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Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims

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Re: Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims

#111

Post by nl »

yummyfajitas wrote: post #78
nl wrote: post #69

Earlier quoted context omitted.

Please explain how they were "hiding" the risk. They mixed mortgages which were extremely unlikely to be repaid into packages with enough AAA rated mortgages so that they would meet the credit-rating agencies policy of rating mixed packages as AAA if a certain proportion were AAA. However, these bonds would be valueless if any of the securities that made them up defaulted. They sold the packaged bonds a AAA-rated sec…

They mixed mortgages which were extremely unlikely to be repaid into packages with enough AAA rated mortgages so that they would meet the credit-rating agencies policy of rating mixed packages as AAA if a certain proportion were AAA. There is no such thing as a AAA mortgage. AAA is a rating for bonds and other fixed income securities. However, these bonds would be valueless if any of the securities that made them up…

See footnote 5 and 6 in https://scholar.google.com.au/scholar?client=tablet-android-... and the diagram on pg 196 in https://books.google.com.au/books?id=jD-LAgAAQBAJ&pg=PA196&l...

Re: Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims

#112

Post by nl »

Lazare wrote: post #90
nl wrote: post #71

Earlier quoted context omitted.

RBS bought subprime mortgage backed securities - the same ones that were (mostly) created by Goldman[1]. RBS (along with most buyers) didn't realize that the AAA-rated securities they bought were actually subprime-backed (because of completely stupid rules by the ratings agencies, which Goldman exploited) When people suddenly discovered what a disaster these were, RBS wrote down £5.9bn, and was forced to seek additio…

Goldman did not invent CDOs, and they did not create the CDOs RBS purchased. (Also, what actually doomed RBS was overpaying for ABN Amro, but that's neither here nor there.) > But Goldman sure made money out of it. How? Exactly?

The sold the securities and shorted them at the same time.

Re: Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims

#114

Post by Laaw »

pak wrote: post #110
Laaw wrote: post #109

Earlier quoted context omitted.

What are you trying to prove, that it wasn't profitable? That the government's bank account was not a higher value higher after the bailout than it was before the bailout? Because that's a fact, and not an opinion. You seem to be equating a lot of "is" with "should", and I'm not dealing at all in the "should". It is a fact of this universe that the US government made a profit off of the bailout, not mater how many li…

> What are you trying to prove, that it wasn't profitable? I'm trying to tell you that your chosen definition of "profitable" is utterly meaningless in a discussion of economics, but you have completely closed your mind to this idea. You don't seem to understand inflation, interest rates, opportunity cost, or the difference between accounting profit and economic profit [1]. Therefore, I can't proceed with this conver…

I asked a question because I was unsure, and you behaved like a prime ass. You will continue to get responses like mine as long as you try to push a viewpoint as hard as you've been trying to here.

Re: Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims

#115

Post by pak »

Laaw wrote: post #114
pak wrote: post #110

Earlier quoted context omitted.

> What are you trying to prove, that it wasn't profitable? I'm trying to tell you that your chosen definition of "profitable" is utterly meaningless in a discussion of economics, but you have completely closed your mind to this idea. You don't seem to understand inflation, interest rates, opportunity cost, or the difference between accounting profit and economic profit [1]. Therefore, I can't proceed with this conver…

I asked a question because I was unsure, and you behaved like a prime ass. You will continue to get responses like mine as long as you try to push a viewpoint as hard as you've been trying to here.

I'm sorry you feel that way. You don't come off as unsure when you answer all your own questions and call these answers "undeniably true fact." But yes, I was more argumentative than I should have been. Best of luck to you.

Re: Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims

#116

Post by tn13 »

oceanstone wrote: post #41
tn13 wrote: post #35

Earlier quoted context omitted.

And interestingly almost all politicians of all hue and color and with capacity to do something seem to be siding with them.

Bernie Sanders wants to break up the banks that took bailout money, creating smaller banks that are no longer "too big to fail." What are people's thoughts on this proposal?

I am always opposed to government interfering into private businesses and I don't like think "I will break up big banks" attitude.

I would support a legislation that says no bailout money to any private company ever. If something is too big too fail the investors would shy away from investing into it.

Re: Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims

#117

Post by Laaw »

pak wrote: post #115
Laaw wrote: post #114

Earlier quoted context omitted.

I asked a question because I was unsure, and you behaved like a prime ass. You will continue to get responses like mine as long as you try to push a viewpoint as hard as you've been trying to here.

I'm sorry you feel that way. You don't come off as unsure when you answer all your own questions and call these answers "undeniably true fact." But yes, I was more argumentative than I should have been. Best of luck to you.

Thanks for the apology. I especially liked where you minimized your own fault and tried to blame your behavior on me.

Re: Goldman Sachs Will Pay $5B to Settle Financial-Crisis Claims

#118

Post by deciplex »

cookiecaper wrote: post #37
deciplex wrote: post #28

Earlier quoted context omitted.

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…

> I think almost any idea is a better idea than that.

Okay I'll take that as a "no", then.

Again, this is a fine, not even a tax. Whatever ethical considerations are bothering you about levying fines for corporate criminal behavior are not going to be addressed by handing over the fines to some third party instead, or whatever you're going on about.

Frankly, they could take the money collected from the fine and launch it into a heliocentric orbit, for all I care, because the primary aim of levying the fine in the first place i.e. as a punishment for criminal behavior is still achieved.

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