SHAMELESS BID RIGGING BY GOLDMAN IN MORTGAGE BOND MARKETS

MEMO SHOWS MALICIOUS INTENT

“make them totally demoralized”

“cause maximum pain”

Carl Levin yesterday revealed memos that showed clear intent to rig the bids of credit default swaps and other credit enhancement products, to cause pain to investors. Coming on the heals of BofA’s settlement for bid rigging in the municipal bond market, the latest round of disclosures undermine the story that the megabanks were unaware of the severity of the problem. They were in fact, creating the problem, had already taken prior steps to set up the problem and now were pushing the markets so that they could short the market at artificially low cost.

Just so you understand, the demoralization and pain they sought to inflict was on pensions, city and county government funds and sovereign wealth funds. They had already inflicted the demoralization on all the homeowners who were  feeling “maximum pain” and feeling it get worse and worse.

So my question is: what are YOU going to do about it?

LLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL

Goldman CDS trading activities under fire

By Francesco Guerrera, Justin Baer and Telis Demos in New York, Financial Times

Published: December 9 2010 22:59 | Last updated: December 9 2010 22:59

Goldman Sachs ’ trading activities in the credit insurance market in 2007 have come under attack from a US senator after e-mails revealed a senior trader urged colleagues to “kill” some investors’ positions.

Carl Levin, chairman of the Senate permanent subcommittee on investigations, told a hearing on Wednesday that the alleged activity “looks like a trading abuse to me”, although he added that at the time in question the credit insurance market was unregulated.

Mr Levin said that in May 2007, Goldman adopted a “short squeeze strategy” to drive down the price of credit default swaps on troubled mortgage-backed securities. Mr Levin alleged the move, which Goldman denies, would have enabled the bank “to purchase the CDSs for itself at artificially low prices”.

The subcommittee’s probe uncovered a document revealing a second trader stating that Goldman “began encouraging a squeeze” – a strategy that never materialised due to market conditions.

Mr Levin’s attack opens a potential new front in the controversy over Goldman’s trading practices. In July, the bank paid $550m (€416m) to settle fraud charges from the Securities and Exchange Commission over an MBS sold during the financial crisis.

Mr Levin produced e-mails in which Michael Swenson, an executive in Goldman’s fixed-income trading division, told colleagues to offer cut-price credit default swaps on MBSs. As the housing market collapsed in 2007, investors, including Goldman, were rushing to buy default swaps to short MBSs that were losing value.

“We should start killing the . . . shorts in the street,” Mr Swenson wrote in an e-mail to Deeb Salem, a trader, in May 2007. “This will have people totally demoralised.”

In another e-mail, he said Goldman should reduce prices on CDSs to “cause maximum pain” for existing holders of credit insurance.

Goldman said on Thursday: “This type of language sounds awful and is very disappointing, but it does not reflect the reality of what happened. There was no short squeeze.”

In his end-of-year evaluation, uncovered by the subcommittee, Mr Salem called the squeeze a “doable and brilliant” strategy but said it ultimately never happened.

Mary Schapiro, chairman of the SEC, told the hearing the language in the e-mails was “troubling”.

Mr Levin, whose subcommittee is due to produce a report on the crisis, noted that in interviews with Goldman employees, Mr Swenson and Mr Salem denied the bank intended to squeeze the market. The two, still with Goldman, could not be reached for comment.

Goldman was given a warning that Mr Levin might mention the e-mails during the hearing, a person familiar with the matter said. The bank conducted its own inquiry, reviewing whether there was any unusual trading activity during the period discussed in the e-mails and concluded that there had been no squeeze.

Additional reporting by Kara Scannell

17 Responses

  1. I love all the information I get on Livinglies –
    I would like to find a PO Box
    thanks

  2. Hey Mr. Davies, It seems that trustee’s can be deemed debt collectors. I sure appreciate the caselaw info. I don’t think it would be a stretch for the bank being responsible for a wrongfully influenced appraisal.

