asterisk2a + cdo   37

The Fed Sends A Frightening Letter To JPMorgan, Corporate Media Yawns
At the top of page 11, the Federal regulators reveal that they have “identified a deficiency” in JPMorgan’s wind-down plan which if not properly addressed could “pose serious adverse effects to the financial stability of the United States.” Why didn’t JPMorgan’s Board of Directors or its legions of lawyers catch this?

It’s important to parse the phrasing of that sentence. The Federal regulators didn’t say JPMorgan could pose a threat to its shareholders or Wall Street or the markets. It said the potential threat was to “the financial stability of the United States.” [...] “…the default of a bank with a higher connectivity index would have a greater impact on the rest of the banking system because its shortfall would spill over onto other financial institutions, creating a cascade that could lead to further defaults. High leverage,
corporate  media  media  conglomerate  too  big  to  bail  too  big  to  fail  too  big  to  jail  TBTF  jpmorgan  jpmorganchase  USA  GFC  recovery  liquidity  trap  repo  liquidity  squeeze  economic  history  Financial  Stability  Board  FinancialCrisisInquiryCommission  crisis  crony  capitalism  Greed  shareholder  capitalism  profit  maximisation  profit  maximization  investment  banking  retail  banking  leverage  CDS  engineering  CDO  MBS  subprime  FDIC  complexity  Fed  Janet  Yellen  Wall  Street  reflate  reflation  derivatives  credit  bubble 
april 2016 by asterisk2a
This Letting Agent Admits The Housing Shortage Is Good News For Landlords - BuzzFeed News
[ Lord Adair Turner book & Richard Koo; banks tend 2 lend 2 property & land rather than productivity/businesses. risk averse, if the family cant pay the mortgage any more, than at least u have not lost all the money! less risky! Its also partly rentier behaviour of banks. // also BOE has to be concerned about future disposable income; rent & utilities eating up 50%-75% of income thus less for consumption! ] “Landlords’ balance sheets are looking healthier than at any point since 2014, and property investors are looking at an excellent rate of return from their portfolios.” Gill warned that changes to stamp duty announced in chancellor George Osborne’s Autumn Statement and due to take effect on 1 April – people selling buy-to-let investments will pay an extra 3% – were bad news for landlords. But overall, the “consistent and developing lack of housing for across all tenures, for a spiralling population” meant the level of demand for rental properties would not reduce, he said.
property  bubble  speculative  bubbles  asset  bubble  asset  allocation  macroprudential  policy  Generationengerechtigkeit  generation  rent  Housing  Crisis  social  affordable  distortion  ZIRP  NIRP  QE  aggregate  demand  Right  to  Buy  Buy-to-Let  Help  to  Buy  Scheme  Help  to  Save  policy  folly  policy  error  consumer  debt  household  debt  budget  deficit  recovery  mortgage  market  credit  bubble  GFC  bank  bailout  BOE  zombie  banks  rentier  rent-seeking  Richard  Koo  underinvestment  productive  investment  infrastructure  investment  zombie  consumer  industrial  policy  economic  history  Mark  Carney  financial  repression  behavioral  finance  behavioral  economics  herding  herd  hunt  for  yield  leverage  margin  trading  equity  bubble  Gini  coefficient  disposable  income  discretionary  spending  VAR  CDO  CDS  risk  aversion  squeezed  middle  class  secular  stagnation  inequality  UK  generational  contract  lost  generation  constituency  Tories  Conservative  Party  nasty  David  Cameron  George  Osborne  general  election  2015  general  election  2020  fiscal  policy  austerity  monetary  policy  liquidity  trap 
february 2016 by asterisk2a
What Really Caused the Crisis and What to Do About It - YouTube
"There are not perfect markets, and there is no perfect planner. [...] we will never arrive at perfect solutions. [...] market will never allocate perfectly ... [...] market will always tend to lend to property and land, and less into productive means (businesses = risk of 100 loss, land or property ... you have a loss when you sell it. << China, UK ) [...] not all credit is good credit. [...] need for macroprudential policy to dampen bubbles bc rate hikes could dampen normal non-speculative area of economy. ie loan to value limits [...] interest rate setting is blunt hammer that people though is the magic wand along the line of self-regulation, free market, neoliberalism and trickle-down [...] GFC can be traced back to the 60-70's - macroecon + micro with absurd assumptions (ie rational expectations, equilibriums, no bubbles) & math & pure theoretical base (no empirical analysis ie of what banks really do ie greed) = makes job of economist as policy advisor real easy.
