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Full Annotated Lloyd Blankfein Testimony

Tyler Durden's picture





 

Below we present Lloyd's full, and merely 2 page, prepared testimony before tomorrow's Senatorial Hearing on the Tourregate. Here are the key amusing excerpts:

Today, the financial system is still fragile but it is largely stable. I want to express my gratitude and the gratitude of our entire firm. We held the government’s investment for approximately eight months and repaid it in full along with a 23% annualized return for taxpayers.

Lie #1: Goldman is still responsible for at least $21 billion in TLGP loans, which are FDIC, and thus fully taxpayer backed. Ironically, this is just a little more than Goldman paid out in bonuses in 2009. Perhaps that money should have gone to really paying out US citizens instead of the bonuses of those who shorted against the US housing market. In the very least, it would be a welcome change if Goldman, just like GM, were to actually acknowledge that the firm is still on the taxpayer bailout dole. To be sure, we note that "god" is finally grateful for being alive and earning billions courtesy of the record steep 2s/10s curve.

Until recently, most Americans had never heard of Goldman Sachs or weren’t sure what it did.

Lie #2: Matt Taibbi made it all too clear what Goldman does.

We don’t have banking branches.

Truth #1: Which begs the question - why is Goldman still considered a Bank Holding Company and why has the FDIC used its depositor-discretionary funds to guarantee Goldman funding?

We provide very few mortgages and don’t issue credit cards or loans to consumers.

Truth #2: In fact, Goldman does nothing at all that benefits the broader US society.

The 35,000 people who work at Goldman Sachs, the majority of whom work in the United States, are hard-working, diligent and thoughtful.

Emphasis #1: According to Fabrice Tourre they are also full of "kindness and altruism."

We work with pension funds, labor unions and university endowments to help build and secure their assets for generations to come.

Correction #1: As Calpers disclosed today, some of America's biggest pension funds are now reconsidering their business relationship with Goldman Sachs. It would appear considering Calpers and others' stunning losses, that value of assets pledged to Goldman for safekeeping have plunged.

And, we connect buyers and sellers in the securities markets, contributing to the liquidity and vitality of our financial system.

Lie #3: Goldman is nothing more than a massive prop desk/hedge fund which feeds on infinite flow from its second to none inventory and client relationships. Furthermore, Goldman's disclaimers for its REDI trading platform force clients to sign off on the possibility that Goldman will actively frontrun them and/or trade against them. If Goldman wishes to join the HFT brigade and call borderline criminal activity "providing liquidity", so be it.

These functions are important to economic growth and job creation.

Lie #4: This statement should be corrected as follows: "These functions are important to Goldman's record bonus pools and ongoing liquidation of our competitors."

Goldman Sachs, in supporting financial regulatory reform, has made it clear that it supports clearinghouses for eligible derivatives and higher capital requirements for non-standard instruments.

Lie #5: Goldman Sachs is in fact lobbying with millions of dollars and doing all it can to persuade its lackeys Dodd and Corker to leave derivatives just as they are. As a case in point see Warren Buffett's (so far rejected) attempt at intervention in derivative reform.

As you know, ten days ago, the SEC announced a civil action against Goldman Sachs in connection with a specific transaction. It was one of the worst days in my professional life, as I know it was for every person at our firm.

Lie #6: The worst day in the life of every Goldman Sachs staffer (including Mr. Blankfein) was when it was disclosed that Q4 compensation benefits would be negative $519 million.

While we strongly disagree with the SEC’s complaint, I also recognize how such a complicated transaction may look to many people.

Correction #2: Spotting 10(b)-5 fraud is very simple. To all people.

While we strongly disagree with the SEC’s complaint, I also recognize how such a complicated transaction may look to many people.

Lie #7: How about something simpler? How about explaining to the people why your Director Stephen Friedman was buying shares of Goldman while in possession of material insider information, when he was a member of the New York Fed of all places? Is there something overly complicated about this flagrant case of insider dealing that the public should be "confused" about?

Yet all of the above is irrelevant - here is the one and only argument that is completely groundless, and is at the core of Goldman's defense. Frankly, we are shocked that Goldman continues pursuing this angle:

Much has been said about the supposedly massive short Goldman Sachs had on the U.S. housing market. The fact is we were not consistently or significantly net “short the market” in residential mortgage-related products in 2007 and 2008. Our performance in our residential mortgage-related business confirms this. We didn’t have a massive short against the housing market and we certainly did not bet against our clients.

Not much needed to be said here. Zero Hedge pointed out that Goldman indeed had a "massive short" against housing both in 2006 and in 2007. 2008 is irrelevant as Goldman's mortgage-loaded counterparties which Goldman had shorted via CDS as Goldman itself has confirmed, ended up being bailed out by the government with the resulting proceeds being funneled to Goldman directly, thus generating even more massive profits. We are speaking here exclusively of AIG, but we are confident Goldman was short all other competitors it knew were long mortgages.

To wit:

Exhibit A: Goldman DV01 in November 2006 and February 2007 - it is stated clearly that the firm is short risk mortgages, first with a $1 million DV01 and then with $2.8 million DV01

Exhibit B: Here is Goldman's absolute net exposure in March 2007 and September 2007. To anybody with 1st grade math skills, it is plainly obvious the firm was net short on both occasions.

Exhibit C: Here is a breakdown of Goldman's profitability in the mortgage space in 2005, 2006 and 2007.

These three tables refute all claims of Mr. Blankfein that the firm i) was not short mortgages and ii) was losing money on mortgages. The last is patently wrong until such time as a blowup of AIG would have destroyed the firm had the government not stepped in and bailed out Goldman.

Q.E.D.

For many more details please read our original analysis on Goldman's mortgage strategy in 2006 and 2007.

Full testimony attached

 

 


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Mon, 04/26/2010 - 17:07 | Link to Comment buzzsaw99
buzzsaw99's picture

Salt of the Earth that one.

Tue, 04/27/2010 - 03:29 | Link to Comment Johnny Bravo
Johnny Bravo's picture

Wanna play a drinking game?

Okay, you have to take a shot every time there is a negative headline about Goldman on Zerohedge.

You'll be fucking wasted in 15 seconds flat.

Mon, 04/26/2010 - 17:11 | Link to Comment Mad Max
Mad Max's picture

My greatest concern regarding the GS debacle is that the feds will devour and destroy GS, with people subsequently thinking that the government went too far, and that they eliminated the entire problem with the financial system.  This would allow the vast remainder of the Wall Street bunch to continue their schemes unhindered, maybe even with more freedom than before.  Remember what the mindless destruction of Arthur Andersen did for accounting.

Mon, 04/26/2010 - 18:02 | Link to Comment anony
anony's picture

 "....mindless destruction of Arthur Andersen did for accounting"?????

Arthur Andersen and the rest of the big 6 at that time deserve to be dissolved, the partners homeless.

If ever there was  a shareholder watchdog that needs wiped out it is the large accounting firms.

How did we get to Big 4 from Big 8?  Do you have any idea the level of cocksucking that the partners in the large accounting firms have done to their clients?  They are whores who deserve to be made obsolete, their partners' pay cut to a single digit hourly rate for their contribution to the complexity of our tax code, the appalling lack of due diligence reporting and opinions worth less than nothing.

You have to be a member of one of them to come here and defend them.