  3. OMG Mr. Davies, is there any cases like this in the 9th circuit?

  4. Alright let’s try that once more! DEBTSTRUCTION!!!!!

  5. I MEANT DEBSTRUCTION!!!!

  6. I hate these shameless bastards and their weapons of mass DEBTSTRUCION!!! shock and awe anyone?, there I said it!!!

  7. INDYMAC CLASS ACTION LETTER TO ATTORNEY REPRESENTING ONE OF THE INVESTORS.

    Brian W. Davies
    43277 Sentiero Drive
    Indio, CA 92203
    b.daviesmd@gmail.com
    760-898-8516
    June 10, 2010

    Via email only poplock@whafh.com

    Rachael S. Poplock, Esq.
    Wolf Haldenstein Adler Freeman & Herz, LLP
    270 Madison Avenue
    NY, NY 10016

    Re: Davies v. NDEX West LLC,
    RCSC Case No. INC 09-0697

    Police and Fire Retirement Systems Detroit v. Indymac, et al.
    USDC/SDNY Case No. 09-civ-4583

    Dear Ms. Poplock:
    In response to our conversation of today’s date, it was a pleasure speaking with you. As mentioned, I am on the homeowner’s side in a case involving Indymac which case is currently conducting discovery.
    I have extensively reviewed and researched the issues in this case which parallel your case, and have come to the same conclusions as alleged in your Complaint. As an educated, trained medical professional, I am not a typical pro se litigant and am currently acting in pro se because frankly, most attorneys, even here in California, don’t “get it” with regards to the issues at the moment. Rather than lose momentum, I opted to file a case to preserve issues.
    I totally concur with you that violations have been egregiously committed on the part of these Defendants’ in their representations and warranties, or lack thereof, which are in abundance and believe our allegations do indeed parallel and would support each other’s causes of action against these same Defendants and mirrored allegations and believe it would be to our mutual benefit to align in these matters and welcome an opportunity to discuss how we may go about a potential enjoinment or similar association of cases to support your class status.
    I have a great deal of supportive research in the form of documentation, cases, etc., that I have amassed in great abundance over the past few months with current and topical laws and actions. Needless to say, this issue affects me very personally, and as such I have approached this issue with a great deal of passion and determination.
    The nature of my case is that my property was contained within a matter involving Indymac Residential Asset Securitization Trust 2007-A5, with the pass through series 2007 E, with the Pooling and Servicing Agreement dated 03-01-07. The SEC file No. is 333-132042, offered by Indymac MBS as the S3 originally filed on 02-24-06. My case issues involve such items as appraisals and various underwriting issues which I believe would support allegations in your case.
    I look forward to speaking with you at your earliest convenience by telephone at 760-898-8516 to discuss further how we may benefit each other’s actions.

    Sincerely,

    Brian W Davies
    BWD:dm

  8. We are blocked at every government agency because we are “one.” One in many. Government agencies will not investigate individual claims. It is up to them to determine a “pattern.” With so many foreclosures – there is clearly a pattern – but also a government agenda..

    And, did the SEC know about these so-called securitizations?? Believe so. What did they do to stop it???

    Credit default swaps came in many forms and fashion – from credit enhancement to “hedging” on price. What else was rigged?? From A to Z??.

    Why did our government turn a blind eye?? Yes, deregulation to an extent —especially derivatives. Nevertheless, MBS remained regulated. Or, was none of this MBS – as it now appears – thus, not regulated at all – even on the so-called MBS from which derivatives were supposedly derived??

    How did SEC insure that MBS filers were compliant?? Any correspondence??

    Good question — What can we do??

    . .

  9. I think the big question is: Why would any investor in his right mind continue to invest with these crooks? No matter what you invest in with these megabanks, you are going to get screwed. Not dealing with Wall Street at all will put them out of business. Boycott megabanks and Wall Street investment firms. http://www.challengingforeclosure.com Sirak@challengingforeclosure.com

