Tag Archives: Lloyd Blankfein

Oligarchs of a Feather Stick Together

02 Sunday May 2010

Posted by in economy, financial reform, financial regulation, Goldman Sachs, Politics, too big to fail, Wall Street

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Buffett defends Blankfein:

OMAHA, Neb.— Warren Buffett offered a vigorous defense of Goldman Sachs Group Inc. Saturday, saying the embattled firm hadn’t engaged in improper activity and shouldn’t be blamed for the losses of its clients.

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Mr. Buffett’s comments—which came early in the day at Berkshire Hathaway Inc.’s annual shareholders meeting—offer a powerful vote of confidence in Goldman, which has seen its shares slide since the SEC announced the investigation on April 16. Goldman’s stock fell 9.4% on Friday alone after it emerged that the Manhattan district attorney’s office was conducting a preliminary criminal probe into its mortgage-trading activities.

[…]

The billionaire investor said he fully supported Goldman CEO Lloyd Blankfein. Asked if he could choose a successor for Mr. Blankfein, Mr. Buffett said: “If Lloyd had a twin brother I’d go for him.”

But he does, Mr. Buffett, he does.

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Blankfein Supports Financial Reform?

28 Wednesday Apr 2010

Posted by in economy, financial reform, financial regulation, Goldman Sachs, lobbyists, Politics, special interests, Wall Street

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OK, now I’m suspicious. Goldman CEO Lloyd Blankfein says Wall Street will be the “biggest beneficiary” of financial reform:

“A financial regulatory reform bill has at least one supporter outside of Congressional Democrats, Lloyd Blankfein, the head of investment bank Goldman Sachs. “I’m generally supportive,” Blankfein told the Senate Permanent Subcommittee on Investigations. Wall Street will benefit from the bill because it will make the market safer, Blankfein said.

“The biggest beneficiary of reform is Wall Street itself,” he said.

I think one of the commenters at The Hill has the right analogy. “Oh please don’t throw me in the briar patch, said Br’er Rabbit.”

Or it could be that Blankfein and his fellow banksters are anticipating a favorable return on their investment:

“For the first time since 2004, the biggest Wall Street firms are now giving most of their campaign donations to Republicans.

A Wall Street Journal analysis of 12 large financial services companies, including J.P. Morgan Chase & Co., Goldman Sachs Group Inc. shows that they have collectively made $1.4 million in political donations, with 52% going to Republicans so far this year.”

Typhoid Lloyd (Blankfein) Spread the Goldman “Poison”

27 Tuesday Apr 2010

Posted by in economy, Financial Crisis, financial reform, financial regulation, Goldman Sachs, Politics, Wall Street

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By the summer of 2006, Goldman Sachs executives realized that the subprime mortgage market and its related securities were headed for a fall, “a very unhappy ending” as senior trader Michael Swenson wrote in a 2007 memo. They also knew their firm was heavily invested in this ticking time bomb.

What to do? The solution from Typhoid Lloyd (Blankfein) and the Goldman gang? Let’s find some suckers to dump this trash on, tell them it’s treasure, bet on it to fail, and rake in the dough.

And rake it in they did.

“The firm, which had profited handsomely off packaging and selling securitized subprime home mortgages to investors during the housing boom, switched directions in early 2007, furiously shedding its home mortgage-linked risk and buying as much insurance as it could, effectively shorting the market throughout the year — a move that netted the firm “billions and billions” at the expense of its clients, according to the documents released by the Senate Permanent Subcommittee on Investigations.

The firm was “spreading the poison throughout the system,” Levin charged.

“Goldman Sachs made billions of dollars from betting against the housing market, and it placed those bets in some cases at the same time it was selling mortgage-related securities to its clients,” said the committee’s chairman, Carl Levin (D-Mich.).”

