Goldman Sachs vs the Fed? Yeah OK
And? The Fed is looking at the Goldman/Greece deal. Big whoop. Were the Fed to slap all of their collective balls on the table they still wouldn't have a pair amongst them as large as Goldman Sachs'. Sorry to say it. GS isn't afraid to perform their extensive manipulation maneuvers in broad daylight while the Fed operates in the darkness behind some obscure curtain of "independence" or whatever their argument is this week.
I vote the guy with the neckbeard gets (figuratively) teabagged if he even tries.
Federal Reserve Chairman Ben S. Bernanke said the U.S. central bank is reviewing derivatives contracts arranged between Goldman Sachs Group Inc. and investment banks with Greece.
“We are looking into a number of questions related to Goldman Sachs and other companies and their derivatives arrangements with Greece,” Bernanke said yesterday in testimony before the Senate Banking Committee in Washington.
Bernanke was responding to a question from Senator Christopher Dodd, a Connecticut Democrat, who asked if there should be limits on the use of credit default swaps to prevent “runs against governments.” Greek bonds slid yesterday amid concern the country’s credit ratings may be cut.
Would we like to guess what happens next? If Goldman Sachs chooses, it will admit no liability, accept some kind of "settlement", make a nice scene, cry "oh, oh no, please, don't cut off our self-regenerating, massive nuclear testicles" (for a great time, try "Matt Taibbi on Lloyd Blankfein's Balls" via Dealbreaker but WTF, you can't give me a headline like that and then not deliver a picture, DB) and then go about its business.
Goldman Sachs Settles with State Regulators and Offers to Repurchase Auction Rate Securities Sold to its Private Clients
August 21, 2008
New York, August 21, 2008 - The Goldman Sachs Group, Inc. (NYSE: GS) today announced that Goldman, Sachs & Co. has entered into a settlement in principle with the Office of the Attorney General of the State of New York and the Illinois Securities Department (on behalf of the North American Securities Administrators Association) regarding auction rate securities (ARS). Under the settlement, Goldman Sachs will offer to immediately repurchase at par the outstanding auction rate securities that are held by its Private Wealth Management clients and were purchased through the firm prior to February 11, 2008. Goldman Sachs has informed the Securities and Exchange Commission (SEC) of the agreement and intends to fully cooperate with the SEC’s ongoing investigation. The terms of the settlement include:
• Goldman Sachs will pay a $22.5 million penalty.
• Goldman Sachs neither admits nor denies allegations of wrongdoing.
• Effective immediately, Goldman Sachs will offer to repurchase at par approximately $1 billion of ARS still held by private clients that were purchased through the firm prior to February 11, 2008, with the exception of those ARS where auctions are clearing. Clients who are eligible for this offer include individuals, all charities and non-profits, and those businesses with accounts of $10 million or less. The firm will complete all buybacks no later than November 12, 2008.
• Goldman Sachs will compensate private clients who purchased ARS through the firm before February 11, 2008, and sold such securities at a loss between that date and the date of this announcement.
• To the extent that a private client has incurred consequential damages beyond the loss of liquidity in the private client’s holdings of ARS, Goldman Sachs will participate in a special arbitration process in which Goldman Sachs will be precluded from contesting liability from the sale of the ARS.
• Goldman Sachs will endeavor to continue to work with issuers and other interested parties, including regulatory and government entities, to expeditiously provide liquidity solutions for institutional investors.
• Goldman Sachs will refund financing fees that it received from all municipal ARS issuers that issued ARS in the primary market through Goldman Sachs between August 1, 2007 and February 11, 2008, and refinanced those securities after February 11, 2008.
Awww, isn't that sweet of them?
And on to the next carcass...