 

 

Mon, 04/26/2010 - 18:25 | Link to Comment Rainman
Rainman's picture

Amen. The accounting firms and ratings agencies are bagmen. I believe they always walked the thin line of reader deceit, yet had a smidgen of honor. Now they are part of the capo regime. For the accountants, FASB is like their Godfather ......a great cover. It works just like the relationship of banksters and Fed. 

Mon, 04/26/2010 - 20:23 | Link to Comment Double down
Double down's picture

Goes with what you said and your Avatar 

NEO
       Do you always look at it
       encoded?

               CYPHER
       Have to. The image
       translators sort of work
       for the construct programs
       but there's way too much
       information to decode the
       Matrix. You get used to
       it, though. Your brain
       does the translating. I
       don't even see the code.
       All I see is blonde,
       brunette, and redhead. You
       want a drink?

Mon, 04/26/2010 - 20:54 | Link to Comment Mad Max
Mad Max's picture

I'm not an accountant, but I deal with them enough.  The problem with the killing of AA was that it resulted in (1) so few remaining "big" firms that none of them will be allowed to die no matter what they do, and (2) for the same reason, dictatorial terms by the remaining "big 4" and completely ridiculous demands if your company is only up to the billion dollar range.  But apparently no increase in standards if your company is in the $100B range.

So, if the same sort of thing happened in i-banking, the end result would be overt endorsement of any fraud by the remaining ibankers, no matter how blatant or serious, and no willingness to take any regulatory action against them.  Does this sound like a good result to anyone?

My point, which apparently wasn't blunt enough, is that if only one firm gets singled out for abuses committed by all, the crucifixion of that one firm will provide virtually unlimited protection for all the surviving firms.

Mon, 04/26/2010 - 21:54 | Link to Comment Hephasteus
Hephasteus's picture

Yup. Got an uncle that got dishonorably discharged from navy for being ordered to violate the constitution and refusing. Then 10 years later he gets pressured by these assholes to do the accounting gimmick crap that is all over every corporation in existance today. He said fuck you and walked.

The people who are going to make a stand against the crap have made their stands. I don't even know if my cousin still works for delloit and touche but if he's fudging he needs to go to jail. You can't allow public companies to pay these peoples salaries. You have to set up a man in the middle attack and have the man in the middle take the money and give it to the accounting firms or else they will slowly surely be conformed into making the purely mythological bullcrap accounting that is pervasive today. It's as certain as a python squeezing something it needs to eat.

Mon, 04/26/2010 - 22:46 | Link to Comment Cistercian
Cistercian's picture

 Two things..your uncle rules.

 And the boa constrictor analogy...brilliant and apt for exactly what is happening to the remnants of the middle class now...squeezed to death, slowly and inexorably.

Tue, 04/27/2010 - 01:17 | Link to Comment Cursive
Cursive's picture

Then 10 years later he gets pressured by these assholes to do the accounting gimmick crap that is all over every corporation in existance today. He said fuck you and walked.

 

I was an internal auditor turned whistleblower at a small publicly traded utility.  I did the same.  My family's living standard has taken a hit, but we do well enough.  We have so much lawlessness and cheating these days that it's always good to read of honorable actions.

Mon, 04/26/2010 - 21:01 | Link to Comment boooyaaaah
boooyaaaah's picture

What is the best way to short GS?

I truly believe because of the connections to congress, former members in the executive branch, the white house visits, and the need for the FED to have a bankster to keep the reflation in tact ----

That GS will weather the storm

But maybe because of Tyler, Beck and the stumbling block (truth) --- they may not weather the storm.

If they don't what is the best way to leverage and short GS

I would like a 100 to 1 shot

Could it be in the somewhere in Cap And Trade adventure?

Maybe a few years from now we will look back at cap and trade as the final a straw of arrogance.

Any suggestions would be appreciated

 

 

 

 

 

 

 

Mon, 04/26/2010 - 22:56 | Link to Comment newbie vampire
newbie vampire's picture

Perhaps the auditors should also make an appearance after Lord Lloyd ?

Mon, 04/26/2010 - 18:05 | Link to Comment anynonmous
anynonmous's picture

My greatest concern regarding the GS debacle is that the feds will devour and destroy GS

That's funny

Mon, 04/26/2010 - 18:11 | Link to Comment Alienated Serf
Alienated Serf's picture

Wow, I skipped right over that.  Madmax, for the good of the nation, your family and the planet at large, KillYaSelf immediately. KYS KYS KYS

Mon, 04/26/2010 - 20:54 | Link to Comment Mad Max
Mad Max's picture

Are you a fan of S.O.D. or M.O.D.?

Mon, 04/26/2010 - 21:14 | Link to Comment Alienated Serf
Alienated Serf's picture

S.O.D. is ok, not sure if i've heard M.O.D., I'll take me some Maiden or KMFDM.  KYS is my own little saying though, is it in use somewhere out there?  I was hopeing it would catch on here, since we need a few more insults and our own lingo.

KYS FYS

Mon, 04/26/2010 - 21:22 | Link to Comment Mad Max
Mad Max's picture

Track #3:

http://en.wikipedia.org/wiki/Speak_English_or_Die

It's worth buying the album if you haven't heard it.  M.O.D. is a related group.  I'd recommend their album Gross Misconduct, and I'd stay the fuck away from Surfing M.O.D., which was terrible.

Mon, 04/26/2010 - 21:28 | Link to Comment Alienated Serf
Alienated Serf's picture

Actually I thought you were referring to SOAD, but this looks like something I need to check out.  Though I haven't paid for music since '99.  Thats right, fuck you Sony!

Spread the love.  KYS.

Tue, 04/27/2010 - 07:44 | Link to Comment El Hosel
El Hosel's picture

"My greatest concern regarding the GS debacle is that the feds will devour and destroy GS"

  Does that include destroying the alumni in office today (and yesterday)?....  The feds are GS in many cases.

Mon, 04/26/2010 - 18:15 | Link to Comment Alienated Serf
Alienated Serf's picture

 dlt

Mon, 04/26/2010 - 18:13 | Link to Comment Fidel Sarcastro
Fidel Sarcastro's picture

The problem with that line of thinking is that Golden Slacks will not be destroyed.  Nothing will happen to GS in the end but a fine that is akin to a nickel in Joe Six-Pack's pocket.

"This would allow the vast remainder of the Wall Street bunch to continue their schemes unhindered..." correct, but GS will again (sickeningly) be leading the pack.

 

Mon, 04/26/2010 - 18:25 | Link to Comment nonclaim
nonclaim's picture

Nah, they will do something harsh and silly like ban FabFab from trading securities for life. And, maybe, fine another guy or two, who will gladly pay "without accepting or denying any charges". That always make me go wtf...

Mon, 04/26/2010 - 19:39 | Link to Comment Crab Cake
Crab Cake's picture

Nothing will happen to Golman Sachs? I suppose that depends if angry dissidents firebomb their buildings?  Molotov cocktails are cheap, and rent a cops aren't all that great a deterrant.  One only hopes that these dissidents don't get their hands on jet fuel fire bombs or whole skyscrapers could come down..... Besides, business buildings aren't that hard to access as long as you have a few guys with sledgehammers, or take the security cards off the first couple of schmucks to hit the floor.

