NYT Speculates on Departure of Goldman Sachs’ Blankfein, Doesn’t Mention Levin’s Referral
The NYT has what I assume to be a bizarre form of beat sweetener on Goldman Sachs today. It spends most of 1,300 words speculating on who might replace CEO Lloyd Blankfein if he were to step down, exploring three possible candidates in depth.
But here’s the explanation for why they think such speculation appropriate:
Two friends of Mr. Blankfein, 56, say he has told them since last summer that he is exhausted from leading the company through the financial crisis and that he would consider stepping down when he could do so gracefully, without the move appearing to be anything but voluntary.
[snip]
To be sure, Mr. Blankfein may decide to stay a while, despite the chatter to the contrary. And as far as Goldman is concerned, Mr. Blankfein is not going anywhere. A spokesman for the firm, Lucas van Praag, declined to comment other than to note that Mr. Blankfein “says he has never felt so energetic and has no plans to retire.”
The NYT repeats that comment from the spokesperson without noting that its reliance on three sources “briefed on the situation” of discussions of Blankfein’s departure sort of contradicts that spin.
The most amazing part of the article, though, is the way in which it frames Blankfein’s possible departure in terms of an SEC probe settled a year ago. While it raises the Levin report on the causes of the financial crash, it somehow neglects to mention Levin’s announcement he was making a criminal referral to DOJ.
Roger Freeman, a financial analyst at Barclays Capital, said Mr. Blankfein might wait to see his firm through the final negotiations with Washington over new regulatory rules for the banking industry in the second half of 2011, before handing Goldman to a younger team in 2012. “This has been an exhausting period,” Mr. Freeman said. “It would not be a surprising time to see a change.”
As the economy stumbled, Goldman’s success brought harsh public criticism, as lawmakers and even some clients complained that Goldman was no longer putting clients first.
That argument gained strength after the Securities and Exchange Commission accused Goldman of fraud last April in connection with a mortgage security it had created and sold. Goldman settled the case last July, paying a penalty of $550 million.
While the firm is clearly doing well, the public ire persists, especially in Washington. On Wednesday, after issuing a report examining the roots of the financial crisis, Senator Carl Levin of Michigan was sharply critical of Goldman’s bet against housing. “Why would Goldman deny what was so obvious, that they were engaged in a huge short in the year 2007?” Senator Levin said. “Because they gained at the expense of their clients and they used abusive practices to do it.”
Hey, NYT? Here’s what Levin also said:
But Levin made clear he has bigger hopes for this examination: he sees the report as perhaps one last chance for U.S. prosecutors to finally reel in the big fish that has eluded them since the markets started melting down in 2007.Levin said he believes execs at Goldman (GS) crossed the line in trying to soft-pedal the extent of the firm’s bets against the staggering U.S. housing market as the credit bubble collapsed in 2006 and 2007.
The firm privately referred to these multibillion-dollar positions as “the big short,” the report indicates – showing, in Levin’s view, that Goldman did indeed have the systematic wager against U.S. housing that it has long denied. He said he was referring the case to the Justice Department and the Securities and Exchange Commission.
“In my judgment, Goldman clearly misled their clients and they misled Congress,” Levin told reporters on a conference call Wednesday morning before the report was released. [my emphasis]
Now, I assume a story like this is all about helping Goldman push Blankfein out as part of a deal it eventually will make with DOJ to persuade it to settle any investigation arising from the Levin referral. That is, this is all about supporting Goldman’s effort to make it look like Blankfein is leaving–if he does–on his own terms. And, in turn, supporting DOJ’s apparent fierce determination not to try any of the criminals who crashed our economy.
It’s just not clear why the NYT really thinks the story–lacking the crucial detail to explain why this might be news–is “news.”
I suspect you are correct on pushing him out. Of course, nobody will have to do justice in this, but for appearances he will find a way out.
As far as, the articles and their lack of everything pertinent that is just more proof they are an inferior product in today’s world. ;-)
I would assume that if Blankfein falls so would a whole long line of people at GS. The actions involved show,
That would not just include Blanfein in a criminal case.
I am not sure what GS would gain by having him depart right now. Either way, there is a long line of people at GS who knew what they were doing and that it was not legal. A fish rots from the head down.
