From the no shit department:
Paulson and Federal Reserve Chairman Ben Bernanke have been widely praised for engineering the Wall Street bailouts, which avoided systemic chaos, and they’ll probably get more plaudits if the government recovers much of the $400 billion in loans it made to financial institutions.
However, while Paulson has been criticized, unfairly or not, because $12.9 billion of the bailout money went to Goldman, he’s drawn little scrutiny for what he did in his first 18 months in office, during the final frenzied stages of the housing bubble.
In his eight years as Goldman’s chief executive, Paulson had presided over the firm’s plunge into the business of buying up subprime mortgages to marginal borrowers and then repackaging them into securities, overseeing the firm’s huge positions in what became a fraud-infested market.
During Paulson’s first 15 months as the treasury secretary and chief presidential economic adviser, Goldman unloaded more than $30 billion in dicey residential mortgage securities to pension funds, foreign banks and other investors and became the only major Wall Street firm to dramatically cut its losses and exit the housing market safely. Goldman also racked up billions of dollars in profits by secretly betting on a downturn in home mortgage securities.
“No one was better positioned . . . than Mr. Paulson to understand exactly what the implications of his moving against the (housing) bubble would have been for Goldman Sachs, because he knew what the Goldman Sachs positions were,” said William Black, a former senior thrift regulator who delivered the harshest criticism of the former secretary.
Paulson “knew that if he acted the way he should, that would have burst the bubble. Then Goldman Sachs would have been left with a very substantial loss, and that would have been the end of bonuses at Goldman Sachs.”
Why, that’s just crazy talk you dirty fucking hippie. Everyone knows it is just crazy conspiratorial talk to suggest that Goldman Sachs was assisted by the fact that so many of her former employees are in high-ranking government jobs that she is jokingly referred to as Government Sachs. It’s just crazy talk to suggest that one reason Goldman is still thriving and her competitors like Lehman are dead and buried is because of her influence. It’s just conspiratorial nonsense to suggest that Goldman got all of her idiotic AIG bets paid off at 100 cents on the dollar because of government intervention. It’s just crazy to suggest the reason they never had to take a haircut on their idiocy was because of the role the Goldman boys played in Treasury and elsewhere.
Get out of here with your crazy conspiracies, you pinko commie traitor. Why do you hate capitalism? Everyone knows the real reason this worked out this way is because let’s face it- Goldman Sachs employees are just smarter and better than you. They earned those bonuses. They eat what they kill, remember.
Juicebagger
If I had a nickle for every time I heard that. . .
General Stuck
That’s okay, all this will end when Dr Evil detonates his giant EmP, and all the ones and zeros go kablooy. No mo digital money for you Mr. land shark.
wilfred
Stop it. As I recall, you trashed those same DFHs for complaining that Obama was a corporatist, especially when they pointed out the relationships that people like Geithner had with Wall Street.
El Cid
Remember, it’s irrelevant until it’s proven that GS directly bribed Democratic lawmakers. Then it might be an issue, not focusing on GS but on the corrupt lawmaker.
Otherwise it’s class warfare.
John Cole
@wilfred: Link?
General Stuck
and could we stay on topic Mr. Cole, and keep the “how has Obama failed you today” posts churned out? We DO have an important election around the bend, and disappointed liberals to feed. thanx.
Cat Lady
What more could he have done? He had no authority! And “everyone made mistakes”. See? Mistakes were made! Let’s stick to trashing Obama, and not look back.
Juicebagger
Forget it wilfred, it’s
ChinatownBalloon Juice.Bullsmith
Okay, so the Republicans run massive disinformation campaigns on American citizens and it works, they get into power without anything resembling a platform that even describes the real world. Meantime, professional criminals oversee professional criminals, their latest scam being to steal the pensions and life savings of yokels from Arkansas to Greece.
So eventually the yokels don’t want to buy American “AAA securities” and the Republican war on truth requires new enemies. The only place this leads historically is to war, but America’s already over-stretched on that front.
So where’s this going? Is there an outcome that includes neither pitchforks nor nukes?