I'm not saying its a great idea, (For you fuckers monitoring the web I didn't say I would do it, nor am I encouraging others. Why don't you do your job, and put the people who deserve to be in prison in prison and it won't come to this?  Oh, and fuck you.), but these people are fools to believe they are safe.  We live in America where everyone has a gun, and access to firebombs via Jim Beam.  These criminals live in walled communities near you, and their kids go to schools that are hardly "secure" just down the road, and their wives shop in highend stores just minutes from local 'hoods. 

I hope our government has the good sense to see this, enforce justice, and do the Peoples' will, but probably not.  Nooses lightpoles, molotov cocktails, and firearms will come to bear if justice isn't done soon.

So, to our "representatives" and law enforcement agents, are you gonna do your jobs or have the People do it for you?  Are you cops or criminals?  I suggest you decide sooner rather than later.

Mon, 04/26/2010 - 19:46 | Link to Comment Alienated Serf
Alienated Serf's picture

say hi to the fellaz from ATF for me tonight.

Mon, 04/26/2010 - 20:19 | Link to Comment Crab Cake
Crab Cake's picture

AS grab ahold of your set will 'ya.  What do you think the dispossessed will do when the TV goes dark, and there's nothing to eat?  What do you think people with nothing left to lose will do when the people that fucked them walk freely and enriched?  I'm a student of History, and I was only pointing out what's coming if something isn't done.  If my friendly neighborhood law enforcement officials, who apparently don't have time for real criminals and terrorists, would like to have a conversation fine by me.  My wife made fajitas, and I have some left over queso.  I'm not afraid to speak my mind, I'm not afraid of the law, and I'm certainly not afraid of death.  If they want to lock me up fine, more time for meditation, reading, and contemplation. They, our representatives and the law enforcement community, can ignore the ramifications of their inaction until it comes to what I described if they want.  However, they should know they've made it inevitable, as much as they'd like to blame the symptom and not the disease.  I pray they'll make the right decision, and bring justice to the criminals.

Mon, 04/26/2010 - 20:51 | Link to Comment Alienated Serf
Alienated Serf's picture

CC, just bein a wise ass.... though if you have fakitas and queso, you are already a criminal suspect in AZ.

hmm, if we could draw more attention attention to financial terrorists by grabbing the attention of the more traditional terrorists.

A draw Llyod Blanknuts as Mohammed contest would be fun.

Mon, 04/26/2010 - 23:03 | Link to Comment merehuman
merehuman's picture

Bless you Crab cake. I am with you. Feel same way. Still trying to wake folks up each day and preparing. Good luck to all of us.

Tue, 04/27/2010 - 01:24 | Link to Comment Cursive
Cursive's picture

@ Crab Cake

 I'm not afraid to speak my mind, I'm not afraid of the law, and I'm certainly not afraid of death.

We need more people thinking like this.  Forget worrying about the consequences of doing the right thing.  Anyone who would disagree with Crab Cake, ask yourself, "Was I the prison guard at Auschwitz in a previous life?"

Tue, 04/27/2010 - 10:05 | Link to Comment Alienated Serf
Alienated Serf's picture

Fabulous Fabrice was just following orders.

Mon, 04/26/2010 - 17:10 | Link to Comment No One
No One's picture

and will any one of the Senators call him on this?

 

Not likely, seeing as how we are in an election year, and 1/3 of these country clubbers are up for re-election.

Mon, 04/26/2010 - 23:08 | Link to Comment newbie vampire
newbie vampire's picture

"and will any one of the Senators call him on this?"

 

Yes, the senators will hit him with all the preapproved questions that he has provided to their campaign committees.

 

 

 

 

Mon, 04/26/2010 - 17:14 | Link to Comment DaveyJones
DaveyJones's picture

God is indeed grateful for being alive

but he only owes his gratitude to himself.

Mon, 04/26/2010 - 17:22 | Link to Comment Slewburger
Slewburger's picture

Fvcking beautiful contradiction: Lie #3

Tue, 04/27/2010 - 00:20 | Link to Comment Nihilarian
Nihilarian's picture

Along the same lines, Bill Clinton did not have sexual relations with that woman.

Mon, 04/26/2010 - 17:23 | Link to Comment BorisTheBlade
BorisTheBlade's picture

Gods don't bleed, Goldman will survive.

http://www.youtube.com/watch?v=ZBR2G-iI3-I

Mon, 04/26/2010 - 22:56 | Link to Comment Cistercian
Cistercian's picture

 News Flash!GS actually false gods!

 GS has offended someone.I don't know who.But I suspect the wrath to come will be epic.

 If we are very fortunate, this doom will also overthrow the other criminal syndicates posing as reputable Wall St. establishments.

 

 Hope springs eternal!

Mon, 04/26/2010 - 17:23 | Link to Comment Rainman
Rainman's picture

Lawyerspeak : The term massive is undefineable and cannot be used against you in a court of law.

Mon, 04/26/2010 - 17:26 | Link to Comment Howard_Beale
Howard_Beale's picture

Alan Grayson would have a field day with Lord Blankfien. If only he was on the Panel we could get some great theater. Click below for the list of morons on the committee--stick finger down throat, vomit, repeat. Do ya think they read up on your CDO primers Tyler?

http://hsgac.senate.gov/public/index.cfm?FuseAction=AboutCommittee.Membership

 

Mon, 04/26/2010 - 18:40 | Link to Comment Miles Kendig
Miles Kendig's picture

In the age of plausible deniability?  ROFLMAO.  Still, it needed to be written as you well appreciate Howard. Even if my critter on panel still hasn't learned to read anything but a clearinghouse summary provided with his check for winning the bobbing for cork contest.

Mon, 04/26/2010 - 20:40 | Link to Comment Howard_Beale
Howard_Beale's picture

Bobbing for cork contest! Ha ha ha....bend over a little farther....a little farther now, critter.

Hey, what happens when Sen. Bob Corker goes bobbing for corks? I guess he has found his calling, working in the whinery at the Capital. I think I've got a case of random thought weirdness like Cheeky had the other night. Time to eat.

Mon, 04/26/2010 - 21:55 | Link to Comment Miles Kendig
Miles Kendig's picture

Might I suggest a personal fav... peace pal

http://www.fandangorestaurant.com/index.html

Mon, 04/26/2010 - 22:04 | Link to Comment Howard_Beale
Howard_Beale's picture

I'll make the reservations if we can decide on a date since it would be no fun without you! 

Mon, 04/26/2010 - 22:43 | Link to Comment Miles Kendig
Miles Kendig's picture

Anytime Howard.  You can mail me using Reggie Middleton's blog page mail service, same name.

http://boombustblog.com/

Mon, 04/26/2010 - 23:04 | Link to Comment Howard_Beale
Howard_Beale's picture

Most excellent Miles...I am registered there as well under same name! In my current health state, we'll plan on sometime in June!

Tue, 04/27/2010 - 00:15 | Link to Comment Miles Kendig
Miles Kendig's picture

Sounds good!  peace pal...

http://www.youtube.com/watch?v=Q_nFwwjBlEc

Tue, 04/27/2010 - 07:08 | Link to Comment Hulk
Hulk's picture

I'm in the area, mind if I join???

Mon, 04/26/2010 - 22:26 | Link to Comment zhandax
zhandax's picture

HB, just for you i just sent Corker this little love note.  He is one of my elected sellouts so he can't use the "you are not one of my constituents" dodge although I have no doubt one of his staffers is busy deleting it now.

