Tuesday, April 20, 2010

Goldman Sachs in line for a small slap on the wrist?

It is evident that the economic crash wasn’t a crash for the people who caused it. While the 99% have suffered from the economic crash, the elite 1 per centers that caused it have benefited disgustingly disproportionately.

Goldman Sachs executives are enduring a well-deserved barrage of questions from the investment community and reporters for its role in creating a complex mortgage security which prompted federal fraud charges against the company. Last week, the SEC filed a civil suit against Goldman, alleging that the New York City-based company allowed hedge fund Paulson & Co., who made billions of dollars betting against the U.S. mortgage market, to help select securities in a so-called collateralized debt obligation, or CDO. The SEC also charged Goldman with failing to tell investors that Paulson was betting that the value of the investment would decline. According to the SEC, investors in the security ultimately lost $1 billion. Conspicuously absent from the two conference calls was Goldman Sachs CEO Lloyd Blankfein, who has been under intense scrutiny in recent months on a number of issues -- including the firm's employee bonus program.

Oh and did I mention, that courtesy of the tax payer bailout, Goldman Sachs just had their most profitable quarter in their 140-year history? ---And last year, in recognition, Goldman Sachs paid only 1% in taxes!

Prediction: Goldman Sachs will get away with a slap on the wrist (just like Ken Lewis from Bank of America, and John Thain of Merrill got away with their investor fraud case).  Crossing the line without breaking the letter of the law is an art perfected by these firms and their armies of lawyers.

Friday, April 09, 2010

Bernanke warns on higher taxes and/or Medicare and Social Security entitlement

Federal Reserve Chairman Ben S. Bernanke has warned that Americans may have to accept higher taxes or changes in cherished entitlements such as Medicare and Social Security if the nation is to avoid staggering budget deficits that threaten to choke off economic growth.

"To avoid large and ultimately unsustainable budget deficits, the nation will ultimately have to choose among higher taxes, modifications to entitlement programs such as Social Security and Medicare, less spending on everything else from education to defense, or some combination of the above," he said.

His remarks highlighted the difficulties posed by funding these entitlement programs over the long term. With the population aging and medical costs rising faster than inflation, Medicare is set to become a major drain on the federal budget in the coming decades, though the recently passed health-care bill has delayed the date when the program will begin to require big infusions of cash.