Vince CA
My outrage meter got stuck on Forehead-Artery-Bursts during the Bush years. Why or how anybody can still care is a mystery to me.
Suck It Up!
@Juicebagger:
you are so right. too many here know what they are talking about and will call wilfred out in a second.
Juicebagger
Bullsmith: The US is hardly overstretched militarily, we just haven’t devoted resources to our imperial wars of choice. We haven’t really seen the manpower and resources that would be available to the nation under total war.
wilfred
@John Cole:
Give a few minutes. But are you really suggesting that you haven’t been trashing people for saying that Obama was in bed with Wall Street?
wilfred
@Suck It Up!:
I’ve been denouncing Obama for his Wall Street connections since the beginning. I think I’d know if anyone else has.
Vishnu Schist
Well if you really look at it closely GS is smarter and better, they positioned moles where needed and cashed in! The fact that they are a bunch of goddamn criminals who in a just world would be hanging from the Brooklyn Bridge is beside the fact. Oh, well. Like others, I’m going to get back to handing the country back to the Republicans. I mean why not, aren’t we all looking forward to the day that Steve Forbes get to keep his hard won inheritance and the rest of us live in company homes? It was a mother fucker coming out of his mother’s womb you know. I personally can’t wait for the day the boss man gives me my advance at the company store then tells me to get the fuck to work.
R. Porrofatto
I disagree with Mr. Black there. As we witnessed with Merrill Lynch and Bank of America, as long as there is a faucet open somewhere gushing with free money — from taxpayers, ripped off pension funds, hapless investors, etc. — even bankruptcy won’t stop the river of bonuses. Goldman’s bonus babies would have done just fine, loss or no.
Juicebagger
Suck It Up: Oh, learn me some manners, you Very Serious Juicebagger, you. I must be made to understand that this really is the best of all possible worlds.
aimai
@Juicebagger:
wait, what? juicebagger, totebagger, teabagger? wake me up when the carptebaggers get here.
aimai
funluvn
So, what’s the issue? The banksters made out like the bandits that they are, their money is still coming in fast and furious and only a couple of suckers firms had to be sacrificed at the Alter of Greed to do it.
Sounds like Republican Economics 101 to me.
Just Some Fuckhead
Cue the wanking of JMN in 3.. 2..
General Stuck
I’m throwing my support behind the draft Hillary for 2012 movement. I miss the good old days of stories about the clenis, DNA, and semen stained blue dresses. Of Welfare Reform and Nafta and liberals rallying against the big meany wingnuts. Obama is just way too serious and boooooring.
Bring back the Travel Gate.
Poopyman
I’ve always been surprised that we’ve never seen banksters hanging from lamp posts since this whole debacle began. Now I’m pretty much convinced that the American public is incapable of outrage. Good news for the bankers, but the rest of us are totally screwed.
And now the new normal in this country is that you can get away with torture, murder, theft, and fraud so long as you’re in the right caste, regardless of whether you’re a Dem or a Reb.
We are so totally screwed.
WyldPirate
@Poopyman:
Get your popcorn ready, Poopyman. Cries of “rule of law, rule of law” will soon be echoing through House hearing chambers over the most ridiculous shit imaginable very soon.
Expect the Village to be outraged and to give it wall to wall coverage. I can see it now–“Obama’s dog shits on the WH carpet. Obama must be impeached for destruction and desecration of the White House. House votes to forward Articles of Impeachment says Speaker of the House Michelle Bachman”
Omnes Omnibus
@Poopyman: I don’t know about that. If you start taking Joe Sixpacks’ houses without legal authority, people will start getting pissed, really pissed.
burnspbesq
@Vishnu Schist:
And pray tell, what have they done that is an actual violation of a currently effective Federal or state criminal statute, that can be proven beyond a reasonable doubt to a jury in Manhattan?
The law is what it is – not what it would be if you ruled by royal edict. Does your thesaurus say “amoral” and “illegal” are synonyms?
Steve
The argument is that Paulson did Goldman a special favor. But everyone in the finance industry was exposed to the housing market. If Paulson had somehow blown things up sooner, they all would have lost.