Nothing will happen if he leaves, that just the way it is.
Since Blankfein announced in congressional hearings that he is ‘doing gods’ work’ – and then maintained that was correct under questioning – his stability is obviously a problem.
To the contrary, if he truly believed, what he did is the only thing he could do.
“Many are called but few are chosen.”
Doing gods’ work is rather a stretch for defrauding your customer base.
First of all, I am agnostic, with leanings somewhat towards the existence of a higher being…of sorts. Second, I would suggest that the references justifying any claim to doing god’s work are highly biased, making almost any interpretation possible, from someone like Blankfein (whom I despise) to Anthony DeMello, (whom I admire greatly). I am not saying that Blankfein is OK, at all, but recall the Inquisition, or, for that matter Corinthians 14:34 about women. All god’s work. Just ask them!
That this statement was on the record before a congressional hearings, it would seem even a MTU would have to refer to some real religious teachings. As far as I know, outright fraud isn’t condoned publicly by any religion known to everyone.
He probably re-defined fraud to do that, which is what the catholic Church had to do to justify killing during the Inquisition, or the silence during WWII over the “Final Solution” by Pope Pius. Humans have this tendency when faced with cognitive dissonance, which I believe is a big part of Blankfein’s process.
But I am no expert on Cognitive Dissonance. It came up in the long thread yesterday here at EW over the Michigan takeover of a town. I had to go back and re-acquaint myself with it’s meaning and how it is manifested. I have come to a very tentative conclusion with respect to CG and religion, hence my perspective on Blankfein.
It’s probably all wrong and I’ll go back to being simply agnostic!
but that’s the new religion, you know, rob from the poor to give to the hardworking rich. They really believe it’s god that’s given them their success and impoverished the multitudes.
As above to Starbuck, am not aware of any religion that publicly calls for fraud as gods’ work.
I’m just saying THEY believe it. I know some rich who don’t think any laws apply to them.
C Street sure believes it
The ruse of doing God’s work to defraud one’s base has proven highly successful for multi millionaire Televangelists for years now. s/
What the televangelist frauds usually preach is standard fare, though, not outright theft through fraud. imho
Well, tax evaison is considered fraud if I am not mistaken.
I don’t know if you recall Chuck Grassley opening an investigation into the finances of some of the top Telebangelists a few years ago.
Well, the mills of the gods(!) have ground slowly, but here’s the resulting product:
Grassley Concludes Senate Probe of ‘Prosperity’ Televangelists …Jan 7, 2011 … A Senate investigation into the spending of six televangelists concluded … ” The tax-exempt sector is so big that from time to time, …
http://www.christianpost.com/…/grassley-concludes-senate-probe-of-prosperity- televangelists-48383/ – Cached
Eric Holder: “We conducted a thorough, one-hour investigation (stopping only twice for breaks) and could find no evidence of wrongdoing. Nothing here. Move along…”
Start putting real screws to Blankfein, and no telling who gets dragged into the mix. (Hear that, Timmy?)
I suppose the NYT editors know better than we do that the Obama DOJ is never going after Wall Street.
Is that a fancy way of saying maybe they will start doing their job?
Thanks for the post empty.
apropos
U.S. Ranks Dead Last In Overall Social Spending
http://www.politicususa.com/en/u-s-ranks-dead-last-in-o…
This report from the OECD and The Business Insider, could not have come at a more crucial time in our national debate regarding the federal budget and the course the Republicans have chosen to take.
The conservative pundits are trying to frame this debate along the lines that the deficit and debt of the United States was created by the liberal, nanny state programs. This is an outright lie they have drummed into the heads of the American people. Unfortunately, some of the pundits are trusted sources of information for millions of people.
The United States currently ranks thirty-fourth(34th) out of the thirty-four(34) members of the OECD in regards to spending on social programs, DEAD LAST.
The amount the United States spends is currently only 7.2% of our gross domestic product on programs that make up our social contract with the American people.
all the MOTU control our money
Blankfein is a board member of the Robin Hood Society, dedicated to the needs of the poor in NYC.
(How’s that for irony,eh?)
