Goldman Sachs

Joe Scarborough doesn’t get it: How GOP and big banks sabotaged Detroit

Joe Scarborough doesn't get it: How GOP and big banks sabotaged Detroit

Joe Scarborough (Credit: NBC/Today)

Vulture capitalism at it’s worst…

Salon

No, unions didn’t kill the Motor City. “In one sense the banks caused it,” ex-banker Wallace Turbeville explains

The same day that Illinois’ Legislature approved a $160 billion “restructuring” of public workers’ pensions, a federal judge ruled that pension protections in Michigan’s state constitution could be overridden as part of Detroit’s historic bankruptcy. Along with fury from unions, that double blow inspired a new round of “I-told-you-so’s” from pundits — like “Morning Joe’s” Joe Scarborough — who frame Detroit as a morality play about politicians who lack the backbone to force cuts on public employees.

To consider what really ails Detroit, Salon called up former Goldman Sachs investment banker Wallace Turbeville, whose recent report for the progressive think tank Demos suggests the pundits have got it all wrong. A condensed version of our conversation follows.

After this decision came out, Joe Scarborough said to his panel on MSNBC, “The problem came from, you know, unions that, you know, push politicians to overpromise benefits that they couldn’t pay for in exchange for votes and money.” What do you make of that kind of analysis?

Well, it’s just based on preconceived notions and not careful analysis of the circumstances. That isn’t what has transpired over the last five years. Because the data don’t reflect that.

And what do they show?

The data show that the current level of salaries paid out by the city, and benefits that are to be paid out are very moderate … The city over the last five years has tremendously cut its operating expenses, close to 40 percent  – which is mostly salaries — and is now operating at levels of employee per capita that are imprudent. And the benefits, if you look into them carefully, are quite modest …

The time scales that we’re operating in now suggest strongly that this is largely an issue of a devastated tax base and a reduction in state revenue-sharing, exacerbated by some really potentially concerning cash requirements associated with derivatives deals and overly complex and imprudent financial transactions.

Who’s to blame for the devastated tax basis?

Continue reading below the fold…

Ted Cruz Gets His Health Insurance Through Goldman Sachs, His Wife Confirms

This is the guy that wants to take away the chance for millions of working Americans to have affordable health care…

The Huffington Post

The wife of Sen. Ted Cruz (R-Texas) confirmed in an interview with The New York Times what the tea party star’s opponents have insinuated gleefully for weeks: The most vocal opponent of Obamacare enjoys a high-priced health plan through investment bank Goldman Sachs.

“Ted is on my health care plan,” Heidi Nelson Cruz, who has worked in the firm’s management division for eight years, told the paper in a story published Wednesday.

Cruz’s plan through Goldman appeared to be an uncomfortable fact for the conservative senator as he lambasted the health care reform law and helped drive what would become a two-week government shutdown. In an exchange during Cruz’s 20-hour anti-Obamacare marathon on the Senate floor in September, Sen. Dick Durbin (D-Ill.) tried unsuccessfully to get Cruz to admit where he gets his own coverage.

“Will the senator from Texas for the record tell us now — and those who watched this debate — whether he is protected and his family’s protected?” Durbin asked.

Cruz deflected the discussion toward an uninsured diabetic woman that Durbin had been talking about earlier.

A spokeswoman for Cruz confirmed to the Times that the senator gets his coverage through Goldman. The Wall Street bank told the paper the coverage is worth at least $20,000 a year. “The senator is on his wife’s plan, which comes at no cost to the taxpayer and reflects a personal decision about what works best for their family,” the spokeswoman, Catherine Frazier, said.

As a HuffPost reader noted, it’s debatable whether such a plan comes at no cost to the taxpayer. Employer-sponsored health plans are generally tax-deductible for companies, so the Cruz family’s expensive health plan presumably reduces Goldman’s tax liability.

“Ted is very much a visionary,” Heidi Cruz Nelson told the Times. “He is very strategic, and he’s very practical, and he does what needs to be done, not what everybody wants him to do.”