It’s true that Goldman did a good job of unwinding their positions and avoiding the tsunami. But either Paulson fed them inside information, which is a claim that I think requires some evidence, or else I don’t know what the scandal is. I don’t think the Government had the ability to ease us out of the housing bubble without simply bursting it, at least not in 2006. Someone can correct me if I’m wrong.
Ash Can
“Her?”
Don’t be pinnin’ none of that shit on us women, boy.
russell
Just wanted to say what fun it was to revisit that bankster clown’s email cri du coeur.
My favoritest line, ever, anywhere:
I am a Master of the Universe! Behold my superhuman bladder control!
Omnes Omnibus
@russell: Superhuman bladder control? That is the worst superpower ever. I had always assumed that the guy meant that the traders wore Depends.
BR
@burnspbesq:
I am not a lawyer, but it seems that there may be some actual criminality involved in some of this stuff (i.e. fraud):
http://blogs.reuters.com/felix-salmon/2010/10/13/the-enormous-mortgage-bond-scandal/
TJ
@russell:
What he forgot to mention is that all the catheters emptied on us.
Juicebagger
Seems like the MotU might have a career in interstate trucking and haulage.
chopper
@Omnes Omnibus:
could be worse. beats ‘supersensitive fee-fees and a super-need for attention and validation’. aka ‘half the blogworld’
Montysano
@Poopyman:
Yesterday, while out running errands during lunch, I flipped on Hannity. He was informing his listeners as to how Wall Street helped Obama get elected, and as a reward, Obama bailed them out. Srsly. There’s where your outrage went.
El Tiburon
Personally I am glad to have done my part to help our Overlords and Protectors keep their private islands and second Lear jets.
It’s why I work hard to pay my taxes. The thought of little Poopsy and Mopsy not flying first class breaks my heart.
El Tiburon
@wilfred:
You are obviously a sock-puppet trolling fire-bagger.
I suggest you keep your homophobic and misogynistic comments to yourself
Janeer, Wilfred.Montysano
@BR: Excellent article. Everyone here needs to read it, and the ensuing comments. A couple of commenters brought up a point that’s been on my mind lately. 25 years ago, your banker was a serious white dude in a suit whose job it was to say “No, you idiot, we won’t allow you to do that”, because if you made a mess, he owned your mess.
Fast forward to the current era: this banker may look the same, but in reality you’re now dealing with a grifter, and he knows that no matter how big a mess you make, he won’t have to deal with it.
Perry Como
This is just asset stripping writ large. I’ll just leave this here.
burnspbesq
@Montysano:
In effect, you’re arguing that firms like Goldman should go back to being general partnerships. I would be totally down with that.
Montysano
@burnspbesq:
I’m not sure what that means, and teh Google only confused me further. Does it relate to what happened with the elimination of Glass-Steagall?
joe from Lowell
@wilfred:
1. This is a post about Hank Paulson, who worked for George W. Bush, and whose career in government ended when Barack Obama took office.
2. Tim Geithner regulated Wall Street. He never worked for them.
You aren’t making any sense.
Singularity
@Wilfrid “Give a few minutes.”:
Over 100 minutes have been given. Where is the link?
Singularity
And posts like the one at the “They eat what they kill” link make me want to go out and beat up a trader, just to hear him cry.
Glenndacious Greenwaldian (formerly tim)
@General Stuck:
hey stuck…who do you think hired all those GS vampires and brought them along with him into Washington?
As a “disappointed liberal,” I feel amply fed by this post.
Steve
@joe from Lowell: Timothy Geithner was, most recently, President of the Federal Reserve Bank of New York from 2003 to 2009. The President of each Federal Reserve Bank is appointed by the Bank’s Board of Directors. Six of those nine directors are appointed by the member banks. For example, Jamie Dimon from JP Morgan Chase sits on the board of the NY Fed.
Was Geithner a regulator or did he work for the banks? I think the most accurate answer is “both.”
wilfred
@Singularity:
I’m not a fucking secretary. Yesterday Cole made a ridiculous post about what some hypothetical Tea Party/ Republican administration would do about excessive Wall Street profits, omitting what the current administrations was actually doing – which was nothing.
