Goldman Sachs Charged with Fraud!

Finally! The golden boys finally aren't going to get away with something. The actual SEC complaint is online here. First:

The Players are Goldman Sachs, Paulson & Co. (a hedge fund run by John Paulson) and one Goldman Sachs VP, Fabrice Tourre.

The fictional investment vehicle in question is ABACUS 2007-AC1.

The Victims are IKB Deutsche Industriebank, Royal Bank of Scotland.

The Money is $1 billion in rigged profits to Paulson, $1 billion in losses to the victims, $15 million to Goldman Sachs for rigging the CDO.

Here is the entire SEC press release:

SEC Charges Goldman Sachs With Fraud in Structuring and Marketing of CDO Tied to Subprime Mortgages
FOR IMMEDIATE RELEASE
2010-59

Subprime Culprits Get $21 Billion to "Refinance" Mortgages

The Center for Public Integrity in a new report, Subprime Players Get Tax Money To Fix Subprime Mess , show the very same corrupt predatory lenders, Countrywide being at the top of the list, are now receiving U.S. taxpayer money to modify mortgages.

Firms that fed off the subprime lending frenzy that devastated the banking system are lining up to collect more than $21 billion in taxpayer funds meant to help bail out borrowers now in trouble on their loans.

Bank Fraud Video

There's not much else to say other than, watch this video.

Almost Half of All Subprime ARM Loans are Past Due

The Mortgage Bankers Association released Delinquency data today and almost half of all subprime loans, in the United States are now past due.

Subprime ARM loans and prime ARM loans, which include Alt-A and pay option ARMs, continue to dominate the delinquency numbers. Nationwide, 48 percent of subprime ARMs were at least one payment past due and in Florida over 60 percent of subprime ARMs were at least one payment past due.

The overall delinquency rate is 7.88% by the end of Q4, 2008. This breaks the record of their delinquency data going back to 1972.

If one includes the number of mortgages with one payment behind the percentages hit 11.93%.

Settlement on CountryWide Predatory Loans - $8.6 Billion

A Settlement of $8.6 Billion was reached today on a lawsuit by 9 states.

Maybe more people and states need to plain sue to be able to restructure their mortgages and principles so they might have a prayer's chance of staying in their homes.

Some details:

Bank of America, which bought Countrywide in July, reached a deal with attorneys general representing 11 states in which it will offer more affordable and sustainable mortgage payments for borrowers who had financed their homes with subprime loans or adjustable-rate mortgages serviced by Countrywide.

Dr. Doom - Roubini Profile in New York Times

The New York Times has a biography on Nouriel Roubini.

Roubini is one of the Cassandras of the financial and housing crisis from 2006, when no one would listen.

According to the article, after Roubini gave a talk on the housing bubble the response was:

The audience seemed skeptical, even dismissive. As Roubini stepped down from the lectern after his talk, the moderator of the event quipped, “I think perhaps we will need a stiff drink after that.” People laughed

What explains Dr. Doom's perceptions is his international economics background and the particular study of domestic economies financial collapses:

Foreclosure Filings: 272,171 last month

WSJ reports.

Increased 8% in July, 55% in a year. But I think the raw number tells the best story.

How many American families (not investors, not foreign investments or 2nd properties, rentals, bank owned, speculators) are actually owned in the United States?

What's the real percentage of US families, your typical working family, losing their home?

This is Interesting - Obama's Campaign Finance Chair

This is a blog post on Obama's campaign finance chair and links to sub prime.

If even half of it can be validated, well, oh boy.

This is socialism for Wall Street and the rich!

The title is a quote from Roubini, economist. I love it, yup, that's right, workers get corporate machinations from hell (often called free trade) while the super rich and institutions get socialism!

There is an interview Yes, that's $2 Trillion in Losses, from Barrons with Roubini (this is his blog), talking about the housing bubble/crisis.

They note so far his predictions about the financial crisis (when most were singing a happy tune) have been dead on accurate, so they interview Roubini for further predictions.

One observation:

Foreclosures Increase 121% from 1 Yr. Ago

Bloomberg

U.S. foreclosure filings more than doubled in the second quarter from a year earlier as falling home prices left borrowers owing more on mortgages than their properties were worth.

subprime