Entries categorized "Goldman Sachs"

Henry Paulson, the Bobolink Foundation, and Goldman Sachs

Before Henry Paulson become Secretary of the Treasury, he was required by law to sell all of his shares in Goldman Sachs.  He was allowed to sell all of his shares of Goldman Sachs stock tax-free.  Thus, by becoming Secretary of the Treasure, he was paid over $200 million dollars.  Yet it seems that Paulson did not divest himself of all of his Goldman holdings.

It seems, though, that Paulson held millions in Goldman-Sachs-controlled investment funds.  He also held stock in the same companies that his every move as Treasury Secretary would impact.

Paulson, like most rich people, started a family foundation that allows him to donate money in exchange for influence and status.  He put over $100,000,000 into a family foundation, which he called the Bobolink Foundation.

I've uploaded the Form 990 for the Bobolink Foundation here.  Read pages 18-21.  According to the tax records, as of March 31, 2008, the Bobolink Foundation held $13 million Goldman Sachs investment funds.  What would have happened to the value of those funds had Goldman Sachs - like Lehman Brothers - gone bankrupt?  

The Bobolink Foundation also held shares in other banks:

  • JP Morgan
  • Merrill Lynch
  • Morgan Stanely
  • The Bank of NY Mellon Corp

Bobolink Foundation was also a major bondholder in several banks.

What would have happened to the share prices of those companies had Paulson not bailed out banks with taxpayer money?   What would have happened to bond values?  What would have happened to Paulson's $100 million family foundation if we taxpayers hadn't been required to bail out Wall Street?

Hank Paulson's Secret Meeting with Goldman Sachs

A year ago, you'd have called me a conspiracy theorist if I suggested that the Secretary of the Treasury - the man responsible for doling out $700 billion - was having secret meetings in Russia with Goldman Sachs.  Some of you should start becoming less dismissive of "conspiracy theories."  This one is true: 

When Paulson learned that Goldman’s board would be in Moscow at the same time as him, he had [Treasury chief of staff] Jim Wilkinson organize a meeting with them. Nothing formal, purely social — for old times’ sake.

 For fuck’s sake! Wilkinson thought. He and Treasury had had enough trouble trying to fend off all the Goldman Sachs conspiracy theories constantly being bandied about in Washington and on Wall Street. A private meeting with its board? In Moscow?

For the nearly two years that Paulson had been Treasury secretary he had not met privately with the board of any company, except for briefly dropping by a cocktail party that Larry Fink’s BlackRock was holding for its directors at the Emirates Palace Hotel in Abu Dhabi in June.

Anxious about the prospect of such a meeting, Wilkinson called to get approval from Treasury’s general counsel. Bob Hoyt, who wasn’t enamored of the “optics” of such a meeting, said that as long as it remained a “social event,” it wouldn’t run afoul of the ethics guidelines.

Still, Wilkinson had told [Goldman chief of staff John] Rogers, “Let’s keep this quiet,” as the two coordinated the details. They agreed that Goldman’s directors would join him in his hotel suite following their dinner with Gorbachev. Paulson would not record the “social event” on his official calendar…

“Come on in,” a buoyant Paulson said as he greeted everyone, shaking hands and giving bear hugs to some.

For the next hour, Paulson regaled his old friends with stories about his time in Treasury and his prognostications about the economy. They questioned him about the possibility of another bank blowing up, like Lehman, and he talked about the need for the government to have the power to wind down troubled firms, offering a preview of his upcoming speech.

Felix Salmon has more details.

29-Year-Old to Head the Securities and Exchange Commission (SEC)

This this a joke?   

Oct. 16 (Bloomberg) -- The U.S. Securities and Exchange Commission named Adam Storch, a 29-year-old from Goldman Sachs Group Inc.’s business intelligence unit, as the enforcement division’s first chief operating officer.

Storch, who joined the SEC Oct. 13, was named to the newly created post of managing executive in the enforcement unit, charged with making the division more efficient, the SEC said today in a statement. At New York-based Goldman Sachs, he had worked since 2004 in a unit at that reviewed contracts and transactions for signs of fraud.

It ordinarily requires a lot of self-discipline let the facts speak for themselves.  Emotions compel us to editorialize.  Yet what more can a person say?  A 29-year-old is going to become the chief operating officer of the SEC's enforcement division.  That sentence would not even make sense if we omitted one material fact: Mr. Storch is from Goldman Sachs. 

Barack Obama is doing everything within his power to increase Goldman Sachs' power and influence.  He's succeeding.  Perhaps making Goldman Sachs stronger was the change he promised?