In interviews with the Times, friends of Heidi Nelson Cruz described her as “less ideological” than her husband, who, recent polls have shown, is still adored by tea party adherents and loathed by liberals and many independents after the shutdown. Before her time at Goldman, she held several posts in the George W. Bush administration, including in the Treasury Department and the National Security Agency.

“Nothing in her background remotely approached Ted’s Scalia-like conservatism,” one friend said, referring to Supreme Court Justice Antonin Scalia.

 

Elizabeth Warren’s First Senate Banking Committee Hearing

Pic of the Moment

Democratic Underground

Senator Warren: ‘Why aren’t more bank execs in jail?’

The Senator says, “I’m just concerned that too big to fail has become too big for trial.”

“Too big for trial,” that’s a powerful tagline to hit the Goldman Sachs crowd with. It’s a brilliant turn of phrase.

Justice Dept. Ends Investigation Into Goldman Sachs Mortgage Abuses Without Pressing Charges

 

 

After four years of investigating Goldman Sachs’ blatant mortgage abuses, the crooks go free.

What the heck does this say to the next round of crooks coming out of Wall Street with their derivatives and toxic debris.

People go to jail for stealing a loaf of bread while others stay free after stealing from the entire global finance system and simply walk away unscathed.

This is one of the few things I don’t like about this administration.  Some people say they are beholden to the Banks for helping to get Obama elected in 2008.  I tend to believe that, but wonder why Obama is still in the tank with Goldman Sachs, et al.   Now, they refuse to endorse or support Obama’s bid for a second term…

Think Progress

After a year-long investigation into Goldman Sachs, the bank singled out by a Senate investigative committee for its abusive mortgage practices in the run-up to the financial crisis, the Justice Department announced Friday that it would not press charges against the bank. Goldman Sachs became of the face of widespread mortgage fraud and abuse that led to the subprime mortgage crisis when evidence that it had made trades described by its own bankers as “shitty deals” came to light during a Senate investigation in 2011.

The Department of Justice, however, concluded that it did not have enough evidence to meet the “burden of proof” required for charges, the Wall Street Journal reports:

“Based on the law and evidence as they exist at this time, there is not a viable basis to bring a criminal prosecution with respect to Goldman Sachs or its employees in regard to the allegations set forth in the report,” the statement read. […]

In a statement Thursday, Goldman said: “We are pleased that this matter is behind us.”

DOJ’s investigation began after an April 2011 report from the Senate Permanent Committee on Investigations revealed that Goldman Sachs had pushed its clients to make trades on risky mortgage-backed securities and credit default swaps even as the bank was betting the same securities would lose value. Though Goldman Sachs was “doing God’s work,” according to chief executive Lloyd Blankfein, other bankers described pushing “shitty deals” on customers. In March of this year, a Goldman Sachs trader lambasted the bank’s “toxic and destructive” culture in a scathing resignation editorial in the New York Times; a former Goldman partner followed up the next week by admitting that the bank’s “commercial animals” had duped customers and peddled “junk” to its clients.

The Securities and Exchange Commission also declined to press charges related to the bank’s role in a $1.3 billion sale of mortgage-backed securities, a reversal from last month when it indicated that it would recommend criminal prosecution. In July, Goldman settled a civil suit with the SEC for $550 million, and it faced sanctions from the Federal Reserve in September.

DOJ reserved the right to re-open the case and press charges should new evidence emerges, but for now, the case seems the latest in a string of them in which the biggest purveyors of the toxic assets that led to the financial crisis walk away with minimal penalties and, in many cases, no penalty at all.

 

STUDY: Super-Rich Hiding At Least $21 Trillion In Tax Havens

Not only is this a national security issue for our country, it’s a global security issue as well…

Think Progress

According to a new study, the world’s super-rich are shielding at least $21 trillion in secret offshore tax havens. Using data from the Bank of International Settlements, IMF, World Bank, and national governments, the Tax Justice Network found that an astonishing 100,000 people worldwide hold nearly $10 trillion of offshore wealth, equivalent to the size of the Chinese economy. According to the study:

1. Big banks manage the wealth. The three private banks handling the most assets offshore are UBS, Credit Suisse, and Goldman Sachs.

