Goldman Sachs Secret Deal With SEC Beggars Belief

[Ichingcarpenter]

Thank the assiduous brilliance of Reuters’ star columnist Felix Salmon for tearing away the phony artifice of the coziness between Wall Street regulators and Wall Street. In today’s offering Salmon blew me away with his exclusive discovery that the SEC secretly promised Goldman Sachs NOT to prosecute any other notorious ripoffs of the innocent investor in mortgage back securities other than Abacus, the heretofore biggest Goldman black eye coming out of the melt-up before the meltdown. I have to admit the clever Salmon is a must-read every morning at 4:45 AM when his blog is sent about, for he is deft at getting beneath the surface of the financial culture and letting its denizens, including the financial media, get their just desserts. Salmon has a superior supply of word daggers.

The SEC took Goldman’s offer of a $550 million fine to cover its sins in the Abacus public offering, which dumped lousy mortgage-backed securities on an unsuspecting public and promised the public that the settlement did not exclude the agency from pursuing fines on other smell-like garbage deals like Hudson and others where Goldman was going mainly short but wanting its public clients to go long the same securities it was shorting. Yet, the SEC quietly told Goldman it was taking the Abacus fine as recompense for all of its sins, a hell of a fine day of fixing the government.

It beggars belief that it took a Freedom of Information Act request to dig up this rotten little arrangement from the recent past. Woulda. Coulda. Shoulda. It is a stark reminder of the message that the US is “driven by such a critical symbiotic and costly relationship “between Wall Street and official Washington,” as Nomi Prins underscores in her new book, All the Presidents’ Bankers: The Hidden Alliances That Drive American Power.

She writes compellingly: “The most elite U.S. bankers and government officials understand that their positions are mutually reinforcing…the U.S. bank heads retain more influence over global capital than any government, and their unique alignment with the presidency is a force that will fortify America’s power…Our choice is simple: either we break the alliances, or they will break us.” There is simply no counterbalance to the secret accommodation that goes on every day between the bigwigs of Wall Street and the powers that be in Washington. More Freedom of Information Act investigations please.

Simply stated, we are living under false posturing about the “pretense of financial reform instead of pushing for real reform… Bankers dominate the globe using other people’s money, and presidents gain command through other people’s votes.” This the truth, the whole truth and nothing but the truth of how the nation runs at the top of its power structure.


http://www.forbes.com/sites/robertlenzner/2014/04/10/goldman-sachs-secret-deal-with-sec-beggared-belief/


I wonder when we all get presidential cufflinks?

[bobthedrummer]

1. Remember the introduction to the old Dark Skies tv show that stated that everything one had been

taught about history was a lie? That's what reading this article did for me Ichingcarpenter-reminded me of Dark Skies. K&R.

[Ichingcarpenter]

2. Actually the infection the link describes is worse

There are Goldman guys imbedded in all areas of the U.S. govt including the SEC

[KoKo]

19. Mario Draghi, President of the EU...World's 9th Most Powerful Person...Goldman-Sachs

Mario Draghi (Italian pronunciation: [ˈmaːrjo ˈdraːɡi]; born 3 September 1947) is an Italian banker and economist who succeeded Jean-Claude Trichet as the President of the European Central Bank on 1 November 2011. He was previously the governor of the Bank of Italy from January 2006 until October 2011. In 2013 Forbes nominated Draghi 9th most powerful person in the world

Background

He was born in Rome, where he studied at the Massimiliano Massimo Institute[2] and graduated from La Sapienza University under the supervision of Federico Caffè. Then he earned a PhD in economics from the Massachusetts Institute of Technology in 1976 with his thesis titled Essays on economic theory and applications, under the supervision of Franco Modigliani and Robert Solow.[3] He was full professor at the Cesare Alfieri Faculty of Political Science of the University of Florence from 1981 until 1994[4] and fellow of the Institute of Politics at the John F. Kennedy School of Government, Harvard University (2001).

