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I doubt it will even be 100 million. The fed is gonna talk tough to impress the voters then slap Goldmans wrist. Goldman is too entrenched in the government for anything worthwhile to happen.
I think most people think the big issue with goldman and company actually bet against 'products' they devised and promoted. But this in itself is not illegal. Perhaps it is somewhat unethical but not illegal. Most people believe that when they buy or sell, the brokerage just facilitates the sale as a middleman. The truth is that the brokerage is on the other side of the trade in most cases. That is how they make most of their money on millions of incremental trades. In fact it is law that they must buy or sell when there are no other buyers or sellers on market order trades. The more trades you make the more money they make.
The real issue Goldman faces is the fraudulent assurance that the securities were independently verified as high quality. This in essence is what caused our financial meltdown in the first place. But for there to be successful prosecution in these cases there has to be found a 'smoking gun' connection found between the brokerage and whichever rating agency gave it's aaa stamp of approval. Once that happens pressure can be brought on underlings to role over on superiors who authorized payoffs to agency employees for there rubber stamps. It will probably be a long time before we see criminal charges faced by upper level brokerage management.
Well, it seems to me goldman sucks is in some real trouble. Allowing an outsider you knew was betting against a security to pick which items to pool together is pretty over the top.
BUT the bigger problem for goldman will come in the plethora of investor lawsuits to follow. As in everybody who bought a toxic mortgage backed security, who will be able to point to this lawsuit in their civil case.
Goldman understands this, that this lawsuit could very well trigger an avalanche of litigation which would push them to bankruptcy. Think about it, if you were goldman would you want a jury of twelve hearing the case between your firm and the school for the blind that invested millions of its trust fund in your products?
permanent_marker
2010 Apr 19, 6:30am
'Government Sachs" story explained in laymen terms:
You go to a car dealership to buy a car. They sell you a a FAULTY car without BRAKES, telling you it has passed 120-point inspection and the car is in top shape.
The minute you drive away, they buy 'insurance' betting your car will crash.
When your car does crash, the dealership cashes in the insurance.
So they made money off you twice:
- by selling you a lemon
- by making money when your lemon crashed.
Now imagine if this did happen in a realworld car dealership... the people will sieze to do business with them. And probably the cops will slap the cuffs on the scumbags.
I believe this investigation will seriously damage Goldman's reputation.
So how many people on the forum are genuinely happy that Goldman Sacks is getting fucked ? Their image is tarnished. This firm is the devil incarnate of the modern world. When someone said, that wall street is a wealth transfer mechanism from the main street to wall street, it was so true. They create nothing of real value.
On the flip side, you can be rest assured that nothing significant will come out of this case. Coldman sucks will pay 100 to 200 million dollar fine, without admitting any guilt. The french trader who created those exotic financial products will be barred from future activity in the investment business and things will continue their old ways. By the way the french trader is an MBA from Stanford which sits in PalofuckingAlto, another snobbish place inhabited by the scumbags of the world.