Posts Tagged ‘criminal charges’

Mike Konczal Talks FinReg on GRITtv: Taxpayers Still on the Hook for Wall Street’s Recklessness

Mike Konczal Talks FinReg on GRITtv: Taxpayers Still on the Hook for Wall Street’s Recklessness

Courtesy of Tim Price writing at New Deal 2.0

Roosevelt Institute Fellow Mike Konczal joined Demos’s Nomi Prins and GRITtv host Laura Flanders last week to discuss the state of financial reform, whether the current bill does enough to change the culture of risk on Wall Street, and whether taxpayers are going to be stuck holding the bag — again.

Check out the full interview:

Mike notes that one of the key questions of reform is “who’s going to pay for this, and ideally we want the people who caused the trouble to pay for it, not regular citizens.” Instead, he says Republicans like Scott Brown have transferred the cost from banks to the FDIC and the savings accounts of average Americans.

On the subject of possible criminal charges for Goldman Sachs, Mike says that the lack of major arrests compared to previous crises “shows how much people haven’t internalized the disaster they’ve caused. The culture is still very much the same.” The problem, he explains, is that firms like AIG “thought they were being very clever when they were actually getting gamed.” The fact that we still aren’t sure how much of this was illegal “shows how disturbed the regulation is.”

Mike pushes back on AIG’s attempts to shift the blame for its reckless bets, noting that “when we talk about what AIG was doing, that’s millions of Americans who are actually in those bonds, that were given loans that they shouldn’t have so that AIG could juke some statistics.” Unfortunately, he offers a grim prognosis for AIG’s victims: “The foreclosure crisis is ongoing, it will be ongoing next year, and the President’s plan there, HAMP, has been a total failure that most credible people have walked away from at this point. We have a quarter of homeowners underwater and they have no relief, and they’re paying into a system that is pretty much insolvent.”

Finally, responding to deficit hawks’ calls for cuts to programs like Social Security, Mike argues that “if they were very concerned about protecting anyone, they would go much harder into financial reform. Because this is really where the deficit’s coming from right now, the fact that we have a major financial crisis. There’s two things that
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Josh Rosner Predicts Legal Trouble for Moody’s

Josh Rosner Predicts Legal Trouble for Moody’s

By Bryce Covert, Courtesy of New Deal 2.0

Bloomberg TV caught up with ND20 contributor Josh Rosner at yesterday’s FCIC hearing on ratings agencies. His take: If Washington really wants to “dive deep” into the causes of the financial crisis, including the role these agencies played, Rosner “cannot imagine that there would not be criminal charges.” The real issue for him is not whether there is a conflict of interest inherent in Moody’s business model, but the compensation structure that “creates a misalignment of interests” by not keeping the agencies tied to the products they rate for the long-haul. Watch here:

 

 


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The politics of the Goldman fraud case

Here’s Edward Harrison’s view of the GS case. I might add, in a civil case, the question may come down to whether the statute was violated, whereas in a criminal case for fraud, there’s the more troublesome issue of intent. – Ilene 

The politics of the Goldman fraud case

Courtesy of Edward Harrison, at Credit Writedowns

Gavel on top of legal books

When I first wrote about the case against Goldman Sachs for fraud on Friday I said that my reaction was “largely positive” as fraud was a major factor in what led to crisis and it is high time regulators started to acknowledge this.

Nonetheless, from my vantage point. The Goldman case is a politically-charged one because there are a number of political and tactical advantages to this particular case. Let me review some of them.

It is no coincidence that this is a civil case instead of a criminal one. When the Obama Administration went after the Bear Stearns hedge fund managers Cioffi and Tannin who blew up in July 2007 via the Brooklyn US Attorneys office, the defendants were acquitted. This was a black eye for the Administration. Here was a Democratic Administration conducting bailouts of Wall Street, allowing the firms to post record profits and reward themselves massive bonuses even as they benefitted from government largesse. And yet, in the only significant criminal case they brought against alleged wrongdoers, they lost. Americans simply don’t understand this. Their anger will be felt at the polls.