From 1984 to 1990 he was the Italian Executive Director at the World Bank. In 1991, he became general director of the Italian Treasury, and held this office until 2001. During his time at the Treasury, he chaired the committee that revised Italian corporate and financial legislation and drafted the law that governs Italian financial markets. He is also a former board member of several banks and corporations (Eni, Istituto per la Ricostruzione Industriale,[5] Banca Nazionale del Lavoro and IMI).

Draghi was then vice chairman and managing director of Goldman Sachs International and a member of the firm-wide management committee (2002–2005).[6]

Draghi is a trustee at the Institute for Advanced Study in Princeton, New Jersey and also at the Brookings Institution, in Washington, D.C.

In his capacity as Bank of Italy governor, he was a member of the Governing and General Councils of the European Central Bank and a member of the Board of Directors of the Bank for International Settlements. He is also governor for Italy on the Boards of Governors of the International Bank for Reconstruction and Development and the Asian Development Bank.[/b\

On August 5, 2011 he wrote, together with the immediate past governor of the ECB, Jean Claude Trichet, a letter to the Italian government to push for a series of economic measures that would soon be implemented in Italy.--------

ECB Candidacy

Draghi was frequently mentioned as a potential successor to Jean-Claude Trichet, whose term as President of the European Central Bank ended in October 2011.[7] Then, in January 2011, German weekly newspaper Die Zeit reported, with reference to high-ranking policy-makers in

On 17 May 2011 the Council of the European Union – sitting as Ecofin – adopted a recommendation on the nomination of Draghi as President of the ECB.[16] He was approved by the European Parliament and the ECB itself[17] and on 24 June 2011 his appointment was confirmed by the European leaders.[18] Draghi began leading the Frankfurt-based institution when Trichet's non-renewable eight-year term expired on 31 October 2011. Draghi's term runs from 1 November 2011 to 31 October 2019.[19]

Concerns were also expressed during the candidacy about Draghi's past employment at Goldman Sachs.[6][20] Pascal Canfin (MEP) asserted Draghi was involved in swaps for European governments, particularly in Greece, trying to disguise their countries' economic status. Draghi responded that the deals were "undertaken before my joining Goldman Sachs [and] I had nothing to do with them", in the 2011 European Parliament nomination hearings.[21][22]
Presidency

In December, 2011, Draghi oversaw a €489 billion ($640 b.), three-year loan program from the ECB to European banks. The program was around the same size as the US Troubled Asset Relief Program (2008) though still much smaller than the overall US response including the Federal Reserve's asset purchases and other actions of that time.

In February 2012, Nobel prize laureate in economics Joseph Stiglitz argued that, on the issue of the impending Greek debt restructuring, the ECB's insistence that it has to be "voluntary" (as opposed to a default decreed by the Greek authorities) was a gift to the financial institutions that sold credit default insurance on that debt; a position that is unfair to the other parties, and constitutes a moral hazard.[24]

Late in February, 2012, a second, somewhat larger round of ECB loans to European banks was initiated under Draghi, called long term refinancing operation (LTRO). One commentator, Matthew Lynn, saw the ECB's injection of funds, along with Quantitative easing from the US Fed and the Asset Purchase Facility at the Bank of England, as feeding increases in oil prices in 2011 and 2012.[25]

In July 2012, in the midst of renewed fears about sovereigns in the Eurozone, Draghi stated in a panel discussion that the ECB "...is ready to do whatever it takes to preserve the Euro. And believe me, it will be enough."[26] This statement led to a steady decline in bond yields (borrowing costs) for Eurozone countries, in particular Spain, Italy and France. In light of slow political progress on solving the Eurozone crisis, Draghi's statement has been seen as a key turning point in the fortunes of the Eurozone.[27]

In April 2013, Draghi said in response to a question regarding membership in the Eurozone that "These questions are formulated by people who vastly underestimate what the euro means for the Europeans, for the euro area. They vastly underestimate the amount of political capital that has been invested in the euro." [28]

[sabrina 1]

26. Not just in the US, they are now embedded in the EU countries, pushing the devastating 'Austerity'

programs on all EU countries. The short way to describe this takeover would be to say, that Wall St gamblers used the workers' of the world's money to gamble with, they lost most of it, now they are making the workers of the world pay THEIR gambling debts.

