Goldman Sachs' investment in Obama pays off huge

Citigroup today announced it would pay a heavy fine for its involvement in the mortgage-backed securities financial crisis:

Citigroup said it would take a $3.8bn pre-tax charge in the second quarter as it became the second big US bank to settle with the Department of Justice to resolve a long-running US government investigation into the sale of mortgage-backed securities.

The bank, which will report earnings later on Monday, said it agreed to pay $7bn in total, including $4bn in cash to the DoJ, $500m in cash to the Federal Deposit Insurance Corporation and several state attorney generals, as well as $2.5bn in consumer relief.

The penalty is much larger than analysts had originally expected Citi to pay to settle the civil investigation. However, the final deal is still lower than the opening bid of $10bn made by the DoJ that prompted big investors to encourage the bank to go to court rather than reach a settlement.

Shares in the bank rose 1.3 per cent in pre-market trading to $47.60 in New York.

The settlement is part of a broader probe into US banks by the state and federal task force formed in January 2012 by the Obama administration to look into the sale of mortgage-backed securities; the debt instruments at the heart of the financial crisis.

JP Morgan has already been fined for its involvement and Bank of America is next on the chopping block:

JPMorgan Chase, the first big US bank to settle with the DoJ, paid $13bn for a broader settlement, while Bank of America is expected to pay as much as $12bn for its own tailored deal.

There’s an entity conspicuously absent from the hit list- Goldman Sachs.

Goldman Sachs bet, through AIG, that the securities it was selling to investors would fail. As part of the TARP bailout Goldman received nearly $13 billion to cover those losses when they did fail. Goldman also shorted the securities through Citibank, JPMorgan Chase and Morgan Stanley.

Goldman knew enough to short the securities which means they knew full well what they were worth.

In the money they got, Goldman Sachs sent a lot of the money overseas and $3 billion of it went right into their own account.

After his own investigation, democrat Senator Carl Levin believed Goldman had deceived investors and the government and referred Goldman to DOJ for a criminal investigation:

Goldman Sachs Group Inc. (GS) misled clients and Congress about the firm’s bets on securities tied to the housing market, the chairman of the U.S. Senate panel that investigated the causes of the financial crisis said.

Senator Carl Levin, releasing the findings of a two-year inquiry yesterday, said he wants the Justice Department and the Securities and Exchange Commission to examine whether Goldman Sachs violated the law by misleading clients who bought the complex securities known as collateralized debt obligations without knowing the firm would benefit if they fell in value.

The Michigan Democrat also said federal prosecutors should review whether to bring perjury charges against Goldman Sachs Chief Executive Officer Lloyd Blankfein and other current and former employees who testified in Congress last year. Levin said they denied under oath that Goldman Sachs took a financial position against the mortgage market solely for its own profit, statements the senator said were untrue.

“In my judgment, Goldman clearly misled their clients and they misled the Congress,” Levin said at a press briefing yesterday where he and Senator Tom Coburn, an Oklahoma Republican, discussed the 640-page report from the Permanent Subcommittee on Investigations.

And what came of that referral? You guessed it.

The Justice Department has decided it will not prosecute Goldman Sachs or its employees for their role in the financial crisis, following an investigation by senators Carl Levin (D-MI) and Tom Coburn (R-OK). The congressional investigation found problems with the credit rating agencies and poor oversight from regulators, and highlighted abuses by Goldman Sachs and other large investment banks. Senator Levin sent a formal referral to the Justice Department for a criminal investigation in April 2011.

The investigative report by the Senate’s Permanent Subcommittee on Investigations, chaired by Levin, found that Goldman Sachs “used net short positions to benefit from the downturn in the mortgage market, and designed, marketed, and sold CDOs in ways that created conflicts of interest with the firm’s clients and at times led to the bank’s profiting from the same products that caused substantial losses for its clients.”

A statement from the Justice Department issued late on Thursday evening noted, “Based on the law and evidence as they exist at this time, there is not a viable basis to bring a criminal prosecution with respect to Goldman Sachs or its employees in regard to the allegations set forth in the report.”

So let’s have a look at how one convinces the DOJ to drop financial probes.

Item 1:

Top contributors to Obama campaign 2008

Goldman Sachs $1,034,615

Item 2:

Incest

As the New York Post reported Tuesday, the Democratic National Committee immediately bought ads on Google that direct web surfers who type in “Goldman Sachs SEC” to Obama’s fundraising site.

Also from Michelle Malkin’s article:

– Goldman Sachs partner Gary Gensler is Obama’s Commodity Futures Trading Commission head.
– Goldman Sachs kept White House Chief of Staff Rahm Emanuel on a $3,000 monthly retainer while he worked as Clinton’s chief fundraiser
– Former Goldman Sachs lobbyist Mark Patterson serves under Geithner as his top deputy and overseer of TARP bailout — $10 billion of which went to Goldman Sachs.
– Obama’s close hometown crony, campaign-finance chief and senior adviser Penny Pritzker, was head of Superior Bank of Chicago, a subprime specialist that went bust in 2001, leaving more than 1,400 people stripped of their savings after bank officials falsified profit reports.

There’s more at the link.

In 2012 JP Morgan CEO Jamie Dimon dared be critical of Obama. The punishment for that was $13 billion.

Goldman’s investment in Obama has paid off thousands of times over. They don’t call Obama “President Goldman Sachs” for nothing.

Image courtesy Clockwork Conservative

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DrJohn

DrJohn has been a health care professional for more than 30 years. In addition to clinical practice he has done extensive research and has published widely with over 70 original articles and abstracts in the peer-reviewed literature. DrJohn is well known in his field and has lectured on every continent except for Antarctica. He has been married to the same wonderful lady for over 30 years and has three kids- two sons, both of whom are attorneys and one daughter on her way into the field of education.