2. Offshore wealth is creating a global economic “black hole.” If the $21 trillion in offshore earned a conservatively-estimated 3 percent rate of return, and that income was taxed at just 30 percent, this would generate tax revenues of nearly $200 billion — roughly twice the amount OECD countries spend on international development assistance.

3. High impact on developing countries. In the 139 developing countries highlighted in the report, the richest citizens had amassed $7.3 to $9.3 trillion of unrecorded offshore wealth that is beyond the reach of local tax authorities. The report reveals that many developing “debtor” countries are actually quite wealthy, but the money is held by a few individuals.

4. Huge tax haven growth in the last few years. In 2005, the world’s top 50 banks managed $5.4 trillion in offshore money. By the end of 2010, the figure is over $12 trillion, representing an average annual growth rate of more than 16 percent.

This tax avoidance study comes at a time when many are questioning presidential hopeful Mitt Romney’s use of tax havens. As an executive at Bain Capital, Romney routed investmentsthrough companies in Bermuda or the Cayman Islands to allow investors to avoid U.S. taxes.

– Steven Perlberg

Rolling Stone: The 1% Are NOT Citizens Of The United States

As   points out over at Addicting Info:

The 1% doesn’t pledge allegiance to any flag. Not even the ones they own.

Rolling Stone – Matt Taibbi

It seems America’s bankers are tired of all the abuse. They’ve decided to speak out.

True, they’re doing it from behind the ropeline, in front of friendly crowds at industry conferences and country clubs, meaning they don’t have to look the rest of America in the eye when they call us all imbeciles and complain that they shouldn’t have to apologize for being so successful.

But while they haven’t yet deigned to talk to protesting America face to face, they are willing to scribble out some complaints on notes and send them downstairs on silver trays. Courtesy of a remarkable story by Max Abelson at Bloomberg, we now get to hear some of those choice comments.

Home Depot co-founder Bernard Marcus, for instance, is not worried about OWS:

“Who gives a crap about some imbecile?” Marcus said. “Are you kidding me?”

Former New York gurbernatorial candidate Tom Golisano, the billionaire owner of the billing firm Paychex, offered his wisdom while his half-his-age tennis champion girlfriend hung on his arm:

“If I hear a politician use the term ‘paying your fair share’ one more time, I’m going to vomit,” said Golisano, who turned 70 last month, celebrating the birthday with girlfriend Monica Seles, the former tennis star who won nine Grand Slam singles titles.

Then there’s Leon Cooperman, the former chief of Goldman Sachs’s money-management unit, who said he was urged to speak out by his fellow golfers. His message was a version of Wall Street’s increasingly popular If-you-people-want-a-job, then-you’ll-shut-the-fuck-up rhetorical line:

Cooperman, 68, said in an interview that he can’t walk through the dining room of St. Andrews Country Club in Boca Raton, Florida, without being thanked for speaking up. At least four people expressed their gratitude on Dec. 5 while he was eating an egg-white omelet, he said.

“You’ll get more out of me,” the billionaire said, “if you treat me with respect.”

Finally, there is this from Blackstone CEO Steven Schwartzman:

Asked if he were willing to pay more taxes in a Nov. 30 interview with Bloomberg Television, Blackstone Group LP CEO Stephen Schwarzman spoke about lower-income U.S. families who pay no income tax.

“You have to have skin in the game,” said Schwarzman, 64. “I’m not saying how much people should do. But we should all be part of the system.”

There are obviously a great many things that one could say about this remarkable collection of quotes. One could even, if one wanted, simply savor them alone, without commentary, like lumps of fresh caviar, or raw oysters.

