Like when they make money by sliding bad investments on people knowing full well they will fail. And they are the most prestigious firm on Wall St. They are on more sides of a trade than you can count.

I suggest people stop trying to make money by investing money and do it the old fashioned way by making a product, earning it, in other words.

The whole concept of Wall Street is designed to control money, taking it away from some, giving it to others. Of course people who get involved in this get burned. Again, its the frog and the scorpion tale.

If you get involved with people who think money is the most important thing in the world, don't be surprised to learn, its not YOUR welfare they care about, just their own bank accounts.
The US has been looted. Time to get over the shock and horror and move on.
The continued media attention to this problem diverts attention from the real issue, fixing it. One of the ways to fix this is to abolish the whole concept, but no one will do that....money is too important...right?

Dawn

Dawn, we can't just brush this aside and forget about it. In my opinion a crime has been committed and the victims need restitution. These brokers think of themselves as "Investment Advisors". Goldman is not alone in this industry. I had a small account at Merrill Lynch one time. I might make a trade once every 6 months. What seems to happen is that my account was probably judged to cost more to maintain in overhead than it was worth. When you get on that list, ML will buy stocks itself if it thinks they are going up, and then recommend them to you when it comes time to sell them. So, I never made money with them. But my losses were not so great that I could take any action.

Goldman however, did not act as an investment advisor. They were outright selling securities to instutions knowing full well that the investment would not likely perform as represented by them. More than that, Paulson's Hedge fund was suggesting securities that should go into one of them for the sole purpose of shorting them as well because he had apriori knowledge of their likely demise. Then we have the rating agencies that rated this junk as AAA. Thats because Goldman pays them a fee for this service. And presumably a little "bonus" if they got what they wanted from the agency.

The stock market and investment banking is the heart of Capitalism and it has got to be honest or at least a little more honest than it currently is. My 401k went down 40%, my company's stock went down by a factor of 12, and the value of my house went down 20%. I want revenge.

regards,

Today was the day of the Senate hearings on Goldman. I just want to express my support of Senator Levin. He really did his homework pointing to various documents and graphs. None of the other Senators did nearly half as much as he did.

keep up Senator

I have a suggestion....lets abolish fannie and freddie then they won't have any lies to trade on

you, like the illustrious senate and media pundits from everywhere under the sun, are totally missing the whole point of this problem.
The US financial collapse happened because government run mortgage company(s) gave out billions of dollars to people who had NO chance of paying this money back so they could buy houses. Oh yeah, let's not forget the lowering of credit standards that allowed the banks to hand out credit cards like the were Halloween candy. THAT ain't gettin paid back either but, between the mortgages and the credit cards, boy you guys sure bought yourselves a voting block. Nice Job!

the democrats and the republicans and anyone else who allowed this to happen to this country should be taken out back and given the cold water hose for an hour while being videotaped for youtube publication.

as for the people who got all the free money and free credit, they are out there right now trying to figure out how to scam billions out of this health care bill you love.
Those are the criminals Andrew. GS might be greedy but they were NOT criminal.
and the real criminals; they're all yours...ain't cha proud?

Dawn

This economic problem was the result of both parties involvement in changing things from the way it used to be. I am talking about the Clinton administration and specifically about Cisneros (if you remember him as Housing Secretary) and his replacement, Andrew Cuomo who took the entire thing overboard as far as pushing banks to grant mortgages to people who could not pay. Then, Wall Street, (Lehmann Bros, I hope its no relation) found that with the high interest rate some of these mortgages had, you could create something called a derivative, which, because of the high mortgage interest, could fund other investments that sit on top of the mortgage. So, instead of selling the mortgages, they sold the derivative bundle. Then the Bush admininistration came in, and their constituents (big banks and wall st) loved this idea. They couldn't get enough of these mortgages to create derivatives with and sell them to institutional investors. And so the bubble was born.

Freddie Mac, Ginnie Mae, Fannie Mae did not originate the problem, they were actually bullied into buying these (sub-prime) mortgages which were below their standard at the time. Cuomo was the guy who started the "Stated" mortgage which was you stated your income and nobody checked it. (I can't help but feel that he was lobbied to do this by the investment banks.) So Lehmann was making a nice tidy sum with this, as Merrill Lynch looked on in envy. So, they started also, and everybody else fell in line as well.

