Financial News

[Cknolls]

I have always said news breaks with the cycles. Confirmed again today.

[jasonxctf]

http://news.yahoo.com/s/ap/20100416/ap_on_...us_nuclear_jobs

[jasonxctf]

Very good chance a correction starts today. Would not surprise me to see mkt down big today into Monday. SPX 1180. If 1180 fails a test of 1150. But the real selloff should occur in July.

 

well at some point here, you've gotta be right at least once.

[Cknolls]

well at some point here, you've gotta be right at least once.

 

 

WTF???

 

Yeah i missed by 4 points smartass.

[jasonxctf]

WTF???

 

Yeah i missed by 4 points smartass.

 

sorry, i was referring to previous posts since the thread started

[southsider2k5]

link

 

And of course the timing was perfect with the administrations new banking regulations...

[bmags]

it doesn't matter if they did something that was provably incredibly fraudulent, of course.

[kapkomet]

it doesn't matter if they did something that was provably incredibly fraudulent, of course.

 

 

Yea, what a coincidence that they annouce it exactly to the Friday before the Monday that they are going to ram home more piece of s*** legislation.

 

Now, you know, this is supposed to be "guilty before innocent" here, kind of like those terrorists...

[Balta1701]

It's impressive to see the same people who say that the government doesn't need more power and that the regulators just didn't do their jobs in the buildup to the crisis rise up to attack the government when the SEC tries to actually do some limited enforcement.

[kapkomet]

It's impressive to see the same people who say that the government doesn't need more power and that the regulators just didn't do their jobs in the buildup to the crisis rise up to attack the government when the SEC tries to actually do some limited enforcement.

 

 

It's called the timing of it, Balta. Come on, you're smarter then that. This is almost ... (almost...) as bad as the UN speeches before Iraq.

[southsider2k5]

It's called the timing of it, Balta. Come on, you're smarter then that. This is almost ... (almost...) as bad as the UN speeches before Iraq.

 

Exactly. They could have done this for years... heck they could had done their jobs when people's money could have been saved, but it happens right before they are going to fight regulations in Congress. This is as pathetic as an Ozzie rant after a shutout.

[Balta1701]

UK, Germany considering actions against GS.

[Balta1701]

Simon Johnson and James Kwak on Moyers.

[StrangeSox]

Timing of the announcement aside (which has obvious political benefits), what are the feelings on the legitimacy of the charges? From the story laid out on NPR, it sounds pretty obviously illegal.

[southsider2k5]

From what I saw on CBNC it sounds illegal. It wouldn't look very good to trump up charges against GS in order to support regulations strengthening and then have your case suck. Granted all we have seen is the government's side of things, but usually when it gets to this point it is pretty clear. The one interesting thing to me is that this is only an SEC civil case.

[Balta1701]

From what I saw on CBNC it sounds illegal. It wouldn't look very good to trump up charges against GS in order to support regulations strengthening and then have your case suck. Granted all we have seen is the government's side of things, but usually when it gets to this point it is pretty clear. The one interesting thing to me is that this is only an SEC civil case.

I'll be the first to admit I don't know if Johnson is correct here but he dealt with that already. Emphasis mine to stress the Civil Case response.

On the show, David Remnick of the New Yorker pointed out that Paulson has not been indicted. And since then numerous people have argued that Paulson did nothing wrong – rather that the fault purely lies with Goldman for not disclosing fully to investors who had designed the CDO.

 

But this is to mistake the nature of the crime here – and also to misread the legal strategy of the SEC.

 

The obvious targets are Goldman’s top executives, whom we know were deeply engaged with the housing side of their business in early 2007 – because it was an important part of their book and they were well aware that the market was in general going bad.

 

Either Goldman’s executives were well aware of the “Fab” and its implications – in which case they face serious potential criminal and civil penalties – or they did not have effective control over transactions that posed significant operational and financial risk to their organization.