But out of Abelson’s collection of doleful woe-is-us complaints from the offended rich, the one that deserves the most attention is Schwarzman’s line about lower-income folks lacking “skin in the game.” This incredible statement gets right to the heart of why these people suck.

Why? It’s not because Schwarzman is factually wrong about lower-income people having no “skin in the game,” ignoring the fact that everyone pays sales taxes, and most everyone pays payroll taxes, and of course there are property taxes for even the lowliest subprime mortgage holders, and so on.

Continue reading here…

Rep. Joe Walsh Explains His ‘Don’t Blame Banks’ Rant: I ‘Was Working On An Empty Stomach’

Yeah right Joe…

Think Progress

Yesterday, ThinkProgress reported on a testy exchange between Rep. Joe Walsh (R-IL) and a group of his constituents during a meeting. At several points during the discussion, Walsh lost his temper, screaming and threatening to eject participants in the meeting. “Don’t blame banks,” yelled Walsh, who disagreed with a constituent who correctly noted that banks use the revolving door and campaign contributions to dominate government.

After our story, the Capitol Fax, an Illinois political website, contacted Walsh for a response. Walsh wrote in an e-mail that he was “working on an empty stomach and had a quicker fuse than normal.” Despite the fact Walsh’s biggest campaign benefactors come from the banking industry — $132,329 in campaign contributions from the finance industry and $18,400 from bank employees — the freshman congressman claims that he’s “no pal of the big banks.” He also reiterated, “but [banks] didn’t get us into this mess — government policy” did:

I do these cup of joe’s every wkend, I show up at a coffee shop or restaurant anywhere in district and anyone can come meet with me and talk to me about anything. They are fun, engaging sessions, I often get people who disagree w me on issues at these events and the conversation can be very spirited. I am very passionate at these events as well as at my town halls. This was no different except I was working on an empty stomach and had a quicker fuse than normal.

The woman I had the heated exchange with was great and she appreciated how open and unusual these events are. I apologized to her for getting a bit to passionate and she smiled and didn’t mind at all. Regarding the substance rich of what I was trying to say – I’m no pal of the big banks and I wouldn’t have voted to bail any of them out. If they’ve abused their charters they need to be prosecuted fully. But they didn’t get us into this mess – goverment policy which has dictated for years that everyone should own a home got us here. The banks only followed the rules government set. And further government meddling will only exasperate the problem.

View the full video and Walsh’s rant here.

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GOP Rep. Joe Walsh Melts Down, Screams At Constituents: ‘Dont Blame Banks!…I Am Tired Of Hearing That Crap!’

Joe Walsh seems like a very loose cannon…

Think Progress

Freshman Rep. Joe Walsh (R-IL) is known for his anti-Obama rhetoric on cable television and his inability to pay his child support payments. But during a recent meeting with constituents in his Chicago-area suburban district, Walsh lost his cool when several attendees asked about why banks have so much power in government. At one point, Walsh even threatened to eject a man who asked Walsh about the revolving door of bank lobbyists infiltrating Congress and financial regulatory agencies.

Walsh at one point screamed, “don’t blame the banks … this pisses me off!” After several constituents accurately pointed out that bank lobbyists occupy key positions within Congress, the SEC, and other oversight bodies that are supposed to supervise bank practices, Walsh began sticking his finger close to his constituent’s faces, yelling, “quiet for a minute or I’ll have to ask you to leave.” The constituent, who had calmly asked his question before being cut-off midway through his sentence, obliged:

WALSH: Thats not the problem! The problem is you’ve got to be consistent. And I dont want government meddling in the marketplace. Yeah, they move from Goldman Sachs to the White House, I understand all of that. But you gotta’ be consistent. And it’s not the private marketplace that created this mess. What created mess was your government, which has demanded for years that everybody be in a home. And we’ve made it easy as possible for people to be in homes. […] Don’t blame banks, and don’t blame the marketplace for the mess we’re in right now! I am tired of hearing that crap! This pisses me off! Too many people don’t listen. […]

WALSH: Quiet for a minute! Quiet for a minute!

