Apr 18

Goldman Says That Charges Are Nonsense & That It Lost $90m On Transaction

SEC, economy, politics 1 Comment »

Here’s Goldman’s latest press release on the subject of those SEC fraud charges.

‘We are disappointed that the SEC would bring this action related to a single transaction in the face of an extensive record which establishes that the accusations are unfounded in law and fact.

We want to emphasize the following four critical points which were missing from the SEC’s complaint.

• Goldman Sachs Lost Money On The Transaction. Goldman Sachs, itself, lost more than $90 million.  Our fee was $15 million.  We were subject to losses and we did not structure a portfolio that was designed to lose money.

• Extensive Disclosure Was Provided. IKB, a large German Bank and sophisticated CDO market participant and ACA Capital Management, the two investors, were provided extensive information about the underlying mortgage securities.  The risk associated with the securities was known to these investors, who were among the most sophisticated mortgage investors in the world. These investors also understood that a synthetic CDO transaction necessarily included both a long and short side.

• ACA, the Largest Investor, Selected The Portfolio. The portfolio of mortgage backed securities in this investment was selected by an independent and experienced portfolio selection agent after a series of discussions, including with Paulson & Co., which were entirely typical of these types of transactions.  ACA had the largest exposure to the transaction, investing $951 million.  It had an obligation and every incentive to select appropriate securities.

• Goldman Sachs Never Represented to ACA That Paulson Was Going To Be A Long Investor. The SEC’s complaint accuses the firm of fraud because it didn’t disclose to one party of the transaction who was on the other side of that transaction.  As normal business practice, market makers do not disclose the identities of a buyer to a seller and vice versa. Goldman Sachs never represented to ACA that Paulson was going to be a long investor.

Background

In 2006, Paulson & Co. indicated its interest in positioning itself for a decline in housing prices.  The firm structured a synthetic CDO through which Paulson benefited from a decline in the value of the underlying securities.  Those on the other side of the transaction, IKB and ACA Capital Management, the portfolio selection agent, would benefit from an increase in the value of the securities.  ACA had a long established track record as a CDO manager, having 26 separate transactions before the transaction.  Goldman Sachs retained a significant residual long risk position in the transaction

IKB, ACA and Paulson all provided their input regarding the composition of the underlying securities.  ACA ultimately and independently approved the selection of 90 Residential Mortgage Backed Securities, which it stood behind as the portfolio selection agent and the largest investor in the transaction.

The offering documents for the transaction included every underlying mortgage security.  The offering documents for each of these RMBS in turn disclosed the various categories of information required by the SEC, including detailed information concerning the mortgages held by the trust that issued the RMBS.

Any investor losses result from the overall negative performance of the entire sector, not because of which particular securities ended in the reference portfolio or how they were selected.

The transaction was not created as a way for Goldman Sachs to short the subprime market. To the contrary, Goldman Sachs’s substantial long position in the transaction lost money for the firm’.

For the article of origin go to Here In The City

reposted here by Francisco Martinez from www.RousTech.com MT4 Bridge and MAM Solutions for Banks and Brokers.

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Apr 05

Why Did the U.S. Treasury Delay its Currency Report?

CFTC, curencies, federal reserve, politics No Comments »

One of the biggest stories in the financial today was the Treasury’s decision over the weekend to delay their semi-annual Currency Report which was set to be released on April 15th. Twice a year, the Treasury looks at how countries around the world manage their exchange rates to decide if anyone has been manipulating their currency. As we mentioned on Friday, the outcome of this report is driven more by politics than economics. It is certainly not a coincidence that this delay comes ahead of a visit to Washington by Chinese President Hu Jintao. Although a few members of Congress may have hoped that the Treasury would officially brand China as a currency manipulator. It is no secret that China is artificially depressing the value of their currency, but to officially brand them as a currency manipulator could spark a more overt currency war. Instead, the Obama Administration has opted for a more conciliatory move to give the Chinese the flexibility that they need to revalue their currency on their own terms. With Treasury Secretary Geithner pledging to press Chinese leaders on currency revaluation during their meetings in June, it has become increasingly possible that China could concede by appreciating their currency. Delaying the currency report is a small price to pay to achieve the U.S.’ end goal of decreasing the competitive edge that China gets from a weak currency. China could even take it upon themselves to engineer praise instead of criticism in the upcoming meetings by proactively strengthening their currency – a strategy that they have used often. If China widens their trading band, it should have a negative impact on the U.S. dollar initially because it would imply that the country no longer needs to buy as many U.S. dollars to offset a rising Yuan.

