Late last evening, Senator Carl Levin released a report of his investigation into the financial crisis entitled “Wall Street And The Financial Crisis: Anatomy Of A Financial Collapse.” The majority of the blame goes toward investment banks, particularly Goldman Sachs (described by Levin- no relation- as “a financial snake pit rife with greed, conflicts of interest, and wrongdoing”), as well as Deutsche Bank, whose former trader, Greg Lippmann (he of “I’m short your house” and sushi spreadsheet fame) gets a lot of airtime. Also criticized are the ratings agencies, who Levin says “weakened their standards as each compete to provide the most favorable rating to win business and greater market share.” To that end, the Senator from Michigan illustrates his point with a story about Standard & Poor’s and UBS. Continue reading »
Senator Carl Levin
Goldman Sachs is “a financial snake pit rife with greed, conflicts of interest, and wrongdoing,” Levin told reporters today.
The following post is by Dealbreaker reader and commenter Infinite Guest.
The e-mails from Goldman Sachs that Senator Carl Levin posted on his website Saturday, ahead of Tuesday’s hearing before the Permanent Subcommittee on Investigations, demonstrate, if anything, that late in 2007, as was widely reported in contemporary media, Lloyd Blankfein and others were rightly concerned by the firm’s mortgage exposure, and the continuing performance of their hedges. The e-mails themselves are not newsworthy. They are only news in the sense that a newsmaker, the senior Senator for Michigan, has presented them along with his office’s own peculiar narrative, at what appears to be, in light of the negative PR dogging Goldman Sachs, a politically opportune time. Nor do these e-mails contribute to our understanding of the financial crisis, nor do they offer any insight into preventing another crisis. Tuesday’s hearing itself, if the statements from Senator Levin’s office are any indication, is bound to be a waste of time. That’s too bad, because Senator Levin, a powerful man, an intelligent, well-connected and highly respected man, is uniquely positioned to understand and address mortgage failures: as Washington is to politics, Detroit is to subprime. Continue reading »
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