 

"Goldman Sachs, in supporting financial regulatory reform, has made it clear that it supports clearinghouses for eligible derivatives and higher capital requirements for non-standard instruments."

Lie #5: Goldman Sachs is in fact lobbying with millions of dollars and doing all it can to persuade its lackeys Dodd and Corker to leave derivatives just as they are. As a case in point see Warren Buffett's (so far rejected) attempt at intervention in derivative reform.

OK, you have become a laughing stock for patriots with a wall street background.  No hard feelings if you resign before the end of your term (not like you do anything for your constituents to outweigh selling them out to the wall street brothel).

Since you have the inside track, let Dearth Blankfein know that 3 billion may appease the Oprah set, but those of us who understand this will only be satisfied with public hangings.

If you grow a set overnight and want a few questions for Dearth tomorrow, http://www.zerohedge.com/article/full-annotated-lloyd-blankfein-testimony.

Regards, Dan

Mon, 04/26/2010 - 21:34 | Link to Comment fxrxexexdxoxmx
fxrxexexdxoxmx's picture

Alan Grayson is insane. He is scary crazy. He is totally corrupt and incapable of rational thought.

Alan Grayson is, cutting up kids to see what they look like inside, crazy.

He dangerous. He is a sadist. He is a facists dream soldier.

Mon, 04/26/2010 - 22:28 | Link to Comment FEDbuster
FEDbuster's picture

That is the kind of guy we need to go after them.  Plus, throw in Ron Paul for some offbeat questions, too.  Hell I'd even like to see the guy worried about Guam capsizing on the panel, just to f*ck with Lloyd's head for ten minutes.

Mon, 04/26/2010 - 17:26 | Link to Comment Tripps
Tripps's picture

nope, you're either 100% wrong here...or The German banks are 100% fools..which is it td? once again....either case you have to BLAME the buyers just as much. BUYERS who buy self -evident frauds should NOT be bailed out

 

While we strongly disagree with the SEC’s complaint, I also recognize how such a complicated transaction may look to many people.

Correction #2: Spotting 10(b)-5 fraud is very simple. To all people.

Mon, 04/26/2010 - 18:04 | Link to Comment anony
anony's picture

Who do you blame for the Toyota gas pedal problem?

 

The buyer or Toyota?

Mon, 04/26/2010 - 20:48 | Link to Comment Kina
Kina's picture

The buyer's fault of course.

 

When I buy a car I assume that the manufacturer is not interested in selling a reliable performing vehicle and could be trying to sell me crap. It is up to me to inspect the entire design, materials and production of the car.

So I always get a mechanical, electrical and automotive engineer to come with me when I buy a car.

 

Just like an Investment bank. You shouldn't assume that it is their business to proved sound investment and advice and products to benefit their 'clients'. They can also be legitimately trying to pass crap off onto you as it is not their business to help you but to also use and scam you. So you have to try and work when they are doing what, maybe toss a coin.

Mon, 04/26/2010 - 21:36 | Link to Comment fxrxexexdxoxmx
fxrxexexdxoxmx's picture

Obama

Mon, 04/26/2010 - 18:16 | Link to Comment BorisTheBlade
BorisTheBlade's picture

either case you have to BLAME the buyers just as much

"takes two to tango", right. even if german banks are 100% fools, it doesn't make gs innocent. fraud is a fraud, gs was obviously shorting the stuff it was selling as if they knew it was crap.

BUYERS who buy self -evident frauds should NOT be bailed out

i guess i missed something if ZH became an advocate of the bail-outs.

Mon, 04/26/2010 - 18:21 | Link to Comment Tripps
Tripps's picture

you guys are drinking kool-aid again. stop blaming just SELLERS of things. BLAME BUYERS as well. ALL BUBBLES become bubbles because the BUYERS refuse to stop buying. INstead they gorge and gorge and bid stuff up as if there is no real risk.

 

i'm tired of it.  real estate was going down big whether or NOT GS shorted it or sold a toxic deal. wake up. i knew in 2004 we were having a bubble in parts of the country

 

so did 1000s of others. by 2007 80% of people knew something was wrong.

 

yet...i don't see ANYONE demanding that BUYERS learn a lesson for their extreme GREED. part of that is they MUST LOSE money to learn the lessons. stop blaming GS

Mon, 04/26/2010 - 20:17 | Link to Comment dcb
dcb's picture

Since no other industry is allowed to designed products to hurt people, please explain why finance is different. why when you design something faulty in other industries the manufacturer carris the cost of the lemon. why is finance different? that is what goveernment is all about. they have the duty to insure industries aren't selling toxic waste. could I sell your family baby food full of toxins, and laber the food healthy. Oh, you didn't tour the plant and read the 30 page paper that went aloing with your food. give me a break. morals are consistent across fields. regardless of law, etc. what happened is wrong. period.

If you don't think so, you need a shrink, or to realize you are in fact a sociopath.  this is  a stupid debate. you don't sell products designed to fail to people. if you do they get a recall.

Same shit happened with dot. com. selling IPO's the firm knew would fail. it's wrong.

Mon, 04/26/2010 - 21:15 | Link to Comment boooyaaaah
boooyaaaah's picture

The credit deault swaps were insurance on mortgages.

Shorting the CDS were how money was made

But the original mortgage money, at least for new homes, was actual money, dinero, that went into the pockets of lumber yards, carpenters, builders and developers.

Did they spend all of it?

Most of the carpenters in California are Hispanics

What did they do --- with all of that money?

Where is it --- money heaven?

 

 

Mon, 04/26/2010 - 21:55 | Link to Comment fxrxexexdxoxmx
fxrxexexdxoxmx's picture

Bentonville, Ark.

Mon, 04/26/2010 - 22:29 | Link to Comment Tripps
Tripps's picture

its hilarous...this is what you don't get.. and loads of people around the country.....its this:

 

the prices or directions of assets are not predetermined...not by GS, not by god...at least pre 2009

2009 to date there is ample PROOF that there are invisible hands, and government support for multiple assets to prop up prices in 1 direction: up

 

however....when a house is built all the parties are working on building a sustainable living area for people. the insurance is bought but the insurance company doesn't bet against them and there are no parties looking to purposely burn houses. the insurance companies earns cash flow in the form of insurance payments. whether the house goes up or down in meanginless if the person can make payments on this and the mortgage

in finance ....that is not the case...price action is EVERYTHING, hedging is everything. hence why cds was created. Goldman didn't cause the crash...neither did shorts. the PRICE action was built on debt and leverage and from government down to consumer. when it popped the FINANCE industries best players had short position and added shorts to hedge the potential bursting. there is nothing shorts did to MAKE people foreclose or miss payments to snowball this burst

 

if anything, the shorts exposed all the risks of our fiat ponzi system where asset prices is all people care about. 15 months later we obviously haven't learned the lessons

Tue, 04/27/2010 - 01:21 | Link to Comment TimmyM
TimmyM's picture

Tell us how you feel about the AIG bailout?

Tell us how you feel about the ZIRP subsidy?

Tell us how you feel about GS and MS becoming BHCs?

Tell us what social benefit comes from synthetic CDOs

Tell us why CDS are not bond insurance without loss reserves?

