New York Attorney General Andrew Cuomo is riding his knight's charger. This time he's pointing his lance at the Wall Street investment houses who have given the world markets the mess of pottage we know as the subprime loan crisis. Crusader Cuomo is using his subpoena powers to force these Moneybags to tell the whole truth under law about their role in slicing and dicing and packaging and recyclying risky mortgage related securities to investors, the total amount of which some put well near a half-trillion American dollars. Already such houses as Goldman Sachs, Merrill Lynch, UBS, etc. are writing off billions, and year end balance sheets are looking anemic even though the first seven months of fiscal year 2007 are bright. The biggest culprit is Goldman Sachs which knew that the housing bubble would burst, began not putting its own monies into such financial interests, but out of utter lust for profit, continued salami slicing subprime instruments and farming them out to eager banks looking for 20 to 30 per cent returns. And now Goldman is under the baleful eye of scrutiny, and as a Wall Street hand put it, 'greedy, they violated a prime rule: you do shit in your own corner'. And they did and dumped a mountain of outstanding debt! Will Goldman's CEO pay himself a bonus even bigger than the us$54 million he pocketed last year? Probably he shall. The greed is beyond belief...will the business friendly, one is tempted to say the mistress of big business Bush White House and the growing number of millionaires in Congress bite the hand that feeds them by regulating strong the banking industry?
General Cuomo brought the student loan industry to heel, and forced Congress to rein in banks and universities who bilked students and families of students into paying exorbitant fees, which provided kickbacks, junkets for university muck a mucks and big bucks for banks. Will General Cuomo succeed in taking on Wall Street? The big banks will squander millions in lawyers who will fight tooth and nail to save damaged reputations, not pay huge fines, and seek either to quash subpoeanas or at the very least receive a slight tape on the wrist whilst pleading nolo contendere.
Saying this, the Bush White House is proposing a gimcrack measure of relief for defaulting homeowners. It is as bad as the fine print in the mortgage loans they signed, with so many restrictions, it will bring relief to the bare minimum of defaultees. And what about ex Goldman CEO Hank Paulson? He is berating the Chinese for not behaving responsibly in matters treasury, trade, currency and the like. And he's proposing bandaids in the subprime mess.
Already the tremours of recession are rumbling underfoot. OPEC keeps prices in the Yankee dollar so that the United States won't default...but the bill is coming due...
18Brumaire feels like those glazed over eyed preachers at Marble Arch calling for repentence for the day of reckoning is neigh!
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment