Posts Tagged ‘Stephen Friedman’

Former NY Fed Chair and Goldman Sachs Director Friedman in the Hot Seat Again

Former NY Fed Chair and Goldman Sachs Director Friedman in the Hot Seat Again

Courtesy of Jr. Deputy Accountant 

Remember former NY Fed Chairman Stephen Friedman? He may have stepped down after getting busted for buying Goldman Sachs shares when he both sat on their board and their audit committee, not to mention the fact that he was serving as chairman of the NY Fed at the time, but he isn’t out of the frying pan just yet. See the deal was supposed to be kosher because of the waiver filed in September of 2008 that somehow made everything OK but that’d be like letting Tim Geither sign a waiver to cash in our gold reserves for dollars through Cash4Gold. You can’t make illegal activities legal, no matter how many papers you push in an attempt to do so.

Bloomberg:

Greg Palm, Goldman Sachs Group Inc. general counsel, took a call in his 37th-floor office at One New York Plaza on Dec. 16, 2008. It was his old boss, Stephen Friedman, a former Goldman chairman who was then head of the audit committee of its board of directors. Goldman’s stock was down 65 percent from its 52-week high during an accelerating global financial breakdown.

Friedman, who had become chairman of the Federal Reserve Bank of New York that year, told Palm he wanted to buy, Bloomberg Markets magazine reports in its August issue.

Palm says he couldn’t think of a reason why Friedman shouldn’t: Goldman had made the necessary disclosures in that day’s filings, Palm says.

“We’d just reported earnings,” says Palm, whose job includes approving trades by directors. “There was no material information that wasn’t public from Goldman’s standpoint.”

Friedman, 72, who is still a Goldman director, bought 37,300 shares at an average of $80.78 each on Dec. 17. Five weeks later, he picked up 15,300 more at an average of $66.61. By yesterday, the stock had doubled to $133.76, giving Friedman a paper profit of $3 million.

Now, the U.S. House Oversight and Government Reform Committee is investigating Friedman’s stock purchases. It wants to know why he was permitted to buy stock in a bank he was regulating as chairman of the New York Fed.

One might wonder why Friedman felt compelled to gobble up GS shares when it was deeply immersed in its darkest days but any curiosity could be easily…
continue reading


Tags: , , ,




Did the NY Fed Leave a Funny Taste in YOUR Mouth Too?

Did the NY Fed Leave a Funny Taste in YOUR Mouth Too?

Courtesy of Jr. Deputy Accountant 

A "travesty" LOL.

Reuters:

Federal Reserve Bank directors say a Senate plan to kick bankers off the boards of regional Fed banks is an overreaction to one headline-grabbing incident and could harm the U.S. central bank.

Federal Reserve insiders worry that planned changes to the century-old U.S. central banking system — comprising 12 regional banks and a 7-member Washington-based Board of Governors — would make it more centralized, less independent, and less effective.

A provision in a wide-ranging regulatory reform bill near completion in Washington would ban bankers from serving on the boards of their regulators.

Alarm about possible conflict of interest at the Fed broke out after Goldman Sachs converted to a Fed-regulated bank to withstand the financial crisis.

This put then-New York Fed chairman Stephen Friedman — a Goldman director and former chairman — in violation of the Fed’s rules. Friedman requested a waiver for owning Goldman shares in 2008 and as he waited for the waiver, he bought more shares.

While his actions were not illegal, Friedman stepped down following public furor.

"This legislation, the way it’s proposed, is an overreaction to a particular unique situation, and to have bankers removed from these boards is a travesty," said Mark Hewitt, chief executive of Clear Lake Bank and Trust Co in Iowa and a director at the Federal Reserve Bank of Chicago.

The situation "maybe left a funny taste in someone’s mouth, but that’s not what’s happening in Chicago," he said.

So it isn’t a conflict of interest for Jamie Dimon to sit on the board of his bank’s regulator? Oh please, you’re totally overreacting, who else has their finger on the pulse of banking? Surely not the Fed themselves (as if that’s their job). 

