Published: Sunday 14 October 2012
Ever since Bill Clinton appointed Goldman honcho Robert Rubin to be his Treasury secretary, the firm has been the top corporate supporter of the Democrats, according to the authoritative Center for Responsive Politics.

Maybe I have been too harsh in judging Barack Obama’s economic performance. Instead of following George W. Bush’s lead in bailing out the bankers first, I wanted Obama to do more for beleaguered homeowners and less for the Wall Street swindlers who trafficked in toxic mortgages. But the president must have done something right, or the hucksters at Goldman Sachs wouldn’t hate him so. 

Ever since Bill Clinton appointed Goldman honcho Robert Rubin to be his Treasury secretary, the firm has been the top corporate supporter of the Democrats, according to the authoritative Center for Responsive Politics. And the investment paid off big time when Clinton followed Rubin’s lead and teamed up with congressional Republicans to reverse the sensible restraints on Wall Street that had kept the economy sound for six decades. Thanks to that decision, Goldman, a high-rolling investment house, was allowed to suddenly become a commercial bank and avail itself of the cheap money provided by the Federal Reserve to bail out troubled banks.

The financiers thought the fix was in once again when Obama turned to Rubin protégé Lawrence Summers as his key economic adviser in the 2008 campaign. Summers had replaced Rubin as Clinton’s Treasury secretary and had been even more vigorous in destroying the regulations that had maintained a stable financial system for 60 years. Wall Street turned against the GOP and its candidate John McCain, much preferring Obama. It should burnish the president’s reputation in the eyes of ordinary voters that those merchants of greed now feel so betrayed. 

As The Wall Street Journal reported Tuesday: “When Barack Obama ran for president in 2008, no major U.S. corporation did more to finance his campaign than Goldman Sachs Group Inc. This election, none has done more to defeat him.”

The high rollers at Goldman have given $900,000 to ...

Published: Monday 23 July 2012
“JPMorgan Chase & Co. (JPM), the largest U.S. lender, has the most units at 3,391, followed by Goldman Sachs Group Inc., Morgan Stanley and Bank of America Corp. (BAC) with more than 2,000 each, the study by the Federal Reserve Bank of New York shows. Citigroup Inc. (C), the third-largest lender, has 1,645.”

 

According to a report from the Federal Reserve, over the last two decades the nation’s biggest banks have created thousands of subsidiaries for the purpose of dodging taxes and regulation. As Bloomberg News reported, the most prolific user of these subsidiaries is JP Morgan Chase:

The biggest U.S. banks created more than 10,000 subsidiaries in the past 22 years as they expanded, using legal structures to pay lower taxes and escape tighter regulation, according to a Federal Reserve study.

JPMorgan Chase & Co. (JPM), the largest U.S. lender, has the most units at 3,391, followed by Goldman Sachs Group Inc., Morgan Stanley and Bank of America Corp. (BAC) with more than 2,000 each, the study by the Federal Reserve Bank of New York shows. Citigroup Inc. (C), the third-largest lender, has 1,645. [...]

The subsidiaries in the Fed study include the banks’ overseas units. For Morgan Stanley, Goldman Sachs (GS) and New York- based Citigroup, about half the legal entities are based outside the U.S. At JPMorgan and Charlotte, North Carolina-based Bank of America, the ratio drops to below a quarter.

The use of corporate tax havens costs the U.S. government about $60 billion annually. In order to make up for that lost revenue, the U.S. would have to charge every one of the nation’s small businesses $2,116.

It’s likely no coincidence that the banks most focused on investment ...

Published: Tuesday 22 May 2012
Though Corzine may be the most extreme example, he isn’t the only financial industry CEO whose pay is out-of-whack with the performance of the company he oversees

Jon Corzine, the former chief executive of bankrupt financial firm MF Global, received an $8 million pay package in the year his company plummeted into bankruptcy and faced a shortfall in customer funds totaling $1.6 billion.

