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…
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.
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.
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.
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.
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.
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 here, here, 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.
As of July 13, 29 public companies had more cash on hand than the U.S. Treasury Department, according to the site Zero Hedge based on numbers from Capital IQ. It’s a stark reminder that if Congress refuses to raise the debt ceiling, the government won’t have nearly enough money to continue funding essential services and programs.
In the first half of July alone, Treasury cash balances were depleted from from $130 billion to just $39 billion. That means the most powerful nation on earth currently is tied with Google for the amount of cash that it has, and is less flush than Bank of America, JP Morgan Stanley, and Goldman Sachs, among others.
American companies are highlighted in yellow
Two of the top three companies are Chinese, while Bank of America comes in third. The numbers effectively rebut Republican claims that the government has plenty of money to keep funding essential services while paying down its debt. It also belies GOP claims that companies are in need of lower corporate taxes. American corporations have a record amount of cash — they are just refusing to invest domestically while lobbying for tax breaks.
Several Republican candidates have called for drastically lowering the corporate tax rate, while congressional Republicans are refusing to concede in debt ceiling negotiations that corporate tax loopholes should be closed to give the government more much-needed revenue.
The Treasury’s cash balances will go back up once more revenue comes in, but on Aug. 3, the government’s savings account will be nearly empty and President Obama would be relying on daily tax revenue to pay the nation’s bills. But there won’t be enough — in fact, there would be a $134 billion shortfall in August alone. The small amount of money available to the Treasury will leave the government facing impossible choices about what to cut.
It sure looks like Goldman Sachs, The Chamber of Commerce, the Koch Brothers and the GOP are making a strong effort to make sure Obama is not re-elected in 2012, thus furthering their own agenda of more corporate tax cuts as well as many states turning to private companies to run schools, prisons, municipalities, etc.
Goldman Sachs, which just six months ago forecast a stronger-than-expected recovery, hasdowngraded its prediction, saying economic growth will slow to a snail-like 1.5 percent in the second quarter of 2011, and 2.5 percent in the third. The investment banking firm also crystal-balled that unemployment will still hover near 9 percent at the end of 2012, and that the U.S. is running a real risk of slipping into another recession. With voters increasingly focused on the economy, is Goldman essentially predicting disaster for President Obama and his fellow Democrats in next year’s election?
Yes. If this prediction comes true, Obama is doomed: ”Alarms bells must be ringing all over Obamaland,” says James Pethokoukis atReuters. The Obama administration, in an “astoundingly optimistic forecast,” promised that the economy would be “off to the races” this year, thanks to its $800 billion stimulus. Now, as per Goldman, we’re looking at unemployment on Election Day 2012 that’s about where it is now. Slashing tax rates and scrapping regulation “may be the only way Obama can win another term,” but don’t hold your breath. “Panic at the White House? Gloomy Goldman Sachs sees high unemployment, possible recession”
And Republicans would rather blame Obama than help: ”If you have an ounce of actual humanity, you see this as an unmitigated catastrophe,” says David Dayen at Firedoglake. But Republicans, who can “use a crappy economy to take down a president,” are cheering. Instead of pushing policies to put people back to work, the GOP is defying all economic theory and pushing Obama to focus on cutting spending to close the deficit — a move that will only pull money out of the economy and worsen matters for everyone except the GOP’s presidential candidates. “Goldman Sachs: Jobs crisis will continue for foreseeable future”
This is nothing for the GOP to celebrate: History confirms that a poor economy is likely to hurt any president, says Nate Silver at The New York Times. But it also shows that Obama’s “situation is by no means completely hopeless.” If he can pass along the blame to the legislative branch, as Harry Truman did in 1948, he can hang on, and even help Democrats pick up seats in Congress. Perhaps it’s House Republicans who should be panicking. “A bad economy can hurt House Republicans”