bank  crisis  JohnMaynardKeynes  keynes  Keynesianism  book  Richard  Koo  aggregate  demand  austerity  liquidity  trap  deleveraging  balance  sheet  recession  debtoverhang  GFC  recovery  secular  stagnation  western  world  dogma  ideology  underinvestment  productive  investment  infrastructure  investment  monetary  policy  monetary  theory  trickle-down  economics  neoliberalism  neoliberal  budget  deficit  economic  history  credit  bubble  output  gap  productivity  inflation  targeting  nominal  GDP  targeting  asset  allocation  economics  investment  banking  zombie  banks  retail  banking  financial  product  CDS  CDO  hunt  for  yield  VAR  risk  aversion  deflationary  deflation  ZIRP  NIRP  QE  debt  monetisation  debt  monetization  Glass-Steagall  self-regulation  regulators  regulation  leverage  margin  trading  property  bubble  arbitrage  speculative  bubbles  asset  bubble  UK  USA  Europe  ECB  Fed  BOE  zombie  consumer  squeezed  middle  class  zombie  corporations  NPL  junk  bond  realestate  macroprudential  policy  mortgage  market  equilibrium  disequilibrium  Economist  economists  Adair  Turner  hayek 
february 2016 by asterisk2a
Vickers warns over weaker bank safety buffers - BBC News
[ no skin in the game ] The man charged with leading an inquiry into the future safety of Britain's banks has said Bank of England plans are not strong enough. Sir John Vickers, who led the Independent Commission on Banking (ICB) said: "The Bank of England proposal is less strong than what the ICB recommended." In a BBC interview, he added "I don't think the ICB overdid it." The Bank of England declined to comment. Specifically, it is the plans to make sure that banks have enough capital that Sir John has questioned. Capital is considered vital to a bank's safety, as it serves to protect it from sudden losses. It comes in many forms, but the most common is funding from shareholders, who expect a hefty return on the risk they are taking. The backdrop to this news is the current slump in bank share prices across Europe. Since the start of the year, European banking stocks have lost a quarter of their value. //&! bit.ly/1Xs0Bac
zombie  banks  retail  banking  investment  banking  toobigtofail  too  big  to  jail  TBTF  too  big  to  bail  economic  history  lobbyist  lobby  Lobbying  GFC  speculation  CDS  CDO  derivatives  Interestrateswap  financial  product  VAR  risk-management  risk  management  Greed  bonuses  bonus  financial  crisis  blackswan  Black  Swan  Career  Politicians  No  Representation  democracy  Super  Rich  1%  plutocracy  oligarchy  Wall  Street  shareholder  value  profit  maximisation  short-termism  self-regulation  regulation  deregulation  regulators  Glass-Steagall  BOE  ECB  Bundesbank  sovereign  debt  crisis  Fed 
february 2016 by asterisk2a
Jan Kregel: The Continuing Risk of Derivatives - YouTube
The other common feature that Kregel notes is that the major objective of active, global financial institutions no longer is the maximization of profits by seeking the lowest cost funds and channeling them to the highest risk-adjusted return. Rather, they are most interested in maximizing the amount of funds intermediated in order to maximize fees and commissions, thereby maximizing the rate of return on bank capital. This means a shift from continuous risk assessment and risk monitoring of funded investment projects that produce recurring flows of interest payments over time, to the identification of riskless "trades" that produce large, single payments with as much of the residual risk as possible carried by the purchasers of the package. The upshot is that most derivative packages mask the actual risk involved in an investment and increase the difficulty in assessing the final return on funds provided.
