http://www.rollingstone.com/politics/story/29127316/the_great_american_bubble_machine/
An interesting article, no matter what you make of it. I would have comments but I'm not in the know about many of the issues that were described in the article, so I'll refrain for now. It is a long article though, so if you want to read it, be ready to spend at least 30 minutes on it.
Jump to PostI could not follow your link so here is one of mine. The scam was that this really rich guy wanted to short CDOs but did not want to risk his money so …
Jump to PostIsn't that standard operating procedure for wall street bankers?
Jump to PostNo. It is fraud. Legally.
Thanks for the RS link.
My question is, does Wall Street create any money, or does it simply act as conduit to shift money from one pocket to another? In that case from the greedy and stupid investor to the fat banker's pocket.
I could not follow your link so here is one of mine. The scam was that this really rich guy wanted to short CDOs but did not want to risk his money so he convinced Goldman Sachs to create some CDOs that were guaranteed to fail so he could short them while GS was selling them at an exorbitant rate so everyone made money (except the people who bought them and the American taxpayers).
Shorting is the process of selling stuff you don't own at today's high rate and buying them at next week's low prices.
The article I posted explained how Goldman Sachs has been intentionally and illegally exploiting financial markets for profit. Sure, it goes into a lot of detail and financial speak at points, but the premise is easy to grasp: Goldman intentionally caused the spiking of oil prices, the collapse of the .com bubble, etc. For example, the article explains how Goldman knowingly overstated and 'hyped up' the .com days despite knowing what would happen: consumers would lose tons of money and they'd fill their pockets.
Isn't that standard operating procedure for wall street bankers?
No. It is fraud. Legally.
No. It is fraud. Legally.
Thanks for the RS link.
My question is, does Wall Street create any money, or does it simply act as conduit to shift money from one pocket to another? In that case from the greedy and stupid investor to the fat banker's pocket.
The difference is that in the one case, the stupid investor makes a bad investment which causes them to lose money, whereas in the other case, Goldman Sachs does illegal behind the scenes work that dooms the investment(s) to failure from the very beginning.
The article I posted explained how Goldman Sachs has been intentionally and illegally exploiting financial markets for profit.
Which is completely and utterly BS.
They were duped as was everyone else.
While some of the information in the article may not be true I don't understand what you mean about them being "duped". They profited immensely.
yes, but they were unaware of what was going on with the 3rd party they worked with.
And now they're being slagged for being associated with someone Obama doesn't like.
What's happening right now is a political game. A lot of people got immensely rich off the announcement that GS were in trouble, an announcement issued by a politically motivated body to coincide almost exactly with a major option expiration moment.
Those in the know that announcement would come cashed in right before the announcement as prices were soaring (after all, GS were doing great therefore people wanted those options because they would turn into stock worth a lot more than the list price on the options).
After the announcement, prices plumetted as the stock was suddenly worthless, and people who just bought the options were left with a major financial loss.
yes, but they were unaware of what was going on with the 3rd party they worked with.
And now they're being slagged for being associated with someone Obama doesn't like.
The U.S. Security and Exchange Commission files a lawsuit against Goldman Sachs and one of its employees. What is important to understand is that if the people whose mortgages make up the CDO make their payments, then the companies that invest in the CDO will profit. Goldman apparently intentionally set up the CDO so that it would be likely to fail (basically by composing it of mortgages that were unlikely to be paid off for various reasons), then Goldman shorted the CDO, which means they took a position where they would profit if the CDO failed. Any way you put it, they took two opposite positions on the same investment. Highly immoral and illegal since it constitutes a conflict of interest.
A quote from a Goldman Sachs employee email (Fabrice Tourre, Goldman executive who helped set up the CDO)
More and more leverage in the system, The whole building is about to collapse anytime now…Only potential survivor, the fabulous Fab…standing in the middle of all these complex, highly leveraged, exotic trades he created without necessarily understanding all of the implications of those monstruosities!!!
Goldman Sachs employees were a top contributor to Obama's campaign. They aren't being smeared. If anything, they should be pursued more than they currently are. Numerous ex-Goldman Sachs employees (and even one that is still on its board) are high ranking government employees. Goldman, in the Matt Taibbi article I posted, was accused of a number of things. It wasn't about the SEC lawsuit that I think you are referring to. Even if you read nothing else, and you just read the emails that have been published that were taken from Goldman employees, you can see their overwhelming greed.
A **** storm appears to be coming Goldman's way
Don't worry, Goldman has enough money to prevail in the political arena!
We're a friendly, industry-focused community of developers, IT pros, digital marketers, and technology enthusiasts meeting, networking, learning, and sharing knowledge.