Goldman Sachs Blankfein Says He Wasn’t Asked to Take AIG Discount on Swaps
What a bombshell! Now we know the fix was in, Treasury did not even bother to offer a discount to AIG’s counter-parties. So it was a de facto bailout of Goldman Sachs among other firms and foreign banks visa-vi the U.S. taxpayer. What is even better about this bailout is that is didn’t fall under TARP restrictions, didn’t need to be paid back and Goldman will be paying huge bonuses this year with the taxpayers money.
Also, unlike the commercial banks, I doubt we would of went over the edge if they failed. Yes, investment banks are important and they make markets but we would of been able to survive without bailing them out. That’s capitalism, winner succeed and losers fail. I think Mr. Geithner will have some explaining to do if not having to resign over the fallout.
Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein testified that he was never asked by U.S. regulators to accept a discount on investment contracts his firm had with American International Group Inc.
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Cash for Clunkers FAQ or 101
Here is a FAQ on CNN Money about the Cash for Clunkers government program to get inefficient fueled vehicles off the roads. This does not sound like the most efficient use of taxpayer money but it has been approved so you might as well get some facts if your in the market for a new car purchase.
Cash for Clunkers FAQ (CNN Money):
The federal government’s new Cash for Clunkers program has caused a lot of excitement for consumers. It’s also caused plenty of confusion.
Buying a new car is a major financial commitment and you don’t want to get so carried away playing the Clunkers game that you lose sight of other big financial benefits you could stand to gain, with or without the government’s incentive.
Clunkers: Do I qualify?
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GMAC set to get an additional $7.5 billion in bailout next week
Surprise, surprise. Who would of thought that we would give more bailout money to GMAC (sarcasm)? Looks like GMAC needs another $7.5 billion in our hard earned tax dollars to provide low cost (or no cost) financing for more American made cars that people don’t want to buy.
If we are going to support our native automotive industry, it would be nice if we made them make cars and trucks are more viable in our current economic environment. What is even more interesting in this press release, is that our Treasury Secretary said that he thinks GMAC will need even more bailout in the future and he has determined we are ready to give it as needed…..period.
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Goldman Sachs raises $5.5 billion for pension and endowment asset purchases
Please bring your attention to the FACT that they will be purchasing assets from pensions and endowments with this $5.5 billion dollars. I would like to know if all the money came from private investors or company funds. First off, Goldman Sachs did take TARP bailout money so it makes me wonder if this is a hidden bailout for the pensions and endowments that were either steered or willing invested in pretty shady financial vehicles.
Or, is this what is to come, with the U.S. taxpayer bailing out all these banks, now they have this huge advantage by getting fresh cash from the Fed & Treasury because asset prices are so depressed. I would like to know more about what assets these funds are offloading. Something does not smell right here.
News (Bloomberg):
Goldman Sachs Group Inc. raised a fund with about $5.5 billion in capital commitments to buy private-equity assets on the secondary market from endowments and pensions that have been stung by losses.
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Bernanke says Fed has exit strategy from credit policy
Well I hope he will be able to keep his word on that. I think right now if all the loans were reigned in right now we would have a full collapse and I am not sure how we are going to write-off all these losses and still keep these banks in business?
News:
Federal Reserve Chairman Ben Bernanke on Friday said the Fed’s buying of longer-dated U.S. Treasuries would “taper off” when the economy no longer needed help, allowing the Fed to cease its emergency support.
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A.I.G. Reports 4Q Loss of $61.7 Billion as U.S. Gives More Bailout Aid
Wow, that just about sums it up. $61.7 billion loss in a single quarter. That is some major derivative exposure and losses. I can’t believe we are actually throwing money at this black-hole of liabilities. There will be outrage if we actually bailout all these unregulated insurance contracts out. It really makes me question why I am sending 1/3rd of my pay to our representatives that in turn have decided to reward greedy corrupt people, if save this flawed system, that is one thing. But, I want to see the board, executives, shareholders and bondholders get wiped out so I know they are not profiting from this mess and we are setting a precedent that will make the next lot think twice about running these types of practices. Here was the most scary statement of the whole article, “Although he avoided offering a forecast on the first quarter, Mr. Liddy said A.I.G.’s outlook was “very much going to be influenced by what happens to the condition of the economy and the financial marketplace around the globe.”” Well if I read this right, you have insurance that is tied to the markets going up when it looks like we are about to have Great Depression 2.0. When do this intervention stop and we let the markets sort this out?
News:
The loss of $22.95 a share compared with a fourth-quarter loss in the period a year ago of $5.3 billion or $2.08 a share. For the year, A.I.G. lost $99.3 billion or $37.84 a share, compared with a profit of $6.2 billion or $2.39 a share for 2007.
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Goldman Sachs’ Blankfein wants Mark-to-Market rule to stay put
We completely agree with Mr. Blankfein’s opinion. Just because people decided to overvalue assets to such excesses does not mean when things don’t go their way, we should abandon our accounting standards to preserve mal-investment. This just shows that our current banking system is in fact “insolvent” and we have resulted to jiggering with our accounting methods to keep these banks and other financial institutions from going bust.
We should make everyone come clean with their assets and liabilities ASAP and if you are solvent then we should assist them with taking over the good assets and if your insolvent, then your bond and shareholders takes the losses along with the bad assets. Yes, we should let bad banks go under. This is what will bring stability and confidence to the markets. We are just prolonging our crisis and making it worse trying to bailout bad banks that made bad decisions when they were GREEDY.
News:
Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein said the financial industry shouldn’t abandon the “mark-to-market” accounting rules that some banks blame for aggravating global economic woes.
The rules, which require banks to book profits or losses when asset values rise or fall, should be even more rigorous, Blankfein wrote in an op-ed piece published yesterday on the Financial Times’s Web site. New York-based Goldman’s adherence to the practice “was a key contributor to our decision to reduce risk relatively early” in the credit crisis, he wrote.
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