  10. FORECLOSING ATTORNEY AS TRUSTEE IS H LIABLE FOR WRONGFUL FORECLOSURE

    PUBLISHED
    UNITED STATES COURT OF APPEALS
    FOR THE FOURTH CIRCUIT
    KAREN WILSON, ü
    Plaintiff-Appellant,
    v. ý No. 05-1392
    DRAPER & GOLDBERG, P.L.L.C.; L.
    DARREN GOLDBERG,
    Defendants-Appellees. þ
    Appeal from the United States District Court
    for the District of Maryland, at Baltimore.
    William D. Quarles, Jr., District Judge.
    (CA-04-2917-WDQ)
    Argued: December 1, 2005
    Decided: April 5, 2006
    Before WIDENER, WILKINSON, and TRAXLER, Circuit Judges.
    Reversed and remanded by published opinion. Judge Traxler wrote
    the majority opinion, in which Judge Wilkinson joined. Judge Widener
    wrote a dissenting opinion.
    COUNSEL
    ARGUED: Howard Robert Erwin, Jr., Baltimore, Maryland, for
    Appellant. Rita Ting-Hopper, DRAPER & GOLDBERG, P.L.L.C.,
    Leesburg, Virginia, for Appellees. ON BRIEF: Scott R. Grigsby,
    DRAPER & GOLDBERG, P.L.L.C., Leesburg, Virginia, for Appellees.
    OPINION
    TRAXLER, Circuit Judge:
    Karen Wilson brought this action against the law firm of Draper &
    Goldberg, P.L.L.C., and one of its lawyers, L. Darren Goldberg (collectively,
    “Defendants”), for violation of the Fair Debt Collection
    Practices Act (the “Act”) in connection with Defendants’ initiation of
    foreclosure proceedings against her. Defendants filed a motion to dismiss
    for failure to state a claim, arguing that they were not covered
    by the Act. The district court treated the motion as one for summary
    judgment, and granted it in favor of Defendants. The district court
    concluded that, because Defendants were acting as substitute trustees
    foreclosing on a deed of trust, they could not be “debt collectors”
    under the Act and that any actions they took in connection with the
    foreclosure could not be challenged as violations of the Act. Wilson
    appeals, and we reverse and remand.
    I.

    http://www.scribd.com/doc/45102700/FDCPA-Wilson-v-Draper-Gold-Berg-PLLC-FORCLOSING-AGENT-LIKE-NDEX-WEST-LLC-ARE-LIABLE-FOR-WRONGFUL-FORECLOSURE

  11. What can WE DO ?

    I am already writing to AGs and filing a personal lawsuit.

    Any other suggestions?

  12. meant to write, take their commissions in 30, one year increments.

  13. Is it ethical for pension funds to reinvest outside of their own state? If the pension fund is large enough that it needs to be invested, should there perhaps always be a ratio of relatively local investing versus investments made on wall street?

    Maybe we created wall streets arrogance by bring wealth to them to get the best possible return rather than a slow but steady local return.

    On the other hand, maybe the problem is wall street takes a huge profit up front on the deals they create, and then they move on to the next deal.

    If Wall Street creates a 30 year deal, maybe they should take their commissions in 30 year increments.

    Oh wait, maybe they do BOTH! Maybe they take a large commission up front, then continue to take yearly commissions as well.

    Once securitization allowed for the changing of terms on the mortgage owner, greed set in, no?

    Those changes in terms may one day be overturned in court.

  14. We need to see more of this.

    Madoff son commits suicide.

    http://www.huffingtonpost.com/2010/12/11/mark-madoff-suicide-hanged_n_795342.html

  15. Maybe we need to unravel the connection Judges or States and possibly big law firms have to these big banks. We need to somehow expose it to the American Public via News Media Huffington Post.

    Give the politicans more ammunition. And get the American People behind us en mass.

  16. THIS DOCUMENT HAS ALL THE ERRORS DEUTSCHE BANK AS TRUSTEE HAS FOUND. THE LIST IS WORTH REVIEWING FOR ANYONE WHO NEEDS TO EVALUATE THE VALIDITY OF AN ARGUMENT. THIS MAYBE GOOD TO JUDICIALLY NOTICE A BANKRUPTCY COURT AS IT IS DEUTSCHE BANK AS CUSTODIAN SAYING DOCUMENTS ARE NOT COMPLETE INTO A HIGH PERCENTAGE.

  17. SHAMELESS PROOF OF CLAIM BY:

    DEUTSCHE BANK NATIONAL TRUST COMPANY AS TRUSTEE IN A CHAPTER 11 AGAINST:

    AMERICAN HOME MORTGAGE ACCEPTANCE INC.

    http://www.scribd.com/doc/45094535/Deutsche-Bank-Proof-of-Claim-against-American-Home-Mortgage-Services

    THERE WAS REPURCHASES DUE AT 90 DAYS
    FOR DEFAULT OR FORECLOSED HOMES. THE SERVICER WAS TO DO IT. THIS COVERS FAULTY AND INCOMPLETE DOCUMENTS PROFFERED FOR THE LOAN LEVEL FILES.

    GOOD READ TO UNDERSTAND THE ARGUMENTS OF THE TRUSTEE GOING UPSTREAM. WHAT OBLIGATIONS WERE DUE. WHO OWES WHAT AND WHO IS ENTITLED TO PAYMENTS IN THE CHAPTER 11.

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