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Submitted by Janet Tavakoli of Tavakoli Structured Finance
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This is a serious allegation that warrants a response from Goldman.
GS: Yes, it is a serious allegation. Now, can we get back to rolling around in this big pile of money?
Goldman gave back to the TARP 1.3 billion,,,I can't tell you how satisfied I feel..
P.S. Didn't they also have puts on AIG?, could be wrong.. I'm going to hit the rack,,I'll read the letter tomorrow.
I guess it comes down to Goldman's definition of "immaterial". $12 Billion ain't nuthin', right Lloyd?!
"At Goldman we always round to the nearest $50 billion, so anything less than $25 billion rounds to zero."
http://www.bloomberg.com/apps/news?pid=20601039&sid=a2X3hNaWcbeg
"Every time we hear the phrase “the United States of Goldman Sachs” we shake our heads in wonder. Every ninth-grader knows that the U.S. government consists of three branches. Goldman owns just one of these outright; the second we simply rent, and the third we have no interest in at all. (Note there isn’t a single former Goldman employee on the Supreme Court.)"
http://www.bloomberg.com/apps/news?pid=20601039&sid=a2X3hNaWcbeg
Janet -
As I've wondered on this very site, earlier today (http://www.zerohedge.com/article/enlighten-me-why-should-aig-have-paid-s...), how is it that you can say with such certainty that Goldman (to say nothing of the other parties that so greatly benefited from CDS settlement at par) would have been so epically screwed were the Gov't to force a < par payout?
Unless you know the terms of all of their net AIG and counterparty exposure, hell, or really their entire trading book at most you can posit they would have done worse than they did, but its impossible to quantify, is it not?
I respect your opinion, but absent further explanation/proof, I'm skeptical as to how you arrived at this conclusion (not that I necessarily disagree).
I like JT also but have seen others just as respectable say that the real reason the payout was 100% was to help save Europe's banks from collapse and that the $ that went to GS were largely passed through to customers. I'm not good enough at reading the financial statements to figure out the pass through. Wish I were. Is Janet?
It appears Bloomberg has reached what seems to be many of the same conclusions.
I don't think she's a lone voice on this stance.
New York Fed’s Secret Choice to Pay for Swaps Hits Taxpayers
http://www.bloomberg.com/apps/news?pid=20601109&sid=a7T5HaOgYHpE#
Being flat AIG risk (or being hedged) means that if Goldman didn't get $13bn in collateral, they would have report zero P&L. They got $13bn in collateral payments (at par), so did they report a gain of $13bn?
Just a case of goldman's exceptionalism.
That and an enourmous super mega gigantic lie.
And on a related note, Matt Taibbi has this to say:
Goldman Lobbies Senate, Says Full Transparency Sucks
Like the new avatar - whistling the tune from the good, the bad and the ugly.
Looking for the unknown fortune..
'Interested Men' are not going to voluntarily turn over each other's stones and willingly expose themselves to prosecution. Corrupt, sociopathic, morally bankrupt financial incest at its finest is what this is.
And to think the 10 billion dollars was paid on what amounts to back room bets that shouldn't even be taken seriously.
How absurd our entire financial system has become.
RIP America, Incorporated.
Have you heard about the FEDS newest emergency program?
TURD? Transient Urban Resistance Depopulation?
NEW YORK (AP) -- GMAC Financial Services is in talks with the Treasury Department for a third injection of taxpayer aid as the auto lender faces a November deadline to raise the $11.5 billion capital cushion mandated by results of the government's "stress test" earlier this year.
A Treasury Department spokesman confirmed Tuesday that GMAC is in discussions about securing additional government help.
Of the 19 banks that underwent the government's stress tests, 10 were determined to be undercapitalized. GMAC is the only one of those to not have been able to raise all of its necessary capital from investors.
Citing unnamed people familiar with the matter, The Wall Street Journal reported on its Web site late Tuesday that the U.S. government could hand over another $2.8 billion to $5.6 billion to Detroit-based GMAC. The move would make GMAC the only U.S. company to receive three rounds of bailout aid.