derivatives  investment  banking  retail  banking  banking  crisis  business  model  risk  aversion  ROI  VAR  CDS  Interestrateswap  financial  literacy  financial  market  financial  crisis  financial  cycle  FinancialCrisisInquiryCommission  tobin-tax  FinancialCrisisResponsibilityFee  CDO  financial  instruments  bonuses  bonus  Greed  shareholder  value  profit  maximisation  Wall  Street  economic  history  self-regulation  regulation  regulators  deregulation  Glass-Steagall  Bank  Oversight  zombie  banks  financial  product 
january 2016 by asterisk2a
"The Untouchables (2013)" PBS documentary about how the Holder Justice Department refused to prosecute Wall Street Fraud despite overwhelming evidence : Documentaries
faustian pact they've made. getting funded their elections by greedy crony capitalists. and are thus beholden to their calls they make and the framework they said they would give them funding for their campaign under. // "breakdown of internal controls [...] 60% of loans in possible portfolio did not meet its own standards, were still bought, put into portfolio" - Citigroup exec // Underfunded/understaffed/non-experience/no-stars @FBI and CIA! corporates have a bigger pocket and star lawyers who know how to position and spin. And without a Whistleblower/Leak it is nearly impossible if not for the case that the accused was really stupid and left a clear trail and or incriminates himself in paperwork/communication. // "criminal intent" //&! No Regrets at Countrywide - bloom.bg/1UptWQC //&! Countrywide’s Mozilo Said to Face U.S. Suit Over Loans - bloom.bg/1RMqPEA //&! NEW SUIT - No, the US government hasn’t forgotten about Countrywide founder Angelo Mozilo - bit.ly/1lQbEfD
GFC  banking  crisis  Greed  crony  capitalism  bank  bailout  economic  history  white-collar  crime  accounting  scandal  corporate  scandal  lobbyist  lobby  Lobbying  Career  Politicians  No  Representation  oligarchy  plutocracy  Super  Rich  1%  Fraud  securities-fraud  bonuses  bonus  financial  incentive  financial  literacy  FinancialCrisisInquiryCommission  Mozilo  CountrywideFinancial  Angelo  Mozilo  subprime  NINJA  Loan  non-performing  NPL  CDS  CDO  citigroup  misselling  misrepresentation  Consumer  Protection  misleading  Positioning  PR  spin  doctor  manufactured  consent  Whistleblower  Eric  Holder  presidency  barackobama  Party  Funding  Justice  System  economic  injustice  Washington  revolving  door  accountability  due  diligence  miconduct 
january 2016 by asterisk2a
BBC Documentary - The Money Trap - How Banks Control the World Through Debt - YouTube
most profitable credit card debt customers are those making just the minimum payment. ... a credit card being a statement of status! retaining customers by upgrading them regularly w higher limits, new colors, new perks (they will never use). // unsecured lending - DEFINITION of 'Unsecured Loan' A loan that is issued and supported only by the borrower's creditworthiness, rather than by a type of collateral. An unsecured loan is one that is obtained without the use of property as collateral for the loan. // revolving debt // the higher your credit limit, the more you are likely to spend. // half of his income to just serve credit card fees and interest charges (no payments towards paying down) debt ... // banks lend irresponsibly bc they know they can get away with it, or somebody else will do it! because there is not regulation. no bank oversight. //&! The Truth about Payday Loans :Young, British and Broke - youtu.be/-yWxTvffbuE //&! Gambling/Betting Shops on Highstreet.
retail  banking  investment  banking  CDO  CDS  subprime  credit  card  debt  credit  card  financial  literacy  household  debt  mortgage  market  Payday  Loans  exploitation  debt  servitude  student  loan  debt  Bubble  property  ethics  moral  beliefs  revolving  debt  consumer  debt  debtoverhang  debt  Super  Cycle  student  debt  private  debt  status  symbol  instant  gratification  status  anxiety  socioeconomic  status  zombie  consumer  consumerist  consumerism  Protection  overdraft  materialism  crony  capitalism  capitalism  NPL  NINJA  Wall  Street  profit  maximisation  shareholder  value  bonuses  bonus  financial  incentive  incentive  creditrating  credit  creditrisk  credit  score  self-regulation  Bank  Oversight  financial  instruments  derivatives 
january 2016 by asterisk2a
Ben Bernanke urges punishment of individual bankers - BBC News
>> Privatisation where and when it is needed. No, only if it suits their ideology and agenda. // regulatory failure. - youtu.be/Yx1P5Wz2iX4 - Ben Bernanke, John Mack Reflect on 2008 Financial Crisis >> NINJA Loan, homeownership, subprime, ... //&! Ben Bernanke on Lehman Crisis: "We Agreed to Be Vague" (Oct. 6, 2015) | Charlie Rose - youtu.be/EYGbtxzIkvw - 'lehman brothers was a sink hole. money put in from gov in a saving attempt would have resulted in being pulled out by its counterparties and creditors. and had not enough collateral and assets.'
