You will recall, no doubt, our puzzlement at the recent payment by Goldman to make “go-away” with this subprime business (in Massachusetts anyhow). We are even more puzzled now that Bloomberg is reporting how little Massachusetts Attorney General Martha Coakley had on Goldman:
The big news from Goldman and Massachusetts Attorney General Martha Coakley this week was a $60 million settlement, under which the investment bank resolved her office’s investigation into its packaging of mortgage securities backed by subprime home loans. Per the usual custom in such accords, Goldman didn’t admit any wrongdoing.
The odd part is that Coakley’s office didn’t accuse Goldman of any wrongdoing, either. It filed no lawsuit. And it made no allegations that Goldman had violated any statutes or rules.
Why did Goldman pay if Coakley’s investigators couldn’t identify any infractions to allege? That’s a mystery. The only statement I could squeeze out of Goldman was a one-liner from a P.R. man, Michael DuVally. “Goldman Sachs is pleased to have resolved this matter,” he said. I’ll bet it is.
The closest thing to an accusation Coakley could muster during a May 11 press conference was that Goldman “had played a role” in predatory lending in the state. Then again, so did a lot of other companies. By that standard, even local newspapers that printed the lenders’ ads might be in trouble.
Let’s just see here. Tax revenues crashing. Romneycare. Big social service infrastructure.
Now introduce Lloyd:
“Hey Martha! Got a deal for ya. You give us a waiver for any and all prosecutions arising out of this subprime business, really just a piece of paper, and I’ll give you a check for $60 million. Whatcha think?”
Sold!
Who do you think got the better end of this trade?
Goldman Pays Greenmail to Make Snoops Go Away [Bloomberg]
Despair not, Friends of Bernie. Checks are headed your way. At least, that’s the rumor. Yes, true, they might not be quite as large as you were expecting, or hoping, or wishing for, but a check is a check- but we post our checks from the phone company for lost quarters as soon as possible, so maybe our perspective isn’t perfect.
If you are still waiting, hang in there. The check’s in the mail.
Checks for about $30 million have been mailed out so far to individual victims of Bernard L. Madoff’s multibillion-dollar Ponzi scheme, according to the court-appointed trustee handling the case.
Those checks are part of $61.4 million already approved for payment by the Securities Investors Protection Corporation, the federally chartered agency which oversees the liquidation of brokerage firms. The total of approved claims is expected to reach $100 million by Memorial Day, the trustee said.
So far, the 125 claims that have been approved for payment add up to losses of $368 million, said Irving H. Picard, the trustee, in a news conference on Thursday.
Of the checks mailed so far, almost all were for $500,000, the maximum protection provided under the S.I.P.C. law.
$30 Million Paid to Madoff Victims [The New York Times]
Yes. (On the matter of Laura Pendergest-Holt cutting a deal to squeal. LPH plead not guilty to one count of conspiracy and one count of obstruction earlier today.)
Earlier: Is Stanford Financial A Ponzi Scheme?
So, you know the SEC? That regulatory body at the height of its game, which uncovers and cracks down on scams by reading about them in the Journal or other business publications, and then either responds or ignores them? You probably thought there was no room for improvement and, for the most part, you’re right. There’s just one tiny area the regulator could use some help, and then it’s not even going to be funny. You will hear the acronym SEC and spontaneously soil yourself in fear. It will be on.
[I] propose allocating additional resources to the following categories:
Trial lawyers: It is important that the Commission maximize the capacity and ability of its trial unit. Simply stated, we must convey to all defendants in SEC actions that not only do we assemble winning cases against them, but also we are prepared to go to trial and we will win. Only then can we expect to secure the type of settlements that both achieve justice for investors and save resources to be used in pursuing the next case. Without that credible threat, we are at a severe disadvantage. Our trial unit does an admirable job, but given the increased caseload, particularly the great increase in the number of emergency actions such as temporary restraining orders and asset freezes, it needs to grow.
In lieu of any interest from the Cochrans of the world, MareSchap is reportedly willing to settle for some Bob Loblaws.
Related: SEC To Make Up For Completely F*cking Up By Joining Twitter
Testimony Concerning Strengthening the SEC’s Vital Enforcement Responsibilities [SEC]
Green shoots or not, recovery is not quick or easy, at least if the survey by the Wall Street Journal bear any weight. (Or at least, bear more weight than the Administration). To wit:
Economists in the latest Wall Street Journal survey see an end to the recession by autumn, but say it will take years for the economy to fully recover.
“In general, I think it will be a subdued recovery,” said Paul Kasriel of The Northern Trust Corp.