 


Tags: , , ,




I Retract My Apology and Call for More Regulation of Goldman Sachs

I Retract My Apology and Call for More Regulation of Goldman Sachs (pdf)

apologyCourtesy of Janet Tavakoli at TSF
(see also Apology)

According to SIGTARP1, both the Federal Reserve and Treasury agreed that an AIG failure posed unacceptable risk to the global financial system and the U.S. economy.  On March 24, 2009, Fed Chairman Ben Bernanke testified before the House Financial Services Committee [P.9]:

[C]onceivably, its failure could have resulted in a 1930’s-style global financial and economic meltdown, with catastrophic implication[s].

From July 2007, AIG’s financial situation deteriorated while so-called “AAA” collateralized debt obligations (CDOs) dropped in value. AIG sold credit default swaps (CDSs) on these CDOs and had to post more collateral, as the prices plummeted. 

Goldman Sachs was AIGFP’s (UK-based AIG Financial Products) largest CDS counterparty with around $22.1 billion, or about one-third of the problematic trades.  Goldman underwrote some of the CDOs underlying its own CDSs, and also underwrote a large portion of the CDOs against which French banks SocGen, Calyon, Bank of Montreal, and Wachovia bought CDS protection.  Goldman provided pricing on these CDOs to SocGen and Calyon. Goldman was a key contributor to AIG’s liquidity strain and the resulting systemic risk.  (See “Goldman’s Undisclosed Role in AIG’s Distress”)

Apocalypse AIG

By mid September 2008, AIG’s long-term credit rating was downgraded, its stock price plummeted, and AIG couldn’t meet its borrowing needs in the short-term credit markets.  According to SIGTARP, “without outside intervention, the company faced bankruptcy, as it simply did not have the cash that was required to provide to AIGFP’s counterparties as collateral.” [P.9] The Federal Reserve Board with Treasury’s encouragement authorized a bailout. 2

The Federal Reserve Bank of New York (FRBNY) extended an $85 billion revolving credit facility, so AIG could make its collateral payments to Goldman and some of its CDO buyers.  AIG also met other obligations, such as payments under its securities lending programs owed to Goldman and some of its CDO buyers.  (See also: “AIG Discloses Counterparties to CDS, GIA, and Securities Lending Transactions.”) 

Goldman “Would Have Realized a Loss”

Fed Chairman Bernanke said AIG’s crisis put the world at risk for a global financial meltdown.  Goldman purchased little credit default protection3 against an AIG collapse.  Even if Goldman escaped a collateral clawback of the billions it held from AIG4, the


continue reading


Tags: , , , , , , , , , , , , ,




 
 
 

Phil's Favorites

The Portfolio Gap

 

The Portfolio Gap

Courtesy of 

Dalbar is known for publishing a study on returns from equity funds compared to the returns that investors capture in those same funds. Every year reveals the same message: The average investor, with remarkable consistency, underperforms their own investments, ostensibly by buying and selling at inopportune times.

The methodology behind the study has been under assault for at least the last 15 years. Here is ...



more from Ilene

Zero Hedge

Fiat's Failings, Gold, & Blockchains

Courtesy of ZeroHedge View original post here.

Authored by Alasdair Macloed via GoldMoney.com,

The world stands on the edge of a cyclical downturn, exacerbated by trade tariffs initiated by America. We know what will happen: the major central banks will attempt to inflate their way out of the consequences. And those of us with an elementary grasp of economics should know why the policy will fail.

In addition to the monetary and debt inflation since the Lehman crisis, it is highly likely the ...



more from Tyler

Digital Currencies

Visualizing The New Cryptocurrency Economy

Courtesy of ZeroeHedge

Over a decade ago, the birth of Bitcoin sparked a revolution in the digital world - and just last year, the number of active cryptocurrencies jumped from roughly 1,600 to over 3,000 worldwide.

