If GS Is A Commercial Bank, Why Do They Still Play By Investment Banking Rules (Grayson Congressional Letter Questions Bernanke)

It's becoming more than occasionally appalling to watch the games played by Goldman Sachs as they run roughshod over Washington.  First some background.  Goldman applied and was quickly granted official status as a bank holding company during the crisis last September, with the result being immediate and unlimited access to the Federal Reserve's discount window.  Ahhh, easy overnight cash, but at a stiff price you naturally assumed.  Not so fast, this is Government Sachs we are discussing.

Conversion to a bank holding company would normally require higher regulatory capital requirements, reduced leverage and less risk overall.  But again, not if you're Goldman Sachs.  In January, Blankfein requested an exemption from these pesky new requirements, and true to its capture, the Fed naturally granted the exemption, explained in this letter to Government Sachs dated February 5th.

Though it has since taken 5 months, and one corrupted, highly-suspect, taxpayer-assisted 2Q profit blowout for anyone in Congress to pay attention, we finally have some Congressional pushback worthy of mention. 

Not surprisingly, the push is being led by anti-bailout stalwart Rep. Alan Grayson of Florida.  On Monday (7-27), Grayson and several other members penned a polite missive to Fed Chairman Bernanke, questioning B-52 on the details of Goldman's various exemptions including that for VaR (Value-at-risk), which have allowed GS to play in both sandboxes.  Goldman receives all the funding benefits due a stable bank holding company, while pushing their market VaR to an all time high last quarter.

I've embedded both letters below. You might wish to contact Grayson directly, and let him know how you feel.

Grayson-Congressional Letter to Bernanke Regarding Goldman Sachs' Special Exemptions  7/27

The Fed's Affirmative Response To Goldman's Request For Special Exemption  2/05/09

Please help by emailing this article to a few friends.  Promoting much greater awareness is the only way we're ever going to beat the banksters and stop the heist.  Sending just 2 emails can make a tremendous difference.  Thank you!

Comments

[Ain't Bullshittin']

They CAN because "Turbo Timmayyyyy" and "B-52" say they can. There is your explaination in plain english. Just because B-52 posted the loss to his personal finances....does NOT make screwing the rest of us OK. Pitchforks, Torches, and the CONSTITUTION are my protection from these CROOKS.

[Angry Jones]

Go Grayson! These big business banking bastards - getting whatever they want - bending/changing every rule they come up against with the power of fear as their catalyst. As more people suffer (no, not the assholes who had to give up the golden toilets), while social programs are being cut hurting our most vulnerable citizens, THIS IS UNACCEPTABLE! !

[DailyBail]

Love the passion, Jones.

How are things going, AB?

[Ain't Bullshittin']

HVCC put me out of work as an appraiser. I can't work for 1/2 my normal fee. My costs to do business have not been cut in half....can't afford to spend 3500 a month and make 2000. Being an appraiser right now has GOT to be the worst job in the entire WORLD. Other than that.......going swimmingly.

[Ain't Bullshittin']

HVCC put me out of work as an appraiser. I can't work for 1/2 my normal fee. My costs to do business have not been cut in half....can't afford to spend 3500 a month and make 2000. Being an appraiser right now has GOT to be the worst job in the entire WORLD. Other than that.......going swimmingly.

[DailyBail]

Have you found something else to do...