I'm amazed at how long it has taken for the people to rise up, as they are now doing in Spain, Italy, Greece with Wall St's robo cops doing what they did here, trying to stop them.

The fact that they WERE BAILED OUT, after such corruption was exposed, that the criminals have gone on to make even MORE money, is mind-boggling.

[WillyT]

3. K & R !!!

[truedelphi]

4. Such Criminal Behavior at SEC, Federal Reserve, Treasury and

a dozen other agencies. On the one hand, the banks can plunder and financially rape us, and on the other hand the environmentally concerned agencies are firmly controlled by Big Pesticide, Big Ag and Big Gm etc.

People are mad.
Our rights as individuals who are supposedly guaranteed our inalienable rights are totally being trampled. So much of a huge disconnect between the way the government and elected officialdom is set up.

But the angry and awakening middle class (or formerly middle class) are also learning how to take back their communities, thanks to people like Paul Ceinfuegos.


So if you are scratching your head saying, "can we stand together and take back our nation, community by community?" The answer is: Yes, and here is how!

Paul Cienfuegos is the name of this activist. In the video there are a lot of great bit sof important info, and I love the great quote from woman writer, who states that "environmentally concerned" agencies exist to regulate environemntalists!

[magical thyme]

21. agreed. found out the last time somebody linked to him, that he is responsible

for saving Maine's water from being stolen by Nestle Corporation.

And this is why we need to stop TPP and it's European counterpart. Iirc, it enables a tribunal to override local laws. Somebody figured out how to stop the corporations at the local level, so all they did is try writing a law that enables corporations to trump communities.

[truedelphi]

35. Your statements are Truth with a capital "T"

Inside the proverbial nutshell.

While the media distracts us with the four lanes of closed highway a la Christy over in New Jersey, and now the "Cow and BLM" scandal in the Far West, our nation is being taken away from us, resource by resource.

And most people have never heard of the TPP.

[Enthusiast]

30. Thank you, truedelphi.

I found that to be very interesting. I loved the quote too.

They would like to label anyone that challenges corporate supremacy as terrorists.

[GoneFishin]

5. Once you accept that a symbiosis exists, you then also have the answer as to why

both Bush and Obama appoint(ed) industry insiders to top government regulator positions of their own industries. IOW why the fox is always allowed to guard the hen house. The answer being that it is good for profits and hence Wall Street.

[Ichingcarpenter]

6. Any Wonder why income disparity is what it is?

Why the one percent is winning?
Why we don't see real change?
Only a blind man thinks this tail is just a rope and not an elephant.

[GoneFishin]

13. The Occupy dynamic was an example of what will happen when the 99% get too close

to bringing any fairness into the equation. Occupy was getting traction, so the camps had to be busted up through an apparent effort of federal and local officials. The M$M refused to cover it. We still don't know exactly who gave the order to break up the camps. BUT THEY COULD NOT COMPLETELY HIDE IT.

You can bet that these same dynamics play themselves out many-fold behind closed doors, without a mention by the M$M.

[Enthusiast]

32. The story of Occupy was they were dirty hippy rapists.

Said so right on my TV set. That was the 'coverage".

[GoneFishin]

37. That's right. It's all coming back to me now. LOL. nt

[suffragette]

25. What Wall Street values is not what we value

Yet we take their valuation as an indicator of whether we are doing well as a nation or not.
And they revolve back and forth between government and their companies, ensuring their values are embedded in our culture.

I keep going back to the microcosm of the reasons they have so often downgraded Costco as a clear illustration of this. They have 'encouraged' Costco to cut jobs and pay rates, to pay CEOS and shareholders (the few) more on the backs of workers and customers by reducing pay and raising prices. When Costco has refused and instead kept doing what is fair, has made them successful and helps communities, Wall Street marks them down. What does that say in terms of the 'market' doing well? What benefits us more as a society?