Why I'm Not a Libertarian

Libertarians will say, "But that's not libertarianism, Mike!"  That response parallels communists who say, "But China isn't real communism!  Russia wasn't pure communism!" 

The bailouts should have been 9/11 for libertarianism.  We libertarians were duped.  We were unwitting foot soldiers for Wall Street. 

"Free markets!  Deregulation!"  All good in theory - until you realize that, in America, this is the end result of libertarianism:

Sergey Aleynikov Hearing on Sept 16, 2009

The next hearing in U.S. v. Sergey Aleynikov, the most disgraceful criminal prosecution since the Duke Lacrosse Case, will be held this coming Wednesday.  While we don't know whether the charges against  Aleynikov will be dismissed, there has been a related development.

Bloomberg is reporting that the SEC wants to take a look inside Wall Street's black box:

Sept. 10 (Bloomberg) -- The U.S. Securities and Exchange Commission is "rigorously" investigating whether traders are using technology to manipulate markets, the agency's enforcement and inspections chiefs said today.

The regulator is probing suspected “market manipulation based on complex use of technology and advanced trading systems,” said SEC Enforcement Director Robert Khuzami and acting examinations director John Walsh in testimony prepared for a Senate Banking Committee hearing. They said the inquiry is among a list of active cases, also including unspecified Ponzi schemes, hedge-fund abuses and insider trading.

The SEC's Keystone Cops only learned about Wall Street's ability to "unfairly manipulate markets," after Goldman Sachs had DOJ arrest Sergey:

The Goldman Sachs programmer, Sergey Aleynikov, was arrested July 3 and charged the next day with theft of trade secrets and transportation of stolen property in foreign commerce. At Aleynikov’s arraignment, Assistant U.S. Attorney Joseph Facciponti said the programmer transferred code to a computer server in Germany and that others may have had access to it, a claim Aleynikov has denied. He is free on $750,000 bond.

Unlike AUSA Facciponti, the SEC wants to know: Why should Goldman Sachs be trusted with market-manipulating software?  While the SEC investigation continues, we'll know more about Sergey soon.

For the good of America, I hope the Aleynikov prosecution proceeds to trial.  Aleynikov will be entitled to put Goldman Sachs' market-manipulating software on trial.  We need to keep the public's eye on Wall Street.  We need the public, Congress, and the Judiciary to keep an eye on the Department of Justice.

Given that the Department of Justice did nothing about Bernie Madoff for years, members of the public as well as federal judges must ask how Goldman Sachs was able to reach the FBI at 3 a.m. to report theft of computer code; and have an arrest 48 hours later.  Does Goldman Sachs have a bat phone that connects to the Department of Justice?  If DOJ doesn't dismiss the case against Sergey, we might just find out.  

"Chasing Small Fry, S.E.C. Let Madoff Get Away"

The modern American prosecutorial novella has a simple theme.  Federal prosecutors ignore rich and powerful people like Bernie Madoff.  Instead, they prosecute small targets.  This June, 2009 New York Times article is typical:

Three months ago, in a courtroom in Bridgeport, Conn., a 72-year-old former Morgan Stanley broker named Richard A. Kwak was cleared of any involvement in a small-time stock manipulation scheme.

The S.E.C. retried Mr. Wilson in 2008. He was cleared. Finally, in March 2009, the S.E.C. retried Mr. Kwak, with the same result. The jury took less than four hours to exonerate him.

I bring all this up because this Monday, Bernard L. Madoff, a contender for the title of greatest financial criminal in history, will be sentenced for the Ponzi scheme he ran for years. Mr. Madoff ruined lives, destroyed philanthropies and cost his investors billions of dollars — yet the S.E.C. was nowhere to be found, despite the repeated entreaties of a whistle-blower, Harry Markopolos.

The Department of Justice is no different from the SEC.  For example, in United States v. Aleynikov, the following occurred: Goldman Sachs called the FBI at 3 a.m. to report that Sergey Aleynikov had stolen Goldman's proprietary software.  This software, Goldman reported, could be used to "unfairly manipulate markets." 

Instead of indicting Goldman Sachs for unfairly manipulating markets, within 48 hours of the call to the FBI, Aleynikov was arrested and in jail.  How does that make any sense?  

If someone came to you saying, "He stole my murder weapon," wouldn't you be more concerned with the murder than the theft?  If Goldman said that a former employee had stolen its market-manipulating software...Should you really be worried about the employee?

It makes total sence, once you realize that line federal prosecutors are much more concerned with getting cozy jobs in the private sector than they are with seeking justice.  Goldman Sachs can send a lot of work to a former AUSA.  

