The Obama Adminstration's Handling of Wall Street.

As an example, say I have:

+$10 long position in the prime market, and it loses 20%.
-$5 short position in the subprime market, and it gains 50%.

I had $5 before, and have $5.50 now.

All three of the above statements would be accurate. I maintained a net short sub-prime position. I was not short the mortgage market (significant, consistent, or otherwise). And my losses were more than offset by my gains.

 

That's the point - I don't need to in a "defense" of GS. The prosecutor is the one that has to prove the lie beyond any reasonable doubt.

But you're again relying on the interpretations of the author and Senator Levin to make your case - but they have their own viewpoints just as Blankfein has his. Their opinions are not conclusive evidence. For example, this statement:


Second, by the time Sparks and Co. were unloading the Timberwolves of the world on [unsuspecting clients] in the summer of 2007, Goldman's mortgage department accounted for 54 percent of the bank's risk. That means more than half of all the bank's risk was wrapped up in its bet against the mortgage market – a 'massive short' by any definition."

Again, if they were long parts of the market and short other parts, that could account for that 54% of the bank's risk without necessarily being a massive short. They could have had both a big short and a big long at the same time, as hedge funds often do in various ways.

I'm not saying you're wrong - I really have no idea what GS was doing behind the scenes, and I have no doubt they were trying to mislead Congress nad maybe perjured themselves. What I am saying is that you need a whole hell of a lot more substantial evidence than this to prove a perjury case. This stuff would be laughed out of court at this point and could easily be destroyed by GS's defense team.

Just a day or two ago, GS got a bunch more subpoenas by the Justice Department - there is an investigation that is going on and has a long, long way to go. You seem to have already prejudged the outcome of that and wonder why they haven't already filed a perjury case - I think that's absolutely nuts.

 

Actually Sammy, I find it hilarious that you are tossing out out the good ole ESL label considering that my English is superior to yours in just about every way, not to mention logic, analytical skills, etc etc etc.

Care for the actual text of Goldman "admissions?" Directly from the SEC:

Mistake in what? Mistake that Goldman didn't know it had to disclose? Mistake that they thought they didn't have to disclose? Mistake in what? Oh the irony, in light of your "ESL" rant. Perhaps you don't know the difference between "fraud" and "conspiracy to commit fraud" from "making a mistake," the least of which involves intent. So Carl Levin postured for several month and we came down to a "mistake?" LMAO.

Do make sure you give me your office address. I'll make sure to send you a dictionary.

LMAO. That's hilarious. Yeah that thread. Which response are you waiting for for me Sammy? The last three posts from that thread are from me, rhadamanthus and you. Rhadamanthus post involves investigation into Morgan Stanley. Your post weren op-eds from Jonathan Weil and Michael Lewis in which you MADE NO ATTEMPT to respond to my post which was the third last post of that thread, which addressed the difference between a market maker and an adviserk, in which you still have no clue about.

What's more ironic Sammy, I made that post on May 3. You replied with your idiotic irrelevant post on May 13. Tried to slip one under the radar did we? Who pulled the disappearing act? LMAO.

LMAO. See above. Fraud: intentional deception made for personal gain or to damange another. Want to hear the definition of "made a mistake" or "had incomplete information." And as mentioned the above, one of the BASIC differences is intent. Seems like you didn't exactly get an intent out of that settlement, which is just a wee bit important.

No moron, learn this basic finance concept called "sunk cost." Abacus already happened. Timberwolf already happened. All those other shorts they had (which made them far more than 15 million) already happened. It's irrelevant. Given that it already happened, what's more expensive? Fight it out in court or settle? How much were they spending and how much will they spend on several months of legal bill. What happened to the stock Sammy, what, $190 down to $150, in a span of 2 weeks?

Hilarious. Yes, perhaps had Goldman had a time machine and knew how much they'd be liable for they wouldn't have done Abacus again. They don't.

Chuckles, I don't know if Goldman had done the right thing at that point because, conceivably they couldn't have done better in a court fight, but I know nothing could be more embarrassing for the government. Goldman made off with several billion with its short positions. They got fined $550 million. Would I take that trade? LMAO, well, what do you think?

The government went on a big brouhaha about fraud. Now here's how I look at it. If it had an iron-clad case, it would litigate and recover more money. Instead they settled for "incomplete information" and "made a mistake." Sounds to me like they either didn't have a case or if they did, let Goldman walk away with like I said, a slap on the risk.

Well, your mom had something missing like Abacus, like a condom.

 

Here's where we disagree. These kinds of cases can take years to build, as we saw with the much simpler and more straightforward Barry Bonds case (or the Roger Clemens one). Perjury cases just never are that simple.

 

Seriously, you've gotta be kidding me. Do you even know what DV01 means? It's the change in the price of a bond with a 1 bp (an "01," duh) change in yield. Spread DV01 is likewise, a measure of the change in value of a CDS with an 01 change, since they had the ABX index there, probably measured of the forward LIB1 curve.

