Goldman admits 'improper' actions in sales of securities
McClatchy Newspapers --By Greg Gordon and Kevin G. Hall --
WASHINGTON — Goldman Sachs' chief acknowledged Wednesday that the investment bank engaged in "improper" behavior in 2006 and 2007 when it made huge bets on a housing downturn while peddling as safe more than $40 billion in securities backed by risky U.S. home loans.
Lloyd Blankfein, Goldman's chairman and chief executive, made the surprising concession at the opening hearing of the Financial Crisis Inquiry Commission, a 10-member panel that Congress created to investigate and lay out for the public the causes of the worst financial crisis since the Great Depression.
Blankfein and senior officers of three other of the nation's most prominent banks told the panel that serious flaws in their risk models and business practices contributed to Wall Street's meltdown and the massive taxpayer bailouts that followed. The commission also heard testimony that the banks and quasi-government mortgage giant Fannie Mae recklessly took on as much as 95 times more risk than they could cover, and that Wall Street excels "at pulling the wool over the eyes of the American people."...
"I do think the behavior is improper, and we regret . . . the consequence that people have lost money in it," Blankfein told Angelides.
Until Wednesday, Goldman had insisted that it was merely managing its risks when it placed "hedges," in the form of wagers against the housing market, various venues including in secret offshore deals, with insurance giant American International Group and on a private London exchange.
Michael Mayo, a managing director and financial services analyst for the U.S. branch of French bank Calyon Securities, rattled off 10 causes of the financial crisis, including excessive investment in real estate, the surge in exotic bets such as credit-default swaps, and the fact that U.S. investment banks allowed leverage — the ratio to which their risks outstripped capital — to approach 40-to-1.
"I'm shocked and amazed more changes have not taken place," Mayo said. "There seems an unwritten premise that Wall Street, exactly how it exists today, is necessary for the economy to work. That's not true. ... Wall Street has done an incredible job at pulling the wool over the eyes of the American people."...MORE...LINK
Goldman Sachs Readies Bonus Bonanza, Braces for Backlash
(ABC News) -- By RICH BLAKE --
Goldman Sachs CEO Lloyd Blankfein will be among the chief executives set to appear tomorrow at the first public hearing of the Financial Crisis Inquiry Commission, and his firm will be back in the public crosshairs later this month when it announces what is expected to be a $20 billion-plus compensation kitty. Some of Goldman's top traders and bankers stand to earn at least $10 million each...MORE...LINK
Comment by "Chris Moore" on Democratic Socialists of America Calls for Taking Money from Poor Whites and Giving It to Blacks, by Eric Striker - Why don’t white workers just seize the means of production and cast off the parasites? 1) Because the ZOG police state will destroy them. 2) Because the...
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