new Matt Taibbi article from RS.
reposted here but not on RS site yet.

http://forums.somethingawful.com/showthread.php?threadid=3159732&pagenumber=1

even if only half of it is true...

I can tell you, I think they pumped and dumped ethanol stocks in 2006 and refining stocks in 2007...crude oil at the top. Any fool knew corn ethanol was a disaster. And they pumped refining equities because they had a PE investment in the Coffeyville refinery.

This is a very interesting and sobering read.

Lesson to investors: must ask your financial adviser if they are betting against you in the investment they are selling you!

what's the old saying?
behind every good man there's a great woman...no, no, wait, i got it:
behind every good scam there's a goldman alum?

This isnt about individuals. This is about Goldman betting against their instituional clients.

yeah, basically goldman against everyone, especially their competition.

i like how they paid only $14 million in taxes last year but paid out about $10 BILLION in compensation and benefits that same year.

Compensation is an expense, and its all paid out so there is little profit left to tax haha.

I bought goldman a few months back. There is something to it.

Great article.

I think you should all get a grip on yourselves - GS is responsible for everything? How convenient! I'm not a fan of GS or other WS firms but in reality other firms were doing the same thing, specifically Morgan Stanley shorted mortgages also but it didn't work out as well for them as for GS. As far as peddling bad mortgages, other firms did more of that. As a matter of fact GS was quite conservative as to what mortgages they dealt in and had tighter underwriting standards than other WS firms. As to betting on mortgages crashing in 2007 - that was a different trading division - and please don't start telling me that they all speak to each other. If it was so clear that this or that product was going up or down, why don't you folks that write about how clear it was now, trade on that “crystal clear” info then? I'm GS aren't saints but the articles is a bit too much. It is human greed that causes these bubbles, and the participants are many, so chill out. Again, I’m no fan of GS and they are tough to deal with in doing business with them but so are the other WS firms – always looking out for themselves and ready to screw anyone but let’s not blame everything on GS, that’s just plain not intelligent.

GS is responsible for everything?

Without disputing their talented alumni's credentials. They have captured key gov't roles in disproportionate numbers.
http://online.wsj.com/article/SB124650487507784319.html

The board of the Federal Reserve Bank of New York is packed with powerful executives. But the selection process leading up to January's promotion of William Dudley to president underscored the lack of clout among the Fed's regional directors as the central bank navigated the crisis.

Mr. Dudley, a 56-year-old former Goldman Sachs Group Inc. economist who ran the New York Fed's markets division, got the top job after a two-month search, succeeding new Treasury Secretary Timothy Geithner.

Behind the scenes, the hiring process triggered concerns with some New York Fed directors, including General Electric Co. Chief Executive Jeff Immelt and PepsiCo Inc. CEO Indra Nooyi, according to people familiar with the situation. One reason: Mr. Geithner took an active role in recommending his successor, lobbying hard for Mr. Dudley and against other candidates, attendees said.

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

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.

and

http://en.wikipedia.org/wiki/Gary_Gensler

Gary Gensler is the chairman of the U.S. Commodity Futures Trading Commission under President Barack Obama.[1]

Gensler was Undersecretary of the Treasury (1999-2001) and Assistant Secretary of the Treasury (1997-1999) in the United States. Barack Obama selected him to lead the Commodity Futures Trading Commission, which has jurisdiction over $5 trillion in trades.[2] Gensler was sworn in on May 26, 2009.

[edit] Biography

After receiving a BS and an MBA from the Wharton School of the University of Pennsylvania, Gary Gensler spent 18 years at Goldman Sachs, making partner when he was 30, becoming head of the company’s fixed income and currency trading operations in Tokyo by the mid-’90s, and eventually the company’s co-head of finance.[3]

http://www.monkeybusinessblog.com/goldman_superheroes/

This isn't about individuals. This is about Goldman betting against their instituional clients.

Goldman had Hank Paulson on speed dial!

