"If These Allegations Are Correct, It Appears To Have Been A Direct Transfer Of Wealth From The United States Treasury To Goldman Sachs Shareholders": Josh Rosner

Our favorite quotes so far from today's FCIC report and reaction from analysts...

• "Less than a 3 percent drop in asset values could wipe out a firm." - FCIC Report

• "The AIG counterparty bailout, which was spun as necessary to protect the public, seems to have protected the institution at the expense of the public." - Josh Rosner

• "The total was for proprietary trades," the report asserts. "Unlike the $14 billion received from AIG on trades in which Goldman owed the money to its own counterparties, this $2.9 billion was retained by Goldman."

• "At the time, the idea was the sucker could go down because there wasn't enough liquidity in the system, money wasn't moving, and you could see a domino effect," said Ann Rutledge, a principal at R&R Consulting in New York, which specializes in structured finance.  In reality, she contends, those fears were overblown: There was ample money in the financial system.  Rather, individual institutions did not have enough cash on hand to survive their losses, she asserts. But the fear of a broader liquidity crisis was used as justification for what now appears to have been a backdoor means of bailing out Goldman, said Rutledge.

• The details in the commission's report leave Goldman "naked," she added. "It doesn't have the fig leaf of a systemic risk argument. Normally what happens when you have a sophisticated institution that's doing stupid credit stuff is you let them eat it, but that didn't happen in the bailout."

• "If these allegations are correct, it appears to have been a direct transfer of wealth from the Treasury to Goldman's shareholders." - Josh Rosner

---

Quotes come from the following stories...

• BOMBSHELL REPORT: Goldman Sachs Got Billions From Taxpayers Thru AIG For Its OWN Account, Crisis Panel Finds; Contradicting SWORN Testimony From Execs

• "Less Than A 3 Percent Drop In Asset Values Could Wipe Out Wall Street" - Crisis Panel Says In Final Report

Comments

[john]

Bill Clinton: I'm Skeptical That Goldman Sachs Violated The Law

http://www.huffingtonpost.com/2010/04/29/bill-clinton-im-skeptical_n_557085.html

[snip]

Former President Bill Clinton said he's skeptical that Goldman Sachs Group Inc. broke the law, while adding that the U.S. government's lawsuit against the firm underscores the growth of financial transactions with "no underlying merit."

[john]

Oh yea Bill?

Mukasey Declines to Create a U.S. Task Force to Investigate Mortgage Fraud

http://www.nytimes.com/2008/06/06/business/06justice.html?adxnnl=1&adxnnlx=1296162581-YVOEcPmB7Wbr1uvN1aM9hw

[john]

flashback:

Geithner enlists lobbyist as top aide

http://www.politico.com/news/stories/0109/18047.html

[snip]... if anyone wonders why i use brackets, its because it reminds me of a sledgehammer.......


Newly installed Treasury Secretary Timothy Geithner issued new rules Tuesday restricting contacts with lobbyists – and then hired one to be his top aide.

Mark Patterson, a former advocate for Goldman Sachs, will serve as chief of staff to Geithner as the Treasury Department revamps the Wall Street bailout program that sent an infusion of cash to his former employer.

[john]

Ahem... Mr. Holder.

US Trustee Takes Interest In "Tah Dah" Documents Mysteriously Appearing In Foreclosures .

http://stopforeclosurefraud.com/2011/01/27/us-bankruptcy-trustee-takes-interest-in-%e2%80%9cta-dah%e2%80%9d-documents-mysteriously-appearing-in-foreclosures-aka-probable-fabrications/

Comment: Must be "Gods" work.