So they are paying back some of the bail out money. Not exactly a fine, and the individuals responsible are not affected.
Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims
31–40 of 118 posts
Re: Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims
#32As a quick refresher, these guys sold CDOs that they knew weren't priced correctly, obfuscated the mispricing, and then profited on short positions against the securities. Took 7 years to settle for being straight up crooks. Still the Wild West out there.
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Re: Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims
#33Earlier quoted context omitted.
> that they knew weren't priced correctly Things are priced at what they will sell for. It's more that they were hiding information about the risk (which of course would have drastically lowered the value and the price people would be willing to pay). I think the difference is significant, however.
Can you expand on the significance of this difference? I guess you're asserting that the "correct price" is the one that someone will pay for it, and that something is only "incorrectly priced" if no one will buy it. But the point is precisely that no one would have bought these goods for the indicated price had GS not obfuscated what they were selling in the first place. It seems to me that you're really splitting h…
there's no difference.
they weren't priced correctly is a perfectly reasonable thing to say, and synonymous with they lied about their level of risk.
Re: Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims
#34Earlier quoted context omitted.
> that they knew weren't priced correctly Things are priced at what they will sell for. It's more that they were hiding information about the risk (which of course would have drastically lowered the value and the price people would be willing to pay). I think the difference is significant, however.
Can you expand on the significance of this difference? I guess you're asserting that the "correct price" is the one that someone will pay for it, and that something is only "incorrectly priced" if no one will buy it. But the point is precisely that no one would have bought these goods for the indicated price had GS not obfuscated what they were selling in the first place. It seems to me that you're really splitting h…
I think VeilEm is saying it was a bait-and-switch, or maybe false marketing.
If you pay me $50k for a BMW, and I deliver a Honda, the problem isn't that $50k is the wrong price for a BMW.
Re: Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims
#35So the company that was one of lead bad actors in a global crisis that wiped out lots of little folks gets - No execs (or anybody else) go to Jail Continues to do business as usual Pays a small fraction of its profits in fines (but gets to keep the multi-billions of tax-payer money under various govt. programs) Admits to no wrong doing Basically a speeding-ticket that gets dismissed when you pony up the cash after be…
And interestingly almost all politicians of all hue and color and with capacity to do something seem to be siding with them.
Re: Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims
#36As a quick refresher, these guys sold CDOs that they knew weren't priced correctly, obfuscated the mispricing, and then profited on short positions against the securities. Took 7 years to settle for being straight up crooks. Still the Wild West out there.
There should really be some way to punish the individuals responsible, even just a fine comparable to the bonuses they made, rather than just having their employer pay compensation while those responsible continue to get richer.
Is there a definitive list somewhere? If there was, a boycott could be organized.
Re: Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims
#37>The firm said it will pay a civil monetary penalty of $2.385 billion, a cash payment of $875 million and $1.8 billion in consumer relief Where is that $3.26 billion of cash going? I know you're going to say the SEC, the DOJ, or some other [combinations of] government entity. I get that. But then where does it go? It seems that people often forget that when this happens, there's still a human that sees a $3.26 billio…
Do you have a better idea? It sounds like you're trying to make a "taxes are theft" argument against fines for committing theft which is pretty hard to take seriously.
>Do you have a better idea?
I think almost any idea is a better idea than that.
>It sounds like you're trying to make a "taxes are theft" argument against fines for committing theft which is pretty hard to take seriously.
I'm not making an argument that taxes are theft. I'm really just trying to illustrate that while there may not be an institutional profit motive for governmental bureaus, there is a personal and/or professional profit motive for whoever gets to spend that money. A lot of young people seem to think that it's always better to have the government providing a service because "they care about more than just profit" or something similar.
Moving the money between a third-party contractor that provides a service bought by the government into the actual government itself doesn't necessarily mean anything good is going to happen. You don't have to look very far, either into the past or into the map, to see that; in many countries, the absolute richest people are politicians and bureaucrats.
It's a lot easier to fire a contractor that does a bad job than it is to replace a government bureau that does a bad job. I think it's important to convey that bureaucrats can and sometimes do still get a large amount of money, and that can affect their motives and decisions just as easily as it can for anyone else. These positions deserve scrutiny and oversight too. The people running the private sector are not that different from the people running public services.
Re: Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims
#38So the company that was one of lead bad actors in a global crisis that wiped out lots of little folks gets - No execs (or anybody else) go to Jail Continues to do business as usual Pays a small fraction of its profits in fines (but gets to keep the multi-billions of tax-payer money under various govt. programs) Admits to no wrong doing Basically a speeding-ticket that gets dismissed when you pony up the cash after be…
The fair and free market with level or shall I say leveled playing fields everybody.
Re: Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims
#39As a quick refresher, these guys sold CDOs that they knew weren't priced correctly, obfuscated the mispricing, and then profited on short positions against the securities. Took 7 years to settle for being straight up crooks. Still the Wild West out there.
> that they knew weren't priced correctly Things are priced at what they will sell for. It's more that they were hiding information about the risk (which of course would have drastically lowered the value and the price people would be willing to pay). I think the difference is significant, however.
They were hiding the risk, both from the purchases and the ratings agencies.
BUT - and this is pretty important - the ratings agencies were negligent in their rating methodology. Intelligent buyers could see the problems.
The book The Big Short covers this in some detail.
Re: Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims
#40Earlier quoted context omitted.
When the government bailed out AIG, everyone who was owed money by AIG got paid. Is there more to the story? We seem to revisit the crisis on HN. Someone should do a write up. We seem to rehash a lot of this. Basically , history just repeating itself. TARP, for example, being a loan: https://en.m.wikipedia.org/wiki/Troubled_Asset_Relief_Progra...
From the USA Today article above, along with this story here, it would seem that government bailed out AIG, which benefited Goldman and a lot of financial institutions that really should have been in a position to "know better", and be prepared to take the loss themselves, while Goldman will happily make sure small home-owners go bankrupt. Or put another way, government pays Goldman 12 Billion for not knowing their b…
The controversy at the time was that Goldman was given 100 cents on the dollar in the AIG bailout.. They should have had a significant haircut but were made completely whole with taxpayer money. Ugly all around.