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Goldman Sachs’s Predations Redux

Goldman Sachs‘s Predations Redux

“The clear theme is that Goldman Sachs loves its clients with the same lip-smacking love that any predator has for incautious prey. If Blankfein is right that Goldman Sachs is doing God’s work it follows logically that God hates Goldman’s clients.” (quoted from William K. Black, New Economic Perspectives)

What kind of predation does Goldman Sachs engage in? Here’s a brief list from Black’s article:

1. Goldman used derivatives to help the Greek government hide its deficit;

2. Goldman was sued for assisting in Enron‘s control frauds which helped Enron avoid paying taxes;

3. Goldman helped spread the subprime mortgages fraud (under Hank Paulson‘s leadership) that led to the 2008 financial crisis and The Great Recession;

4. Goldman has had numerous regulatory actions and investigations that culminated in their paying $550 million to settle SEC charges in 2010;

5. Goldman settled with regulators and paid fines for illegal foreclosures and robo-signing forgery;

6. The FHFA had evidence of “pervasive” appraisal fraud by Goldman during its securitiations of subprime mortgages;

7. Goldman disregarded underwriting guidelines in order to increase profits;

8. Goldman purchased fraudulent mortgage originators’ loans and resold them to Fannie and Freddie;

9. Goldman leveraged information in its warehouse lending business to increase its profits;

10. Goldman forced lenders to repurchase defective loans that were still on Goldman’s books;

11. Goldman realized that the securitizations they had helped create were no longer safe and began to “short” the “junk” mortgages;

12. By shorting the market, Goldman profited from its clients’ losses;

13. Goldman knew about the devastation that its securitizations would inflict on the economy but, rather than warn everyone against the coming crisis in the mortgage market, it stayed quiet and profited enormously by shorting the market!

via Goldman Sachs: Information, Comments, Opinions and Facts: Goldman Sachs’s Predations Redux.