Poison is the sanitized version. Goldman exec Tom Montag put the appropriate tag on it:

“One particular security, named Timberwolf I, a collateralized debt obligation of other collateralized debt obligations that were based not on actual home mortgage bonds but instead on those bonds’ movements, lost 80 percent of its value within five months of issuance. A senior executive…remarked in a June 22, 2007, email, “Boy, that timberwolf was one shi**y deal.”

Which is precisely what Goldman’s clients got—one shi**y deal.

Are Goldman Charges the Tip of the Iceberg?

19 Monday Apr 2010

Posted by in bailout, economy, Financial Crisis, financial reform, financial regulation, Goldman Sachs, Politics, too big to fail, Wall Street

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Could Friday’s news that the Securities and Exchange Commission is bringing civil charges of fraud against Goldman Sachs be the tip of the iceberg? Consider what has happened since then.

The German government is considering legal action against Goldman.

British Prime Minister Gordon Brown called for investigations into the bank’s role in the mortgage market.

“The SEC is investigating whether other mortgage deals arranged by some of Wall Street’s biggest firms may have crossed the line into misleading investors.

S.E.C. Enforcement Director Robert Khuzami told CNBC, “We have brought and will continue to pursue cases involving the products and practices related to the financial crisis.” … a wide range of cases are currently being investigated.”

Subprime mortgage king Countrywide is also in the crosshairs:

“Federal criminal investigators looking into the collapse of Countrywide Financial Corp. have been calling witnesses before a grand jury, say people familiar with the matter.”

Former Goldman employees are starting to talk, implicating company execs up to and including CEO Lloyd Blankfein in Goldman’s profiting from the housing market collapse.

Dylan Ratigan has a basic explanation of what Goldman and others were doing. The analogy goes like this—they were selling cars with faulty brakes and then taking out life insurance policies on the people to whom those cars were sold.

But it was even more sinister than that. Goldman not only sold the car with faulty brakes, while telling the buyers that the brakes were good, they designed the car to have faulty brakes, knowing that it was going to crash at some point. So they profited on both ends, selling the car they knew would crash and then collecting the life insurance when it crashed.

Those who are quick to dismiss the charges against Goldman as a tempest in a teapot, something that will quickly blow over after the firm pays a small (relative to their size) fine and goes on their merry way should remember this. It was a night watchman who found a piece of tape on a lock on a door at the Watergate Hotel which led to an investigation which culminated in the resignation of a president.

The question now is do we have a modern-day Woodward and Bernstein? Do we have a modern-day Ben Bradlee who will defy the powers that be and publish the information those reporters uncover in spite of the possible repercussions that those powers may bring to bear? Do we have a modern-day Sam Ervin in Congress? Is there a modern-day John Dean? An ethical person with inside knowledge of the activities at Goldman and other Wall Street giants who is willing to talk?

Time will tell.

Obama’s Attitude Adjustment Toward “Fat Cats”

13 Saturday Feb 2010

Posted by in Financial Crisis, Obama, Politics, special interests, Wall Street

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President Obama certainly has had a “change” of heart regarding Wall Street bonuses. He has gone from referring to the payouts as “shameful,” “the height of irresponsibility,” and “obscene” to saying he doesn’t “begrudge” Chase CEO Jamie Dimon and Goldman CEO Lloyd Blankfein their bonuses because, “I know both those guys; they are very savvy businessmen.”

What happened in between the time the president said, “I did not run for office to be helping out a bunch of fat cat bankers on Wall Street,” and “I, like most of the American people, don’t begrudge people success or wealth. That is part of the free- market system.”

This happened:

“Just two years after Mr. Obama helped his party pull in record Wall Street contributions — $89 million from the securities and investment business, according to the nonpartisan Center for Responsive Politics — some of his biggest supporters, like Mr. Dimon, have become the industry’s chief lobbyists against his regulatory agenda…And industry executives and lobbyists are warning Democrats that if Mr. Obama keeps attacking Wall Street “fat cats,” they may fight back by withholding their cash.”

Warning duly noted and appropriate corrective measures taken.