FedUpUSA

Archive for April 16th, 2010

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In light of the SEC FINALLY filing suit against Goldman Sachs, I’d like to point out that there were many of us out here screaming for government and regulators to wake up and see the crimes of Goldman Sachs – not the least of which is the entire take-over of the US Treasury. 

Goldman Sachs has robbed this country (we the taxpayers) blind with the complicity and aid of our own government.  George Bush, Hank Paulson, Barack Obama, Timothy Geithner – all either part of or owned by Goldman Sachs.  We have video of testimony of Paulson and Geithner right here on this website that should be sufficient to convict them.  They’ve been caught on video lying and perguring themselves for over three years!

If we have a hope at all of surviving this mess with our Republic in tact every single one of these people needs to be tried for treason and sedition.  Every single person that aided this theft and fraud also needs to be put on trial.  And all need to suffer the consequences of conviction and that is not limited to merely jail time (or worse) but restitution to the American people must be made!

It’s About Damn Time (Goldman)

Posted by Karl Denninger

From the wire:

The Goldman Sachs Group Inc SEC reportedly files fraud charges against company over structures of certain collateralized debt obligations related to subprime.

claims center around omission and mistatement of certain facts tied to subprime mortgages

Hattip rebeltraders

Form the complaint:

“The product was new and complex but the deception and conflicts are old and simple,” said Robert Khuzami, Director of the Division of Enforcement. “Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party.”

You mean creating CDOs specifically at the request of some hedge fund that wants to short subprime (that is, they believe the underlying reference paper is either worth far less – or actually worthless) without disclosing how that CDO came into existence when selling it on to “investors” presents a problem?

See, I told you so…..

Now let’s see the SEC actually press this thing and further, let’s see criminal charges and I’ll be impressed.

BTW, back in February I said:

In other words Paulson combed through the data available on these subprime mortgage deals and picked out the crappiest of the garbage – the most-rotting of the dead fish, all of which allegedly were “AAA” at the time one would presume but which he was quite sure would soon be either downgraded - or default outright - and then asked Goldman to use those as the references against which it would write the swaps that Paulson wanted to buy.

But remember – Goldman didn’t buy the bonds to set up the CDO – they just issued a credit-default swap, which, it appears, Paulson’s hedge fund bought.

Goldman then went out and solicited people to buy the tranches of the CDOs, selling what was alleged to be a cash-flow stream that Mr. Hedgie had offered (out of the goodness of his heart, no doubt – ed: yes, that’s sarcasm) to fund!

Here’s the question:

Did Goldman disclose to the potential buyers in the offering circular that John Paulson had come to them with a laundry list of characteristics he wanted in the CDO and offered to fund the credit-default swaps which would only make him money if those reference bonds blew up, and that he would take large, material losses IF THE SECURITIES – AND THE CDO – PERFORMED AND ACTUALLY GENERATED THE CASH FLOWS PROMISED?

The SEC finally thinks this is important?

Duh.

NOW LET’S SEE ALL THE OTHER ALLEGED FRAUDSTERS GET NAILED, LIKE THE GARBAGE THAT WAS RUN ON JEFFERSON COUNTY, ALABAMA!

If you’re a PENSION FUND or other investor who got nailed by this crap here is your opportunity to sue these jackasses to beyond the orbit of Mars.

Link to the SEC complaint

We Got A Wee Problem Here

Posted by Karl Denninger

Consumer sentiment is not what the market claims it should be…

According to a Reuters report, the reading on current economic conditions fell to 80.7 in April from 82.4 in March. The consumer expectations reading fell to 62.3 from 67.9, according to Reuters. Also according to Reuters, the one-year inflation expectation index rose to 2.9% from 2.7%

The latter is a problem, as it is well over The Fed’s desired 1-2% range.

Nor is the expectations number from Reuters good.

The sentiment index fell to 69.5, which was wildly off expectations of 75 – that is, the market expected improvement and got serious deterioration instead.

But the barkers on CNBS continue to pump stocks, and suck in retail buyers – especially the crazy speculators in the options market:

I’m compelled to take the other side of this bet.

SEC Charges Goldman Sachs With Subprime Fraud

By: BooRadley

Sorry, subscription to the Wall Street Journal needed. I wanted to get this out quickly, as it just broke.

Goldman Is Charged With Subprime Fraud

The Securities & Exchange Commission charged Goldman Sachs Group Inc. and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages.

The SEC said Goldman Sachs structured and marketed a synthetic collateralized-debt obligation, or CDO, that hinged on the performance of subprime residential mortgage-backed securities.

The CDO was structured and marketed by Goldman in early 2007 when the U.S. housing market and related securities were beginning to show signs of distress, the SEC complaint said According to the SEC, Goldman Sachs failed to disclose to investors vital information about the CDO, in particular the role that a major hedge fund played in the portfolio selection process and the fact that the hedge fund had taken a short position against the CDO.

“Undisclosed in the marketing materials and unbeknownst to investors, a large hedge fund, Paulson & Co. Inc. ["Paulson"], with economic interests directly adverse to investors in the [CDO], played a significant role in the portfolio selection process,” the complaint said.

“The product was new and complex but the deception and conflicts are old and simple,” said Robert Khuzami, Director of the Division of Enforcement.

The SEC also named Goldman employee Fabrice Tourre in the complaint, saying she was “principally responsible” for creating the CDO…..

Someone in the comments at the Wall Street Journal asked how Goldman would get out of this one. Here was an excellent reply:

Easy: they’ll pay a trivial fine while admitting no wrongdoing, no one higher than the unfortunate working for the trader will be convicted of anything, and obama and co will say it’s a great day for justice in america. duh.

I will not get my hopes up, but let us hope that Ms. Tourre considers her rights as a whistle-blower and uses them to inform on those higher up the Government Sachs food chain.