Yet, it's the values of Wall Street that end up being promoted through them being retained as advisors and appointees at the highest levels.

[Rex]

7. This could all have been prevented back in the 80s when grand theft

first started. The authorities should have made an example out of the S&L crowd. But OF COURSE we cannot arrest certain individuals from the Bush family! MY GOD MAN! That would mean the downfall of America! Hurummphhh!

When you allow the criminals in and to start writing laws, well you get THIS.

Punitive laws are only for blue collar workers...white collar crime doesn't exist anymore. Insider trading? That is SO 1990s!

[Ichingcarpenter]

9. Savings and loan 800 went to jail.....vs zero went to jail

This stands in stark contrast to the failure of many savings and loan institutions in the late 1980s. In the wake of that debacle, special government task forces referred 1,100 cases to prosecutors, resulting in more than 800 bank officials going to jail.

Former prosecutors, lawyers, bankers and mortgage employees say that investigators and regulators ignored past lessons about how to crack financial fraud.
http://www.nytimes.com/2011/04/14/business/14prosecute.html?adxnnl=1&pagewanted=all&adxnnlx=1397325984-+YLffvAGtXLWhauUx3OqaA

[Rex]

11. Yes but the BIG FISH got away and that made an impact on the other 1%ers.

Neil should have ended up in jail and so should Jeb for their involvement.

I hear there are some people going to jail over the 2008 financial swindle...again, not the big names or the sources so doesn't really impact the 1% imo.

800 nobodies does not equal one Kenneth Lay or one Neil Bush imo.

[erronis]

15. McCain - how has he been exempt?

I know he played is POW card over and over.

But he was part of the Keating circle of thievery.

Does anyone know how he got his "get out of jail (US)" card?

[Rex]

38. How did Tom Delay stay out of jail? How about Tom Foley?

Hell why is Daryl Issa still not in prison? How about Rick Scott...a KNOWN criminal!? NO, today if you make it SO big...you are granted immunity by the PTB.

One of the reasons America is in such bad shape imo.

[MannyGoldstein]

8. Meanwhile, at the White House

"No... no... Lloyd, we've gone through this before, you can't give them huge cash rewards until after they leave their government positions... no, Jamie, I don't think I'm treating Lloyd better than you... no, I'm not playing favorites here... yes, Elizabeth Warren's under control..."

[Ichingcarpenter]

10. Man..... that guy doesn't even get Presidential Cufflinks

like the banksters.

[Rex]

12. I wonder if he sometimes wants to say

DON'T YOU GUYS HAVE ENOUGH!? IS THEIR NO END TO GREED IN THIS TOWN?

[ProSense]

28. Nice photo. FYI

"No... no... Lloyd, we've gone through this before, you can't give them huge cash rewards until after they leave their government positions... no, Jamie, I don't think I'm treating Lloyd better than you... no, I'm not playing favorites here... yes, Elizabeth Warren's under control..."

...some of Goldman's top people and allies didn't fare better than "Jamie."

Former Corporate Chairman of Consulting Firm and Board Director Rajat Gupta Found Guilty of Insider Trading in Manhattan Federal Court
http://www.stopfraud.gov/iso/opa/stopfraud/NYS-120615.html

Hedge Fund Founder Raj Rajaratnam Sentenced in Manhattan Federal Court to 11 Years in Prison for Insider Trading Crimes
http://www.stopfraud.gov/news/news-10132011.html

That's a lot more significant than a fine.

Obama's CFPB under Richard Cordray "took $800 million from Bank of America"
http://www.democraticunderground.com/10024802019

[Ichingcarpenter]

34. is that a poor attempt at spin?

On the facts of this post?

Yes I guess this one guy is the fall guy for the whole criminal affair

CASE SOLVED......

but the thread is about Goldman Sachs
not your fall guy.

[shanemcg]

14. Check out the links about the ranch in Nevada

For a trip down Surreal Lane.