So, the Obama Administration can use this Goldman case as a Trojan horse for discovery both at Goldman and at other firms. You have already heard that the Merrill – Magnetar scheme was identical to this one. Robeco, a Dutch bank is claiming that Merrill defrauded them in the exact same way that Goldman is alleged to have defrauded ABN Amro and IKB.

As we know from the O.J. Simpson proceedings, a civil case merely needs to meet the ‘preponderance of evidence’ threshold and is a far cry from the ‘beyond a reasonable doubt’ bar set in criminal trials. It is easier to get a favourable outcome and pass the discovery from this case to the US Attorneys as a foundation for a criminal proceeding. This tactic also gives Congress a green light to go on a fishing expedition at Goldman and elsewhere on Wall Street if they so choose.

From a political perspective, the Obama Administration…
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Goldman Sacked?

Goldman Sacked?

Courtesy of George Washington

The Goldman fraud indictment is obviously huge news.

The Connecticut Attorney general wants to file criminal charges:  

Visit msnbc.com for breaking news, world news, and news about the economy

And New York might not be far behind

ProPublica points out that other major banks did the same thing as Goldman.

Shahien Nasiripour writes:

Securities fraud charges against Goldman Sachs are just the beginning as federal regulators and investigators comb through the wreckage of a fraud-induced recession, caused by a pervasive and systemic culture of deceit at Wall Street’s biggest firms, say Wall Street analysts.

Are the prosecutions finally starting? Is the dam finally breaking? Has Goldman really been sacked? 

Maybe.

But Tyler Durden thinks it’s all bread and circuses. 

And as Mish points out (edited slightly for readability): 

Here is a list of some of the things the SEC has ignored.

Geithner’s Illegal Money-Laundering Scheme Exposed; Harry Markopolos Says “Don’t Trust Your Government”  

77 Fraud, Money Laundering, Insider Trading, and Tax Evasion Investigations Underway Regarding TARP  

Secret Deals Involving No One; AIG Coverup Conspiracy Unravels 

Questions Geithner Cannot Escape 

Time To Indict Geithner For Securities Fraud 

Bernanke Guilty of Coercion and Market Manipulation 

Paulson Admits Coercion; Where are the Indictments? 

Bernanke Suffers From Selective Memory Loss; Paulson Calls Bank of America "Turd in the Punchbowl" 

Let the Criminal Indictments Begin: Paulson, Bernanke, Lewis

***

We need a complete ethics overhaul but we will not see it until people are thrown into prison and corporations have to choose which business they want to be in as opposed to the current state of affairs where anything for a profit is acceptable. 

  • Firms give advice based on how much profit the firms will make on it
  • Firms trade their own books to the detriment of clients
  • Firms make upgrades and downgrades after they take positions themselves
  • Firms front-run trades
  • Firms engage in dark pools
  • Firms deemed too big to fail take advantage by upping leverage
  • Firms like Goldman Sachs (which is nothing more than a giant hedge fund with no ethics) have access to Fed funds at low interest rates to do whatever the hell they please

Is someone finally standing up to the vampire squids of the world?

Or is this yet another p.r. stunt, where deals will be cut, a few low-level patsies will be convicted, and business as usual will continue?

Only time will tell …


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ValueWalk

Goldman Raking in Billions As Workers Face Looming Aid Cut

By Anna Peel. Originally published at ValueWalk.

WASHINGTON, D.C. – Amid a global pandemic and economic crisis hurting small businesses and workers across the country, Goldman Sachs reported “blowout second-quarter earnings” today, raking in a whopping $2.42 billion in profit — a boon CNBC is calling the mega bank’s “biggest earnings outperformance in nearly a decade.” Goldman Sachs was able to capitalize on the trillions of dollars the Federal Reserve and the Trump administration inje...