Folks like Aleynikov pay the price.  An innocent man's freedom is just the price the public must pay so that AUSAs may do business with the likes of Goldman Sachs.

Journalist has Proof that Paulson Lied to Congress about TARP

Former Treasury Secretary Henry Pauslon requested $700 billion from Congress.  He told Congress that he intended to use the money to buy mortgage-backed securities.  Five days after he recieved the $700 billion, he used it to pay billions to Goldman Sachs via AIG.

Observers long speculated that Paulson lied to Congress about his intended use of the $700 billion.  Speculate no more.  We have proof.

During the bail outs, Paulson gave extensive interviews to Vanity Fair reporter Todd Purdum. In this video interview, Paulson's perjury is revealed:

William D. Cohan is on Goldman Sachs' Payroll

William D. Cohan wrote a puff-piece about Goldman Sachs in the most recent issue of Time.  The end of the article describes Cohan thusly: "Cohan, a contributing editor at FORTUNE, is the author, most recently, of House of Cards: A Tale of Hubris and Wretched Excess on Wall Street."

Mr. Cohan failed to make an important disclosure: In 2007, Cohan recieved a nearly $50,000 payment (£30,000) from Goldman Sachs.  Cohan's book, The Last Tycoons: The Secret History of Lazard Frères & Co., won the Goldman Sachs Business Book of the Year award.

Cohan's most recent book, House of Cards, is again eligible for another award.  Details here.

Why didn't he disclose this obvious conflict-of-interest?  Or is financial journalism so corrupt that finanical reporters don't think they need to disclose mid-five-figure payouts?

How Goldman Sachs Helps Clients Manipulate Stock Market

One of Goldman Sachs' business is in issuing analysts reports.  These reports often move the stock market.  Unfortunately, many people take these reports at face value.  Chumps buy-and-sell based on publicly-released reports.

Goldman has found a way to cash in on their market-moving reports.  They sell these reports to clients ahead of time:

Goldman Sachs Group Inc. research analyst Marc Irizarry's published rating on mutual-fund manager Janus Capital Group Inc. was a lackluster "neutral" in early April 2008. But at an internal meeting that month, the analyst told dozens of Goldman's traders the stock was likely to head higher, company documents show.

The next day, research-department employees at Goldman called about 50 favored clients of the big securities firm with the same tip, including hedge-fund companies Citadel Investment Group and SAC Capital Advisors, the documents indicate. Readers of Mr. Irizarry's research didn't find out he was bullish until his written report was issued six days later, after Janus shares had jumped 5.8%.

Every week, Goldman analysts offer stock tips at a gathering the firm calls a "trading huddle." But few of the thousands of clients who receive Goldman's written research reports ever hear about the recommendations.

See how it works?  Goldman Market Manipulation

  1. Write a report you know will move the markets once its publicly released.
  2. Sell the report to preferred clients.
  3. Delay releasing the report until your clients can purchase stock.
  4. Publicly release the report.
  5. Clients sell the stock, taking a cool-and-quick gain.

Pretty cool, isn't it?  Most great crimes are fascinating.

What other crimes does Goldman Sachs commit each day?  Perhaps we'll soon know.

The financial media only began exposing Goldman Sachs after blogs like Zero Hedge developed huge readership.  

Scandal sells.  And when it comes to Goldman Sachs, every day brings a new scandal.

Gays or Goldman Sachs?

Someone e-mailed to tell me I'm obsessed with Goldman Sachs.  Yes, I am.  Why aren't you?  Is there an issue more important to America's future? 

They have stolen trillions from you.  Your children will not, for the first generation in centuries, lead a better life than you have.  Thanks to Goldman Sachs.

If you are not singularly obsessed with Goldman Sachs, why not?  I'll bet you're obsessed with some other issue of the day.  How many of you need blood pressure medication whenever gay marriage is mentioned?  
Do you really thing the gays are a bigger threat to this country than Goldman Sachs?  Please explain.

When your sons and daughters cannot find jobs, do you blame gays?  Affirmative action?

What a joke most people are.  

We obsess over men having sex with each other.  We deny orpahns parents - because those parents are gay.  Better a child to suffer than a gay to be recognized as equally human.

People take to the streets against gay marriage.  "Yes on Prop 8!" they scream.

Meanwhile, bankers steal trillions from the United States, causing us to either lose jobs or fire workers we care about because we can't afford to keep them on payroll.  Our children will have problems we can't imagine because of the excessive borrowing necessary to bailout Goldman Sachs.

What is wrong with us?  What is wrong with you?