Tell us why it is good for i-banks to structure products to ratings thresholds?

Tell us why ratings firms should be paid by underwriters?

Then tell us why it is not fraud to design a product to fail, and sell it to customers as if it was professionally constructed to perform?

Tue, 04/27/2010 - 01:18 | Link to Comment BorisTheBlade
BorisTheBlade's picture

ALL BUBBLES become bubbles because the BUYERS refuse to stop buying.

this isn't a discussion about the bubbles, why do you want to shift it there?

Mon, 04/26/2010 - 22:07 | Link to Comment FischerBlack
FischerBlack's picture

You're right about one thing, a lot of people from now on will assume that anything Goldman is trying to sell them is not worth owning.

Tue, 04/27/2010 - 01:23 | Link to Comment Assetman
Assetman's picture

That is certainly true.

Unfortunately, with no banking braches-- yet a banking charter blessed upon them nonetheless-- time (and Ben, and Hanky, and Turbo Timmy) is on Goldman Sachs side.

Can't wait for the European trials, though...

Mon, 04/26/2010 - 17:41 | Link to Comment doomandbloom
doomandbloom's picture

Someday, it will be said that ZH was the butterfly whose fluttering wings bought a hurricane at 85 Broad street;-)

Mon, 04/26/2010 - 18:35 | Link to Comment dumpster
dumpster's picture

do butterflys fart

Mon, 04/26/2010 - 22:03 | Link to Comment Crab Cake
Crab Cake's picture

Yes, in fact they do.  Proof, you say?  You asked for it.

Farting Butterfly

http://www.youtube.com/watch?v=vNv40kXPF6I

Mon, 04/26/2010 - 17:43 | Link to Comment Fritz
Fritz's picture

It is a travesty that the Squid is allowed Bank Holding Company status.

The Squid must die!

Mon, 04/26/2010 - 20:34 | Link to Comment Howard_Beale
Howard_Beale's picture

Absolutlely. Must be squashed into squidbits.

Mon, 04/26/2010 - 17:44 | Link to Comment doomandbloom
doomandbloom's picture

They stab it with their steely knives but the just cant kill the beast- Eagles

 

well not yet

Mon, 04/26/2010 - 17:46 | Link to Comment unwashedmass
unwashedmass's picture

 

now, for anyone else, this would be considered lying, baldfaced lying to Congress.

not GS, tho. they are doing God's work, you see, and that allows blatant lying to anyone who questions.

Mon, 04/26/2010 - 18:05 | Link to Comment Fazzie
Fazzie's picture

 Its not a lie if you pay off enough people to redefine truth!

Mon, 04/26/2010 - 20:33 | Link to Comment chumbawamba
chumbawamba's picture

Yeah.  Bullets don't lie either.  They're either true or they aren't.

I am Chumbawamba.

Mon, 04/26/2010 - 18:06 | Link to Comment Rainman
Rainman's picture

....when it comes to lying, it's hard to figure out who is pitching and who is catching when these two groups are in the same room together.

Expect nothing from the elected Critters except grandstanding for the mid terms.

The real issue for Lloyd is about getting gang-banged from other multiple directions. And a management change is already inevitable. Lloyd and Ken Lewis can go off to adjoining rat holes for their disgraced retirement. 

Jamie must be licking his chops to nail a chunk of the Squid's biz. That is, assuming the spotlight passes by JPM's shaky ass deals. I'm sure he's hoping the bloodshed stops at the GS door. Dimon is an inside guy with Team Obama....probably shacked up in the Lincoln Room by now. Staying close to da main man.  

Tue, 04/27/2010 - 01:40 | Link to Comment Assetman
Assetman's picture

Yeah... good observations.

I think Goldman is just a silly sideshow for really good political theatre.  There will likely be fines, yet Goldman can likely absorb it.  But can they absorb the collateral damage (lawsuits, lawsuits, lawsuits)?  Maybe.

Given all the exposure in interest rate derivatives, my sense is that the House of Dimon is the one really most protected.  Call it symbiosis with the Obamaites, if you will.

Funny thing is, all this cover and populism behind the banking reform bill might means abslutely nothing in November-- especially if the Fed is still lending at zero and banks are buying Treasuries at 3.5%.  This everyday theft from the millions who can save is the big unseen source of pent-up anger.  Of course, there are still millions ticked off with healthcare reform.  Just perhaps a different population subset.

 

Mon, 04/26/2010 - 17:51 | Link to Comment emsolý
emsolý's picture

beautiful exposé.

once this gets to court, of course, lloyd will no longer 'recall' anything.

(small issue: the Friedman thingy was about him buying, not selling, GS shares, no?)

Mon, 04/26/2010 - 17:51 | Link to Comment Miles Kendig
Miles Kendig's picture

Too bad most members of congress, like most of those who serve at the pleasure of the president pay others to do their reading and writing for them.

Mon, 04/26/2010 - 17:52 | Link to Comment Carl Marks
Carl Marks's picture

Every so often,when their debts get ahead of them, the goyim initiate a pogrom against the money lenders. This too shall pass.

Mon, 04/26/2010 - 17:57 | Link to Comment Deep
Deep's picture

WARREN BUFFET IS A SCUMBAG

Mon, 04/26/2010 - 18:04 | Link to Comment Fazzie
Fazzie's picture

 Buffet has higher moral standards than "God" himself, though!

Mon, 04/26/2010 - 23:14 | Link to Comment Kayman
Kayman's picture

If Warren had an ounce of integrity, he would stop bringing Chinese crap into this country and killing American jobs.

And for a guy who said derivatives were terminal for this country, he sure has sucked up a facefull of derivatives.

Finally, behind the "aw shucks public persona and the Cherry Coke" I sure wouldn't want to be in a gang shower when Warren drops the soap.

Mon, 04/26/2010 - 18:10 | Link to Comment Sqworl
Sqworl's picture

The prize is CCX...this is just theater and GS could give a shit about a stupid Billion dollar fine!!!

Mon, 04/26/2010 - 18:32 | Link to Comment Miles Kendig
Miles Kendig's picture

No question.

Mon, 04/26/2010 - 18:11 | Link to Comment SRV - ES339
SRV - ES339's picture

I've got the beer and nuts for tomorrow's big show... DOES ANYONE HAVE THE "KICK OFF" TIME?

Mon, 04/26/2010 - 18:22 | Link to Comment Alienated Serf
Alienated Serf's picture

10AM on c-span3.  DO NOT GIVE CNBS BIZ!! streams online.

Mon, 04/26/2010 - 18:35 | Link to Comment gmrpeabody
gmrpeabody's picture

By the time this dog and pony show wraps up tomorrow, these panelists will be thanking Blankfein and company for their service and dedication to America. And Blankfein will wish them Godspeed and success in the passage of their new financial reform bill, even to urge a bipartisan passing of the bill. All will be right. It will be all I can do to keep my breakfast down.

Tue, 04/27/2010 - 01:28 | Link to Comment Assetman
Assetman's picture

I wonder if anyone who is batshit crazy ultrashort Goldman Sachs is going to make a bit of a scene tomorrow?

Or is testimony closed to the public? 

It probably should be.

Mon, 04/26/2010 - 18:37 | Link to Comment Conrad Murray
Conrad Murray's picture

We need some "KILL THE SQUID" shirts.

