Updates: These short positions GS took are the AIG CDS’ we lost billions on?! Golden Slacks getting hammered by SEC fraud charges…
Update: Oh shxt! I didnt realize the short positions they are talking about are the damn AIG CDS!!! Oh snap! These are the frakkin CDS we lost BILLIONS on via AIG! h/t doc holiday:
Skeptical CPA: December 2008Re: “Some of AIG’s speculative bets were tied to a group of [CDOs] named ‘Abacus,’ created by [GSG]. … In what amounted to a side bet on the value of these holdings, AIG agreed to pay [GSG] if the mortgage debt declined in value and would receive money is it rose. … The plan has resulted in banks in North America and Europe emerging as winners: They have kept the collateral they previously received from AIG and received the rest of the securities’ value in the form of cash from Maiden Lane III. … It also has been a double boon to banks and financial institutions that specifically bought protection on now shaky mortgage securities and are effectively being made whole on those positions by AIG and the [Fed]”, my emphasis, Serena Ng, Carrick Mollenkamp & Michael Siconolfi at the WSJ, 10 December 2008.”
Update: Cramer is all over CNBC saying his confidential high sources say GS had a position , long, in the CDO, really laying it on shilling for Golden, really sad. Saying its caveat emptor the German bank who took losses is responsible, while he is saying GS was long the position. Shill Jim shill. wow some guy(silvan raines, sp?) says Cramer takes money from GS to his face on the air just now, heh.
“These are very serious charges against a key supporter of President Obama’s bill to create a permanent Wall Street bailout fund. Despite President Obama’s rhetoric, his permanent bailout bill gives Goldman Sachs and other big Wall Street banks a permanent, taxpayer-funded safety net by designating them ‘too big to fail.’ Just whose side is President Obama on?
“Instead of permanent bailouts for President Obama’s Wall Street allies, Republicans believe the best way to protect taxpayers is by reforming Fannie Mae and Freddie Mac, the government-sponsored companies that sparked the meltdown by giving high-risk loans to people who couldn’t afford it.”
NOTE: Goldman Sachs was President Obama’s top Wall Street contributor during the 2008 election cycle, donating nearly $1 million to his campaign.
Update: John Boehner GOP minority leader House, just put a wicked spin on that ball, his statement said these charges against GS a partner in Pres Obamas Fin Reg Plan are very concerning, that the FIn Reg Reform Bill will protect GS as too big to fail, Boehner said, whose side is President Obama on? oooooohhhh!! ^5 to Boehner
Update: So I was thinking the Volcker Rule is gonna make a BIG comeback off this, ya know? I mean WSJ was just declaring it dead, again, this week and I do not see how the banks are gonna fight Volcker Rule and the Consumer Protection Thingy in the face of the headlines the lamestream put together off this. And it is things like this that kill the markets for everyone, thanks GS you frakkers.
12:51pm EST: DOW down 153 now, back under 11k, like Spinal Tap, it goes to eleven..that’s about all that number was worth…S&P back under the big 1200 the traders were so excited about…GLD, OIL, all down…
Update: Steve Liesman – Paulson’s right hand man, Pelligrini, was source of confirmation for the fraud charges in re his selection of the ‘lousy’ subprime securities that went into the CDO. He left Paulson in 2009. Steve says what Paulson did is likely not illegal, the issue is disclosure and that is all on GS…
Paging Andrew Cuomo, will Andrew Cuomo please file an indictment on the white courtesy phone….
Update: WSJ has the SEC complaint up in pdf here
Update Q/A Adam Schapiro of FoxBiz asks other fin firms did this, on synthetic CDOs like Deutsche Bank, are they facing charges?
ongoing investigation is the answer
DOW is tanking, down 75 now, GS down 20 (12%)
Q- Why Paulson not charged?
A- Paulson didnt make the representation to the long investors, GS did.
Update:11:11 am est: SEC conf call LIVE on CNBC now!
they chose which MBS would make up this CDO, J Paulson had significant role in building product, had incentive to choose worst rated MBS to put in the CDO and then they took a short position against it
the prospectus for the long investors in the CDO revealed none of this including Paulsons role..
long investors lost $1b, paulson made $1b
Sing with me!
Karma chameleon baby
CNBC Chyron: SEC charges GS with FRAUD ON SUBPRIME SECURITIES
SEC: GS misstated, omitted key facts related to subprime products
SEC: (John) Paulson & Co had hand in structuring CDO in question
SEC grew a pair, hoocodanode!