GMAC spokeswoman Gina Proia declined to comment.
The government currently holds a 35 percent equity stake in the auto lender after providing $12.5 billion in aid to keep loans flowing to buyers of GM and Chrysler cars. The latest capital infusion would be in the form of preferred stock, the paper said Tuesday. The government's stake could rise if the new preferred shares were ever converted into common stock.
Last December, the government gave GMAC $5 billion in exchange for 5 million shares and GMAC's agreement to extend financing services to bailed-out Chrysler LLC. Then in May, the Treasury Department announced a new $7.5 billion injection for GMAC. Of that, $4 billion went to support new loans to Chrysler dealers and customers, and the rest went toward boosting GMAC's capital base -- still short of the $11.5 billion the government's "stress test" showed the company would need to stay afloat if the economy worsens.
To help GMAC raise the remaining capital, the Federal Deposit Insurance Corp. took the rare step earlier this year to allow the junk-rated company to gain access to the FDIC's debt guarantee program. The FDIC agreed to guarantee up to $7.4 billion in GMAC-issued debt in case the company defaulted on payment, and has already backed about $4.5 billion worth.
According to the paper, the FDIC told GMAC Tuesday that it would guarantee the remaining $2.9 billion in debt in order to prevent the company from being forced to reduce its lending volume at a time when the U.S. government has a sizable interest in making sure customers can afford to buy vehicles from government-backed automakers General Motors and Chrysler.
The Treasury spokesman declined to comment on whether the government's ownership stakes in GM and Chrysler make it more willing to again help prop up GMAC.
GMAC has been trying to recapture its once-dominant share in the auto financing market. Leasing virtually collapsed during the financial crisis as the resale value on leased cars plummeted and the practice stopped being profitable for lenders. The government-subsidized lender rebranded its banking division earlier this year as Ally Bank, hoping to smooth over its image and lure new customers.
GMAC's market share in the auto financing market has fallen sharply during the crisis as its cash available for lending declined. Banks like J.P. Morgan Chase and Wachovia, meanwhile, scooped up new business. GMAC had 3 percent of the auto financing market in the first six months of the year, down by almost half in the same period a year ago, according to Experian Automotive.
GMAC in August posted a wider second-quarter loss of $3.9 billion, mainly due to booking a $1.6 billion charge related to the company's ResCap mortgage business. GMAC also incurred a $1.2 billion tax charge on its conversion from a partnership, or LLC, to a privately held corporation.
Net revenue fell 22 percent to $1.03 billion from $1.32 billion.
Midway through the quarter, GMAC added Chrysler Group as a preferred lender. However, GMAC's automotive unit lost $727 million in the quarter, as higher unemployment rates in the U.S. pushed the number of delinquent contracts up a percentage point to 3.4 percent.
I can say with certainty that Lloyd Blankfein is a hypocrite.
He has claimed that he wishes he had never utilized the FDIC TLGP.
Goldman Sachs currently has over $20 Billion out in FDIC backstopped loans.
Goldman Sachs currently is projected to have approx. $20 billion or so in profits available for their bonus pool.
Pay off the FDIC TLGP bonds immediately and stop the hypocricy.
If Goldman is not willing to pay off the bonds immediately and go out to the cap markets and borrow at market rates, they have simply conceded that they are still dependent on the support of the American taxpayer.
Mr. Blankfein, you are a hypocrite.
The only way to prove the "lie" alleged by Ms. Tavakoli is to drag all parties before Congress, under oath, including Paulson, for a full disclosure of what occurred in the meetings of one year ago.
I think there is very, very little that comes out of Goldman Sachs that one can trust. I commend Ms. Tavakoli for having the courage to come forward.
To President Obama: Your current Treasury Secretary, Timothy Geithner, was part and parcel of this entire despicable mess. Mr. Geithner should be immediately removed from his duties and replaced with an objective, non Wall Street and non Goldman Sachs influenced leader.