As Visual Capitalist's Ashley Viens details below, cryptocurrencies have now evolved past simple digital currencies, offering solutions to meet the complex needs of modern financial markets.

Today’s graphic from Abra visualizes the complex, ever-evolving cryptocurrency ecosys...



more from Bitcoin

Kimble Charting Solutions

Gold Miners Indicator Attempting Multi-Year Breakout, Says Joe Friday

Courtesy of Chris Kimble

Are Gold Mining stocks about to be sent a bullish signal they haven’t received in years? Possible says Joe Friday.

This chart looks at the Senior Miner/Junior miner (GDXJ/GDX) ratio over the past few years. Historically when the ratio is heading up, miners tend to do very well.

The ratio has created a series of lower highs just below the falling line (1), since the summer of 2016. The ratio is currently testing the strong falling resistance line and the June 2019 highs at (2).

Joe Friday Just The Facts Ma’am; If the ratio succeeds in a double breakout at (2), it sends miners a long-awaited bullish message.

...

more from Kimble C.S.

Insider Scoop

Scott Galloway Calls For Twitter's Board To Replace 'Part-Time CEO' Jack Dorsey Amid Africa Move Plans

Courtesy of Benzinga

A shareholder in Twitter Inc. (NASDAQ: TWTR) and New York University business professor wrote an open letter Friday to the company's board calling for the replacement of CEO Jack Dorsey.

What To Know

Scott Galloway, who owns more than 330,000 shares of Twitter stock a...



http://www.insidercow.com/ more from Insider

Lee's Free Thinking

Chart Shows the Fed Ramping Up Not QE - Funding Almost All Treasury Issuance

 

Chart Shows the Fed Ramping Up Not QE – Funding Almost All Treasury Issuance

Courtesy of Lee Adler, Wall Street Examiner 

The Fed is ramping up “Not QE” .

The Fed bought $2.2 billion in notes today in its POMO, “not QE,” operations. Actually $2.15 billion because they sold back a whole $50 million. Must have been a little glitch in the force.

This brings the Fed’s total outright purchases of Treasuries to $170 billion since it started Not QE, on September 17.

It also did $107 billion in gross new repo loans to Primary Dealers to buy Tre...



more from Lee

Chart School

Silver stock taking the sector higher

Courtesy of Read the Ticker

As the US economy begins to show late cycle characteristics like: GDP slowing, higher inflation, higher wage costs, CEO confidence slump. 

Previous Post: Gold Stocks Review

The big players in the market are looking for the next swing off good value lows. This means more money is finding it way into the gold and silver sector, and it is said gold and silver stocks actually lead the metal prices.

The cycle below shows prices are ready to move in the months ahead (older chart re posted).


Click for popup. Clear your browser cache if image is not showing...



more from Chart School

Members' Corner

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

 

Sacha Baron Cohen Uses ADL Speech to Tear Apart Mark Zuckerberg and Facebook

By Matt Wilstein

Excerpt:

Sacha Baron Cohen accepted the International Leadership Award at the Anti-Defamation League’s Never is Now summit on anti-Semitism and hate Thursday. And the comedian and actor used his keynote speech to single out the one Jewish-American who he believes is doing the most to facilitate “hate and violence” in America: Facebook founder and CEO Mark Zuckerberg.

He began with a joke at the Trump administration’s expense. “Thank you, ADL, for this recognition and your work in fighting racism, hate and bigotry,” Baron Cohen said, according to his prepared...



more from Our Members

The Technical Traders

VIX Warns Of Imminent Market Correction

Courtesy of Technical Traders

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX. These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance. This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. 

Vix Value Drops Before Monthly Expiration

When the VIX falls to levels below 12~13, this typically v...



more from Tech. Traders

Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

Reminder: We are available to chat with Members, comments are found below each post.

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



more from Biotech

Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

more from M.T.M.

Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

...

more from Promotions





About Phil:

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...

Learn more About Phil >>


As Seen On:




About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

Market Shadows >>