.I.G. He moved to A.I.G. at the request of Henry M. Paulson Jr., then the Treasury secretary and a former Goldman director.

Details about his holdings were disclosed in Goldman’s proxy statement and confirmed by an A.I.G. spokeswoman, who said they constituted “a small percentage of his total net worth.” Mr. Liddy had already owned some stock in Goldman Sachs before joining its board in 2003.

He has said that he considers his work at A.I.G. to be a public service(Beware of false prophets, which come to you in sheeps clothing), performed on behalf of the taxpayers, who ended up with nearly 80 percent of the insurance company. His goal is to dismantle the company and sell its operating units, using the proceeds to pay back the rescue loans. On Thursday, A.I.G. said it had sold its car insurance unit, 21st Century Insurance, to the Zurich Financial Services Group for $1.9 billion.

Along the way, Mr. Liddy has clearly disclosed that A.I.G. was serving as a conduit, with much of the rescue money passing through and ending up in the hands of A.I.G.’s trading partners.

Goldman has said in the past that it had collateral and hedges to reduce the risk of its exposure to A.I.G.

Still, his stake could represent a potential conflict and is likely to reignite questions about Goldman’s involvement in A.I.G., and about why taxpayer money was used to shield A.I.G.’s trading partners from losses, when asset values plunged everywhere and most investors suffered greatly.

Had A.I.G. simply declared bankruptcy, the financial institutions doing business with it would have ended up in court, as they did in the case of Lehman Brothers, fighting to get pennies on the dollar for their claims.

Instead, Goldman Sachs received $13 billion of the Federal Reserve’s rescue money to close out various contracts it had outstanding with A.I.G. It was one of the biggest beneficiaries of the government rescue.

A spokeswoman for A.I.G., Christina Pretto, dismissed any suggestion that Mr. Liddy’s financial ties to Goldman might have shaped his actions at A.I.G.

“A.I.G. is a large institution that engages in standard commercial activity with companies all over the world,” Ms. Pretto said. “These activities are handled in the normal, day-to-day course of business and rarely, if ever, rise to the level of the C.E.O.”

She said in particular that Mr. Liddy was not involved in the discussions of how to close out the contracts of A.I.G.’s counterparties in derivatives and other forms of trading.

“Discussions regarding these matters were handled exclusively by the Federal Reserve Bank of New York,” Ms. Pretto said.(oh that's even better)

According to Goldman’s proxy, Mr. Liddy holds 18,244 units of restricted stock, which would be worth about $2.2 million if they were sold at today’s market price. The rest of his holdings are in common stock. Restricted stock cannot be sold without incurring significant tax penalties, but the proxy said that Mr. Liddy’s restricted units would be converted to common shares on May 9.

Officials at the Fed, which initiated the bailout of A.I.G. last September, have said they were not happy about having to pour public resources into private sector companies, but felt that they had to do so to avoid a chain of losses at financial institutions all over the

[dlry]

Pass this around. Whether you like/dislike Gs this is a first step to censure the blogs, internet,etc.
Anyone that brings a little light to the night or creates discomfort for the power players will come under similar pressure.


Goldman Sachs Sues Blogger “Goldmansachs666.com”
http://tinyurl.com/da3cf8


http://www.goldmansachs666.com/2009/04/ ... trate.html

[mxsquid]

Interview with Dylan Ratigan of Fast Money (CNBC). Click on the MP3 player on my site.

http://megamata.com/forum/viewtopic.php ... p=298#p298

[dlry]

Either no one reads anymore or maybe a majority of the people can't put 2 and 2 together...at least Paul Farrell tries to tie it together with a television series...maybe the masses will start to get it...who knows?

GOP or Dems? Conservatives or liberals? It doesn't matter. We'll all controlled by "The Conspiracy." So why not surrender, let them have the power? The truth is, through their lobbyists and surrogates in Washington, they already rule America. Surrender is a mere formality.
Accept reality. Hold them accountable later. After the next crisis. After the next meltdown of disaster capitalism -- if there's anything left after the "Great Depression II" sweeps like a pandemic across the planet, consuming all economies, for a long time. But for now, Goldman and other banks may well be short-term buys. Just be ready to dump them in the near future ... a scenario that will be here sooner than you think. End of Story

Jack Bauer can't stop 'The Goldman Conspiracy'
http://tinyurl.com/cw6fn5

[dlry]

Most people don't care what these guys make...but I think what really pisses people off about these guys is their sense of entitlement (welfare state) even though they spew capitalistic rhetoric. Look if a guy buys 1,ooo,ooo shares of stock at $1 and sells it a $100...bravo for him....he deserves a $99 mil payday...it took guts and he got it right....but this crap(offing losers to the rest of us) and then taking the big bucks has to stop...and it doesnt matter if it happened on floor 1 or floor 15...the activity took place under your roof, therefore, its your problem.

Off Jesses site pulled these comments from

Goldman Sachs Shook Tens of Billions Out of Tax-Payers -- Now They're Whining All the Way to the Bank

In short, Mr. Blankfein is not at all prepared to go out on his own in the rough and tumble of the market; he just doesn't like government programs that come with conditions, like the TARP. He would much rather get his government money with no strings attached. And, since there are channels through which Goldman can get government money without any strings, it is perfectly understandable that Mr. Blankfein would opt out of a program with strings.
In this sense, Mr. Blankfein's attitude might be comparable to a mother receiving Temporary Assistance for Needy Families (TANF). To receive their benefits of roughly $500 per month, mothers must meet a variety of work and other requirements and endure lectures on the virtues of being married.


The basic story is straightforward. The Wall Street crew thinks that they are entitled to pilfer as much as they want from the public and from the government. These people have no interest in a "free market"; they would be scared to death of being forced to work for a living in the absence of a government safety net.
The Wall Street crew has relied on its political power to rig the rules to make them incredibly wealthy. They are relying on this political power to ensure that the rules remained rigged, even though their crooked deck wrecked the economy, costing tens of millions of people their jobs, their homes and their life savings. So far, it looks like the Wall Street boys are winning.