DrJohn was brought up with the concept that one can do well if one is prepared to work hard but nothing in life is guaranteed.

Except for liberals being foolish.

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old guy

9 years ago

Will BHO leave office “dead broke” too?

James Raider

Member

Good hit on the corruption of this Admin., DrJ.

And it is spreading its disease to Canada by appointing Bruce Heyman, a seriously wealthy investment banker from Goldman Sachs, as U.S. ambassador to Canada (in March). Strangely, Heyman and his wife are spreading the Chicago-style liberal idiocy across the 49th parallel.

This clown Heyman is a real winner . . . An ex-Goldman Sachs bundler for Obama is starting to look like a diplomatic bungler.

It’s hilarious that this Admin’s worshipping believers think Republicans are “big business” when this Admin has sold its soul to the biggest and most corrupting machine in the Nation.

It’s actually difficult to comprehend how a zero talent guy like Bruce Heyman gets to become THE ambassador to America’s biggest trading partner. As demonstrated in this article, Heyman is simply clueless, how could he . . . . oh, yah, right, he got appointed by Mr. Cluelessness himself. Goldman Sachs isn’t America’s friend, and neither is this Admin. Here’s more proof . . . . . . .

This is the text of the archived article:

The U.S. Tells Ottawa: O Canada, Stop Pouting

President Obama once promised to remake America’s image around the globe. He has kept that promise—only not in the way many voters who backed him had hoped.

Mr. Obama’s latest step in the image makeover is to tell Canada—the U.S.’s largest trading partner, largest supplier of energy and most loyal ally in war and peace—that its long-nurtured special relationship with the U.S. is not so special after all. To carry out the mission, Mr. Obama has sent a new U.S. ambassador to Ottawa.

Bruce Heyman, a former Goldman Sachs GS +1.30% banker based in Chicago and a top Obama campaign bundler in both 2008 and 2012, may have deserved an ambassadorship for his services. But that’s what all those tiny islands in the Caribbean are for. Appointing Mr. Heyman—who is diplomatically challenged, to put it diplomatically—his top representative to Canada says a lot about what the president thinks about his northern neighbor.

Mr. Heyman made his debut in Ottawa earlier this month with a dinner speech at the National Gallery followed by a Q&A with former Canadian ambassador to Washington Frank McKenna. Mr. McKenna used the event to raise what Canada sees as troubling “irritants” in the bilateral relationship. Mr. Heyman used it to explain to Canadians how insignificant they are in the eyes of Washington.

Mr. McKenna began with the Trans-Pacific Partnership, a proposed free-trade agreement among 12 countries that Canada is eager to see completed. He thanked the U.S. for inviting his country to join but then pointed out that the members are “all hung up because we’re waiting for fast track” negotiating authority, which would assure an up or down congressional vote on any deal. When will it happen, the Canadian wanted to know.

Mr. Heyman called this “focusing on the wrong things.” With or without fast track, “I don’t think that should be a reason for anybody not to negotiate.” He even told Mr. McKenna that TPP “could be” completed without fast-track.

This is nonsense: No country is likely to put the opening of its most protected markets on the table until they know that the U.S. Congress will not be allowed to pick the deal apart. Mr. McKenna seemed incredulous that the ambassador was trying to spin it otherwise. He politely moved on.

The Keystone XL pipeline, he told Mr. Heyman, “in many ways is a proxy . . . for the relationship” with the U.S. That is to say, from Canada’s perspective, things are not good and Keystone is the reason. He asked why, after five years, the pipeline has not been approved.

What followed was a lecture from Mr. Heyman that was more suited to children than a foreign-policy audience. The government has received three million comments from Americans since the beginning of the year, he said. “Maybe tonight on your drive home”—boys and girls—”you can think about how long it would take to process each individual memo.” Then he added: “This is a very, very large and significant number of comments and we have to process it. It’s going to take some time.”

Things didn’t go too well either when Mr. McKenna tried to get a U.S. commitment to fund the customs plaza that Canada needs to support a new bridge it is building at the Detroit-Windsor crossing, where the U.S. trade with Canada is greater than with all of Japan. “We support nice infrastructure between our two countries,” Mr. Heyman said. “This is a financing issue and I think it’s best that we wait and have those discussions privately.”

When Mr. McKenna moved to raise “another issue that has turned out to be bothersome,” Mr. Heyman cut in: “Do you have any good issues here you want to talk about? I try to take this at a high level and make this a lot of fun. I’m sorry you’re all bummed out here. We have this incredible relationship. C’mon.”

Mr. McKenna kept his cool: “When you’re the small partner in a relationship the irritants do become quite significant,” he calmly explained.

Mr. Heyman remained clueless. “Frank,” he asked, “did you ever buy a new car? You get a new car? And you have that new car, it smells great and it looks beautiful and everything else. And you bring that new car home and you realize there’s a scratch on the bumper that you didn’t notice when you bought it. And you go inside and start thinking about the scratch all day long. Ever do that?”

Mr. McKenna deadpanned: “No.” But the American went right on with his analogy that effectively belittled Canada’s concerns as trivial next to its good fortune in being a U.S. neighbor.

Many Canadians have already been saying that they’ve given up on Mr. Obama and now count the days until he leaves office. That may be a good survival strategy for Canada. But it can’t be good for the U.S., which doesn’t have so many allies that it can afford to offend one of the most important.

Bill

You Obama voters sure did pick a winner. Better luck next time.