Organizations, Businesses (Ineractive: Muckety.com)
As reported by Reuters, the Senate Permanent Investigations subcommittee, chaired by Senator Carl Levin (D-Michigan) released a report today accusing investment
The report also condemned greed, weak regulation and conflicts of interest throughout the financial system.
No one was surprised. Despite the revelations and accusations in the 639-page report (proof that the financial suffering of the United States, if not the world, was created and manipulated by Wall Street), most people continued their day in a normal manner.
"Well, yeah; that's what these people do," said Ruby Stintmacher, 62, of Sedavia, Missouri, hanging out her laundry. "They [deleted] us. I gotta toothache and can't afford a dentist, but that Little Lloyd Blankfein -- he's got five houses. I'd like to hangin' him, instead of these sheets."
"All the unemployed people we got? It's just a more public show that we got a permanent underclass in America," said Stintmacher. "Ya gotta keep a certain percentage of people poor. Ya need a cheap labor pool -- except we just don't got no manufacturing base to put 'em to work."
Promp Amboy, a buoy maker in Witchita, Kansas, was more philosophical. "The way I see it, the bloodsucking parasites should be scraped off the skin of the country, along with their bourgeois fellow-travellers, and the wealth redistributed -- and if it takes a literal class war to do that, I'm all for it."
Bobby Thompson, 9, of Los Angeles, observed "My daddy says poor people suck and that we should invest heavily in shotguns now. This gonna be on teevee?"
Case studies from the go-go years of the real estate bubble formed the bulk of the report, which said a runaway mortgage securitization machine churned out abusive loans, toxic securities, and big fees for lenders and Wall Street.
It cited internal emails by Wall Street executives that described mortgage-backed securities underlying many collateralized debt obligations, or CDOs, as "crap" and "pigs."
It said Washington Mutual -- which became the largest failed bank in U.S. history in 2008 -- embraced a high-risk home loan strategy in 2005 while its own top executives were warning of a bubble that "will come back to haunt us"...
Mass downgrades of mortgage-related investments in July 2007 by Moody's and Standard & Poor's constituted "the most immediate cause of the financial crisis," it said.
Investment banks, it said, charged $1 million to $8 million in fees to construct, underwrite and sell a mortgage-backed security in the bubble, and $5 million to $10 million per CDO.
As for Goldman, the subcommittee said, the firm "used net short positions to benefit from the downturn in the mortgage market." It said Goldman designed, marketed, and sold CDOs in ways that created conflicts of interest with clients, while also at times providing the bank with profits "from the same products that caused substantial losses for its clients."
A spokesperson for Goldman said, "While we understand the feelings of many Americans over events in the markets of the past several years, we don't care. So sorry about you peasants." *
(* Note: No spokesperson for Goldman Sachs has made such a remark. It was not intended to be a factual statement, but to underline the main point of the post.)