"under oath".. good one DH.. I can see how that'd play out..
"so help me god? ha ha.. yeah.. sure.. whatever.."
It is a tough job to even hypothesize on how this could be fairly investigated. But, at a minimum, the idea of Lehman's condition and Goldmans condition at the same time before Lehman was refused the 6billion bridge loan and no bankholding status, the amount of shorts and CDS's on for all affiliates of Goldman, and other TARP recipients, and a proper retroactive audit back to the day before Lehman went down for Goldman, and for Morgan since they both wanted to claim that they didn't need the money, but i guess these are two separate cases.
Why would the AIG counterparty list come out on the same day as the list of AIG bonus's if not to shove it through since the public understands bonuses and the million billion difference went less easily noticed?
What is tough agrotera is picturing how our current law enforcement and judicial systems could fairly handle such an investigation. A system of justice that excludes societies decision makers from the prospect of justice is a society that no longer holds to the concept of the rule of law. Such a society is by definition corrupted by those that exercise power and derive its benefits, including those that view a lie by omission as their civic duty. See the explanation our justice department provided for why Paulson lied to the nation last fall.
I have said it before associate, without the ruthless reapplication and reintroduction of the standards of the the rule of law to all levels of society we are headed for a Cas Sunstein powered version of state Fascism.
DH +1. Lloyd is this way because our government not only allows it. It fosters and rewards it.
Dear MK...such sad truth you speak.
You don't do it fairly. You hire Brazilian kidnappers. Nothing will garner a confession from these worms like an ear getting snipped off.
Only if you desire the current leadership be replaced with Robespierre. That is IF you view the current leadership as something other than Robespierre in governing philosophy.
without the ruthless reapplication and reintroduction of the standards of the the rule of law to all levels of society
absolutely Miles. we must return to the rule of law or else there is little hope.
well said!
just looked up Cas Sunstein on wiki. here's a gem:
TaxationSunstein has argued, “We should celebrate tax day.”[18] Sunstein argues that since government (in the form of police, fire departments, insured banks, and courts) protects and preserves property and liberty, individuals should happily finance it with their tax dollars:
Sunstein goes on to say:
would love to hear an argument between you & him on this Miles (with deadhead as co-barrister).
Excellent gems tip e canoe. Here is a bit more. Apologies for the morning reading folks. BTW, there are far better trained minds here on this (and indeed most) subjects. On this one I would defer to Ned Zeppelin or Marla.
Cas Sunstein, key personal adviser and potential Supreme Court Nominee of the Obama Administration has this gem of a thought of how the rule of law should be applied to key decision makers which has now been extended to all of those within key corporations in the United States. The Sunstein and by extension the Obama legal doctrine of judicial exclusion encapsulated:
Prosecuting government officials risks a “cycle” of criminalizing public service, [Sunstein] argued, and Democrats should avoid replicating retributive efforts like the impeachment of President Clinton — or even the “slight appearance” of it.
http://jonathanturley.org/2008/07/21/obama-adviser-cass-sunstein-rejects...
