The CDO Daisy Chain | Probublica

Here's how the Wall Street Money Machine worked in the run-up to the financial collapse: Banks created CDOs from mortgage-backed securities. Banks often retained the large top portion, called the "Super Senior." The bottom portion, or "Equity," was often sold off to hedge funds. The middle portion, or "Mezzanine," often went into new CDOs. The main buyers of those new CDOs were once again the banks.

http://www.propublica.org/special/the-cdo-daisy-chain

Nothing to see, move along... they passed the 'stress test'... Banks ripped US off, news? Verification or Vindication? Remains to be seen.

Confidential Federal Audits Accuse Five Biggest Mortgage Firms Of Defrauding Taxpayers

http://www.huffingtonpost.com/2011/05/16/foreclosure-fraud-audit-false-claims-act_n_862686.html

"The False Claims Act allows the government to recover damages worth three times the actual harm plus additional penalties."

Rolling Stone Expose on Goldman Sachs

Taibbi’s Takedown of ‘Vampire Squid’ Goldman Sachs

From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression — and they're about to do it again

"The first thing you need to know about Goldman Sachs is that it's everywhere. The world's most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money. In fact, the history of the recent financial crisis, which doubles as a history of the rapid decline and fall of the suddenly swindled dry American empire, reads like a Who's Who of Goldman Sachs graduates..."

Fantastic "House Advantage" Series from the NYT

Articles in the House Advantage series from The New York Times examine the ways that Wall Street banks can, and often do, gain advantages over their customers. Today’s giant banks not only create and sell investment products, but also bet on those products, and sometimes against them, putting their interests at odds with some of their customers’. The banks and their lobbyists also help fashion financial rules and regulations. And banks’ traders know what their customers are buying and selling, giving them a valuable edge.

Advantage: The Bankers Club — Helping to Write the Rules that Run the Market

A Secretive Banking Elite Rules Trade in Derivatives

By LOUISE STORY

In theory, clearinghouses exist to safeguard the integrity of the multitrillion-dollar derivatives market. In practice, they also defend big banks’ dominance.

December 12, 2010

Advantage: Financial — Getting Paid on the Upside, but Not Losing on the Downside

Banks Shared Clients’ Profits, but Not Losses

By LOUISE STORY

Banks like JPMorgan Chase offer to help big investors like pension funds earn a little extra. When it works, both win. When it doesn’t, only the client loses.

October 18, 2010

Advantage: Product Design — Designing Products Then Betting Against Them

Banks Bundled Bad Debt, Bet Against It and Won

By GRETCHEN MORGENSON and LOUISE STORY

Investigators are trying to determine whether banks like Goldman Sachs intentionally sold their clients especially risky mortgage-linked assets.

December 24, 2009

Advantage: Price Setting — Controlling the Marks on Investments, With Self-Interest in Mind

Testy Conflict With Goldman Helped Push A.I.G. to Edge

By GRETCHEN MORGENSON and LOUISE STORY

The bank’s demands for billions of dollars from the insurer bled it of cash, which the government later provided.

February 7, 2010

Advantage: Friendly Regulators — Watching Out for the Banks

In U.S. Bailout of A.I.G., Forgiveness for Big Banks

By LOUISE STORY and GRETCHEN MORGENSON

Federal regulators ignored recommendations to force banks that did business with A.I.G. to accept losses.

June 30, 2010

Advantage: Ratings Game — How Debt Watchdogs May Have Been Compromised

Rating Agencies Shared Data, and Wall St. Seized Advantage

By GRETCHEN MORGENSON and LOUISE STORY

Trying to be transparent, credit rating agencies made their computer models public, and banks used that knowledge to shape some of the investments involved in the financial crisis.

April 24, 2010

Advantage: Information — Inside Insights Help Protect Banks' Interests, but Leave Clients Behind

Clients Worried About Goldman’s Dueling Goals

By GRETCHEN MORGENSON and LOUISE STORY

The conflicts inherent in having a trading arm have created a wariness toward Goldman Sachs.

• Goldman Sachs’ Responses to The Times

On the third Wednesday of every month...

A Secretive Banking Elite Rules Trading in Derivatives

By LOUISE STORY

On the third Wednesday of every month, the nine members of an elite Wall Street society gather in Midtown Manhattan.


The men share a common goal: to protect the interests of big banks in the vast market for derivatives, one of the most profitable — and controversial — fields in finance. They also share a common secret: The details of their meetings, even their identities, have been strictly confidential.


Drawn from giants like JPMorgan Chase, Goldman Sachs and Morgan Stanley, the bankers form a powerful committee that helps oversee trading in derivatives, instruments which, like insurance, are used to hedge risk.
In theory, this group exists to safeguard the integrity of the multitrillion-dollar market. In practice, it also defends the dominance of the big banks. (MORE).

 

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Doonesbury joins the fray...

“A Banker’s Progress“.
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