Video: We Will Remember

(H/T HotAir)

Sign the Pledge at We Will Remember.

Justice: Goldman Sachs sued by the SEC for the Meltdown of 2008

Finally, some justice to these bastards:

Via the NYT:

Goldman Sachs, which emerged relatively unscathed from the financial crisis, was accused of securities fraud in a civil suit filed Friday by the Securities and Exchange Commission, which claims the bank created and sold a mortgage investment that was secretly devised to fail.

The move marks the first time that regulators have taken action against a Wall Street deal that helped investors capitalize on the collapse of the housing market. Goldman itself profited by betting against the very mortgage investments that it sold to its customers.

The suit also named Fabrice Tourre, a vice president at Goldman who helped create and sell the investment.

In a statement, Goldman called the S.E.C. accusations “completely unfounded in law and fact” and said the firm would “vigorously contest them and defend the firm and its reputation.”

The instrument in the S.E.C. case, called Abacus 2007-AC1, was one of 25 deals that Goldman created so the bank and select clients could bet against the housing market. Those deals, which were the subject of an article in The New York Times in December, initially protected Goldman from losses when the mortgage market disintegrated and later yielded profits for the bank.

As the Abacus deal plunged in value, Goldman and a prominent hedge fund made money on their negative bets, while European investors like IKB and ABN Amro lost more than $1 billion, the S.E.C. said.

According to the complaint, Goldman created Abacus 2007-AC1 in February 2007, at the request of John A. Paulson, a prominent hedge fund manager who earned an estimated $3.7 billion in 2007 by correctly wagering that the housing bubble would burst.

Goldman let Mr. Paulson select mortgage bonds that he wanted to bet against — the ones he believed were most likely to lose value — and packaged those bonds into Abacus 2007-AC1, according to the S.E.C. complaint. Goldman then sold the Abacus deal to investors like foreign banks, pension funds, insurance companies and other hedge funds.

But the deck was stacked against the Abacus investors, the complaint contends, because the investment was filled with bonds chosen by Mr. Paulson, who is not named in the suit, as likely to default. Goldman told investors in Abacus marketing materials reviewed by The Times that the bonds would be chosen by an independent manager.

“The product was new and complex, but the deception and conflicts are old and simple,” Robert Khuzami, the director of the S.E.C.’s division of enforcement, said in a statement. “Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio, while telling other investors that the securities were selected by an independent, objective third party.”

In response Goldman Sachs says:

The SEC’s charges are completely unfounded in law and fact and we will vigorously contest them and defend the firm and its reputation.

Yeah, sure the accusations are unfounded. If I were a Goldman employee; I would be looking for a new job pronto.

From the SEC Press Release:

The SEC’s complaint alleges that after participating in the portfolio selection, Paulson & Co. effectively shorted the RMBS portfolio it helped select by entering into credit default swaps (CDS) with Goldman Sachs to buy protection on specific layers of the ABACUS capital structure. Given that financial short interest, Paulson & Co. had an economic incentive to select RMBS that it expected to experience credit events in the near future. Goldman Sachs did not disclose Paulson & Co.’s short position or its role in the collateral selection process in the term sheet, flip book, offering memorandum, or other marketing materials provided to investors.

The SEC alleges that Goldman Sachs Vice President Fabrice Tourre was principally responsible for ABACUS 2007-AC1. Tourre structured the transaction, prepared the marketing materials, and communicated directly with investors. Tourre allegedly knew of Paulson & Co.’s undisclosed short interest and role in the collateral selection process. In addition, he misled ACA into believing that Paulson & Co. invested approximately $200 million in the equity of ABACUS, indicating that Paulson & Co.’s interests in the collateral selection process were closely aligned with ACA’s interests. In reality, however, their interests were sharply conflicting.

According to the SEC’s complaint, the deal closed on April 26, 2007, and Paulson & Co. paid Goldman Sachs approximately $15 million for structuring and marketing ABACUS. By Oct. 24, 2007, 83 percent of the RMBS in the ABACUS portfolio had been downgraded and 17 percent were on negative watch. By Jan. 29, 2008, 99 percent of the portfolio had been downgraded.

