Oct 31st 2011, 23:19:54
Citigroup 285 million
Goldman Sachs 550 million (http://www.sec.gov/news/press/2010/2010-59.htm)
JPMorgan 156 million (http://www.sec.gov/...s/press/2011/2011-131.htm)
In the case of JPM and GS they allowed outside hedge fund managers to select the sh*tty mortgages bundled together to make the CDOs (collaterized debt obligations). Those same hedge fund managers had hundreds of millions of dollars bet against the CDOs. The CDO packages (all backed by horribly risky mortgages) were sold as highly rated debt by the banks to pension funds and charity funds, among others. The banks selling the CDO investments hid the involvement of the hedge fund managers who helped put together the packages.
There was no way to know that the highly rated debt was bunk. It was not public that the sleezebags who created the CDOs had their money aligned against the buyers of the CDOs. Maybe within big banking circles it was known through connections - who knows.
I don't even know what kind of shinanigans these are comparable to.
But the crazy thing. Many of the CDOs were 'bet' against (I use that loosely) through the CDS mechanism (credit default swaps). The banks and hedge funds purchased the CDS as a form of insurance for in case a 'credit event' occured with the CDOs. A credit event is a loose term. The ISDA (Intl Swaps and Derivatives Ass.) determines if a credit event takes place. If a credit event takes place then the party that sold the CDS pays the buyers the face value of the derivative insured. Who composes this ISDA that determines if something is a credit event? Yea, go figure, the same banks that would make huge payoffs if a credit event occurs and triggers the CDS.
So the US government was responsible for many of the CDS because they held Fannie/Freddy. Fannie/Freddy were CDS brokers.
This is the biggest conflict of interest I've ever seen. Amazing. And how does it end? The banks get all their money back, the US govt gives them that money, and then they line their pockets with the biggest bonuses ever gifted. It's like giving everyone in the US a dirty guido. And what's the penalty? A few hundred million of fines.
And H4 claims that somehow 'buyers' are supposed to do their own research and find 'misstated and omitted key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.'?
Since when can a business misrepresent their product and then blame the buyer for not finding the information the seller hid?
Goldman Sachs 550 million (http://www.sec.gov/news/press/2010/2010-59.htm)
JPMorgan 156 million (http://www.sec.gov/...s/press/2011/2011-131.htm)
In the case of JPM and GS they allowed outside hedge fund managers to select the sh*tty mortgages bundled together to make the CDOs (collaterized debt obligations). Those same hedge fund managers had hundreds of millions of dollars bet against the CDOs. The CDO packages (all backed by horribly risky mortgages) were sold as highly rated debt by the banks to pension funds and charity funds, among others. The banks selling the CDO investments hid the involvement of the hedge fund managers who helped put together the packages.
There was no way to know that the highly rated debt was bunk. It was not public that the sleezebags who created the CDOs had their money aligned against the buyers of the CDOs. Maybe within big banking circles it was known through connections - who knows.
I don't even know what kind of shinanigans these are comparable to.
But the crazy thing. Many of the CDOs were 'bet' against (I use that loosely) through the CDS mechanism (credit default swaps). The banks and hedge funds purchased the CDS as a form of insurance for in case a 'credit event' occured with the CDOs. A credit event is a loose term. The ISDA (Intl Swaps and Derivatives Ass.) determines if a credit event takes place. If a credit event takes place then the party that sold the CDS pays the buyers the face value of the derivative insured. Who composes this ISDA that determines if something is a credit event? Yea, go figure, the same banks that would make huge payoffs if a credit event occurs and triggers the CDS.
So the US government was responsible for many of the CDS because they held Fannie/Freddy. Fannie/Freddy were CDS brokers.
This is the biggest conflict of interest I've ever seen. Amazing. And how does it end? The banks get all their money back, the US govt gives them that money, and then they line their pockets with the biggest bonuses ever gifted. It's like giving everyone in the US a dirty guido. And what's the penalty? A few hundred million of fines.
And H4 claims that somehow 'buyers' are supposed to do their own research and find 'misstated and omitted key facts about a financial product tied to subprime mortgages as the U.S. housing market was beginning to falter.'?
Since when can a business misrepresent their product and then blame the buyer for not finding the information the seller hid?