Why Goldman Sachs Can't Go Free

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Repetition does not transform a lie into a truth.
http://dirisqypi.isuisse.com/association-of-healthcare-professionals.html - association of healthcare professionals

Kassi of DC 9:09AM May 02, 2009

Anonymous Banker weighs in on why the government should not allow the return of TARP funds, just yet!!!
Let’s see if I understand this. The banks and investment houses violate Federal Regulation H which governs safety and soundness in real estate lending. Over a period of ten years, they issue trillions of dollars in sub-prime loans. Then they sell these loans to Fannie Mae and Freddie Mac, and in the process, make a huge profit and basically absolve themselves of all risk associated with these loans. Then, because there is an implied guarantee by our government on these Mortgage Backed Securities, they buy them back from Fannie Mae and Freddie Mac to hold in their capital accounts.
When the entire thing starts to unravel, the government steps in and stands behind the implied guarantee bolstering the world’s confidence in our markets. Had they not done this, every bank, even the best of them, would have been insolvent.
When more needs to be done, our government commits our tax dollars and those of our future generations to bolstering these financial companies by providing TARP money, in exchange for preferred shares in these companies. These two moves, revitalize the financial markets and perhaps we should see some return on our investment in the future.
However, the government foolishly fails to put reasonable restrictions and implicit directions on how TARP funds can be used. Some of the greedier companies fail to do their part by controlling reasonable costs such as executive compensation and dividend payments. Our government steps in to protect our investment and changes the terms of the TARP contract, adding these restrictions.
The financial companies cry foul play. Well surprise, you greedy bums. Take a look at Federal Circuits, 4th Cir. (November 02, 1992) Docket number 91-2647, 91-2708 which can be found here: http://vlex.com/vid/charter-thrift-supervision-own-37480633
Now pay special attention, my friends, to Section III – B. If my interpretation is correct, a sovereign (that would be the US Government) can nullify a contract by change in legislation. Basically that makes no government contract binding to any other parties. The power lies in OUR hands.
Smacks similar to those wonderful contracts that you put out to your credit card holders in which, YOU get to change the rules at any time. I love old adages, like this one: What goes around, comes around.
To our leaders, let’s let our bet ride for a little while longer and see if we can get a return on our investment. Why let the financial industries have our money when they are failing and then take it back when their new-found profitability comes from our investment. And since, it appears that, we the people, through our government, now have some power over how the funds are to be used, you might want to consider imposing some Small Business Lending on these same banks that are holding our funds.
Can you ever imagine a scenario in whi

Anonymous Banker of NY 1:13AM April 21, 2009

Seems to me we need two types of breakups plus some regulation
1) separate investment houses from banks - completely.
2) Put limits on the size of entities that trade in the market - similar to the breakup of standard oil 100 years ago.
3) Require that derivative contracts go through an exchange
4) Revoke the corporate charter of organizations that pay their executives based on short term performance.
The problem is that the investment houses own the government.
or
Elect Mort Zuckerman as president - he's an honest man who understands the problem.

r knox of CA 12:45PM April 15, 2009

as badly as we need a combination of new regulatory controls on how Goldman "makes" money AND substantially higher income taxes on the money it "makes"---including especially on capital gains.
The fact of the matter is this. In a high-tech world, there will always be outfits that can out-trade YOU, the average investor. Perhaps you like this "hedge fund" GAME where the market for everything is constantly "jiggled" from arrays of computers and where YOU are effectively "taxed" a little each day by the "private sector" via these activities.
Or perhaps you just don't understand that this is what happens in a post-Reagan world.
Wake up. Don't celebrate bandits as though these corporate guys are "Butch Cassidy and the Sundance Kid". Enact your tax code back to the pre-Reagan style.

Muser of NM 12:21PM April 15, 2009