too  big  to  jail  regulators  morality  Justice  System  injustice  Law  &  Justice  white-collar  crime  corporate  scandal  accounting  scandal  mis-selling  CDO  CDS  Interestrateswap  benbernanke  book  TBTF  too  big  to  bail  GFC  trickle-down  economics  economic  history  Super  Rich  1%  bank  bailout  banking  crisis  investment  banking  bank  crisis  retail  banking  CEO  pay  CEO  Abacus  subprime  car  loan  NINJA  fairness  Generationengerechtigkeit  austerity  budget  deficit  Student  Bubble  Wall  Street  profit  maximisation  shareholder  value  free  market  Privatisation  MervynKing  George  Osborne  David  Cameron  self-regulation  regulation  deregulation  Career  Politicians  No  Representation  revolving  door  inequality  Gini  coefficient  income  distribution  oligarchy  democracy  social  contract  political  theory  timgeithner  UK  USA  ideology  dogma  lehmanbrothers 
october 2015 by asterisk2a
Volkswagen Congress Hearing: Emissions scandal - watch live - YouTube
VW USA subsidiary CEO Michael Horn. // 'VW the people's car.' 36:40 - I had no understanding what a defeat device is & that it could be installed to cheat emission tests. [<< Symptom of being a conglomerate! Corporate Culture & Values.] min 38:09 - Is hardware, software & even has to do something with the fuel tank. In some models (gen 2) its just software & a sensor. // 49:20 - framing of the answer with EPA (influenced?), cars on the road right now, even they are not passing emissions test, "are legal & safe to drive for the owners." // min 57 NOx, air pollution. 'compensation will be part of discussion'. 40 times than allowable limit. // 1:11:00 - according to him, @ the current state of investigations, this was out of the engine-drivetrain-engineering/software/emissions department within VW. Was not a corporate executive decision from the top. [My 2 cents: more likely decision was made within those departments due to pressure from top to make the test pass happen. << 1:51:00]
VW  Volkswagen  conglomerate  corporate  culture  corporate  values  air  pollution  libor  rigging  scandal  banking  crisis  investment  banking  self-regulation  regulation  regulators  accountability  Wall  Street  shareholder  value  profit  maximisation  retail  banking  PPI  mis-selling  scandal  bank  crisis  CDO  CDS  pharmaceutical  industry  pharma  big  pharma  corruption  bribery  Petroleum  automotive  autoindustry  carbonemission  carbonfootprint  emissions  white-collar  crime  Justice  System  Law  &  Justice  corporate  state  corporate  media  Positioning  Meat  Egg  Dairy  food  industry  lobbyist  lobby  Lobbying  revolving  door  conflict  of  interest  fiduciary  responsibility  exploitation  mainstreet.org  ethics  ethical  machine  democracy  Career  Politicians  No  Representation  double  standard  Abgas-Affäre  Interestrateswap  corporate  social  responsibility  corporate  scandal  Chemical  Fashion  deception  PR  spin  doctor  monopsony  oligopol  madoff  Enron  Worldcom  BP  accounting  accounting  scandal  tax  evasion  tax  avoidance  crony  capitalism  TBTF  too  big  to  jail  too  big  to  bail  Ego  arrogance  Monsanto  Protection  Act  patent  troll  intellectual  property  willful  ignorance  willful  negligence  DeepwaterHorizon  tax  code  consumer  fraud  Protection 
october 2015 by asterisk2a
UK mortgage market, Barclays Qatar probe and US bank CEOs by FT Banking Weekly
there will be no push for new homes to flood the market, increasing prices support status quo, Loan to value measures (underwater or not?). house prices outpaced income since GFC. Buy-to-Let amplifies boom-bust. bank system resilient enough for 35% fall of prices. // generationengerechtigkeit - more of disposable income to spend on rent! putting money into pockets of rentier (buy-to-let) who can him or herself buy only so many pairs of jeans.
