Senate panel subpoenas institutions, including Goldman Sachs, Deutsche Bank...

[WhiskeyGirl]

WASHINGTON -- A Senate panel has subpoenaed financial institutions, including Goldman Sachs Group Inc. and Deutsche Bank AG, seeking evidence of fraud in last year's mortgage-market meltdown, according to people familiar with the situation.

The congressional investigation appears to focus on whether internal communications, such as email, show bankers had private doubts about whether mortgage-related securities they were putting together were as financially sound as their public pronouncements suggested. Collapsing values for many of those securities played a big role in precipitating last year's financial crisis.

Earlier this week, a bipartisan group of 10 members of Congress sent a letter to Federal Reserve Chairman Ben Bernanke, questioning whether Goldman Sachs is being too lightly regulated and too generously backed by taxpayers.

http://online.wsj.com/article/SB124890898142691729.html

I wonder if there asked for anything else?  Maybe these companies have internal and external reports?  File reports with a government agency?  Were they ever subject to an audit?  Internal?  External?  Anyone notice this business was going bad?  How could you promote a product and NOT know it was failing? 

Who was responsible for reports?  Outsourced to India or elsewhere?

[WhiskeyGirl]

"Dead Banks Walking"

The injection of free TARP funds enabled the recipient banks to enter a charred landscape that was, nevertheless, bristling with easy profits. For example, $10 billion of TARP funds enabled Goldman Sachs to make leveraged trades during the bear market rally of the last four months. Though this is the same activity that caused its downfall, Goldman now assumes a government guarantee on its risk-taking. With no limits on their appetite for risk, record profits are theirs for the taking.

Second, some of the shadow banks, such as Goldman Sachs and Morgan Stanley, were allowed to become bank holding companies. This change allowed them access to the Fed Window to borrow at zero percent interest. This greatly increased the profit margins of the banks day-to-day lending operations.

Third, the reduction of Fed rates to below one percent has steepened the yield curve, enabling banks to take six to eight percent plus spreads in lending to boost earnings.

Fourth, for the first time, the Fed is paying interest on bank reserves. This meant that all banks can borrow at zero and lend back to the Fed at an interest rate spread of some three percent, thus boosting earnings further. The downside is that banks are discouraged to lend to risky companies and individuals while they can lend at no risk to the Fed. Therefore, despite political pressure for banks to lend, credit remains tight.

With the great privileges listed above, and with the competitive landscape improved by the disappearance of Lehman Brothers and the absorption of Bear Stearns and Merrill, it is little wonder that the surviving banks earned more. A firm like Goldman Sachs, with its stellar earnings, is now effectively a hedge fund subsidized by taxpayers.

read more here - http://news.goldseek.com/JohnBrowne/1248934140.php

Borrow at zero and lend back at 3% plus?  How do I get a piece of this action? 

Does this make sense to anyone?  Are those profits really a pass through from taxpayers? 

Why would anyone lend to Main Street or The Donald, when they can make more from taxpayers?  Robbing Peter and Paul?

[WhiskeyGirl]

Isn't it possible that these banks got a clue over the past ten years?  No emails or written documentation to show or prove they knew something bad was happening?  Maybe they relied on 'verbal' communication?

Is anyone asking about the processes and procedure they had in place to ensure bad things didn't happen?  Was anyone in charge of analysis?  Taking a peek at the numbers?  Any one? 

Did they just run blind for years?

Are they a good investment for taxpayers, and capital from our government?

The financial meltdown didn't happen overnight...or maybe they just woke up one day and it was bad?

Who was guarding the chicken coop?

[WhiskeyGirl]

What details, reports, evidence did they use to claim their bonuses all these years?  Were they just bonus welfare?  Did anyone have to monitor and track their progress on key items of interest to the firm?  Profitability?  Performance?  Risk management?  Anyone subpoena the pay/performance records?