People apoplectic that someone might get by with ripping off the grass that belongs to the USA!

[rhett o rick]

16. Goldman-Sachs are backing HRC for president, giving her $400,000 as a down payment. nm

[Dragonfli]

17. I am curious about something, perhaps you or someone else knows the answer

When the bankers buy the politicians the require, are they listed as employees or contractors? Also is the $400,000 signing bonus tax exempt, deferred until the laws they purchased are enacted, or simply taxed as normal income?

I am also curious about the pay rate of a purchased President. I assume the job of president / banking associate carries a much higher rate than say the Senator banking gig or the justice department get out of jail free card dispenser position.

All modern presidents have managed to secure this employment. Is the pay seven or eight figures and does the job by contract demand fellatio or is that done simply out of love for our monetary masters and social idols?

I have been thinking about applying for a job in banking/political office and so I am trying to learn more about this lucrative prostitution/service industry.

[rhett o rick]

18. I dont have answers to your questions. I wonder if Goldman-Sachs gets to deduct

from their taxes (if they even pay taxes) their expenses for buying politicians.

HRC represents Goldman-Sachs and not the 99%.

[KoKo]

20. "Private Contractors"...(Our Politicians) .....That's a good Meme! Recommend.

[Octafish]

33. Lobbying costs often are passed on to the mopes and deducted from taxes.

Think Progress:

GOLDMAN SACHS: The mega-bank Goldman Sachs, which is often called “Government Sachs” in insider circles because of its clout over Washington, spent $22 million in campaign contributions and $21 million in lobbying over the last decade. It paid an ultra-low tax rate of 1.1 percent in 2008, while also receiving $800 billion in government loans to help weather the financial crisis.

SOURCE: http://thinkprogress.org/economy/2011/04/13/158264/tax-dodging-lobbying-congress/

"The Artful Dodgers"

[Tierra_y_Libertad]

27. The bribes are no longer delivered in the traditional brown paper bags.

[Octafish]

22. ''What would Goldman think?''

http://www.gregpalast.com/larry-summers-goldman-sacked/

[woo me with science]

23. Huge K&R

[johnnyreb]

24. Gee, Reuters and Forbes guys still have belief to be beggared!

This appears to be the blog referred to:

Yes, the SEC was colluding with banks on CDO prosecutions
By Felix Salmon April 9, 2014
http://blogs.reuters.com/felix-salmon/2014/04/09/yes-the-sec-was-colluding-with-banks-on-cdo-prosecutions/

Random belief-beggaring stuff from my notes:

February 16, 2011
But a veritable mountain of evidence indicates that when it comes to Wall Street, the justice system not only sucks at punishing financial criminals, it has actually evolved into a highly effective mechanism for protecting financial criminals.
http://www.rollingstone.com/politics/news/why-isnt-wall-street-in-jail-20110216

09/06/2011
A year after it was warned that it might be violating federal law, the Securities and Exchange Commission is still breaking the law by destroying records of closed enforcement cases, a lawyer in the agency’s enforcement division has alleged.
http://www.washingtonpost.com/business/economy/sec-still-destroying-records-illegally-whistleblowers-lawyer-says/2011/09/06/gIQAAD7E7J_story.html

11/29/2011
Judge Rakoff put his finger on a comfortable arrangement that has been going on for many years. A bank commits a fraud and makes a lot of money. The SEC brings a suit for fraud, but settles the case while the bank admits no responsibility and offers a “never again” promise. The judges blesses the agreement. The SEC declares victory. The bank continues with business as usual and commits another fraud. The SEC brings suit and so on, ad infinitum.
http://www.forbes.com/sites/stevedenning/2011/11/29/citigroup-gutsy-judge-preoccupies-wall-street/?partner=yahootix