So, who broke the law? What law? In the case of Goldman, a possible case can be made that they committed fraud. It looks like (to be proved) they, in concert with Paulson, deliberately picked mortgages they knew would fail. Got the agencies to rate them AAA, sold the derivatives on the market and shorted the ones they had not yet sold. Goldman shorted as much as 12.7 Billion of them. That sums up to fraud because you are selling an investment thats going to fail for the customer, make money for yourself by going short on the remainder. So, Goldman knows the investment is going to tank, recommends it to you, and short sells what he doesn't sell and makes money from both ends.

There is a rumor today that Goldman may seek to settle with some of their customers to avoid the long list of likely lawsuits.

You might want to read "Finanacial Fiasco" by Johan Norberg who gives a non-partisan play by play of the situation.

I will read it. Thank you for the book...far better than flowers or candy but not as lubricating as wine.(watch that dirty mind now)
LOL
lehmann..no relation, this is a married name. I was born Bouchard...translates to people with large mouths who watch sheep...suits me, yes?

I have to admit that, of all the things I am good at, thinking about financial chaos is not one of them. Much of what I've said here is a result of casual research of snews and internet sources. I have no real knowledge. I should probably just shut up. I DO know that this hearing crap and the legislation being proposed is unlikely to solve or rectify anything. I have nothing further to add.

On a different note, and specifically to Andrew, I have been thinking about why you keep telling me I'm scattered and seem to be arguing for the sake of it. Something occurred to me and I want to let you know.

I am neither right nor left and eschew the dogma of either side so I argue with both. This probably makes me look like a rabid dog but, so be it.
For me, this whole situation; from the president and his broken promises and heavy handed tactics; to the teaparty and the attempt by the christian right to claim it; to the immigration issue and the left's attempt to claim THAT; to the financial collapse of the world; is all because of the bullshit of both sides.

it is puritanism(the Cromwellian kind) using the power of the state to enforce the dogma of one group or the other throughout wider society by force rather than by persuasion.

both sides are doing this. both sides claim a morality, declaring that morality to be the 'only way to live as moral people' and wants to enforce it.

I want true freedom. I know the difference between the Rome of the Emperors and the Rome of the Republic. They are all trying to become an Empire. Both sides.
I am fighting to stay a republic.
The Empire of Rome fell to the corruption and greed of the Caesars.(sounds familiar, yes?)
The Republic was killed by the Caesar (the first one) so he could have power.(this is what I see happening in the last several presidencies) They (Brutus and Co) killed Caesar to keep Rome a republic with the power held by the people via the senate but, Octavius came along and called himself Caesar anyway. Beware the Ides of March...

all this has happened before, it will all happen again
you can call me a lone soldier fighting her personal war for freedom
or you can call me a scatter brained screamer
it doesn't matter, they are the same thing, in the end

Dawn

Book first, wine later, and then.....I just can't help it.

Anyway, this time I am mostly in agreement with you. In one of my first posts I said, "I wonder if I will still be here when somebody writes The Rise and Fall of Democracy".

See, we elect somebody based on some list of issues they debate about. And whoever gets elected it looks to us like those issues are the level of involvement of this official. Its not as shown by the fact that the government can cause (or allow to occur) the total destruction of the economic system of the country. Thats the problem I see and I am willing to bet its the root cause of what bothers you and all the other debaters of politics. The politicians have too much power to run or ruin things. They can give the Christian right "Right to Life" laws for example. It doesn't affect any of the other things they really want to do. As long as the Christians got that, they are placated and the government continues merrily along. Same with the gun people. Same with the Green people. They all get little handouts so they will go away. That is how I see it. Negative isn't it? Where's that wine.

regards,

No kidding...we agree...
wait, let me check to see if the sky fell...nope, just thunder, but it was a close thing I think.

You know, when I look at this whole thing, I step WAY back and I've seen something that REALLY bothers me...

empire building.
this country has been looted and everyone is shouting about who stole what when, but the real point is, the money is gone and I'm pretty certain it ISN'T being dumped into US entitlement programs. They are all going bankrupt.
To me, this says the money is still out there, probably in the hands of a very few individuals.
Why?
We're talking TRILLIONS of dollars...not the kind of money you steal so you can have a yacht and a big house and pretty girls to screw while snorting bolivia's best of your 60k dollar high tech coffee table...
we're talking national level money...and I don't see any rich countries in this world lately (unless you count oil producers, I'll get to them)
this kind of money could be used to bail out Europe once the transition from republic to empire is complete in the US....they can do this and maintain the forms of republic which should keep Americans arguing over dumb crap like they are now.
Pax Romana, Andrew

the peace of Rome...under the Emperor's...sounds like an intellectual idea to me, from someone who's got a pretty good education. IT also sounds like the kind of thing the average American blue collar worker would NEVER understand was happening.
When the Caesar's took control of Rome, there was a civil war which Caesar ended by controlling the army. In this country, a large police state is poised, ready to be 'played' (chess reference) at the first sign of civil unrest( through Bush expanded martial laws and homeland security which has two devout Muslims in high ranked positions).
This frees up the actual military to continue the conquest of mideast and eventually the baltic states, places the 'looting' hasn't really effected.
I'm probably cutting my own throat saying this stuff out loud...
what do you think though? Am I way off base?
still think a library education is for entertainment purposes only?