REPORT: In 12 Years, Income For Richest 400 Americans Quadruples, Tax Rate Nearly Halved
http://thinkprogress.org/2011/04/18/tax-disparity-chart /
New data released by the IRS reveals that, over a period of 12 years, tax rates for the richest 400 Americans were effectively cut in half. In 1995, the richest 400 Americans paid, on average, 29.93% of their income in federal taxes. In 2007, the last year for which the IRS has released data, the richest 400 Americans paid just 16.63%
Robbing HOOD (hoodlum) more like it
That’s a good one!
BTW, it might be instructive to know just which god that Blankfein was referring to.Maybe his predecessor,Paulson?
Should Hank Paulson Be In Jail? | zero hedge26 posts – 23 authors – Last post: Dec 16, 2010
Hank Paulson almost certainly gave Bill Gross the green light to purchase GSE bonds, letting him know the backing would be made explicit(er? …
http://www.zerohedge.com/article/should-hank-paulson-be-jail – Cached
(This zerohedge piece is terrific,not long,with videos. Good stuff!)
Excerpt from Zero Hedge piece:
Sen. John McCain of Arizona … says he was misled by then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke. McCain said the pair assured him that the $700 billion Troubled Asset Relief Program would focus on what was seen as the cause of the financial crisis, the housing meltdown.
“Obviously, that didn’t happen,” McCain said in a meeting Thursday with The Republic’s Editorial Board, recounting his decision-making during the critical initial days of the fiscal crisis. “They decided to stabilize the Wall Street institutions, bail out (insurance giant) AIG, bail out Chrysler, bail out General Motors. . . . What they figured was that if they stabilized Wall Street – I guess it was trickle-down economics – that therefore Main Street would be fine.”
Even the New York Times called Paulson a liar in 2008:
“First [Paulson’s Department of Treasury] says it has to have $700 billion to buy back toxic mortgage-backed securities. Then, as Mr. Paulson divulged to The Times this week, it turns out that even before the bill passed the House, he told his staff to start drawing up a plan for capital injections. Fearing Congress’s reaction, he didn’t tell the Hill about his change of heart. Now, he’s shifted gears again, and is directing Treasury to use the money to force bank acquisitions. Sneaking in the tax break isn’t exactly confidence-inspiring, either.”
This is of particular relevance,imho:
In 2004, at the request of the major Wall Street investment houses—including Goldman Sachs, then headed by Paulson—the U.S. Securities and Exchange Commission agreed unanimously to release the major investment houses from the net capital rule, the requirement that their brokerages hold reserve capital that limited their leverage and risk exposure. The complaint put forth by the investment banks was of increasingly onerous regulatory requirements—in this case, not U.S. regulator oversight, but European Union regulation of the foreign operations of U.S. investment groups. In the immediate lead-up to the decision, EU regulators also acceded to U.S. pressure, and agreed not to scrutinize foreign firms’ reserve holdings if the SEC agreed to do so instead.
The 1999 Gramm-Leach-Bliley Act, however, put the parent holding company of each of the big American brokerages beyond SEC oversight. In order for the agreement to go ahead, the investment banks lobbied for a decision that would allow “voluntary” inspection of their parent and subsidiary holdings by the SEC.
(Hank Paulson,Wikipedia)
Just a little followup, if I may,to the aforementioned 2004 SEC unanimous agreement to release major investment houses from the net capital rule.
Two years later, in 2006, we have this:
http://www.businessweek.com/bwdaily/dnflash/may2006/nf2…
President George W. Bush has bestowed on his intelligence czar, John Negroponte, broad authority, in the name of national security, to excuse publicly traded companies from their usual accounting and securities-disclosure obligations. Notice of the development came in a brief entry in the Federal Register, dated May 5, 2006, that was opaque to the untrained eye.
Unbeknownst to almost all of Washington and the financial world, Bush and every other President since Jimmy Carter have had the authority to exempt companies working on certain top-secret defense projects from portions of the 1934 Securities Exchange Act. Administration officials told BusinessWeek that they believe this is the first time a President has ever delegated the authority to someone outside the Oval Office. It couldn’t be immediately determined whether any company has received a waiver under this provision.
