Arizona: Goldman Sachs

Posted by AzBlueMeanie:

Josh Kalven posts this timely piece as Congress considers new regulations for Wall Street -- let's begin with the repeal of the Gramm-Leach-Bliley Financial Services Modernization Act and return to the Glass-Steagall Act. (I have previously discussed this topic.) Ten Years After The Repeal Of Glass-Steagall:

This weeks mark ten years since the enactment of the Gramm-Leach-Bliley Financial Services Modernization Act. This piece of legislation repealed a Depression-era law known as Glass-Steagall, which segregated commercial and investment banks. By breaking down that wall, huge financial institutions were able to invest heavily in exotic "derivatives" that put the whole financial system -- not just their investors -- in peril.

Posted by AzBlueMeanie:

McClatchy News continues its investigative report on Goldman Sachs with part 4 of the series Why did blue-chip Goldman take a walk on subprime's wild side?:

Goldman Sachs was one of the last Wall Street giants to enter the subprime lending world, but when it did, it quickly climbed into bed with profligate, highflying firms — companies such as New Century Financial Corp.

In at least nine deals from 2002 to 2007, Goldman sold bonds backed by more than $5 billion of New Century's mortgages, one even after the California lender's underwriting criteria all but disintegrated and a cash squeeze paralyzed its operation.

Posted by AzBlueMeanie:

McClatchy News continues its investigative report on Goldman Sachs with part 2 of the series Goldman takes on new role: taking away people's homes:

Goldman Sachs spent years buying hundreds of thousands of subprime mortgages, many of them from some of the more unsavory lenders in the business, and packaging them into high-yield bonds. Now that the bottom has fallen out of that market, Goldman finds itself in a different role: as the big banker that takes homes away from folks such as the Beckers.

The couple alleges that Goldman declined for three years to confirm their suspicions that it had bought their mortgages from a subprime lender, even after they wrote to Goldman's then-Chief Executive Henry Paulson — later U.