 

They will undoubtedly pursue the “we did not know” defense – which of course debunks entirely the position taken by Gerry Corrigan (of Goldman and formerly head of the NY Fed) when I pressed him before the Senate Banking Committee in February. Corrigan claimed that Goldman’s risk management system is the best in the business and simply superb; the former may be true, but the latter claim will be blown up by Lloyd Blankfein’s own lawyers – they must, in order to keep him out of jail. (Aside to Mr. Blankfein’s lawyers: the people you are up against have already read 13 Bankers and may put it to good use; you might want to get a copy.)

 

And don’t be misled by the purely civil nature of the charges so far – and the fact that the announced target is only one transaction. This is a good strategy to uncover more information – for broader charges on related dimensions – and it allows congressional enquiries to pile on more freely.

 

As for John Paulson, the issue will of course be the “paper trail” – including emails and phone conversations. A great deal of pressure will be brought to bear on the people who have worked with him, many of whom now faced permanently broken careers in any case.

 

Here’s the legal theory to keep in mind. Mr. Paulson only stood to gain on a massive scale (or at all) if the securities in question were mispriced, i.e., because their true nature (that they had been picked by Mr. Paulson) was not disclosed. In other words, the Paulson transactions at this stage of the game only made sense if they involved fraud. The principals involved (Paulson and top Goldman people) are all super smart, with unmatched practical experience in this area; they get this totally.

 

John Paulson was not the trigger man – it was Goldman and its executives who withheld adverse material information from their customers. But if the entire scheme was Mr. Paulson’s idea – if he was in any legal sense the mastermind (obviously he was, but can you prove it beyond a reasonable doubt?) – then we are looking at potential conspiracy to commit fraud. And if he had conversations of any kind and at any time during this period with top Goldman executives, this will become even more interesting - so of course all relevant phone records will now be subpoenaed.

[southsider2k5]

I'll be the first to admit I don't know if Johnson is correct here but he dealt with that already. Emphasis mine to stress the Civil Case response.

 

You want to know what I think of regulation a nutshell? It has been as long as three years, and they only have enough to go off of one incident in civil court. According to that they want to find something, anything for someone to pile on with because that is all the SEC has been able to find in three years. Great job of protecting anyone there.

[Balta1701]

Which, I'd argue, is what happens when you're able to write the laws. You write them so it's really hard for them to send you to jail, even if you nearly destroy the world.

[kapkomet]

Which, I'd argue, is what happens when you're able to write the laws. You write them so it's really hard for them to send you to jail, even if you nearly destroy the world.

 

 

So aren't you essentially saying the same thing... that government is the problem? They let it happen.

[Balta1701]

So aren't you essentially saying the same thing... that government is the problem? They let it happen.

Yeah, that government being nice to the banks is a huge part of the problem. One might even go so far as to call it "Conservative" government. Conveniently, it also suggests that adversarial government is a major part of the solution.

[southsider2k5]

Which, I'd argue, is what happens when you're able to write the laws. You write them so it's really hard for them to send you to jail, even if you nearly destroy the world.

 

That doesn't make a bit of sense. If this is a violation of laws, what does the writing of laws have to do with this? This is all on the enforcement side, which is the realm of the SEC in this case.

[Balta1701]

That doesn't make a bit of sense. If this is a violation of laws, what does the writing of laws have to do with this? This is all on the enforcement side, which is the realm of the SEC in this case.

Because this isn't the only thing that happened that should have been against the law.

[kapkomet]

Yeah, that government being nice to the banks is a huge part of the problem. One might even go so far as to call it "Conservative" government. Conveniently, it also suggests that adversarial government is a major part of the solution.

 

 

You want so bad to tar and feather "conservatives" that you mock and slant every arguement against/for them, whatever the position is to support your wonderful leaders. You're seriously brainwashed if you think this is a "conservative" issue.

 

The "solution" must be more regulation from our government, and it must be "cracking down" the weekend before more laws are to be rammed down our throat when they could have done this for 20 years at any point, under any administration.

[StrangeSox]

If the problem was ineffectual law enforcement, then it doesn't seem like less regulation would be the answer; when left to their own devices, this is what they come up with.

[StrangeSox]

So aren't you essentially saying the same thing... that government is the problem? They let it happen.

 

No, the people who did really dumb things are still ultimately at fault. Those who let them do dumb things are also responsible, but aren't the primary cause.