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Goldman Sachs Hearings

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washunut

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Surprised I have not seen anything on this board about the 11 hours of Goldman sachs hearings yesterday.

To me it seemed as a showtrial. A bunch of bullies, called senators beating up on a group of citizens who happen to be very unpopular with the public.

Anyone have a view?
 
My view is basically that it's just political theatre and the usual dog and pony show.
 
lizzie said:
My view is basically that it's just political theatre and the usual dog and pony show.
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The stakes seem to be somewhat higher as congress is also putting together financial reform. This is something the country needs. That being said, it has to be done correctly as this is has a huge impact on our whole economy.

Grandstanding, and pilifying the industry could lead to going oversaespolicies that not only reform but stifle this industry. America will not be happy if we do something that outsources a bunch of jobs.

It was mentioned yesterday that Goldman sachs employs 35,000 people, mostly in the U.S. We do not want those jobs going overseas.
 
washunut said:
The stakes seem to be somewhat higher as congress is also putting together financial reform. This is something the country needs. That being said, it has to be done correctly as this is has a huge impact on our whole economy.
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I have no problem with reinstating Glass-Steagall, but I do have a problem with everlasting bailouts and direct governmnent control of corporations and banks.
 
lizzie said:
I have no problem with reinstating Glass-Steagall, but I do have a problem with everlasting bailouts and direct governmnent control of corporations and banks.
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I do not think this bill reinstates Glass- Steagall. I am concerned that we have senators more interested in grandstanding than fixing what needs fixing.

To be honest, I am not sure anyone really knows what needs to be fixed.
 
washunut said:
I do not think this bill reinstates Glass- Steagall. I am concerned that we have senators more interested in grandstanding than fixing what needs fixing.

To be honest, I am not sure anyone really knows what needs to be fixed.
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It probably doesn't reinstate it. I know that McCain proposed doing so last year, but apparently, not enough legislators were interested in doing so. I'm not a financial whiz by any means, but looking at the timeline of legislation and the financial crisis, it appears that the repeal probably did have a role to play. Another thing I really don't like about the current proposed legislation is that is doesn't address Fannie and Freddie, and their hands were all in the pie too.
 

Don't get me wrong getting rid of Glass-Stegall was probably a mistake. Although putting the genie back in the bottle could be very destructive to our economy. Just think if we pulled apart all of our giant institutions that are needed in the economy. There is no way of knowing if 1+1 will equal two, or if we will restrict credit even more than it is today.

As far as fannie and freddie you are correct that is a huge problem as are the rating agencies that I do not think are touched in this legislation and may have been the biggest enabler of all.

Also people are killing derivatives today. Some of them are over the top, but for example wheat futures which farmers need in order to know what they will get for their crops are also a form of derivative. I am not sure this congress has demonstrated that they are knowledgeable enough to pass any meaningful reform that will help our economy.
 

Letting the genie out in the first place was destructive to our economy. We are acting (collectively) as if all that debt out there is just going to go away, and it isn't. It's going to be rough, but we must get it under control, both at the personal level and at the government and corporate levels.


washunut said:
I am not sure this congress has demonstrated that they are knowledgeable enough to pass any meaningful reform that will help our economy.
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No, they are not knowledgeable enough to pass meaningful reform. They are using this as a tool to create and continue the trend of a class warfare mentality. They think it makes them look like heros to the "little people", and it does when the general population is uninformed, but this has nothing to do with meaningful reform and everything to do with partisan politics, power, and symbolism.
 

Agree on both points. What is interesting is that the debt issue you mention continues today. People have bought many billions of bond funds because they thought they are safer than stocks. Sort of like people buying houses 5 years ago.

When interest rates go up, and they will we may find that the next bubble will be U.S. treasuries and there will be many more pension funds etc who will lose many billions.
 
lizzie said:
My view is basically that it's just political theatre and the usual dog and pony show.
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Yup, they're not actually going to do anything. No one holds the aristocracy accountable.
 
My favourite part

[nomedia="http://www.youtube.com/watch?v=7J38kN4Uszs"]YouTube- Goldman exec grilled over %!(#@ deal[/nomedia]
 

Yeah, I've been hearing and reading similar stories.
 
I think these hearings are important, but not as important as the trial. I wish there was a criminal trial too. Goldman Sachs and similar companies were the single biggest motivator for the economic crisis and that we now have clear evidence that they knowingly were pushing crap to customers while hedging their bets the opposite way, then that is at best highly unethical.

Just think, if your doctor was able to put out a life insurance on you with him as the beneficiary, do you really think he would do his best to save your life? I dont.
 

Like the knucklehead Levin yesterday, I do not think your analogy is at all valid. Not sure what you know or don't know about how markets work. If you do know how they work then what you are saying is worse.

In a market people take positions. Looking back you will find that one side of a transaction probably did better than the other. So should we look at every transaction in every industry and say that the side that did not realize the value expected should go back to the other side and get compensated??

The financial companies did have a role in what went wrong. The reason the industry already has so many regulations and regulators is to rein in excesses. You nicely sidestep the role of congress who has oversight and the Fed, SEC,FDIC etc for not doing their jobs and reining in risk.

That could be done today with no new rules. The sad part is that most of the public are dupes when it comes to this market and are led like sheep to the silly type of generalizations as we see in the note above.

It would be interesting if someone from Goldman Sachs read the note above. Then sued the writer for libel. I am not a lawyer so I have no idea if they would prevail, but I would enjoy watching how that would work out in the courts.
 
that 'group of citizens' got exactly what they deserved...it was a pleasure to watch their feet being held over the fire.
 
randel said:
that 'group of citizens' got exactly what they deserved...it was a pleasure to watch their feet being held over the fire.
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So then you would agree we should hold hearing with Obama and Geithner. They certainly are, in the words of Sam Levin, selling treauries that most people consider a sh*** deal. Perhaps to the extent that they are committing criminal fruad.

Perhaps we should a hearing with Levin on the other side of the table. As one of a hundred senators he has presided over a country that has taken on more debt than probably any in history.

My sense is that he exposed himself as a coward and a bully.
 

GS would not be in trouble with the SEC on this particular case if it told the investor that the RMBS that it was buying was constructed by a group associated with Paulson and that Paulson is taking out a CDS on that RMBS.

GS failed to disclose material information to the purchaser of he RMBS, that is why it is in trouble
 

That is the opinion of the SEC, I am not sure it is correct. The courts will decide. Regardsless that has nothing to do with the foul language and treatment by Coward Levin.

He beat up on someone whom he knew would bot respond because of the power of the senate.

To Goldman this was a tiny deal generating $15 million in fees. Was it really worth the government destroying the reputation of one it's most important companies even if the charges are valid?

Let's remember that this " case" was only voted out of the SEC by 3-2. Highly unusual, it was trumpeted on the news mid trading day again unusual.

Now what was leaked today was something I am told always happens in this situation, but was blown up by people who feel it is more important to get reelcted than protect the US economy.

I continue to place more investments overseas and commodities to protect against these lunatics. BTW, not in EU investments as they are the model Obama and team are following and will cause our economy to act like theirs LT, not good.
 
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