The Dam Breaks: Sen. Kaufman Outs Wall Street

[kpete]

Senator Ted Kaufman (D - DE) will deliver a speech today that represents a potential turning point for the country.

......................

As part of that effort, we must ensure that the legal system tackles financial crimes with the same gravity as other crimes. When crimes happened in the past (as in the case of Enron, when aided and abetted by, among others, Merrill Lynch, and not prevented by the supposed gatekeepers at Arthur Andersen), there were criminal convictions. If individuals and entities broke the law in the lead up to the 2008 financial crisis (such as at Lehman Brothers, which allegedly deceived everyone, including the New York Fed and the SEC), there should be civil and criminal cases that hold them accountable...

Mr. President, I’m concerned that the revelations about Lehman Brothers are just the tip of the iceberg. We have no reason to believe that the conduct detailed last week is somehow isolated or unique. Indeed, this sort of behavior is hardly novel. Enron engaged in similar deceit with some of its assets. And while we don’t have the benefit of an examiner’s report for other firms with a business model like Lehman’s, law enforcement authorities should be well on their way in conducting investigations of whether others used similar "accounting gimmicks" to hide dangerous risk from investors and the public....

In Greece, the main transactions in question were called cross-currency swaps that exchange cash flows denominated in one currency for cash flows denominated in another. In Greece’s case, these swaps were priced "off-market," meaning that they didn’t use prevailing market exchange rates. Instead, these highly unorthodox transactions provided Greece with a large upfront payment (and an apparent reduction in debt), which they then paid off through periodic interest payments and finally a large "balloon" payment at the contract’s maturity. In other words, Goldman Sachs allegedly provided Greece with a loan by another name.

The story, however, does not end there. Following these transactions, Goldman Sachs and other investment banks underwrote billions of Euros in bonds for Greece. The questions being raised include whether some of these bond offering documents disclosed the true nature of these swaps to investors, and, if not, whether the failure to do so was material....

http://kaufman.senate.gov/press/floor_statements/statement/?id=de804dbb-6dc3-4537-8c5d-81496714ed73
http://www.dailykos.com/storyonly/2010/3/16/846691/-The-Dam-Breaks:-Sen.-Kaufman-Outs-Wall-Street

[Joanne98]

1. I hope he says something we don't already know.

[happy_liberal]

2. I think what they are hiding with their fuzzy accounting

might be different than what they tell us they are hiding.

Enron for example, went bankrupt?? right after they stole billions from Cali...yeah sure....

[Subdivisions]

5. Do you happen to know where the records for Enron and Worldcomm

are/were located?

[rpannier]

10. I think I do

You can find the ashes from the shredded papers sealed in a drum in the Gulf of Mexico somewhere

Either that or Bush had them sealed until the year 3333333333 QAD

QAD comes after PAD, which replaced AD as they year designator -- so figure in 1000000000000000777 years they can be opened

[BeFree]

3. Bond market?

Heard last night on Maddow that the bond markets are where the true shenanigans are taking place. It was said that the bond markets are unregulated as compared to the stock markets.

This article affirms that. These guys are flying under the radar and using all kinds of made up weapons to amass large sums of money.

So.... it seems to have become a 'James' Bond market?

[OffWithTheirHeads]

4. They don't give a fuck about war crimes or torture,

why the fuck would they care about this?

[WillYourVoteBCounted]

6. how is this different from Enron, or any other scam. Wealthy criminals get off and

get to keep their ill gotten gains which are located at some offshort bank probably.

[midnight]

7. The mechanisms and the names of these financial shenanigans makes me dizzy.

While I'm sure that this was the intended purpose, allowing banking to continue with these sharks in the water is a national security risk that needs to be addressed more than x-raying peoples' bodies, tapping their phones, etc....

[Mopar151]

9. What they've done already has seriously damaged our economy

If they tank an oil state's sovregin wealth fund, it could start a nasty little shootin' war. Are we ready for missles in Manhattan? 'Cuz it ain't like the banksters don't deserve it.

[Overseas]

8. K&R for more revelations on the ethics of the "free market"

and the "wisdom of the private sector."

[unhappycamper]

11. What Wall Street has done this time is to abscond with trillions of dollars

of our money. And they made a clean getaway - nobody caught, nobody arrested, nobody going to jail. :(

[swilton]

12. Thumb in Dyke

My feeling is that it will have no effect - the cards are stacked against courageous politicians who tell the truth.

[florida08]

13. excellent summation

of what has happened. Did not know that 6 banks hold 63% of the nations savings and loans.

The rule of law depends in part on manageably-sized institutions, participants interested in following the law, and gatekeepers motivated by more than a paycheck from their clients....

We all understood that to restore the public's faith in our financial markets and the rule of law, we must identify, prosecute, and send to prison the participants in those markets who broke the law.

It was financial terrorism. I think some arrests are what most of us are waiting for. Particularly those who have lost their savings, investments and pensions to these thugs. I would also like to hear who were the people who reaped the benefits from this great rip-off.