The timing of Bush’s move is intriguing. On the same day the President signed the memo, Porter Goss resigned as director of the Central Intelligence Agency amid criticism of ineffectiveness and poor morale at the agency. Only six days later, on May 11, USA Today reported that the National Security Agency had obtained millions of calling records of ordinary citizens provided by three major U.S. phone companies. Negroponte oversees both the CIA and NSA in his role as the administration’s top intelligence official.
…
William McLucas, the Securities & Exchange Commission’s former enforcement chief, suggested that the ability to conceal financial information in the name of national security could lead some companies “to play fast and loose with their numbers.” McLucas, a partner at the law firm Wilmer Cutler Pickering Hale & Dorr in Washington, added: “It could be that you have a bunch of books and records out there that no one knows about.”
And coincidentally,according to David Cay Johnson in his article,”9 YouThings the Rich Don’t Want You to Know about Taxes”:
… during seven of the eight George W. Bush years, the IRS report on the top 400 taxpayers was labeled a state secret, a policy that the Obama administration overturned almost instantly after his inauguration.)
I thought that designation was too clever by half.
John McCain hasn’t cared about Main Street since he broke its windows while in a rit of fealous jage in high school. He and his hundred millionaire wife can’t remember how many houses they have.
Well, perhpas someone should remain him that those who now live in glass houses-or perhaps in his case-crystal palaces-shouldn’t throw stones?
However, I won’t cast any stones against him in this instance, if what he said was the truth.Apparently, there is no love lost between McCain and Paulson,acording to the article from which McCain’s upthread quote was excerpted. Here’s a bit more:
Sen. John McCain: I was misled on bailout
Dan Nowicki – Feb. 22, 2010
The Arizona Republic
Paulson, President George W. Bush’s Treasury secretary from 2006 to 2009, also is dishing out criticism of McCain, who on Sept. 24, 2008, temporarily suspended his ultimately unsuccessful presidential campaign to go to Capitol Hill to confront the economic crisis.
In his new book “On the Brink: Inside the Race to Stop the Collapse of the Global Financial System,” Paulson belittles McCain’s contribution to the response, noting that “when it came right down to it, (McCain) had little to say in the forum he himself had called.” He also called McCain’s decision to return to Washington, apparently without a plan, “impulsive and risky” and even “dangerous.”
McCain said Bush called him in off the campaign trail, saying a worldwide economic catastrophe was imminent and that he needed his help. “I don’t know of any American, when the president of the United States calls you and tells you something like that, who wouldn’t respond,” McCain said. “And I came back and tried to sit down and work with Republicans and say, ‘What can we do?’ ”
McCain last month voted against confirming Bernanke for a second term as Fed chairman, saying he should be held responsible for his contribution to the meltdown. Bernanke still won easy Senate approval.
Read more: http://www.azcentral.com/news/election/azelections/articles/2010/02/22/20100222mccain-tarp0222.html#ixzz1Ju9twG4b
Sorry, that should say that someone should remind him
What I don’t understand is, why would anyone ever again do business with GS?
Whether you’re a government agency, a business, a non-profit or an wealthy individual,
why would you let Blankfein and his sticky-fingered crony’s get their hands on your $$$?
But as GS’s Facebook fund-of-funds shows, greed makes some people blind.
greed + stupidity=catastrophe
Way Off Topic
sadlyyes,
I thought of you when I saw this
http://www.flickr.com/photos/33388783@N08/5603129967/
hahahahahaahaha
Republican budget includes overhaul of food stamps
(AP) – 1 hour ago
WASHINGTON (AP) — House Republicans resurrected a 1990s-era fight over food stamps in their budget approved last week, arguing that any serious attempt to cut spending must include an overhaul of government programs that help needy families pay for food.
Congress already has started cutting some food programs, including reducing the Women, Infants and Children Program by $500 million as part of a deal on this year’s budget. And last year, more than $2 billion in future funding for food stamps was redirected to other programs.
On Friday, the House approved a Republican proposal to overhaul the $65 billion food stamp program — known officially as the Supplemental Nutrition Assistance Program, or SNAP — by replacing it with capped block grants to states, which would pay for the aid but make it contingent on work or job training. That proposal was included in a 2012 budget plan put forward by Budget Committee Chairman Rep. Paul Ryan, R-Wis.