LOL

Dawn

I must inform you that Robert Rubin was the Secretary of the Treasury for both the Clinton terms(Summers was the deputy secretary) and prior to that served on the board of Goldman Sachs for nearly 26 years...this guy also worked for Citi Group and after time with Citi he "resigned" because of 'poor' performance...he was still compensated with a small severance pay of 126 million in cash and stock options...that was up until 2008...Hmmmm. Wow, I am in the wrong business, why can't I get a job like that and do a bad job and still get the big paycheck?

Rubin was "the one" that refused to regulate derivatives and blocked the CFTC (commodity futures trading commission) from oversight and eventually Credit Derivatives were excluded from regulation altogether. With the help of his Citi Group lobbyist buddies, Rubin managed to repeal the Glass-Steagall Act of the 1930s and many attribute this in a large part to the financial crisis of 2008.

Rubin also tried to manage some shifty deals with financial bond-rating companies to prevent them from down grading "Enron" debt because guess who they owed money too...you guessed it...Citi Group. All this on Clintons watch!

Where is this divisor of the hellish financial market now...whispering in the ear of President Obama on the right and Summers whispering in the left ear...these men are responsible for this mess and they are not in jail?

Guess who else worked under Rubin and Summers during the Clinton administration? None other than Little Timmy Geithner...funny how these masters of financial fraud found their way into the Obama Administration...

The men that created the mess are now the advisers to the current administration, don't you find this a bit odd? This is like letting Hitler be the judge at his own trial...they create the disaster that destroyed a staggering 4.6 trillion in personal American wealth and they have been placed in authority to right it? These are the things that cause me to see Obama as I do, very immature as a leader because of the people he allies himself with...huge mistake and he will pay for it come election...he will be sent packing! And for him there will be no repair.

Buy the way, they are all members of the CFR...

James...

PS in all fairness and trying to be just in these matters, Bush had four Goldman Sachs people in his administration...Paulson was also complicit in the huge money scam...funny how a multi-billion dollar bank keeps getting in the White House...Hmmmmm

Well, after Clinton we had 8 years of G. Bush and his Treasury Secretaries were Paul O'Neill, John Snow, and Henry Paulson. Since you did not mention any of them, you must think they were helpless in correcting these problems that the Clinton people created. In fact they were just as complicit for the full 8 years.

When Obama came in, he had a full economic catastrophe on his hands and asked Paulson to stay on to have at least that much stability. The economic problems left by G. Bush meant that Obama would not be able to execute on his promises until this economic problem got under control.

One of things that Obama did do was to appoint a "Pay Czar" by the name of Kenneth Feinberg. Certainly the top executives could not pay themselves big bonuses using taxpayer money (even though they tried). But in the end, the people that are responsible for salaries and bonuses of these CEOs is the stockholders of the company. They vote on it. The President can't control it that easily unless we forego democracy.

As far as Enron, that occurred in 2001 which was Bush's 2nd year. They did nothing either and neither did Congoleeza Rice when she had for-warning of 9/11 for that matter.

I agree with you about Robert Rubin and I can find no reason for repealing the Glass-Steagall act other than he was lobbyed to do it. It goes back to one of my old complaints about this type of government. We elect people based on the issues of the campaign, but these issues were never part of it but they are more important.

Government officials have too much freedom to do whatever they want. My crystal ball says that this is the root cause of dissent with the government. It is growing and splinters like the tea party are going to increase and further polarize the public opinions. Who can tell where it will lead. The next election will be the beginning of the new political fighting raised up a notch. Watch and see.

regards,

I was responding to a thread you posted involving the Clinton administration...go back to the Obama forum for my take on Bush...don't you see where I gong with this? Goldman Sachs is every where in the White House in many administrations...coincidence?

I think not!

James...

PS I think if you read the last sentence above your last post you will see that I did indeed mention Goldman Sachs and Paulson in the Bush administration...