Investors in the liabilities of ABACUS are alleged to have lost more than $1 billion.

The SEC’s complaint charges Goldman Sachs and Tourre with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b-5. The Commission seeks injunctive relief, disgorgement of profits, prejudgment interest, and financial penalties.

Allow me to humbly submit that I hope that these bastards get exactly what is coming to them. I mean, these guy literally gambled as the stock market and by proxy; our economy went straight into the toilet.   Many people that I know; like my parents, lost a good deal of money on this stuff. Not only that, after the credit crises hit; G.M. ended up having to shed a bunch of expenses; and as a result, my parents lost their optical and dental insurance. That came as a indirect result of this Wall Street mess. So, as far as I am concerned; throw the book at these bastards.

Capitalism is one thing, heartless greed is another; and these bastards crossed that line, big time. 😡


Video: Is the Stimulus Working?

This comes via R.S. McCain:

Video: America's Comeback

This Comes via The Other McCain:

Republican Governor’s Association HQ

The revolution starts today. What are you doing?

Obama announces spending freeze, Liberals heads explode

I am sure that you have already heard about President Obama’s proposed spending freeze.  I’m sure you also have read the reaction of the Blogosphere as well. To be blunt, the left is not happy at all. To see a representation of this, check out this video of Rachel Maddow going toe to toe with Biden’s economic guy.

Visit msnbc.com for breaking news, world news, and news about the economy

I have to give Rachel Maddow credit; She might be as left wing-dingy as a I am a right wing-dingy — But she sure as hell can make the Obama Administration explain themselves and defend their policies very well. So, I give her credit for that, she handled herself very well and did not give this guy a pass or go light on him. Color me quite impressed. Now, as for her politics, I disagree with it. Further more, the spending thing is nothing more than good political theater. See Rachel Maddow maintains that Obama would be pulling a Hover, sorry, that is just wrong. There are many things that have changed in way Wall Street and further more, the United States handles its affairs, since the big wall street crash of 1939 and the subsequent depression. Further more, it would help stop this out of control deficit that we have on our hands. Now, I will give her credit, she does rightly (Um, sorry, just a figure of speech) observe that this politically for the Obama Administration is a political blunder; because basically, Obama is doing what John McCain ran on in the 2008 election and lost. However, Obama’s guy explained that the cuts are not across the board. Hence my idea that it is nothing more than political slight of hand.

Further more, as much as I know this is going to make me sound like Pat Buchanan; (NTTAWT!) we need to repeal NAFTA and TAFTA and the rest of those Free Trade agreements with all these Countries. We need to go back to imposing tariffs on ALL imports from around the world. That would raise capital that our Nation so desperately needs. Now politically, that could cause us problems; but it would put a huge dent in our Nation’s debt to China. It would also encourage manufactures to build their products here in America, instead of overseas — and as an “America First” type of Conservative, that would make me extremely happy.  😀

Bottom Line: While Rachel might be good at interrogation, her hypothesis is just flat out wrong or at the least, overstated.

Are the Democrats jumping from the ship?

It is a plausible question, and an interesting one at that.  Are the Democrats now jumping from the bloated ship of socialist waste ever known to humankind?  Are Democrats preparing themselves for the “Nuclear Option” on healthcare?  The questions abound, the speculation is running rampant, and internet meme’s are burning up the bandwidth.  I, on the other hand, will tell you what I do know.

First off, let us start with the local story; Michigan Lt Governor John Cherry was expected to be the person to succeed Michigan Governor Jennifer Granholm at the helm of Michigan Governorship.  However, Democrat Governor Jennifer Granholm’s performance as Governor of this state has been less than stellar.  I ought to know this, I have lived here all of my life.  Double-digit unemployment, a one state recession that towered over the national recession for many years now; put quite bluntly, there are no jobs here in Michigan. Sure, there are jobs, if you want to work in a fast food joint, making minimum wage.  However, if you happen to be a 37-year-old man, looking for a decent paying, full time job, with health insurance — you are frankly out of luck.