They took mortgages about to explode. Like a butcher grinding up rat meat and calling it AAA sirloin and selling it to Burger King. And then taking out an insurance policy from AIG to bet against the value of ground up Rat!

http://watch.bnn.ca/the-close/july-2009/the-close-july-2-2009/#clip189690

About how the ground up Rat's Ass fared...

http://money.cnn.com/2007/10/15/markets/junk_mortgages.fortune/index.htm

and about the guidelines...
http://www.secinfo.com/dScj2.v343.htm
First..
Mortgage loans are underwritten in accordance with Fremont's current
underwriting programs

But then....
It is
expected that a substantial portion of the Fremont mortgage loans may represent
such underwriting exceptions.

This is a great article. I have been doing some reading on the subject of market crashes, and I can recommend three books. 1) The Great Crash, this is a very informative and witty book. It is a great, fast read and the similarities between 1929 and 2008 are remarkable. 2) Devil Take the Hindmost, a history of financial speculation. I really enjoyed this book, and found the various ways that people get taken by speculative bubbles to be a refreshing reminder of how simple we are, making the same mistakes again and again. 3) 1907, which is a short, brisk read detailing the panic of 1907. It is a great story that demonstrates how quickly mass psychology can turn from euphoria to fear, and what the implications are when there are runs on banks

College Professor of mine reccomended this way back...
http://www.amazon.com/Manias-Panics-Crashes-Financial-Investment/dp/0471467146/ref=sr_1_1?ie=UTF8&s=books&qid=1246708993&sr=1-1

MichaelNYC:

As to betting on mortgages crashing in 2007 - that was a different trading division - and please don't start telling me that they all speak to each other.

________________

Please don't start telling me that this makes it ok.

Right now it seems that Cash and other "safe" investments are in favor. As usual, this is a reaction to events that occured in the past (the crash of 2008), which was the time to be in cash. I have no idea what the next bubble will be, but one aspect of the current market that I do like is the fact that investors who are willing do deploy cash are being compensated for their risk with historically high rates of returns on corporate debt (Fromm AAA to junk) as well as with munis, and even Buy America Bonds. Clearly there is risk in these investments, but I for one believe that the interest rates on these investments are actually generous compared to the risks being taken, at least in the case of AAA Corporate debt, Buy America Bonds, and other high quality, GO muni bonds.

mh23 is right on the bonds and, in the deflationary environment we could very possibly be entering, the high quality bonds could be the best bet.

As for Goldman being responsible for everything, that's definitely a bit far fetched. However, I was pretty amazed at learning just how many pies they have their part in baking and, needless to say, it is a bit strange.

It took much more than some artful manipulation and strategic positioning to get us to where we are, that's for sure. But, it sure didn't help us that GS had the ability to do as they pleased and profit from the folly of the general public.

I don't put our government or political system above pandering to the likes of their friends that help get them elected. It's a sad, fucked up game, that allows lined pockets to make decisions that might not be in the best interest of the general public.

Anger is rising by the general public at the ineptitude of their electorate and the greed of the big banks. Sure, the public is just as much to blame by buying homes they couldn't afford, maxing out credit cards, and buying SUVs and I, by no means, mean to absolve them of their responsibility. However, it still doesn't mean anyone likes getting taken advantage of for their vulnerability.

Change is coming, alright. Just not from the Washington...

MichaelNYC:

As to betting on mortgages crashing in 2007 - that was a different trading division - and please don't start telling me that they all speak to each other.

To think this wasn't hedging firm exposure is absurd. To think that a position that large would be done without talking to all the firms mortgage experts and not in consideration of the firm's large exposure to mortgage credit is beyond absurd!

but in reality other firms were doing the same thing, specifically Morgan Stanley shorted mortgages also but it didn't work out as well for them as for GS. As far as peddling bad mortgages, other firms did more of that. As a matter of fact GS was quite conservative as to what mortgages they dealt in and had tighter underwriting standards than other WS firms

1) more conservative-wrong. Goldman's GSAMP & GSAA shelf are performing as bad if not worse than anything done during that time
2) other firms did the same thing- true, but those firms didn't have hank paulson on speed dial to pay off their bets when the casino failed as well