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Phil's Favorites

Warnings Grow: "We Are in a Massive Economic Downturn"

Courtesy of Pam Martens

Lael Brainard, Member of the Federal Reserve Board of Governors

Yesterday, Federal Reserve Governor Lael Brainard gave a speech via webcast to the National Association for Business Economics. She warned, effectively, that the rosy spin coming out of the Trump administration needed to be weighed against the reality on the ground. Brainard raised the caution that credit downgrades on bonds and corporate defaults are occurring at “a faster pace than in the initial months of the Global Financial Crisis.” Bra...



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Kimble Charting Solutions

Junior Gold Miners Working On 7-Year Breakout!

Courtesy of Chris Kimble

Its been a long 7-years if you happened to buy Junior miners ETF (GDXJ) back in 2013, as it has traded sideways since those highs.

This chart comes from Marketsmith.com, which reflects that GDXJ is trading above long-term moving averages and its relative strength continues to push higher.

GDXJ has spent the majority of the past 7-years inside of the trading range (1).

The rally off the bottom of the range in March, has GDXJ working on an upside breakout of this trading range at (2).

A...



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Zero Hedge

Gary Shilling: The Social Security's Funding Crisis Has Arrived

Courtesy of ZeroHedge View original post here.

Authored by A. Gary Shilling, originally published in Bloomberg Opinion

The Social Security Trust Fund has done quite well in recent years, due to the postwar babies’ surge into the labor force in the last decades of the 20th century while retirees from the low-birth rate Great Depression years were drawing relatively few benefits. The combination of these two forces pushed the Social Security Trust Fund balance from about zero in ...



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The Technical Traders

Second Phase Real Estate Collapse Pending

Courtesy of Technical Traders

Real estate, especially commercial real estate, is likely to be the first segment of the real estate market to enter the second phase of an extended collapse.  The COVID-19 virus has created an atmosphere where continuing operations for retail, restaurants, and many other business segments is virtually impossible to maintain.  Without the ability to earn sufficient income, thousands of restaurants and other retail businesses have already closed or are in the process of closing.  This has pushed the commercial real estate market into turmoil.  We believe the residential real estate market will follow the commercial market because consumers are going to suffer as commercial real estate collapses....



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Biotech/COVID-19

While coronavirus cases spike in the South, the Northeast seems to have it under control - here's what changed

 

While coronavirus cases spike in the South, the Northeast seems to have it under control - here's what changed

Face masks and social distancing have become the norm in New York City. Noam Galai/Getty Images

Courtesy of Taison Bell, University of Virginia

Hospital Capacity Crosses Tipping Point in U.S. Coronavirus Hot Spots” – Wall Street Journal

This is a head...



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Digital Currencies

Chainlink Crypto Surges To A New All-Time High - Here's Why...

Courtesy of ZeroHedge View original post here.

Authored by Joseph Young via CoinTelegraph.com,

Surging volume, price discovery, and new partnerships pushed Chainlink price to a new all-time high at $8.48...

image courtesy of CoinTelegraph

...

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Chart School

Dow 2020 Crash Watch - Update

Courtesy of Read the Ticker

Like 1929 the markets have bounced. This time it is on the back of the FED $6.5T money printing.

Previous Post: Dow 2020 Crash Watch 

But can the FED blow $6T every time the market rolls down to test support.

Yes, maybe before the US 2020 elections the FED will do 'what it takes'. But post elections not so much, the year 2021 is a long way from the next election (presidential or congress) and defense of the markets may not be so supportive at $6T or $10T per market smash. The FED may hesitate, and that will be window for stocks to break lower.

The 36 month simple moving a...

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Lee's Free Thinking

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

 

These Charts Show COVID 19 Is Spreading in the US and Will Kill the Economy

Courtesy of  

The COVID 19 pandemic is, predictably, worsening again in much of the US. Only the Northeast, and to a lesser extent some Midwestern states, have been consistently improving. And that trend could also reverse as those states fully reopen.

The problem in the US seems to be widespread public resistance to recommended practices of social distancing and mask wearing. In countries where these practices have been practi...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

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Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

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Mike will show off the TradeExchange's new platform which you can try for free.  

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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