That’s evidence enough. The official party line is to point out injustice in the system but to make sure that such criticism never crosses the line into any criticism of the current Administration or Democratic Party’ certainly that might in any way result in losses in the upcoming elections. Cole rountinely bashes the Left when its criticisms threaten Obama or the Democrats. It’s the safe, “I confess, they did it” position.
@joe from Lowell:
2. Tim Geithner regulated Wall Street. He never worked for them
I surrender.
liberal
@Just Some Fuckhead:
Heh.
Stillwater
@burnspbesq: And pray tell, what have they done that is an actual violation of a currently effective Federal or state criminal statute
I’m curious about this. You’re saying, in effect, that no existing laws prevent the Federal Reserve from disseminating highly valuable economic policy information and other data to a limited number of private sector firms for the particular benefit of favorably timed investment decisions? I can’t believe this is true… Could you elaborate a bit?
Chyron HR
@wilfred:
It’s central to your point!
Speaking of points, break this down for us really simply: Which part of THIS post–the one you’ve been throwing fits about all morning–do you disagree with?
wilfred
here:
https://balloon-juice.com/2009/12/21/your-daily-how-obama-has-failed-us-post/
This is a good example. I really don’t give a shit what John thinks but he is a representative sample of a position that runs like this and which I think needs to be attacked for the weasely shit that it is:
“Of course the Left is right about these things, and we support their right to voice these opinions. We’ll even agree with them when the logic is inescapable. But we will not take the next step of hammering the Administration over these things. Instead we’ll make smirky comments about how childish the left is, and how much they are hurting Obama, the Democrats, Truth, Justice, the American Way and Life, generally, As We Know It.”
Enough, already.
liberal
@burnspbesq:
Yawn. “Criminal” can be used more generally. E.g. slaveholders in the Old South were “criminal monsters,” even though owning other human beings was in fact legal and even directly written into the Constitution.
liberal
@Montysano:
It refers to this quote of yours:
“He owned your mess” because of the partnership structure.
Many have suggested that moving from partnerships to public corps made the incentive structures worse. IMHO moving back would hardly be sufficient to fix all the problems in the FIRE sector, but AFAICT it would be a valuable step.
Omnes Omnibus
@wilfred:Timing is an issue. It is close to the election, so it is not unreasonable for those who want more Democrats elected to try to emphasize the positives and de-emphasize the negatives. Tone is another issue. Urging the administration to do something is different than shouting that Obama is worse than Bush.
Stillwater
@burnspbesq: no existing laws prevent the Federal Reserve I meant to write ‘Treasury’ instead of ‘Federal Reserve’, but the general question applies to both institutions.
Omnes Omnibus
@liberal: I would separate commercial from investment banks and require i-banks to be partnerships again if I were the King of the Forest.
liberal
@Stillwater:
You might have a point, but even if the Fed broke laws (which IMHO is highly likely—not just the legal question you raise, but other ones re Fed activities), those laws certainly don’t provide remedies like stringing banksters from lampposts. Not that I have a problem with the latter.
liberal
@Omnes Omnibus:
Yeah. Though you have to restore a whole bunch of sh*t to even be able to make the C/I distinction, don’t you?
wilfred
@Omnes Omnibus:
Ah. Here:
Now I read that, and I’m happy. All the DFHs that I know are happy. But some people will worry that the Republicans will use that against Obama – “Who lost Afghanistan?” “Caving in to terrorists” and thus will be anxious – “will this hurt us?” Me, I’m happy.
That’s the difference.
http://www.nytimes.com/2010/10/15/world/asia/15nato.html?hp
Omnes Omnibus
@liberal: I am not saying it would be easy, or even possible, but I am not likely to become King anytime soon either.
liberal
@Omnes Omnibus:
Say it ain’t so…
:-)
liberal
About the banksters and “crime”: dictionary.com has this as one of the meanings of crime:
Re the banksters, I’d put them under “monstrous wrongdoing”…
Just Some Fuckhead
@liberal: It’s a crime how some people use the dictionary for their own nefarious and pedantic ends.
