Financial Crime of the Century

[dlry]

Author Says G-20 Meeting in Scotland this Week about Dumping U.S. Dollar

Collapsing the US dollar, first of all, is an assault on the structure of the United States economy toward the creation of a “World Company.” This concept, Estulin states, was initially discussed at the April 1968 Bilderberg Group meeting, held in Canada at Mont Trembland, by George Ball, a senior Lehman Brothers banker and former undersecretary for economic affairs for Presidents John Kennedy and Lyndon Johnson.

The aim of this World Company, as explained by Ball was “to eliminate the archaic political structure of nation-state” in favor of the more “modern” corporate structure. Ball also called for further political integration in Europe, and then the rest of the world, as a precondition for expanding the power of a World Company, thus putting the financiers on the same levels as governments.

http://www.prweb.com/releases/G-20/US_D ... 150584.htm

[dlry]

I think Goldman has succeeded in bringing new meaning to the word "low-life's"



Goldman left foreign investors holding the subprime bag

Experts estimate that Wall Street investment banks sold 25 percent to 50 percent of these bonds and related securities overseas, resulting in massive losses in Europe and elsewhere when the market collapsed.

Last spring, the International Monetary Fund projected that global write-downs on "U.S.-originated assets" stemming from the subprime disaster could reach $2.7 trillion.

Gary Kopff, a securitization expert who analyzed unpublished industry data, said that Goldman packaged or marketed offshore deals worth at least $83 billion from 2002 to 2008. These deals, called collateralized debt obligations, amounted to a $1.3 trillion global market, and Goldman reaped as much as $1.66 billion for assembling and selling them.

Some of Goldman's subprime mortgage securities wound up in the hands of financially struggling Eastern European governments such as those in Romania, Bulgaria, Slovakia and Slovenia, said a Wall Street expert involved in trading those types of securities who declined to be identified because of the matter's sensitivity. This person said that one Slovakian bank's multimillion-dollar investment wound up worthless.



The offering drew a scornful reaction from the bond analyst who warned investment clients to stay away. The analyst's report, a copy of which was obtained by McClatchy, described Goldman as "a single underwriter solely interested in pushing its dirty inventory onto unsuspecting and obviously gullible investors."

For foreign banks, the lure was spelled AAA. Under both public and private deals, experts said, 80 percent or more of the bonds carried top grades from financial rating companies, assuring investors that the securities were among the safest plays in the financial world.

The triple-A rating was "the clincher," said an official of another German bank, who also wasn't authorized to speak publicly and requested anonymity.

Few investors, however, knew that Goldman and other Wall Street dealers were paying the biggest U.S. financial ratings firms for grading the risky bonds.

Sylvain Raynes, a former analyst for Moody's Investors Service, the largest U.S. rating firm, likened the Wall Street firms' relationships with the rating agencies to hiring "a high-class escort service.

http://www.mcclatchydc.com/227/story/77844.html

[dlry]

Trading maxim used to be buy low and sell high or BLASH...now its put your hands in the air, this is a stick up!!!!!!!!!!!!!!!!!!!!!!!

This lady should be placed into a regulatory post...thank the heavens for people like her!

Janet Tavakoli Retracts Her Apology To Goldman Sachs, Calls For More
Regulation Of The Government Backstopped Hedge Fund

Goldman’s Turn to Apologize

In light of the SIGTARP report, I withdraw my earlier apology to
Goldman. Public commitments to AIG are currently around $182 billion.
If you wonder what Goldman CEO Lloyd Blankfein meant when he said:
“[Goldman Sachs] participated in things that were clearly wrong and we
have reason to regret and we apologize for them,” think of Goldman’s
role in AIG’s crisis, Goldman’s bailout, and Goldman’s ongoing heavy
taxpayer subsidies. That way, one of you will be genuinely sorry about
it.

http://tinyurl.com/yhh6sbs

[dlry]

The only way to iron out the wrinkles in the regulatory agencies misjudgments is with this: http://tinyurl.com/yc93rh5


It Is Time To End The Farce That Is The SEC

Zero Hedge has written previously about Section 31. We also, prophetically, pointed out, that the SEC is massively conflicted on the topic of HFT as the paradigm generates revenues for the agency. We, however, did not realize just how conflicted Mary Schapiro is, and just how pervasive the HFT lobby power is: in order to make the lives of High Frequency Traders easier (and their lobby ever wealthier), the SEC is willing to axe one of its own revenue streams. All this is happening even as the SEC is bleating daily that its catastrophic corruption and incompetence can be easily fixed by just one or two $100 million budget boosts. And with the US taxapayer raped daily by the administration, certainly not an ounce of KY will be needed to fill the... budget shortfall from making the P&Ls of HFTs even more artificially propped up.

Yes, we are not making this shit up.

And since bullshit rarely travels alone, why should the SEC's public excretions, er, relations, machine be any exception. The other SEC press release that caught our eye is simply a stunner. It appears that the SEC is planning to gradually repeal Reg FD. Long live insider trading. They caught Raj Raj (and SAC is allegedly going down next) - so their quota for the next 20,000 years is now fulfilled.

http://tinyurl.com/yaga4o9

[dlry]

Happy Holidays from the WH: http://i49.tinypic.com/i4q1hz.jpg



Wednesday, December 23, 2009
“Body Count From Goldman Actions Crosses Into Criminal Territory”

While she is very knowledgeable of this market, perhaps she is unaware of the full extent of the wrongdoings Goldman committed by getting themselves paid on the AIG bailout. The Federal Reserve and the Treasury aided and abetted Goldman Sachs in committing financial and ethical crimes at an astounding level.