David Dayen has a fresh cross-post up: Besieged Misurata Residents Seek NATO Ground Troops for Libya
IRS Completed Only 13 High Wealth Audits in 18 Months
IRS Completed Only 13 High Wealth Audits in 18 Months
A special unit created in 2009 by the IRS to audit wealthy Americans with foreign assets has investigated only 13 tax returns to date.
The Global High Wealth Industry Group of the IRS audited two returns in fiscal year 2010 and 11 during the first six months of FY 2011, according to the Syracuse University’s Transactional Records Access Clearinghouse (TRAC) after reviewing IRS records obtained through the Freedom of Information Act.
TRAC also found that only 78 agents have been assigned to the new unit, compared to almost 5,600 agents working in rest of the Large Business and International Division, which also audits businesses with assets of $10 million or more.
An IRS spokesman disputed TRAC’s assessment, saying their analysis was “incorrect.” But the official did not offer any figures on how many audits had been performed by the new unit.
http://www.allgov.com/Controversies/ViewNews/IRS_Comple…
The biggest fraud perpetrated on a nation ever. A loss of wealth orchestrated by corporate financier’s driving the cost of energy through the roof (147.50 p/b/o) knowing full well the increase in energy cost and appurtenant increase in the cost of living would result in the default of mortgages which could not stand a dramatic increase in the cost of living. This ploy has been seen before and executed but never to this extent and without accountability.
GS knew that the American people would default when all those mortgages that looked good on paper crumbled when energy cost rose. They then insured the performance of the “MBS,” knowing full well AIG would have to pay….. The is a fraud. This is a market manipulation. This is corporate sodomy. Guess what? They are doing it again. No moral hazard here as America is again fleeced by slime in crime as the price of energy extracts liberty and life just as quicksand is unsuitable to pour footing and foundation for a house. GS, Moodys, S&P, AIG? No wonder why Jefferson thought theses bastards would be a greater threat to liberty than standing armies. They are. We have witnessed it and experienced it. Jefferson is, as usual spot on as the corporate interests continues to squeeze Americans, using the color of law to extract water from a desert rock, or blood from a slave! Unfortunately the government is more concerned with keeping Manning quiet and under wraps than it is with prosecuting and convicting corporate slime in corporate crime who have decimated a standard of living for Americans, while acting more like enablers, like silent Germans than protecting the rights of the governed or the welfare of a nation, gutted by a myopic amoral legal entity entitled, “Corporation.” Patriot Day! Sure!
hahahahahahaha BRAVO!
advertisement for local restaurant.
http://knox.villagesoup.com/business/offer/dining/the-w…
The Waterfront Restaurant is pleased to announce that this tax year it has paid more in U.S. taxes then General Electric.
We are absolutly delighted to be successful enough to be able to contribute to the United States defense and welfare and understand how in this difficult times a company like General Electric could be unable to contribute.
The Waterfront, serving meals, employing locals, using the local bank and paying our fair share for over 32 years.
If goldman sachs is looking for a successor to blankfien, why not just go internal and promote geithner?
Z
Heh… Good one.
Like this:
Am I Going to Have to Kill You?’: The Horrific Ways Abusive Debt Collectors Threaten and Harass Their Victims
In an economic downturn, some debt collectors have concluded that violating federal law is simply the cost of doing business.
All the news that fits, they print.
Right. Mid-fiftyish CEO’s of the world’s top investment banks – convinced they are doing God’s work – all casually step down as a consequence of frail government probes already completed and shelved.
Such reporting suggests that Rupert Murdoch bought the Times and not the WSJ.
I wonder if the Times printed this bit of gossip to appease its readers on the Upper East Side and Central Park West, and their spouses further south.
Tossing out one CEO, no doubt with the benefit of a platinum kiss goodbye, while leaving his minions and their peers in place in and outside the West Wing, the Treasury and the Federal Reserve, is not offering much of a scapegoat. Nor will it purge banking or government of any of their sins. It’s just shuffling a high priest with groping hands from one parish to another.
Who knew the theater season would be so busy this year?
It took a LOT of hard work to get so many players organized to pump housing prices as high as they got them in 2006. No wonder some might want to take a breather.
Wasn’t Blankfein one of Sorkin’s sources in Too Big to Fail?