On average, the 52 economists who participated in the survey project that the recession will end in August. They expect gross domestic product to contract 1.4% at a seasonally adjusted annualized pace in the current quarter, compared with the 6.1% drop recorded in the first quarter. Slow growth is expected to return by the third quarter, with the economy expanding more than 2% in the first half of 2010.
Guesses abound, and we aren’t particularly sure we believe anyone anymore. (Yes, we know, that’s very Taleb of us). Still, we are suspicious. Given the potential for downside, and the painful unemployment numbers that abound, it is hard to be bullish. But, then, we are permabears at heart.
Economists See Long Road to Recovery [The Wall Street Journal]
Layoffs are said to be going down for investment bankers at the House of Morgan circa now, so far apparently affecting Natural Resources and FIG. While this is deeply upsetting, given the ban on congratulatory plaques for deal teams, one might ask what’s the point of taking part in this racket anymore. More details as we get them.
Update: Associates in SLF (Syndicated & Leveraged Finance) added to the mix.
Our photog writes: This scene must have been created by God himself, for the Charlotte
haters on DB. A ten year old Lincoln Navigator with copious amounts of chrome, festooned with a NASCAR sticker on the rear window, parked outside of the Hearst Tower (where the BAC trading floor in Charlotte is located). The pièce de résistance is the vanity (NC) plate that reads “WALL $T”.
New York Attorney General Andrew Cuomo has just announced an agreement with The Carlyle Group, which includes a $20 million fine and Carlyle’s agreement to sign a “code of conduct” that would preclude, among other things, PE firm employees or employee family members from contributing to pension officials (within two years of doing biz with the pension).
No word yet on voluntary self-regulation when it comes to associate fashion.
Cuomo To Announce New Kickback Developments [PEHub Liveblog]
It should come as no surprise that what we have been pointing out all along- that the larger TARP recipients were strong-armed and the process was amateur hourish- is less than just a speculation anymore. *Duh* Not even to mention the imperial asston of arbitrary involved in deciding amounts required to “assure stability.” ($25, no, how about $10 billion to Goldman… we bet Bald does the New York Time crossword puzzle with a pen too. Now that we think of it, we don’t see Lloyd’s initials next to any of these handwritten corrections).
This should entirely change the tenor of discussions, and give the lie to the farce that was demonization of TARP participants by the likes of Barney Frank. Think for a minute how off the wall it is to repeat something like “Don’t like it? Don’t take government money” given the current offer-you-can’t-refuse “revelations.” Again, this should change the tenor of the discussion. But, of course, it probably won’t.
Finance is a convenient scapegoat for the political class. The conspicuous excess with which we have all comported ourselves (shamelessly in some cases) invites scrutiny when the boom times end. Not to mention the fact that the complexity of the business invites simple answers to difficult questions like: “How did you people fuck this up so badly?” In this context it should be unsurprising that the general public and its high school economics education feels qualified to assert that Greenspan’s self-defense arguments are bunk. How is it you expect to be immune from the scrutiny of the financially illiterate? (As an aside, do we think that constituency is concentrated more heavily in the backyard of Barney Frank, Barbara Boxer or Maxine Waters?)
Judicial Watch, the public interest group that investigates and prosecutes government corruption, announced today that it forced the Obama administration to release documents about the October 13, 2008, Treasury Department meeting that coerced major banks to allow the government to take $250 billion equity stakes. Among the other news, the documents confirm former Treasury Secretary Hank Paulson told the CEOs of nine major banks that they had no choice but to allow the government to take equity stakes in their institutions. The documents show Obama Treasury Secretary Tim Geithner, FDIC Chairman Shelia Blair, and Fed Chairman Ben Bernanke co-hosted the meeting with Paulson.
Judicial Watch Forces Release of Bank Bailout Documents [Judicial Watch via Clusterstock]
Free Viagra! So in the event a layoff you still have the ability to get off.
Pfizer Inc. says it will provide 70 of its most widely prescribed prescription drugs — including Lipitor and Viagra — for free to people who have lost their jobs and health insurance.
The world’s biggest drugmaker said Thursday it will give away the medicines for up to a year to Americans who lost jobs since Jan. 1 and have been on the Pfizer drug for three months or more.
The announcement comes amid massive job losses caused by the recession and a campaign in Washington to rein in health care costs and extend coverage. The move could earn Pfizer some goodwill in that debate after long being a target of critics of drug industry prices and sales practices.
In light of this generosity from the big-hearted people at Pfizer, are there any other companies we should lobby for free shit? Obviously there are a few that would go hand in hand with the love drugs.
Related: Free bouncy rides (that one’s safe for work, and you won’t be disappointed).