She notes, accurately, that Goldman used AIG to hedge its bet on CDO’s, either for itself with the Abacus deals, or for its clients, with the Davis Square deal. Had AIG failed, Goldman would have been on the hook for the losses: to execute the CDO with synthetic mortgage bonds, Goldman went “long” the CDS and then turned around and went “short” with AIG, effectively taking the risk of the mortgage bonds defaulting and then transferring it to AIG.

But Ms. Tavakoli fails to note that the collapse of the CDO bonds and the collapse of AIG were a deliberate strategy by Goldman. To realize on their bet against the housing market, Goldman needed the CDO bonds to collapse in value, which would cause AIG to be downgraded and lead to AIG posting collateral and Goldman getting paid for their bet. I am confident that Goldman Sachs did not reveal to AIG that they were betting on the housing market collapse.

It is bad enough that the creators and sellers of the CDOs, such as Goldman, BlackRock and TCW, have not been held to account for selling worthless bonds while representing them to be of AAA quality. Most of these influential power brokers have succeeded in blaming the victim (investors and insurers who believed their lies about the quality of the bonds) for the financial crisis to distract from their own questionable activities.

Goldman goes quite a few steps further into despicable territory with their other actions and the body count from Goldman’s actions is so enormous that it crosses over into criminal territory, morally and legally, by getting taxpayer money for their predation.

http://tinyurl.com/yadatdu

[dlry]

Responding to Goldman Sachs

Goldman said it suffered losses due to the deterioration of the housing market and disclosed $1.7 billion in residential mortgage exposure write-downs in 2008. These losses would have been substantially higher had it not hedged. Goldman describes its activities as prudent risk management. Many Wall Street firms wound up taking losses. The question is, however, how did they manage to get through a couple of bonus cycles without taking accounting losses while showing "profits?"

The answer is that they sold a lot of "hot air" disguised as valuable securities. Goldman claims this was prudent risk management. In reality, Goldman created products that it knew or should have known were overrated and overpriced.

Earlier, Goldman denied it could have known this was a problem, yet acknowledged I had warned about the grave risks at the time. If Goldman wants to stick to its story that it didn't know the gun was loaded, then it is not in the public interest to rely on Goldman's opinion about the greater risk it now poses to the global markets.



The public is an unwilling majority owner in AIG, and public money was funneled directly to Goldman Sachs as a result of suspect activity. The circumstances of AIG's crisis were extraordinary and without precedent. I maintain that the public is owed reparations, and it would be fair to make all of AIG's counterparties buy back the CDOs at full price, and they can keep the discounted value themselves.

http://tinyurl.com/y878pvq

[defio70]

...This is a call for a boycott.
A call to break these institutions by destroying their deposit base and "net interest margin", one consumer at a time, as a protest against the outrageous actions these firms have taken in terms of risk and their shifting of the costs of that risk, which should have resulted in their failure and closure by The FDIC and OCC, onto the backs of their customers via outrageous fees, interest rates and costs, along with the direct subsidy being paid by all taxpayers generally...
http://market-ticker.denninger.net/arch ... MONEY.html

[dlry]

Responding to Goldman Sachs
Janet Tavakoli
From her website:

Goldman Sachs recently acknowledged that I warned (using fact based analysis) about these grave risks at the time it manufactured value-destroying CDOs, but it said my opinion was in the “minority.” Goldman would have you believe it the financial equivalent of a member of the Flat Earth Society in the lifetime of Galileo Galilei. Just as a competent long-distance navigator does not care how many nonprofessionals are members of the flat earth society, one does not rely on whether an opinion is in the minority or majority as a basis for performing appropriate due diligence when underwriting a securitization. A reasonable man expects a long-distance navigator to have some competence in his craft, and a reasonable man can expect a certain level of competence (and standards) from underwriters. A basic investigation of the underlying collateral revealed grave risks–not reflected by the ratings–compounded by suspect securitization practices. Public money was used to bailout AIG in an extraordinary crisis, and the general public are not sophisticated investors. The argument that AIG was a sophisticated investor no longer applies as a reason to avoid consequences of this behavior

http://tinyurl.com/y878pvq

[dlry]

William K. Black's Theory of Corporate Fraud

William K. Black is a former senior deputy chief counsel at the federal Office of Thrift Supervision. During the savings and loan crisis of the late 1980s Black investigated accounting fraud. He spoke with Huffington Post Senior Reporter, David Heath, about how fraud can infiltrate entire corporations.

http://tinyurl.com/y89tewt

[dlry]

PPIP May Have INCREASED the Amount of Some Toxic Assets

Citigroup, Bank of America and other players are already gaming the program (and see this), which will create unintended consequences.
Bloomberg has some choice quotes:

It’s “absolutely ridiculous” that banks, which were expected to reduce their holding of such volatile mortgage securities, bought them before the government program was running and may now profit, said Michael Schlachter, managing director of Wilshire Associates, the Santa Monica, California- based investment-consulting firm. “Some of them created this mess, and they are making a killing undoing it” ...

“Any time the government says, ‘We’re going to buy something in the securities market,’ they’re putting out a sign that says, ‘Free money, come and get it’,” he said.

Well yes . . . isn't that what looting is all about?

http://tinyurl.com/62wa9t