Tue, 04/27/2010 - 03:16 | Link to Comment Howard_Beale
Howard_Beale's picture

Done. Front of shirt reads Kill the Squid! Back of shirt reads "Goldman Suchs!" Black on white. I have also put up a one sided shirt in Black with White letters KILL THE SQUID!

http://www.zazzle.com/kill_the_squid_tshirt-235872773421036918

http://www.zazzle.com/black_kill_the_squid_tshirt-235732543179708414

All proceeds of $4.35 profit will be donated to ZH.

And here's the coffee cup:

http://www.zazzle.com/kill_the_squid_mug-168112397889410589

All proceeds will be donated. Period! Many thanks to the first buyer--jeez that was fast!!!

And we have more! Grilled Vampire Squid, It's What's for Dinner! - T Shirts Black and White--Goth for you youngins...just go to Zazzle and type in vampire squid. They should be coming up in the search soon. I will keep creating as you keep buying. Again--all proceeds are to keep ZH up in our coming meltdown. I just get the luxury of carpal tunnel! Send me your ideas at howardbeale72 at gmail.com and up they will go. Have put in a request with Tyler et al for funds to go directly to ZH and I just get to have fun making what you want!

Here's another one:

http://www.zazzle.com/grilled_vampire_squid_its_whats_for_dinner_tshirt-235864860367785501

Gold Bitches T-shirt is up...a very nice mug with an eagle will be up in the morning. Way too late for me but I will keep creating. Thanks for buying! It's for ZH!

http://www.zazzle.com/gold_bitches_tshirt-235807917478163543

Wed, 04/28/2010 - 19:40 | Link to Comment Conrad Murray
Conrad Murray's picture

Fuckin A brilliant. Cheers!

Mon, 04/26/2010 - 18:42 | Link to Comment Vendetta
Vendetta's picture

I also recognize how such a complicated transaction may look to many people.

Yep.  Rocket science looks really complicated to many people too Lloyd.  We flew them with radio shack parts in them and used duct tape too.  We called duct tape 'rocket tape' and it impressed people with its complexity... if 1 of 3 actually flew properly without 1 of the stages blowing up or it crashed into the desert the higher ups called it 'success' but the company owner was corrupt like you Lloyd too.

Mon, 04/26/2010 - 19:04 | Link to Comment unwashedmass
unwashedmass's picture

 

You have to admire the sheer nerve of these guys to put out testimony that can easily be taken apart and shown to be lies the night before.

They have no fear....which kinda says it all, doesn't it?

Mon, 04/26/2010 - 19:07 | Link to Comment Jacks Raging Bi...
Jacks Raging Bile Duct's picture

I love the smell of grilled Vampire Squid in the morning. Smells like Victory!

Or, perhaps that's just Teen Spirit....

Mon, 04/26/2010 - 19:10 | Link to Comment Alienated Serf
Alienated Serf's picture

i wouldn't get too fired up yet lil buddy, gonna be a close game!

Mon, 04/26/2010 - 19:30 | Link to Comment Rainman
Rainman's picture

......and the Squid has that global derivatives meltdown nuclear option available at all times. Work the outside pests, then go to the inside friends. Bathe everybody on Team Obama with national security-type bullshit. That should clear out the in-fire. Right after the elections all is good and green.

Mon, 04/26/2010 - 19:14 | Link to Comment DavosSherman
DavosSherman's picture

and "Doing God's work" isn't worshiping the devil either. Phucking morons.

Mon, 04/26/2010 - 19:19 | Link to Comment non-anon
non-anon's picture

Sting and his wife call for Big Governement.

As Big Government is the only one that can solve all our problems.

Sure thing Sting, please go away!

Mon, 04/26/2010 - 19:36 | Link to Comment Crab Cake
Crab Cake's picture

Sting also called, publically, for legalizing cannabais.  We're even in my book.

End the War on Freedom, End the War on Drugs. End the cartels, end the tax bleeding, and end the free access that youths have to powerful substances. 

If you can't do what you want with your own goddamned body, do you really think you're free? 

Who cares what some rich celebrity thinks or says anyway? 

 

Mon, 04/26/2010 - 20:03 | Link to Comment Rainman
Rainman's picture

Since Arnie's a confirmed toker ( on film ) the odds are good reefer will be legalized in the the People's Republik of CA this November. That should solve the state budget crisis. And if it doesn't nobody will give a fuck anyway.

Tue, 04/27/2010 - 01:38 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Summers is on Oxy, BS smokes opium, and Timmah does speed.  There is something for everyone.  We are all on drugs.  Don't tell the bible belt.  They will spoil the party.

10 Celebrities Caught on Tape with Drugs:

http://www.youtube.com/watch?v=anqbpL_BN5Y&feature=related

Mon, 04/26/2010 - 19:48 | Link to Comment Cammy Le Flage
Cammy Le Flage's picture

Someone from this site should "live blog" his testimoy.  It would be too funny.   I wonder if his face will turn red like Timmy's or if he can hold a straight face.

Mon, 04/26/2010 - 21:11 | Link to Comment Miss Expectations
Miss Expectations's picture

A la Mystery Science Theatre.  AND we'd get to see the backs of Tylers' and Marla's heads.

http://www.youtube.com/watch?v=_EAXYH4b4yM

 

Tue, 04/27/2010 - 01:15 | Link to Comment Rusty Shorts
Rusty Shorts's picture

 - thank you.

Mon, 04/26/2010 - 19:53 | Link to Comment BlackBeard
BlackBeard's picture

This should be syndicated among other media venues.

Mon, 04/26/2010 - 20:14 | Link to Comment b_thunder
b_thunder's picture

Email this to your senator/congressman. Maybe we get lucky and one of them sees this and asks some of the questions raised here...

Mon, 04/26/2010 - 23:46 | Link to Comment newbie vampire
newbie vampire's picture

"Email this to your senator/congressman. Maybe we get lucky and one of them sees this and asks some of the questions raised here..."

It would not surprise most if Lord Lloyd has already given them his preapproved questions  that he has answers for.

Its quite hard to ask searching questions when you are also asking for campaign contributions.

 

Mon, 04/26/2010 - 20:34 | Link to Comment stoverny
stoverny's picture

"One consequence of the growth of the housing market was thaty instruments that pooled mortgages and their risk became overly complex."

HAHA this may be the most unintentionally hilarious reversal of cause-and-effect that GS has trotted out yet.  Thanks for the laugh, Blankie!

Mon, 04/26/2010 - 22:04 | Link to Comment FischerBlack
FischerBlack's picture

Unintentional? I doubt it. That's really what he believes. Not only is Blankfein an evil financial terrorist, but he's completely incompetent.

And the worst day of your professional life is yet to come, you forked-tongued snake.

Mon, 04/26/2010 - 20:46 | Link to Comment ginunn
ginunn's picture

I did the math for Exhibit B and find them even on the first part at 10.3bn each and long on long for the second part at 13.1bn/12.7bn. Unless i misread a figure.

Mon, 04/26/2010 - 21:00 | Link to Comment jory
jory's picture

He didn't say Goldman wasn't short mortgages.  He said they weren't "massively short" .  The data presented confirmed this.  They were very mildly short.  $3 million net is a rounding error on a $1 trillion balance sheet.  

