Goldman Sachs (GS) 01 (Jun 08 - Apr 10)

[kennynah]

it's easy to become sympathetic towards these ex-GS fellas...just like hostages can become psychologically twisted by the kidnappers....

BUT imo.... if these ex-GS people are found to have knowingly creamed the unfortunate in grossly fraudulent acts... they should be punished severely...

i think we are mostly in agreement that we must be ethical in our conduct; in business and in personal life...

[winston]

Ha Ha ... The Master of the Universe looks like a lost small boy.

As far as I'm concerned, tax payer's money should never be used to bail out AIG in the first place.

Was AIG really too big too fail ? So what, if all the Investment Banks failed together with AIG ?

[millionairemind]

Ha Ha ... The Master of the Universe looks like a lost small boy.

As far as I'm concerned, tax payer's money should never be used to bail out AIG in the first place.

Was AIG really too big too fail ? So what, if all the Investment Banks failed together with AIG ?

Its a contagion effect. Big Ben is trying to avoid a repeat of 1929-1932.

He was a former scholar on the Great Depression and he knows what will happen if the banks/financial industry freezes up.

Although I am against bailing out, I do agree with what he did.

However, I do think that he is creating another bubble by holding interest rates too low...

His failure to catch this crisis back in 2006/2007 tells me his lack of oversight.

[winston]

Dont know. I dont think it's the end of the world if he did not do anything. Free markets will adjust very quickly to the situation..

He could still print money and flood the market without bailing out private enterprise.

In the name of "potential catastrophe", a lot of stupid sthings were done. A good example is "Iraq" where it would supposedly be the end of the world if they did not do anything...

[millionairemind]

Once trust is gone, who dares to trade with you now??


Goldman boss Lloyd Blankfein denies moral obligation towards clients
Lloyd Blankfein has admitted that he believes Goldman Sachs has no moral obligation to tell clients it is betting against a product it is asking them to buy.

By James Quinn, US Business Editor
Published: 6:00AM BST 28 Apr 2010

The stark admission – made by the bank's chairman at the end of a more than nine-hour marathon hearing before the US Senate – came in spite of his assertion that "I think people trust us" as he tried to fend off accusations that Goldman inflated the US housing bubble.

Senator Carl Levin told the veteran banker that he "wouldn't trust" Goldman as he repeatedly asked whether the bank would disclose its position "when they're buying something you solicit them to buy, and then you're taking a position against them?"

"I don't believe there is any obligation" to tell investors, Mr Blankfein responded. "I don't think we'd have to tell them, I don't think we'd even know ourselves."

His responses are key in the light of the Securities and Exchange Commission's civil fraud charges against Goldman Sachs in connection with a $1bn mortgage-backed derivative which the regulator alleges was mis-sold to investors, allowing one investor to benefit over another.

The admission came during testy questioning of seven of the bank's current and former executives before the Senate permanent sub-committee on investigations.

Senator Levin said he was "deeply" troubled by "Goldman documents [which] show it was betting heavily against a market it was selling to clients."

Using 901 pages of internal Goldman emails and other documents, Senator Levin tried to highlight examples where the bank used clients "as objects for its own profit."

He referred to a $2bn transaction – known as Hudson 1 – the aim of which he said was to "shift risk" from Goldman's balance sheet. One email showed a Goldman salesman admitting Hudson was "junk" while a senior manager later called the effort a "great job".

For much of the hearing, the seven 'witnesses' attempted to use a market-maker defence, based on the assertion that Goldman's role was purely as a middle-man in the market.

Dan Sparks, the former head of Goldman's mortgage department, was the only one of the seven to come close to apologising for the bank's role in the financial crisis.

He admitted that Goldman was "a participant in an industry that got loose" and that it "made some poor decisions in hindsight."

However, despite having left the bank in 2008, Mr Sparks still employed the continually-repeated mantra used by his former colleagues – that full disclosure to clients "was not something that's a responsibility of a market maker."

Earlier in the day, Fabrice Tourre – the French-born Goldman trader also accused of fraud by the SEC – admitted to a lack of accuracy in key documentation relating to the $1bn (£655m) toxic debt ­parcel at the heart of the fraud allegations engulfing his employer.

Mr Tourre confessed that a document submitted to the bank's mortgage capital committee concerning the Abacus 2007 derivative "could have been more accurate" and "was merely a 'cut and paste' from previous transactions."

The memo stated that Goldman and ACA Capital selected the mortgages within Abacus – a synthetic collateralised debt obligation (CDO) under scrutiny by the SEC – when in fact almost half were selected by Paulson & Co, the hedge fund which made a $1bn profit from shorting the transaction.

Mr Tourre denied the SEC's allegations against him, saying he had been the subject of "unfounded attacks" on his character and motives.

[kennynah]

i think levin (the senate committee chairman) did a tremendously good job of "interrogating" all these ex and current gs execs...

gs went into the session stating again and again that they are market makers...

they kept saying it is their nature of their business to take opposite sides of the trade to their customers... this all sounds very logical until levin kept homing in the very fact...

"you packaged junk..and intentionally sold to clients without telling them of the risks"...."how can be ethical?".."it matters not that you appear to be market making".... (not exact words but paraphrased)

[LenaHuat]

Goldman Sachs may soon settle its fraud case with the U.S. regulator, the New York Post reported on Thursday, opting to end a legal fight rather than endure a repeat of the public flogging it received this week.

Do U think GS will settle? If GS does, it will make the same fatal mistake as Michael Jackson.
I don't think GS will settle.

[kennynah]

if GS can do less damage to its already tainted brand by paying .. they may just do so... and if their attorney believes that they will eventually be incriminated by any formal charges brought to them, this will be another added reason to "pay and forget" ..
move on to suckering its clients and they'll make those fines back in no time...

[winston]

They will settle. Why drag it out and distract senior management's focus ?

If the settlement amount is say, US$500m, it will just take a few minutes to recover it back when their share price goes up after the settlement. They will of course not plead guilty

[LenaHuat]

I hope more forumers will venture a guess. The outcome will be known ASAP (if they settle) or maybe 3-4 years later, by which then this forum would have made a few forumers millionaires, and some a few times over