UK  mortgage  market  2015  NPL  underwater  CDS  securitisation  retail  banking  investment  banking  CDO  Taper  BOE  ZIRP  NIRP  QE  property  bubble  Buy-to-Let  Help  to  Buy  Scheme  self-regulation  regulation  regulators  Right  to  Buy  generation  rent  Supply  and  Demand  Demand  and  Supply  distortion  GFC  recovery  leverage  macroprudential  policy  microeconomic  policy  constituency  Tories  Conservative  Party  Generationengerechtigkeit  rent-seeking  rentier 
october 2015 by asterisk2a
US-Klage gegen S&P: Details der Klageschrift - SPIEGEL ONLINE
Der Analyst scheint ziemlich baff. "Dieser Deal ist lächerlich", schreibt er einer Kollegin in einer E-Mail. "Wir sollten ihm kein Rating geben." Die Kollegin sieht das ähnlich - wenn auch nur bedingt: "Das Modell erfasst nicht mal die Hälfte des Risikos", stimmt sie zu. Aber: "Wir geben jedem Deal ein Rating… Er könnte von Kühen strukturiert werden, wir würden ihm ein Rating geben." Der saloppe Wortwechsel stammt vom April 2007, dem Beginn der US-Kreditkrise. Besagter "Deal" war ein besonders wackliges Hypothekenpapier - und die Analysten, die sich darüber lustig machen, arbeiten für Standard & Poor's (S&P), eine der drei großen Rating-Agenturen Amerikas. ist ein regelrechter Finanzkrimi: Gnadenlos enthüllt er, wie Insider lange vor anderen wussten, dass der Crash kommen würde - und trotzdem fleißig weiterzockten, um abzukassieren.
2008  GFC  creditrating  CDS  accountability  creditcrunch  WallStreet  creditrisk  corruption  subprime  CDO  ratingagencies  insider-trading 
february 2013 by asterisk2a
UPDATE 3-Goldman wins dismissal of Timberwolf CDO lawsuit | Reuters
Goldman Sachs Group Inc won the dismissal of a lawsuit accusing it of causing an investor to become insolvent by fraudulently misleading it about risky debt it expected would tumble in value.
In a decision made public on Thursday, U.S. District Judge Barbara Jones in Manhattan said the plaintiff, Basis Yield Alpha Fund, failed to sufficiently show that its investment in the Timberwolf 2007-1 collateralized debt obligation was a "domestic" transaction, entitling it to sue in a U.S. court.
She nonetheless gave the Cayman Islands-based fund 30 days to file a new complaint to recover its $56 million loss. Basis had accused Goldman of securities fraud and common law fraud.
goldmansachs  timberwolf  CDO  Abacus 
july 2011 by asterisk2a
Wolfgang Munchau On How The Greek Rollover "Deal" Is A Toxic CDO | zero hedge
"This structure is still not quite so complex as some of the more elaborate CDOs we have encountered in the global financial crisis. If you take some time to work through the arrows and boxes, you see relatively quickly that this complex structure is not a private sector participation at all. Rather it is a private sector bail-out...

The punchline is not surprising, but it is funny:
The rollover agreement represents, from an economic point of view, nothing but a collateralised bond. It subordinates all other bondholders. The rating agencies would normally not hesitate to attach a default rating to Greek government debt.
So the solution is to create a complex structure, and claim that it is technically not a collateralised bond, but something that defies definition.