 

Mon, 04/26/2010 - 21:09 | Link to Comment Dehrow
Dehrow's picture

To anyone who reads this...A bunch of e-mails that were sent back in forth among Goldman execs, and the trader, Fabrico tourreenaaa, I don' t know his name, anyway, are posted on the internet. I suggest you take a look at them, cuz they are interesting, especially when you take note of dates and times.

Also, common name that appears is "Sparks," who I assume was one of the main Sup-prime Mortgage dudes.

Lastly, it seems French people are a bunch of fags.

Here's the link I got, Scroll down to bottom: http://news.yahoo.com/s/ap/20100426/ap_on_bi_ge/us_goldman_sachs_damage_control

Mon, 04/26/2010 - 21:19 | Link to Comment Cammy Le Flage
Cammy Le Flage's picture

Email does not work.  You must fax.  I just faxed this whole thing to Sen. Levin and Sen. Coburn.  These are committee hearings tomorrow.   Not a lot of Senators there - but the media will be....

Mon, 04/26/2010 - 21:36 | Link to Comment Reese Bobby
Reese Bobby's picture

I think the 3/07 data is pretty damning.

In Residential Mortgages Goldman indeed claims to have been long $7.2 billion of sub-prime and Alt-A mortgages.  But the $5 billion short via ABX is a significant hedge.  And we don't know what became of those mortgages.  Were they soon thereafter packaged and sold as doomed RMBS for fat fees?

But the real short exposure is the $4.1 billion net short in Structured Product Trading.  I doubt that made the pitch books for the toxic RMBS they were pushing world-wide.

It is also worth noting that the derivative hedges at that time basically required no margin and thus no capital.

High crimes I'd say.  It is one thing for a hedge fund to make a negative bet.  Is quite another for an investment bank to push products they think are crap while running a net short position that is not disclosed to the RMBS investors/victims.  And that other thing is widely known outside the $5,000 suit world of Goldman Sachs as a "grift".

 

Mon, 04/26/2010 - 21:43 | Link to Comment Reese Bobby
Reese Bobby's picture

FYI: In my view it is the $1.6B RMBS long versus the $5.7B RMBS + ABX short that is relevant in Structured Product Trading.  It is an synthetic RMBS product that is central to the fraud case.  CDO's may own RMBS but that is diversified kitchen-sink pile of crap; not true RMBS.

Mon, 04/26/2010 - 21:45 | Link to Comment cocoablini
cocoablini's picture

prediction:

Market sells off tomorrow during Goldman Show Trial to show Uncle Sam who the Daddy is...

Mon, 04/26/2010 - 22:15 | Link to Comment Fix It Again Timmy
Fix It Again Timmy's picture

Fax to our public serpents [servants] for free by using:

http://www.freedomspeaks.com/default.aspx

Mon, 04/26/2010 - 22:21 | Link to Comment Atomizer
Atomizer's picture

There is a big game in town. Siphoning money to create new labor camps. USA will champion the efforts under disguise to become charters of a new global world. All of this is a false pretense.

If you haven't read these books, your going to learn in the future.

Blowing Our Tax Dollars on Wind Farms and News About the NWO

http://windfarms.wordpress.com/2008/03/15/agenda-21-explained/

Follow the money & architects. They are standing in broad daylight. Most are trying to duck for cover, the exposure is quite heated.

Zero Hedge members.. Do your research and you will find your next shoe to fall.

Mon, 04/26/2010 - 23:38 | Link to Comment David Fiderer
David Fiderer's picture

Blankfein's testimony reads like the Reader's Digest version of Hank Paulson's memoir.

Tue, 04/27/2010 - 00:24 | Link to Comment Cammy Le Flage
Cammy Le Flage's picture

 

Via Fax: 202-224-1388

Senator Levin:

 

Via Fax:  202-224-6008

Senator Coburn:

 

Attached please find today’s post from www.zerohedge.com, one of the most popular financial blogs on the web today.   It completely deconstructs what Mr. Blankfein will say in less than what would constitute a “book report” in the 6th grade.   So easy.  With footnotes, even.  Don’t let Mr. Blankfein make it complicated.  

 

It involves Mr. Blankfein and should be read prior to tomorrow’s “show”.    Which will be just that unless …..

 

Anywho….one of your staff should definitely follow the comments to this blog post and pay attention.  

 

There is a lot more at stake here than meets the eye…..

 

Now, the populace of this country is well aware that Goldman is not the only naughty one, but they decided to put themselves up at the forefront.  Such is life.

 

My issue with the whole thing (personally), just admit you lied and played a game and won, but sheeeeezzzzzz – don’t come back and try and say you are an ethical businessman in the process working for an ethical business.   Come on.

 

There are no more ethical businesses at Goldman’s level anymore.   NONE.  Find me one and I will be happy to be wrong.   I would love to be so wrong in this case but we all know that this is just truth and reality.   Our world would be vastly different if I was wrong.  Ethics is currently gone from our world economy and society.  That we all know.  Don’t you?

 

Have fun tomorrow.  Frankly, I would drink cocktails during the whole thing.  Otherwise, I might be sick.   I feel for you both having to listen to the drivel.  So make them talk.  Have a conversation.  Don’t be reality t.v.   Really make them talk.  You are United States Senators!  Yes, you are.

 

And, don’t yell at Lloyd but make him answer questions and take notes while he does.  People hate it when you take notes when they talk.  I usually do my grocery list.  Especially when I have to hear “whatever”.  

 

Oh, and while you are it, perhaps you can ask him if he will personally donate an entire Ward of Katrina homes – fully constructed – and fully free of loans etc. in exchange for us – humanity – allowing him to be so rich.  Seems very fair.  Very.

 

 

Sincerely,

 

A Smart ****** Resident Who Cannot Vote For Either Of You But Can Try to Effect Change……in the most benevolent of ways

 

Tue, 04/27/2010 - 01:10 | Link to Comment sweet ebony diamond
sweet ebony diamond's picture

Goldman Sachs is a boiler room.

That is truly unbelievable.

They should be forced to disclose this in public advertising for 1 year, so that everybody is clear about their intentions.

edit: Sorry. I forgot about the circle jerk. Carry on.

http://www.reuters.com/article/idUSTRE63Q0E320100427

Kenneth Griffin, the chief executive of hedge fund Citadel Investment Group, said on the sidelines of the conference it should not be used to push through financial reform and doing so would be "childish".

But lawyer Cohen said he thought the SEC's action would have little, if any, impact on the legislative process.

Some clients, such as Citadel, and private equity firm Blackstone, have publicly vowed to stand by the investment bank and remain clients.

Tue, 04/27/2010 - 06:49 | Link to Comment John McCloy
John McCloy's picture

Some clients, such as Citadel, and private equity firm Blackstone, have publicly vowed to stand by the investment bank and remain clients.

This GS getting on the phone to their biggest clients and prodding them to make a public statement because they are scared to death of a run on clients.We will see how loyal they remain as nations ban GS business and states begin to sue.

Tue, 04/27/2010 - 04:06 | Link to Comment chindit13
chindit13's picture

Dear Lloyd,

Please open up the checkbook and write a check for $300 billion. That should just about square things and put us all back to where we were before this all started, save for the penalty portion, which a just and fair Universe, if it were to exist, would demand.  Let's pretend it does.

