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Senate Probes Banks for Fraud
They can run (or, rake in $3 billion in three months) but they can't hide. A Senate panel has subpoenaed financial institutions, including Goldman Sachs and Deutsche Bank, seeking evidence of fraud in last year's mortgage-market meltdown, sources tell The Wall Street Journal. The congressional investigation is focusing on whether emails and other internal communications reveal that bankers privately doubted whether the mortgage-related securities they were facilitating were as sound as their public reports suggested. Washington Mutual, now largely owned by J.P. Morgan Chase, has also been subpoenaed. The investigation is the latest in a series of moves by Congress to examine the roots of the economic meltdown. Spokesmen from the banks have yet to comment.
Plantagenet
Chris Dodd is head of the Senate Banking Committee. Is Dodd going to investigate himself for taking a special VIP cut-rate mortgage from Countrywide Savings & Loan back before the housing collapse?
daniel66
Dodd is getting spanked in the CT polls over this mess, this is probably a feeble attempt to boost his numbers.
Bulldoglover100
Dodd??? That's the best you can do? LOL Let's talk BUSH and his allowing the release of ALL checks and balances on this industry! Dodd? took a low rate home loan that 39 CONGRESSMEN, Repugs and Dems alike, took. The real cause of our country being in this position belongs to the Republicans and the uneducated who vote for them!
Slamlander
Actually, that can go back to Clinton as well.
missbike
'Scuse me Slamlander- it goes back to Ronald Reagan, who deregolated everything he could, left the budget in a horrible mess of red ink, and created that awful savings and loan scandal under Bush. The one his other son should be in prison for.
That didn't teach anyone a lesson, but no, it doesn't "reach back to Clinton". It's all 100% Republican DNA bad judge ment.
nickatdabeach
I'd suggest probing Barney Frank but I've heard from reliable sources that he'd really enjoy it.
cosanostradamus
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Hang 'em all! Let Gawd sort 'em out.
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Genni2002
Investigation...ooohhh... sure that this isn't meant as a joke? Pretty sure they will get to hide under the Senate's own huge Harry Potter's like invisibility cloak, kept around for finance and banking buddies in situations requiring that our rep's need to look like they are representing US. Mantra in the meantime: credit union, credit union, credit union....
bcaldwell
Good luck on this, Goldman, they may find is pretty much blameless in this debacle. They got into subprime late and missed the boat - they acquired Senderra in 2007 after the damage was done and actually started a loan modification program 2 years ago. Goldman gets a bad rap because they sit back and watch the other guys play and then comes in and feed off their mistakes.
Chase on the other hand has some explaining to do because they were neck deep in all of this as was Merrill Lynch(BOA)-might want to ask them about the First Franklin deal in 2006. Likewise, Chase is going to have to dig up the guys at Bear Stearns - if anyone can get Jimmy Cayne away from the Bridge table long enough.
For Chase, the WaMu deal will be interesting. they underwrote a lot of the MBS and they stand to gain a lot from the merger when they come out on the other side of this mess. But, lost in all of this is the role of international banking giant HSBC. One could say that their acquisition of Household in 2003 started this mess.
Also, whomever is on this committee might want to ask the Bear guys now at Chase what their role was in the helping to facilitate the crash of FNBA. That would be VERY interesting.
hockeydog
In actual fact, what we know is that Henry Paulson raked it in big time, and misused his office to favor Goldman. We also suspect that TurboTax Timmy G. slid in behind his mentor and continues the subterfuge.
We know that Goldman has profited mightily by the demise of their competition, and although we feel powerless to do anything about it, we recognize the fact that our Federal Government has been hijacked by your Wall Street buddies.
We recognize this mostly by the stench. Kind of like getting a whiff of a decaying corpse, but not knowing exactly where the body is hidden!!!
connie47
Isn't unrestrained capitalism wonderful?
Dikheadsed
It also seems that the 'goldman' boys are effectively operating the government into ground. I find old 'goldman' people involved in all aspects of the governments influencial positions making it very easy to direct policy... one even ran the NYfed before coming to power in the government.
I smell something, do you? Might be that corpse you where talking about..., or it might be a dead government being operated by corruption and greed. Smelly stuff.
We all must stand up and not take this. Spent within our means and save save save. Stop using credit cards and spending money that does not exist. Only buy what is proper for operating our home and life, and stop feeding this monkey.
sparky13
"There's something rotten in the senate, " was never so true !
Mixpixlix
The only way to fix what's rotten in the Senate (and rest of Congress) is term limits.
Hasn't anyone wondered why the President is term limited but members of Congress are not?
It would do them a lot of good to know they can't feed at the public then lobbyist teat forever.
b2brian
Damn right!
Picachu
Yes term limits are badly needed, along with meaningful campaign finance reform so you don't need a gazillion bucks to run for office. And then we need to run the lobbyists out of Washington. They can email and write letters and make phone calls just like the rest of us. They don't need to be glad handing congress while they shove money into their pockets and take congressmen on expensive junkets. I'm sure none of that affects any of the votes of our dedicated public servants.