transparency  financial  finance  financialcrisis  financialmarket  ratingagencies  default  greece  PIIGS  EFSF  ESM  bailout  2011  germany  ECB  angelamerkel  ponzischeme  CDO  SIV  scam  sovereign  debt  crisis 
july 2011 by asterisk2a
JPM Settles Magnetar Charges Related To Misleading CDO Information With SEC For $153.6 Million | zero hedge
SEC TO HOLD CONFERENCE CALL TO DISCUSS ENFORCEMENT VS JP MORGANJP MORGAN TO PAY $153.6M TO SETTLE SEC CHARGESJP MORGAN TO SETTLE SEC CHARGES ON MISLEADING IN CDO ON HOUSINGSEC CITES MISLEADING INVESTORS IN CDO TIED TO HOUSING MARKETKHUZAMI: JPMORGAN FAILED TO DISCLOSE MAGNETAR'S ROLE, INTERESTSKHUZAMI: JPMORGAN HAS REIMBURSED INVESTORS IN TAHOMA CDOKHUZAMI SAYS SEC MISLED INVESTORS IN SQUARED CDO

The recurring question from the ongoing press conference is why nobody at JPM is being charged, and Khuzami is completely unable to reply.Another question for the porn addicts is why it charged GSC's Steffelin in this case while it did not charge anyone from ACA in Abacus. Either the response is either very muffled, or Khuzami has a large appendage in his mouth.
Question: who at JPM knew that Magnetar was selecting the CDO; SEC response: we will not comment beyond what is publicly filed. ...
Magnetar  CDO  jpmorgan  SEC  settelment  2011  fraud  Abacus  wallstreet 
june 2011 by asterisk2a
YouTube - Burns Says Don't Read Too Much Into Goldman Subpoena
Douglas Burns, a formal federal prosecutor, talks about the Manhattan District Attorney's office subpoena of Goldman Sachs Group Inc. Goldman, the fifth-biggest U.S. bank by assets, is being asked to turnover information on the firm's activities leading into the credit crisis, according to two people familiar with the matter. Burns speaks on Bloomberg Television's "InBusiness with Margaret Brennan." (Source: Bloomberg)
goldmansachs  subpoena  2011  SEC  financialcrisis  investigation  settelment  CDO  Abacus 
june 2011 by asterisk2a
JPMorgan Ex-Structured Product CDO Head Llodra May Face SEC Suit - Bloomberg
Michael Llodra, who was global head of structured-product collateralized debt obligations when he left JPMorgan, received a Wells notice from the Securities and Exchange Commission on Jan. 4 saying investigators planned to pursue civil claims against him related to the sale of a 2007 product, according to Llodra’s broker registration filings. The SEC also gave a Wells notice on Jan. 14 to Edward Steffelin, a former executive at a firm that helped manage JPMorgan’s 2007 “Squared” CDO, his brokerage records show.
The SEC has been probing whether JPMorgan, the second biggest U.S. bank by assets, and Steffelin’s former firm, GSC Group, misled investors about hedge-fund Magnetar Capital LLC’s possible role in selecting underlying assets in the $1.1 billion Squared deal, according to a person briefed on the matter who spoke on condition of anonymity because the probe isn’t public.
SEC  jpmorgan  2011  suit  CDO  Magnetar  fraud  misleading 
april 2011 by asterisk2a
Goldmans Tourre Shouldnt Face SEC Lawsuit, His Lawyers Say - Bloomberg
The U.S. Securities and Exchange Commission’s lawsuit against Fabrice Tourre should be thrown out, lawyers for the Goldman Sachs Group Inc. trader accused of misleading investors in a product linked to subprime mortgages told a federal judge. Andrew Rhys Davies, Tourre’s lawyer, said yesterday that the SEC is trying to circumvent a U.S. Supreme Court ruling issued in June, Morrison v. National Australia Bank, that limits the reach of civil claims for acts occurring outside the U.S. “The SEC is attempting to do an end run around Morrison,” Rhys Davies told U.S. District Judge Barbara Jones in Manhattan. 

=========================

Banking is International, But not Law.
goldmansachs  law  financialcrisis  SEC  CDO  fraud  2011 
february 2011 by asterisk2a
FT Alphaville Europes EFSF really is not saving anything
But a consequence of the overcollateralisation is that the funds available for disbursement are less than they would otherwise be — the ‘ABCD’ minus the ‘BCD.’ Münchau reckons a “realistic” ceiling would be about €250bn — far less than the touted €440bn. BarCap reckons it’s about €255bn. There’s also the already-mentioned issue that as more countries tap the EFSF, the more other members’ obligations rise, since facility-requesting members, for obvious reasons, are excluded from contributing.