Your grainy little picture TELLS ME NOTHING. I DONT' KNOW WHAT I'M LOOKING AT. What I can say for certain however, is that a spread DV01 IS A DIFFERENTIAL. It measures CHANGE. It DOES NOT MEASURE GOLDMAN (or anybody else's) POSITIONS.

Like I said, actually go gain some expertise in the field (start by reading a Fabozzi book) before coming here and embarrassing yourself again.

As for lying, what is your *****iing definition of lying? Goldman stated it had no "massive net short" against the housing market. That is VERY BELIEVABLE. To say it was short the sub-prime market and no massive net short against the housing market is FAR FROM CONTRADICTORY (aka. lying).

I know, you probably don't know the size of the market. Currently the size of the U.S, housing market is $10.6 trillion (before the sub-prime crisis, it peaked at $14 trillion in 2005). Of that $5.4 trillion are Agencies (Fannie, Freddie, Ginnie). Another $3 trillion are unsecuritized carried on bank balance sheets as well as unsecuritized Agencies. Private Label prime loans amout to $1.2 trillion. Private label sub-prime/second lien/HE are only about $1 trillion. The soruce is Amherst. Don't ask for a link, it's subscribers only.

Even during the height of sub-prime issuances in 2005, sub-primes never amounted to more than 21.8% of ALL housing originations and a much smaller proportion of existing mortgages. Heck it was 7.8% origination in 2001, 7.2% in 2002 and 8.6% in 2003 before jumping to over 18% in 2004. That means, as an aggregate, excluding Agencies (the biggest chuck), banks are LONG THE HOUSING MARKET. Goldman can EASILY short the sub-prime while not "massively" shorting the housing market.

Don't quit the day job.

 

Like I said, I don't particularly care for your background. It's not about you. It's about your claims. Your claims are false. Nothing more, nothing less. You held your own neck out there by making a false claim in a subject to which is not your expertise. It was pointed out to you. Nothing more, nothing less.

No chest thumping on my part. I don't tolerate incompetence (say for Goldman's "clients") and am not one to cater to another's sensibilities. Call it a character flaw if you want.

Your quote tells me nothing. Does Goldman generally work with clients, as stated? Holy crap, they do. The contention was, is and always will be: ARE THEY WORKING WITH CLIENTS IN THIS INSTANCE, specifically relating to Abacus.

As I said about SammyFisher, I don't think you know what a market maker is.

A very good question to ask in the case, which would quickly put aside your "Goldman screwed its client" nonsense is, "who is the client in this case." We know (as I've told you) that for every synthetic CDO, there is a long side and there HAS TO BE a short side. We know somebody like Landesbank and RBS lost money. We also know John Paulson was on the short side?

Who's the client? Who paid the fees? Who asked Goldman to put together the deal? Paulson paide the fees. Paulson asked Goldman to put together the deal. As I've mentioned, Goldman is the market maker, but if we have to tag a "client," then if anything, it would appear that Paulson is the client and Goldman served him very adequately.

The claim Goldman screwed its clients is factually incorrect.

Chuckles, you won't find it in any database. It's a research from Amherst Securitiess LLC, you know, one of those companies that made a killing in the financial crisis. It's the type of report that some MD's have a fit when one of their traders/quants e-mail to their sales buddies who then send them to clients, for marketing purposes.

Want a look? Contact Amherst directly. You get the full subscription for several tens of thousands of dollars.

Obstruct away from you? LMAO? Seriously, like I said, go find out what DV01 means. There's a reason why your little table showed $/bp as the unit. Because that is what DV01 measures.

There are several curves at work here, since we're talking about MBS. The LIB1 curve and the LIB6 curve being the most common. In sub-prime CMO's, typically the floater bonds are based off LIB1 and for the underlying mortgages, by far the vast majority of ARM's are based off LIB6 (others include TSY1, TSY1Y, COFI, etc).

Goldman could not have placed any additional bets on the housing market for DV01 to change. Why? Because the underlying curve, be it LIB1/LIB6 or whatever could flatten or steepen. Like I said, DV01 is at its basic, a differential. It measures change. It DOES NOT measure total position. Your graph is nothing more than an indication of how much Goldman stand to gain (or lose) if there is a 1bp change in LIB1/LIB6.

And we do know exactly what happened to the LIB1/LIB6 in late 2006/early 2007. You might think your post is proof that Goldman was massively betting against the market, IT DOES NOT.

That gets me to your last point, actually. I KNOW Goldman was betting against the market. Not just sub-prime, but the whole housing market. As a matter of fact, I stated as much in this very thread. Two things though:

1. It is not illegal. Yours truly wasn't very "flat" during the whole thing
2. Your whole contention is "massive net short." As I've mentioned already, there is ZERO legal definition of "massive" out there. On top of that, Goldman covered all its bases by saying "net short position" on the housing market. A billion or two here and there, not through the full year (which also was factual), is a drop in the bucket measured against Goldman's trading positions, especially net mortgage trading positions.

 

Well, the investigation into Goldman Sachs may be ongoing and the verdict still undetermined, but I think we can all agree that MFW is guilty of being a royal jerk.