This comment has been removed by The Daily Beast's editors.
Slamlander
Congress Critters really ought to watch the CNBC Special "House of Cards" by CNBC's David Faber.
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It appears the root of the problem goes back to the late 90's when the Clinton administration (as reported in the NY Times - September 30, 1999), in an attempt to expand the dream of home ownership to among minorities and low-income consumers, pressured Fannie Mae into expanding mortgage loans to borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans - sub prime loans
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Those in the States can use the link at http://www.mulliganteam.com/Blog/House-of-Cards-NBC-Special-State-of-the-Ho using-Market
There was no fraud, only a bunch of willing and greedy victims buying on the "bigger fool" theory. Goldman Sachs actually looks like a hero in some of this. The Congressional Investigation also needs to talk to Bernanke, whose job it is to detect a fraudulent bank and close them down.
This is political grandstanding and is more worthy of the Onion than TDB's cheat sheet.
smitisan
Oh lawdy, here's that old chestnut again. Look, people needed jobs, WalMart wanted to expand its empire, builders wanted to build homes, developers wanted to develop subdivisions, banks wanted to make lots of loans, and there wasn't anyone left to build homes and subdivisions for except the people working at WalMart. So what happens? Clinton gets the blame. Pllleeeease! And then talk about political grandstanding.
Slamlander
When did I ever blame Clinton? That was a quote from the website. The Times article hasn't been rebuked (It's accurate) either but also a claim that I didn't make. It may be an old chestnut but it still hasn't been cracked.
On the record, I never appreciated Bill Clinton until I watched Bush Jr foul the nest. I hated Clinton until I saw much worse. I'm one of those Republicans that voted for Obama. By George! Even Republicans have Centrists, amazing isn't it? I followed Powel through that door.
GPatton
It was one of the things Clinton did to keep from being kicked out of office. Had he not done favors like this all over the place, he would have been the first US President kicked out of office! Thank you William Jefferson Clinton!
smitisan
Laws-a-mercy, I'm talkin to trolls agin. When'm I evah gone lern?
missbike
What a short memory you have, fella. Reagan! Trashed every advance this country made, every lesson learned from the Great Depression... An actor has no business as president! No education, but great at selling snake oil! And you people are still floating along on the effects of Reagan Kool Aid, even though everything Jimmy Carter said has been proven true. We owe that man a huge apology.
exploora
It was predicted that the destruction of capital, from the inside, related to the movement of capital, will destroy the societies that capitalism built, due to the criminal insanity that was rumored to dominate financial institutions. I wonder who pays the millions needed to win campaigns? We are doomed. :(. Onions and lies make people cry.
Slamlander
I don't know about that. The Onion usually makes me laugh.
devilsadvocate
So they're finally going to be looking into the Treasury Departme......err....Goldman Sachs....err....Treasury.....errr Goldman?
mattbenzor
Its just another phony probe.They never find anything and thats what they want to do.Just make a "LOOK SEE" moment look see where doing something but actually doing nothing.Its just a bunch of bullcrap show.Now when people get go to jail then maybe they where serious
Joanne38
Stimulus Funds now to fund pornography? Can you believe how this government is wasting our taxes? It is getting more crazier every day. Obama has got to go before he destroys this country for good. What in heck is people thinking? Hell, we have to have somebody stand up and put a stop to his ideology. He needs a one way ticket back to Kenya or Indonesia and quick. Obama has spent $950,000 in campaign funds in the past year with election law firms in 12 states for legal resources to block disclosure of any of his "personal records." What has he got to hide? If anything is he suppose to spend campaign funds to hide his records that we should have knowledge of? Not to mention where are the ethics complaints? Did American donors give him this money to hide his records? Or, did his donations come from Americans? That is secret also. No one seems to want to get to the bottom of it. Why?
smitisan
Cheez, Joanne, if you're going to come here, learn some English.
Slamlander
says the pot to the kettle...
smitisan
Okay, Slam, I guess you got it in for me since my earlier post that was supposed to go under GPatton somehow got under yours instead, so it looked like I thought you were blaming Clinton instead of him. You might have figured that out had you done the math. But what is it exactly makes me the pot here? I have parsed the above sentence any number of ways and in a few languages, triangulated and diagrammed, cubed, hypercubed, and tessaracted it, but somehow my command of English is inadequate to discern the flaw. Guess I need to go give my Master's in Lit back.
GPatton
What these guys have done dwarfs anything Bernie Madoff ever thought of doing. Many BSDs from GS, etc. will be joining him soon. I'm lovin' it. George Patton
ConstitutionalRights
Lets demand that Barney Frank, Maxine Waters, Chris Dodd and anyone in Congress who had anything to do with the banking regulations and rules be investigated. I think you'll find the smoking gun under each of their pillows!!!
Slamlander
Yes but it is not actionable.
sharinlite
Until they drag Barney Frank and Chris Dodd in to seriously question and, the investment houses are completely checked out as well as the financial institutions, this is just bunk!!
Thank you.
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