CONSTITUENT: Joe, what did I say–

WALSH: Quiet for a minute or I’m going to ask you to leave. You need to listen, or I’m going to ask you to leave.

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Goldman Sachs Employees Told To Stay Away From Occupy Wall Street: Report

Goldman Sachs has told its employees not to enter Zucotti Park, as the Occupy Wall Street protests continue, CNBC reports.

This is outrageous, yet totally expected from the likes of Goldman Sachs

The Huffington Post

Goldman Sachs employees better not think of grabbing lunch or taking in the scenery at Zucotti Park. “The firm” as it’s known among its workers hasbanned employees from going to the site of the Occupy Wall Street protests for any reason, CNBC reports.

As the protests, which started September 17 continue into their fourth week, Goldman Sachs employees are being told to stay away from the park, at least six Goldman staffers told CNBC. The staffers said they didn’t know whether the policy was official.

The ban on entering the the park is just one of many policies Goldman uses to try to keep its employees — and itself — out of the public eye. As of January, the investment bank had banned the use of Facebook, despite its $450 million investment in the social networking site, according to Fast Company. Goldman also banned its employees from commenting on popular Wall Street site Dealbreakerin 2008.

Continue reading here…

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New York Times Smacks Down Rep. Darrell Issa’s Demand For A Retraction

Darrell Issa

Image via Wikipedia

Think Progress

On Thursday, the New York Times responded to a demand for a retraction from Oversight Chairman Rep. Darrell Issa’s (R-CA) office regarding a major piece published two weeks ago about Issa’s many conflicts of interest between his congressional work and his vast financial holdings. In the letter, Dean Baquet, the assistant editor of the paper, debunked claims of factual inaccuracies listed by Issa spokesman Frederick Hill.

In two instances, the Times acknowledged that its reporter Eric Lichtblau made mistakes. In one case, a county assessor provided faulty information. In another, Lichtblau simply used Issa’s own family foundation disclosures; he could not verify their accuracy with Issa because his office refused to respond to three weeks worth of requests by the Times.

The letter, worth reading in its entirety, demolishes what’s left of Issa’s demand for a retraction:

#1) Issa Claim: “Directed Electronics is, in fact, not a supplier to Toyota.”

NYT Response: Issa not only calls himself an “auto supplier” to Toyota on multiple occasions, but his Directed Electronics company has licensing agreements with Toyota for aftermarket parts including car alarms, an iPod adapter, and a remote start interface. The Times then lists Issa’s continued financial ties to the company he once led as an executive.

#2) Issa Claim: A golf course is not visible from one of Issa’s corporate office towers.

NYT Response: The office building overlooks the Shadowridge County Club only a quarter a mile away, and Issa’ realty agency for the building advertises “direct views to golf driving range.”

#3) Issa Claim: “Rep. Issa does not have investments dependent on Goldman Sachss (sic) performance.”

NYT Response: “Your interest in Goldman’s performance is borne out by, among other factors, your extensive holdings in its mutual funds, your investigation into the lawsuit brought against the firm by the Securities and Exchange Commission in 2008, and the concerns raised in your July 2011 letter about the impact on Goldman of capital requirements. As was noted in afollow-up column by one of our news columnists, Floyd Norris, Goldman Sachs also underwrote DEl’s initial I.P.O., another indication of the ties between you and the firm.” (ThinkProgress has also reported on Issa’s extensive ties to Goldman Sachs herehere, and here.)

#4) Issa Claim: The discussion of earmarks on West Vista Way “fails to mention that at the time he sought funding for his district he did not own this property.”

NYT Response: As the story noted, you secured two earmarks for the road, before and after you bought the property. (ThinkProgress debunked Issa’s claim about his earmark in April, but Issa continued to try to deceive the press.)

Notably, the Heritage Foundation blog, one of the few outlets still questioning the Times’ reporting, has received donations from Issa’s charity foundation.

View the New York Times response to Issa below:

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