Senate hearings were held Tuesday regarding Goldman Sachs investment theories. Several investment bankers are accused of actively selling mortgage investments at a time when they knew the market was crashing. In essence, these men profited largely from selling what they knew their clients were going to lose money on. Or did they?
Regardless, these people are also being accused of causing the economic decline in recent years with what they did, as pointed out by the New York Times. If so, how could so few people have this much power? Can fewer than eight people really ruin the economy of the entire nation? This could be scary.
Goldman Sachs position is that they did not act as financial advisers to their clients, and that these clients are savvy investors that indeed did choose what risks to take.
Only one of the investment bankers is cited as personally being investigated by the scrutinies of the Securities and Exchange Commission (S.E.C.) for his perceived wrongdoing. Fabrice Tourre is alleged to have constructed an elaborate scheme to defraud investors. As reported on MSNBC, Tourre states this to be a false claim and denies any wrongdoing.
According to CNN and other sources, Goldman is also facing fraud charges, though the company claims to have lost a bundle of money, too.
Sen. Carl Levin of Michigan was openly distressed at Tuesday’s hearing, citing a Goldman email that referred to a particular product called “Timberwolf” as being one sh**ty deal. Sen. Levin questioned the company’s trustworthiness in even selling such things. Sen. Claire McCaskill of Missouri likened the bankers to gamblers, pit bosses and bookies who held the odds in their favor. She was a little dramatic in her expression of this.
It is openly being stated by numerous sources that these hearings are intended to pressure republicans as the Democrats push for financial reform. At the same time, it seems that this company was merely lying to itself in saying that what it did at that time, back in 2007, did not encompass any wrongdoing whatsoever, when they knew what it would come to in the end. It seemed the company’s short term scheme to capitalize someone’s losses into gains for itself could indeed cost the company some big profits in the long-term scheme of things. Not to mention that what it eventually did to the American public is clearly unspeakable, though who’s to say if anyone at Goldman Sachs could know it all then. People are still angry.
However, there is some oversight as to how it could be allowed to happen at all. Could these men be fully blamed for what was not regulated and what no one really knew? How could anyone truly predict the tremendous crash that came of it? Maybe even they didn’t know their own financial power. Could they be just as surprised as anyone by the magnitude of what they did? Maybe not, but then, again, who’s to say. One day you’re just doin’ your job, and the next day you’re responsible for the whole country crashing. What?
It seems that financial reform is the concern that we will be hearing more and more of, for a good number of years, while these financial wizards from Goldman Sachs try to come up with some theories of how it all happens to begin with. Court isn’t expected for at least another year.