 

Uh, everybody charged with illegality has made a mistake, though the biggest "mistake" here was that the Fabulous Fab got caught; the SEC punishes innocent "mistakes" with slaps on the wrist (or actually by not bringing an action at all, that's what the whole "Wells Notice" process is about, not that you'd know jack sh-t about it....) - it punishes not-so-innocent mistakes with half billion dollar civil suits. Guess which one it is?

SO we agree - you shrank away and hid for over a year.

Then why did you bring it up, Beaver? What is the ROI on > $550 million in losses vs. $15 million in gains - you're the Chinese guy here so you're allegedly good at math if the stereotypes are true - aidez-moi, ma salope.

Yes, nothing could be more embarrassing for the SEC...than having "no case" as you stated many times, and walking away with the largest civil enforcement penalty in history. They must be really good negotiators! :grin:

You know sometimes, I ask myself why I bother...and it's for moments like this.

It is so hilariously awesome that you started this post with a paen to your mad ESL skillz and you end with this:

If you were actually had a sense of humor (something pretty much all CBC's lack - Sura faint!) . . . . this would be a totally sick pun. Instead, you end up sounding like GWB or Sarah Palin, bwahahhaha. For the 4th time, the phrase is "slap on the wrist". It ain't "slash on the wrist" "slap on the risk" nor is it "slap on the rickshaw" "scab on the wrist" or or "scam for the rich"

 

It's always fun to watch Little Sammy get punked...

 

This is the sad part of it all. Even if anything happens, as is always the case with regulation, it will be too late to matter.

 

I've already addressed the "material misstatements" part.

More interesting part, page 2 of Abacus circular:

Page 8, under "Risk Factors:"

Sounds like they told you exactly what's going on. Who didn't pay attention?

 

Well let's see Sammy. According to my prediction when this whole **** was actually going on, I said that I cannot foresee a circumstance in which politically possible for Goldman not to lose to some politically motivated trumped up charges. Seems like that's exactly what happened.

And now, seems the economy is rather week and there is an election next year, well what do you know, a Subpoena and a perjury charge.

Not of course, that I'm spinning some conspiracy theory here but you gotta admit, the timing is most convenient.

LMAO. You post NOTHING OF SUBSTANCE for me to reply. Would have been a waste of time for me to even read. You NEVER actually addressed Goldman's role as a market maker. As usual, when the winds go against you, you dodge the question and run like a moronic little twerp.

Once again, there was NOTHING for me to refute. I suppose I could have posted an op-ed like you but even that I'd consider a waste of my time.

I didn't bring up Abacus. The Senate/SEC did, you know, with the whole perjury thing?

I brought up Ralph Cioffi. I think you're so full of **** you got your cases mixed up. Cioffi and Tannin, you know, the hedge guy at Bear Stearns. The ones you were so sure would be found guilty? Acquitted on all charges except one moved to EDNY.

Some find government work here. The e-mail alleged by the DA:

The actual e-mail:

The SEC alleged fraud. It got a mistake. LMAO. Where's the fraud case Sammy?

Wouldn't it be better to you know, prove it in court and then levy the fine, so you can you know, pay back the investors the full amount instead of just part of it?

Abacus was a $2.1 billion synthetic CDO by itself. It got wiped out. Want to toss in the others?

I actually do think it's funny. It's actually really funny. I think it's hilarious to find the internet spelling police, on a BBS, caring so deeply for a post that took me less than 5 minutes to compose and never bothered (and will never bother to) to proof-read.

The bottom line comes down to something like this. I think that if one bothers to waste time pointing out my spelling errors, it pretty much comes down to that moron doesn't have much of a coherent argument. Seriously, who among those that have such a strong argument trifles with such nonsense.

Sounds like that you don't have much of a point Sammy. We're not really surprised are we?

 

People wonder why the economy is in such dolrums....it's so stupidly obvious.

People's wealth were in their homes. They were spending and buying but more of all it was leveraged by their home value. Homes they paid lots of money to - to construction companies to loan brokers to wall street bankers and to many many other people. And the assets were sold to guess who? Homeowners! In the form of toxic assets.

So you had people over paying for home and credit in other to get pensions based on their own risky investments.

So people not only lost their money on a bad investment they lost in their pensions.

People talk about the evils of redistributing wealth....but that's exactly what our system did with Wall Street at it's core. They found a way to get people to over pay for property AND sell the soon to be toxic IP's on the bonds back to people. They made a killing on both the home value and selling the assets back to people.

Where did the trillions in profits come from? It came from average people. But when you suck that much money out of people guess what, they will take a generation to recover.

There's just no more money to suck out of people's pockets. Lower taxes raise taxes - it doesn't matter. The wealth has been transferred to people who are buying up beach front property in Mexico.

Our system - Dems and Reps have failed this country. Owned by money they caved to it. And we'll recover but I wonder if there will be another bubble to repeat the same thing.

But I do see this is unstainable and what will happen when so much of the weath has transferred over that there is not enough to suppoer a consumer economy?

I have no idea.