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Author Topic: " Deutsche Bank Also 'Victimized' Goldman 'Victim' "  (Read 1825 times)
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WhiskeyGirl
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« on: May 03, 2010, 04:14:53 PM »

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Goldman Sachs was not the only investment bank selling the complex securities that ultimately resulted in staggering losses for the German bank IKB Deutsche Industriebank. Traders at Deutsche Bank sold similar collateralized debt obligations (CDOs) -- built from credit protection on a portfolio of mortgage-backed securities selected in consultation with hedge fund manager John Paulson -- to the German bank. And like Goldman, Deutsche Bank didn't reveal Paulson's role in the construction of the CDOs. So far, the SEC has not charged Deutsche with fraud relating to these transactions.

The failure of Goldman to disclose the role of Paulson to buyers of a single synthetic CDO forms the heart of the fraud charges the Securities and Exchange Commission filed against Goldman earlier this month. Paulson's hedge fund, Paulson & Co, made billions of dollars by betting against portfolios of mortgage-backed securities, often by purchasing the short position in CDOs structured by large investment banks.

Two Deutsche Bank traders who requested anonymity say that Paulson's role, both in selecting a reference portfolio and in shorting it, was never disclosed to any customers taking the other side of the trade on CDO deals. In fact, they never told clients who was on the other side of a trade. The traders cited IKB as one of the customers who bought CDO trades for which Paulson & Co helped select the reference portfolios.

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Larry McDonald, author of the book on Lehman Brothers "A Colossal Failure of Common Sense," experienced the cowboy style of derivative bond trading first hand during this time. McDonald says, "Look: things were moving so fast on the trading desks at all banks during this time -- it was like the Wild West. We didn't have laws on most of these derivates trades. But just because everyone was doing it doesn't mean it passed an internal ethics check. I worked next to these guys. They knew what they were creating could be viewed as morally wrong, but there was no real law to stop it and the profits were so big."

http://www.theatlantic.com/business/archive/2010/04/deutsche-bank-also-victimized-goldman-victim/39471/

If derivatives and CDOs are like gambling, why do they do it?  Money?

Was this Clinton's deregulation?  No law?  A lawless market?

Gambling, and the house always wins?
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WhiskeyGirl
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« Reply #1 on: May 03, 2010, 04:20:44 PM »

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Germany is kicking away props of global recovery

Germans must realise their desire for a rich lifestyle will destroy everything the European Union had painstakingly constructed


The Germans are getting out of hand. First, they play a key role in causing the financial crisis. Then, just as the world starts to claw its way back to some kind of normality, they start kicking the props away.

This accusation is not about fighting the second world war again or inciting xenophobia, but a reality check on how those peace-loving, social-democratic Germans are selfishly jettisoning ailing European Union countries, starting with Greece, to maintain probably the richest, most all-embracing cradle-to-grave welfare state on the planet.

Who are these rich German's?  I know many who are native, non-immigrant and poor. 

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Alan Greenspan, while rightly discredited for much of his handling of the US economy, was correct to point out a few weeks ago that the crash was as much the fault of greedy investors as it was spivvy investment bankers and fraudulent US mortgage lenders. He said a herd of European investors in search of high-yielding bonds turned a normal property crash into a disaster. The Europeans he was referring to came largely from Germany.

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Some analysts believe the German government would happily live with a much-reduced EU of only the richest nations. It might work for a while, but all it will do is impoverish more people and make them resentful of German affluence.

After Angela Merkel's comment that the Athens government tricked its way into the EU, it will surely make throwing a German towel on a Greek island beach an act of war.

Contrast this with the US and an Obama admin that despises the US and is taking us on the one way road of debt and poverty.

In the US, we have to support Wall Streets lavish lifestyle.  Generational debt and theft.

more here - http://www.guardian.co.uk/commentisfree/2010/apr/29/germany-destroying-global-recovery

my opinions.

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It doesn't do any good to hate anyone,
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WhiskeyGirl
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« Reply #2 on: May 03, 2010, 04:36:39 PM »

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German and British banks both lost money because of the fraud, according to the SEC suit. The Royal Bank of Scotland Group Plc, majority-owned by U.K. taxpayers, unwound a position in Abacus bought by its ABN Amro unit by paying Goldman Sachs $840.9 million, the SEC said. Germany’s IKB Deutsche Industriebank AG lost nearly all of its $150 million investment in the CDO, according to the SEC.

more here - http://www.bloomberg.com/apps/news?pid=20601127&sid=a62lSQvORMQg

Why didn't Goldman take a haircut when AIG went under?
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It doesn't do any good to hate anyone,
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WhiskeyGirl
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« Reply #3 on: May 03, 2010, 05:12:26 PM »

Is big government in Washington, the job rotation, looking out for Main Street?

Who's looking out for the little guy that works each day, for small pay and just wants to feed his or her family?
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All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
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WhiskeyGirl
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« Reply #4 on: May 03, 2010, 08:14:35 PM »

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British taxpayers have a direct material interest in the outcome of the fraud case brought against Goldman Sachs by the US financial watchdog, the Securities and Exchange Commission.

Because the bulk of the loss on the transaction at the heart of the charge against Goldman ended up with Royal Bank of Scotland, the bank where British taxpayers have an 84% stake.

How the loss ended up with Royal Bank is quite a long story, which I'll summarise below.

But the material fact to dwell on for now is that on 7 August 2008, just before Royal Bank was semi-nationalised, it paid out $841m to Goldman Sachs to settle a claim on credit insurance provided by ABN, the Dutch bank which Royal Bank had acquired (or to be more precise, it had bought a big bad chunk of ABN in the autumn of 2007).

more here - http://www.bbc.co.uk/blogs/thereporters/robertpeston/2010/04/goldman_may_owe_british_taxpay.html
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All my posts are just my humble opinions.  Please take with a grain of salt.  Smile

It doesn't do any good to hate anyone,
they'll end up in your family anyway...
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