Tag: Goldman Sachs

From Nowdy with love…

The following is a letter released today by Lloyd Blankfein, the chairman of banking giant Goldman Sachs.

Dear Investor:

Up until now, Goldman Sachs has been silent on the subject of the protest movement known as Occupy Wall Street. That does not mean, however, that it has not been very much on our minds. As thousands have gathered in Lower Manhattan, passionately expressing their deep discontent with the status quo, we have taken note of these protests. And we have asked ourselves this question:

How can we make money off them?

The answer is the newly launched Goldman Sachs Global Rage Fund, whose investment objective is to monetize the Occupy Wall Street protests as they spread around the world. At Goldman, we recognize that the capitalist system as we know it is circling the drain – but there’s plenty of money to be made on the way down

Read more…

It’s a ‘Bermudan’ day in the neightborhood…Paige St John at the Herald Tribune exposes why ‘buying Bermuda’ is like being hooked on crack.

Is Paige St John at the Herald Tribune a member of the Slabbed Nation?  Let them eat cake indeed Mikey.

The new Florida norm are carriers like ACA Home, a tiny St. Petersburg home insurer started after 2005 with funding in part from a Bermuda reinsurer.

ACA Home has no employees and pays an affiliate, American Strategic, to run its business.

Financial filings show reinsurers take 86 cents of every premium dollar ACA collects – $9 million of the $10.5 million it collected in 2009.

The cost for turning over almost all of its risk is high. ACA pays as much as 33 cents for $1 of protection against the most likely kind of storms, the equivalent of paying $66,000 a year to insure a house worth $200,000. Continue reading “It’s a ‘Bermudan’ day in the neightborhood…Paige St John at the Herald Tribune exposes why ‘buying Bermuda’ is like being hooked on crack.”

From the Cerebral Wing of the Slabbed Nation: President Obama, The Peter Principle, Crooks and Liars.

New York Times columnist Frank Rich has encapsulated literally years of posts here on Slabbed regarding the financial crash of 2008 and explains why Team Obama is regarded as an utter failure by the American public.  As a reader commented via email to me with the link, (this column is) “Something that you could have authorship of.”  Rich lays out the case both against Team Obama and Team GOP.  The bottom line is Wall Street owns the GOP 100% and the Dems about 85%. What a great choice we have as the wealthy elites continue to drain the treasury dry and run the country further in debt. Here are a few snippets:

The reasons for his failure to reap credit for any economic accomplishments are a catechism by now: the dark cloud cast by undiminished unemployment, the relentless disinformation campaign of his political opponents, and the White House’s surprising ineptitude at selling its own achievements. But the most relentless drag on a chief executive who promised change we can believe in is even more ominous. It’s the country’s fatalistic sense that the stacked economic order that gave us the Great Recession remains not just in place but more entrenched and powerful than ever.

No matter how much Obama talks about his “tough” new financial regulatory reforms or offers rote condemnations of Wall Street greed, few believe there’s been real change. That’s not just because so many have lost their jobs, their savings and their homes. It’s also because so many know that the loftiest perpetrators of this national devastation got get-out-of-jail-free cards, that too-big-to-fail banks have grown bigger and that the rich are still the only Americans getting richer.

This intractable status quo is being rubbed in our faces daily during the pre-election sprint by revelations of the latest banking industry outrage, its disregard for the rule of law as it cut every corner to process an avalanche of foreclosures. Clearly, these financial institutions have learned nothing in the few years since their contempt for fiscal and legal niceties led them to peddle these predatory mortgages (and the reckless financial “products” concocted from them) in the first place. And why should they have learned anything? They’ve often been rewarded, not punished, for bad behavior. Continue reading “From the Cerebral Wing of the Slabbed Nation: President Obama, The Peter Principle, Crooks and Liars.”

and, this we call “justice”?

With Jefferson Parish in an uproar over justice delayed, the time seemed right to post two stories I noticed reading news online today.

First, from the Sun Herald – Contractor pleads guilty to wire fraud:

A contractor who served time in state prison for home-repair fraud after Hurricane Katrina pleaded guilty today to wire fraud in federal court…An FBI probe led to an indictment in June accusing Deveny of defrauding at least 10 homeowners in Harrison and Hancock counties and enticing investors through false and misleading real estate contacts.

The second story comes from Yahoo Finance – Goldman Sachs earns $1.74B, easily tops forecasts:

Goldman Sachs Group Inc.’s earnings easily beat analysts’ forecasts again…Goldman’s results are closely watched because they…[are]… considered the strongest bank on Wall Street and regularly exceed forecasts…Beating expectations was enough to drive Goldman’s shares higher, despite a broad decline in the stock market. They rose $3.02, or 2 percent, to $156.72…While low interest rates hurt the trading business, they benefited the investment banking division, which reported a 24 percent jump in revenue. With borrowing rates so low, many companies were eager to issue new debt.