Juicebaggers, ho!
Burnsey lives offa FIRE, so watch whose toes you crimp. He wouldn’t want to lose the ‘investment’ of those years he spent earning peanuts among the proles as a GS-13.
That would be criminal.
Vishnu Schist
@burnspbesq:
Oh hell dude, I don’t know, I guess when I find that one group of people games the system, gets paid 100% on the dollar on bets they place and that 100% gets taken out of the pockets of the same group of shlubs that got taken for a ride in the first place, then the same group of people bitch and moan a storm up that they are the “producers” and will simply lose all motivation to bless the world with their brilliance if they need to pay an additional 4% in taxes. All the while fueling an industry specifically designed to destroy a supposed welfare state, that they more than happily participate in when it is to their benefit (re: read the first fucking sentence again). I guess I just get all DFH flustered and out of my fucking mind when I consider this a “just” society. So, sorry that I cannot cite the exact federal statute that prohibits screwing over the majority of Americans on a glorified ponzi scheme.
So now that the US economy is in the shitter, I hope you can rest happy knowing that the Federal Statutes may or may not prohibit the good hot dicking you just received.
burnspbesq
@Montysano:
In a general partnership, every partner has unlimited personal liability for all partnership debts and obligations. That, in my view, leads to an enlightened approach to risk management.
burnspbesq
@Stillwater:
No, I’m not saying that at all. I’m not saying anything; I’m asking a question.
That said, if there is information in the Fed’s files that any citizen wants, that isn’t covered by one of the FOIA exemptions (see 5 U.S.C. section 552(b)), they can file a FOIA request and get it. And one of the things that having relationships with people in agencies gives you is the ability to pick up the phone and get somebody you know on the other end and say “look, you and I both know that I can get this information under FOIA. Can you save me the trouble of filing a request?”
burnspbesq
@Vishnu Schist:
Oh, bullshit. You used the word “criminal.” One is only a criminal if one commits a crime. Being a rapacious, amoral douchebag is not, in and of itself, a crime. If you think it should be, take it up with Congress.
But if you can’t point to a crime, find some other word than “criminal.”
chopper
@burnspbesq:
damn, i just looked at my electric bill and yelled out ‘this is highway robbery’. guess i better report for re-neducation.
Juicebaggers, ho!
Hey, go easy on Burnsey, all of his free time is taken up trying to figure out how to pass a camel through a needle’s eye.
And, of course, how to bill his clients for those wasted hours.
catclub
@burnspbesq:
“In effect, you’re arguing that firms like Goldman should go back to being general partnerships. I would be totally down with that. ”
You forget that those firms have also been granted carte blanche at the FED’s discount window – like real banks.
Whole lotta things need to be unwound.
Perry Como
@burnspbesq: Racketeering, conspiracy and fraud are a few good places to start. The states and the feds can and should go after the bankers. Not the hair stylists and ex-Wal-Mart stockers they hired to sign the paperwork, they need to go after the people that decided forging affidavits en masse was a good way to paper over their colossal fuck ups in originating and securitizing mortgages.
Jump, fuckers.
Arclite
Our country is a meritocracy where the free market works perfectly to make sure the best company succeeds on an even playing field.
Vishnu Schist
@burnspbesq: oh good lord, please tell me you are yanking my chain.
Juicebaggers, ho!
Vishnu Schist: Sadly, Burnsey is dead serious.
If you ask nicely, he’ll do his poor little rich boy routine and tell you how hard it is to be in the income bracket, what with the expense of keeping up with the Jonses AND keeping the kids away from the common scum in the public schools.
Juicebaggers, ho!
Sorry, Mr. Comfort the Comfortable is in the top income bracket.
My failure is likely due to the fruits of a state school education, unlike my betters.
burnspbesq
@Juicebaggers, ho!:
Were you born stupid or did you have to work to get there?
burnspbesq
@Vishnu Schist:
Why would I do that?