Guilty until proven innocent? Please, Lloyd. You make me laugh! As if the taxpayer was guilty of all the fraud, corruption, incompetence and stupidity that you and your Wall Street colleagues inflicted on us, but for which WE HAD TO PAY NO QUESTIONS ASKED. Since you are a religious man of sorts, or so you would like us to believe with your god's work and all, let us just throw in another term from another religion so that perhaps it becomes more clear to you why this is good: karma.

You may be curious how I came up with that number of $300 billion. Simple really, and frankly, I gave it a whole lot more thought than your old buddy Hank Paulson gave when he pulled his "within the next three days I need $700 billion to buy toxic assets or the whole system collapses." out of his arse. Remind me, Lloyd, how many toxic assets did Hank buy?

Anyway, here's the back of the envelop methodology: Since your employees and even ex-employees are probably more infallible than the Pope (that's kind of like being "very unique"), I start off the bidding with Ms. Nomi Prins figure of $56.7 billion as total undeserved taxpayer support given Goldman Sachs since the beginning of the crash. That number is now probably as stale as any of Fabrice Tourre's relationships, customer or romantic, but let's use it as a good start.

To that number we have to add the ill-gotten gains you made off of Bernanke overbidding on $1.25 trillion of MBS' and $500 billion of Treasuries that were part of the gift known as QE I. As Goldman is a huge player, even amongst the other Primary Dealers, I will assume for the sake of argument that Goldman was on the selling end of about 15% of all of those bonds, and that on average Bernanke paid about 5% above fair value, though some of this resulted from firms such as Goldman and BofA scoffing up trash in the market in anticipation of Bernanke's generous bids. Sorry, Lloyd, you'll have to eat that, because otherwise the taxpayer has to eat it, and the taxpayer is full and fed up. Just to show our supreme generosity---we can be god-like, too---we'll cut you some slack on the Treasuries and just make you pay for the MBS fluff.

Stay with me here, Lloyd....that's 15% x 5% x $1.25 trillion for $9.375 billion. So your cart now has a shade (shade defined as a Goldman Sachs' mid level prop desk trader's bonus) over $66 billion.

But there's more. See, Lloyd, as we now know, the absolute only reason Bernanke lowered rates to zero is to pump money into the banks. Seriously, Lloyd, even if you were really a Bank Holding Company, you wouldn't be making any more new loans than BofA or Wells Fargo is, right? You'd just be riding the yield curve and using any excess to ramp stocks or search your customer books for big short positions so as to inflict pain on them for your profit. No gain without a customer's pain, right Lloyd? Isn’t that the company motto, though you’ve probably translated it into Latin on your company shield.

That means you are going to have to pay for the opportunity cost that the savers of this formerly great nation had to pay by not receiving at least a rate commensurate with the rate of inflation. You will have to pay that as a rough percentage of the assets you hold relative to the other bailed out banks. This gets a little tricky, because all of you used those Repo 105's to paint a false picture at reporting date, thanks to the great professionalism demonstrated by the accounting industry. Well, maybe it is not so difficult because you all did it, so the relative levels of assets might be the same with or without Repo 105's.

Savers in this country hold about $10 trillion of deposits. Goldman carries a balance sheet of about $850 million, and assets of the big banks total about that same $10 trillion. Now if you would like to argue that some of the banks are actually much much larger, but hide bazillions off balance sheet, then we will consider a discount if you show us proof. Tell us what YOU know. What does Jamie really have? What about Ken Lewis' ex firm? Come on, you’ve already got a pigeon’s voice...use it. Squeal!

Absent that, I'm going with 8.5% as your share. Two years of lost interest at a time of 3% inflation, on $10 trillion, puts Goldman Sachs share at---sorry, this is going to hurt, but it's for your own good---$51 billion. Hey, I didn't even compound, so you got off easy.

So where are we now.....$117 billion. Don't look so upset, this is just what you took from the taxpayer. What's that? You already paid back some of it? Okay, let's call it an even $100 billion. Don’t argue, Lloyd.  Three hundred million heavily armed Americans are in no mood to argue.

The problem, my friend, is that without some REAL punishment, I'm afraid you'll do it again. You and your ilk just do not engender a whole lot of trust. Sorry to be so blunt. We are going to have to toss in a deterrent, which is to say triple damages. Come on, don't argue, Lloyd. What you and your brethren did WAS damaging, and you were rewarded rather than punished for it, which may be the way the US works now under the current Administrations, but not how it is supposed to work. This just evens the score and sets the world on its proper axis again and the country on the right course. Too bad you have to eat all the lobbying and campaign contributions.  Lots of fat bellies in Congress say thanks.

The final number is $300 billion.  Clawback your bonus and your staff's bonuses as needed.  It's not as if they earned the money, right, front loading revenue and all on deals that went bad over time?

Oh, Lloyd, I'm also going to need that Bank Holding Company charter back.

Tue, 04/27/2010 - 01:24 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Llyord Blankcheck is such a dueche.

Tue, 04/27/2010 - 01:50 | Link to Comment Bear
Bear's picture

This is just Theater for the Masses ... nothing will come of any of it

Tue, 04/27/2010 - 01:59 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Open Thread?  No?  Well Tarpley has been killing it and I wanted to bring it up.

http://tarpley.net/

Tue, 04/27/2010 - 02:40 | Link to Comment primefool
primefool's picture

A bit of a radical idea - but het we live in interesting times:

1. Government provides a 100% guarantee on unlimited amounts in bank accounts and money market funds. These assets are what the population at large considers "money".

2. Shut down Wall Street and do radical surgery with full anesthaesia. Keep the few good parts if any.

3. While you are at it - here is my recipe for a delicious squid salad:

- take one large fresh squid . chop into fine pieces, add chopped chives and srikle with lemon juice. add salyt per taste. Serve chilled. Serves 300 million.

Tue, 04/27/2010 - 03:57 | Link to Comment Sagan
Sagan's picture

does anyone know where i can watch the hill hearing online (ie not tv bloomberg or cnbc)? thanks

Tue, 04/27/2010 - 05:18 | Link to Comment primefool
primefool's picture

There is a free program called "livestation". Download and install that. You can watch CSPAN and many other channels on this.

Tue, 04/27/2010 - 05:53 | Link to Comment Sagan
Sagan's picture

works like a dream, thanks!!

Tue, 04/27/2010 - 05:58 | Link to Comment primefool
primefool's picture

your welcome. I believe the circus is on cspan 3 - so be sure to "search" for that channel!

Tue, 04/27/2010 - 08:18 | Link to Comment Leo Kolivakis
Leo Kolivakis's picture
Ritholtz Discusses SEC Fraud Case Against Goldman Sachs:

And Geffner Doesn't See SEC Settling Goldman Case:

Tue, 04/27/2010 - 17:02 | Link to Comment Jim B
Jim B's picture

+1

Tue, 04/27/2010 - 10:08 | Link to Comment Alienated Serf
Alienated Serf's picture

So when do we start the local fight clubs? (i know, i broke the rule)

Tue, 04/27/2010 - 16:59 | Link to Comment Jim B
Jim B's picture

I hate to be cynical, but

Will the Senators ask for campaign contributions before or after the hearing?

Tue, 04/27/2010 - 17:52 | Link to Comment velobabe
velobabe's picture

i can't get past mr. b's voice. it belongs to a girl. plus his head looks like it needs a condom.

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