Thom Hartmann: Blistering Report Scolds Goldman

[democracy1st]

Run time: 07:07 https://www.youtube.com/watch?v=qZOhK8MEeXU   Posted on YouTube: April 14, 2011 By YouTube Member: thomhartmann Views on YouTube: 292   Posted on DU: April 18, 2011 By DU Member: democracy1st Views on DU: 189

 
Goldman Sachs Ripped Off And Misled Clients, Senate Report Says

Goldman Sachs, the nation's fifth-largest bank by assets, systematically misled clients, sold them financial instruments it knew to be junk, bet against them and profited off of their losses, according to a Senate report released this week.

The report, the product of a two-year investigation, paints the firm as Exhibit A of Wall Street's evolution from a place that raises and deploys capital to worthy businesses into a vulturous creature that preys on unwitting investors.

Goldman's conduct in the two years leading up to the near-implosion of the financial system show a firm dedicated to "sticking it to their own clients," said Senator Carl Levin, a Michigan Democrat who chairs the panel that produced the report. "Goldman gained at the expense of their clients, and used abusive practices to do it."

In 2006 and 2007, Goldman recorded more than $21 billion in profit thanks to a strategy that ensured earnings as the housing bubble inflated and then popped. It also dodged a loss in 2008 -- one of the few firms to do so -- during a year that saw the demise of three of its direct competitors.

The "abusive" tactics the firm employed helped gain those winnings, according to the report by the Senate Permanent Subcommittee on Investigations. While Goldman was betting -- or "shorting," in Wall Street parlance -- that securities would collapse, clients were on the losing end.

"Of course we didn't dodge the mortgage mess," Goldman chairman and chief executive Lloyd C. Blankfein explained to a colleague in a Nov. 18, 2007 email documented in the report. "We lost money, then made more than we lost because of shorts."

Four complex financial instruments with names like Timberwolf and Abacus show how the firm profited while others lost, according to the Senate report.

http://www.huffingtonpost.com/2011/04/15/goldman-sachs-levin-investigation_n_849708.html