SEC Press Release

STOP THE LOOTING AND START PROSECUTING!!

Wall Street Is Now America  

By Charles Hugh Smith

The stock market is not just a proxy for the U.S. economy and American “capitalism”–it is now the proxy for America itself.

Leadership now consists of managing perceptions via the stock market. By juicing the stock market higher by 80%, and promoting that fact daily in the Mainstream Media, America’s political and financial leadership (one in the same Elite) has masterfully managed global and domestic perception of itself and the nation. To wit:

1. The stock market is a proxy for the U.S. economy because Corporate America is a proxy for America.
2. The stock market has risen admirably, along with global Corporate America’s profits, hence the U.S. economy is fully healed and once again expanding, as is our birthright.
3. We (the leadership Elite) managed to “save” the U.S. economy and American (crony, predatory) Capitalism, thus we are brilliant, competent and you should do as we say.
4. Since nothing else matters but the “health” of the economy as reflected by its proxies, Wall Street and the financial sector, then the rise of the stock market is also a proxy for the nation itself: America is once again ascendent because the U.S. stock market has risen so admirably.There is a sort of crude logic to this linkage of proxies and symbols to the nation and the “idea” of America, and the State/Financial leadership has exploited it with great mastery.Anyone who could sell “change” as a cover for protecting the status quo is indeed a master of propaganda, symbolism and misdirection.So since the stock market is rising, America itself is also once again ascendent.Never mind that only the top 10% of households have enough of a stake in stocks, bonds and other financial wealth (top 10% owns 83% of the nation’s financial wealth) to experience more than a proxy increase in measurable wealth. The bottom 80% (which owns 7%) should be satisfied with the reflected glow of their “betters” increasing wealth. (The slice between 80% and 90% holds 10% of the nation’s financial wealth; I guess that qualifies as “the middle class.”)Never mind that the bedrock of middle-class wealth, the home, is still crumbling in value.Never mind that risk is still rewarded and thrift is severely punished.Never mind “too big to fail” is now “too big to fail, but with benefits.”Never mind the stock market rise is the result of ceaseless manipulation of futures contracts, high-freqency trading and manipulations hidden behind proxies.Never mind that Corporate America continues shedding jobs in the U.S. due to structurally high taxes and fixed costs such as healthcare; Corporate America already earns most of its revenues and profits overseas.Never mind that 250,000 citizens are serving in warzones; the two hot wars the nation is engaged in have dropped from the news. Nobody cares about anything but sports and the rising stock market, as both reflect America’s best, most resplendent values: corruption, media spin, fraud, embezzlement, entitlement, debauchery of credit, distracting media circuses, misinformation, misdirection and propaganda.Never mind that fuel costs $400/gallon in the nether reaches of the Afghan campaign. Nobody cares how much wars cost in treasure or lives any more; it’s all about Wall Street, baby.Never mind the $3 trillion in Federal deficit spending in the past two years; the stock market is rising, so that proves deficits don’t matter.Never mind the $23 trillion squandered or promised to bail out the thugs, crooks, fraudsters and conspirators on Wall Street; the market is rising, that means it’s all been fixed. Go out and spend, spend, spend, don’t be a party-pooper.Never mind that 14% of the nation’s mortgages are in default or foreclosure; the stock market is going up, everything’s good so stop complaining.Never mind that states, counties and cities are all on the edge of bankruptcy; Wall Street is issuing big bonuses, Corporate America profits are rising 8%, and stocks are skyrocketing.Never mind that local government and agency pensions funds are woefully underfunded; who cares about that doomsday stuff, the market is rising!Never mind that taxes are increasing across the board, along with junk fees, traffic fines, city garbage collection fees, etc. Everything’s OK now that the market is rising.Never mind that healthcare costs are set to rise, even though the U.S. already pays two times as much for sickcare as other developed nations (as a percentage of GDP). Healthcare stocks are rising, so it’s all to the good.Never mind the citizenry’s health continues to slide into diabesity and other chronic lifestyle illnesses; we’ll just borrow another couple trillion dollars for new meds. The profits will be immense, Wall Street is gonna love it and so will you.Never mind that personal incomes are flat (up $1.2 billion in February in a $14 trillion economy, whoopie), the market is up big, that’s all that counts.Never mind that the off-balance sheet liabilities of the nation exceed $100 trillion– with the market rising, we’re all gonna get so rich that the $100 trillion we owe in Medicare, Medicaid, Empire and interest on the national debt will be chump change.Never mind that the savings rate is dropping again; who needs savings when you have stocks? We’re minting money here on Wall Street.Never mind that nothing has been fixed in the banking sector or Wall Street; fraud, embezzlement, off-balance sheet lies, mark-to-fantasy and all the rest of the causes of the 2008 meltdown are all still firmly in place.Wall Street loves the confusion of all the alphabet-soup agencies getting into the regulatory act; that will make it easy to game the system by pitting the FDIC against the SEC, etc., with Wall Street’s proxy, the Federal Reserve, on hand to shovel out more trillions to the miscreants.Never mind that all this new wealth flowing from the rising stock market goes to the top 10%; you people in the bottom 80%, if you hustle, maybe you can become our maids and drivers and stuff like that, bus our tables and walk our dogs. It’s the American way, people; Wall Street is bursting with profits from the rising stock market, so that means America is back on top.We’re sorry about your foreclosed home and destroyed credit and equity, but look on the bright side; food stamps cover most of your groceries and maybe you can do our nails or something like that for cash. Unless you expect a real job, then forget it; we only hire people for cash.Jobs, integrity, the Constitution, democracy, moral capitalism, thrift, production, accountability–don’t make us laugh; none of that matters. The only thing, quite literally the only thing, that matters is the stock market is going up. Don’t you read the news?

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