The New York-based bank continued to reduce compensation costs. The bank was strongly criticized during the financial crisis for doling out big paychecks even after it received government aid and while the broader economy suffered. Goldman set aside $3.83 billion for compensation and benefits during the quarter. It has now set aside $13.12 billion for compensation during the first nine months of the year, a 21 percent drop from the same period last year.

Compensation totaled 43 percent of the company’s revenue for the year so far, down from 47 percent last year.

No doubt the contractor’s revenue would have increased, too, had the authorities looked the other way.

Neil Barofsky sat down with Bloomberg reporter Richard Teitelbaum recently giving a wide-ranging interview on his time as the Special Inspector General (SIG) over what has become the $700 billion “hydra-headed beast encompassing 13 financial aid plans” known as the Troubled Asset Relief Program or TARP for short. The piece gives a good bit of insight into Barofsky’s past as a federal prosecutor including his time as a one time kidnap target of the FARC, a Columbian NARCO terrorist organization we previously explored in connection with the politically connected ownership of Republic Insurance in the Lindner family. Here are a few excerpts of the article where we also find out Treasury Secretary Tim Geithner is now in the crosshairs beginning with Barofsky’s office space at Treasury:

The space assigned to him as head of the Office of the Special Inspector General for the Troubled Asset Relief Program, or SIGTARP, was shoehorned into the basement, three floors below U.S. Treasury Secretary Henry Paulson’s offices.

“They eventually discovered a broken sewer main beneath the floor,” says Barofsky, 40, adding that he doesn’t think any slight was intended by relegating him to the malodorous quarters. Still, he says with a smile, “I wasn’t given the prime real estate in Treasury.” Continue reading “”

He’s backkkkkkkkkkk Steve shuts down Yahoo! ALL plus Monday Music

Guess who just got back today?
Them wild-eyed boys that had been away
Haven’t changed, haven’t much to say
But man, I still think them cats are crazy

They were asking if you were around
How you was, where you could be found
Told them you were living downtown
Driving all the old men crazy

The boys are back in town

(H/T Steve)

SEC Charges Goldman Sachs With Fraud in Structuring and Marketing of CDO Tied to Subprime Mortgages
FOR IMMEDIATE RELEASE

2010-59

Washington, D.C., April 16, 2010 — The Securities and Exchange Commission today charged Goldman, Sachs & Co. and one of its vice presidents for defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.

“This is a relationship built on mutual trust and confidence. Time and again, our Goldman Sachs colleagues have shown that they have the best interests of Allstate at heart.” Ed Liddy.

The Allstate Corporation Continue reading “He’s backkkkkkkkkkk Steve shuts down Yahoo! ALL plus Monday Music”

About the financial crisis and free market ideology. Author Michael Lewis mocks House GOP book club.

….they are ideologically aligned with the industry. They want to believe that the free market system can and should work in this country, like it does in other industries. So they don’t understand from an insider’s perspective like I have, what that actually means, and the consequences of that to Americans. ~ Wendell Potter, former Insurance PR Exec.

For the first time in our history, ideology and theology hold a monopoly of power in Washington. ~ Bill Moyers

Great ideology creates great times. ~ Kim Jong Il

Now that we are set up lets check in with noted financial author Michael Lewis and a recent talk he gave with Vanity Fair editor Graydon Carter:

Recently Vanity Fair editor Graydon Carter and V.F. contributing editor Michael Lewis sat together onstage in front of an intimate crowd at the Museum of Modern Art in New York City and discussed Lewis’s new book, The Big Short: Inside the Doomsday Machine, which tackles the question of what caused the U.S. economy to tank.

You will probably get sucked into Lewis’s hour-long talk, just as the House Republican book group became engrossed in a lecture Lewis gave about the financial collapse. “I was supposed to be there for an hour,” says Lewis in the clip above, referring to his visit with the Hill staffers. “I was there for almost three. And nobody left. And their questions were increasingly: ‘Oh my God, Goldman Sachs did what? A.I.G. did what?’ They didn’t understand it … The minute they started to understand, they were outraged. And I think the more things are explained, the more outraged people will get.” Continue reading “About the financial crisis and free market ideology. Author Michael Lewis mocks House GOP book club.”

Slabbed takes the Regulatory Challenge Part 3: Incompetent is as incompetent does. Tim Geithner and Peter Principle.

The Peter Principle is the principle that “In a Hierarchy Every Employee Tends to Rise to His Level of Incompetence.” It was formulated by Dr. Laurence J. Peter and Raymond Hull in their 1969 book The Peter Principle, a humorous treatise which also introduced the “salutary science of Hierarchiology”, “inadvertently founded” by Peter. It holds that in a hierarchy, members are promoted so long as they work competently. Sooner or later they are promoted to a position at which they are no longer competent (their “level of incompetence”), and there they remain, being unable to earn further promotions. This principle can be modeled and has theoretical validity.[1] Peter’s Corollary states that “in time, every post tends to be occupied by an employee who is incompetent to carry out his duties” and adds that “work is accomplished by those employees who have not yet reached their level of incompetence”.