It’s worth noting the EFSF itself has said that lending capacity is dependent on “a number of variables,” but that eurozone members “will provide guarantees for EFSF issuances up to a total of €440bn . . . the available amounts under the EFSF will be complemented by those of the European Financial Stability Mechanism (€60bn) and of the IMF. They are sufficient to deal with possible needs.”
EFSF  2010  CDO 
september 2010 by asterisk2a
SEC's Top Cop Oversaw Deutsche CDOs - WSJ.com
Securities and Exchange Commission enforcement chief Robert Khuzami oversaw a group of lawyers at his old firm, Deutsche Bank AG, that was closely involved in developing collateralized debt obligations, the same product in the agency's fraud lawsuit against Goldman Sachs Group Inc., according to people familiar with the matter.

Five senior executives of Goldman Sachs Group Inc., including the firm's co-general counsel, sold $65.4 million worth of stock after the firm received notice of possible fraud charges, which later drove its stock down 13%.

Sales by three of the five Goldman insiders occurred at prices higher than the stock's current level. The stock sales by co-general counsel Esta Stecher, vice chairmen Michael Evans and Michael Sherwood, principal accounting officer Sarah Smith and board member John Bryan occurred between October 2009 and February 2010. It was the most active spate of insider selling in three years, according to InsiderScore.com
SEC  goldmansachs  fraud  CDO  deutschebank  2010 
may 2010 by asterisk2a
Selling fire insurance to arsonists | Richard Adams | Comment is free | guardian.co.uk
So what is at stake? According to the SEC's filing [pdf], it charges fraud against Goldman Sachs and one of its employees, Fabrice Tourre, "for making materially misleading statements and omissions in connection with a synthetic collateralized debt obligation ("CDO") GS&Co structured and marketed to investors". The alleged fraud was two-fold. First, that the bank allowed "a significant role" in shaping the CDO's portfolio to be made by a hedge fund, Paulson & Co. The Paulson hedge fund planned to bet against the success of the CDO's underlying assets, and Goldman Sachs knew this and failed to disclose it to the institutions that eventually invested in the CDO. Second, that Tourre went further and misled a key investor – named ACA Management– to believe that the Paulson hedge fund was also investing in the CDO, when in fact the hedge fund was doing the opposite: betting against its success.
SEC  goldmansachs  CDO  synthetic  2010  april  fraud  short-selling 
april 2010 by asterisk2a
Michael Lewis’s ‘The Big Short’? Read the Harvard Thesis Instead! - Deal Journal - WSJ
She emailed scores of Harvard alumni. One pointed her toward LehmanLive, a comprehensive database on CDOs. She received scores of other data leads. She began putting together charts and visuals, holding off on analysis until she began to see patterns–how Merrill Lynch and Citigroup were the top originators, how collateral became heavily concentrated in subprime mortgages and other CDOs, how the credit ratings procedures were flawed, etc.
CDO  economics  finance  research  recession  crisis  michaellewis  CDS  lehmanbrothers  merrylllynch  thesis 
march 2010 by asterisk2a
“Body Count From Goldman Actions Crosses Into Criminal Territory” « naked capitalism
Don't bet what you can not afford to lose.
.
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.
goldmansachs  bet  betting  aig  bailout  derivatives  CDO  mortage  MBS  toxicassets  prime  non-prime  subprime 
december 2009 by asterisk2a
The Reckoning - Citigroup Saw No Red Flags Even as It Made Bolder Bets - Series - NYTimes.com
The bank’s downfall was years in the making and involved many in its hierarchy, particularly Mr. Prince and Robert E. Rubin, an influential director and senior adviser.

Citigroup insiders and analysts say that Mr. Prince and Mr. Rubin played pivotal roles in the bank’s current woes, by drafting and blessing a strategy that involved taking greater trading risks to expand its business and reap higher profits. Mr. Prince and Mr. Rubin both declined to comment for this article.

-- with hindsight -- these people were the architects of this crisis.
Summers and Greenspan and Rubin were part of the Clinton administration, and Bush partly too.
citigroup  MBS  robertrubin  fed  treasury  billclinton  administration  history  housing  bubble  architect  bailout  CDO  housemarket  barackobama  larrysummers  timgeithner  alangreenspan 
december 2009 by asterisk2a

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