However, to be fair, some of Michigan’s woes cannot be laid at the feet of the Democratic leadership.  GM’s credit crisis cannot be blamed entirely on the Democrats, at least not the current ones in office here in Michigan.  GM and Chrysler’s troubles are a direct result of the mortgage crisis, which was caused by President Jimmy Carter and President Bill Clinton and that idiotic piece of legislation that opened up the mortgage market to high-risk individuals.  When the credit markets froze up, due to the stock market crash and subsequent credit freeze, the big three found themselves in the middle of it.  This is my biggest issue that I have with the “Republicans” or those within the Conservative movement.  They always, without fail, blame the unions for the troubles of the big three; when in all honesty, unions had zero to do with the meltdown or its effect on the automakers.  The entire mess was, in fact, lack of proper regulation in the mortgage industry and the stock market in regards to credit swaps that caused this whole mess in the first place.  Sorry to my fellow Conservatives, but I am just not buying that talking point.

However, it would be fair to mention that the unions did play a role in the financial woes of the big three, as did the big three’s failure to listen to the automotive experts, who saw what Japan was doing in the 1970’s and their arrogant attitudes.  The big three could have saved themselves much heartache, by building smarter, higher quality vehicles.  However, by the time the big three got around to embracing the ISO standards, it was too little, too late.  As for the talking point of Union workers making too much money, I find it amazing how many Conservatives have axe to grind with those who simply want to make a decent working wage.  Most of the people that make these idiotic claims are those who are making more than two hundred and fifty thousand a year and have no financial worries at all; but they want to rip away the comfortable living of others.  Do you see now why I have not voted “Republican” yet?

Another point that I feel that is important to make, is the fact that the big three are just designing some of the most god-awful looking car nowadays.  Heck, even the trucks are now getting just plain butt-ugly.  Does it make any damned sense to build cars for every day Americans that look like they taken from the pages of a twenty fifth century comic book?  Whatever happened to graceful, classic designs from the 1950’s, 1960’s and 1970’s?  Those were real cars back then, now all the big three can produce is glorified garbage — and do not even get me started on the idea of an electric car, now that is a idea that is going to go right straight were the Chevy EV1 went, right straight into the scrap heap.

Now back on the subject of politics, it seems that Chris Dodd, going to retire.  Getting sweetheart deals on a house mortgage can do that to a fellow, especially when people in your district are losing their houses left and right.  I also notice that Bryon Dorgan is also retiring; he supported Obama’s healthcare plan, which made him damaged goods.  I also notice that Colorado Governor Bill Ritter is withdrawing from that race — corruption will do that to a fellow.

Now what is my personal take on these retirements and how it affects the 2010 elections?  My take is this; I believe that there are going to be some very big upsets come election time.  Now, I do not necessarily see a Republican wave or anything like that.  However, I do see a drastic change in Washington D.C.  I do also see a “defanging” of the socialist monster that exists on Capitol Hill right now.  As for the Governor’s race here in Michigan, I believe that the Republicans can win Michigan, but they are going to have to work to earn the trust of the American people.  It would take some very hard work and some massive breaking of some very established political rules to do it.  However it can be done.  The people of Michigan want real answers, real results, not political grandstanding, and platitudes.

It is going to be a very interesting 2010.  I look forward to writing about it and giving you my take.

Quote of the Day

Barack Obama ran for president as a man of the people, standing up to Wall Street as the global economy melted down in that fateful fall of 2008. He pushed a tax plan to soak the rich, ripped NAFTA for hurting the middle class and tore into John McCain for supporting a bankruptcy bill that sided with wealthy bankers “at the expense of hardworking Americans.” Obama may not have run to the left of Samuel Gompers or Cesar Chavez, but it's not like you saw him on the campaign trail flanked by bankers from Citigroup and Goldman Sachs. What inspired supporters who pushed him to his historic win was the sense that a genuine outsider was finally breaking into an exclusive club, that walls were being torn down, that things were, for lack of a better or more specific term, changing.

Then he got elected.

Hey America, Welcome to my World!

Just wanted to be nice about it.

Welcome to my World!