Corzine resigned from the firm and turned down an $11 million severance package after MF Global filed for bankruptcy October, and he is not likely to realize the more than $5 million of his pay package that is tied to the firm’s now worthless stock. But he didn’t walk away empty-handed, the Wall Street Journal reports:

About $5.35 million of Mr. Corzine’s compensation came in the form of stock options, which are now worthless as a result of MF Global’s failure. Still, the former New Jersey governor and Goldman Sachs Group Inc. chairman got more than $3 million in cash compensation, including a $1.25 million bonus.

Though Corzine may be the most extreme example, he isn’t the only financial industry CEO whose pay is out-of-whack with the performance of the company he oversees. In 2011, Bank of America CEO Brian Moynihan made six times what he made in 2010 even as the bank’s stock price was cut in half. Goldman Sachs CEO Lloyd Blankfein’s pay increased 13.7 percent (to $19 million) in 2011, even as shareholder return declined 45.6 percent. Wells Fargo CEO John Stumpf received a 2.1 percent bump in pay (to $17.9 ...

Published: Thursday 3 May 2012
“The banks have been so successful weakening the rule that Volcker himself was disappointed in its outcome.”

Federal regulators in charge of writing the Volcker Rule, which would ban federally-insured financial institutions from risky proprietary trading, are moving at a faster pace than expected and could have the rule finalized by September.

Wall Street banks have been lobbying to weaken the rule since it was originally proposed by its namesake, former Federal Reserve Chairman Paul Volcker, and now that it is just months away from finalization, their efforts are getting stronger. The chief executives of six major Wall Street banks, led by JPMorgan Chase CEO Jamie Dimon, traveled to Washington yesterday to personally lobby the Federal Reserve on multiple issues — weakening the Volcker Rule chief among them — Bloomberg reports:

JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon led Wall Street bosses in a closed-door meeting to personally lobby the Federal Reserve about softening proposed reforms that might crimp their profits.

The contingent, which included Bank of America Corp.’s Brian T. Moynihan, 52, and Goldman Sachs Group Inc.’s Lloyd C. Blankfein, 57, pressed the Fed on rules they said would overstate trading risks and harm financial markets, the central bank said yesterday in a statement. They also discussed what they see as flaws in Fed stress tests designed to gauge the strength of the nation’s largest lenders.

Wall Street banks, with the help of Massachusetts Sen. Scott Brown (R), were able to water down the Volcker Rule even before it became law as part of ...

Published: Saturday 14 April 2012
“The SEC has the power to shut Goldman Sachs down for what it did, and the offenses it describes are felonies. But they just gave out another slap on the wrist - no, make that a pat on the wrist - with today's announcement.”

The sweetheart deals just keep coming. Lawbreakers at one bank after another are let off the hook as their shareholders write a check. And then they go out and repeat the illegal behavior they promised not to do in the last settlement.

It shouldn't be surprising that this keeps happening over at the SEC - especially as long as Robert Khuzami continues to serve as Director of the Commission's Division of Enforcement.

But while each of these deals has been shameful, destructive, and outrageous, the $22 million agreement with Goldman Sachs which the SEC announced today - another one in which the guilty party "neither confirms nor denies wrongdoing" - looks like the worst one yet.

The SEC has the power to shut Goldman Sachs down for what it did, and the offenses it describes are felonies. But they just gave out another slap on the wrist - no, make that a pat on the wrist - with today's announcement.

The Worst Thing

It's not just the fact that the SEC continues to ignore the public's outrage by letting bankers off scott-free. And it's not just that this kind of irresponsible behavior ensures that the law breaking will continue. Its not just that crooked bank executives are allowed to "neither admit nor deny wrongdoing."

It's not even the fact that this time around the SEC has worded its announcement in a clumsy attempt to obscure the criminal behavior of Goldman's employees - although that's one of this agreement's worst features.

No, what makes this deal the worst we've seen in a long while is the timing. Most of the other recent sweetheart deals dealt with crimes that led up to - and created - the 2008 financial crisis. But this time Goldman Sachs is walking away from crimes its bankers committed as recently as last year.

That's been the SEC's pattern under both the last ...

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