Tuesday morning in New York, the Goldman Sachs Senate Hearing opened as Goldman executives squirmed under harsh questioning from lawmakers. The Goldman Senate Hearing is here to talk to seven current and previous Goldman executives about possible Goldman Sachs fraud in last year’s financial meltdown. Goldman personalities set to appear including Lloyd Blankfien, head honcho, and Goldman Sachs fraud suspect “Fabulous” Fabrice Tourre.
Goldman Senate Hearing zingers
The Goldman Senate Hearing had scolding from members of Senate’s Permanent Subcommittee on Investigations. Some notable comments from committee members reported by Frank Ahrens at the Washington Post contain Sen. Claire McCaskill telling the group of Goldman Sachs execs “You are the bookie. You are the house. You had less oversight than a pit boss in Las Vegas.” McCaskill was talking about Goldman’s role in creating a 2007 investment seeking quick money by betting against a synthetic collateralized debt obligation (CDO) that was planning to fail. Referring to Goldman’s fee for setting up the bets, she asked them “What’s your vig?” “Vig,” short for vigorish, is a word used to describe the additional cash collected by a bookie for placing bets.
The Goldman Senate hearing was preceded on Monday by the release of incriminating documents by Sen. Carl Levin, D-Mich., who chairs the committee. CNN reports that the documents suggest that Goldman Sachs bet far more aggressively against the nation’s housing market and its own customers than originally believed, collecting a pay day of as much as $3.7 billion in the process.
The Goldman Sachs fraud was denied
The Goldman Senate Hearing is the latest chapter in a drama that all began with the sub-prime mortgage crisis, and was continued with the Securities and Exchange Commission accusing Goldman Sachs of fraud, and continuing with the release of incriminating e-mails from Goldman bond trader “Fabulous” Fabrice Tourre. Marketwatch.com said that testimony prepared for Blankfien’s appearance before the committee today denies Goldman Sachs fraud with claims that the CDO may look bad, but it fraud. Blankfien says that CDOs are too complicated for most people to understand, therefore the impression is that they are purposely created to confuse investors.
Tourre appears at Goldman Senate Hearing
The Goldman Senate Hearing was an opportunity for “Fabulous” Fabrice Tourre to publicly defend himself after being named as the focus of the SEC investigation into Goldman Sachs fraud. The charges were denied and he promised to fight them. He said he regretted writing emails to his girlfriend where he bragged about spinning an unsustainable web of risk to investors.
Resources for the article
Frank Ahrens at the Washington Post
http://voices.washingtonpost.com/economy-watch/
Marketwatch.com
http://www.marketwatch.com/story/goldman-ceo-abacus-cdo-looks-bad-but-isnt-fraud-2010-04-27