Via The Old Grey Lady:

The United States economy shed 190,000 jobs in October, and the unemployment rate reached a 26-year high of 10.2 percent, up from 9.8 percent in September, the Department of Labor said Friday in its monthly economic appraisal.

While the pace of job losses has slowed significantly since the peak of the recession last winter, the unemployment rate, which measures the number of people actively seeking work, continues to climb, and economists do not foresee relief until well into next year.

“There’s no doubt that the slashing and burning of jobs has abated quite a lot,” said Allen L. Sinai, the founder of Decision Economics, a research firm. “The economy is recovering, but it is a very soft recovery.”

The biggest losses came in the construction, manufacturing and retailing sectors. Health care companies added 29,000 jobs to their payrolls, and the number of temporary workers increased by 34,000 — a significant gain that could indicate employers are beginning to expand their businesses again.

The Labor Department also revised September’s losses to 219,000 from 263,000.

Dean Baker, a director for the Center for Economic and Policy Research, said he did not expect declining unemployment rates until next spring. “We may be looking at very high levels,” Mr. Baker said, “barring a policy response, for several years into the future.”

Um, Why should there be any policy response? I believe that we are already tapping our resources to the limit now.

On Thursday, in anticipation of the unemployment report, Congress overwhelmingly voted to extend benefits for jobless workers for up to 20 weeks. That will soothe the short-term financial pain of many families, but demands for a new wave of government relief may intensify if companies continue to cut back.

Yes, let’s encourage people NOT to look for a job and continue to spend ourselves into a hole; by being a nanny state.

So far, the federal stimulus package has injected billions into local economies, giving states money, for instance, to finance construction projects or retain teachers. The housing and auto sectors have been propped up with government credits meant to encourage spending. But weak consumer demand and hefty labor costs are still forcing many employers to cut positions and reduce hours to survive.

So much for Hope and change!

The article goes on trying to defend President Obama, which is so typical for the New York Times, but it is quite obvious, this President has failed on all fronts, the stimulus, the bailouts —- everything. He is, in fact, a black Jimmy Carter.

Ed Morrissey says:

This is now Obama’s economy.  He owns the double-digit unemployment level, having bought it with the $787 billion stimulus plan that he promised would keep unemployment no higher than 8%.

I agree with that. Obama simply continued the bailouts that President Bush started, which was a huge mistake.

The AP Reports:

But the loss of jobs last month exceeded economists’ estimates. It’s the 22nd straight month the U.S. economy has shed jobs, the longest on records dating back 70 years.

Counting those who have settled for part-time jobs or stopped looking for work, the unemployment rate would be 17.5 percent, the highest on records dating from 1994.

Now, if I were a partisan Blogger, I would simply sit here and blame Obama for it all. However, I am a bit more smarter than this. This all goes to Carter and then to Clinton. This video from the Wayne County Republicans will explain:

These unemployment numbers are just a ripple effect of all of this. Bush had a hand in it, as well as Obama. This is what happens when you elect faux Conservatives as Republicans and it is what happens when you elect Socialists.


Ron Paul on the Fed

(H/T to the Daily Paul)

Okay, I will be the first to admit it; I do NOT agree with Ron Paul on Foreign Policy.

But he sure makes a hell of a great deal of sense; when it comes to economic policy.

Here he is on Bloomberg TV:

While I personally believe some of his followers are a bit goofy. The man himself, is another story.

…and let me give this fair warning. First idiot that comes in here and leaves a stupid comment about me being a damn Neo-Conservative will get sent to the damn twit filter so fast, it will make your head swim. 😡

Guest Voice: It Is Going To Be A Rocky Road by Chuck Baldwin

Let’s face it: most Americans live in a world of false security. This is somewhat understandable, given the fact that the majority of the U.S. population was born after 1945. Few remember the dangers and hardships of World War II; fewer still remember the Great Depression. Few Americans know  what it’s like to not have some sort of “supercenter” nearby with shelves stocked with every kind of food imaginable, twenty-four hours a day. Few know what life was like before there were restaurants of all sizes and types on virtually every street corner in America. And only a handful remembers  when most roads were unpaved, or when sports were truly a pastime and not a megabuck obsession.