July 7, 2011
Federal prosecutors officially adopted new guidelines about charging corporations with crimes — a softer approach that, longtime white-collar lawyers and former federal prosecutors say, helps explain the dearth of criminal cases despite a raft of inquiries into the financial crisis.
Though little noticed outside legal circles, the guidelines were welcomed by firms representing banks. The Justice Department’s directive, involving a process known as deferred prosecutions, signaled “an important step away from the more aggressive prosecutorial practices seen in some cases under their predecessors,” Sullivan & Cromwell, a prominent Wall Street law firm, told clients in a memo that September.
The guidelines left open a possibility other than guilty or not guilty, giving leniency often if companies investigated and reported their own wrongdoing. In return, the government could enter into agreements to delay or cancel the prosecution if the companies promised to change their behavior.
http://www.nytimes.com/2011/07/08/business/in-shift-federal-prosecutors-are-lenient-as-companies-break-the-law.html?_r=2&pagewanted=1&ref=business

The Untouchables
January 22, 2013
FRONTLINE investigates why Wall Street’s leaders have escaped prosecution for any fraud related to the sale of bad mortgages.
http://www.pbs.org/wgbh/pages/frontline/untouchables/

And just for fun:

Have any criminal court cases been dropped due to loss of evidence in the WTC7 collapse?
Sep, 9 2009
http://www.abovetopsecret.com/forum/thread500012/pg1

[octoberlib]

29. Truth Out

has an interesting interview with Nomi Prins.

What I found, is that that for the past century, mutually reinforcing relationships amongst the most powerful men in the past century were drivers of American domestic, national and foreign policy than just the government was, no matter who the president, or what the party in the Oval. I found that every president had connections of various degrees of closeness with the most influential bankers during his term. I knew these associations existed throughout the decades, but I was surprised to discover just how prevalent they were.

The alliance between leaders in Washington and on Wall Street has undergone a series of character changes over the past century. In the early 1900s, when President Teddy Roosevelt - widely perceived as a "trustbuster" - was breaking up the monopolies in certain industries, he didn't 'bust' the banking industry because he was facing a great financial panic in 1907 and decided he needed J.P. Morgan's help to thwart it. In the 1910s, Taft and Wilson aligned with the bankers in establishing the Federal Reserve, and then Wilson and the bankers aligned in war-financing efforts during WWI. In the 1920s, Hoover, Coolidge and Harding and the bankers aligned to endorse a spirit of political isolationism at home, laissez-faire banking policy, and financial internationalism as US bankers pushed into Europe again to take advantage of their ailing former competitors' post-war weakness, with transactions that ultimately combusted during the 1929 crash and Great Depression. In the 1930s to the 1970s though, something changed. Between the Great Depression, World War II, the Cold War and into the early 1970s, bankers were more content to be careful, to support general American expansion abroad and national interest at home, and their practices were more subdued and less speculative.

By the 1970s, things changed again; bankers found that Middle-East oil was a good source of financial independence from the US government's domestic initiatives. With Chase and Citibank leading the charge, US bankers recycled "petrodollars" into Latin American loans, got into trouble and needed the Reagan-Bush government to bail them out. It did, and from that moment on and through the major 1994 and 1999 deregulation under the Clinton administration, they increased their risk-taking and divergent path from the public interest, and though associations between bankers and presidents continued, and general national and financial policy goals were the same, bankers became more globally predatorial and had less interest in helping to sustain the general good at home. The recent 2008 crisis and time since then is the culmination of that attitude, coupled with the enabling and support by presidents of both parties, of their practices and power concentration, without requiring anything from them in return to benefit the population.

http://www.truth-out.org/progressivepicks/item/22953-the-oligarchy-doesnt-care-about-democracy-just-rigged-markets


There's more in the interview about FDR and the Clintons .

[Enthusiast]

31. K&R! This post should have hundreds of recommendations!

[Octafish]

36. All the Presidents' Bankers

Nomi Prins: Policies of the United States are driven by a critical symbiotic and costly relationship “between Wall Street and official Washington."

Whoulda known? Besides DU kick.

[bobthedrummer]

39. Bankster USA kick

Bankster USA/PR Watch (The Center for Media and Democracy)
http://banksterusa.org