The Peter Principle is a special case of a ubiquitous observation: anything that works will be used in progressively more challenging applications until it fails. This is “The Generalized Peter Principle.” It was observed by Dr. William R. Corcoran in his work on Corrective Action Programs at nuclear power plants. He observed it applied to hardware, e.g., vacuum cleaners as aspirators, and administrative devices such as the “Safety Evaluations” used for managing change. There is much temptation to use what has worked before, even when it may exceed its effective scope. Dr. Peter observed this about humans. Continue reading “Slabbed takes the Regulatory Challenge Part 3: Incompetent is as incompetent does. Tim Geithner and Peter Principle.”

No ch

McClatchy DC’s Greg Gordon has done a bang up job dissecting Goldman Sachs’ huge profits after the bailout.  This topic represents the intersection of TARP, the Wall Street investment banks and the offshore reinsurance industry. With subprime mortgages stuffed inside insurance linked securities that were peddled both domestically and overseas, the securitized reinsurance contained a derivative based financial guarantee which was likely made good by TARP (my posts on Allstate’s Willow Re, which was not bailed out can be found here in general with my “bell cow post” here. With a tip of the hat to our good friend Mr CLS I can short cut the exhaustive written series of articles by Greg Gordon that focuses on bailed out Goldman Sachs with a recent Youtube interview he gave.

As an aside I continue to believe the collapse of this glorified pyramid scheme explains more on the recent volatility of the costs of RE than anything you’ll hear from the paid shills at their tradegroups (Ol’ Eli is so proud of his work there his Bio is access restricted). I think after a fair read of the information open-minded folks would tend to agree. Or put another way the tail risk associated with Hurricanes does change over time but not overnight. And those that could game the system made out like bandits. The Youtube embed is below the fold. Continue reading “No ch”

Wall Street paternalism and disconnect at it’s finest and on display. A Skadden partner writes about shareholder ignorance and displays plenty in the process.

I’ve written a series of posts on the disconnect from reality between the Wall Street fantasy land and Main Street, which has made modern day Wall Street possible. The problem is systemic in my opinion, from trade publications like the National Underwriter whose editor in chief believes spending yet more money on public relations is the answer to bad faith insurer claims handling, to their trade groups and shills like Robert Hartwig that try to convince the fleeced taxpaying public that insurers really didn’t screw people here after Katrina. As is his custom, however, it was Mr CLS who gives us almost more googling to do than time but in this instance a post of his on Yahoo Allstate provided me the catalyst to author this post which will illustrate again the disconnect of which I speak and it is there we begin:

sop, check out the “Winners” of the 4th Annual U.S. Securitization Awards…….

Don’t know what happened to the 5th Annual U.S. Securitization Awards, guess they cancelled and took “the 5th”.

The links he gave listing the winners was 404, no doubt broken on account of the financial crisis but undaunted I did a quick search and found them. This of course resulted in one of those patented Ah Ha moments for me but before I connect the paternalistic dots lets examine some of those that Wall Street honored back in April 2008 at the 4th annual U.S. Securitization Awards:

Deal of the Year: IHOP Corp./ Applebee’s International Securitization. Underwriter: Lehman Brothers

Deal of the Year – CMBS: Equity Office Properties Securitization Financing. Underwriters: Bear Stearns, Goldman Sachs and Bank of America

Deal of the Year – CDO: Genesis CLO 2007-1 and Genesis CLO 2007-2. Underwriters: Genesis 2007-1: CDO manager: Ore Hill Partners, Underwriter: Deutsche Bank. Genesis 2007-2: CDO manager: Levine Leichtman Capital Partners, Underwriter: Deutsche Bank

ABS Firm of the Year: Goldman Sachs

Outstanding Contribution Award: The American Securitization Forum / Dept. of the Treasury

As if these ironies aren’t delicious enough the final one is over the top.

Lifetime Achievement Award Recipient: C. Thomas Kunz, Retired Head of Structured Finance, Skadden, Arps, Slate, Meagher & Flom

We are well familiar with State Farm’s main US based law firm Skadden, Arps, Slate, Meagher & Flom from their great work revising the history of the Katrina litigation planting falsehoods such as the oft repeated meme that Jim Hood used his criminal investigation of State Farm to assist Dickie Scruggs in cramming the first big settlement down State Farm’s throat (with help of ignorant bloggers such as Mississippi’s own Tom Freeland  who still repeats such propaganda on occasion despite reams of contemporaneous press reports to the contrary). Our readers will also no doubt recall I once lamented the impact of layoffs at Skadden on our daily readership earlier this year.

While reading the award winners and the Skadden connection to the toxic paper industry (makes one wonder how much work the boys at Skadden did on State Farm’s Merna Re) a recent post on Greenbackd came to mind that featured the work of Skadden partner John Carney who evidently is in charge of shilling for the firm and it is to the Greenbackd post we go next: Continue reading “Wall Street paternalism and disconnect at it’s finest and on display. A Skadden partner writes about shareholder ignorance and displays plenty in the process.”