Modern living within the world’s only “superpower” has created a giant unsuspecting, soft, lackadaisical, and lethargic society. We expect the government to keep our streets safe, our roads paved, our stores stocked, our jobs secure, and our enemies at bay. However, in the desire to make government the panacea for all our problems, we have sold not only our independence, but also our virtue.

Where the federal government was contracted (via the U.S. Constitution) to accept limited power for the overall good of both states and people, it has become a monster of gargantuan proportions, claiming authority over virtually every liberty and right known to man. And in the process, it decided it didn’t need God, either.

It is no hyperbole to say that the U.S. federal government has been on a “Ban God” bandwagon for the past 50 years. Whether it kicks prayer and Bible reading out of school, bars military chaplains from praying in Jesus’ name,  burns Bibles in Iraq, removes state supreme court chief justices from their positions for posting the Ten Commandments, or threatens high school principals with jail for asking the blessing, the federal government has invoked the judgment of Heaven upon our country as surely as did Old Testament Israel.

Although the comfortable, sports-crazed, TV addicts probably aren’t paying attention, this country is on the verge of an implosion like you cannot believe. For anyone who cares to notice, the signs are everywhere.

First of all, Israel and Iran are on the verge of war. And right now, I’m not concentrating on the “why” or “who’s right or wrong” of the equation. I’m simply telling you, war between Israel and Iran could break out at any time. And when it does, the chances that it will not become nuclear and not become global are miniscule. Yes, I am saying it: the prospects for nuclear war have never been greater. The CBS-canceled TV show, JERICHO, could become   a reality in these United States in the very near future. (I strongly urge readers to purchase both seasons of JERICHO and watch them, because this could be our future.)

Secondly, America is on the verge of total financial collapse. By the end of this year, America’s budget deficit will stand at around $2 trillion. The debt gap is many trillions more than that. But the nail in the coffin for America’s fiscal health will be the decision by China to dump the U.S. dollar. Ladies and gentlemen, this will be the death knell for our financial stability (and a painful lesson in sowing and reaping).

It is estimated that China owns around one-third of all U.S. debt. If and when China dumps the U.S. dollar, there would be nothing left to stabilize it, and Weimar Republic/Zimbabwe-style inflation will ensue. America will be thrust into financial chaos. (If one doubts that China is planning to dump the dollar, consider that China is currently purchasing and stockpiling gold at an unprecedented level. This is why gold has suddenly surged to over $1,000 per ounce and why it will continue to rise.)

Third, the paranoia regarding the Swine Flu being demonstrated by both government and media spokesmen begs a giant push for some type of “government solution.” If they keep hyping this “pandemic,” mass hysteria and fear (created by the government and its lackeys in the media) will result. This would, no doubt, necessitate some form of forced vaccination, quarantine (maybe this is what all those internment camps will be used for), and martial law.

Exactly how and when all of the above will actually materialize is yet to be seen. There is no doubt in my mind, however, that within the next few months, the world that we know today is going to vanish. And most Americans are totally unprepared for what’s coming.

If you are able to get out of debt, do it. If you need to scale down your lifestyle in order to be better prepared for difficult days, do it. If you don’t have guns and ammo, buy them. If you have not prepared some sort of preserved food pantry, do it. If you don’t have some kind of survival plan in place for you and your family, get one. If you are not physically fit, get in shape. If you are able to move to a more secure, out-of-harm’s-way location, do it. (During any kind of financial or societal meltdown, urban areas will quickly turn into war zones. Can anyone say, “New Orleans after Hurricane Katrina”?) In other words, get your nose out of the boob tube, get your bottom off the easy chair, and get busy.

Am I worried or discouraged? Absolutely not! (But I am preparing.) The potential good that may result from all of the above is that perhaps God will protect and raise up a remnant of people who would be willing to rebuild a place where Natural Law is respected, constitutional government is revered, and where a ubiquitous, loathsome, overbearing federal government is far, far away. You know, like America’s Founding Fathers did 233 years ago.

In the meantime, get ready. It’s going to be a rocky road.

(Source)