Thanks, deadhead. I hear ya, and believe me, I’ll take your valuable suggestion under advisement to the extent it merits. You know, my plucky fellow citizen, in my Administration, in this Obamanation of mine...er, ours...it is important to hear from all of you...from the entire broad spectrum of individual and irrelevant souls, even ones such as yourself who---if you will allow me to say so--- are pissing into the wind, but who make up this nation of which I am only a small but obviously most important part. Your opinions really do matter to me, and I say that with the fullest measure of sincerity of which I am capable. Of course some voices are louder than others, just as some wallets are larger than others, and as a sitting politician in hopes of re-election---so that I can continue on the path of CHANGE we need and which you, The American People, quaint and hopelessly naive as you are, demanded---it is in my interest, and I believe in the country’s interest, that I listen to those who have my ear and pay the bills. After all, it’s YOUR money in their pockets, so I have a responsibility to treat it with the respect you expect lest I neglect to reflect on what alliteration got me where some of you now realize I never should have been. But let’s leave Reverend Sharpton out of this for a moment. Let me add that I feel it is crucial at this very delicate time in our nation’s financial history to move forward and not look back, to do what MUST be done, not wallow in what WAS done or what MIGHT have been done or even what SHOULD have been done. It‘s all about the future, about our families‘ future, about our childrens’ future. Our childrens’ future, deadhead. (PAUSE) Now I’m sure you know enough political rhetoric to realize how important linking those two words are---children and future---and I swear as I stand here before you, as your God is my unworthy judge, that I will redouble my efforts and not rest until I’ve uttered those two words to the point of projectile vomiting. And let me end by saying that we must never forget that the past is our past and the future is our future and the past pluperfect is our future tense of choice (PAUSE at this crescendo and look squarely into the camera), lest we not become what we could have been had we not been what we might have never become or even dared to dream of being. Let not those cold words chill our wounded hearts, but instead let us embrace the warmth of this beautiful autumn day out here in the Hamptons, and take some small measure of pride in the good we have brought to the neighbors around us.
All the best.
Barry
112676...
sheer brilliance. thank you for this beautiful string of words. you've started my day with a fantastic laugh. now I'll cry.....
Hope there's more laugh than cry, deadhead. A good bottle of Prosecco tends to make me wax cynical, and you tossed me a softball at which I couldn't help but swing.
chindit13
Janet
Have you considered that it wasn't a lie because he KNEW his bitch Paulson, (who has a ton of pension money still left at Goldman) would bail them out?
I guess you can grab headlines by saying someone lied, but then I can see how my argument would quickly be shunned because no such conspiracy to defraud the American people and its many generations of people to jam through an agenda that doesn't exist.......my fault.
Paulson is going to swing for this.
Tentacles everywhere:
http://www.dailypaul.com/node/112204
http://www.youtube.com/watch?v=KhQjxL1P5iI
The sad thing is; fuck all will come of this shoddy episode. Geithner will still have his job even though he doesn't deserve it, GS will continue plunder all and sundry while the agencies that are suppose to protect us will continue to strategically bumble along under guidance of ex GS employees. Maintain the rage.
Great article, and a worthy andidote to the complete nonsense posted yesterday attempting to cast doubt on Goldman's role in this criminal enterprise. Goldman stole the AIG money with the complicity of its planted and beholden US government officials, Geithner and Paulson. Period. The rest is "fill in the blanks" and complete the missing pieces. Unfortunately, the lack of public rage at the GS Thievery Corporation's activities diminishes the possibility of the rule of law being vindicated in this sorry episode.
MK has it right - the lawlessness at that level is mind boggling. The banksters own the enforcers. And there still appear to be a few ardent sympathizers for the Regime among us. I guess it was that way in Vichy France. If your back is getting scratched, and the rule of law is of no particular interest to you, who cares?
+100
+!
Settling for the ability to fight for any and lay claim to the scraps of the corrupt while selling out the premise of responsible self governance built upon the foundation of the rule of law applicable to all with preference to none. My forbearer's would kick my ass were I to do so.
Great page on Goldman's investment portfolio:
http://www.tracked.com/company/goldman_sachs/investments/
I like that site layout ...very easy. GS holdings looks like a good read for a rainy day. Energy % of pie surprised me as did other %
wow, look at the #'s for their holdings in JPM, BAC, JNJ & GE for Q2
Is she qualified...I'd say yes...called it years ago
http:www.tavakolistructuredfinance.com/janettavakoli.html
The Fourth Turning has commenced!
This boomX thinks the college grad today will survive in a welfare/military state.
Yes indeed Sqworl. This coming generation will have a heck of a full plate... We must do all we can to set the table for success.
Historians a hundred years from now will probably write whole books about the "deal with the devil" made by D.C. with GS to better enrich themselves and "manage" the sheeple-facing aspects of the financial markets in order to buy votes and money from both sides. Bah. Humbug.