More of the report Click Here

The Best MT4 Bridge/Mam Solution for Brokers and Banks

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Mar 08

Beijing studies severing peg to US dollar

news, politics No Comments »

China’s central bank chief laid the groundwork for an appreciation of the renminbi at the weekend when he described the current dollar peg as temporary, striking a more emollient tone after months of tough opposition in Beijing to a shift in exchange rate policy.

Zhou Xiaochuan, governor of the People’s Bank of China, gave the strongest hint yet from a senior official that China would abandon the unofficial dollar peg, in place since mid-2008. He said it was a “special” policy to weather the financial crisis.

for the rest of the story.

http://www.ft.com/cms/s/0/6cd3a766-2925-11df-972b-00144feabdc0.html

March 8 (Bloomberg) — Bloomberg’s Stephen Engle reports on People’s Bank of China monetary policy. Central bank governor Zhou Xiaochuan says the nation should be careful in exiting anti-crisis policies, suggesting that the government may not let the yuan appreciate soon against the dollar. (Source: Bloomberg)

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Feb 24

The Too greedy to fail have hijacked Washington…Gerald Celente

banking, economy, federal reserve, opinions, politics No Comments »

http://geraldcelentechannel.blogspot.com/

Reposted here by Francisco Martinez www.forextradingbank.com

Gerald Celente

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Feb 18

Keynesian Economics Is Wrong: Bigger Gov’t Is Not Stimulus

economy, federal reserve, news, opinions, politics No Comments »

Based on a theory known as Keynesianism, politicians are resuscitating the notion that more government spending can stimulate an economy. This mini-documentary produced by the Center for Freedom and Prosperity Foundation examines both theory and evidence and finds that allowing politicians to spend more money is not a recipe for better economic performance.

In this video the speaker mentions that hopefully the politicians will see that this type of stimulus is not a good idea and stop this. I am not so hopeful and trusting of politicians changing their stripes. Perhaps if their own bank accounts, salaries and retirement plans were reduced like the rest of us who deal with the results of poor economy then this will be the only thing that will cause them to face a new problem and do something about it… lets make our problem their problem. Hit them where it hurts, in their wallets and if they are sitting wait for them to get up so you can kick them their too.

Posted here by Francisco Martinez www.roustech.com MT4 Bridge and MAM and also new Dealing Desk Services for brokers and banks.

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Jan 31

Celente said “Bernanke is no genius”, and “Obama is like a coach or a pep rally leader when team is behind at half time”

banking, federal reserve, politics No Comments »

The big banks are laughing all the way to the bank after reappointing Bernanke.

Says ” no evidence that if these firms failed the world would have collapsed “, this said in reference to the big brokers and banks that were bailed out.

reposted here by Francisco Martinez www.forextradingbank.com and www.roustech.com

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Jan 29

“Washington guarantees Wall Street $US 4 trillion”

banking, federal reserve, news, politics 1 Comment »

The tax on banks proposed by Washington guarantees Wall Street $US 4 trillion which means top banks will keep playing the same game in the future, economic trend forecaster Gerald Celente warned.

Goldman Sachs is nothing more than a big hedge fund, period and paragraph. If they went under people dont have go to the ATM machine to get their money out of the Goldman Sachs bank, they do not have Goldman Sachs cheques, they are just fronting for Wall Street and all Wall Street is doing is gambling and their risks are covered by the American taxpayer, said Celente.

America was at its greatest when it was not about Wall Street but Main Street; when it was not about the Walmart but moms and pops and community; when it was not about factory farms but family farms. Everything in America has gone corporate, grieved the forecaster.

Celente concluded by saying, the merger of state and corporate powers, according to Mussolini, who knew a thing or two about it, is called fascism and fascism is coming to America.

Reposted here by Francisco Martinez www.RousTech.com Risk management services and software for Banks and Broker or Forex using MT4. Rous Mam and ECN Bridge.

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Jan 27

The Young Turks on President Obama

federal reserve, politics 1 Comment »

The FED Leadership is appointed, we don’t get to vote for them. So who is held responsible? Who did they give the money too? Tax payers have to pay back the FED for their bailing out their favorite institutions and they are telling us that they don’t have to tell us who they helped with money that we have to pay back?

The Young Turks Here

Reposted here by Francisco www.roustech.com. mt4 bridge, mam and dealing desk service solutions.

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